BUS 343 – Introduction to Marketing

Jason Ho
Mateja Andrejevic
D103

April 13, 2011

Team 2 – AJST Consulting

Alex Juy 301047781
Jamie Marmolejo 301064605
Steven Ruggles 301094255
Turbo Su 301114816

[MARKETING PLAN]
 Table of Contents
Executive Summary....................................................................................................................................... 3
Problem Recognition..................................................................................................................................... 4
Opportunity Identification ........................................................................................................................ 4
Environmental Analysis ................................................................................................................................. 4
Macro Analysis .......................................................................................................................................... 4
Competitive Analysis ................................................................................................................................. 5
SWOT ............................................................................................................................................................ 6
Internal Environment ................................................................................................................................ 6
External Environment ............................................................................................................................... 6
Customer Analysis ......................................................................................................................................... 6
Marketing Objectives .................................................................................................................................... 7
Target Market Selection................................................................................................................................ 7
Positioning Strategy ...................................................................................................................................... 8
Marketing Mix ............................................................................................................................................... 9
Product ...................................................................................................................................................... 9
Pricing........................................................................................................................................................ 9
Distribution ............................................................................................................................................. 10
Promotion ............................................................................................................................................... 11
Traditional Media .................................................................................................................................... 11
New Media .............................................................................................................................................. 11
Tactical Plan ................................................................................................................................................ 12
Planned Schedule .................................................................................................................................... 13
Contingency Plan ........................................................................................................................................ 14
Brand Erosion .......................................................................................................................................... 14
Return on Investment (ROI) .................................................................................................................... 14
Evaluation ................................................................................................................................................... 15
Cost-Benefit Analysis .............................................................................................................................. 15
Appendix ..................................................................................................................................................... 17
Income Statement............................................................................................................................... 17
SWOT Details....................................................................................................................................... 18
Positioning Strategy ............................................................................................................................ 22

Li-Ning – Marketing Plan 2

 Executive Summary

Li-Ning is an athletic sportswear company that is famous in China for its quality products. Currently, the
company is trying to break into the US market. In doing this, Li-Ning will be facing well-established
competitors such as Nike and Adidas, who already possess a large portion of the sportswear market.
Working in Li-Ning’s favour, however, is their ability to make quality products at relatively lower prices.

This is a competitive advantage for the company, especially with regards to the market that Li-Ning will
be targeting. Specifically, young American males aged 13-34 that are basketball fans. With
endorsements from popular NBA athletes such as Shaquille O’Neal, Baron Davis, and Evan Turner, Li-
Ning will be able to appeal more to this specific group. Furthermore, since Li-Ning’s products are of
similar quality to competitors and available at lower prices; this will be the company’s main positioning
strategy.

Li-Ning’s main focus will be to increase awareness of its brand in the US. With marketing tactics
revolving around promotion in basketball leagues and the Olympics, Li-Ning will be able to meet its main
marketing objective of increasing its US market share. While the company faces strong competitors, Li-
Ning has a competitive advantage that it will harness in order to increase awareness and, ultimately,
market share.

Li-Ning – Marketing Plan 3

 Problem Recognition
Currently, Li-Ning is trying to enter the U.S. sportswear market and the main problem is that people are
not aware of the Li-Ning brand. This is a large issue because, in the sportswear market, brand perception
and brand presence is a vital component to increasing market share. As of 2010, a mere 1.4% of Li-
Ning’s total revenues came from US operations. 1

Opportunity Identification
Fortunately, this is an opportunity that Li-Ning can capitalize upon. Since a small number of people are
aware of Li-Ning’s brand and products, Li-Ning can instil a brand image that consumers perceive to be
more attractive than competitors’. Furthermore, since the sportswear industry is one that thrives off of
trends, Li-Ning can react to new trends that affect consumers’ demand for sportswear products.

Environmental Analysis
Macro Analysis
 Political/legal –
While trade between the US and China has been increasing, there are still frictions that exist.
This is due to the fact that China has a mixed record with regards to implementing World Trade
Organization obligations. China also has a poor record with intellectual property rights.2

 Economic –
Due to the recession, consumers are more careful in regards to the purchases they make.
Additionally, US consumers may be less inclined to adopt a product whose brand is relatively
new.3

 Social –
There has traditionally been a negative connotation associated with products that are labelled
“Made in China.” While this sentiment still exists in markets such as the North American one,
there is a shift in perception with products that are made in China. This is because younger
consumers are open to adopting new brands.4

