A_project_report_on_a_comparative_market.docx

A Project Report on A COMPARATIVE MARKET STUDY: NIKE VS ADIDAS.

Submitted By JUHI SANGTANI

For The Degree of THE BACHELOR OF MANAGEMENT STUDIES UNIVERSITY OF MUMBAI

Under the Guidance of PROF. MUSTAFA SAPATWALA

S.I.E.S. COLLEGE OF ARTS, SCIENCE AND COMMERCE SION (W), MUMBAI – 400 022 ACADEMIC YEAR – 2015-16

DECLARATION I, JUHI SANGTANI, studying in the Third year of Bachelor of Management Studies course in the academic year 2015-2016 at S.I.E.S College of Arts, Science and Commerce, Sion (West), hereby declare that I have completed the project titled, A COMPARATIVE MARKET STUDY: NIKE VS ADIDAS as a part of the course requirements of Bachelor of Management Studies of University of Mumbai. I further declare that the information presented in this project is true and original to the best of my knowledge.

Date: Place: ANITA AGRAWAL

JUHI SANGTANI

CERTIFICATE I, PROF. MUSTAFA SAPATWALA hereby certify that JUHI SANGTANI studying in the Third Year of Bachelor of Management Studies course at the S.I.E.S College of Arts, Science and Commerce, Sion (West), has completed a project on A COMPARATIVE MARKET STUDY: NIKE VS ADIDAS, under my guidance in the academic year 2015 -2016. I further declare that the information presented in this project is true and original to the best of my knowledge.

Date : PRINCIPAL Place : (Dr. Harsha Mehta)

(External Examiner)

College Seal

PROF. MUSTAFA SAPATWALA

ACKNOWLEDGEMENT I would like to express my gratitude and sincere thanks to my Project Guide PROF. MUSTAFA SAPATWALA, S.I.E.S College of Arts, Science and Commerce, for instilling confidence in me to carry out this study and extending valuable guidance and encouragement from time to time, without which it would not have been possible to undertake and complete this project. I also wish to extend my appreciation to our Principal Dr. Harsha Mehta and the Vice-Principal Prof George Abraham, for their kind co-ordination and support. I would also like to thank our BMS Coordinator Mrs. Anita Agrawal and Core Faculty Members of BMS Mr. Mustafa Sapatwala to provide us with all the required help and motivating us to do the project in the best way.

I would like to thank my colleagues for their valuable comments and suggestions for making this a cherishable experience for me. I would also like to thank my parents and my friends, who have stood by me whenever needed, and without whose support this task would not have been accomplished.

TABLE OF CONTENTS

Sr.No.

Particulars

Pages

1

EXECUTIVE SUMMARY

7

2

CHAPTER 1

8

A)

INTRODUCTION: COMPARING STRATEGY

9

B)

ATHLETIC SHOE INTRODUCTION

10

C)

INTRODUCTION TO ATHLETIC FOOTWEAR INDUSTRY

18

D)

AIMS AND OBJECTIVES OF THE REPORT

21

3

CHAPTER 2

22

A)

COMPANY PROFILE AND OVERVIEW: NIKE

23-36

B)

COMPANY PROFILE AND OVERVIEW: ADIDAS

37-51

4

CHAPTER 3

52

A)

LITERATURE REVIEW

53

B)

NIKE VS ADIDAS

55

C)

CASE STUDY

59

5

CHAPTER 4

63

A)

RESEARCH METHODOLY

64

B)

DATA COLLECTION

65

C)

QUESTIONNAIRE

66

6

CHAPTER 5

70

A)

DATA ANALYSIS AND FINDINGS

71

7

CHAPTER 6

73

A)

LIMITATIONS

74

8

CHAPTER 7

75

A)

CONCLUSION

76

B)

RECOOMENDATION AND SUGGESTION

79

9

BIBLOGRAPHY AND REFERENCES

80-81

EXECUTIVE SUMMARY From past many decades people are getting more into sports as a recreation as well as an entertainment. Hence, sports materials and equipments especially the shoes that are used in various sports are demanded much higher. Nike is the leader in the athletic shoe industry after which comes Adidas. So this clearly states that they are Giants in athletic footwear industry and are highly competing each other. In this study most of the factors are covered that affects the competition of Nike and Adidas. It contains all the details of Nike as well as Adidas. And there also a survey conducted, considering various factors of Nike and Adidas. The purpose of this report is to learn about strategy and strategic management by comparing the strategies of two companies from the same industry. The strategies of Nike and Adidas have been compared from the footwear industry. Nike and Adidas both specialize in footwear, apparel and accessories and their competition is intense as Nike is the market leader and Adidas is the market challenger. The topics in this report cover critical incidents of both Nike and Adidas that occurred in the past and the comparison between both their strategies as well their future plans. This report shows us the influence the strategy has on the success or failure of companies and how companies craft sustainable strategies that help them to retain their position in the market.

CHAPTER 1

INTRODUCTION: COMPARING STRATEGY Nike and Adidas have almost similar strategies but different implementation methods. Both the companies concentrate heavily on technology and strive to produce new and innovative products. Nike focuses on the American markets whereas Adidas focuses on the European market. Nike does not have any production plants as they only design, distribute and market their products and hence they outsource to various countries in Asia, mainly Taiwan and Korea, which outsource their production to China, Indonesia and Vietnam. Adidas on the other hand, carry out all their production in Germany and recently has adopted Nike’s outsourcing policy by outsourcing to Asian countries. Nike and Adidas both follow a premium pricing strategy which according to Kotler, is a strategy where companies charge a premium price for their products. Their competition is always intense and according to Anderson (2010) during the world cup 2010 Nike launched the popular “write the future”, three minute advertisement featuring world cup stars which was a major hit on YouTube and Adidas replied with their two minute video with celebrities like Snoop Dogg and Daft Punk into a famous scene from the movie Star Wars. Nike sponsored nine teams whereas Adidas sponsored 12 teams.

Even though Adidas was the official sponsor of the World cup 2010, Nike attached an LED display to a 30 story skyscraper in Johannesburg where soccer fans could write short messages using popular social networking websites such as Twitter and Facebook and Nike put up 100

messages on the side of the walls every night.

Adidas adiPURE III Nike Tiempo Elite

ATHLETIC SHOES (INTRODUCTION) An athletic shoe is a generic name for footwear designed for sporting and physical activities. Athletic shoes, depending on the location and the actual type of footwear, may also be referred to as trainers (British English), sandshoes, gym boots or joggers (Australian English) running shoes, runners or gutties (Canadian English, Australian English, Hiberno-English), sneakers, tennis shoes (North American English, Australian English), gym shoes, tennis, sport shoes, sneaks, or takkies (South African English) and rubber shoes (Philippine English) canvers (Nigerian English). USE IN SPORTS The term Athletic Shoes is typically used for running in a marathon or half marathon, basketball, and tennis (amongst others) but tends to exclude shoes for sports played on grass such as association football and rugby football, which are generally known as "boots", or in North America as cleats. Attributes of an athletic shoe include a flexible sole, appropriate tread for the function intended and ability to absorb impact. As the industry and design have expanded, the term "athletic shoes" is based more on the design of the bottom of the shoe than the aesthetics of the top of the shoe. Today's designs even include sandal, marry Jane and even elevated styles suitable for running, dancing and jumping. The shoes themselves are made of flexible compounds, typically featuring a sole made of dense rubber. While the original design was basic, manufacturers have since tailored athletic shoes for the different purposes that they can be used for. A specific example of this is the spiked shoe developed for track running. Many of these shoes are made up to a very large size because of athletes with large feet. High-end marathon running shoes will often come in different shapes suited to different foot types, gait etc. Generally, these shoes are divided into neutral, overpronation and underpronation (supination) running shoes to fit the respective foot strike of the runners. THERE ARE A VARIETY OF SPECIALIZED SHOES DESIGNED FOR SPECIFIC USES: Racing flats Track shoe Skate shoes Climbing shoe Approach shoe Wrestling shoes Cleats

Football boot Dance Shoe

THE SNEAKER ERA

The word sneaker is traditionally defined a shoe consisting of a solid rubber sole attached to an upper made, usually, of canvas. While rubber soled shoes called plimsolls had been in use for some time for aristocratic lawn sports, and King Henry VIII was reported to have worn a sneaker-like shoe for playing tennis, the true life of the sneaker did not begin until American inventor Charles Goodyear patented the process for vulcanization of rubber. Until that time, the sneaker as we know it now was simply not possible. The oldest sneakers used for basketball are thought to be the Converse All Stars, first produced in 1917, but the Spalding Company produced shoes in 1907 specifically for the game of basketball. Still these are not the oldest sneakers. A discovery at an estate sale has led experts to believe that the first basketball shoes were produced by Colchester Rubber Company of Colchester, Connecticut who went out of business in 1893. While there is no significant evidence to point to the use of these shoes for basketball, it seems that shoes that were produced just a few miles from the birthplace of basketball just two years after the invention of the game would certainly have been used for basketball. By the early 1900's, sneakers were being produced by small rubber companies who specialized in the production of bicycle tires. U.S. Rubber, a conglomerate of nine other rubber companies, introduced Keds in 1916 while Converse introduced the first mass marketed basketball sneaker in 1917 with their introduction of the Converse All Star. Other companies, including B.F. Goodrich and Spalding Co., were producing tennis shoes and smaller family-owned companies were manufacturing early cleared shoes. At first the market for sneakers was small and practically invisible, but after World War I, America turned to sports and physical health as a way to demonstrate moral fiber and patriotism. The market for sneakers grew steadily as young boys lined up to by sneakers endorsed by football player, Jim Thorpe and Converse All Stars endorsed by basketball player, Chuck Taylor. In the 1920's and 30's, manufacturers added traction to the soles of their sneakers and began marketing them for different sports. A major innovation of this time was the production of distinct models for boys and girls. Sneakers were known for comfort and used almost strictly for athletic endeavors. The revived Olympic Games provided exposure and heightened interest in sneakers and sports in general, leading to increased sales. It was at this time that the German sneaker manufacturer, Adidas would be founded in Herzogenaurach. German manufactured sport shoes would dominate the market until the late 1960's with the founding of current market leader, Nike. World War II interrupted production of sneakers for the public as factories switched to produce items in support of the massive war effort and raw materials became scarce. After the cessation of hostilities, the slow rise in the popularity of sneakers resumed. Another major brand, Puma, was also founded at this time after Rudolph Dassler split with Adi Dassler in a feud. Rudi Dassler set up shop across town and the Puma brand was born.

