Marketing Analysis of ThunderStix Essay Example

platform and a direct distribution channel. The website provides information about the product, demonstrates how to use the bangers for fundraising purposes, specifies suitable events for their use, and includes pricing and availability details.

Lundberg shipped 5,000 samples of Cheerstix(r) to Nike, with confidence that they would attract customers. The following day, Nike contacted Lundberg and requested an order for 25,000 pairs. These were intended for the 1997 U.S. Men's National World Cup playoff game against Costa Rica in Portland, Oregon (Rovell, 2003). This marked the initial introduction of Cheerstix(r) to an American fan base, but it was not the last. Subsequently, numerous sports teams including those in the Arena Football League, NBA, WNBA, NFL, MLB, and collegiate sports teams started placing orders.

Vonco Products Inc., a manufacturer located in Lake Villa, Illinois, specializes in plastic bags for various purposes such as medical, retail, and industrial uses (Vonco, 2003). In addition to their bag production, Vonco also creates promotional items which include large foam hands and specially shaped plastic axes designed for baseball teams like the Cleveland Indians and Atlanta Braves. They also produce horseshoes for the Indianapolis Colts football team as well as puppets (Pryweller, 2002). Recognizing the growing popularity of Cheerstix(r), Vonco decided to embrace this trend by introducing their own version of a noisemaker named Thunderstix(r). With their established presence in the plastics industry and the recent high demand for such products, it was a logical decision for Vonco to expand their product range to include Thunderstix(r).

The two companies have differentiated their products through inflation. Cheerstix(r) utilizes a straw while Thunderstix(r) incorporates a patented one-way valve technology, allowing them to be inflated by mouth

like a balloon (Pryweller, 2002). Additionally, Cheerstix(r) are packaged in pairs for easier distribution to excited fans, whereas Thunderstix(r) come in bulk packaging (Gameops, 2003). Both companies claim their products are more durable than the other, although an independent study reveals that Thunderstix(r) are more prone to punctures compared to their Chinese counterpart (Chaffin, 2002).

Since the Korean company that first made Thunderstix(r) and Cheerstix(r) went out of business, these two products have dominated the market for bangers (Pryweller, 2002). Ever since Vonco introduced the Thunderstix(r) line in 1998, the two have been fiercely competing for the remaining market share. Current findings suggest that Cheerstix(r) is currently in the lead, holding a significant 80% of the market (Pollard-Terry, 2003).

There has been an interesting occurrence where most individuals commonly mistake any banger they come across as Thunderstix(r), even if the specific product being referred to is Cheerstix(r). This can be attributed to the 2002 American League Championship Series (ALCS) between the Los Angeles Angels and the Minnesota Twins. In their pursuit of the American League pennant, Angel's fans were initially provided with Thunderstix(r) to support and motivate their team towards triumph. The exuberance displayed by the crowd, seemingly amplified by these bangers, left sports announcers astounded.

The attention and hype around the rah-rah sticks, known as Thunderstix(r), left Angels officials uncertain about whether the sticks or the team's surprise playoff run received more attention. Throughout the series, which was nationally televised, the announcers consistently referred to the sticks as Thunderstix(r), even though half of the games had noisemakers provided by Cheerstix(r). Cheerstix(r) acknowledges that Thunderstix(r) is the most commonly used name for the sticks, but emphasizes the importance

for sports team marketing executives and sponsors to know who to contact for the popular promotional item (Hartman, 2002).

There are several reasons why Cheerstix(r) currently dominates the market. One key factor is the cost difference between Cheerstix(r) and Thunderstix(r). While Cheerstix(r) only cost around 60 cents per pair including shipping, Thunderstix(r) are priced at about 80 cents per pair without considering shipping expenses (Pollard-Terry, 2003). This 20-cent disparity becomes crucial when a sports team intends to distribute them as giveaways to a whole stadium of spectators. To illustrate, the Angels franchise managed to save approximately $30,000 by opting for Cheerstix(r) instead of Thunderstix(r) as their giveaway during their final games in the 2002 season.

