1Nike vs Adidas

DEEPTHI RAJ.RDHARINI.RMADUMATHI.SPRATHEEBA.GVINOTHINI

MARKETING MANAGEMENT ASSIGNMENT-I

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Table of Contents Current performing

trends of the sportswear industry.

Nike-Introduction Products Endorsements Marketing Strategy Adidas-Introduction Products Endorsements Marketing Strategy

The brands in sports

Side by Side: Revenue

comparison Market

capitalization: Nike vs Adidas

SWOT Analysis-Nike SWOT Analysis-

Adidas

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Slides 4 – 8 : Deepthi Raj R Slides 12 – 27 : Pratheeba G Slides 28 – 33 & Slides 51 – 61 : Vinodhini M Slides 34 – 46 : Madumathi S Slides 47 – 50 : Dharini R

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SPORTSWEAR INDUSTRY

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7Nike vs Adidas

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Nike Founded in January 1964 as Blue Ribbon Sports

(BRS) by Philip Knight and his coach Bill Bowerman.

Officially became Nike, Inc. on May 30, 1971.

Sponsors many high-profile athletes and sports teams around the world.

Headquartered in Washington County, Oregon.

Nike is the largest sportswear manufacturer in the world.

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Nike CEO- Mark Parker

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Goals To make a profit for the shareholders.

Looking to increase its profit by 10% annually.

Manufacturing superior products and innovating in the area of product design.

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Challenges

The apparel industry is struggling.

There are the major competitors.

The most popular product might be going out of style.

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Products Shoes Jerseys Shorts  Cleats  Baselayers For track and field,

baseball, ice hockey, tennis, association football, lacrosse, basketball, and cricket.

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Visible Air Technology Nike designer Tinker Hatfield created the Nike

Air Max with Visible Air. Altered the course of sneakers. Makes Nike’s footwear lighter than any of it’s

counterparts’. Each air system comprises pressurized

compressible air system that provides cushioning based on the specific sport.

Air does not compress and collapse. Provides durable cushioning.

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Nike Flywire Nike Flywire is a thread, composed

of Vectran or nylon, and developed by Nike, used in the upper of a shoe.

To minimize weight and maximize support.

Shoes containing Flywire became available for consumer purchase in 2008.

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Nike’s Cost-plus Pricing Model

Nike began to raise its prices while the rest of the market was dropping them

. Their competitors were offering heavy

promotional discounts to try to stay afloat and keep consumers buying. 

 Nike appeals as a premium product.

Nike had originally used a cost-plus model.

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Pricing and Packages-Nike

Running shoes: ~$100.00.

Football cleats:~$140.00. Women's Shoes:~ $70.00.

NFL jerseys:~ $100. Jacket:~ $85.

Nike+ Sportband:~$59.00.

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Celebrity Endorsements

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Nike puts its money behind some of the world’s biggest names in sports

   Michael Jordan- $60 million

Tiger Woods-$20 million

 Rafael Nadal, LeBronJames, Roger Federer-$10 million

 Maria Sharapova-$8.75 million

 Kevin Durant- $8.5 million

Kobe Bryant-$8 million

 Cristiano Ronaldo- $8 million

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Cancelled Endorsements

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The big names that fell out of Nike’s grace : Maria Sharapova- tested positive for

meldonium.   Oscar Pistorius- amputee shot and killed

his girlfriend.

Lance Armstrong- illegal doping

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Nike 5 year Kit Deal With Indian Cricket Worth $60 million

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Nike and Indian Cricket Nike joined up with India back in 2005 on a five-

year deal worth $45 million($9 million per year.)  Original agreement was later extended to

include the 2011 World Cup

India went on to win the tournament on home soil that year.

Re-upped the deal for 5 additional years at ~$12 million per.

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Da Da Ding!!!

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The First Nike Marketing Strategy

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Bill Bowerman used a waffle maker to create the first ‘Nike Moon Shoe’.

Bowerman later began writing articles and books about jogging and how it could be used as part of a fitness program.

This helped inspire the 1970’s running boom that Nike clearly benefitted from.

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Styling Of Product Objective Or PurposeCompany does this through associating triumph with the apparel. For instance, when a superstar athlete sponsors a particular brand of sports shoes, the shoes will be related with victory. It has psychological effect to the viewers and this is reinforced with promotional which affirm this point.

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Targeting strategies The targeting

techniques include product sponsorship by professional and well known athletic team, college sports team as well as celebrity athletes. This marketing strategy of Nike is particularly successful as of its capability to reach many athletes.

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Consumer Behavior towards Nike

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Nike primarily targets its younger customers and not only sports people

Powerful brand image Footwear sales remained unaffected even during

recession. The ‘Just Do It’ slogan and the Swoosh are global

style statements.

Ventured into digital sports and e-commerce to cope with the changes in technology trends.

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Adidas German multinational corporation that designs

and manufactures sports shoes, clothing and accessories.

Headquartered in Herzogenaurach, Bavaria. Registered on 18 August 1949 by Adolf Dassler.

Largest sportswear manufacturer in Europe, second biggest in the world.

Subsidiaries:Reebok;Runtastic;Taylor-Made Adidas; Ashworth and Matix

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Goals and Challenges

GOALS: Be the top seller in the shoe, sportswear, clothing

and accessory industry far beyond their competitors.

Increase profit. CHALLENGES:

Separating and establishing themselves over their competitors like Nike, Under Armour, Puma.

Obtaining celebrity endorsements from competitors.

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Products 4 brands with 4200 products.