THE SNEAKER ERA PART II The 1950's witnessed another increase in the amount of leisure time available to families. The Baby Boom began and sneakers officially became the choice shoe for American youth as school dress codes relaxed. Hollywood officially sanctioned this fashion with a string of movies featuring actors in sneakers, including James Dean and his Converse Jack Purcells in West Side Story. Sales of sneakers soared to 600 million pairs a year in 1957, leading leather shoe manufacturers to issue ads claiming that sneakers were bad for children's feet and the sneaker manufacturers to respond with claims that sneakers cured the syndrome of "inhibited feet". Sneakers were imported from Japan in the early 60's, but accounted for only a small portion of the market until Nike founders Phil Knight and Bill Bowerman began importing Tiger shoes under the name Blue Ribbon Sports. Sneakers came into their own in the 70's as jogging became the new fashionable sport and created a need for a special shoe used just for the purpose of jogging. Technology created a need for exercise apart from work and the shoes to perform this exercise. Until this time, manufacturers had been concerned with high production, but now they began to focus on marketing shoes for a lifestyle purpose. Shoes for walking, running shoes, football shoes, basketball shoes-- every sport needed its own shoes- and then you needed another pair of sneakers for just casual wear. By the 80's, sneakers were everywhere. Woody Allen wore them to the ballet, Led Zeppelin wore them in their 1976 documentary, and Dustin Hoffman wore them while playing reporter Carl Bernstein in the movie All the President's Men. The shoes originally developed for sports became the mainstay for most people. Nike and Reebok were the market leaders while older brands Adidas and Converse were nearly in ruins. Newer companies came in and out of fashion and the industry began shelling out large amounts of money for sports endorsements. A major footnote in the Sneaker Era is the signing of basketball player Michael Jordan to a contract with Nike to produce and endorse his own signature line of shoes. Today, the Nike Swoosh and the Jordan Jumpman are icons and require no introduction.

SNEAKER CULTURE Sneaker collectors, called "Sneakerheads", use sneakers as fashionable items. Casual sneakers like the Air Force One (Nike) or Superstar (Adidas) have become icons in today's pop culture. Artistically-modified sneakers can sell for upwards of $500. SNEAKER TECHNOLOGY When it comes to sneaker technology, shoes are divided into three major areas: the upper, the midsole, and the outsole. Depending on the materials and combinations used, one model of sneaker can vary greatly from another. THE UPPER Uppers, the top part of the shoe with the laces, fancy designs and bright colors that holds the shoe together, usually come in one of three materials, leather, synthetic leather, and mesh. Special editions, retro and vintage models, Converse and casual shoes like the Nike Vandal, the Air Force 1, and the Nike After Party for women may have a canvas upper. The most famous shoes to have an all canvas upper are the Converse All Stars. THE MIDSOLE Midsoles are used to cushion and provide support and protection for the foot. There are four types of materials used in commercially produced sneakers. Midsoles are often constructed of a

combination of materials. Midsole materials are Phylon, polyurethane, Phylite, and EVA. THE OUTSOLE The outsole, the part of the shoe that comes in contact with the ground, provides durability, and it is the first stage of cushioning for the shoe. Patterns on the outsole vary according to the needs of the sport. The five most commonly used materials for outsoles are as follows: BRANDS List of athletic shoe brands, large brands include: Adidas ASICS Clae Converse DC Shoes Fila Gola Heelys K-Swiss Keds Keen Lacoste Lonsdale Mizuno New Balance Nike Pony PF Flyers Puma Reebok Saucony Sperry Top-Sider Starbury Supra Vans

SPORTS SHOE GUIDE The runner with the spikes should feel that he had more grip on the track. The following table provides details about specific sports shoes. When viewing the table consider how much trainer technology has advanced in the last 100 years.

High Jump This type of shoe has a much thicker sole. This gives maximum support and comfort. The shoe is light and flexible which helps the athlete achieve speed over a short distance before jumping. This shoe has to have spikes. The spikes at the front help the athlete to gain speed in the run-up. The four spikes t the heel provide grip when the athlete takes off.

Javelin

This type of shoe has to be robust and durable. Athletes drag their feet along the ground during the throw. As a result the shoe has to be made from a tough, hardwearing material. Support is crucial. Javelin shoes look more like boots with protection around the ankle. Most of them feature strapping. This prevents the foot from moving in the shoe.

Jumps and pole vault

These events require speed both on the ground and in the air. In most cases straps have replaced the laces. The sole tends to be both firm and flexible allowing extra bounce in the jump. The spikes are once again very important. They provide the grip before the jump. Notice the spikes tend to be just at the front of the shoe.

The Throws

The shoe has to allow the athlete to throw and spin. A hooked strap over the toe helps to prevent the feet from moving sideways during the build up to the throw. These types of shoes do not have spikes but have a hard sole. This lengthens the lifespan of the shoe. The sole tends to have circular grooves on the balls of the feet. These help the athlete to spin.

Sprinting

This type of shoe has to be lightweight and offer flexibility at the front. They all tend to have spikes, which are located at the front. They are able to cope with lots of different types of surfaces. Most Olympic Athletes have their shoes specially made.

Long Distance

These shoes have to be both durable and flexible. Comfort is a real priority, also this about the sweat factor. A mesh is sometimes added in the upper part of the shoe to allow the foot to breathe. The cushioning is also very important. Spikes are sometimes added but are not essential.

INTRODUCTION TO ATHLETIC FOOTWEAR INDUSTRY Market Analysis The U.S. market for athletic footwear includes all producers of non-cleated, rubber and plastic footwear designed in an athletic style or for athletic use. The industry is a collection of smaller, segmented, yet often overlapping markets, defined by both the price and the purpose of the shoes. For instance, there are mini-markets for shoes designed for each of many sports and other purposes: basketball, running, walking, tennis, and casual wear. The greatest overlap between these categories is between performance shoes and casual wear. Many people wear running shoes or basketball shoes on a daily basis in a non-athletic setting. One can walk or play basketball in running shoes. Therefore, there is some degree of overlap between most segments. The industry is dominated by a few large firms, while the majority of other players have less than 5% market share. The graph below shows the market share breakdown by sales volume for 2004, before the merger of the #2 and #3 firms, Adidas and Reebok.

This graph shows market share after the merger of Adidas and Reebok.

These firms fight for market share through non-price competition, on strategies such as strengthening brand image and increasing product proliferation. The success of each firm is greatly dependent upon its marketing campaigns. The brand image of the major firms is created by extensive marketing campaigns and celebrity endorsements. Consumers associate themselves with a particular brand and tend to stick with the brand with which they are comfortable. Entry to the industry is difficult as brand loyalties are high.

The United States is the world’s largest importer of athletic footwear, which is primarily manufactured in Asian nations. The graph at right shows the trend in US footwear production and imports. Most firms design the sneakers and outsource their manufacturing to foreign producers. The sneakers are then distributed to major retailers and are sold to the consumer through a variety of channels. The following provides an analysis of Porter’s Five Forces relating to the athletic footwear industry; internal rivalry, entry barriers, substitutes and complements, supplier power, and buyer power. It is easy to become the market leader or the market challenger for organizations but sustainability is the primary concern and hence organizations focus of the sustainability by coming up with strategies that will make their position sustainable in the long run. Nike’s future plans are to focus on the environment and production of eco friendly products. They mentioned in their 2005 and 2006 Corporate Responsibility Report that they will become carbon neutral by 2011 by reducing their Caron Dioxide emissions. They have decided to design all Nike brand footwear in ways through which they can reduce waste production during product design and packaging. They will eliminate the use of volatile organic compounds and use more environmental friendly material in their products and be carbon neutral by 2011. Adidas on the other hand became the official sportswear partner of the London 2012 Olympic Games. The London Organizing committee for the Olympic Games and Paralympics Games (LOGOC) has few regulations which all of its partners are obligated to follow. These obligations are focused towards the environment. Adidas, being a partner of LOGOC has to follow all these regulations

as their future plans are to be the official sponsor of almost all major events in the world, and in order to achieve this goal their strategy is to produce environment friendly goods as well. They have to ensure that all their products are produced with environment friendly materials, which would protect the human health and the environment and their packaging should also be produced with materials that can be recycled. Hence we can see that both the future plans of Nike and Adidas are quite similar.

AIMS AND OBJECTIVES OF THE REPORT To learn about strategy and strategic management of 2 companies of same industry. The strategies have been compared on the basis of athletic footwear industry. To study the demand of which company products are more and methods used by them to attract the market. To understand the competition between two Giants in the market. To measure the effectiveness of advertisement / promotional activities for a competing product class and corporate advertising. To understand and measure various factors that affect brand-building, brand re-call and finally the choice of customers while buying it. To understand the competition between Nike and Adidas. To understand Athletic footwear industry. To know how they face their competitor’s strategies. To know how they survive in the cutthroat competition. As there is competition, which factor differentiates them from each other is shown in the report. To learn, how these companies have dealt with critical situations they faced in past.

CHAPTER 2

COMPANY PROFILE AND OVER VIEW NIKE, JUST DO IT. COMPANY PROFILE:

Founded:

24 January 1964

Founder(s):

William J. "Bill" Bowerman , Philip H. Knight

Headquarters: Beaverton, Oregon, United States Area served:

Worldwide

Key people:

Philip H. Knight(Chairman),Mark Parker(CEO) & (President)

Industry:

Designing and Manufacturing- Sportswear,Sports equipment

Products:

Athletic shoes, Apparel, Sports equipment, Accessories

Revenue:

▲ US$ 18.627 billion (2010)

Operating income: ▲ US$ 2.199 billion (2009) Net income:

▲ US$ 1.883 billion (2009)

Total assets:

▲ US$ 12.443 billion (2010)

Total equity:

▲ US$ 7.825 billion (2010)

Employees:

30,200 (2008)

NIKE'S BUSINESS Nike was involved in the design, development and worldwide marketing of high quality footwear, apparel, equipment, and accessory products. The largest seller of athletic footwear and athletic apparel in the world, Nike offered its products through approximately 18,000 retailers in the US and various independent distributors, licensees and subsidiaries in nearly 200 countries around the world. Independent contractors manufactured most of Nike's products. Footwear products were mostly produced outside the US, while apparel and equipment were made both in the US and abroad. Nike's athletic footwear products were worn for both casual or leisure purposes. Running, basketball, children's, cross-training and women's shoes were Nike's top-selling product categories. Nike also offered shoes designed for outdoor activities like tennis, golf, soccer, baseball, football, bicycling, volleyball, wrestling, aquatic activities, hiking, and other athletic and recreational uses. Nike sold sports apparel, athletically inspired lifestyle apparel, as well as athletic bags and accessory items. Nike often marketed footwear, apparel and accessories in "collections" of similar design or for specific purposes. Nike also marketed apparel with licensed college and professional team and league logos. Nike sold sports balls, timepieces, eyewear, skates, bats, gloves, and other equipment designed for sports activities, swimwear, cycling apparel, maternity exercise wear, children's clothing, school supplies, timepieces, and electronic media devices. Nike also sold various plastic products to other manufacturers through its wholly owned subsidiary, NIKE IHM, Inc. and plastic injected and metal products to other manufacturers through its whollyowned subsidiary, BAUER Italia S p A. Nike sold a line of dress and casual footwear, apparel and accessories for men and women under the brand names Cole Haan®, CH, Gseries by, Cole Haan, and Bragano through its wholly-owned subsidiary, Cole Haan Holdings. Nike's wholly-owned subsidiary, Bauer NIKE Hockey Inc., offered ice skates, skate blades, in-line roller skates, protective gear, hockey sticks, and hockey jerseys, licensed apparel and accessories under the Bauer® and NIKE® brand names. Bauer also offered various products for street and roller hockey. Another wholly- owned subsidiary Hurley International offered a line of action sports apparel (for surfing, skateboarding, and snowboarding) and youth lifestyle apparel and footwear under the Hurley brand name. HISTORY, OVERVIEW Nike, originally known as Blue Ribbon Sports (BRS), was founded by University track athlete Philip Knight and his coach Bill Bowerman in January 1964. The company initially operated as a distributor for Japanese shoe maker Onitsuka Tiger (now ASICS), making most sales at track meets out of Knight's automobile. According to Otis Davis, a student athlete whom Bowerman coached at the University of Oregon, who later went on to win two gold medals at the1960 Summer Olympics, Bowerman made the first pair of Nike shoes for him, contradicting a claim that they were made for Phil Knight. Says Davis, "I told Tom Brokaw that I was the first. I don't care what all the billionaires say. Bill Bowerman made the first pair of shoes for me. People don't believe me. In fact, I didn't like the way they felt on my feet. There was no support and they were too tight. But I saw Bowerman make them from the waffle, and they were mine.” In 1964, in its first year in business, BRS sold 1,300 pairs of Japanese running shoes grossing

