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Is George Foreman the Champion in
Another Ring?
A junior high school dropout from a poor
Houston neighborhood, George Foreman came to the public's attention by
winning an Olympic gold medal in the boxing ring in 1968. He then built a
successful career as a professional heavyweight boxer, eventually retiring
in 1977 to become an evangelical minister. Ten years after that, he
returned to the boxing ring, but lost a bout to Evander Holyfield. But in
1994, Foreman won back the heavyweight championship at age 46, the oldest
man to do so.
A rugged, ornery fighter in his younger
years, Foreman eventually became a cheerful, self-deprecating man who
seemed unimpressed by his achievements. His new popularity led to many
opportunities to endorse products, ranging from hamburgers to mufflers. But
what Foreman is likely to be best remembered for, outside the boxing ring,
is the line of grills that carries his name.
Grills? Yes, the ex-boxer collaborated with
Salton, Inc., an Illinois-based firm, to introduce George Foreman's Lean,
Mean, Fat Reducing Grilling Machine. With sales approaching $1 billion,
Salton designs, markets, and distributes small appliances and other
products for the home. The company places great emphasis on its array of
brands. Its small appliances carry a variety of labels, including
Toastmaster, Farberware Melitta, and Juiceman. The company also has other
lines of tabletop, time, lighting, personal care, and wellness products,
with brands such as Block China, Westclox, and Stiffel.
Resembling a waffle iron, the grill cooks
the top and bottom of foods at the same time, so cooking time is faster.
The grill is tilted, so fat runs off the food and collects in a small tray.
The grill was introduced in 1995; the now well-known celebrity promoted it
through infomercials on TV and personal appearances. Looking back, Foreman
says the first customers were "old people and the blind, because it's
easy to operate, and older people are very concerned about fat." Sales
of the grill took off after a couple of years. It has now earned the status
of the biggest-selling household appliance-ever.
Salton has launched other products bearing
Foreman's name, including a countertop appliance that can roast whole
chickens or beef or pork roasts. The Foreman family of appliances now
includes over 100 items and accounts for nearly one-half the company's
sales volume.
To gain the worldwide, perpetual rights to
the George Foreman name for branding purposes, Salton entered into one of
the largest endorsement contracts any celebrity ever signed. The company
agreed to pay a total of $137.5 million for the perpetual rights to the
"George Foreman" name. This payout far exceeded George's largest
boxing payday, which was $12.5 million for the Holyfield fight. Salton's
management is quick to point out that this contract actually saved the firm
considerable money because the original contract gave Foreman almost 60% of
the profits from all products carrying his name.
For its investment, Salton received a
strong brand built on the Foreman name and, perhaps equally important, the
former fighter's charming personality and his willingness to promote the
products at any opportunity. Salton's chief executive, Leon Dreimann,
admitted that at first, he "did not recognize the love that the public
had for George." Now he realizes that the grill's success not only is
a result of having a good product but also "should be attributed to
George Foreman and the credibility he has with the public."
When the economy softened at the start of
the new century, sales of many products-including small appliances-sagged
or at least leveled off. As Salton called on its marketing expertise in
efforts to build sales, some observers wondered whether the firm had
overpaid Foreman. Salton's president, Bill Rue, remained confident that the
brand would have longevity. "We never regretted this deal with
Foreman," he said. "Without doing it we couldn't expand the
brand. . . . Foreman is a brand to us. It's not a grill."
What does Salton need to do to assure that
the George Foreman brand keeps a smile on the face of consumers?
More about George Foreman
Salton, Inc., is now marketing the Foreman
line as well as its other brands internationally. In 2001, in order to gain
distribution in Europe, Salton acquired a firm based in the United Kingdom
and another located in France.
On the basis of his boxing career, George
Foreman has a measure of name recognition around the world, which will help
the company build awareness and recognition for the Foreman grills and
other Foreman products. But effective marketing also requires that Salton convey
to consumers the brand's attributes-such as quality, convenience,
state-of-the-art design, and value price. In addition, as often occurs in
international marketing, there may be cross-cultural issues to deal
with-for example, the views of a country's residents toward meat or toward
different methods of food preparation.
Even expanding the product line at home
will present challenges for Salton and its star spokesperson. Entering the
outdoor gas grill market with a George Foreman grill placed the brand in
the same ring with such entrenched competitors as Weber and Sunbeam. That
endeavor proved unsuccessful, and Salton accepted defeat.
Domestically or internationally, Salton is
counting on Foreman still having a strong endorsement punch. The company
believes in the strength of the brand as well as the affection people feel
for the man who became a brand name. As explained by Salton's CEO, "We
saw what his name could do for us."65
1. What are some of the advantages and disadvantages of basing a brand
on the name and reputation of a celebrity?
2. What else can Salton, Inc., do to benefit from its well-established
George Foreman brand?
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