1
Li-Ning LTD. 2010 Annual Report - http://www.irasia.com/listco/hk/lining/annual/ar71068-ew02331.pdf
2
Morrison, W. China-U.S. Trade Issues - http://www.fas.org/sgp/crs/row/RL33536.pdf
3
Glassburn, C. Shopper Culture - http://www.integershoppermarketing.com/2009/03/new-products-are-hit-by-
the-recession.html
4
Himelfarb, E. ‘Made in China’ is finally cool - http://www.cnngo.com/shanghai/shop/chinese-design-made-china-
renaissance-807794

Li-Ning – Marketing Plan 4

  Technological –
Euromonitor International found that online athletic footwear and clothing sales were
increasing at a steady rate. Niche clothing and footwear purchases made online are becoming
increasingly popular as well.5

Competitive Analysis
 Nike –
The biggest competitor that Li-Ning faces in the US is Nike. In the US, Nike has 346 mono-
branded stores operating and has 34,400 employees as of 2010. With regards to strategy, Nike
realizes that the demand for its products is highly affected by design trends and the popularity
for various sports and activities. Nike relies on their ability to anticipate consumer preferences
along with technical innovation to compete in the market.6

 Adidas –
Another major competitor is Adidas. In North America, Adidas has 461 mono-branded stores
and 10,200 employees. Adidas’ mission is to excel as a sports brand. They plan to gain sales and
market share by focusing on the running and basketball categories with their Adidas Sport
Performance products while establishing Reebok as a leader within the training and fitness
categories. 7

5
Euromonitor International. Clothing & Footwear: Opporunity –
http://www.sfu.ca/~jma41/bus343/clothingopportunity.pdf
6
NIKE INC. Annual report pursuant to section 13 and 15(d) –
http://media.corporate-ir.net/media_files/IROL/10/100529/nike-ar-20100804/docs/NIKE_2010_10-K.pdf
7
Adidas Group. Annual Report 2010 –
http://www.adidas-group.com/en/investorrelations/assets/pdf/annual_reports/2010/GB_2010_En.pdf

Li-Ning – Marketing Plan 5

 SWOT
The SWOT analysis found here highlights the main points made in a more detailed analysis, which can be
found in the appendix.

Internal Environment

Strengths Weaknesses
 Quality products  Lack of brand awareness
 Strong domestic company  Lack of human capital and resources
 Endorsements from popular athletes in the US (~30 employees as of
(Baron Davis, Shaq)8 2011)9
 Minimal distribution channels

External Environment

Opportunities Threats
 Differentiate products from competitors –  Strong competitors (Nike, Adidas)
(ie: shoe safety)  “Made in China” connotation
 Make product information readily  Recession
accessible to customers to create a
positive image of Li-Ning products
 Capitalize on market trends (green, online,
athletic wear) 4

Customer Analysis
Presently, Li-Ning appeals most to younger basketball fans. After evaluating the internal portion of the
SWOT analysis, it is in Li-Ning’s best interest to segment based on demographic variables. Research has
shown that US NBA fans are 31% more likely to be male, and around 37% lay within the age range of 18-
34.10 It is reasonable to assume that this age range is considerably active and more likely to make
sportswear related purchases. With regards to household income and purchasing power, a significant
amount of fans fall within the $25k-40k range. For the most part, incomes are quite spread. 9

8
Love, T. Li-Ning makes high-profile NBA signing –
http://www.sportspromedia.com/news/li-ning_makes_high-profile_nba_signing/
9
Li-Ning. Event Press Kit - http://www.li-ningusa.com/skin1/files/Li-Ning-Event-Press-Kit.pdf
10
SportsBusinessJournal. Scarborough Research Data Examines NBA Fan Demographics -
http://www.sportsbusinessdaily.com/Daily/Issues/2007/02/Issue-100/The-Back-Of-The-Book/Scarborough-
Research-Data-Examines-NBA-Fan-Demographics.aspx#

Li-Ning – Marketing Plan 6

 Marketing Objectives
Li-Ning’s main objective is to gradually earn market share in the US while remaining sustainable as a
competitor in the US sportswear market.

 Increase Li-Ning’s US market share to 1% (from a present 0.00442%)11

 Position Li-Ning as a brand that appeals to younger audiences in the US
 Create a loyal customer base

Target Market Selection

Presently, Li-Ning has very little advertising in the US, but from what they have communicated thus far,
they are targeting a younger audience that enjoys basketball. Looking at the segmentation conducted
above and analysing the company’s strengths, Li-Ning’s target marketing strategy should focus on males
that are NBA fans, aged 13-34. Currently, endorsements with athletes, such as Baron Davis, will work in
Li-Ning’s favour. This group is relatively more price sensitive, with US citizens in the 15-19yr and 20-24yr
age brackets earning lower average gross incomes in 2010 than 200812. This sensitivity to price will work
in Li-Ning’s favour due to lower priced products that are of equal quality to competitors’ brands.
Another factor that will contribute to Li-Ning’s success among price sensitive consumers is Nike’s
planned price increases.13 This creates a competitive advantage with regards to this specific group.
While the younger portion of this age segment may not have as much purchasing power, it is assumed
that parents will be making purchases. One thing that Li-Ning’s advertising has not communicated yet is
low price. Given that the target is a more price sensitive group, Li-Ning should start to communicate low
price for high value.

