VS1
A COMPARITIVE ANALYSIS OF MARKETINGSTRATERGIES FOLLOWED BY NIKE AND ADIDAS                  TEAM MEMBERSANUPAMA VENU      ...
INDEX1. INTRODUCTION   1.1. BRIEF ANALYSIS OF INDUSTRY   1.2. BRIEF DEFINITON OF INDUSTRY       1.2.1.TRENDS IN THE INDUST...
INTRODUCTIONBrief Analysis of IndustrySport is an integral part of modern contemporary society. Sport has always been asso...
Brief definition of IndustryTrends in the IndustryThe latest picture of the industry has not been as rosy as it has been e...
spending on food, beverages and clothing & footwear account for 47 per cent, 34 per centand 22 per cent of their total con...
7                                                                   ©¢ ¤¦£¢ © ¦¤ ¤            s ce £ee      ¢ ¡  ©¤¦§ ¦ ¡¤...
Major Forces shaping the IndustryPorter s Five ForcesBarriers to Entry LowThe Barriers to entry to the athletic footwear i...
Bargaining power of suppliers to this industry is virtually non-existent. There are a largenumber of suppliers in the mark...
Prediction for 2009 10                         10
The Company and Major Product LinesBrief History of CompanyAdidasAdidas was formally registered on 18 August 1949 as Adida...
University of Oregon. Philip Knight went on to study at Stanford where he published a paperon ending the German domination...
Flagship Products, Major Product Lines andRecent ForaysAdidasAdidas manufactures running shoes under its adiStar and Super...
NikeNike s first products were track running shoes which came under the name Nike Air Max,followed recently by the Nike 6....
History of the BrandsAdidasThe company s clothing and shoe logo bear the trademark three stripes, which is thecompany s co...
To keep up with the competition, Adidas generates close to 60 new foot -friendly designseach year. The Adidas credo is to ...
NikeNike positions itself as the market leader of sports footwear and uses the greatest athletesand the record of their ac...
It was after the introduction of the Jordan shoes and mass -marketing that went with themthat the trainer wars got underwa...
MARKETING STRATEGYCUSTOMERSBoth nike and adidas are a well known and accepted brands. Their main customers areathletes and...
lifestyle products. The main problem they are trying to solve is the risk of injury and thepossibility that an athlete mig...
y   Liberty   y   Puma   y   New balanceNike is the official kit sponsor for the Indian cricket team for 5 years. Nike bea...
y   Nike is strong at research and development           y   Nike is a global brand. It is the number one sports brand in ...
Strengths of Adidas   y   Competitive pricing   y   Good financial position   y   Effective Marketing Strategy   y   Marke...
New BalanceNew Balance is the one company that has kept a substantial amount of manufacturing in theUnited States, and has...
of their respective sports. Nike and apple has announced a partnership targeting runnersand music lovers and has launched ...
y   Brand recognition   y   Supply chain   y   Collaboratively competitive   y   The company launches every six months bet...
ADIDASRevenue               $15.6 billion (2008)Operating income      $1.5 billion (2008)Profit                $933 millio...
adiPRENE+ is similar to adiPRENE in that it is a neoprene -likeadiPRENE+                 material, however it is primarily...
Zoom Air is among the more technologically advanced (and expensive)Zoom Air    cushioning systems used by Nike. It essenti...
A polyurethane-based material created by Nike that is both durableFoamposite               and lightweight; it is created ...
NIKE      y Brand conscious consumers      y Change in buying habits in younger people      y Generation Y prefers other t...
SEGMENTATION, TARGETING, POSITIONINGMarket SegmentationBoth Adidas and Nike fall under niche marketing. They have a narrow...
SEGMENTS TARGETEDBoth Nike and Adidas target aspiring athletes in the age group of 15 -35. In the lifestyle andapparel mar...
is widely used by runners. Adidas also uses kangaroo leather to make their more expensiveshoes.CricketIn the 1990s, Adidas...
POD S AND POP SNIKE  ADIDASIn spite of all the technology that supposedly goes inside a typical sports shoe, if you takeaw...
DESIGN YOUR OWN SHOESNike allows customers to design their own shoes from a catalogue of predefined designs.Customers can ...
IN A NUTSHELLThe brand image for both Nike and Adidas is immense; however Nike has attained aconsiderable competitive adva...
However, Nike offers customers more comfortable and durable athletic shoes at a higherprice, while Adidas has a lower pric...
company manufacturing their own shoes. It is said that Jeff Johnson came with the idea forthe new name, deciding to honour...
student Carolyn Davison to work with his new brand. Knight wanted a design that wouldrepresent movement. Davidson supplied...
the brand s visibility in the UK. Recently dubbed Captain of England, Beckham led his teamto victory in the 2000 FIFA Worl...
MARKETING MIXPRODUCTCORE NEEDSThe fundamental level is the core benefit; the benefit here is to protect the foot and provi...
PRODUCT LINE WIDTH OF NIKE          Footwear Accessories                      Sports            Sports  Body care         ...
Basket ball              Water bottles      Swimwear              Cricket bats          After shave                       ...
Comfort:Nike shoes are renowned all over the world for the comfort they provide. Well padded andcushioned, they provide a ...
outlets and then it reaches to the customers. Nike has out sourced their production to SouthAsian countries like Taiwan Ch...
47                           : $723e `aXdc           `Ypul   b   Ad da B kha                            a` Y      Xbetter ...
N k Zoo                                                                 s r      t   Kob    v us  V Sn a ks       xws     ...
Adidas tried to spread meanings like We know then- we know now and There is nothingbetween you and success, so exceed your...
ANALYSIS REPORTCUSTOMER SURVEYWe conducted a customer survey to find out the customer preference and why peopleprefer a ce...
the hyper competition phenomenon explained earlier. Both Nike and Adidas help athletesperform at the peak of their ability...
which keep up with the needs of the customers. They provide a brand value and haveestablished themselves in the market of ...
Adidas nike case study
Adidas nike case study
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  1. 1. VS1
  2. 2. A COMPARITIVE ANALYSIS OF MARKETINGSTRATERGIES FOLLOWED BY NIKE AND ADIDAS TEAM MEMBERSANUPAMA VENU 09014CLAES JOTORP 09126DEEPAK TUSHIR 09032GUSTAV TENERZ 09128SAIRAM KRISHNAN 09088SANJAY SHARMA 09090SUNANDA SURESH 09112 2
  3. 3. INDEX1. INTRODUCTION 1.1. BRIEF ANALYSIS OF INDUSTRY 1.2. BRIEF DEFINITON OF INDUSTRY 1.2.1.TRENDS IN THE INDUSTRY 1.2.2.MARKET ANALYSIS 1.2.3.MAJOR PLAYERS AND MARKET SHARES 1.3. MAJOR FORCES SHAPING THE INDUSTRY 1.3.1.PORTER S FIVE FORCES 1.4. PREDICTION FOR 2009-2010 1.5. THE COMPANY AND MAJOR PRODUCT LINES 1.5.1.BRIEF HISTORY OF COMPANY 1.6. FLAGSHIP PRODUCTS, MAJOR PRODUCT LINES, RECENT FORAYS 1.7. HISTORY OF THE BRANDS2. MARKETING STRATERGY 2.1. CUSTOMERS 2.2. COMPETITORS 2.3. COLLABORATORS 2.4. COMPANY 2.5. CONTEXT 2.5.1.TECHNOLOGY 2.5.2.SOCIO CULTURAL 2.5.3.ECONOMIC3. SEGMENTATION, TARGETING, POSITIONING 3.1. MARKET SEGMENTATION 3.2. SEGMENTS TARGETED 3.3. POD S AND POP S 3.4. VALUE PROPOSITION 3.5. POSITIOING 3.6. EVOLUTION AS A BRAND4. MARKETING MIX 4.1. PRODUCT 4.2. PLACE 4.3. PRICING 4.4. PROMOTION5. ANALYSIS REPORT 5.1. CUSTOMER SURVEY 5.2. MARKETING STRATERGIES 5.3. PORTER S GENERIC STRATERGIES 5.4. CREATING VALUE 5.5. CAPTURING VALUE 5.6. SUSTAINING VALUE6. REFERENCES 3
  4. 4. INTRODUCTIONBrief Analysis of IndustrySport is an integral part of modern contemporary society. Sport has always been associatedwith discipline, dedication and perfection and hence sportsmen have always beenrespected, across borders, religions and races. Sportsmen, professional or amateur, needquality gear, specific to their game, to be able to compete better. It is this market that thetwo conglomerates, the subjects of our study, cater to. Both these companies started off asfootwear makers for the modern athlete, their innovative designs and technology creatingwaves. But now these firms have diversified. They compete on the broader platform offootwear, apparel, accessories and equipment. Today they are among the world s topcorporations, with a worldwide presence. Our study will concent rate on the primaryproduct these two firms make Athletic Footwear.We will compare their marketing strategies, their targeting and their marketing mixes. Wewill dissect their segmentation and examine their positioning on the global playing field. Andlastly we ll state our conclusions on the comparative marketing strategies of these firms.The world s athletes play using their products. Let s see how they play the market. Welcometo NIKE versus ADIDAS 4
  5. 5. Brief definition of IndustryTrends in the IndustryThe latest picture of the industry has not been as rosy as it has been earlier. At this stage,with the big four, Nike, Adidas, Reebok and Puma and the others such as Converse and NewBalance, the industry is experiencing hyper competition. The reasons for this being that thedemand for the products has been decreasing and at the same time, there has been anincrease in the popularity of alternate footwear. This inadvertently has resulted indecreasing margins and the quest for new markets and innovation to get the profits upagain.The worries seem to have ended, at least momentarily with the emergence of China,Turkey, Brazil and Russia as huge untapped markets for their products. Of these, China is thebiggest bet for the big guns. Why? China s huge m iddle class is rising and the country s everincreasing wealth serve as a classic ingredient for market ignition. Both Nike and Adidasrealised this early and invested heavily in advertising during the 2008 Beijing Olympics.Adidas partnered the games and Nike, as always focused on individual player and teamendorsements. The Chinese marker saw huge residual sales after the Olympics. Nike, forexample, saw its sales increase 50 pc in China in 2008 on a currency neutral basis and againa 50 pc increase in sales in Q1 2009.Turkey and Russia, similarly, had a 25 pc increase in sales in 2008 and another 30 pc in Q12009. Brazil alone had a 30 pc increase in Q1 2009. The opening up of these markets hasprovided respite to the industry and they are making good us e of it. Already most of thesefirms use South Asia as their manufacturing base, to make use of the cheaper labour, inparticular. Now they have a greater incentive to move to South Asia as their market seemsto be shifting here too.MARKET ANALYSISIndia has a large market for footwear and the brand loyalty is also growing. India is rankedthe 4th largest economy by GDP (in purchasing power parity term) and is expected to rank3rd during 2010, just being behind USA & China in footwear industry both production andconsumption. India s GDP for footwear grew at the rate of 9.4% for the year 2008 -2009 thecountry s GDP stood at Rs 54 lakh crore, translating into a per capita income of Rs 48,450,thus resulting in a compounded annual per capita income growth rate of 9.25 per centduring 1951-2009.If we analyze the consumption pattern of 70 different economies and segment them intolow-income, middle-income and high-income brackets, we will observe that consumer 5
