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Presented By: GORKY PURI NADIR ALI QURESHI VIKAS TOLANI SHVETA KAUSHAL GROUP NO. 22
Continue to bring inspiration to present and future athletes, while maintaining the company's standard of quality for its products.
Company Overview
Reeboks principal business activity is to design & worldwide marketing of high quality footwear, apparel & equipment. Distributed around the world: (Asia, Australia, Canada, Europe, Latin America, and the United States) Reebok is 3rd largest seller of athletic footwear and athletic apparel in the world.
Product in Offer
Running Pink Ribbon
Sports equipments
Men's Styling Women Sportswear
REEBOK'S POSITIONING
Celebrate Individuality in Sport and Life
Reebok understands that people are, above all, unique.
Reeboks positioning reflects this; celebrating the distinct qualities that make people who they are - their unique points of view, their individual style and their remarkable talents and accomplishments.
Reebok celebrates their individuality, their authenticity
COMPETITIVE SCOPES
ADIDAS
ADIDAS is in the sportswear, apparel and sports accessories industry. The main competitors of ADIDAS in the industry are NIKE, and PUMA since it acquired REEBOK in January, 2006.
NIKE
Nike is currently the world leader in Sports goods industry with a brand value of $12,672 million. The company concentrates on style and technology with a high price range of the products.
PUMA AG
A German based company best known for its football shoes and athletic shoes. The competition from Puma has become stronger after the 2008 Olympics in which the Jamaican sprinter Usain Bolt broke records and won 6 gold medals. Bolt was wearing Puma shoes!
SWOT ANALYSIS
Strengths : Weaknesses
Research and development Marketing Outsourcing Name recognition Y2K+ Readiness Financials
Dependency on Footwear sales Inefficiencies within Management Rely on Retail sales stores to sell.
CONTD.
Opportunities : Threats
Asia College/Pro Sports Emergence of more Sporting events Womens Marketplace Competition Sweat Shop Issues Manufacturing Capacity Global/Domestic Economies
Energy Audits
Consumer Behavior
Cultural Factors Social Factors
Economic Factors
Product Factors Demographic Factors
Readiness to Pay
37.07 40 35 25.86 30 25 20 15 10 5 0
500-999 1000-1999 2000-2999 3000-3999 4000 +
19.83
7.76
9.48
Strategies
To solve problems.
To make themselves feel good.
help in the achievement of the marketing objectives of the company which are,
Market penetration gaining market share across all markets in
which we compete
Market development expanding into new markets and addressing
providing clear and consistent messaging and supporting product initiatives at the point-of-sale.
MARKET INDUSTRY
Comfort
Durability Style Price Brand
Adidas strategy in India has been consistent over the past few years. The broad elements of the strategy are to target the brand to urban youth with our brand proposition from competition to lifestyle using the authentic sports platform and build and reinforce credibility through relevant brand ambassadors and grassroots sports marketing programs. It would target principal consumption centres, namely metros and build significant stand-alone exclusive store presence in significant locations. The strategy would be to play to our strengths, i.e. in apparel and mid to high priced footwear.
CONTINUED
Multi-Brand Approach
There is a natural limit a brand can achieve given the diverse tastes and expectations of a highly fragmented consumer market. Thus, a multi-brand approach will provide the firm with a major competitive advantage and significant additional commercial opportunities compared to a single brand strategy. It can leverage the power of its brands in a more precise and meaningful way, utilizing the combined strengths of each to compete for a higher percentage of the market, covering a greater number of consumer needs, price points and demographics.
COMPETENCE
Broader distribution
Close cooperation with retailers can significantly improve the in-
store experience for the product. Establishing shop-in-shop formats (e.g. with JJB and Dicks Sporting Goods) or retail partnerships (e.g. with INTERSPORT) are examples where the company is leading the industry. Such co operations can be particularly effective in markets that have become dominated by price and lack of differentiation.
Cost leadership
reduce and optimize costs, through scale benefits, back office consolidation and combined capital expenditure planning.