When comparing the lead time for ordering Vonco's Thunderstix(r) versus Cheerstix(r), it is typically longer for the former. The importance of lead time arises when there is a spontaneous event and there are only a few days between placing the order and needing the items. In addition to saving costs, Cheerstix(r) managed to secure a contract with the Angels to provide the bangers for the ALCS. This was possible because they could ensure delivery of 135,000 rah-rah sticks within two days of placing the order (Hartman, 2002).

Cheerstix(r) has the ability to meet tight deadlines due to the fact that the bangers are sold directly to customers and the rah-rah sticks are their main product. In contrast, Vonco has to arrange production time around their various other products and sales have to go through a distributor. Additionally, it is common for Jim Lundberg, the owner of Cheerstix(r), to personally hand deliver orders that need to arrive on time (Sandomir, 2002).

Finally, the most significant

aspect in my opinion is that Cheerstix(r) was the first to introduce the bangers to the U.S. market in 1997 (Rovell, 2003). When Vonco launched its own version a year later, Cheerstix(r) had already established a strong reputation with numerous sports teams and their sponsors. Consequently, Vonco's strongest marketing advantage is that their promotional items are made in the United States.

Some people quickly dismiss Cheerstix(r) and Thunderstix(r) products as a passing trend. If these bangers do indeed become like the pet rock, Lundberg has effectively capitalized on the opportunity to generate profits from selling these noise-makers. Lundberg set up production at an existing plastics plant in Beijing, requiring minimal capital investments. Consequently, he has maximized his initial returns, which is crucial given the short lifespan of such trends.

Despite having limited funds for marketing, he primarily invested in sending out samples to sports teams and sponsors, as well as establishing a website. He was confident that sponsors would readily embrace the opportunity, as the banger provided plenty of space for displaying corporate logos, and its other side could feature a catchphrase like "Yes we can," similar to the ones used by the Angels in the 2002 ALCS.

The founder also recognized that the bangers would appeal to sports teams' marketing executives due to the lively atmosphere they create in a stadium. Moreover, compared to other giveaways like "Bobbleheads" or "Rally Towels" that typically cost around $2, the bangers are relatively inexpensive and can be thrown harmlessly. As soon as televised games featured fans using Cheerstix(r), numerous orders flooded in because a stadium filled with fans rhythmically clapping the bangers together conveys a vibrant, enjoyable ambiance. Additionally, they

functioned as 40,000 billboards, promoting the sponsoring corporation throughout the event.

Despite experiencing a temporary decline in sales in the Fall of 2002, Cheerstix(r) faced a setback when the Pacific-10 conference banned the use of their noisemakers at football and basketball events. The conference deemed the "ear-popping clatter" of the rah-rah sticks unfair for the home team (Hartman, 2002). This decision, although expected to disappoint Lundberg, actually pleased him as it brought significant attention to his business. Lundberg expressed his satisfaction, stating "If that statement isn't great for business, I dunno what is" (Lanser, 2002). Despite the ban, the incident generated extensive publicity for Cheerstix(r) and motivated people to purchase the noisemakers to incite home crowds. Consequently, sales skyrocketed to an unprecedented 3.5 million pairs by the end of 2002, which was seven times more than what was sold in 1998 (Hiestand, 2002).

Lundberg shifted his focus to high school sports by the end of 2002, a market he previously ignored. He used to reject consumers associated with high school athletics as he considered them unimportant. However, he now recognizes the strong demand from boosters clubs for Cheerstix(r) as a fundraising tool. Sales to high school groups now account for 60% of the company's revenue, leading to an estimated 5 million pairs of Cheerstix(r) sold in 2003 (Hiestand, 2002).

To expand beyond being considered a passing trend, Cheerstix(r) and Thunderstix(r) must modify their marketing strategies. This includes identifying and targeting new market segments, such as high school sports groups, to fully exploit their potential. Additionally, some design adjustments should be made to the noisemakers in order to decrease their volume level. By doing so, the risk of losing

customers, like those in the Pac-10 conference, can be minimized. Another option is to introduce a secondary product line that incorporates these design changes. This enables retention of existing fans who enjoy the intense noise of the original products while also catering to those who prefer a more subdued atmosphere. Undoubtedly, the popularity of these noisemakers is evident today, and with innovative marketing approaches, they have the potential to remain a successful product for years to come.