$8,000. By 1965 the fledgling company had acquired a full-time employee, and sales had reached $20,000. In 1966, BRS opened its first retail store, located at 3107 Pico Boulevard in Santa Monica, California next to a beauty salon, so its employees no longer needed to sell inventory from the back of their cars. In 1967, due to rapidly increasing sales, BRS expanded retail and distribution operations on the East Coast, in Wellesley, Massachusetts. By 1971, the relationship between BRS and Onitsuka Tiger was nearing an end. BRS prepared to launch its own line of footwear, which would bear the Swoosh newly designed by Carolyn [12] Davidson. The Swoosh was first used by Nike on June 18, 1971, and was registered with the U.S. Patent and Trademark Office on January 22, 1974. In 1976, the company hired John Brown and Partners, based in Seattle, as its first advertising agency. The following year, the agency created the first "brand ad" for Nike, called "There is no finish line", in which no Nike product was shown. By 1980, Nike had attained a 50% market share in the U.S. athletic shoe market, and the company went public in December of that year. Together, Nike and Wieden+Kennedy have created many print and television advertisements, and Wieden+Kennedy remains Nike's primary ad agency. It was agency co-founder Dan Wieden who coined the now-famous slogan "Just Do It" for a 1988 Nike ad campaign, which was chosen by Advertising Age as one of the top five ad slogans of the 20th century and enshrined in the Smithsonian Institution. Walt Stack was featured in Nike's first "Just Do It" advertisement, which debuted on July 1, 1988. Wieden credits the inspiration for the slogan to "Let's do it", the last words spoken by Gary Gilmore before he was executed. Throughout the 1980s, Nike expanded its product line to encompass many sports and regions throughout the world. In 1990, Nike moved into its eight-building World Headquarters campus in Beaverton, Oregon. The 1970s In 1971, Knight and Bowerman decided to develop a distinctive trademark and a new brand name 'Nike', inspired by the Greek winged Goddess of Victory... The 1980s In the early 1980s, Nike replaced Adidas as the leading athletic shoe company in the American market. When Nike went public, Knight became one of the richest men in the world. But in the mid1980s, after five years of rapid growth at an annual rate of 44%, Nike failed to anticipate the emerging market for aerobic shoes, having concentrated its efforts on casual shoes. THE LOGO The SWOOSH logo is a graphic design created by Caroline Davidson in 1971. It represents the wing of the Greek Goddess NIKE. Caroline Davidson was a student at Portland State University in advertising. She met Phil Knight while he was teaching accounting classes and she started doing some freelance work for his company. Phil Knight asked Caroline to design a logo that could be placed on the side of a shoe. She handed him the SWOOSH, he handed her $35.00.

MARKETING MIX OF NIKE Nike's marketing strategy is an important component of the company's success. Nike is positioned as a premium-brand, selling well-designed and expensive products. Nike lures customers with a marketing strategy centering on a brand image which is attained by distinctive logo and the advertising slogan: "Just do it". Nike promotes its products by sponsorship agreements with celebrity athletes, professional teams and college athletic teams. PRODUCT

Nike produces a wide range of sports equipment. Their first products were track running shoes. They currently also make shoes, jerseys, shorts, base layers etc. for a wide range of sports including trackfield, baseball, iceockey, tennis, Associationfootball, lacrosse, basketball and cric ket. Nike Air Max is a line of shoes first released by Nike, Inc. in 1987. The most recent additions to their line are the Nike 6.0, Nike NYX and Nike SB shoes, designed for skateboarding. Nike has recently introduced cricket shoes, called Air Zoom Yorker, designed to be 30% lighter than their competitors. In 2008, Nike introduced the Air Jordan XX3, a high performance basketball shoe designed with the environment in mind. Nike sells an assortment of products, including shoes and, association football, basketball, tennis, American football athletics, golf and training for men, women, and children. Nike also sells shoes for outdoor activities such as tennis, golf, skateboarding, football, baseball, American , cycling, volleyball, wrestling, cheerleading, aquatic activities, auto racing and other athletic and recreational uses. Nike is well known and popular in youth, chav culture and hip hop culture as they supply urban fashion clothing. Nike recently teamed up with Apple Inc. to produce the Nike+ product which monitors a runner's performance via a radio device in the shoe which links to the iPod nano. While the product generates useful statistics, it has been criticized by researchers who were able to identify users' RFID devices from 60 feet (18 m) away using small, concealable intelligence motes in a wireless sensor network. In 2004, they launched the SPARQ Training Program/Division. Some of Nike's newest shoes contain Flywire and Lunarlite Foam. These are materials used to reduce the weight of many types of shoes. In the video game Gran Turismo 4 there is a car by Nike called the NikeOne 2022, designed by Phil Frank. PRICING STRATEGY Nike Comes under Ceiling price. The cost of making one pair of Shoes. Is less than $25. But it adds more than $15 for. Compensating & paying for R&D. Advertisement and sales team. To add up the total cost for one. Pair of shoes will be $80. STRATEGIES POLICIES Accelerating growth through focused Execution. Delivering superior, innovative products. Supply Chain a Competitive advantage Deepening relationships with customers. PROMOTION Nike positioned its products as high performance shoes designed with high technology features. Nike athletic shoes were targeted at men and women aged between 18 and 34 years. Till 1976, except for the routine purchase of space in running publications, Nike's advertising was largely

in the form of cooperative arrangements with retailers who inserted ads in local newspapers. Nike is the world's #1 manufacturer and marketer of athletic footwear and apparel. Almost out of the blue, the company established itself as one of the world's most familiar brands during the 1980s and 1990s.and now 2000s. As familiar as a Coke bottle or Big Mac, the Nike "swoosh" logo came to symbolize not just sports culture, but street culture, as the appeal of the star players who endorsed the brand was carried onto city streets. Nike is undisputed leader in sports-oriented street wear. “Advertising Age estimated global measured advertising expenditure of $308 million in 2006, making Nike the world's#89 advertisers. Nike has been using the same logo ever since they established the famous swoosh. The swoosh logo is a graphic design created by Caroline Davidson in 1971. It represents the wing of the Greek Goddess Nike. Caroline Davidson was a student at Portland State University in advertising. She met Phil Knight while he was teaching accounting classes and she started doing some freelance work for his company. Phil Knight asked Caroline to design a logo that could be placed on the side of a shoe. She handed him the Swoosh, he handed her $35.00. In spring of 1972, the first shoe with the Nike swoosh was introduced (from Nike Consumer Affairs packet, 1996). Not only does Nike have one of the famous logo, Nike also has one of the most famous slogans around: “Just Do It!” According to Nike company lore, it was coined at a 1988 meeting of Nike’s ad agency Wieden and Kennedy and a group of Nike employees. Dan Weiden, speaking admiringly of Nike’s can-do attitude, reportedly said, “You Nike guys, you just do it.” Then the brilliant slogan came about. Nike continues to lure customers with a marketing strategy centering around a brand image which is attained by th distinctive logo and advertising slogan. It is my belief that Nike's power to sell comes from deep-rooted desire for cultural. In 1982, Nike aired its first national television ads, created by newly formed ad agency Wieden+Kennedy, during the New York Marathon. This would mark the beginning of a remarkably successful partnership between Nike and W+K that remains intact today. The Cannes Advertising Festival has named Nike its 'advertiser of the year' on two separate occasions, the first and only company to receive that honor twice (1994, 2003).

PLACE

Niketown at Oxford Street,London Nike sells its product to more than 25,000 retailers in the U.S. (including Nike's own outlets and "Niketown" stores) and in approximately 160 countries in the world. The company also has a program called NIKEiD at nikeid.com, which allows customers to customize designs of some styles of Nike shoes and deliver them directly from manufacturer to the consumer. Nike sells its products in international markets through independent distributors, licensees, and subsidiaries.

BUSINESS SEGMENTS - NIKE

Footwear (52% of Revenue) Nike specializes in athletic footwear, particularly in running, cross-training, basketball, and soccer, although Nike also sells sport-inspired casual footwear like its Air Force Ones footwear line. Footwear sales increased 14% in 2008, reaching about $9.7 billion, and accounted for 52% of Nike's 2008 revenue. Much of the growth in footwear revenue is attributed to the 8% increase in footwear sales in the EMEA region. Approximately 45% and 40% of the company's 2008 footwear sales occurred in the United States and EMEA regions, respectively. Apparel (28% of Revenue) Nike sells sports apparel such as running shorts, t-shirts, and licensed apparel (with logos of college and professional sports teams). Apparel sales totaled $5.2 billion in 2008, a 14.4% increase from a year earlier. Nike attributes much of this revenue growth to a 25% increase in sales in emerging markets like Russia in the EMEA region as well as a currency-neutral 50% increase in revenues from China. The EMEA region accounts the majority of Nike's apparel sales, accounting for 40% the company's revenue earned from apparel. Equipment (6% of Revenue) Nike also sells sports equipment such as balls, protective equipment, and golf clubs. Sales of Nike branded equipment reached $1.07 billion in 2008, a 9.5% increase from 2007. This increase was driven primarily by an 18% increase in equipment sales in the EMEA region, which accounted for 40% of the company's equipment sales. Other (14% of Revenue) Nike also sells apparel and footwear under the Nike Golf, Cole Haan, Converse, Hurley International, and Umbro brand names. Nike earned approximately 14% of its revenue, or $2.6 billion in 2008, from these segments. This represents a 15% increase in sales from 2007, which can mainly be attributed to significant growth in the Nike Golf and Converse segments. SWOT ANALYSIS STRENGTHS Nike is a very competitive organization. Phil Knight (Founder and CEO) is often quoted as saying that 'Business is war without bullets.' Nike has a healthy dislike of is competitors. At the Atlanta Olympics, Reebok went to the expense of sponsoring the games. Nike did not. However Nike sponsored the top athletes and gained valuable coverage. Nike has no factories. It does not tie up cash in buildings and manufacturing workers. This makes a very lean organization. Nike is strong at research and development, as is evidenced by its evolving and innovative product range. They then manufacture wherever they can produce high quality product at the lowest possible price. If prices rise, products can be made more cheaply elsewhere (to the same or better specification), Nike will move production. Nike is a global brand. It is the number one sports brand in the World. Its famous 'Swoosh' is instantly recognizable, and Phil Knight even has it tattooed on his

