Gatorade Drops Tiger--Only Nike is Left

Gatorade, a Pepsi brand, announced that it was discontinuing its relationship with Tiger Woods, leaving only Nike as a major sponsor. Actually, the announcement was most surprising in that most people didn't know that Tiger endorsed Gatorade. Pepsi has so mismanaged the brand that it is becoming a shadow of its former self in the category. The CEO of Pepsi, Indra Nooyi, even was on TV and said that Gatorade is for athletes so they expected a bit of a drop in their market share. Okay, so you want to further narrow the market for your already withering brand?? Surprising, but, okay, if you insist, I will not consider this is the future because you have told me it is not for me. Guess I'll go for Powerade or some other brand. You're told me the brand is not for me. Hope you make up the difference in volume with athletes. I imagine that Pepsi will be supplying lots of Gatorade to the teams it sponsors in hopes of getting a bump from their association.

PepsiCo Inc. first announced it was partnering with Tiger in October of 2007, to develop a branded drink for its Gatorade line called Gatorade Tiger. The drink, which launched in March, 2008, came in three flavors “inspired and selected by Tiger.”

Since that time, Gatorade has changed a great deal. We do not really know if Tiger has changed or has always been a "skirt-chaser". Gatorade certainly cannot claim to be hurt by Tiger's off-the-course problems. The brand, which has since rebranded itself "G" to get more street-cred with the athletic types Pepsi wants, is certainly not looked at or positioned as being pristine. Look at the ads for Gatorade. They look like they are trying to win over the street ball and skate-board crowd. They want to be edgy and urban in their appeal. Few people would believe that the athletes Gatorade touts as being associated with them are pure and simple folk. Tiger certainly is not. I believe that Gatorade dropped Tiger because he is not actively playing golf and so has no monetary value for them. It has, I believe, nothing to do with values. Gatorade said it would continue to support Tiger's foundation--probably a loop-hole in getting out of its contract or a way for Gatorade to protect itself if is consumers balk.

Nike will likely continue to support Tiger. There would not be Nike Golf if it were not for Tiger. Nike defines its brand as being for athletes, and if you have a body, you are an athlete. In other words, unlike Gatorade, Nike is for everyone who wants to be active and do better at what they do--run, play basketball, golf, etc. Their brand is defined "between the lines", so to speak. It occurs on the playing field one chooses. So Tiger's indiscretions do not impact the Nike brand quite like they have other brands that borrowed his persona to equate with their own (e.g., Accenture). Nike sponsored John McEnroe, even though at the time he was considered the "bad boy" of tennis. His on-court performances, though, were outstanding and that's what Nike cared about. Accenture, on the other hand used the phrase: "Come on, be a Tiger", suggesting that it was his total package that the firm would help one emulate. When the chuckling from clients began, Accenture was out.

Brands are about symbols, attributes and associations. The associations with Tiger's private life were too much for Accenture; the attributes are what matter for Nike. Who knows what matters to Gatorade anymore?!

Reputation Trumps Brand is a Crisis

The move by Accenture and Gillette to drop Tiger Woods shows the power of reputation and the concern of boards about reputation risk. Brands are important, but they are related primarily to customers. Reputation is related to all stakeholders, and in a crisis, companies look to manage their relationships with all stakeholders and some of these concerns may trump the customer.

Years ago, DuPont had a situation with Benlate, a pesticide that was rumored to be burning cotton crops after a rain. The division argued to maintain control of the situation and keep it between the product management and the customers. By the time the board intervened, the cost had escalated to nearly $500 million. Investors were concerned about the company's insurance protection; lawsuits were pending; employees were questioning DuPont's commitment to environmental safety. The company learned a lesson. It should have made the situation a corporate issue rather than a division one.

In contrast, when Tylenol was tampered with in 1982, J&J didn't allow the crisis to be managed by McNeil, the division that makes Tylenol. They immediately made it a J&J issue. When Kidder Peabody, the investment firm that GE used to own had an scandal involving a broker who stole from his clients, Jack Welsh immediately made it a GE issue, taking responsibility away from K-P to manage it.

Accenture had to act. It is a consulting firm. Its value is entirely intangible. That is, it does not make or sell products, but rather gives advice. Its value is its credibility, its reputation. Anything that impacts that reputation is a threat to the firm's perceived value to clients. Tiger was the association they previously wanted. "Come on, be a Tiger" was the slogan. Tiger's winning, his talent, his aggressiveness, his intelligence, his personality, were the associations Accenture coveted. Tiger is now a tainted set of attributes. His association is no longer positive. He is a joke line on Letterman and Conan. Not the stuff Accenture can tolerate.

