SBJ/July 30-August 5, 2012/Marketing and Sponsorship

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  • Ganassi drivers racing to breakfast table

    Kellogg’s plans to feature Ganassi Racing’s top drivers on the cover of five breakfast products at Target stores nationwide during the next two months.

    The point-of-sale promotion is the first of its kind since the company became an associate sponsor of Ganassi Racing’s Target-sponsored NASCAR and IndyCar teams. Kellogg’s will put driver Dario Franchitti on the cover of Frosted Flakes, Scott Dixon on the cover of brown sugar Pop-Tarts, Juan Pablo Montoya on the cover of Rice Krispies and strawberry Pop-Tarts, and all three drivers on the cover of a special-edition cereal called Vrooms that’s being released as part of
    the promotion.

    The driver-branded products will be featured in displays at Target stores across the country beginning Aug. 19. They also will be promoted in Target’s national circular ads.

    In addition to putting drivers on cereal and Pop-Tarts boxes, Kellogg’s will run a sweepstakes that offers a grand prize trip to the Indianapolis 500 or the Brickyard 400. The sweepstakes winner will get a trip to the Indy race of his choosing, a $1,000 stipend, breakfast with Ganassi drivers, pit passes and more.

    “This was about leveraging our brands [Kellogg’s, Target and Ganassi] to the fullest,” said Rick Simington, Kellogg’s senior national account executive. “We have very strong brands together that can create awareness in the marketplace.”

    Dan Griffis, Target’s director of strategic partnerships, lifestyle marketing and events, added, “Target always looks to create a differentiated product on its shelves. To get a Juan Pablo Montoya box of cereal, that exclusivity is something we try to go after.”

    The promotion was developed by Kellogg’s Target brand team. The company became an associate sponsor of Ganassi Racing’s Target teams two years ago. It also sponsors Carl Edwards, who drives the No. 99 car for Roush Fenway Racing.

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  • Apparel brand has fighting spirit

    An upstart apparel brand using mixed martial arts to build a name for itself has a few weapons in its corner.

    Respect Your Universe, which sells premium-priced performance apparel, has no fewer than five former Nike executives calling the shots. Its front office also includes former executives of Lululemon Athletica, the successful maker of performance apparel for women and the yoga market.

    Company President John Wood, a black belt in judo, can relate to those who are looking for apparel that can hold up to the rigors of intense training.

    RYU must convince consumers that its performance apparel is worth the higher price.
    To find its own success, however, RYU must stand out among industry titans Nike and Under Armour, not to mention established MMA lifestyle brands such as TapouT and Affliction. The brand must also convince athletes that its products are worth prices as much as twice the competition’s.

    With a new training line for women, plans for a flagship store in Las Vegas, and the opening of a branded athletic training center, RYU could gain traction with consumers.

    RYU began in 2008 as the idea of Wood and former Jordan Brand marketing director Emmanuel Brown. Wood, who works by day as the director of customer development in several Las Vegas nightclubs, knew Brown, who often frequented those clubs.

    A few months after attending a UFC fight together, Brown phoned to ask Wood whether he wanted to partner on a “side project.” The two planned a line of custom fight shorts, designed specifically for MMA athletes. Wood, who trains daily with UFC athletes, believed that fighters would invest in higher-priced apparel if it lasted longer.

    RYU enjoyed modest success but lacked capital to grow. And the partners quickly realized the challenges of trying to start a company in the teeth of a recession. The project was shelved until 2010, when Wood and Brown enlisted the help of Christopher Martens, former Nike general manager and merchandise director, and Erick Siffert, former Nike Outdoor executive, who also served as director of product operations at Lululemon before joining RYU.

    Martens and Siffert helped build and design the RYU line before joining the venture full time. Martens is now CEO and Siffert is COO. They were later joined by CFO Steve Eklund, who held the same position at Nike Global Apparel & Equipment and Nike Golf.

    Respect Your Universe

    Founded: 2008

    Headquarters: Las Vegas (the company’s development and product sales team is based in Portland, and its products are manufactured in Asia)

    Employees: 11 (goal of 18 by end of 2012)
    Former Nike executives now with RYU: Emmanuel Brown, Christopher Martens, Erick Siffert, Steve Eklund, Kevin Hyland

    The arrival of the former Nike executives helped attract investors, but it didn’t translate into instant success. The company restarted the line in 2010, but needed another year to raise enough capital to get RYU on the right track. RYU raised an initial $5.5 million and then listed the company’s stock for trading over the counter.

    “Certainly the talent pool in the company is one of their biggest assets, I would say,” said Andrew Burns, vice president and research analyst at investment firm D.A. Davidson & Co. “You wouldn’t see a company raising capital at this stage — I know it might have been difficult, but to have been able to raise capital in this market, it’s absolutely a testimony to the executive team and to the ideas as well.”

    In June of this year, the company filed for a $5 million stock offering on Canada’s TSX Venture Exchange, with plans to use the proceeds to fund retail marketing and operating expenses. The company hopes the capital infusion will help it break even beginning next year.

    RYU began as a line of fight shorts exclusively for men, but the company has just launched women’s training wear. With several former Lululemon execs now working for the RYU team, the company has extra insight into the market.

    With all of its products, RYU believes that technology and innovation will set the brand apart. The company, for example, uses a patented closure system on its shorts. It uses natural materials — from organic cotton to bamboo — and prides itself on being 95 percent sustainable.

    “Being green, taking care of the environment, is important to us — it’s one of our four pillars: strength, honor, respect and sustainability,” Wood said.

    The company’s most recent moves have included the launch of women’s training wear.
    RYU’s success will ultimately be determined by how well the products sell. A full-zip hoodie from RYU’s men’s line costs $138, while a full-zip hoodie from MMA apparel brand TapouT retails for $49.99, and a full-zip hoodie from Nike’s training line goes for $75. Said Martens: “The goal is to invest in something that lasts longer and you don’t have to replace it in two months because you got a deal on it.”

    Despite RYU’s martial arts roots, Martens stressed, “We’re using MMA as an inspiration, but we’re not an MMA brand.” He said the apparel can be used by athletes in most other sports. In that light, RYU has signed endorsement deals with MLB outfielder Darnell McDonald, bodybuilder Phil Heath and endurance athlete Christian Isakson.

    Still, RYU channels most of its resources toward the MMA market. The company is an event sponsor for UFC and has a sponsorship deal with MMA fighter Rocky Bice.

    “There was one thing that really attracted us to them,” said UFC Chief Marketing Officer Bryan Johnston. “They came from the mindset that we don’t want to be a T-shirt company, and most of the brands that have surrounded the UFC have been very much a T-shirt-oriented company. The fact that these guys were making gym gear and training gear was very, very important to us.”

    As for its next move, RYU has signed a lease for its first retail location, which is set to open in September in The Shoppes at the Palazzo in Las Vegas. This month, the company opened the first House of RYU athletic training center in Las Vegas.

    RYU has begun interviewing for an international staff, and is setting plans to expand in Europe.

    Katherine Zdrojeski writes for sister publication SportsBusiness Daily.

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