ankle. Strong management team and good corporate strategy in both North American and overseas markets. First mover advantage in e-commerce. Brand recognition and reputation. Diversity and variety in products offered on the web (footwear, apparel, sporting equipment, etc.) Strong control over its own distribution channel. Strong customer base. Strong financial position with minimal long term debts. Innovative designs in footwear enabling consumers to design their own shoes online. Diversity and variety in products offered on the web. Emerging brand name. WEAKNESS 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. This may leave it vulnerable if for any reason its market share erodes. The retail sector is very price sensitive. Nike does have its own retailer in Nike Town. However, most of its income is derived from selling into retailers. Retailers tend to offer a very similar experience to the consumer. Can you tell one sports retailer from another? So margins tend to get squeezed as retailers try to pass some of the low price competition pressure onto Nike. Negative image portrayed by poor working conditions in its overseas factories. E-commerce is limited to USA. The direct sale to consumers is creating conflicts with its own resellers. Currently available supply chain, manufacturing, and fulfillment technologies aren't known for its research easily integrated with online build-to-order systems and development leading to innovative designs. The e-commerce is limited to USA, however, has planned to expand to Canada and international in the near future. Online customer service is not "helpful" or easy to find. Nike has invested billions of dollars in building its image those customers Recognize and capture their loyalty, too. In 2008, Nike spent $2.8 billion on advertising, 12.4% of revenue (wikinvest). This large investment is to sustain its market leading position. Also, its unique identity constructs an effective barrier to entry. The company offers a diversified range of sports products. However, the revenue of the business is heavily dependent on its share of the footwear market. This may leave some room for competitors such as those multi-dimensional companies to select market niches under price Nike and to focus their marketing and advertisement. Some major fashion firms have owned a limited amount of success from accessories and sportswear. For example, DKNY, Tommy Hilfiger, and Ralph Lauren already have a strong brand name and gained a small market advantage. During Q1 2009, Nike's advertising expenses jumped 39% because of higher marketing efforts surrounding the Olympics (wikinvest). Nike’s sport marketing will continue to be its major marketing strategy and a selection of accessories and souvenirs of Olympics bring in revenue of appeals. OPPORTUNITIES Product development offers Nike many opportunities. The brand is fiercely defended by its owners whom truly believe that Nike is not a fashion brand. However, like it or not, consumers that wear Nike product do not always buy it to participate in sport. Some would argue that in youth culture especially, Nike is a fashion brand. This creates its own opportunities, since product could become unfashionable before it wears out i.e. consumers need to replace shoes. There is also the opportunity to develop products such as sport wear, sunglasses and jewelry. Such high value items

do tend to have associated with them, high profits. The business could also be developed internationally, building upon its strong global brand recognition. There are many markets that have the disposable income to spend on high value sports goods. For example, emerging markets such as China and India have a new richer generation of consumers. There are also global marketing events that can be utilized to support the brand such as the World Cup (soccer) and The Olympics. Rising of the Internet environment: With no doubt, online market could be the most potential market for every business. One of the best advantages is the online market, which not only can provide a large and wide selling channel, but also can build a good relationship with customers. For the future orientation, Nike could allow their customers to order products online, and pick them up at a retail store. A good product development always gives Nike an opportunity for growth. Especially for today, consumer’s taste and preference are varied from time to time. Product’s life cycle is getting short. Nike specializes in athletic footwear, especially in running, basketball, and soccer. Footwear business accounted for 52% of Nike’s 2008 revenues. Other market such as apparel, equipment and other also accounted 48% of Nike’s revenues. In addition, even though its pricing is than other brands’, the company still creates its unique value above customers’ expectation. Basically, consumers can have a wide range of selection from running shoes or sunglasses with Nike brand. THREATS Nike is exposed to the international nature of trade. It buys and sells in different currencies and so 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. This is an issue that faces all global brands. The market for sports shoes and garments is very competitive. The model developed by Phil Knight in his Stamford Business School days (high value branded product manufactured at a low cost) is now commonly used and to an extent is no longer a basis for sustainable competitive advantage. Competitors are developing alternative brands to take away Nike's market share. Continuing challenges in import/export duties. Threats to free trade and foreign currency fluctuations. Possibility of distress from growing beyond its capabilities. Growing Competition, Fashion Shifts in Footwear market. The growing of competition- Nike targets at many segments in a variety of sports products; it compete many Companies, like New Balance, but also against large athletic footwear and Manufacture like Adidas AG and Puma. The figure below provides an overview Nike and its major competition. The fake overflow in the market- Fake products could be one of the most critical reasons for Nike. In fact, in some Asia countries: Taiwan, China, or Vietnam. Nike could lose more than million dollars business because they do not have effective way to stop those fake products. Consumer cost- As a consumer, Nike always represent high quality and highly reliable. However, the cost will be higher than other brands. The public feels that Nike overcharges its consumers and should reduce the price of their products. Company Revenue Net Income Gross Margin Advertising costs (millions) (millions) % of revenue NIKE INC. $18,627 $ 1,883.4 45% 12.4% ADIDAS € 10,299 € 815 47.4% 13.4% CRITICAL INCIDENTS THAT AFFECTED NIKE

Nike, Inc. had gone through various incidents which had an impact on their success. According to Dermesropian, Drage, Grigaite and Lopez (2004,p.3) in 1972, Nike persuaded marathon runners at Olympic Tracks to wear their shoes which was an innovative strategy as it resulted in strong advertising when some of the runners were the top finishers and popularity of Nike continued to grow throughout the 70s. In 1979 Nike had 50% of the US running shoe market. In 1988 Nike introduced their famous slogan ‘Just do it’ and acquired a company called Cole Haan. They sponsored many famous athletes such as Michael Jordan, a famous basketball player and Tiger Woods, an excellent young golf player. During 1992 Nike acquired Canstar sports which included the hockey equipment maker Bauer and opened its first Niketown store. In early 1995 Nike acquired a license to put its logo on NFL uniforms which resulted in strong marketing.

AIR JORDAN : They launched a new brand called Jordan, in 1997, which was influenced by the famous basketball player Michael Jordan and one of the most famous shoes of that brand were called Air Jordan. Some incidents harmed Nike during 1998 as they had to cut 1,200 jobs due to the fall of sales in Asia and the demand of athletic shoes fell in 1999. Nike wanted to diversify and in the year 2000 they shifted a little towards the technological and electronic sector and introduced athletic electronics, which included MP3 players, heart monitors, and two-way radios. They opened their first Nikegoddess store in California in 2001. They acquired Hurley International, a distributor of action sports apparels and lost their license to put their logos on NFL uniforms to Reebok in 2002. In 2003 they acquired one of their competitors called Converse but it continued to operate independently in order to sustain the brands popular name. BACKGROUND AIMS AND OBJECTIVES OF NIKE Provide and environment which develops people to maximize their contribution to Nike. Identify focused consumer segment opportunities. Provide quality and innovative services and products internally and externally. One of the Nike’s objective statements is to be the world’s leading sports and fitness Company. This statement describes the sports and fitness industry business it belongs to. However, it does not mention about what product and service they will provide. It does not mention about distribution and customers also. It only can tell the public about its management direction and its ambition of remaining the leading position in sports and fitness industry.

ADIDAS, IMPOSSIBLE IS NOTHING COMPANY PROFILE

Founded

1924 (registered in 1949)

Founder(s)

Adolf Dassler

Headquarters

Herzogenaurach, Germany

Key people

Herbert Hainer (CEO), Erich Stamminger (CEO, Adidas Brand), Igor

Landau (Chairman of supervisory board) (2009-)

Industry

Designing and Manufacturing

Products

Footwear, Sportswear ,Sports equipment Toiletries

Revenue

€10.799 billion ($15.6 billion)(2010)

Operating income

▲ €1.070 billion ($1.5 billion)(2010)

Profit

▲ €642 million ($933 million)(2010)

Employees

38,980 (2010)

ADIDAS BUSINESS Adidas Inc. is a marketer of sports apparel and athletic shoes. The German manufacturer, through its marketing strategy which rests on a favorable brand image, has evolved into a large multinational enterprise. In keeping with the brand image is its association with the distinctive logo and its advertising slogan, "Impossible is Nothing." In order to maintain and sustain this image, the company makes huge investments in advertising and brand promotion. At the critical time of global economic crisis, Adidas will react to the consumers’ pessimistic attitude and stressful emotion during this period. It may become a good chance for Adidas because it can take advantage of its previous advertising way of “Impossible is Nothing” campaign by sponsoring sports stars to express the corporate philosophy of grit, determination, passion and humor, giving people more courage and psychological comfort in face of economic crisis. But besides that, we also focus more about family function especially in Asian countries which emphasize a lot on family, which can provide caring emotional communication. Therefore, from both strong-willed hero worship and water-like fork environment, customers can easily link Adidas image with not only strength, but also warmth. The preferred media we choose are TV, specific magazines, outdoor and internet. OVERVIEW Adidas was formed by German sports apparel by the founder Adi Dassler during the 1920’s. While Dassler was in his mother’s wash room he decided to begin an athletic shoe. After he made the shoe he had help from his brother and twelve other people to produce around 50 handmade shoes per day. These athletic shoes were made for running and training. “For over 80 years, Adidas has been part of the world of sports on every level, delivering state-of-the-art sports footwear, apparel and accessories. Today, Adidas is a global leader not only in the shoe industry, but also in the sporting goods industry. Shoes from the Adidas are available in virtually every country of the world.” Recently Adidas and the NBA joined forces and made “The Brotherhood”. “The Brotherhood” consists of Tracy McGRady of The Houston Rockets, Dwyane Wade of The Miami Heat, Tim Duncan of The San Antonio Spurs, Chauncey Billups of the Detroit Pistons and Gilbert Arenas of the Washington Wizards. When it came down to it Adidas and the NBA came up with the slogan called “Basketball is a Brotherhood.” The main focus of “The Brotherhood was Adidas to sponsor the NBA. The way these six players were selected was by their athletic ability which is why they are also known as all stars. Then these six players decided to form a series that would help kids to discover their dream by playing with NBA Stars. A strong advertising and public Relation events makes adidas as a worldwide recognized brand and it would be more sustainable in the world market.