PUMA
BRAND PERSONALITY
Passion Openness Self-belief Entrepreneurship
SUCCESS FACTORS
Strong Presence: Sports and lifestyle fashion market
Products meeting market demand
4 Ps of Marketing Mix
PRODUCT
It has wide range of footwear, sportswear, sports goods, fashion accessories.
Black label include collboration with
renowned designers such as Alexander Puma group owns Puma, Tretorn, Hussein, Chalayan.
PRICE
Pumas pricing is designed to be competitive to the other fashion shoe retailers. The pricing is based on the basis of premium
PLACE
Puma shoes are distributed to Multi-Brand store front and the exclusive Puma stores across countries. It allows Puma to offer a
PROMOTION
Location, targeted advertising in the newspaper and strategic alliances serves as the foundation of Puma advertising and
promotion effort. The athletes and other famous sports personalities are always taken as brand ambassadors. They form the prime building blocks of their portion strategy.
SWOT ANALYSIS
STRENGTHS
Branding Management International Strategy Experience in R&D WEAKNESS Missing sports segment Distribution system Comparable lower financial resources
OPPORTUNITIES
Technology Acquisitions Sponsorships Fitness hype THREATS High competition Limitation of products Actual economic situation
Rivalry
Own distribution
COMPETITORS
NIKE. Inc
Number one sports brand in the world
ADIDAS SALOMON AG
Focus on core sports like soccer, tennis, athletics, skiing
PRADA SPORTSWEAR
Well known luxury brand
DIESEL
Major fashion brand including: sunglasses, footwear, watches, fragrances and writing tools
NIKE
Nike is a global sports shoe giant company. It is the largest seller of athletic footwear in the world, holding the lion share of 33% of the
global market. The company has production facilities in Asia, sales facilities in almost 200 countries, and customer service and other operational units worldwide
THE 4 Ps OF MARKETING
PRODUCT
Nike offers a wide range of shoe, apparel and equipment products,
Nike started selling sports apparel, athletic bags and accessory items in 1979. Their brand Cole Haan carries a line of dress and casual footwear and accessories for men, women and children.
They also market head gear under the brand name Sports
through Nike IHM, Inc. Bauer Nike Hockey Inc. manufactures and distributes ice skates, skate blades, in-roller skates, protective gear, hockey sticks and hockey jerseys and accessories.
PRICE
Nikes pricing is designed to be competitive to the other fashion
shoe retailers.
The pricing is based on the basis of premium segment as target customers. Nike as a brand commands high premiums. Nikes pricing strategy makes use of vertical integration in pricing wherein they own participants at differing channel levels or take part in more than one channel level operations. This can control costs and influence product pricing.
PLACE
Nike shoes are carried by multi-brand stores and the exclusive Nike
Nike sells its product to about 20,000 retail accounts in the U.S. and in almost 200 countries around the world.
Independent distributors need not adapt to local pressures because the 4Ps of marketing are managed by distributors.
PROMOTION
Promotion is largely dependent on finding accessible store locations. It also avails of targeted advertising in the newspaper and creating strategic alliances.
Nike has a number of famous athletes that serve as brand ambassadors such as the Brazilian Soccer Team. Nike also sponsors events such as Hoop It Up and The Golden West Invitational. Nikes brand images, the Nike name and the trademark swoosh, make it one of the most recognizable brands in the world. Nikes brand power is one reason for its high revenues. Nikes quality products, loyal customer base and its great marketing techniques all contribute to make the shoe empire a huge success.
SWOT ANALYSIS
STRENGTHS
Nike is a globally recognized for being the number one sportswear brand in the World.
Nike being a competitive organization has a healthy aversion towards its competitors i.e. during Atlanta Olympics, Reebok expensed on sponsoring the games; Nike however sponsored the top athletes and due to this step, it gained valuable coverage.
Nike has no factories; rather it uses contract factories to get the work done which makes it quite a lean organization. It has contracts with above 700 shops globally in about 45 different countries.