11
Euromonitor International. Footwear US - http://www.sfu.ca/~jma41/bus343/lining/USAfootwear_EM.pdf
12
Euromonitor International. Average Gross Income of Population -
http://www.sfu.ca/~jma41/bus343/lining/grossincome.pdf
13
Murphy, Maxwell and Solsman, Joan E. “Nike Plans Price Increases”, Wall Street Journal, Mar. 18, 2011 -
http://online.wsj.com/article/SB10001424052748703818204576207003213004100.html

Li-Ning – Marketing Plan 7

 Positioning Strategy

14
Figure 1 - Positioning Map for Li-Ning and their Competitors

The positioning map is based on quality and price of Li-Ning and competitors. The quality was quantified
by consumer feedback on a 5-star scale. Quality is relevant because if Li-Ning is not producing high
quality products, then increasing awareness would not be an effective strategy. Then, price of the brand
was based on the average selling price available. It is recommended that Li-Ning position itself as a
brand that is capable of producing high quality products at a low price, which will create value in the
minds of the target market.

Li-Ning has a better quality product, but at a lower price in comparison to Adidas. This shows that there
is potential in the US market with their quality advantage. Li-Ning and Nike are at par when it comes to
quality, but the price difference is significant. Promoting Li-Ning’s products to the correct target market
will allow them to acquire a piece of the US market share.

By increasing awareness, Li-Ning’s location on the positioning map may not necessarily move. This
strategy is focused on getting consumers to be more aware of the Li-Ning’s product and therefore does
not directly affect quality or price. However, this strategy would increase revenues, which is not
incorporated in the positioning map.

14
Refer to the appendix for a more detailed evaluation.

Li-Ning – Marketing Plan 8

 Marketing Mix
Product

Objectives/Policies
To increase market share and brand awareness, Li-Ning will focus marketing efforts towards their
basketball products.

Concept
In the US, Li-Ning will be positioned as a high quality product at a low price. It will appeal to a younger,
cost-conscious audience with its fresh image.

Product Lines
Li-Ning offers shoes and apparel for a wide variety of activities including basketball, running, and
badminton. Li-Ning will focus more on developing basketball and running in the US.

As mentioned previously, Li-Ning has signed NBA stars, such as Shaq and Davis, to represent their
basketball products lines. Davis has his own line of shoes that incorporate his face as a logo which will
appeal to many young NBA fans.

Packaging and Label

Presently, Li-Ning offers unique packaging for their F2 shoes. Instead of the traditional shoe box, a
transparent plastic casing is used to display the shoes. Li-Ning should continue using this packaging as it
is attention-grabbing.15

Pricing

Objectives
The products’ pricing will support its brand positioning as high quality at a low price. The main objective
is to increase Li-Ning’s market share through increased awareness and have US sales account for more
than 5% of total sales in five years time.

Policy
To gain market share, trial pricing will be implemented. This mitigates the risk in the minds of consumers
of buying a new brand. Li-Ning’s products feature high levels of quality; there will be a gradual rise in
prices after a strong customer base is developed. Another factor that will allow an increase in price is
increased brand awareness during the 2012 Olympic Games, where a large promotional campaign will
be executed.

15
Aring, K. Coroflot - http://www.coroflot.com/karing/work-experiences/14

Li-Ning – Marketing Plan 9

 Price Points and Tactics
The price will be kept at approximately $65. By initially setting prices low, Li-Ning will encourage larger
orders which can generate increased interest from retailers when it comes to displaying the product in
store.

Distribution

In the US, there are only three different retail store companies that consumers can purchase Li-Ning
products from: Champs, Eastbay, and Li-Ning’s mono-branded store. Consumers also have the option to
visit these retailers’ online stores and purchase products online. Compared to competitors, Li-Ning has a
small number of distribution channels.

It is recommended that Li-Ning continue distributing its products through retail stores. It will be
beneficial to increase the number of retail stores so that Li-Ning products are more accessible to
consumers. With a more intesnsive distribution, consumers can compare Li-Ning’s products to other
shoes available in the market. Consumers may observe that Li-Ning products are of similar quality to
other well-known brands, yet are lower in price which may lead to increased adoption.