HISTORY OF ADIDAS

Adolf ("Adi") Dassler started to produce his own sports shoes in his mother's wash kitchen in Herzogenaurach, Bavaria, after his return from World War I. In 1924, his brother Rudolf (Rudi) Dassler joined the business which became Gebruder Dassler Schuhfabrik (Dassler Brothers Shoe Factory) and prospered. At the 1928 Olympics, Dassler equipped several athletes, laying the foundation for the international expansion of the company. During the 1936 Summer Olympics on Berlin, Dassler equipped quadruple gold medal winner Jesse Owens of the U.S. with his shoes. Late in World War II, the shoe factory shifted to production of the Panzerschreck anti-tank weapon. The brothers split up in 1948, with Rudi forming Puma, and Adi forming Adidas. The company formally registered as adidas AG (with lower case lettering) on 18 August 1949. The phrase All Day I Dream about Soccer, although sometimes considered the origin of the Adidas name, was applied retroactively. The name is actually a portmanteau from "Adi" (a nickname for Adolf) and "Das" (from "Dassler") German-based Adidas-Salomon AG is the second largest manufacturer of sporting. The global footwear market is a growing market with an increase in consumer demand based on globally increasing consumer incomes. The sports footwear market is significantly characterized by the high speed of innovation, which forces the companies to invest more in development initiatives. At the same time the companies are trying to reduce costs through decreasing supplier prices in order to stay competitive. Looking forward, the footwear market is expected to steadily keep growing. The Adidas Group is a worldwide operating German sports apparel manufacturer with its head office in Herzogenaurach. The company was founded in August 1949 and named after its founder Adolf (Adi) Dassler. With the winning of the World Cup 1954 in Bern by the German national team, the Adidas soccer shoes became world-famous. The German team played with Adidas soccer shoes where you could replace the studs – a new innovation in those days. In the following years Adidas expanded its production beyond athletic footwear and produced sportswear and equipment. In 1989 the company became a corporation. In 2006 Adidas took over their British rival “Reebok” with the goal to accelerate its drive in the U.S. market and to approach Nike, the world market leader in the athletic footwear industry. Today, Adidas is still trailing Nike. The Adidas Group consists of the brands Adidas, Reebok and Tailor-Made. Adidas has always been a company that stands for revolutionary inventions in the athletic shoe industry. Adidas reported in 1996 one of the most successful years in its history after implementing new sales and marketing strategies. This could only be topped in 2001 where Adidas-Salomon achieved record-breaking sales. Another significant trend lies in long-term sponsoring contracts that Adidas gained within the last few years. In April 2006 they signed a contract to become the official NBA apparel provider for. MARKETING MIX PRODUCT

Adidas - Footwear, apparel, and hardware such as bags and balls. Salomon - Winter sports incl. skis, snowboards, snowblades, ski boots and bindings, inline skates, hiking, apparel. Mavic -Cycle components, Bonfire - Snowboard apparel. Arc'Teryx - Outdoor apparel, climbing equipment, Cliché - Skateboard equipment, footwear and apparel, Taylor Made-Adidas Golf - Golf equipment, golf apparel, golf shoes and finally,

Maxfli - Golf balls, irons and accessories. Accessories Adidas also designs and makes watches, eyewear, bags, baseball caps, and socks.As well, Adidas has a branded range of male and female deodorants, perfumes, aftershave and lotions. In 1990, Adidas was holding on to just a two to three percent share of the U.S. market. Between 1988 and 1992 Adidas total sales dropped from nearly $2 billion to $1.7 billion. In the same period, Nike’s sales went from $1.2 billion to more than $3.4 billion. From being the U.S. market leader in the late 1970s, Adidas’s market share dropped to 3 percent in 1992. The European market shares dropped while Nike’s shares grew. Adidas also have had problems with the upstream value activities in their value chain. Traditionally, the company have their own factories and wholly owned subsidiaries. What happened in the '70s and forward, during the Adidas recession, was that Adidas was unable to ship products when it was needed, and they had a long supply chain - it took 18 months to get a new shoe into the market. PRICING Adidas products are generally cheaper than Nike products, much of pricing can be directly proportional to the type of technology incorporated into the shoe. This brand, which employs a premium-price strategy, is the root of the group's strength in Europe, with the brand generating 50% of all its sales there in 2008. ADVERTISING AND PROMOTIONS COMMERCIAL ADVERTSISING

Commercial advertising media can include wall paintings, billboards, street furniture components, printed flyers and rack cards, radio, cinema and television adverts, web banners, mobile telephone screens, shopping carts, web pop-ups, skywriting, bus stop benches, human billboards, magazines, newspapers, town criers, sides of buses, banners attached to or sides of airplanes ("logo-jets"), advertisements on seatback tray tables or overhead storage bins, taxicab doors, roof mounts and passenger screens, musical stage shows, subway platforms and trains, elastic bands on disposable diapers, stickers on apples in supermarkets, shopping cart handles (grabertising), the opening section of streaming audio and video, posters, and the backs of event tickets and supermarket receipts. Any place an "identified" sponsor pays to deliver their message through a medium is advertising. One way to measure advertising effectiveness is known as Ad Tracking. This advertising research methodology measures shifts in target market perceptions about the brand and product or service. These shifts in perception are plotted against the consumers’ levels of exposure to the company’s advertisements and promotions. The purpose of Ad Tracking is generally to provide a measure of the combined effect of the media weight or spending level, the effectiveness of the media buy or targeting, and the quality of the advertising executions or creative. Adidas use several advertising media to promote their product in the marketplace. Different advertising media use in the in the market like commercial advertisement, Print media advertisement, covert advertising, Infomercials, Celebrities advertisement, Online advertisement, Public transport advertisement, e-mail etc. COVERT ADVERTISING

Covert advertising is when a product or brand is embedded in entertainment and media. For example, in a film, the main character can use an item or other of a definite brand, as in the movie Minority Report, where Tom Cruise's character John Anderson owns a phone with the

Nokia logo clearly written in the top corner, or his watch engraved with the Bulgaria logo. Another example of advertising in film is in I, Robot, where main character played by Will Smith mentions his Converse shoes several times, calling them "classics," because the film is set far in the future. I, Robot and Spaceballs also showcase futuristic cars with the Audi and Mercedes-Benz logos clearly displayed on the front of the vehicles. Adidas also use this advertising technique. TELEVISION COMMERCIALS The TV commercial is generally considered the most effective mass-market advertising format, as is reflected by the high prices TV networks charge for commercial airtime during popular TV events. The majorities of television commercials feature a song or jingle that listeners soon relate to the product. Virtual advertisements may be inserted into regular television programming through computer graphics. It is typically inserted into otherwise blank backdrops or used to replace local billboards that are not relevant to the remote broadcast audience. Adidas has a large amount of TV commercial advertisements in the worldwide TV network like BBC, CNN etc. INFOMERCIALS

There are two types of infomercials, described as long form and short form. Long form infomercials have a time length of 30 minutes. Short form infomercials are 30 seconds to 2 minutes long. Infomercials are also known as direct response television (DRTV) commercials or direct response marketing. The main objective in an infomercial is to create an impulse purchase, so that the consumer sees the presentation and then immediately buys the product through the advertised tollfree telephone number or website. Infomercials describe, display, and often demonstrate products and their features, and commonly have testimonials from consumers and industry professionals. Adidas arrange several infomercials in the sports based program. CELEBRITIES

This type of advertising focuses upon using celebrity power, fame, money, popularity to gain recognition for their products and promote specific stores or products. Advertisers often advertise their products, for example, when celebrities share their favorite products or wear clothes by specific brands or designers. Celebrities are often involved in advertising campaigns such as television or print adverts to advertise specific or general products. Adidas use David Bekham as their brand ambassador and many more celebrities in every region to promote their product. In the 1990s, Adidas signed the world No. 1 batsman Sachin Tendulkar and made shoes for him. He is still wearing Adidas shoes when he plays matches. Adidas even made action figures after Sachin Tendulkar. PLACE

Shoes from the Adidas are available in virtually every country of the world. Adidas Group generates revenue by selling its products to retail stores or directly to the customer via one of the brands' concept stores, factory outlets, concession corners, or online stores. Of this revenue, 46% is from footwear, 42% from apparel, and 12% from hardware. In addition to selling its products to retailers, the brand has 1332 own-retail stores worldwide, included 329 new stores opened in 2008. In 2008, the Adidas Group saw overall sales in North America

decrease by 14% in conjunction with the United States' economic downturn. However, Adidas has relatively low US exposure overall, with 24% of 2008 sales coming from all of North America. In contrast, Adidas Group's continuing expansion into the growing economies in Asia and Latin America led to significant sales growth in those regions. The company aims to have emerging markets represent over 35% of global sales. The group has captured a majority of the premium athletic apparel market in several countries including India and Japan (it is tied with Nike in China). Latin America has had sales grow 53% and 38% the past two years. The company's strategy in these emerging markets is to target the wealthiest segments, establishing the group's output as premium products in the industry BUSINESS SEGMENTS

The Adidas Group organizes its business segments by brand: Adidas (72.5% of 2008 net sales): The Adidas brand is the ultimate profit driver for the Adidas Group, accounting for 72.5% of all group sales in 2008. The brand, which was restructured during 2007, now consists of 2 segments: Sports Performance (80% of brand sales in 2008) and Sports Style (20%). The Adidas segment has seen its revenues grow to €7.8 billion in 2008 from €7.1 billion in 2007. Reebok (19.9% of 2008 net sales) : Reebok has three different divisions: Reebok (80% of brand revenue in 2008),Reebok-CCM Hockey (9%), and Rockport (11%). The brand also contributes to the group's strength in Europe, where it makes 32% of its sales. TaylorMade-Adidas Golf (7.5% of 2008 net sales): Taylor Made-Adidas Golf is comprised of TaylorMade and Adidas Golf, (footwear and apparel). Golf clubs and accessories accounted for 71% of the segment's sales in 2008, with the remaining 29% from footwear and apparel sales. TaylorMade-Adidas Golf generated $812 million in 2008 net sales.

SWOT ANALSYIS STRENGTHS Legacy & heritage: With decades of heritage & legacy, Adidas has travelled a long way to establish itself as a youthful brand. The brand was started in 1949 and has travelled a long way since then. Diversified portfolio: Company has multiple product portfolio’s with varied range of footwear & accessories under brand name Adidas (premium segment) & Reebok (mid range). Strong financial position: With its 2400 store globally accounting $4.3billions, the company is in strong financial position. Distribution network: By selling it from online stores to company owned stores to supermarket stores, Adidas has an effective distribution system for their products available through different channels. Branding by creating touch points with the community: Celebrity endorsements & sponsoring major sports organizations such as FIFA, UEFA, NBA & Olympics has increased the awareness of Adidas in the market & hence it has increased the highly targeted customer base as well. Collaborations & memberships: Strong relationship within the sustainability area with organizations such as International Labor organization, International Finance Corporation has given the company an edge over competitors so that they can have a sustainable business. CATEGORY 1 Year 3 Year 5 Year Sales % 2.33 2.94 6.96 EPS (TTM) % -27.53 -3.02 17.01 Dividend % 0.00 14.47 33.78 WEAKNESSES Premium price range: High price range due to innovative technology & Production methods have made the brand affordable to limited customers only, especially in developing countries. rd Outsourced manufacturing: Adidas has 93% of production outsourced to 3 party manufacturers (largely to Asia) to avail of low labor cost & easy availability of resources. They are running a risk of over dependency on outsourcing especially in Asian markets. Also, the overall quality of products perceived by the consumers of developed economies is a major concern as far as brand is concerned. Limited product line: Adidas along with the recently acquired Reebok brands, has got only 2 brands under their group although they have got deep assortments within these brands. Thus, there is more scope for product line expansion. Other Facts: Rigid pricing structure. Our survey shows Nike behind Adidas in market share in India, has not do well in Indian subcontinent market. The direct sale to consumers is creating conflicts with its own resellers. Currently available supply chain, manufacturing, and fulfillment technologies aren't known for its research easily integrated with online build-to-order systems and development leading to innovative designs. The e-commerce is limited to USA, however, has planned to expand to Canada and international in the near future. Online customer service is not "helpful" or easy to find.