STRENGTHS
Nike is quite strong regarding its research and development; quite evident regarding its evolving and innovative product range.
They manufacture high quality at the lowest possible price, if prices rise due to price hike then the production process is made cheaper by changing the place of production. It belongs to the Fortune 500 companies. Nike employs about more than 30.000 people worldwide. It has a strong sense of marketing campaign by sponsoring top athletes. It uses linarite foam and fly wire materials in order to make the manufactured shoes lighter and more controllable.
WEAKNESSES
Even though the organization has a diversified range for sportswear, the income of the business, however, is still heavily dependent upon its share of the footwear market which leaves it at a quite vulnerable spot if for any reason its market share erodes.
The retail sector is price sensitive; retailers usually tend to offer a very similar experience to the consumers with another cheaper product, which in return tends to get squeezed as retailers try to pass some of the low price competition pressure onto Nike. Nike was for quite some time unwilling to disclose any type of information concerning its partnering companies.
WEAKNESSES
It was charged with the violation of overtime and
minimum wage rates in Vietnam, 1996, that was seen as having poor working conditions, and that it was also charged for exploiting cheap workforce overseas. Pakistan and Cambodia to produce soccer balls.
Nike was also reported to have applied child labor in It was positioned as a subject of criticism by anti-
globalization groups due to its unruly and exploited manner that was quite a disaster for its reputation.
OPPORTUNITIES
The brand is sternly defended by its owners who believe that Nike is not a fashion brand, however, a large number of consumers wear Nike Product because they derive a fashion trend rather than to participate in a sport.
It is mostly argued that in youth culture, Nike is a fashion brand which also creates opportunities for Nike since its products would become outdated before even the product wears out i.e. consumers will feel the need to replace the product with a newer trend.
There are many international regions that still need tapping and there is need for sportswear and with Nikes strong global brand recognition, it can initiate in many markets that have the disposable income to spend on high value sports goods. Nike gives a lot of effort on its corporate marketing mainly through the promotion of corporate brand and sponsorship agreements.
THREATS
Nike is exposed to the international nature of trade so it sells its product in different currencies which destabilizes the costs and margins for profits over long periods of time.
The market for sports shoes and sportswear is quite competitive; the competitors are constantly developing alternative brands and techniques to take away Nikes market share.
THREATS
Consumers are constantly shopping around for a better deal that conveys a good quality and if one store charges a higher price for the products, the consumer would try to seek a better deal of the same product in the premises that delivers the same value but cheaper of the two, this type of price sensitivity among the consumers is a potential threat to Nike.
The textile industry unpleasantly upsets the atmosphere, and therefore the organization is constantly struggling to retain its eco-friendly reputation.
the existing firms. In the footwear industry, the level of rivalry is high. There are several competitors such as Reebok, Adidas, New Balance, Puma and of course Nike. The competition between these companies is so intense because they are dealing with short-life cycles products.
over the past twenty years is beginning to stabilize. This forces firms to differentiate using marketing, advertising, fashion and technology to steal market share away from their competitors.
sport footwear industry. The threat in this area is low because many of the powerful companies in this industry are benefit from the economic of scale. Since they are producing, marketing, selling and innovating more, they are saving money because their fixed costs are spread out over a larger volume.
industry is product differentiation. Big companies such as Nike, Reebok and Adidas own their brand identity that differentiates their product to others and they have established their own loyal costumers.
Each pair of shoes is a very small percentage of overall sales and consumers usually do not buy shoes in large quantities.
suppliers (especially in foreign manufacturing) to integrate forward into the industry's business (in overseas markets) and become a rival to the industry.
Since the raw materials and equipment to make the sport shoes is very important to the companies, supplier cab gain bargaining power.
Threat of substitutes
This factor is low in the sport footwear industry, because there are already few substitute products for it, such as the specific
innovating and adapting to the new trends and costumers needs that can decrease the treat of substitute products
RECOMMENDATIONS
Nike should be more aware of their bad reputation in the labor practice and try to come out with solution for the unethical business.
