SY : 2019-2020

CONSUMER BEHAVIOR

HIV Strikes “MAGIC”

Case Study

Name of the Book

CONSUMER BEHAVIOR (Fifth Edition)

Name of the Author
John C. Mowen / Michael Minor

Page : 345

Submitted by :
Larizza V. Diuco
BSBA III

Submitted to :
Mrs. Dalisay C. Maglaya
 Case Study : HIV Strikes “MAGIC”

The unexpected announcement shocked the world: “Magic” Johnson

revealed HIV positive. Earlier in 1991 THE WALL STREET JOURNAL had called

him the “Perfect Advertising Spokesman” . In fact, Johnson ranked behind only Bo

Jackson , Michael Jordan , and Tommy Lasorda has a persuasive sports figure .

He had endorsed product for such firms as Nestle , Converse , Nintendo , Pepsi

Cola, Spalding Sports , and Kentucky Fried Chicken. How would this companies ,

who paid Magic about $12 million a year for his endorsements , react to his

conditions?

Initially , the companies , like the world at large , were stunned . A

spokesperson for Pepsi said , “There’s no road map to tell us where to go . This is

all very new and happened very suddenly . No decisions have been made , nor

should they be. “ A manager at Spalding said that although the company was

shocked and dismayed,” Magic Johnson has been a member of Spalding team

since he came to the NBA. He’s very important part of our family, and we will

support him and his commitment to HIV research”.

Although the companies with whom he had contracts cautiously

supported Johnson , industry analysts were less sanguine about the effects of his

revelation . One suggested that he could be used in public relation capacities to

make both him and the companies he was associated with look good. Most

observers, however, thought there was a serious danger in associating a brand

with AIDS . One analyst commented , “Magic deserved every bit of the tribute
he’s getting, but the initial coverage is going to be upbeat and positive , and then

the reality is going to set in . This is not the kind of thing people want to see in

advertising. Advertising is not about grim realities. Advertising is fantasy , and

AIDS is not fantasy .”

One advertising executive said of the situation , “Its not so cut – and –

dried with him. Its not like when Bruce Willis announced he would be going in for

alcohol rehab , and they pulled all of the { Seagram’ s } ads immediately .” Another

analyst sized up the situation this way: “there is a potential risk , and with anyone

else they might not be sure , but Johnson has a unique status. If suddenly

Converse or KFC , Yanked his contact , there would be backlash against the brand

. But companies will have to use “Soft Sell” on the brand side because the public

is going to be sensitive to a brand exploiting this .”

When attention shifted from Magic Johnson’s endorsement of products

to his efforts to educate the public about AIDS, the view of his effectiveness took

180 degree turn . One leader in the movement to fight AIDS among African –

Americans said , “ Even though this is a personal tragedy , there is an opportunity

to turn this into something positive . I think it will changes the way people not only

perceive the disease AIDS , but how they relate to people with HIV they view him

as everyman . They think that if he can get in , maybe I can too. Things will

definitely change now that Magic Johnson has spoken out .”

Between 1991 and 1997 Magic’s endorsements contracts moved in

tandem with his on – again – off –again returns to basketball . This picked up when

he was on the U.S basketball team in the 1992 Olympics . Then , when he rejoined
the Lakers in the 1992 – 1993 season, endorsements came his way once again .

unfortunately , player complaints forced Magic to retire again in 1993. However,

he returned to basketball yet again in February 1996 , only to retire once more at

the completion of the season. During this time period he signed new endorsements

contracts .

It should be noted that payments for the endorsements are small part

of Magic Johnson’s earnings . Most recently , in partnership with Sony Theatres,

he was been opening large multi screen movie theatres in major in major cities

across the United States.

I. Time Context :
 Earlier in 1991 The Wall Street Journal had called him the “perfect

advertising spokesman”
 II. Summary :

With an announcement that stunned the nation , Earvin (Magic)

Johnson , the brilliant guard who was the marquee name for the Lakers and

the National Basketball Assn. for 12 years, retired Thursday, saying he had tested

positive for the virus that causes AIDS . Earlier in 1991 THE WALL STREET

JOURNAL had called him the “Perfect Advertising Spokesman” . In fact, Johnson

ranked behind only Bo Jackson, Michael Jordan , and Tommy Lasorda has a

persuasive sports figure. He had endorsed product for such firms as Nestle ,

Converse , Nintendo , Pepsi Cola, Spalding Sports, and Kentucky Fried Chicken.

How would this companies , who paid Magic about $12 million a year for his

endorsements , react to his conditions? Initially , the companies , like the world at

large , were stunned . A spokesperson for Pepsi said, “There’s no road map to

tell us where to go . This is all very new and happened very suddenly .No decisions

have been made , nor should they be.

Magic Johnson has been a member of Spalding team since he came to the

NBA. He’s very important part of our family, and we will support him and his

commitment to HIV research”. Most observers, however, thought there was a

serious danger in associating a brand with AIDS . One analyst commented “Magic

deserved every bit of the tribute he’s getting, but the initial coverage is going to be

upbeat and positive , and then the reality is going to set in . This is not the kind of

thing people want to see in advertising. Advertising is not about grim realities.