Adidas: footwear, sport kits, apparel, toiletries. Reebok is the leading subsidiary in the Adidas

group.

Rockport :outdoor footwear, apparel, accessories. Taylor Made: golfing.

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Footwear

The major product of Adidas is footwear. Come in various design and style

Adidas footwear is robust and athletic.

These products are not need based.

The shoes are bought by customers to satisfy their wants and desires.

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Apparel

The first Adidas item of apparel was the Franz Beckenbauer tracksuit created in 1967.

Clothing items varying from men's and women's jackets, leggings, track pants, and t-shirts.

Largest manufacturer of sports bras in Europe, second largest manufacturer in the world .

T-Shirts, jackets, sweatshirts, shorts are in great demand.

Targeted towards comfort during heavy activity.

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Pricing and Packages-Adidas

Adidas shoes start at under $50 

Their apparel starts under $25

 Adidas has fair prices for high quality sport and fashion clothing, accessories, and footwear.

Men's sneakers are most expensive.

Children's shoes are the lowest price.

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Adidas-Pricing Strategy Adidas, because of its style, design and

promotions uses skimming prices as well as competitive pricing.

For run of the mill products, Adidas uses competitive pricing keeping in mind competitors like Nike, Reebok and Puma.

For products which are newly introduced in the market and are uniquely designed, Adidas uses skimming price.

Apparel constantly use skimming price and are higher priced due to brand equity of Adidas in the apparel market.

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Celebrity Endorsements Lionel Messi -$20m

Derrick Rose-$14m

Damian Lillard-$10m

David Beckham

Katy Perry

Kanye west

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MARKETING STRATEGIES Understands the market demand and the sports

products.

Adidas Sport Performance focuses on interactive products, like the Adidas miCoach.

World’s first web-based training service, combines the state-of-the-art training with a personalized web service and real-time audio coaching.

It is compatible with all portable music players.

Focus And Differentiation Strategies

FOCUS:

The target customers are those who play sports.

Main age group is 20 to 29 year old people and high school athletes 14 to 19 years of teenagers.

DIFFERENTIATION:

Adidas has a strong history of connection with sports, which is stronger than all other brands.

The play to win strategy.

Associated with big events like NBA and the FIFA World Cup.

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The sports

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FootballNIKE

Products: Football kits, Nike Vapor, Alpha, force(cleats).

Players: Ronaldinho, Ronaldo, Cristiano Ronaldo, Didier Drogba, Neymar, Zlatan Ibrahimović, Wesley Sneijder, Wayne Rooney

Innumerable clubs including Manchester United.

 National teams-Brazil, France, England etc.

Indian football team  NFL- All team uniforms Locally- Chennaiyin FC

ADIDAS Produces the kits of many

football teams around the world Produces the balls used in

the UEFA Champions League matches and FIFA World Cup tournaments since 1970

National Teams- Argentina,Germany, Spain etc

Players- Lionel Messi

Restarted their football business in June 2015. Expects to achieve new record sales in 2016.

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CricketNIKE

Sponsors only the Indian cricket team.

Nike has recently introduced cricket shoes called Air Zoom Yorker, designed to be 30% lighter than their competitors.

ADIDAS

England

Royal Challengers Bangalore

 Sponsors the likes of Kevin Pietersen, Sachin Tendulkar

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BasketballNIKE

USA, Canada, Brazil, China teams etc.

Shoes and apparel named after LeBron James, Kobe Bryant and Air Jordan after the legendary Michael Jordan

ADIDAS

Australia, Turkey, France, Russia

Crazylight, Rose and Lilliard series of basketball shoes.

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SIDE BY SIDE COMPARISON

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Revenue Comparison

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NIKE

Revenue -US$30.601 billion 

Operating income-US$4.175 billion 

Net income-US$3.273 billion 

Total assets-US$21.600 billion 

Total equity-US$12.707 billion 

Number of employees-62,600

ADIDAS

Revenue-€ 16.915 billion

Operating income -€ 686 million

Net income-€ 634 million 

Total assets-€11.59 billion

Total equity-€5.49 billion

Number of Employees-53,731

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SWOT ANALYSIS

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SWOT ANALYSIS -NIKE STRENGTHS  Nike is the world’s no.

1 shoemaker Nike sells its products

in more than 180 countries.

Evolving and innovative product range. 

Nike is a global brand.

WEAKNESS The income of the

business is still heavily dependent upon its share of the footwear market.

The retail sector is very price sensitive.

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SWOT ANALYSIS- NIKE

OPPORTUNITIES Nike is a fashion

brand. People do not only buy Nike to participate in sports.

Opportunity to develop products such as sport wear, sunglasses and jewellery.

THREATS costs and margins are

not stable over long periods of time. Such an exposure could mean that Nike may be manufacturing and/or selling at a loss.

Competitors are developing alternative brands to take away Nike’s market share.

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SWOT ANALYSIS- ADIDAS

Strengths Good financial position Effective Marketing

Strategy Market Leader Strong online presence Strong brand Strong international

operations Strong distribution

chain Competitive pricing

Weakness High cost structure Over pricing Limited product

line Online customer

service not helpful

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SWOT ANALYSIS- ADIDAS

Opportunities Change in consumer

lifestyles Available

technological innovations

Entering new markets Expand customers Expand

Product/Service lines Mergers/Acquisitions

Threats Competition from

foreign markets. Competitor’s action. Growing power of

consumers to set the price.

Increase in taxation Price war between

competitors

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Thank You