Nike is a well known for their product all over the world. However, Nike must be more careful in releasing the advertising because such big reputation Costumer price sensitivity is a potential treat to Nike, thats why Nike need also to consider their product price in order to compete with the other sport brand products. Try to think solution in case for the big treat of the merger of other sport brand. Focus on their product development is very good, but they have to consider also what are the costumer really needs
Home market lobbying/pressure groups Very few sporting events apart from cricket fixtures to attract customers
ECONOMIC
Marginal share of 2.44 percent in global trade worth US$ 97.606 billion Estimated target of 12 bn $ (7bn $ export + 5 bn $ domestic) trade by the year 2012 overseas economies and trends.
The Indian footwear retail market is expected to grow at a CAGR of over 20% for the period spanning from 2008 to 2011. Footwear is expected to comprise about 60% of the total leather exports by 2011 from over 38% in 2006-07.
Growing middle class and growing buyer power leading customers to look for branded shoes. seasonality issues sports is more of a rage in summers. Lack of targeting of market segments for kids and women .
SOCIAL
In nutshell the supply chain in footwear starts from the farmers end and ends with finished goods in the customers hand. The farmers who tame the animals send the skins to skins & hides collector in their respective area, then these raw materials are sent to the tannery which transforms these skins into raw material for the shoe manufacturing companies, which in turn convert this into finished goods in the form of footwear.
Further these footwear are sent to warehouse of the manufacturing companies, after that these goods are supplies to customers through various channel members like retailers, wholesalers, retail chains, department stores. The diagrammatic illustration is shown below:
CONSUMERS PREFERENCE
Globally, Nike is the market leader and has captured the major share of the footwear industry. It is known for its excellent quality,
designs and the brand name. It is widely accepted and preferred at a global level.
INDIAN PERSPECTIVE
In India, Reebok and Nike are mostly preferred by men as they are priced competitively and has a fairly good
reputation. Puma is the first choice among girls due to their feminine designs and colors. They are even reasonably priced.
STRENGTHS
Existence of more than sufficient productive capacity in Tanning
Easy availability to Export Market
and USA
WEAKNESSES
Environmental Problem
Delay in delieveries Uneconomical size of manufacturing units Non availability of quality footwear
OPPORTUNITIES
De-reservation of the footwear sector
Growing fashion consciousness globally Growing international and domestic market Use of modern technology Exhibit strengths in manufacturing ,eg.
THREATS
Entry of multinational in domestic market
Stiff competition from other countries Limited scope for mobilising funds through
private placement and public issues,as many business are family owned
CONCLUSION
The athletic footwear industry is a strong, market driven industry.
buyers is low because each pair of shoes sold in very small percentage, the bargaining supplier is medium, and the only weaknesses to this industry is the current rivalry.
Q7.IF PRICES OF YOUR PREFERED BRAND INCREASES WILL YOU PURCHASE AGAIN
AMONG ALL ITS CLOSE COUNTERPARTS IN THE SPORTS SHOE AND APPAREL SEGEMENTS.
AFTER ITS SPONSERSHIP TO MAJOR SPORTS EVENTS AND TEAMS LIKE
might led adidas at the top spot in the pack in coming financial year
CONSUMERS ARE NOT SHOWING THAT KIND OF CRAZE IN REEBOK
ONLY 8% MARKET HAS BEEN COVERED BY REEBOK IN RECENT PAST. THAT IS MISERABLE AS PER ITS STANDARD THE COST OF THE PRODUCTS ARE NOT AFFORDABLE AS COMPARED TO EUROPEAN AND U.S MARKET
Suggestion
THE BOTTOM LINE OF THE MARKET RESEARCH SPEAKS THAT BRANDED SHOES IN INDIA HAS BEEN INCREASINSG ON DAY BY DAY BASIS. THAT SOUNDS GOOD FOR INTERNATIONAL AS WELL AS DOMESTIC MARKET.