Advertising is fantasy , and AIDS is not fantasy . Another analyst sized up the
situation this way: “there is a potential risk , and with anyone else they might not

be sure , but Johnson has a unique status. If suddenly Converse or KFC , Yanked

his contact , there would be backlash against the brand . But companies will have

to use “Soft Sell” on the brand side because the public is going to be sensitive

to a brand exploiting this .”

One leader in the movement to fight AIDS among African – Americans

said , “ Even though this is a tragedy , there is an opportunity to turn this into

something positive . I think it will changes the way people not only perceive

the disease AIDS , but how they relate to people with HIV they view him as

everyman . They think that if he can get in , maybe i can too. Things will definitely

change now that Magic Johnson has spoken out .”

Between 1991 and 1997 Magic’s endorsements contracts moved in tandem

with his on – again – off –again returns to basketball . This picked up when he

was on the U.S basketball team in the 1992 Olympics . Then , when he rejoined

the Lakers in the 1992 – 1993 season, endorsements came his way once again .

Unfortunately, player complaints forced Magic to retire again in 1993. However, he

returned to basketball yet again in February 1996 , only to retire once more at the

completion of the season. During this time period he signed new endorsements

contracts .
 II. View Point

Magic Johnson is known as a “ perfect spokesperson ”,he

endorsed products such as Nestle , Converse , Nintendo , Pepsi Cola ,

Spalding and Kentucky Fried Chicken . These companies paid Magic Johnson

a 2 million a year for his endorsement’s , until Magic Johnson revealed he

was HIV positive.

One leader in the movement to fight aids among African - said,

even though this is a personal tragedy , there is an opportunity to turn this

into something positive, I think it will change the way people not only

perceive the decease and Aids but how they relate to people with HIV

because they view him as everyman . Magic rejoined the Lakers in the

1992 - 1993 seasons , unfortunately player’s complaints forced magic to retire

again in 1993. During this time period he signed new endorsement’s contracts.

The payments for endorsement’s are a small part of Johnson’s earnings.

 IV. Statement of the Problem
 Major Problem :
Problem faced by firms that had endorsement contracts with Magic

Johnson . The firms had endorsement contracts with Magic Johnson

were very shocked and dismayed about the sudden revelation on his

condition.
 Minor Problems

a. The problem faced by AIDS activists are discrimination, unlawful

judgement and criticism.

b. Johnsons rejoined the Lakers in the 1992 – 1993 season, endorsements

came his way once again. Unfortunately, player complaints forced Magic to

retire again in 1993 it is because of his condition.

c. The endorsements of Magic Johnson down into a small part of his earnings.

Most recently, in partnership with Sony Theatres.

V. Objectives

A. Short-term objectives :

 To understand the affect of purchasing decision of the consumer.

 To create strategies or promotions of such firms.

B. Long-term objectives :

 To encourage returning customers to maintain their brand loyalty by

providing comprehensive and persuasive motivational incentives.

 To propose recommendations for such firms management for recovering

the brand image.

 VI. Areas of Consideration
Strengths

 Company’s has been around for a long time.

 High product specialization, higher quality assurance.

 Good reputation, brand , customer , etc.

Weaknesses

 Celebrity endorsement is high cost advertising than normal advertising.

 Lack of awareness about the condition of Magic Johnson.

Opportunities

 Global expansion for awareness of brand name and products.

 Quick access for all the issues.

 Possible new market plans of such firms.

Threats

 Economic factors : Inflation of product sales.

 Globalization and the external competition.

 VII. Courses of Action
 Marketing executives can come up with their final decision about Johnson’s

endorsement contracts and results in their products still maintain the full

value if they decide to keep or drop Johnson’s endorsement deals.

 Marketing executives can drop Johnson’s contracts by scheduling a

meeting with him to talk about the risk to their products and brands if

Johnson continues to represent their companies. They can use their

judgement more on consumer products than on sporting goods products.

 Marketing executives can create marketing campaigns that include their

products and Magic Johnson in it, so they can raise awareness about other

deadly diseases as well as the HIV virus.

VIII. Recommendation

I recommend that it is important to have a along term vision for business

development. In their situation they must be productive for every steps to maintain

brand loyalty. The alertness to make away before it become big issues to the

companies is always the best option.

 XI. Conclusion

I therefore conclude that the firms Nestle , Converse, Nintendo, Spalding

Sport, Pepsi Cola, Kentucky Fried Chicken and Sony Theaters are they proved

their company in a long term in industry , the quality of the products and the

services. They cannot avoid the issue because of what happen to their endorser

Magic Johnson. It’s a big impact for the sales of such companies because it’s a

serious condition. When it comes to the behavior of people, instead of being cursed

with it, take it as a warning. We must be careful and have a safe sex which includes

all the prevention and protection.

 X. Detailed Action Plan

Objective Activity Action Responsible

To be more Make To-Do list , Manager or Management

productive. make a daily and supervisors must

weekly to-do list to have 5 minutes to

help structure each brief all the staff to

management and meet the target for

maximize productivity everyday production .

Be strategic to think Promotion of all the

of solutions that products involve right

address that issue before the issue grow.

All the CEO’s having

Offer support and set a press conference to

realistic goals. give information ,

answer the questions

about the issue and

give some

inspirational thoughts

for Magic their brand

ambassador. And for

the future of their

products.