OPPURTUNITIES Changing Lifestyle: With the saturation of developed economies, changing taste & preferences, education & changing lifestyle of developing economies, there is a steep rise in the demand of premium goods & services. Market development: Entering into new markets will be the only way to succeed in the future because developed economies are already having high competition. Expansion in product line: Expanding its product line will open a new set of opportunities while at the same time it can differentiate itself from the competitors by following this strategy. Increasing demand of premium products: If we only consider the Indian market then there is a growth rate of 33% in demand of premium products. This tells us the future business opportunity & expanding market size of developing economies. Backward integration: This will be smart strategy if followed by Adidas as it will help Adidas to secure their patent rights & also integrate their R&D with the operational team in order to work in open system. THREATS Competition: Although Adidas is a global brand but it is facing fierce competition from other brands nd like Nike which is No.1 brand and Adidas being in 2 Position in this premium segment. Besides this, there is regular competition from local players, substitutes and market penetrators. Supplier Dominancy: Due to majority of its production being outsourced; Suppliers have more bargaining power then the company. Government Regulations: With its 35% products manufactured in China & 93% of production happening in Asia, Import regulations, duty& tariffs plays a critical role in the pricing and success of the company.

CRITICAL INCIDENTS THAT AFFECTED ADIDAS Adidas also faced various occurrences in order to attain the title of the second largest athletic footwear sportswear and accessories manufacturer.

Adidas Samba Adidas registered as a company in 1949 with the three stripes logo as their trademark. Explained that in the year 1950 they produced the “Samba” all-round soccer shoes which are even now considered to be the best classic training shoe today. One of the biggest successes of Adidas was in 1952 when it was the most common shoe brand worn at the Olympic Games held in Helsinki. They made the first track shoes with removable spikes. Emil Zatopek, in Adidas shoes, won three gold medals in one week creating a huge impact on the image of the brand.

German National Team wearing Adidas in the 1954 football world cup In 1954 Adidas became famous all over the world as the German national team was victorious in the football world cup for the first time, wearing Adidas shoes with screw-in spikes. In 1955 Adidas came up a shoe with exchangeable spikes which became very popular among the high jumpers. In 1964 Billy Mills won the men’s 10,000 meters wearing the new Adidas shoe which

was considered the lightest shoe weighing 135 grams. In 1969 Adidas produced the world’s first injection molded multi stud soles of polyurethane, which gave a one year guarantee on the soles. Adidas began production of balls in 1961 and in 1970 their football was the official ball of the football world cup. In 1971 the famous ‘Fight of the century’ where Muhammad Ali and Joe Frazier fought with each other, both of them wore special boxing shoes designed by Adidas.

Adidas Copa Mundial In 1979, Adidas produced ‘Copa Mundial’, which even today is still the world’s best selling soccer shoe. In 1986 Adidas introduced Azteca, the first synthetic world cup matchball in the world. However, in 1993 Adidas took over Sports Inc., a US based sports marketing company and Adidas was losing US$100 million a year. Robert Louis Dreyfus had become the new president of Adidas and he downsized the German staff and went subcontracting to China. Adidas once had 70% market share in the US and it fell to 2% in 1993. In 1994 Adidas made a comeback by producing the revolutionary soccer shoe called the Predator during the soccer world cup in the USA. They went public in 1995 and acquired the Salmon Group which consisted of the brands TaylorMade, Mavic and Bonfire in 1997. The new company is named Adidas-Salmon AG. They were the first sporting goods company to chosen as the official sponsor of a soccer world cup in 1998 when they sponsored the 1998 FIFA World cup in France.

Adidas Predator Mania In March 2002 Adidas launched ClimaCool a footwear with a ventilation system and introduced the new Predator Mania boots and jerseys with the dynamic layering concept in the 2002 FIFA world cup with their own official ball called the Fevernova. They sold over 6 million footballs and more than 1.5 million jerseys and half a million of the Predator Mania that year. In 2006 Adidas became the official partner, supplier and licensee for the FIFA world cup to be held in 2006, 2010 and 2014. They acquired Reebok International in the same year. BACKGROUND AIM AND OBJECTIVES For Adidas, India is: a strategically important growth market:Factors for success: Supply Chain Management. Cutting edge technology. Aggressive approach to market, Association with sports events and personalities. Future plans: Four-fold sales growth in next three years, Add more showrooms, Launch new products. To be the global leader in the sporting goods industry. Maximize the operational and financial performance. Creating shareholder value. Diverse brand portfolio. Investments focused on highest-potential markets and channels. Creating a flexible supply chain. Leading through innovation. Understanding needs/wants of the people. Becoming a sustainable company. Multi-brand strategy. Innovating products, services and processes. Provide a wide variety of products to a broad spectrum of consumers.

CHAPTER 3

LITERATURE REVIEW Yee and Sidek (2008) - investigated how the respondents are influenced by factors of brand loyalty towards sportswear brands. Previous research adopted seven factors to test in the Malaysian environment. The seven factors of brand loyalty are brand name, product quality, price, style, promotion, and service quality and store environment. Brand name has shown strong correlation with brand loyalty. In order to increase customer satisfaction and drive them to be brand loyalists, marketers are encouraged to develop aggressive marketing programs; there is positive and significant relationship between factors of brand loyalty (brand name, product quality, price, style, promotion, service quality and store environment) with sportswear brand loyalty. Study of more focused factors that are appropriate to the Indian environment is recommended in order to obtain accurate information. Youn, Song and MacLachlan (2008) examined how consumers’ brand preferences and price sensitivities evolve as their levels of experience increase in outdoor sports gear categories. It is proved that how consumers evolve along discrete latent states that represent their experience and knowledge levels, and how this corresponds to changes in preference parameters. In our empirical estimation and evaluation of the model we utilize customer membership data from a large outdoor and sporting goods retailer. Existing single-category Hidden Markov approaches require a rich purchase history and do not work well for the types of durable product categories in an area such as sport climbing, as typical customers make relatively few purchases in any single category, even over long periods of time. For this reason we use a multi-category framework in which unobservable experience levels are inferred by leveraging information from multiple categories. Using Hierarchical Bayes estimation, account for initial consumer heterogeneity as customers first take up the sport at different skill levels. This also allows us to account for consumer heterogeneity in transition probabilities as customers accumulate experience and knowledge at different rates. We model the latent states to follow a Markov chain with a transition probability matrix that is specific to individual customers, and is a function of their cumulative purchases in each category. Thus, we are able to identify the typical brand(s) purchased by customers at different stages of their experience. We find empirical evidence that customer who are beginners or are new to sport climbing will prefer certain brands while customers who have more experience or knowledge of the sport will prefer other brands. The multi-category approach allows us to determine which product category is most indicative of a stage of a consumer’s evolution. Krishna (2012) focused on attitudes and behavior on the concept of the youth’s buying behavior towards branded sports shoes, different consumers have got different decision making process. The buyer’s ultimate goal is to buy the product of qualitative, quantitative with low/best affordable price. In order to identify different kinds of consumer’s behavior towards buying of different branded shoes and Nike sports shoe. Investigator has carried out buying behavior of youth and different kind of consumer behavior models, literature and theory of consumer behavior; and finally, analyzed and concluded. Yoh, Mohr and Gordon (2012): investigated factors that influence Indian teens’ athletic footwear purchase. Four hundred and fifty-six teens participated in the study. Throughout the review of related literature and the conduction of a pilot study, seven characteristics were considered; price, color, style, brand name, comfort, quality, and celebrity endorsement. It indicated that gender played a significant role in the purchasing behavior of Indian teens. Male teens stated that comfort and quality are the most important factors while female teens revealed that style and color are more important factors than any other factor. Marketers and advertising managers of athletic shoes companies should utilize the findings of this study to communicate with teen consumers more effectively. Sportswear, including sports shoes, becomes a common and popular category because it gives young people a more relax lifestyle and greater versatility and comfort. It is believed that consumers prefer products of developed countries to products of developing or underdeveloped countries. Ko, Kim and Hoon (2008) tried to compare consumer behaviors for sports shoes between Nike and Adidas. Their research model analyzed relationships among country-of-origin, perceived quality, perceived price, brand image and purchase intention for sports shoes in Korea and China.. Brand image was found to play an important role in influencing perceived quality and perceived price in Nike and Adidas respectively. Perceived quality was found to influence positively purchase intention in both countries. Perceived price was found to negatively

influence purchase intention in case of Nike.

NIKE VS ADIDAS (COMPARISON) ADIDAS Adidas is competence in all sectors of sports. A.d.i.d.a.s - All Day I Dream About Sports or from the original German founder of the company, Adolf "Adi" Dassler, more likely considering the company history and its German origins. Adidas – AdiDassler. NIKE - Nike came from the Greek name for the Goddess of Victory MOTTO Adidas' motto is "Impossible is nothing." Nike's motto is "Just do it." SPONSORSHIP Sport / Entity Adidas

Nike

UCLA 1. Univers ities

2. Basketb all

3. Football

University

USC

"T-Mac"(Tracy McGrady) "Agent 0"(Gilbert Arenas) "KG"(Kevin Garnet) Tim Duncan Chauncey Billups Dwight Howard Josh Smith "Vincinaty"(Vince Carter)

Reggie Bush Mario Williams ➢

4.

of

Kansas

Adrian Peterson

Sergio Garcia

Tiger Woods

5. Golf

6. Boxing

7. Tennis

"PacMan"(Manny Pacquiao)

Novak Djokovic Jo-Wilfried Tsonga Fernando Gonzalez Fernando Verdasco

8. Baseball

9. Soccer

Roger Federer Rafael Nadal Maria Sharapova Juan Martin Del Potro

Derek Jeter (JJ)

Kaka Messi Gerrard Beckham Lampard Raúl

C.Ronaldo Ronaldo de Assís Moreira (aka. Ronaldinho) Fernando torres Wayne rooney Zlatan Ibrahimovic Didier drogba

Difference between Nike and Adidas Both Nike and Adidas are well known sportswear firms that have become household names of sorts throughout many parts of the world. The undisputed giants of the sportswear and sports equipment industries, consumers can generally expect quality products from the two brands. Nevertheless, there are instances wherein one may be the better option over the other, and the factors that go into making such a decision do not always have anything to do with the quality of the products. Let's take a look at some of the factors that may influence your purchase decision in the future.