Reputations, like brands, are comprised of symbols, attributes and associations. The difference is that reputations are based upon a larger number of stakeholders. Brands are what firms decide they want to be seen as; reputation is how stakeholders see them. The reputation of other companies that Tiger endorses are all watching this. Someone has to be first--that was Gillette. I know that the calls are going on within the management teams and board rooms of AT&T, Nike, Rolex and other companies that "employ" Tiger. They are all asking the same question: "what is the impact on our reputation? Can we take the risk? Do we want to be the last company defending our association with him? What are we hearing from employees, customers, special interest groups, the media, investors and other stakeholders?

Reputation management is the process of balancing the financial interests of the company against the needs and interests of the company's many stakeholders. An endorsement is a brand association. The endorser's attributes help further enhance the performance characteristics of the brand. Tiger is "tainted goods". He may still be the greatest golfer in the world, but his personal character is under question. His attributes no longer are desirable association.

I heard one professor on TV claim that the contracts Tiger has are unbreakable. I am not sure what this fellow knows or doesn't know about the subject of contracts. Typically, companies have a clause in these contracts that allows them to be broken if the endorser does something to create risk to the company. All of the companies that have signed Tiger are intelligent companies. I can't imagine that they do not have clauses that allow them to cancel the contract without further payment.

This is a sad situation all around. But, it is an interesting learning situation showing how not to handle a crisis and also the importance of reputation.

Tiger's Death by a Thousand Cuts

So now the news is that Gillette has decided to stop its advertising with Tiger Woods. It seems that we are now seeing his death by a thousand cuts. My prediction is that others will hold on but start to back off if things continue to deteriorate. Gillette, a men's brand, spun it that they are giving him the time out of the spotlight he needs. It's the time out of the spotlight they need in association with him. You don't give a winning brand time off; that is reserved for question marks. As of this writing, Accenture just announced that they were ending the sponsorship with Woods saying that he no longer represents the type of person with whom they want to associate.

Let's keep in mind that Gillette is owned by Procter & Gamble. P&G has always been protective of its reputation and the primary focus on P&G, other than Gillette, is woman. They position themselves as a family company. It makes sense that they would back off Tiger until they better know where the "wind is blowing". The postured this as being on his side, but they are playing both sides in this one. They step aside from having Tiger associated with them, and for those who support Tiger they can say that it is done for him. Well played, sir!

Companies are very concerned with their reputations. This has not been a good year for corporate reputation, with all indicators of trust at record lows. Companies do not like controversy or to be caught in situations in which they have to defend the actions of another--they have enough problems defending their own actions. Woods now is a problem.

As I have said before, this did not have to be this way. Tiger still has not stepped in front of the cameras. He continues to speak through his website. Who the hell is giving him PR advice? Whoever it is should be ushered into the PR Hall of Shame. This is one of the worst example of handling a crisis I have seen. Tiger is allowing everyone to control this story other than himself. This is not an age when the news media take a quote from someone. This is an era of 24-hour news outlets that need to manufacture the news they cannot get otherwise to attract interest. They are sharks and Tiger is bleeding.

The first rule of a crisis is to take control of the situation, tell the truth, and take the offense rather than the defense. Admit your mistakes publicly, muster a few tears and look contrite. Do something, but stop hiding behind a manufactured, impersonal website. For those who think this is Tiger speaking to us directly through his site, let's get real. He has an entourage and they are hard at work. They are either terrible at their jobs, or he is the worst client they have ever had and refuses to listen to their advice.

While we're at it, can someone please tell David Letterman to stop with the Tiger jokes. He keeps referencing Tiger's problems and associating them with his own. He has a wife at home as well. Cool it, Dave. You came out of this looking like someone taking the high road. Don't go low road and ruin everything for a few laughs.

Gatorade Pulls Its Tiger Connection

Pepsi, the owner of Gatorade, has decided to drop a drink named after Tiger Woods. The timing is curious. Gatorade said it was decided before the whole "Tigergate" incident; many think the timing is more than coincidental.

