| id="body"> | | | | Nike determined from that point on, they were |
| What does McDonald really sell? And what about | | | | going to "bro" people to death. Since that decision, |
| Nike? I know what you're thinking. You're thinking | | | | Nike has long replaced Adidas as the "it" sneaker |
| what in the world does understanding McDonald's | | | | among the "in-crowd". |
| and Nike's marketing strategy have to do with | | | | So what do the big global investment firms sell? |
| building wealth? As you'll discover in this article, | | | | The big investment firms employ some very |
| understanding this has everything to do with how | | | | sharp minds as well. They understand that selling a |
| successful you'll be in building wealth. | | | | customer a dream and not reality will gather |
| So what does McDonald's sell? | | | | more assets. That's why they don't attempt to |
| If you guessed hamburgers, fries and milkshakes, | | | | sell you great returns even though this the |
| guess again. | | | | number one thing that every investor wants. How |
| Your second guess is probably wrong too. | | | | else can you explain why most investment firms |
| Because I know with today's marketing obsession | | | | always tell you never to expect more than 6% |
| with "lifestyle" marketing, most people believe that | | | | to 10% maximum returns a year from your |
| McDonald's sells a feeling of comfort and a | | | | stock portfolio? Do those returns sound dreamy |
| family-friendly atmosphere. Just look at their | | | | to you? Because if this was their major |
| Happy Meals, their creation of Ronald McDonald, | | | | marketing campaign, how many private wealth |
| their Disney promotion tie-ins and their "You | | | | management clients do you think they would |
| Deserve a Break Today" jingle. But again, if you | | | | have? |
| thought this, you would be wrong. | | | | Can you imagine a slogan: "Because we make you |
| Pure and simple, McDonalds sells real estate. In | | | | 8% a year"? |
| 1968, McDonald's operated just 1,000 restaurants. | | | | Somehow I don't think that slogan would drum up |
| Less than 40 years later, it operated over 30,000 | | | | much business. So the global investment houses, |
| restaurants and opens 2,000 new restaurants | | | | just like McDonalds and just like Nike, have figured |
| every year. As I said, it sells real estate. If you | | | | out a way to sell you something else instead. |
| still don't believe me, Ray Krok's (the owner of | | | | Because they are not interested in trying to earn |
| McDonald's) right-hand man and business partner, | | | | more than 6% to 10% a year for you, and this |
| Harry Sonneborn, once stated, "We are in the real | | | | concept could never be sold as a dream, they sell |
| estate business. The only reason we | | | | you trust, and in the case of a post 9-11 America, |
| sell...hamburgers is because they are the greatest | | | | sometimes even shamelessly sell national pride. |
| producer of revenue from which our tenants can | | | | Just look at some of the slogans they have used. |
| pay us rent." | | | | Prudential. "Growing and Protecting Your Wealth". |
| And What about Nike? What do they sell? | | | | Merrill Lynch. "We're bullish on America". And |
| Given that Nike does not own a single sneaker | | | | Goldman Sachs: "We Stress Teamwork in |
| factory or have a single person directly involved in | | | | Everything We Do." |
| manufacturing their sneakers on their payroll, it is | | | | The message has always been, "Trust us, |
| most definitely not shoes. They outsource every | | | | because we know what we're doing. Since we're |
| single step of the manufacturing process so they | | | | the authorities, if we can't earn you more than |
| can spend the greatest percent of their annual | | | | 6% to 10% a year, then you certainly won't be |
| budget every year on marketing. Nike's largest | | | | able to do any better on your own." And in the |
| budget percentage is overwhelmingly allocated | | | | case of Merrill Lynch's slogan of "We're Bullish on |
| every to their designs and marketing department. | | | | America", if that's true, I'd like to take a look at |
| And what do they do? | | | | their CEO's stock portfolio in mid-2006 and see |
| They are Nike's idea factory. Nike sells dreams, | | | | exactly how much of his portfolio is allocated to |
| pure and simple. | | | | the U.S. stock markets. |
| Before Nike paid Michael Jordan more than enough | | | | A simple way to determine what is the core of a |
| money that he could ever possibly know what to | | | | company's mission is not to read their mission |
| do with, the sneakers every kid wanted on their | | | | statement, but to observe what companies spend |
| feet when they went back to school were | | | | all their time and money doing. McDonald's spends |
| Adidas. Nikes were what kids wore when you | | | | all their time and money building new restaurants. |
| couldn't afford Adidas. Back then, Run DMC cut a | | | | Conclusion: McDonald's #1 goal is to sell as much |
| track titled "My Adidas", not "My Nikes". Adidas | | | | real estate as possible through selling what enables |
| had the respect of the hip-hop community, not | | | | their tenants to pay rent - fast food. Nike spends |
| Nike. When Nike realized that the key to success | | | | all their time and money developing new |
| was to sell not shoes, but the concept that | | | | marketing campaigns and doesn't even have one |
| wearing Nikes would make you a better athlete, | | | | single employee on their direct payroll that makes |
| would make you stronger, run longer, run faster, | | | | sneakers. Conclusion: Nike's #1 goal is to build the |
| give you more endurance, even make you jump | | | | strongest message possible that the Nike brand is |
| higher "just like Mike", only then did they started | | | | the "it" brand to own. |
| selling more shoes than anyone else. In fact, | | | | And global investment firms spend all their time |
| before they hired Michael Jordan to promote their | | | | and money training their financial consultants how |
| ideas, Nike was losing so much money that they | | | | to gather more assets, not how to make more |
| almost went bankrupt. In fact, this strategy | | | | money for their clients. If you really are skeptical |
| proved so successful that Nike even coined a | | | | of this, just call up you financial consultant and ask |
| term for it. | | | | him (or her) how he spends all of his time every |
| They call this process "bro-ing" (Source: No Logo, | | | | day. Ask him (or her) to describe an average day |
| by Naomi Klein, p. 75). They would take their | | | | to you and calculate how much of every day is |
| prototype shoes to the inner-city playgrounds of | | | | actually spent in activities that will maximize the |
| Philly, Chicago, and New York, approach young | | | | return of your portfolio versus how much of |
| kids, and say "Hey bro, check out the shoes" to | | | | every day is spent in activities that will maximize |
| build a buzz around them (this stuff is just too | | | | the amount of additional assets gathered for the |
| good to ever make up.) Nike shoe designer Aaron | | | | firm. And therein lies your answer. |
| Cooper stated that when he went on a "bro-ing" | | | | Almost every global investment firms' #1 |
| expedition in Harlem in New York City, that kids | | | | objective is to gather as many assets as they |
| would tell him that Nike was the most important | | | | can, not to maximize the returns of your |
| thing in their lives. Number two was their girlfriend. | | | | portfolio. |