Photo by comopeiz Photo by adifansnet

Sponsorships and Market Focus Nike has always come in ahead of Adidas in terms of celebrity sponsorships, although to its credit, Adidas has taken considerable steps to narrow the gap. Nike still has the edge over its competition in terms of sales however, and it remains to be seen whether Adidas will catch up any time soon. In terms of market focus, Nike has a more varied line-up, comprised of basketball and running shoes, as well as cross-training products. Among the different brands under the Nike umbrella are Umbro, Converse and Cole Haan. Adidas for its part currently offers products that are geared primarily towards the soccer, tennis and general athletics markets. Among the companies in Adidas' roster are Reebok, Taylor Made and Rockport. Market Strategies Nike remains firmly focused on the domestic market, although it has made inroads into the lucrative international soccer market fairly recently. The company is also considered largely responsible for the frenzy of athlete sponsorship that the industry is known for today. All of this ties in with Nike's dominance of the advertising and marketing aspects of the business, a hold that the company will likely retain for the foreseeable future. Adidas on the other hand has traditionally focused on the European market, although it is a formidable name in the rest of the world as well. This is mainly due to the company's affiliation with soccer, which is widely considered to be "the" International sport. The company has recently taken steps to increase its marketing and advertising budget, and has even made inroads into the lucrative sports equipment and sportswear markets. Outsourcing Policies Nike isn't really a production company per se, and almost all of its products are outsourced to various countries in Asia, particularly Taiwan and Korea, which in turn outsource production to still other Asian countries, among them China, Indonesia and Vietnam. The company does have a home office in Beaverton, and it is there that Nike products are designed, developed and marketed. Adidas recently adopted a similar approach, with virtually all the design and development work being handled in Germany, and production being outsourced to Asian countries as well. This move has helped Adidas remain competitive in the industry. Similarities and Differences Nike More focused on the local market. More effective advertising and marketing. Recently updated the look of its line. Offers custom product lines. Excellent website support for custom options. All production is outsourced. Adidas More focused on the European market. Specializes in soccer, tennis, and athletics. Recently expanded its product line to include sports equipment and clothing. Recently updated its production for increased efficiency and cost effectiveness. Production is outsourced to Asian countries. CASESTUDY The World Cup Brand Winner: Adidas or Nike? With approximately 2.6 billion people worldwide following the 2010 World Cup, the spectacle has been a field day for marketers, each trying to connect their brand with the strong emotions fans have for their favorite teams. But the stakes are particularly high for those brands that actually sell football gear. Two contenders, Adidas and Nike, each have a shot at becoming undisputed market leader when the whistle blows on July 11 and the final game concludes. Coming into 2010, their records show them evenly matched: each is estimated to have earned $1.5-1.7 billion in football merchandise sales in 2008 and 2009, and each controls about a third of the total market.

Adidas is playing its tried and tested strategy of being the official FIFA sponsor of the World Cup games. This means the referees wear Adidas uniforms, the footballs are Adidas-branded and televised ads for football apparel and equipment during matches can only be, you guessed it, for Adidas. Moreover, Adidas is the official sponsor for 12 of the 32 teams playing in the World Cup — so the uniforms of teams such as Germany, Argentina, and Spain (all of which advanced to the quarter finals) were emblazoned with the Adidas logo. Given the shutout sponsorship strategy by Adidas, Nike has had to fight back using different tactics. Back in the 2006 World Cup games, it tried an end-run using digital technology, tapping into consumers' new penchant for online social networking. Collaborating with Google, Nike created the world's first social network for football fans, which it named Joga.com (in reference to the Brazilian phrase joga bonito, which means "play beautifully"). The site featured discussion groups on various teams, games, and players, and video clips of Nike-sponsored football stars performing awe-inspiring moves. Fans, thought Nike, would flock to the site as a place to commune with like-minded individuals all over the world, and their enthusiasm would make the videos go viral. Although Nike came out of the 2006 World Cup in decent shape, thanks in part to the fact that a Puma-sponsored (and not an Adidas-sponsored) team won the championship, its digital strategy didn't deliver as much lift as it hoped. The vision of millions of fans heavily engaged with the Joga website (while subtly being reminded of the Nike brand) didn't quite materialize. The problem, so it would seem, was that while Nike's move recognized consumers' shift to new media and technologies, it did not capitalize on the deeper and less obvious changes in consumer expectations, attitudes, and behaviors that accompanied that shift. Fast-forward to the 2010 World Cup games. Once again Nike faces the Adidas official-sponsor shutout approach, and once again Nike opts for a digital offense. Only this time, its marketers take a very different approach. On May 20th, several weeks before the games began, Nike released a three-minute video ad called "Write the Future" on its Facebook page. The well-crafted ad features some of football's most famous players (all in Nike gear) imagining what their future would be if they were to make or fail to make a certain play in the game. In less than a week, the number of Nike followers on Facebook doubled, driven by the desire to see the ad and pass it along. But "Write the Future" is not just a static ad. Fans are given tools to edit the spot — and their edited versions compete for votes from appreciative peers. Meanwhile, a "Write the Headline" opportunity via Facebook and Twitter gives fans an even bigger opportunity to see their creativity in lights; it invites them to post a short grabber of a phrase reporting on the future of a player. The most popular of these are displayed in a bright LED light show (visible from 2.5 kilometers away) on Johannesburg's fourth largest building, which Nike has taken over. Nike also supported its online campaign with "Write the Future" elements in more traditional media. Although it could not advertise during the televised games, it ran a 30-second version of the "Write the Future" ad on shows airing at the same time on other channels, and on soccer matches prior to the start of the games. The television spots included a tout to pique fans' interest in seeing the full threeminute version online. The success of the campaign is indisputable. Five weeks after its debut, the online spot has been viewed by over 20 million people. According to a Nielsen survey that tracks brand buzz (by examining brand references in blogs, online message boards, and social networking sites), as of mid June, Nike enjoyed more than double the share of buzz associated with the World Cup than its rival Adidas (30.2% share of buzz vs. 14.4%, respectively). What are the keys to the upset? Clearly the campaign's success owes much to its creative execution and fit with Nike's brand image. But the new factor here is that it corresponds very well with how consumers have evolved in the digital age. Considered more broadly, Nike's "Write the Future" campaign is a good example of a company figuring out how to size up a trend and find the right application of it to its business. (This is the focus of Luc Wathieu's and my article in the current issue of HBR, "Are You Ignoring Trends that Could Shake Up Your Business?") Back in 2006, Nike had perceived that social networks were in vogue, but thought it would be sufficient simply to create one to capitalize on that trend. By 2010, it had thought more deeply about the implications of that trend: those consumers had come to expect a much more active role in the content they engage with. They now want to customize content and products to fit their preferences and personality, get immediate feedback on their actions and opinions, and be rewarded for their contributions. They derive great satisfaction from being first to discover things and disseminate them to others. They resent any perceived lack of transparency from the

businesses they interact with. Nike's efforts to connect those implications with its business imperatives aren't limited to the "Write the Future" campaign. It has also looked for ways to capitalize on the same trend in its product development. Ask anyone in the business of football merchandise and they will tell you that the big money is in the shoes. Manufacturers typically time their latest and greatest football boots with the World Cup extravaganza. For the current World Cup, Nike launched its Mercurial Vapor SuperFly II. But someone that buys a pair gets more than the enhanced acceleration the new shoes are designed to provide. The shoes come with a unique user code that, once entered online, unlocks a full training program. Its Nike Football+ program was developed in conjunction with the world's leading coaches and players, and offers a myriad of video training sessions, tips, and methods for improving one's play. Programs can also be downloaded through an app to an iPhone or to other mobile webenabled handsets to take to the field. No longer are athletes being asked to pay upwards of $300 just to have a better physical shoe; they're also getting a service that helps them become better players. In a matter of days, the 2010 World Cup will be history, and Nike's current campaign and current shoe will have had their day in the sun. What may endure is its knowledge of how to size up a big new trend and understand how to apply it to its business challenges, and that may produce a whole string of victories. Other companies who want to win with the next hot new thing should take note.

CHAPTER 4

RESEARCH METHODOLOGY Research methodology is a strategy that guides a research in providing answers to research questions and for this, research survey is being done. “Accuracy of the study depends on the systematic application of the method”. The researcher has to decide the method to be used that helps him to get a desired direction in a systematic way. METHODOLOGY ADOPTED IN THIS REPORT QUESTIONNAIRE DESIGN: The questions were designed in an easily understandable way with the help of our teachers, so that the respondents may not have any difficulty in answering them. The questionnaire contained 10 questions. This has to be done to get opinion of the people regarding the Nike & Adidas and the ongoing competition between them and which is preferred more. RANDOM SAMPLING: Sampling can be defined as a part of population. Thus random sampling may be defined as the selection of a portion from the whole population in which each elements of the population has an equal chance of being selected. A more please definition is that each element in the population has a non-zero and known probability of selection a randomly drawn sample is an unbiased sample. In this research survey 50 people were surveyed at random to get the relevant information. SAMPLE SIZE: The sampling techniques used in this project are probability sampling techniques and the methods used in cluster sampling. SAMPLING UNIT: The respondents who were asked to fill out questionnaires are the sampling units. These comprise of students, Gym trainers, athletes, people with specific brand preferences etc. SAMPLE SIZE: The sample size was restricted to only 50 between age group of 15-35, which comprised of mainly peoples from different regions of India. SAMPLING AREA: The area of the research was Mumbai, India.

DATA COLLECTION STRUCTURED QUESTIONNAIRE In this collection data, structured questionnaire is used as a tool by asking a set of standardized questions to know the perception of the giants regarding footwear industry of the masses. And which is better Nike or Adidas. INTERVIEW The next step involved in collecting information requires discussion with people. Thus valuable information was gathered informal friendly talks with the people. SECONDARY DATA COLLECTION Various websites & magazines were consulted to collect literature relevant to the topic. IMPORTANCE OF THE STUDY The study was considered significant for the following reasons: Understanding of dynamics in marketing of sport shoe was facilitated. Sports shoe manufacturers could understand the demands of consumers.

Feedback derived from consumers to shoe manufacturers was made possible. Helpful for budding shoe companies to understand the preference patterns of consumers. STATEMENT OF THE PROBLEM The objective of the study was to investigate the brand preference of sport shoe consumers in Mumbai, India.

QUESTIONNAIRE

Which is your favorite Sport?

This Question is asked to figure out the demand of particular type of shoes according to the sport. I.e. understanding demand pattern according to the sports. Which sports brand do you prefer? This Question states demand pattern of athletic footwear brands. Which Brand is cost-effective or money friendly? This states that what are the consumer preferences and which impact of promotion is on them. Which punch line motivates you more? It’s simply to know which brand has more influential punch line. Do you compromise quality for price? Higher brands have higher quality as well as higher prices. So common people have tendency to buy shoes that are cheaper and unbranded. So to know are people willing to pay for good quality. If you consider quality which brand is better? Just to compare both the brands on the basis of their quality and variety they offer. Which Brand has better advertisements and promotions? Just to analyze which brand is more effective with their AD campaigns.

Are you loyal to a particular brand? This Questionnaire shows the nature of the customer’s i.e. Are they loyal to a particular brand or not? Is there any impact of celebrities on your purchase of sport shoes? This is to take out a survey that how much impact celebrity endorsements affect the buying behavior of a customer. Which Brand’s Product is more durable? To analyze and compare the durability of the product served by the brands. INTERPRETATION Interpretation refers to the task of drawing inference from the collected facts after an analytical study; in fact it is a search for broader meaning of research findings. It is through interpretation that the researcher can well understand the abstract principle that respondents beneath his findings. The simple statistical tools will used to analyze the data collection, Bar Graphs and pie chart have been used to illustrate the findings diagrammatically. The scores given by people were considered on various factors and were interrelated in graphs and pie charts. The following questionnaire states that majority of the people prefer Nike in terms of quality and brand loyalty and prefer Adidas in terms of cost and less price. Nike has kept its brand loyalty for a very long time because of which it has maximum customers under it. Their promotion has also been done on a very large scale and they have targeted more customers as compared to Adidas. HYPOTHESES On the basis of the review of literature and understanding of the research problem it was hypothesized that the consumer perceptions are influenced by explicit factors like brand, quality, price, durability, after sale service, etc.