  6. 6. spending on food, beverages and clothing & footwear account for 47 per cent, 34 per centand 22 per cent of their total consumer expenditures, respectively .India is standing on the threshold of a retail revolution and witnessing fast changing retaillandscape, with footwear market is set to experience phenomenal growth.India is the major source for supplying medium and low priced footwear and most of themanufacturers, who have outsourced their production to China are planning to outsource itto India. Some of the footwear industry who have turned to India are Adidas, Nike andPuma.INDIAN FOOTWEAR INDUSTRY The Footwear Industry is a significant segment of the Leather Industry in India. India ranks second among the footwear producing countries next to China. India produces more of gents footwear while the world s major production is in ladies footwear. The industry is labour intensive and is concentrated in the small and cottage industry sectors. While leather shoes and uppers are concentrated in large scale units, the sandals and chappals are produced in the household and cottage sector. The major production centres India are Chennai, Ranipet, Ambur in Tamil Nadu, , Mumbai in Maharastra, Kanpur in U.P. , Jalandhar in Punjab, Agra and Delhi. The following table indicates concentration of units in various parts of the country: Region Large & Medium Scale SSI Household Tamil Nadu 64 31 7 Delhi & up North 4 8 25 Agra, Kanpur 9 34 14 Calcutta 1 3 19 Bangalore 6 3 4 Mumbai 3 11 Others 13 10 32 6
  7. 7. 7 ©¢ ¤¦£¢ © ¦¤ ¤ s ce £ee ¢ ¡ ©¤¦§ ¦ ¡¤ ¨¨ ) ¡ ¤¡ ¦¢ ¨¨ e S s e cs ve ¡ ¨¤ ¢ ¦ ¤( S s es e ve se es y# ¨£¢¤ ¦ ¥¢ ¥ ¤¢ © ¤ #©¢¦£ ¦¢ ¨¨ ¡ ¤ ©¢ £ © ¤ ¦ ¤( y c ve e ee es s e S e ve se s e y ¢¥ ¡ ¡ §¤ ¤ © § £ ¤¢ ©¢ ¤¡ ¥¦ # ¥ s e e ec e c ee e s es ¡ © ¤ c c se c e se e ¨¡¥¡ ¢ ¢¨¢ ¦¢ ¨¨¢ ¢ ¡ ¢ ¡ ¦ ¨¨¢ ¡ ¤¤¨ ¢§¤ ¦ ¡¤ ¡ y ey c y e e B ce s c s e e e c es ¢ ¢¡ ¦¢ ¡ ¢ e c ec ve s es e ¨¨¤ ¡ # ¦ © ¡ ¤ ¦¤ ¥£ ¡ ¨§ ¤ ¡ e e s y sc e es e   ¤¤ ¦ ¤¥ ¢ § $ ©¢ ¨ ¦¢§§¢ ¡ ¢ ¡ #¦¢ ¤¤ ¢ ¡ ¤¦ ¦ ¤ ¤ y c e e e e e es s e s e¦¤ § ¤ ¢ ¦ ¤ ¦ ©¢¦£ ¡ ¤ ¤ ¨¢ ¡ ¡ # ¢§¤ © ¢ £ ¢¦ % ¢ ¢! e c s e e s s c y se c y e s   2006 © ¨§¤ ee sc ¢ ¤ $ ¢ ¡ § ¤¦¥ ¢©© s e c s e ¡ £ © ¤ # ¨¨¢ © #¤ £ y e y s c e ee   ¤£ ©¢ ¢! ¥ £ ¥ ee s e ¥£ ¦ ¡¤ ¡ ¡ ¡ § ¡ ¤ ¦ ¢¨§ ¦¤ ¢ ¡ ¨¨¢ ¢¡§ ¦ e e ye s s c e ¦¢ ¡ § j ve y e¡c y 16 c ey e   ¢©© ¥ £ ¦¤ § ¤ ¤¨ ¡ ¦¢ ¨¢ £¤¨¥ ¡ ¤ § s e e s c ses c ¡ ¦ ©¢ ¨ ¡ e 31 c e e s e e e ¦ © ¡ ¦ ¢¨§ ¦¤ ¢ ¡ ¤ ¦¢¡ ¦¢ ¡ ¢ ¦¢ © ¨¦¢ ¨ ¡§¢¦¥ ¤£¢ ¡s y e ye s j e es e s y e c es e e ve ce   Majo players and Market hares
  8. 8. Major Forces shaping the IndustryPorter s Five ForcesBarriers to Entry LowThe Barriers to entry to the athletic footwear industry are quite low. Though selling topquality footwear for athletes is a highly competitive field, there is a huge potential for newentrants. Due to the enormous scale of operations of both Nike and Adidas, there are ableto control their costs and hence maintain a competitive advantage over new and emergingcompetitors. Their powerful brand identities give them an au ra which is difficult for a newentrant to pervade through and beat. Their brand images have a distinct competitiveadvantage. Even with all these factors coming into play, the industry is a comparatively easyone for new manufacturers to enter. Also, there is a threat of other manufacturers toexpand their portfolio. These, with already strong regional brand names, might emergestrong competitors. For example, in India Bata launched its Power brand of running andathletic shoes which are still going strong. In addition to these, there is also the loss fromcopies of their premium footwear, made mostly in the far eastern countries. They also resultin a huge loss of revenue. Though they do not strictly come under this category, they havebeen included for s ake of easy reference.Bargaining power of buyers HighThere are a huge number of buyers with respect to the number of brands in the industry.Therefore these companies are in a constant struggle to differentiate their brand and useother innovative means to market them differently and successfully. They must establish astrong brand identity, essential to attract and retain the target consumer. Identity is the keyto brand trust and loyalty. Many buyers in new markets are cost sensitive and switching costis low for the buyer, hence the importance of the brand image. The buyers of sportsfootwear have changed in the past decade and there has been an increase in womanpurchasing athletic footwear. The new generation has vastly different tastes and purc hasingmethods. All in all, the buyers have a high amount of bargaining power.Bargaining Power of Suppliers Low 8
  9. 9. Bargaining power of suppliers to this industry is virtually non-existent. There are a largenumber of suppliers in the market and the materials needed for this industry, namely,Cotton, Rubber and Leather are commodities readily available in the open market. Theconglomerates hold sway over the suppliers as they have mostly standardised their inputprocedures and hence can easily switch between substitutes. This gives them enormouspower over their suppliers. The suppliers are usually dependent on these firms as a meansof survival. In this situation, bargaining power of suppliers is negligible.Threat of Substitutes LowThere are no real substitutes for athletic footwear. There may be substitutes for a fashionitem. But for a professional athlete, substitutes for his shoes do not exist. He cannot playwith boots or his bare feet. He cannot switch mainly due to his performance specification sbut he has little alternative to switch as well. A consumer is not likely to switch and so, thethreat of substitutes is very low.Rivalry among existing Competitors HighThe rivalry among existing competitors is very high in this industry. Nike, Adid as and othersin this field such as Puma and Reebok have grown tremendously in the last decade and eachof them have been offering more choice, more identity due to endorsements by topsporting personalities and by aggressive marketing and sales strategies. The industry is inhypercompetition and the rivalry is extremely fierce. 9
  10. 10. Prediction for 2009 10 10
  11. 11. The Company and Major Product LinesBrief History of CompanyAdidasAdidas was formally registered on 18 August 1949 as Adidas AG, by Adolf Adi Dassler,whose name formed the company s title. Adolf Dassler was born in Bavaria and startedmaking sports shoes in his mother s kitchen after he returned from World War 1. He wasjoined in 1924 by his brother Rudolf Dassler and using t heir mother s laundry as theirmanufacturing base, they began operations. Famously, during the 1936 Olympics, AdiDassler drove to Munich and persuaded Olympic gold medallist Jesse Owens to wear hisshoes which established his reputation among the sporting world and gave him lots ofcontracts and financial success.After the Second World War, though, the brothers split up and Rudolf Dassler went on toform his own company, which later became Puma. After the death of Horst Dassler, Adolf sson, the company went through some troubled times. It was then bought by Frenchindustrialist Bernard Tapie and subsequently by Robert Louis-Dreyfus. In 2001 HerbertHainer took over as CEO of Adidas and has been leading the conglomerate ever since. A longline of innovative products and successes later, Adidas is one of the world s largestcorporate, with a product line to envy and worth millions of dollars. The trademark threestripes and the slogan Impossible is Nothing are Adidas identity, a image it spends afortune to uphold. In 2005 Adidas acquired British giant Reebok to further strengthen itsmarket and customer base.Indian OperationsThough Adidas entered into a license agreement with Bata in 1989, it formally beganoperations only in 1996 with the establishme nt of Adidas India Marketing Private Limited. In1998 Adidas pulled a masterstroke, they roped in Sachin Tendulkar as their brandambassador which proved a sound business decision. In 1999, keeping in mind the priceconscious Indian consumer, Adidas launch ed its cheapest ever shoes in India. In 2004,Adidas India launched the advantage adidas campaign, which increased sales by 30%. In2005, Andreas Gellner took over as Managing Director for Adidas India. Adidas sees India asa huge growth market and according to Gellner, Adidas will invest huge sums to take on itscompetitors here.NikeBill Bowerman and Philip Knight started the company we know today as Nike in 1962. It wasoriginally known as Blue Ribbon Sports. Bowerman was Knight s track and field coach at the 11
  12. 12. University of Oregon. Philip Knight went on to study at Stanford where he published a paperon ending the German domination in the athletic footwear industry. He travelled to Japanand entered into an agreement with the Onitsuka Tiger company and became their soledistributor in the US. Bowerman and Knight received their first shipment of 200 shoes andsold them at local meets to make a good profit. Bowerman, who had earlier designed shoesfor his athletes, joined hands with Tiger to make the famous Tiger Cortez shoes, whichbecame worldwide bestsellers and launched the business. In 1971, Knight and Bowermanbegan to make their own shoes under the brand name of Nike, named after the Greekgoddess of victory and bearing the Nike swoosh, which is one of the company s biggeststrengths today. In 1972, Blue Ribbon Sports parted ways with Onitsuka Tiger and becameNike Inc.Today Nike is the world leader in athletic footwear, with market shares exceeding the othermajor players by significant margins. The Swoosh and Just Do It slogan are huge brandidentities. Nike is a truly global player and seen as a model for innovation driven growth.Indian OperationsNike has been present in India for over a decade through its seven year license agreementwith Sierra enterprises, which didn t help much in the bigger scheme of things as Reebokand Adidas came to the country with fully owned subsidiaries. This explains why the globalmarket leader is still lagging behind in India. In 2004, instead of renewing its franch ise, itbecame a subsidiary and started operating with more freedom and capital. The result wasthat the market share rose and Nike became a force to contend with in the Indian market.Probably the biggest sign of the change in guard was the heavy investment in Cricket byNike, culminating in its bagging of the Indian cricket team s jersey rights, worth Rs 200Crores. Nike then launched its special range of cricket shoes and sponsored the Indianfootball team as well. Though Nike has entered the market in earnest very late, the worldno.1 will stop at nothing to gain lost momentum in the Indian subcontinent. 12
  13. 13. Flagship Products, Major Product Lines andRecent ForaysAdidasAdidas manufactures running shoes under its adiStar and Supernova brands, which includethe adistar Ride, the adiStar Control 5, the Supernova Sequence and the Supernova Glide.The famous Copa Mundial football boot is Adidas s premier football boot, which laterdeveloped into the Predator range. For basketball, Adidas is most famous for its Superstarand Pro Model shoes.Beside these Adidas makes jerseys for national and domestic cricket, football, rugby, andtennis and lacrosse players with a separate line for gymnasts.Adidas has recently entered the sports lifestyle market, following on the heels of Puma andReebok and has launched watches, eyewear and most recently, deodorants, aftershaves,perfumes and lotions. COPA MUNDIAL 13
