Impact of Ad Spending: Losers
The great recession took its toll on American industry, but Nike, Dominos, and Samsung managed to gain market share during this period. Nike used creative marketing strategies like celebrity advertising while their competitors like Reebok struggled with inconsistent advertising. Dominos put their focus behind recession-related advertising, optimizing their online ordering experience, and offering more meal options like pastas while Pizza Hut marketing struggled and Papa Johns chose not to add new items to their menu. Finally, Samsung, put more focus into the smartphone market and differentiated themselves through creative advertising and attractive product designs.
Who Lost US Market Share to Nike?
- Reebok was a longtime competitor of Nike, ahead of the company in market share prior to the 1987 stock market crash.
- By 1989, Nike had pulled ahead with 25% of market share compared to 24.2% by Reebok.
- In 2006, Reebok was purchased by Adidas.
- The brand's performance dipped during the great recession, but began to recover as early as late 2010.
- Reebok had also not yet mastered creating high performance shoes, as Nike had started off focused on performance-driven shows before diversifying.
- Reebok's advertising was criticized as "inconsistent and confusing" compared to the clear and artful advertising by Nike.
- The brand's recovery was largely traceable to a refocus in its advertising, exemplified by the EasyTone walking shoes campaign that promised: "a better butt with every step."
Who Lost US Market Share to Domino's
- The recession hit the large pizza chains hard, as cheaper alternatives, like value menu items and frozen pizza, became more popular, forcing all participants to fight for market share.
- Despite this, Papa John's went into 2009 with confidence, announcing plans to expand locations and grab new market share.
- While Domino's and Pizza Hut added pasta, sandwiches and other new items, Papa John's continued to focus on pizza.
- Domino's optimized their online ordering site with a tracking system that included a simulated pizza, unlike Papa Johns and Pizza hut. This boosted Domino's to number 1 in online sales, from 11% to 28% share of the market.
- Dominos focused on value-based offerings and began offering two-topping pizzas for $5.99, forcing Papa John’s and Pizza Hut to respond with unlimited topping $10 pizzas.
- Domino's used recession-related TV advertising that seemed more aware and responsive to customers, while Pizza Hut TV advertisements focused on things like quality.
- While Papa John's took a hit in the recession, possible due to their inflexibility and lack of innovation, the company recovered quickly and continued to expand aggressively.
Who Lost US Market Share to Samsung
- Nokia sales plunged during the recession.
- In 2008, Samsung Electronics led the global mobile phone trend in user interface. They introduced AMOLED displays and eye-catching designs.
- Samsung was able to differentiate themselves through smart, aggressive marketing like with creative unpacking websites, a partnership with NASCAR, and introducing mobile charging kiosk in 10 US airports.
- Expanding to the smartphone market, then dominated by Blackberry, Nokia, and Apple, become a key focus for Samsung.
- Mistakes and minimal smartphone offerings left Nokia struggling for market share. Their market share slipped to 7.8% of the US market by 2010 as smartphones like the Apple IPhone began to dominate the market.
The research reviewed newspapers, company reports, and other publications to identify and understand the competing companies that struggled during the recession while Nike, Samsung, and Domino's gained market share. Since the recession was over 2 years ago, 2007-2009, many of the sources are older than 2 years old.