CHAPTER 5

DATA ANALYSIS AND FINDINGS Price Premium Nike

Adidas

Nike in terms of satisfied and loyal customers are willing to pay a price premium, while Adidas leads with loyal but less satisfied then Nike customers. In addition, Adidas prices are also marginally less. Satisfaction / Loyalty Nike

Adidas

In terms of satisfaction, Nike leads with both very satisfied as well as satisfied customers. Dissatisfaction level is low. Adidas dissatisfaction level is also less but not more than Nike. Perceived Quality Nike

Adidas

Here again, Nike edges out Adidas in terms of Product quality. But in terms of Product design perceived Quality is better than Nike. Perceived Value The consistent responses by Adidas users perceive it as a value-for-money service. Nike is perceived to be a bit expensive by its customers than Adidas. Brand Personality The brand personality of Nike comes across as an exciting and competent brand. Its vibrancy appeals to the customers who relate to the advertising messages. But Adidas is also emerging as a better brand with some good promotional strategies. Brand Awareness Brand awareness of the respondents was high with most being aware of both Nike and Adidas. So the spoils are even for both the Brands here. Comparing the overall findings we see that Nike leads in four brand equity measures (satisfaction/loyalty, perceived quality, leadership & popularity, market share). The other three measures (brand personality, brand awareness, market price and distribution coverage) have been shared by both Adidas and Nike. To conclude, the Brand Equity of Nike is higher than Adidas, though marginally.

CHAPTER 6

LIMITATIONS The geographical area was very much limited to residential area & so the results are not particularly reflection of the current behavior. BIASES AND NON-COOPERATION OF THE RESPONDENTS The collected data are placed into an order. Percentages of respondents answered similarly are calculated and placed in a table. Then this is interpreted. This involved drawing conclusion from the gathered data. Interpretation changes the new information immerging from the analysis into information that is per relevant to the study. Due to limited time period and constrained working hours for most of the respondents, the answers at times were vague enough to be ignored. Most of the people took their Nike Shoes in the period preceding March due to high sale so comparison was not in a proper base & so the response to initial contacts were not all encouraging and that has been the primary reason in the inability to quantify the results large enough so as to deduce any relevant outcomes. Preparing the questionnaire was time consuming as well as forming the sample size. Many respondents were not in favor for both of the brands, there was a problem to find specific Adidas and Nike brand lovers.

CHAPTER 7

CONCLUSION, RECOMMENDATION AND SUGGESTIONS CONCLUSION On the basis of the results of this study it was concluded that customers of Mumbai prefer wearing sports shoes on regular basis for various purposes other than gym. Not only is it used by athletes, but also teens and mid age group. Adidas and Nike brands were highly preferred at the cost of Indian made shoes like ASE, Action and others. Particular brands were preferred because of its perceived quality and durability by the consumers. Least importance was assigned to price, variety or safety provided by the sports shoes to the consumers in this study. The brand name and image attracted consumers and they felt that the preferred brand reflected their personality. The consumers were contended with the materials used and color options provided by their preferred brands. There was complete agreement on the satisfaction with the quality of preferred brand sports shoes. They perceived that the style of the preferred brand was suitable to them and also believed that the style of their preferred brand has distinctive features. They agreed that the behavior of salesperson of the store was friendly and courteous. There was agreement by a large number on the impact of celebrities on purchase of sport shoes. It was also believed that the increase of price hindered their ability to purchase. Sportspersons agree that the preferred brand provided goods value for buyers money. They also agreed on satisfaction with the price range and disagreed on purchase of another brand of same quality with lesser price. This exhibited their strong association with the brand and their loyalty. It is noteworthy that many of the respondents provide importance on the price of sports shoes of their preferred brand. Respondents were determined not to switch over their preferred brand sport shoes under normal circumstances and they expect some sort of discount to be offered. SELECTIVE REVIEWS OF PEOPLE WORLWIDE Nike “Adidas are spending more time blogging that being athletes”

(A comment provided by Nike employee) “When I look into new basketball shoes, I’ve always liked the Nike Brands, because they seem to have more heel and ankle support, but when I try to order online (which is how I purchase my B’ball shoes), I can never find my size 11 ½ in stock. “Between the two (Nike & Adidas), Nike”. Adidas “Adidas all the way, there is no shoe in the market, which is more comfortable, and pocket friendly than Adidas. The shoe is reliable, trendy and sporty all the same.” “I grew up a fan of Nike; I am becoming more of an Adidas fan by the minute.” “Mark Zuckerberg! His name is usually followed by the word “Adidas” “I’m a tennis sneaker kind of girl, but for my golf shoes, I bought the Adidas. It has a built in arch support which is great when you are walking 18-holes, carrying a full set of clubs on your back, I needed the extra support!” HARD TO COMPARE DIFFERENT STYLES “Nike is hard core technology for sports: it’s Nike Plus, it’s Dri Fit, and it’s Air. It’s innovation. Adidas is different. Their products are more focused in style: Adidas Originals, Adidas Stella McCartney, Adidas Y-3. What’s also very significant about the two brands is their communication: Adidas is “impossible is nothing”, is about empowering people (which by the way is not very far from Nike positioning in the eighties). Nike is all about winning. About being the best.” “In my honest opinion, that’s where the difference lies in my eyes. Nike appeals to the hardcore sport goers who thrive on competition and want the ‘best’ when competing, which Nike has well promoted themselves as; as being the ‘best’ and that you’ll win with them”. “Adidas has long appealed to a large demographic of consumers, from athletic people to hip-hop dancers. They’ve created a more ‘chill’ feeling around their products that personally makes me feel and look relaxed but trendy at the same time. ‘Impossible is Nothing’ has been a great campaign that appeals to the Average Joe who always wanted to make it big and sees that it is possible for anyone.” DIFFERENT SPORTS / FUNCTIONALITY “Nike, I have great products from them for basketball and other competitive sports. Adidas, I have for working out, running and notably casual wear”. Many of the responses were in favor of other brands we haven’t discussed, mainly New Balance. “New Balance for the win. NB finally figured out that sneakers are a fashion market and have been making some very cool looking NBs–but on top of that, New Balance are comfortable and don’t fall apart like a lot of hipper brands”. As you can learn from the above reactions (we presented only few sample examples), opinions about the leading sporting shoe are indecisive. I’m sure ten years ago – we would have heard Nike’s fans shouting much louder. Adidas is in fact bringing new challenges: Adidas bought Reebok. Adidas carrier – David Beckham has significant mark on Adidas brand. Adidas and Nike show a close fight over global market share. Adidas is successfully communicating a stylish atmosphere. Adidas to overcome Nike, once we spotted that the discussion over the two leading brands in the blogosphere is becoming very similar in its volume.

While for some it was hard to admit that Nike is losing its dominancy, most of the comments we received were in fact supporting initial assumption that Nike is facing hard competition coming from Adidas. We profiled your evidence and personal preferences in favor of Nike, in favor of Adidas, and those found it hard to take one side only. RECOMMENDATIONS AND SUGGESTIONS Following recommendations are recommended on the basis of the findings of this study: The results of the present study may be helpful to upcoming sports marketing professionals in order to enhance their sales. The results of the present study shall guide the sports manufacturers and franchise in making their product better. A similar study can be conducted on National and International level sportspersons. The study in future days may include vast area not just limited a particular region. The tool used in the study may be made systematic by using Likert Scale for assessing the perception of the consumers. Adidas should undertake more celebrity endorsements and should increase their quality. Nike should lower their prices to reasonable to meet larger markets of customers. On the basis of this research, it is found that both the companies have cut throat competition; both the companies should promote their products which are in great demand. Adidas should change its strategies in order to reach up the level of Nike, and to promote well in most parts of the country. Nike should not only target high level customers, but also mid income group for specific periods to increase sales.

BIBLOGRAPHY AND REFERENCES WEBSITES http://www.press.adidas.com/en/ http://www.jdsports.co.uk/whatsnew.aspx?id=5375. http://www.press.adidas.com/en/DesktopDefault.aspx/tabid-4/79_read-8621/. http://www.fashiontrendsetter.com/content/fashion_events/2008/Adidas-Denim- by-Diesel-in-storeevent-p1. http://www.jdsports.co.uk/whatsnew.aspx?id=5508 http://www.champion.ie/ "Adidas Orginals - Extended House Party Film". http://www.adidas.com. http://www.adidas.com/campaigns/originalsss2009/content/#/lifestyle/full-length- film. http://www.channelseven.com/newsbeat/99features/news19990624.shtml, October 2003 http://www.urlwire.com/newsarchive/062499.html, October 2003 http://www.adidas-salomon.com/en/news/archive/2000/2000-07.asp, October 2003 http://www.adidas-salomon.com/en/overview/welcome.asp, October 2003 http://www.adidas-salomon.com/en/investor/strategy/default.asp, October 2003 http://www.adidas-salomon.com/en/investor/reports/default.asp, October 2003 http://www.adidas-salomon.com/en/overview/history/default.asp, October 2003 http://www.cybersource.com/solutions/success_stories/nike.xml, October 2003 http://www.nike.com/nikebiz/nikebiz.jhtml?page=1, October 2003 http://www.nike.com/nikebiz/nikebiz.jhtml?page=15, October 2003 JOURNALS Adidas, Annual Report 2002 Adidas, Annual Report 2001 Nike, Annual Report 2002 Nike, Annual Report 2001 Industry Sector Analysis of Sporting Goods, U.S. and Foreign Commercial Service, 199Multex Fundamentals / ProVestor Plus Company Report, Nike Inc., October 2003 ShoeStats 2002, AAFA, January 2003 Bheri, G.C. (2004) Marketing research 3rd ed. New Delhi: Tata McGraw-Hill Publishing Co.Ltd. 2. Cadogan, J. W. and Foster, B. D. (2000) Relationship Selling and Customer Loyalty: An Empirical Investigation, Marketing Intelligence and Planning, 18, 185- 199. Chaudhuri, A. and Holbrook, M.B. (2001) “The chain of effects from brand trust and brand affect to brand performance: The role of brand loyalty”. Journal of Marketing; 65 (April): 81-93. 4. Ko, Eunju., Kim, Kyung, Hoon., Zhang, Hao. (2008) “A Cross Cultural Study of Antecedents of Purchase Intention for Sports Shoes in Korea and China”, Journal of Global Academy of Marketing Science, Vol-18(1), PP: 157-177. Krishna, Srungaram, Narsimha, Vamshi. “Assessing Youth’s Buying Behaviour towards sports Shoes” (A Case Study of Nike)” Master’s degree level Dissertation submitted to University of Halmstad, School of Business and Engineering for the degree of Master of Science in International Marketing, reviewed on 23-03-2012

at hh.diva-portal.org/smash/get/diva2:238641/FULLTEXT01. Reichheld, F,F, and Sasser, W.E. (1990) “Zero Defections: Quality Comes to Services”, Harvard Business Review, September-October, 105-111. Yee, W. F. and Sidek, Y. (2008) “Influence of Brand Loyalty on Consumer Sports”, Int. Journal of Economics and Management 2(2); 221-236. Yoh, Taeho., Mohr, Mike. & Gordon, Brian. (2012) “The Effect of Gender on Korean Teens' Athletic Footwear Purchasing”, The Sport Journal, Vol 15. Youn, Nara., Song, Inseong., MacLachlan, Douglas. (2008) “A Multi-category Approach to Modeling Consumer Preference Evolution: The Case of Sporting Goods”, reviewed on 23-03-2012 at http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.184.4506.

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