  14. 14. NikeNike s first products were track running shoes which came under the name Nike Air Max,followed recently by the Nike 6.0, Nike Nyx and the Nike SB skateboarding shoes. Recently,Nike launched special cricket shoes for bowlers and batsmen called the Nike Air ZoomYorker and the Air Zoom Opener. But its bestselling line still remains the legendary AirJordan basketball shoes, named after Michael Jordan. Air Jordan still contributes more than30% of Nike s shoe sales.Like Adidas, Nike too entered the sports apparel and eq uipment market and makes jerseysand specialist apparel for various sports. Recently Nike teamed up with Apple to launch theNike+ range, which can monitor a runner s performance through a radio device linked toApple s ipod.But Nike s most recent product is the one making waves across the sports world. Called theLunar Glide, Nike is using Flywire (A thread developed by Nike, composed of Vectran, aliquid crystal polymer) and Lunarlite Foam to make the world s lightest shoes. Advertisedusing the slogan Actually, it is Rocket Science , it reiterates Nike s commitment totechnology. SOLE COLLECTOR 14
  15. 15. History of the BrandsAdidasThe company s clothing and shoe logo bear the trademark three stripes, which is thecompany s corporate logo. Adidas also has a trefoil sign that it uses only on heritageproducts since 1972. The three stripes logo represents performance and the future of theAdidas Branding identity. It has become synonymous with Adidas and its dedication toproducing high quality athletic product s to make athletes perform better.When Adidas entered the marketplace some 50 years ago, its focus was to produce shoescrafted specifically for soccer and running.The new millennium has since brought about an Adidas renaissance; the brand has steadilyregained market share over the past five years to become the worlds number two athleticshoe company (behind Nike). How did it go about repositioning to once again be among thecoolest of kicks?Adidas claims that, the brand values of the company authenticity, inspiration, honestyand commitment are derived from sport. Historically, this sensibility was demonstratedthrough early and continued involvement with Olympic athletes, as well as activesponsorship of major global sporting events like the World Cup. Adidas s rapid growth inAsia, where revenue rose by 15 percent to US$ 878M last year, may be further propelled inJapan and Korea when those two nations host the World Cup this year an event which isexpected to garner 2.5M spectators and o ne billion TV viewers worldwide.However, the key to revitalized success seems to lie in the considerable endorsement dealsAdidas has developed with world class athletes. Recent sports figures representing Adidasdon t only score high marks in their game they also score high in their celebrity quotient.British football star David Beckham s relationship with Adidas has no doubt lent itself well tothe brand s visibility in the UK. Recently dubbed Captain of England, Beckham led his teamto victory in the 2000 FIFA World Cup. With Europe as Adidas s largest market, exposure likethis reflects in the numbers; sales grew seven percent to US$ 2.7 billion, last year.Reinvention was the key, not only for the Adidas s marketing strategy, but also for itsproduct line. Eclectic, individual, no -rules sports such as snowboarding, inline skating andsurfing have grown into significant categories. Activities such as golf, hiking and mountainbiking, which were seen as lifestyle and leisure activities, are now part of mainstreamsports. Increased product offerings in these categories have undoubtedly contributed to abetter score for the brand. 15
  16. 16. To keep up with the competition, Adidas generates close to 60 new foot -friendly designseach year. The Adidas credo is to regard shoes as feet, resulting in a product with superiorfit and performance capabilities. Tactics have been revised in getting these products out forconsumption. As a result, products have been repositioned in higher -end and sportsspecialty stores.In 2002 Adidas footwear innovation, ClimaCool TM, made its debut. The new technologyadded breathable materials to the shoe. In July, the Group completed its three-divisionalstructure for its sore brand, Adidas, and positioned its third division as Adidas Sports Style .In 2004 Impossible is nothing became the central message of a global campaign thatAdidas launched. It refers to the shared attitude with the athletes, of always pushingyourself further, to beat the limits. In September, Adidas designer Stella McCartneyannounced their partnership, introducing the Adidas by Stella McCartney collection.On January 2006, Adidas announced the acquisition of Reebok LTD. By combining two of themost respected and well-known brands in the worldwide sporting goods industry, the newGroup will benefit from a more competitive worldwide platform, well-defined andcomplementary brand identities, a wider range of products, and a stronger presence acrossteams, athletes, events and leagues.Adidas continues to prove itself as a brand built to last through a game plan of reinvention.With the recent acquisition of a lifetime partnership with Orlando Magics Tracy McGrady(basketball) and its heavy involvement with 2002 World Cup, it continues to strike savvydeals that capitalize on the star power of young athletes and increase its visibility in themarketplace.It appears that team Adidas has honed its strategy to become a revitalized contender intoday s competitive sporting goods market and is now duly recognized as the sneaker ofyesterday and today. 16
  17. 17. NikeNike positions itself as the market leader of sports footwear and uses the greatest athletesand the record of their achievements in advertising. The swoosh logo was developed byCarolyn Davidson in 1971. Together with the Just Do It slogan, the Swoosh logo perfectlyexpresses the brand and its philosophy. It expresses a high ambition and a will for victory,which is a part of Nike s brand image and corporate culture.It was only 36 years ago that we had a world without Nike, and in that period Nike has gonefrom the brash newcomer, to the number one mass-market leader. The Nike story beginswith the meeting of its co-founders at the University of Oregon. It was here that middle-distance-running business student Phil Knight fell under the tutelage of the college athleticscoach, Bill Bowerman. Nike would go on to grow out of the fusion of Bawermans sportinginnovation and Knights marketing know -how.Even at a very early stage it seemed that Knight had a far-reaching goal, to break the long-established brand nomination of the U.S. marketed by the then main player, Adidas.In order to achieve this aim, legend has it that Knight and Bowerman each put in $550 tocement their partnership, and decided to call their new company Blue Ribbon Sports (BRS).BRS was basically the American distributor of Onitsuka training shoes.In 1965, after a period of selling Onitsuka shoes from the back of their van at athletic meets,the company grew.The company went from strength to strength, but after heated disagreements between BRSand Onitsuka, the new boss at BRS decided to split from Tiger in 1971 and create their owncompany manufacturing their own shoes. It is said that Jeff Johnson came with the idea forthe new name, deciding to honour the Greek goddess of victory, and thus Nike was born.It was also at this that the fledgling company had to decide on a logo for the brand, andanother of the legends that the company managed to create for itself was developed.Nike took off virtually instantly in the United States, and within a year company sales wereat almost 2 million pairs. In 1981 Nike decided to take another major step, with the U.K.becoming the companys first wholly owned foreign distributorship.However it was in 1985 that Nike really became a major player. It was in this year that itmanaged to persuade the then little known Chicago Bulls basketball rookie Michael Jordanto endorse his own range of shoes. Even Nike could not have imagined the effect that thissingle act would have on sales. The new Jordan endorsed range transported Nike andtrainers in general to a completely new lever of popularity. 17
  18. 18. It was after the introduction of the Jordan shoes and mass -marketing that went with themthat the trainer wars got underway. Each of the brands, desperate to stay one step aheadof the competition, came up with a continuous stream of developments and inventions oftechnical wizardry. For a while in the late 1980s Reebok actually overtook Nike to becomethe number one player (at least in terms of sales), but Nike came back strongly with its justdo it slogan in 1988, and regained the top spot in terms of market sales - a position theyretain to the present day.In 2006, Nike entered the cricket market with a 5-year sponsorship of the Indian cricketteam for US$43m. Nike and Apple released the Nike+iPod sports kit, enabling runners to logand monitor their runs via iTunes and the Nike+ website.In 2008, Nike introduced shoes featuring new Flywire and Lunarlit e Foam materials. Flywireis a new technology made up of thin wires of vectran fibers, which are 5 times stronger thansteel and never lose strength. Lunar Foam is a material developed by NASA that gives theshoe excellent shock absorption and a great feel with minimal weight.Back in 1971, the newly created Nike Company was ready to hit the market with its shoes,and a logo to represent the brand was urgently needed.Phil Knight turned to an associate from his teaching life and commissioned graphic -designstudent Carolyn Davison to work with his new brand. Knight wanted a design that wouldrepresent movement. Davidson supplied Knight with a few designs one of which was theinitial Swoosh so well known today. Knight was not particular enamoured with any of thesedesigns, but with deadlines to meet the Swoosh was chosenEven though Davidson was initially paid only $35 for her design, the story doesnt end there.In 1983, Knight took Davidson out for lunch and presented her with a diamond -encrustedNike ring, and also an envelope. The envelope contained Nike Stock.Nike has continuously pushed back the boundaries of trainer design, staying focused underPhil Knights guidance, and is going to take some dislodging. 18
