The Convection Cycle of Action Sports Companies

An action sports company has to start out somewhere and usually it is just as an idea at first from an experience. When you take the CEO from Gopro, Nick Woodman, he was on a surfing trip and wanted to take pictures closer to the action. Then when you look at the opposite way which is Red Bull, a major beverage company, that makes money selling their drink to people and then paying athletes huge sums of money as an endorsement for their product. 

SOURCE: www.liveonegroup.com

I asked the question in my research of: “How can extreme-sport oriented companies use social media effectively and safely in marketing?”. In a way to market extreme sport companies, companies create low-budget videos and post them onto social media. For example, a Red Bull-sponsored base jump from the space was widely reported both in social media and in more traditional media (Tierney, 2012). After the company publishes the video to social media, word spreads out fast and fans “like” and share the video.

Another question I asked in my studies is: “Do celebrities have an impact on action sports marketing?” So it is evident that the target market for action sports is the young adult population but how do celebrities come into play? Well, big businesses are spending billions of dollars on endorsement deals with such celebrities. When research shows that once celebrities are involved in a product that they can match, they bring more value to that product. One example would be that there have been studies done that women are 22% more likely to buy a product or service that is endorsed by a female athlete. When women athletes represent a niche sport that more men tend to play, then those women that tend to favor that sport also would like to see a woman represent it and then buy it. Females were expected to spread more positive word-of-mouth about a product or brand that is endorsed by their favorite athlete than males.

For one blog post, I researched the largest brand I could think of regarding action sports, Nike. An example was how Nike associates themselves with the big names in action sports. Michael Jordan has his own shoes made by which company?, Nike. Then there was Tiger Woods and his products in golfing, Derek Jeter sponsored by Nike for baseball and Cristiano Ronaldo with his shoes from them in soccer. The company has always made sure to lock up athletes early as they have seen the “Next Best Thing” before any other company. They locked up Michael Jordan in 1984 and never let him out of their sights. Now Nike has Rory McIlroy in a 10-year, $200 million sponsorship golf deal. Athletes are turning the sports they play into a business and are becoming entrepreneurs. A quote from Nikki Stone, gold medal champion in 1998, states how "extreme sports athletes know how to take risks.” People wanting to get into business will have to learn that it takes guts and a lot of work to run a business. But when the person becoming an entrepreneur is an athlete, to be successful they must take that extra unknown risk at times. Also the athletes that realize that they cannot possibly go through the risks of extreme sports their whole life and will have to eventually settle down to do something for stable for a living.

Everything an athlete does, playing the sport or changing to the business aspect, it just feeds back into the market of action sports and in return grows the market larger.