Does the NFL Risk Oversaturation? The Pursuit of Growth vs. the Value of Scarcity & Exclusivity

Source: Fox Sports

Great luxury brands such as Brunello Cucinelli, Patek Philippe, Hermes, and Ferrari use deliberate scarcity and exclusivity to optimize brand equity, enhance willingness-to-pay, and distinguish themselves from the competition.  

Most people would not consider the National Football League (NFL) a luxury brand.  Yet, the NFL traditionally benefited from scarcity and exclusivity.  While Major League Baseball played 162 games per year, and the NBA teams competed 82 times per season, the NFL played only 14 games per season when I was a child.  All but one of the games took place on Sunday afternoon in a six-hour window, making that day an event that was highly anticipated each week.  One very special game took place on Monday night, with Howard Cosell, Frank Gifford, and Don Meredith serving as the star-studded announcing team.  Two networks split the games, and another (ABC) broadcast the very special Monday night event. 

Today, the NFL has expanded in numerous ways.  Revenues and profits have skyrocketed over the years.  Yesterday, the NFL announced the 2026 schedule.  The NFL now plays 17 games per season, with an 18th game anticipated soon.  Games will be played on Wednesday, Thursday, Friday, Saturday, and Sunday at different points during the season.  Games will be broadcast on streaming services, as well as major broadcast and cable networks.  Games will be played around the globe, meaning that on some Sundays, there will be games from early in the morning until nearly midnight on the east coast.  The growth is astonishing.  I love the sport. Yet, I keep asking myself: Is there a point at which the NFL will have gone too far in pursuit of growth?  Will the NFL lose some of the scarcity and exclusivity it enjoyed relative to other sports, and in so doing, erode its brand equity?  Perhaps not.  Americans cannot seem to get enough of football.  Still, it bears asking the question. 

Many successful companies face this challenge.  They want to grow, but they find themselves risking oversaturation and brand dilution. At various points, luxury brands such as Coach and Gucci severely harmed their brands because of their expansion strategies.  The best brands practice restraint. They grow with some caution and discipline.  Ferrari, for example, has grown its production volumes in recent years. Still, it makes less than 14,000 cars per year.  By comparison, Porsche produces roughly 300,000 vehicles per year.  Ferrari has expanded by producing ever-more-expensive vehicles, rather than moving down market to cater to a broader audience.  Hermes is very careful about the distribution of the famous Birkin bag.   Customers cannot just stroll into a store and purchase one.  You have to earn the right to purchase the bag!  

Will the NFL show any restraint in the years to come, or will they continue to expand aggressively?  How much football is too much, or are fans' appetites simply insatiable?  These are the questions the owners and their broadcast partners must grapple with in the years to come. 

Social Media Strategy

My former colleague Mikołaj Jan Piskorski of Harvard Business School has written a new book titled "A Social Strategy: How We Profit from Social Media. In this interview excerpt from Forbes.com, Piskorski offers two important pieces of advice for companies as they engage customers via social media platforms. I highly recommend reading the book.


Brands often are too eager to inject themselves into conversations about their product. Despite a brand’s best efforts, most consumers are not going to identify with or trust a brand the way they would a friend. To alleviate this problem I recommend that companies focus on facilitating interactions between their customers.

The second issue is that companies often engage socially without clear business goals. Instead, they focus on getting the highest number of likes or followers, or getting highest rates of engagement. At the end of the day, none of these metrics matter if they do not lead to higher sales or lower costs. Companies that have mastered the social space start with their business objectives and ask: “What is the source of my competitive advantage, and how can I use social platforms to strengthen it further?” Without asking this question first, many efforts in this sphere end up having no business results, even if they create a lot of engagement with their customers.

When Protecting Your Brand Goes Too Far: The Nutella Story

Photo credit: Teymur Madjderey

I remember being introduced to Nutella when visiting my grandmother in Italy as a kid.  I loved Nutella then, and I still do today.  Apparently, Sara Rosso REALLY loves Nutella.  In fact, she founded World Nutella Day, which takes place on February 5th each year, in case you are interested.  Rosso also has an extensive website featuring recipes and lots of other information about the product. 

This year, though, Rosso announced that World Nutella Day would not take place.   Apparently, she received a "cease-and-desist" letter from lawyers at Ferrero, the Italian company that makes Nutella.  The company sought to protect its copyrights and trademarks.  It worried that Rosso was infringing on its intellectual property rights. 

When Rosso revealed the news about the cease-and-desist order, her many fans (also big fans of Nutella) became upset.  They began to write about their frustrations with Ferrero's action on Rosso's Facebook page.  Nutella had a brewing controversy on its hands.

Fortunately, the company reacted fairly quickly.  They caught wind of the negative feedback from many fans of the product, and they backed off.  Rosso was free to orchestrate World Nutella Day each year and to feature recipes and other information on her website.

What an amazing story.   Here's a woman who is the ultimate brand evangelist, and the lawyers almost stifled all enthusiasm.   Leave it up to the lawyers to mess up a good thing!   Actually, there is a great lesson here.  Companies do want to watch carefully for copyright and trademark infringement.  On the other hand, what's better for a brand then an authentic customer evangelist?!  When a company has diehard fans, and not just customers, it should very pleased.  A customer evangelist can provide the type of authentic promotion that a company would have a very hard time creating. 