  19. 19. MARKETING STRATEGYCUSTOMERSBoth nike and adidas are a well known and accepted brands. Their main customers areathletes and sports enthusiasts but it doesn t limit there. Men women and even children arewell versed with the brands and use them. Children from the age of 15 to adults of the agegroup 35 use both nike and adidas shoes.For Nike and Adidas, the Beijing games are a brawl for 21st century dominance of thesneaker world. Both the rivals are looking forward for the Olympics 2010. While everyOlympics is a dogfight for the longtime rivals, this years games are a bigger deal for adidasespecially. Beijings the doorway into a vast new market. There are 2.6 billion feet in China,most of them without sneakers. Both companies expect the country to be its second -largestmarket, after the U.S, within a few years. Its the ultimate land grab, for both nike andadidas. Despite the relative strength of Germany-based Adidas in Europe and weakness inNikes flagship U.S. market, Nike has expanded its global lead over its rival over the pastthree years. Nikes 36 percent worldwide market share dwarfs the 21.8 percent share forAdidas, according to Sporting Goods Intelligence. The strategies adopted by Adidas havebeen successfully implemented in several areas. They always ensure that the needs ofvarious consumer groups are fulfilled by going into partnership with high -end designers andtechnology. Adidas has been consistently dragged down by the once -mighty Reebok brand,which contributes about 6 percent to its parents total.OUR ANALYSIS (According to customer survey)The customer analysis for both Nike and Adidas is largely similar and hence they will beexplained together and differences, if any, will be pointed out.The Consumers are typically professional athletes, amateur sportsmen and young peoplewho identify with sport as a lifestyle, mostly in the age group of 15 -35. But this age barrierseems to be falling now, as our research told us. More children in the 12+ age category areidentifying with these brands mainly due to their addiction to European Football which hasgained a huge fan following. Also, the consumers are brand conscious adults and girls, wholook to them as status symbols, an image which both these brands strive to uphold by highpricing and premier status.The unsatisfied need for most customers in this market is primarily high end footwear whichhelps them perform better in their chosen playing field, but at a lower cost than what thesebrands offer. For the fashion conscious segment of the market, they come in with their 19
  20. 20. lifestyle products. The main problem they are trying to solve is the risk of injury and thepossibility that an athlete might underperform due to low quality footwear.The principal decision makers in the process are the buyers themselves as they know besttheir specific need for their specific sport.Buyers generally buy these products as durable long lasting products that they use speciallyfor big game days. The quantity bought differs for team and individual sports, as teamsgenerally order a large number of performance footwear for all its players and individualsusually buy a single pair. The places where the consumers mostly buy are original outletsand franchises. Retail stores are largely low key sellers for them. The frequency of buying isless, compared to other markets.WAR BETWEEN NIKE AND ADIDASThe problem for Adidas is that, while its staked out its turf as an official sportswear partner,Nike has more top athletes. They include Swiss tennis ace Roger Federer and Australiantrack star Craig Mottram, along with old standby basketball legends Kobe Bryant and LeBronJames. But nike s athletes aren t guaranteed to win games, there is always a risk elementassociated with their performance.Nike has signed up 22 of Chinas 28 s ports federations to outfit most of its athletes. The dealis just one of 40 that Nike signed with various national federations, including the U.S,Germany and Russia, ensuring that team members will be decked out in Nike gear duringplay regardless of where they have their individual endorsements. So for many of 3,000athletes in the Adidas stable who will compete in Beijing, donning the three stripes will belimited to the medal stand. During play, theyll be in Nike gear.COMPETITORSNIKE is one of the most successful manufacturers of athletic footwear, competing withReebok, L.A. Gear and Adidas, as well as with manufacturers of casual footwear. Nike is theworld s No.1 manufacturer and marketer of athletic footwear. Nike stands for success,excellence, high performance, fame etc. y Adidas y Reebok y Woodland y Red tape y Bata 20
  21. 21. y Liberty y Puma y New balanceNike is the official kit sponsor for the Indian cricket team for 5 years. Nike beat Adidas andPuma by bidding highest, US $ 43 million.ADIDASThe chief competitors of adidas are PUMA and Nike. In August 2005, the companyannounced that it had made a deal to acquire rival Reebok for $3.8 billion. The acquisitionwould increase its market share and to establish a stronger foothold in the Sports Industry.This merger is indeed a success which has achieved significant sales growth. Merger ofAdidas Reebok complement each other in competing with their competitors, Nike; and ismore cost efficient and beneficiary to both brands with Reebok s strong presence in USmarket and the global recognition of Adidas. y Nike y Red tape y Bata y Liberty y Puma y New balanceNikeNike enjoys a 47% market share of the domestic footwear industry, with sales of $3.77billion. Nike has been manufacturing throughout the Asian region for over twenty -five years,and there are over 500,000 people today directly engaged in the production of theirproducts. They utilize an outsourcing strategy, using only subcontractors throughout theglobe. Their majority of their output today is produced in factories in China, Indonesia, andVietnam, but they also have factories in Italy, the Philippines, Taiwan, and South Korea.These factories are 100% owned by subcontractors, with the majority of their outputconsisting solely of Nike products.Strengths of Nike y Nike is a very competitive organization y Nike has no factories. It does not tie up cash in buildings and manufacturing workers. This makes a very lean organization. 21
  22. 22. y Nike is strong at research and development y Nike is a global brand. It is the number one sports brand in the World. y Product Range y Capacity for innovation y Distribution expertise y Single Brand y Stars endorsement y Contract manufacturing y Large portfolio of productsWeaknesses of Nike y The organization does have a diversified range of sports products. However, the income of the business is still heavily dependent upon its share of the footwear market. y The retail sector is very price sensitive. Nike does have its own retailer in Nike Town. y Single Brand y Too many stars endorsement y Contract manufacturing y Spread portfolio of products y Reliant on retailers y Reduction of target marketAdidasAdidas is the main competitor for Nike. Adi das currently enjoying the fastest growth of anybrand domestically, with a market share of 6% and revenues of $500 million. They havebeen shielded from bad publicity by the two Goliath s of the industry, Nike and Reebok, andare reaping the rewards substantially. They have adjusted their manufacturing strategy,from a vertical operation in Germany in the 60 s and 70 s, to an outsourcing focus todaythroughout Asia. Unlike the big two, they do not have a code of conduct, and their factoriesare considered to be the worst in the industry. It is just a matter of time before they areexposed, with an underground swelling of negativity already occurring today. In order toavoid the negative effects and lost revenues that Nike and Reebok have received, they needto immediately begin to take a proactive stance in regards to the working conditions of theirfactories. 22
  23. 23. Strengths of Adidas y Competitive pricing y Good financial position y Effective Marketing Strategy y Market Leadership y Strong online presence y Strong brand y Strong international operations y Strong distribution chainWeaknesses of Adidas y High cost structure y Over pricing y Low quality products/services y Limited product lineReebokReebok, as the second leading manufacturer of footwear, has domestic revenues of $1.28billion and a market share of 16%. Similar to Nike, they also utilize a 100% outsourcingstrategy and manufacture their products throughout Asia. They have created andimplemented their own code of conduct for manufactures to fol low, but have lessinfrastructure than Nike across the globe to enforce it. However, their strength, the creationand distribution of a global brand, is allowed to foster under this manufacturing strategy, asthey focus on their core competencies, and outs ource their production.ConverseWith a market share of 3% and revenues of $280 million, Converse manufactures theirproducts both domestically and internationally. It is important to note that the only productthey continue to manufacture in the U.S. toda y, is the Chuck Taylor All Star, with plants inLumberton, NC and Mission, TX. This is a product where the Made in the USA label iscrucial to its success, and internalization is a source of competitive advantage. These twofactors serving as the sole reason why the production remains within the U.S. All other shoemodels are outsourced in Asia, with the explanation of reduced wages driving this strategy.Converse, like Adidas, must also generate a higher degree of internal monitoring of theirsubcontractors, or they will soon face increased scrutiny 23
  24. 24. New BalanceNew Balance is the one company that has kept a substantial amount of manufacturing in theUnited States, and has a 3% market share with sales of $260 million. They currently operatefive plants in New England, employing over 1400 workers, that produces 50% of theiroutput. With this mixed strategy, of vertical integration and outsourcing, they are veryunique, with their strategic reasoning based on the advantages gained through higher levelsof quality domestically, and the Made in the USA label. They are in a highly specialized,niche business, running shoes, and closeness of factories is more essential to their customerbase than the other companies because of special orders. For their most tech nical productsthey employ outsourcing, following the strategy of their competitors. Although there issomething to be said for manufacturing domestically, they are straying away from the skillsthat they do better than anybody else the design and marketing of the premier runningshoe in the industry. Their long-term strategy should shift to a 100% outsourcing model,allowing them to control this niche for the future.The basis for competition is to see who is better than the other and to win more consume rsacceptance and to be the leading and most loved brand of consumers. Adidas and Nike arelike by many and they have a strong base of brand loyalty yet they compete with each otherand they bring out new, revised and improved products to keep up their com petition witheach other. Nike is the slightly over priced but yet the have their customer base. Their latestinnovation was Nike + ipod. While Nike tries to bring in creative and out of the boxtechnology favoring music and sports lovers Adidas brings in new products and expands themarket that they are serving. They innovated shoes which had a chip in it which coulddetect and tell the time, calories and other information of the user. They compete tobecome the number one. While Nike is more accepted in U.S, Adidas has a strong base inGerman and the European market.COLLABORATORSNikeOne of the oldest collaboration was in 1985 with Michal Jordan and had introduced AirJordan . This year nike has collaborated with Nemo for Nike Boots and Buzz Adrin for Nike6.0. The partnership between Nike and Buzz Aldrin is based on a shared passion forperformance innovation. Buzz Aldrin serves as an icon of exploration, a space pioneer, andmaverick who looked towards the next frontier. His personality, independence andcreativity are similar to the mindset of Nike s 6.0 athletes who are pushing the boundaries 24
