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 18

INDUSTRY

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 wholly-
owned 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 mid-
1980s, 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 ▲ €1.070 billion ($1.5 billion)(2010)

income

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 toll-
free 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. University of USC
Univers ities Kansas

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

Reggie Bush
3. Football Mario Williams

➢ Adrian Peterson
4.
 Sergio Garcia Tiger Woods
5. Golf

6. Boxing "PacMan"(Manny
Pacquiao)

Novak Djokovic Roger Federer

Jo-Wilfried Tsonga Rafael Nadal
7. Tennis Fernando Gonzalez Maria Sharapova
Fernando Verdasco Juan Martin Del Potro

8. Baseball Derek Jeter (JJ)

Kaka C.Ronaldo
Messi Ronaldo de Assís Moreira (aka.
Gerrard Ronaldinho)
Beckham Fernando torres
9. Soccer Lampard Wayne rooney
Raúl 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 three-
minute 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 web-
enabled 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
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http://www.jdsports.co.uk/whatsnew.aspx?id=5375.
http://www.press.adidas.com/en/DesktopDefault.aspx/tabid-4/79_read-8621/.
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event-p1.
http://www.jdsports.co.uk/whatsnew.aspx?id=5508
http://www.champion.ie/
"Adidas Orginals - Extended House Party Film". http://www.adidas.com.
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THANK YOU
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