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Samsung NBA Deal: Will Samsung Become The Next Nike?

Samsung has reached a deal with National Basketball Association (NBA) for $100 million to become the official handset, tablet and TV provider of the NBA, Women’s National Basketball Association, and NBA Development League. The deal allows Samsung to use its monitors at courtside for replays. Additionally, the brand will receive exposure during televised games and distribute customized NBA content on its smartphones and tablets.
The deal came after Samsung featured LeBron James in their ads in 2012. The advertising partnership helped the consumer electronics brand capture young, male demographic while defeating competition.
Here’s what Samsung’s deal with NBA means for advertisers:

  1. Product placement is still effective

    Product placements are often seen in movies and television programs. By featuring products or services on screen, brands can increase awareness, gain mind share, and most importantly, increase revenue. Companies such as Reese’s Pieces and Red Stripe in particular have found profound success with product placement. Reese’s Pieces saw a 65% increase in sales after its placement E.T. The Extra-Terrestrial while Red Stripe witnessed a 50% boost in revenue after its placement in The Firm. These successes are mainly due to the transfer of attitude towards the movie or television program to the brand. For instance, if you like a certain movie, you will likely transfer this positive attitude towards the brand featured in the movie.

    By becoming featured in upcoming NBA shows and programs, Samsung will likely attain tremendous results. The consumer electronics company will likely encourage NBA fans to transfer their positive attitude towards the NBA to Samsung, making the electronics giant a even more  enticing and favorable brand in the world.

  2. Celebrity endorsement still generates large returns for brands

    Before the rise of young all-stars like LeBron James and Carmelo Anthony, NBA was dominated by this man: Michael Jordan. Michael ran the court and won 6 championship rings during his career with the Chicago Bulls. After gaining major exposure and fame, Michael was the perfect celebrity endorsee. While Michael received offers from several athletic apparel companies such as Converse, he eventually partnered with Nike. The partnership saw tremendous success right from the start. Just a few months after the release of Air Jordan in March 1985, Nike earned $70 million in revenue by May. This figure went up to $100 million by year’s end. Today, the Jordan brand is more powerful than ever before. Last year, the Jordan brand sold $2.5 billion worth of shoes and gained 58% market share in the U.S. basketball shoes market. Simultaneously, it obtained 77% of children’s basketball shoes market.

Although Nike and Samsung are in two different industries, the outcomes will likely be the same. By endorsing superstars like LeBron James, Samsung can leverage celebrity endorsements to increase favorability and sway consumers’ brand attitudes. This in turn can help Samsung make consumers feel positively towards their brand. This will ultimately help the consumer electronics company establish even more grounds in the global tablet and smartphone space.
While digital marketing is the prominent marketing tool in today’s digitalized world, traditional marketing tactics such as product placement and celebrity endorsement remain powerful tools. By using these traditional marketing approaches, companies can strengthen brand images, enhance brand attitude, and more importantly, augment sales.