  25. 25. of their respective sports. Nike and apple has announced a partnership targeting runnersand music lovers and has launched Nike+ipod which has hit the market and is creating atrend it was one of the biggest success. Nike is also in collaboration with Black CoachesAssociation, to provide scholarships, it gives sponsors to youth, and sports clinic to enhancethe opportunities for minorities in sports industry. Mia Hamm; Tiger Woods; Brazil Soccerare the celebrity collaborators of nike.Adidas has a new designer Stella McCartney who will be the company s official newestdesign collaborator and it would be called as Adidas by Stella McCartney . McCartney andAdidas will co-host an exclusive soiree. Adidas Originals is hoping to be The Greatestthrough its new partnership with boxing legend Muhammad Ali. The collaboration willlaunch Ali by Adidas . Ali has an old association with adidas. Adidas Consortium City Series3 - Adidas Consortium city Series is back this time collaboration with Paris Colette London sCrooked Tongues, Toronto s Livestock and Tokyo s VA. Advertising partner of adidasbasketball shoes is 180LA agency. Adidas originals has teamed up with Cheez, Kalavinka andYoppi for football shoes. New York Yankees; University of Tennes see; Kobe Bryant are ohercollaborators for adidas.Incentives and motives of the collaborators are to join with the best and fast moving sportsshoe which is used by many people around the world and is widely distributed and acceptedby people. Those collaborators get a opportunity and exposure. The celebrities are used bythe company to increase their market value and for acceptance by the consumers as theyhave a urge to but those products that are endorsed or used by their favorite stars.COMPANYCORE COMPETENCYA company s core competencies are those things that a company can do so as to be betterthan their competitors in the central areas of the company where the most value is addedto your products.Core Competencies of Adidas y Technology y Customer focus 25
  26. 26. y Brand recognition y Supply chain y Collaboratively competitive y The company launches every six months between 600 and 800 new designs in footwear.Core Competencies of Nike y Technology y Customer focus y Strategic OutsourcingStrategic Outsourcing An advantage for Nike and Adidas over competitorsNike s core competency is strategic outsourcing. The core skills that set nike and adidasapart from the competition, are their marketing, distribution, and technological expertise.The following questions are always asked by the expertise to the company: y Is internalization a source of competitive advantage? y Is manufacturing a skill our firm does better than anybody else? y Will firms be able to leverage their manufacturing expertise in the future? y Are we releasing any of the firm s proprietary skills/information by outsourcing?The answer for both adidas and nike is NO. Therefore, in today s global environment, themost strategically viable manufacturing strategy is the outsourcing of their products. Theefficiencies that are gained, in the form of shifting of risk, reduced capital requirements,lower wages, and ability to focus on their core competencies, strongly outweigh all othermanufacturing options.Both companies are huge conglomerates with an enviable turnover worldwide. They havelarge media budgets and a large amount of money to throw around, which they do, withincredible fervour and gusto. They are both pioneers in this field and hire the best talentfrom the best universities across the world. Hence they have the best people in theirorganisations and that, coupled with their access to almost unlimited capital, makes thempotent forces. 26
  27. 27. ADIDASRevenue $15.6 billion (2008)Operating income $1.5 billion (2008)Profit $933 million) (2008)NIKERevenue US$ 18.627 billion (2008)Operating income US$ 2.199 billion (2007)Net income US$ 1.883 billion (2008)Total assets US$ 12.443 billion (2008)Total equity US$ 7.825 billion (2008)CONTEXTTECHNOLOGYAdidas was originally intended to be a product line for soccer sportswear. Currently,however, adidas has spread its target to all sportswear.Name Description A neoprene-like material that feels somewhat like nerf, it is mostadiPRENE often used in the heel of a shoe. adiPRENE is quite durable, and is meant to respond to the cushioning needs of a active feet. 27
  28. 28. adiPRENE+ is similar to adiPRENE in that it is a neoprene -likeadiPRENE+ material, however it is primarily found in the forefoot of a shoe. It is located in this region because it is designed to provide greater forefoot momentum at toe-off. Torsion is a stability technology located in the midsole of the shoe;Torsion it is meant to provide natural rotation between the forefoot and the heel, ultimately allowing for better support in the midfoot.Nike has integrated technology system to develop their product. Nike always adopted thelatest technology for their product and innovated new products. y Speed of change of product y Design Ability y Speed of News reportingName Description Nike Air is the most basic cushioning material used by Nike; it is madeNike Ground out of a polyurethane bladder filled with air. It provides adequate cushioning for the casual wearer, but may not provide sufficient or proper cushioning for serious atheletes with ind ividual preferences. y Encapsulated Nike Air - Nike Air that is encapsulated within the heel of the shoe y Visible Nike Air - Nike Air that is positioned in the heel of the shoe, but is visible 28
  29. 29. Zoom Air is among the more technologically advanced (and expensive)Zoom Air cushioning systems used by Nike. It essentially is a thin bag of pressurized air that, when inflated, has a thickness of 8mm. Inspite of its thin profile, it often provides more than adequ ate cushioning, and even has somewhat of a bounce-back response when compressed. Zoom air is often times preferred by athletes who rely on quickness and speed because the thin profile allows for better court/field feel because your center of gravity remains mostly unchanged, and your foot is located close to the ground. y Double Stacked Zoom Air - two Zoom Air packs stacked on top of each other, usually located in the heel y Full Length Zoom Air - Zoom Air packs located both in the forefoot and heel, provid ing optimal cushioning A technique is used that forces air into a pre-formed shape, thusMax Air allowing for more pressurized gas to fit into a larger bag. Max air is generally not larger in size and visible, meaning that the shoe puts the wearer at a higher distance off the ground. Because of this, Max Air is best suited for athletes who do not necessarily depend on quickness and speed, but rather athletes who are larger in size, and need a more dependable and firm cushioning system. y Air Max 360 y Air Max 180 Nike Shox is a cushioning system developed by Nike that is comprisedNike Shox of polyurethane-foam columns that provide cushioning in a way that keeps the foot parallel to the ground; a benefit of this process is that the cushioning system provides great stability and impact protection. Nike Shox is generally located in the heel of the shoe, but there are an increasing number of shoes that feature a full length shox -based system of cushioning. 29
  30. 30. A polyurethane-based material created by Nike that is both durableFoamposite and lightweight; it is created from a single piece of molded material. When first worn, it is somewhat uncomfortable, but over time, the material actually molds to the shape of your foot, thus providing a tailored fit that feels quite natural A seamless inner sleeve made of lycra that hugs the foot, and is meantDynamic Fit to take the place of the shoe tongue. Because it is seamless, manyInnersleeve prefer it because it reduces the chance of chafing and has a natural and comfortable feel to it. A thermoplstic urethane structure located either on the outside of theMonkey Paw shoe, or between the lining and the outside. It is primarily located around the ankle region and helps to prevent ankle sprains due to ankle inversion.Waffle Sole Traction technology derived from rubber put on a hot waffle iron back in 1972. Remains the premier low profile traction, second only to actual spikes.SOCIO CULTURALADIDAS y Since 70-s, customers are brand focused. y Sport consumers prefer fashion and style which is a value proposition of both nike and adidas. y Young generation believes more on advertisements and internet. y Since 90-s even women consumers dominate the athletic field and changed the market. y Children are becoming more brand conscious and opt for branded products. y The tradition values and attitude is changing of the people using branded products is a status symbol. As the income has changed people shift from normal to branded ones. 30
  31. 31. NIKE y Brand conscious consumers y Change in buying habits in younger people y Generation Y prefers other types of footwear y Increase in the female share of the market y Corporate social responsibilityECONOMICThe economy depends on the current income, price, savings, debt and credit savings. y USA economic growth is in slow growth because of WTC. y Contract manufacturing is chosen by many athletic shoes company. y Slow down in the economy y Reduction in consumer confidence y Barriers of entry to the EU y Contract manufacturingCOMPETITIVE FORCES y Competition is more tight with the coming of Reebok and Adidas for Nike and Nike, Puma for Adidas y Competition is happened around the world, globally, not locally y Athletic shoe trend is going to be fashion -oriented 31
  32. 32. SEGMENTATION, TARGETING, POSITIONINGMarket SegmentationBoth Adidas and Nike fall under niche marketing. They have a narrowly defined customergroup seeking a distinctive mix of benefits. Their products are mainly aimed at both menand women looking for sports apparel. Adidas and Nike promise their customers comfort,reliability, style and performance. Both the companies have lived up to their reputation inthe world of sports shoes. Niche marketers aim to understand their customers needs so well that the customers arewilling to pay a premium . This is very true in the case of these two companies. Adidas andNike sports shoes are priced high. But customers are willing to spend the extra money forthe quality and service they receive.NIKENike pays top athletes in many different sports to use their productsand promote/advertise their technology and design. Nike is the official kit sponsor for theIndian cricket team for 5 years, from 2006 till end of 2010. Nike beat Adidas and Puma bybidding highest. Nike also sponsors some of the leading clubs in world football, such asManchester United, Arsenal, FC Barcelona, Inter Milan, Juventus, Shakhtar, Porto, Steaua,Red Star, Club América, Aston Villa, Celtic and PSV Eindhoven. Nike sponsors several of theworlds top golf players, including Tiger Woods, Trevor Immelman and Paul Casey.ADIDASAdidas are the main sponsors and kit sponsors of the successful Australian Cricket Team andthe England Cricket Team. They are also the main sponsors of the Indian cricketers SachinTendulkar and Virender Sehwag and English cricketers Kevin Pietersen and Ian Bell. Adidasare the main sponsors of Australian Domestic Cricket Competitions - Pura Cup, KFCTwenty20 Big Bash, Ford Ranger One Day Cup and the Indian Premier League teams DelhiDaredevils and Mumbai Indians.For the 2008 Summer Olympics in Beijing, China, Adidas spent 70 million sp onsoring theevent, amid criticisms. Adidas also sponsors events such as the London Marathon. 32