I Can't Get No Satisfaction: The Rolling Stones & Ticket Prices

Rafi Mohammed has a good blog post at HBR about the Rolling Stones and their concert tour pricing strategy.  The Stones chose to price their tickets for this tour very high, and numerous reports indicate that they are discovering soft demand for those expensive seats.  What should they do now?  Should they simply cut their prices?   As Mohammed notes, brands often worry about simply slashing prices in the face of weaker-than-anticipated demand. They don't want to tarnish their brand in any way, or anger customers who previously paid full price.  How can the Rolling Stones proceed?   Mohammed offers numerous ideas, some stronger than others.  I found one particular tactic interesting and thought that I would share it.   Mohammed explains that companies can choose to add value to their product or service, while maintaining price, as opposed to offering a steep discount.  Here's his explanation: 

"The most common remedy to this malady is to maintain price but add value, so customers feel they're getting more for their money. Guitarist Keith Richards could casually drop in an interview that this may very well likely be the band's last tour (the "hedge" in the wording is intentional). Or, as the band did at its opening gig in L.A., they could bring in special guests such as Gwen Stefani and Keith Urban. These additions make the experience more memorable, so customers value it more." 

I don't agree with the point about promoting it as the last tour... music fans have heard that one all too often, only to discover that bands keep coming back.  However, the concept of adding value makes good sense, and the example of Stefani and Urban is a good one.   The Red Sox have done something quite similar this year, as demand has dropped for tickets at Fenway.  Rather than simply slash prices, they have added breaks on concessions to some tickets.  The concept applies to products as well.  You could add a small complementary product as a free gift to entice people to buy a particular good (think accessories along with an electronics item or a piece of apparel). 

What happens if your favorite brand is attacked?

Think about one of your favorite brands, one to which you are quite loyal.  Perhaps you might even describe yourself as a fan.  How would you react if you heard some very negative news about that company?  Would you be less willing to purchase that product?  Or, would you become very defensive?

Monika Lisjak, Angela Y. Lee and Wendi L. Gardner set out to examine these questions through a series of experimental studies.  In one study, the researchers examined how people would respond to a critical editorial about a favorite brand - Starbucks or Facebook.  According to Kellogg School of Management Insights, "Sure enough, after crunching the numbers, Lee and her colleagues found that self-conscious, low-self-esteem subjects who said they liked Starbucks initially actually rated the coffee company more favorably after they had read the critical editorial."   Interestingly, in a subsequent experiment, they found that individuals get less defensive about a favorite brand if they are given some other opportunity to affirm themselves.  According to Lee, "If Starbucks is part of you, and you read something negative about Starbucks, you feel attacked.  But I now give you another way to feel good about yourself. Then, once that need is being satisfied, you may not feel that you need to defend Starbucks anymore.” 

I'm not surprised by the findings.   People do develop a strong attachment to certain brands.  Several questions do remain.  Specifically, I wonder whether the level of criticism attached to the brand matters.  Where do people draw the line?   What would it take for someone to "turn" on one of their favorite brands?   You would imagine that people might begin to "turn" on their favorite brands if a pattern of alleged misconduct emerges over time.  How much of a pattern does one need to see though?  Finally, I wonder if there may be other attributes of individuals that might signal whether they are likely to be defensive, or if they would lessen their loyalty, to favorite brands that have been criticized.   In other words, what are the characteristics of the "hyperloyal" customer who will be likely to stand firm even in the face of criticism for their favorite brand?

P&G's Organic Growth Strategy

Business Week reports on new P&G CEO Bob McDonald's strategic push to emphasize organic growth over acquisitions, particularly growth in emerging markets.   I must say that I applaud any CEO who is willing to put a priority on organic growth vs. acquisitions.  I think too many chief executives fall in love with doing deals, rather than doing the hard work required to grow existing brands.   Moreover, too many firms pay an overly high price tag for deals.

Having said that, the P&G organic growth strategy has some risks.   First, a company of that size must generate a ton of new growth simply to "move the needle" - i.e. to grow the overall top line by a small percentage.  Second and perhaps more importantly, P&G must take care not to diminish its brand equity in various product lines as it tries to grow in emerging markets.  Under McDonald's predecessor, A.G. Lafley, P&G definitely shed many of its lower-priced brands and focused instead on premium positioning of its products.  That strategy proved very successful.   Now, however, to grow in emerging markets, P&G will face pressure to offer lower-priced versions of its products.  The question is this:  Can P&G effectively maintain its premium strategy in the developed world while catering to lower income customers in emerging markets?  In an increasingly global economy, might that strategy dilute certain brands?  In the past, it may have been easier to position brands differently in different countries.  That has become a bit more difficult with globalization, increased international travel, and the like. 

Luxury Goods: How the Rich are Spending Their Money

The Wall Street Journal has a fantastic article today about how the wealthy are spending their money, specifically their attitudes toward luxury goods.  Christina Binkley reports:


"In fact, one time-honored tenet of the luxury industry—that discounted prices lower products' prestige—appears to no longer be true, according to several studies. A survey released in April by the American Affluence Research Center, a luxury consultant based in Alpharetta, Ga., found that 60% of respondents said discounts didn't affect their opinion of brands.  Items the rich do value at full price are one-of-a-kind clothes and accessories and experiences that create fond memories. Weekend getaways and vacations were the top two things the wealthy intended to spend more money on, Harrison Group says. The new luxuries are things that are in limited supply and have an emotional quality, rather than just a high price tag."

The data suggest that the discounting that took place during the recession has taken its toll on the perceptions of luxury brands.  Once those goods have been offered at steep discounts, it becomes difficult to bring pricing back to previously high levels.  Moreover, it appears that the recession may have some lingering attitudinal effects on all consumers, even those with high incomes.  Finally, the data suggest that wealthy consumers are most likely to have high willingness to pay for authentic experiences and more unique items, as opposed to mainstream luxury branded goods.  It will be interesting to see how this trend holds up as the economic recovery picks up steam.