The truth is likely somewhere in between. Gatorade is a product that is in trouble. It had a good market position and then, like the other Pepsi brands, was rebranded last year. Gatorade became "G", I would imagine to give it "street cred". The ads are harder-edged which supports my contention. Somehow, Pepsi decided it had to make the product more current and hip. The results have not been good. Reports have indicated that "G" has lost market share. This comes on the heels of Tropicana, another Pepsi brand, which had to reintroduce its old packaging after customers strongly objected to the new package design. The logo for the Pepsi product, which changes depending on the product, was criticized for being curiously similar to the Obama campaign logo--Pepsi said it was pure coincidence.

This has been a terrible year for Pepsi brand management. It did not have to be so. In the new world, Pepsi could have co-created the package designs with customers and gotten strong customer buy-in. Pepsi, instead, acted like it was pre-Internet days and did its branding in secret between the chief marketing officer and an outside branding agency.

Companies are not in control anymore. Brands are shared and are part of customer experience. They always have been but now customers can act on their likes and dislikes more aggressively. Pepsi needs to wake up to the new world. It claims to be the brand for a "new generation" but acts like it is managed by the old one.

Back to the question of whether or not the dropping of the Tiger brand was preplanned or is in reaction to his marital infidelities. As noted, I think the truth lies somewhere in between. Gatorade is in trouble and is looking for ways to reconnect with its original customer base which it is loosing. Tiger is an expensive endorsement and likely too expensive for a brand in trouble. The problems Tiger has had likely pushed the decision to the front burner.

Tiger is a Actually a Cheetah

So now we know what we all suspected. Tiger was cheating on his wife with several woman. He's human. What a shock. An attractive, rich guy traveling the world gets hit on by women and give in to temptation. Again, what a shock?

So, why are we still waiting for an appearance from Tiger? Why does he continue to believe that he can manage this through his website? Does he really believe that we believe that he is writing all of this and not having his entourage front for him? Maybe it is a shock to him to learn that he is human. He was raised by a father that developed him to be a robot and that has served him well on the golf course. Maybe he can't quite believe that he has human frailties like the rest of us mortals?

While he has helped by coming out and admitting his mistakes, he still has not done what needs to be done, which is to make an appearance and show his emotions. He has to stop trying to make us feel that the media are wrong for doing their jobs in covering this story. Once again, he is not an ordinary person. If he were, this would never have been a story. He is a brand. He has responsibilities beyond himself. As I said before, he needs to take the David Letterman approach. Admit mistakes and tell people that it is now his responsibility to rebuild his relationship with his wife. He can then ask for some privacy to do that. Spare her--she hasn't done anything wrong, nor have the children.

I am still waiting for Tiger to act like the person we all thought and hoped he was.

Come On...Be a Tiger!!

Many golf fans like me are dismayed by Tiger Woods' recent car accident and hoping that he is okay. The brand and reputation management expert in me, however, is not enthralled by Tiger's response, or lack of it, to the situation.

Tiger is an individual and he has the right to his privacy. However, he has become a brand, both in his own right and in his ability to endorse other brands and provide them with equity, e,g, Nike and Accenture, among others. He is the first $1 billion a year pro athlete in terms of winnings and endorsements. He receives millions for simply showing up at tournaments and millions more for lending his name to projects.

When someone becomes a brand, he/she looses the ability to act as an individual. They take on larger, almost "corporate" responsibilities. His actions are his own and also reflect on other organizations.

I don't know what happened at Tiger's house that night that led him to jump in his car at 2:00am and back into a fire hydrant and tree. But, the speculation has become ridiculous. There are office pools with people betting on what happened. Some think he and his wife had a fight and he stormed out; others think he was cheating on his wife; others have other ideas. The sleazy media like the Enquirer and Star are running stories claiming he has been cheating on his wife and produced pictures of the alleged "other woman". I also understand that in the first 24-hours after the accident, there were more than 3,000 news stories written about the accident.

Tiger's silence just fuels those speculations more, giving them greater longevity and "legs". He needs to learn from David Letterman. If something happened, then tell us what happened and get it over with. We can all understand if he had a fight with his wife and stormed out. He's human. Maybe he was jet-lagged from his recent trip to China. Whatever the reason, or reason he can come up with, please say something.

I expected more of Tiger. I have always admired his talent and his philanthropic activities. All these begin to look manufactured in retrospect. When tested under fire, Tiger has failed the test that leaders must accept and brands are bound to accept--that they are larger than life and as a result have greater expectations on them.