  33. 33. SEGMENTS TARGETEDBoth Nike and Adidas target aspiring athletes in the age group of 15 -35. In the lifestyle andapparel market targets consumers who identify with sport as a way of life and are brandconscious.ADIDASThe unique Adidas Shoes compared with other sport shoes covers the largest market. Somemakes of athletic shoes have raced ahead of the pack in appreciation, among them Adidasrunning shoes. These brands and a couple of others have gained the respect of thousands ofbeginner and professional sportsmen around the world, because o f great design, qualityconstruction and durability that rivals any other shoe.The company officially became the No. 1 driver in golf in 2005 and in 2008 Adidas madetheir first major move in cricket market. At present, Adidas has slowly crawled its way b ackup into the ranking of the top footwear manufacturers in the world. Adidas wants to reachthe pinnacle of success. Customer satisfaction is the main motive of the company.Adidas mainly focuses on men and women who are brand conscious or are looking forcomfort and performance in the area of footwear. It has more than 200 varieties of men sfootwear and more than 150 women footwear. Adidas also makes sports specific shoes. Ithas got an entire line of shoes devoted to sports like basket ball, football, tennis, golf andrunning. A major chunk of their customers include athletes who are looking for sports shoes whichare customized according to their needs. Adidas constantly comes up with new technologiesto help sportsmen improve their performance by providing comfortable shoes. They areconsumer focused and therefore continuously improve the quality, look, feel and image ofthe products and organizational structures to match and exceed consumer expectations andto provide them with the highest value. They seek to help athletes of all skill levels achievepeak performance with every product they bring to market.RunningAdidas currently manufactures several running shoes, including the adiStar Control 5, theadiStar Ride (the replacement for the adiStar Cushion 6), the Supernova Sequence (thereplacement for the Supernova Control 10), and the Supernova Cushion 7 (which wi ll soonbe replaced by the Supernova Glide), among others. In addition, their performance apparel 33
  34. 34. is widely used by runners. Adidas also uses kangaroo leather to make their more expensiveshoes.CricketIn the 1990s, Adidas signed the world No. 1 batsman Sachin Tendulkar and made shoes forhim. He is still wearing Adidas shoes when he plays matches. Adidas even made actionfigures after Sachin Tendulkar.BasketballAdidas has been a long time basketball shoe manufacturer and is one of the leadingbasketball brands in the world. They are most famous for their iconic Superstar and ProModel shoes, affectionately known as shelltoes for their stylized hard rubber toe box.SkateboardingAdidas SB (Skateboarding) is shoes made specifically for skateboarding. Many of the shoesAdidas previously made were redesigned for skateboarding.NIKENike has divided its customers into the following way y Women y Men y Girls 3-36 months 3-8 years 8-15 years y Boys 3-36 months 3-8 years 8-15 years 34
  35. 35. POD S AND POP SNIKE ADIDASIn spite of all the technology that supposedly goes inside a typical sports shoe, if you takeaway the logos, it s almost impossible to differentiate between a Nike, a Reebok and anAdidas. So, Nike/ Reebok/ Adidas have instead focused on differentiating themselves byconverting their brands into cultural currency. Even non-athletic types have four pair ofsports shoes one for jogging, one for trekking, one for cross -training and one for tennis.NIKE WITH APPLEThe Nike+ package consists of a pair of specially designed Nike+ running shoes, an iPodnano, and a Nike + iPod sport kit to connect the two. The kit consists of a sensor that fitsinto a built-in pocket beneath the insole of your left shoe and a receiver that fits into theiPod nano dock connector. The sensor uses a sensitive accelerometer to measure youractivity, and then wirelessly transfers this data to the receiver.As you run, iPod tells you your ti me, distance, pace, and calories burned via voice feedbackthat adjusts music volume as it plays. In addition to progress reports, iPod alsocongratulates you when you ve reached a personal best your fastest pace, longestdistance and time, or most calories burned. You can also choose a PowerSong that helps yourun stronger and listen to it every time you need a boost.This in itself is incredible, but Nike+ also lets you save your running data at nikeplus.com, sothat you can set goals and track progress. You can challenge friends and strangers tocompete with you by sharing your running data with them. The Nike+ website also includesother web 2.0 features like user forums where you can meet and challenge other runners,ask questions, and give feedback; a challenge gallery where you can view all user createdchallenges; and a distance club where you can view everyone s running milestones. 35
  36. 36. DESIGN YOUR OWN SHOESNike allows customers to design their own shoes from a catalogue of predefined designs.Customers can choose their own colours and mascots to create shoes which define theirpersonality.ADIDASAdidas shoes are cheaper than Nike. It has grown from a minor player to the second biggestcompany in the industry. It has a huge scope for growth and innovation.It has the largest international portfolio of sport ambassadors. Adidas introduced a subbrand in 1990 to serve the high -end products for all categories of shoes and apparel. The Equipment sub brand would represent the best, whatever th e product was. The low-endproducts, for the normal consumer still have a high technology and level of innovationbecause of their inheritance of the older innovations and technology from the Equipmentline. This strategy made the Adidas brand take on a different meaning; it still meantparticipation, emotion and performance. This was a success strategy for Adidas. 36
  37. 37. IN A NUTSHELLThe brand image for both Nike and Adidas is immense; however Nike has attained aconsiderable competitive advantage due to its reputation for quality and innovation. BothAdidas and Nike have used the same theoretical systems to create their brand buildingprograms. The companies are benchmarking each other, using the techniques from eachother s successes. Nike launched their sub brand product Alpha line which wasbenchmarked on Adidas already launched sub brand of the Equipment product line for theelite of sports men. We can find many similarities like endorsements strategies and thecompanies advertising strategies. What differs in the endorsement strategies is that Adidasfocuses in sponsoring teams and global events, while Nike have their centre of att ention onstars in specific sport like basketball and Michael Jordan or in golf and Tiger Woods. Aboutadvertising, both companies have about the same scale and scoop of advertising but theytry to communicate different messages. The message from Adidas is; the only one youcompete with is yourself whereas Nike communicates a provocative, aggressive winnerattitude which can be related to the American sports attitude You don t win silver, you losegold . As we can understand the two companies are aiming at nearly the same targetedcustomer group but with a slightly differentiation of attitude. Adidas stand for a competingand winning over your self-attitude, and Nike stands for a winning over everyone attitude.This differentiation is based on the differenc es in culture between the two companies andbetween Europe and USA. Adidas chose a brand-building strategy that was built on thesame theoretical criteria as Nike.Adidas had the same strategy within creating equity value to their brand. They challengedNike in endorsement strategy, and in advertising, but with a slight difference incommunicated message, by doing it through the same media. To differentiate themselves,events like Adidas Streetball Challenge was created.VALUE PROPOSITIONValue proposition consists of the whole cluster of benefits the company promises to deliverto its customers.Both Nike and Adidas promise their customers sports shoes which will provide them withcomfort and durability. They have a brand value and have established themselves as stylestatements. Nike and Adidas have a wide range of athletic footwear specialized for varioussports like football, cricket, running, gym etc. 37
  38. 38. However, Nike offers customers more comfortable and durable athletic shoes at a higherprice, while Adidas has a lower price range offering almost the same benefits.Nike communicates a provocative, aggressive winner attitude which can be related to theAmerican sports attitude You don t win silver, you lose gold . Adidas stand for a competingand winning over your self-attitude, and Nike stands for a winning over everyone attitude.POSITIONINGThe core of Nike s brand positioning is the Just Do It slogan. It means being what you areand concentrating on what is important to you.Adidas represents passion, elegance and durability.EVOLUTION AS A BRANDNIKEIt was only 36 years ago that we had a world without Nike, and in that period Nike has gonefrom the brash newcomer, to the number one mass-market leader. The Nike story beginswith the meeting of its co-founders at the University of Oregon. It was here that middle-distance-running business student Phil Knight fell under the tutelage of the college athleticscoach, Bill Bowerman. Nike would go on to grow out of the fusion of Bawerman s sportinginnovation and Knights marketing know -how.Even at a very early stage it seemed that Knight had a far-reaching goal, to break the long-established brand nomination of the U.S. marketed by the then main player, Adidas.In order to achieve this aim, legend has it that Knight and Bowerman each put in $550 tocement their partnership, and decided to call their new company Blue Ribbon Sports (BRS).BRS was basically the American distributor of Onitsuka training shoes.In 1965, after a period of selling Onitsuka shoes from the back of their van at athletic meets,the company grew.The company went from strength to strength, but after heated disagreements between BRSand Onitsuka, the new boss at BRS decided to split fr om Tiger in 1971 and create their own 38
  39. 39. company manufacturing their own shoes. It is said that Jeff Johnson came with the idea forthe new name, deciding to honour the Greek goddess of victory, and thus Nike was born.It was also at this that the fledgling company had to decide on a logo for the brand, andanother of the legends that the company managed to create for itself was developed.Nike took off virtually instantly in the United States, and within a year company sales wereat almost 2 million pairs. In 1981 Nike decided to take another major step, with the U.K.becoming the companys first wholly owned foreign distributorship.However it was in 1985 that Nike really became a major player. It was in this year that itmanaged to persuade the then little known Chicago Bulls basketball rookie Michael Jordanto endorse his own range of shoes. Even Nike could not have imagined the effect that thissingle act would have on sales. The new Jordan endorsed range transported Nike andtrainers in general to a completely new lever of popularity.It was after the introduction of the Jordan shoes and mass -marketing that went with themthat the trainer wars got underway. Each of the brands, desperate to stay one step aheadof the competition, came up with a continu ous stream of developments and inventions oftechnical wizardry. For a while in the late 1980s Reebok actually overtook Nike to becomethe number one player (at least in terms of sales), but Nike came back strongly with its justdo it slogan in 1988, an d regained the top spot in terms of market sales - a position theyretain to the present day.In 2006, Nike entered the cricket market with a 5-year sponsorship of the Indian cricketteam for US$43m. Nike and Apple released the Nike+iPod sports kit, enabli ng runners to logand monitor their runs via iTunes and the Nike+ website.In 2008, Nike introduced shoes featuring new Flywire and Lunarlite Foam materials. Flywireis a new technology made up of thin wires of vectran fibers, which are 5 times stronger th ansteel and never lose strength. Lunar Foam is a material developed by NASA that gives theshoe excellent shock absorption and a great feel with minimal weight.Nike has continuously pushed back the boundaries of trainer design, staying focused underPhil Knights guidance, and is going to take some dislodging.DEVELOPING THE SWOOSHBack in 1971, the newly created Nike Company was ready to hit the market with its shoes,and a logo to represent the brand was urgently needed.Phil Knight turned to an asso ciate from his teaching life and commissioned graphic-design 39
  40. 40. student Carolyn Davison to work with his new brand. Knight wanted a design that wouldrepresent movement. Davidson supplied Knight with a few designs one of which was theinitial Swoosh so well known today. Knight was not particular enamoured with any of thesedesigns, but with deadlines to meet the Swoosh was chosenEven though Davidson was initially paid only $35 for her design, the story doesnt end there.In 1983, Knight took Davidson out fo r lunch and presented her with a diamond -encrustedNike ring, and also an envelope. The envelope contained Nike Stock.ADIDASWhen Adidas entered the marketplace some 50 years ago, its focus was to produce shoescrafted specifically for soccer and running.The new millennium has since brought about an Adidas renaissance; the brand has steadilyregained market share over the past five years to become the worlds number two athleticshoe company (behind Nike). How did it go about repositioning to once again be among thecoolest of kicks?Adidas claims that, the brand values of the company authenticity, inspiration, honestyand commitment are derived from sport. Historically, this sensibility was demonstratedthrough early and continued involvement with Olympic athletes, as well as activesponsorship of major global sporting events like the World Cup. Adidas s rapid growth inAsia, where revenue rose by 15 percent to US$ 878M last year, may be further propelled inJapan and Korea when those two nations host the World Cup this year an event which isexpected to garner 2.5M spectators and one billion TV viewers worldwide.However, the key to revitalized success seems to lie in the considerable endorsement dealsAdidas has developed with world class athletes. Recent sports figures representing Adidasdon t only score high marks in their game they also score high in their celebrity quotient.British football star David Beckham s relationship with Adidas has no doubt lent itself well to 40
  41. 41. the brand s visibility in the UK. Recently dubbed Captain of England, Beckham led his teamto victory in the 2000 FIFA World Cup. With Europe as Adidas s largest market, exposure likethis reflects in the numbers; sales grew seven percent to US$ 2.7 billion, last year.Reinvention was the key, not only for the Adidas s marketing strategy, but also for itsproduct line. Eclectic, individual, no -rules sports such as snowboarding, inline skating andsurfing have grown into significant categories. Activities such as golf, hiking and mountainbiking, which were seen as lifestyle and leisure activities, are now part of mainstreamsports. Increased product offerings in these categories have undoubtedly contributed to abetter score for the brand.To keep up with the competition, Adidas generates close to 60 new foot -friendly designseach year. The Adidas credo is to regard shoes as feet, resulting in a product with superiorfit and performance capabilities. Tactics have been revised in getting these products out forconsumption. As a result, products have been repositioned in higher -end and sportsspecialty stores.In 2002 Adidas footwear innovation, ClimaCool TM, made its debut. The new technologyadded breathable materials to the shoe. In July, the Group completed its three-divisionalstructure for its sore brand, Adidas, and positioned its third division as Adidas Sports Style .In 2004 Impossible is nothing became the central message of a global campaign thatAdidas launched. It refers to the shared attitude with the athletes, of always pushingyourself further, to beat the limits. In September, Adidas designer Stella McCartneyannounced their partnership, introducing the Adidas by Stella McCartney collection.On January 2006, Adidas announced the acquisition of Reebok LTD. By combining two of themost respected and well-known brands in the worldwide sporting goods industry, the newGroup will benefit from a more competitive worldwide platform, well-defined andcomplementary brand identities, a wider range of products, and a stronger presence acrossteams, athletes, events and leagues.Adidas continues to prove itself as a brand built to last thr ough a game plan of reinvention.With the recent acquisition of a lifetime partnership with Orlando Magics Tracy McGrady(basketball) and its heavy involvement with 2002 World Cup, it continues to strike savvydeals that capitalize on the star power of young athletes and increase its visibility in themarketplace.It appears that team Adidas has honed its strategy to become a revitalized contender intoday s competitive sporting goods market and is now duly recognized as the sneaker ofyesterday and today. 41
  42. 42. MARKETING MIXPRODUCTCORE NEEDSThe fundamental level is the core benefit; the benefit here is to protect the foot and providecomfort.BASIC PRODUCTThis is the second level here the marketer has to convert the core needs into the basicproduct of the customer. Sturdy footwear with a comfortable body, a lasting sole and valuefor money is the basicAUGUMENTED PRODUCTSAugmented products are those that the marketer provides to their customers, whichexceeds their expectations. 42
  43. 43. PRODUCT LINE WIDTH OF NIKE Footwear Accessories Sports Sports Body care wear Equipment Football Bags T- shirts Basket ball Deo Running Backpacks Hoodies Football Cricket Sunglasses Track suits Golf equipments Basket ball Gloves Track jackets Cycling Wind runner Tops Shorts Pants PRODUCT DEPTH Nike has different shoes for different sports like for running on hard surface, smooth surface, cycling, basket ball, cricket. PRODUCT LINE WIDTH OF ADIDAS Foot wear Accessories Sports wear Sport Body Care EquipmentsFoot ball Bags Jackets Foot ball DeoRunning Eye gear Jerseys Basket ball Shower gelTennis Watches Scarves Football pump Perfumes 43
  44. 44. Basket ball Water bottles Swimwear Cricket bats After shave Mats Pants tights Wrist band Tops Padding Shorts Hats Sweatshirts Socks Tracksuits Dresses Shirts Skirts PRODUCT DEPTH Under football sports shoes include -Soft ground, hard ground, firm ground, turf rugby, Astroturf, leisure wear, asphalt, multi surface and rugby. COLLECTION OF FOOTWEAR Adipore, Classics, Clubs, F50, Predator PRODUCT PROFILE NIKE Apart from delivering a pair of comfortable sports shoes Nike also provides a number of value-added features with its products. The features that are a part of every Nike sports shoe are as follows. High Performance Sports Shoes: Nike has patented the Air system and has made it into a regular feature in most of its models. Many models feature an air pocket in the shoe that reduces the weight of the shoe and reduces pressure on the heels. Besides the ov erall design and compactness of the shoes have made it a favorite of many professional athletes around the world. 44
  45. 45. Comfort:Nike shoes are renowned all over the world for the comfort they provide. Well padded andcushioned, they provide a tremendous level of comfort to the wearer and reduce the strainto his feet while playing.Lightweight:This attribute is in line with the two described above. A lightweight shoe provides greatermobility and eases the pressure on the feet of the wearer.Durability:People purchasing a pair of shoes at such a high price often feel that they have made aninvestment. They would obviously want to see their shoes last a long time. To prove thispoint we draw the example of the authors of this marketing plan. All of us own a pair ofNike s and have been wearing them for well over two years a symbol of the durability ofNike shoes.Style:Nike s designs are considered to be the most stylish in the industry and beat all others as faras looks are concerned. Attractively packaged, it is a delight to bring a pair home. Add to thisthe Swoosh the most recognizable symbol in sports and you have a product that wouldgive the user a definite sense of pride.ADIDASAdidas shoes are very comfortable, light weight, stylish and great value for money.The soles are designed really well and give you great grip across all terrains.The shoes are very easy on the legs and they protect you from any kind of twists or sprains.PLACECHANNEL LEVELSThe producer and the final customer ar e part of every channel. A zero level channel or adirect channel is one in which the product reaches the customers hand directly from themanufacturer. Nike and adidas follows a one level channel or an indirect channel methodwhere there is a manufacture who manufactures the goods and then they get it to the retail 45
  46. 46. outlets and then it reaches to the customers. Nike has out sourced their production to SouthAsian countries like Taiwan China Indonesia and Korea who produces the goods and thensends them to the retailers. There is only a single channel in between the manufacturer andthe customer.CHANNEL LENGTHThe number of intermediaries that a product has to go through before it reaches the finalconsumer. Both Nike and adidas has only one intermediary b efore the final good reachesthe consumer from the manufacturer and it s the retailer.CHANNEL BREADTHThe number of different entities that are involved for the same distribution function atdifferent stages in a distribution channel. There are no entiti es involved during any stages ofthe production or the distribution for both Nike and AdidasPRODUCT BRAND EXTENTIONThe introduction of a product that is known to a company but which has features ordimensions which are new to consumers, there are three types of product extensionsrevisions, additions and repositioning. Bats are already a product for adidas but the launchof Adidas ST a new range of bats with the signature of Sachin Tendulkar is an example forproduct extension. Another extension is t he different types of shoes that adidas has forfootball. While Nike hasThe use of a well known brand name to launch a new product, of an unrelated category intothe market is brand extension. Nike has extended its brand from sports shoes andsportswear it has launched a new range of watches, apparel, bags and deodorants for bothmen and women. Adidas has also extended its brand to causal wears and toiletries for bothmen and women; water bottles, bags and sports equipment.CHANNEL MANAGEMENT PRACTICESThe channel chosen affects all other marketing decisions. The company s pricing depends onwhether it uses mass merchandises or high quality boutiques. In managing theintermediaries the firm must decide how many efforts to devote to push and pull strategy.Push strategy uses the manufacturer s sales force, trade promotion, money or other meansto induce intermediaries to carry, promote and sell the product to users. Pull strategy, the 46
  47. 47. 47 : $723e `aXdc `Ypul b Ad da B kha a` Y Xbetter business than at normal business days D - D H1 1MRP for e ch s e There are annual and bi annual discounts at the stores which attract e s s se y e c y53 BG1 F10 6 H815 6 C5 721 21 A0B C5 G 5 B H1 8 IWV CT e e es e 20 to 30% profit on theD 6 5510 e ces e se y e c C5 28 1 B 2 1C 6 H1 7 C5 721 y e se ves e e e s veH 0 C5 21A0 B C5 G 5 s y ese 61 es 86A CT s c D5 F610 961H 1 92872100B HH85 721 1787U 21 C5 7 86 A 6 C98C e e s e ceHH1 289610 928 G F8E 6 71 H 5 F610 C58P @ H1y e e e sc e e e e C5 4 B 72 6 AA3 C5 2B 7 86A 61 7216G e e e s e ceC5BG 51C5 8 28H 0B55 BG CT D 28H C 1 6B4 7 861 8 9 5165 928 86A C5 2 C 721 6 C5B s e y sv e e c e e e s e c e ce eC5 0B64 5 2 6 4487 8 2B C 1 @7 6 44B 5 37B6A C5 2BA3 92872 A 7 0 B64 61e e cs ee e c e s ee 86 A CT e e ces v y e trategies Basi Pri in Q SR Q PRICING D5 F610 C5 28 7 51 6 8 7210 7 e sc e e e e es 6B0 7 21 A3 B9 7210 7 C5 5 C5 B 6 03 2B C5 713 6 A C 8CP 52 0 856 71 e 1 e ss e e ve se e s c es es e c s es e C5 32852B 721 H1 6B4 5 F610 C5 28 8 58 6B4 G 5 37B6 A C5 6 B4 7210 7 C5 e e s e c ey e e c e e s 51C5 B 0387 0 6 C5B 7 21 52 0 856 71 C5 C58P 6 03 2B C5 71 3 6 A C5 9 5165 e e ss e ve se e s s e y ey e s e ec s e s HH3A 4B AH C C5 C58P 721 5 37B6A C5 5 B0B6A C5 721 21A0B C5 4 B e e e e cs e es ces 63 B 6 C5 ec y ey 3 9 5165 C 3I D9285 F610 H 221C 4B 9 5165 HH3A 7 21 C 3A C5BG 3 17871 721 F8E s s e y ses e y c e e e s se s s D58 6 76B B5 86187 06 528 es e e e C5 928 3728 3C5 @ 86187 06 528 0 B64 5 37B6A C5 7210 7 B5 6 03 2B C5 e c s es e e c es e e ec s e 713 6 A B5 2B851 82300B 4B 06B4 6 C5B 721 2B85B0B6A @928 856 71 es @ c c s e 3 6 635 143210 e ses ve s c
  48. 48. N k Zoo s r t Kob v us V Sn a ks xws syrwv : $10,000 Co r xst na u sry € rx box, gn d b s ‚ Kob B an ‚w s PROMOTIONPromotions are mainly focused on the consumer with prices at trade promotions increasingor decreasing with the conte t of the specific promotion drive Both Nike and Adidas are f ginto a lot of sponsorships and advertising.Nike centred their brand e uity model on the platforms the endorsement focus strategy h i icreating a dominant media presence development of Flagship stores NikeT wn and sub i o ibranding. The Adidas strategies were based on, endorsement focus strategy, advertising,sponsorship programs focusing on major global events, sports associations, and teams, andsub-brands. To create brand awareness both companies have been usi endorsement ngstrategies in their brand-building programs. What differs is that Adidas focuses onsponsorship of teams and events e.g. national teams and big sport events like the OlympicGames and different World Championship events. This will help themto create awarenesswith help from different types of media. In contrast Nike has their focus on individuals likeM. Jordan and T. Woods and their success stories.Nike s advertising strategy was to create dominant presence in media. Nike created media ppresence in several trend setting United States cities. TV ads linking Nike to a city were used,but real drivers were huge oversized billboards and murals on buildings that blanketed citieswith messages featuring key Nike-sponsored athletes, not products. A didas took up thecompetition with Nike through raising their advertising budget to a level that made itpossible to compete with Nike on the same conditions and the same strength as Nike did tocapture the consumer interest. Adidas did not just spend moremoney they made an impact qwith brilliant e ecutions. They made TV and other advertising campaigns. The company fcommunicate their heritage of innovation, technology and big success stories withpersonalities like Emil Zatopek, Mohammad Ali. 48
  49. 49. Adidas tried to spread meanings like We know then- we know now and There is nothingbetween you and success, so exceed your own expectations and limitations and Earn it .The success was obvious and after hard work and striving toward a top position in theindustry Adidas was back in business.Nike s third strategy was to develop, flag ship stores, Nike Town shops in bigger cities, firstnational, and then abroad. Nike was the first company to establish flagship stores and itturned out to be a sensation. Adidas choice was with which they made great success.Examples of that is the Adidas Streetball Challenge a local three-person team basketballtournament, this event started out as a trail in Berlin in the beginning Chart-03: Adidasmarket Share comparison of the 1990s as one time occasion. In the mid 1990s it hadbecome a huge sport event with about 500,000 participants all over the bigger cities inEurope. In the finals in Germany it attracted 3200 players and 40.000 spectators. Adidasmade hereby a brand-building success. 49
  50. 50. ANALYSIS REPORTCUSTOMER SURVEYWe conducted a customer survey to find out the customer preference and why peopleprefer a certain brand. Our survey consisted of people in the age group 15 -40. Most of thempreferred Nike to Adidas, but felt that Nike was overpriced. Those who preferred A didas,however showed great brand loyalty to the brand. We asked them to rate attributes likequality, price, durability, comfort, style, advertising and innovation on a scale of 10. Theresults that we obtained is graphically shown below. 12 10 8 6 Nike Adidas 4 2 0 Quality Durability Price Comfort Style Advertising InnovationMarketing StrategiesBoth Nike and Adidas are in the maturity stage of the product life cycle. The market isbasically experiencing a slowdown in sales growth because the products have achievedacceptance by their most potential buyers. Profits are stabilising and declining because of 50
  51. 51. the hyper competition phenomenon explained earlier. Both Nike and Adidas help athletesperform at the peak of their ability and this goal continues the drive the brands activitiestoday. Both Nike and Adidas use celebrity and team endors ements as the base formarketing their products. Nike traditionally sponsors teams and Adidas sponsors individualplayers.The overall marketing strategy adopted by both firms is highly researched and successful.They must keep innovating and achieve prof its through high volume and low cost.Porter s Generic StrategiesOverall cost leadershipNike has always been higher priced than Adidas and both of them use this difference againsteach other, Nike trying to reiterate its high performance premium stand and Adidas tryingto capture the market with lower prices.DifferentiationNike offers its consumers the option to customise their own shoes on its website, a hugedifferentiation that Adidas does not have. Nike also has a large array of innovative product s,including the Nike+, in collaboration with Apple. Adidas stands for competing and winningover yourself attitude, aptly represented by their slogan Impossible is Nothing . Nikecommunicates a provocative and aggressive winner attitude with their Just Do It slogan.FocusNike and Adidas focus on aspiring athletes between the age of 15 -35. They also cater to theneeds of people who consider in sport as a way of life and are willing to pay a premium forthe brand value of the products.CREATING VALUENike and Adidas provide customers the best goods in athletic footwear. They giveimportance to comfort, durability and value for money. Nike is known for coming out withinnovative products like Nike+. Adidas on the other hand offers customers the same val uebut at a marginally lower cost. Both Nike and Adidas are taking full advantage of the newlyexpanding footwear market. They offer discounts during strategic occasions and increasesales. Nike and Adidas are continuously coming out with new and cutting e dge technology 51
  52. 52. which keep up with the needs of the customers. They provide a brand value and haveestablished themselves in the market of footwear industry and consumers are proud to beassociated with them.Nike and Adidas have a variety of sports shoes which suit various needs of variouscustomers. From basketball to gym shoes, they cater to all needs in the athletic shoesindustry.Nike and Adidas are into extensive advertising campaigns which reflect their positioning inthe minds of their customers. Adidas stands for competing and winning over yourselfattitude, aptly represented by their slogan Impossible is Nothing . Nike communicates aprovocative and aggressive winner attitude with their Just Do It slogan. Both Nike andAdidas use celebrity and team endorsements as the base for marketing their products. Niketraditionally sponsors teams and Adidas sponsors individual players.Capturing ValuePricing philosophyThe basic pricing philosophy of both brands is dependent upon the quality of the produ ct. Aproduct with a high degree of innovation also has a higher pricing. Their customers arewilling to pay a higher price for their brand value and the benefits that their products offer.Considering the higher income of today s generation and the increa sing buying power ofcustomers both Nike and Adidas have priced their products wisely.They have been largely successful with recovering the value generated as the market ismostly receptive to their innovative and advanced products. The younger generation lovesthe brand value and are willing to pay a premium price for the products offered. With theincrease in awareness among people about the importance of wearing the right kind ofshoes for a particular sport and the quantum leap in the buying power of c ustomers, theathletic footwear has been fast growing.Sustaining ValueAccording to our survey, both brands have been successful at retaining customers. Adidashas higher brand loyalty among the two, but Nike s cutting edge technology enables it tomaintain its customer base. Adidas s three stripes and the Nike s swoosh are among theworld s top logos but the swoosh is dominant in most places. 52

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