Li-Ning – Marketing Plan 10

 Promotion

Li-Ning should focus on NBA endorsements and attaining athlete support. By having these athletes
support the product; it gives Li-Ning’s brand credibility and builds reputation in the US market.

Traditional Media
Ads will be played during peak seasons of various sports events and
Television
during games (ie: basketball) to target the younger athletic individual.
Print advertisements should be produce to reinforce the other forms of
Print advertisement. This will portray Li-Ning as existent and in return get
consumers to find out more about their products.

The stores selling Li-Ning products will have more in-store promotion to
increase trialability. Consumers believe that the product is high in
In-Store Promotion
quality, but consumers lack this knowledge. By allowing consumers to
experience the quality, the product may sell better.

New Media
Product information will be updated and made more available on Li-
Ning’s website. Once consumers learn about the brand, having more
Website
information about their product readily available will improve
consumer engagement.
Li-Ning produced a viral video about their arrival into the US taking
advantage of social media.16 The company will continue to produce
Social Media
promotional material through different social media channels to create
and improve consumer engagement.

16
YouTube. Customs Harasses Man Over Li-Ning Shoes – http://youtu.be/F5MWk3qtflE

Li-Ning – Marketing Plan 11

 Tactical Plan
Increasing Li-Ning’s awareness in the US market, the company will be targeting those between the ages
of 13 and 34 who are athletic and primarily basketball players.

From now to August 2011, Li-Ning will focus on creating and finalizing marketing advertisement,
promotions, distribution channels and communication for July 1, 2011 to June 30, 2012. Within this
planning phase, an update to their website should be considered, providing more information about
their products and distribution channels.

The NBA17 and NCAA18 Basketball organizations are avenues to get promotion via athlete endorsements.
Younger people will be more aware of Li-Ning’s brand if they see their athlete role models endorsing the
products. This opportunity can also lead to television advertisements during basketball games.

Another significant athletic event would be the London Olympics in 2012.19 The Chairman of the
company has strong ties to the Olympic Games; he won 6 medals in 1984. Since Li-Ning is venturing into
the international market, this is an opportunity to get their brand out there. They succeeded at the
Beijing Olympics in 2008, with Li-Ning, the athlete himself lighting the cauldron at the opening
ceremony. Sponsoring the American teams will increase their brand awareness within the US.

For younger students, Li-Ning will need promotion and advertisement around the new school year.
Allowing in-store promotion and increasing trialability could potentially lead to an increase in revenues
from this market segment.

Li-Ning should branch out and adopt both traditional and new ways of marketing—traditional involving
television and print advertisements. There is more potential for this at basketball games and other
athletic events. Also, Li-Ning should look into engaging the consumers with products. Increasing
trialability in stores is one method, harnessing social media to their advantage is another. Engaging
consumers will lead to increased brand awareness and brand loyalty.

17
National Basketball Association – http://www.nba.com
18
National Collegiate Athlete Association – http://www.ncaa.com
19
London Olympics 2012 – http://www.london2012.com

Li-Ning – Marketing Plan 12

 Planned Schedule

PRIMARY SECONDARY
July 2011

Back to School
August 2011
- in store promo
- trialability
- print and tv ads
September 2011
- social media

October 2011
NBA & NCAA

- athlete endorsements
November 2011 - tv ads during games
- sponsor athlete equipment
and apparel Christmas / New Year
- social media Season
December 2011
- tv, print and social media
ads to target shoppers

January 2012

February 2012

March 2012

April 2012

May 2012
London Olympics 2012

- sponsor US team
June 2012 - tv ads during games

Figure 2 - Schedule of Strategic Promotions

Li-Ning – Marketing Plan 13

 Contingency Plan
Brand Erosion
A problem that Li-Ning may face is brand erosion. Domestically, the Li-Ning brand is perceived as good
quality. In the US, Li-Ning has yet to establish the brand. Reactions of US consumers to promotions
cannot be predicted. People may assume that Li-Ning is a lower quality product due to the lower price.

To mitigate brand erosion, Li-Ning should pay close attention to trends and the popularity for certain
sports and activities to adapt strategies to cater to these trends. To keep brand image strong, it is
important that Li-Ning focus on consistently delivering the benefit implied in their high quality, low cost
positioning-value.

Return on Investment (ROI)

Increasing awareness by promotion and advertisement is risky because consumer reactions may differ
from what is expected. Li-Ning may be producing quality campaigns to increase awareness, but
consumers may not purchase their products and therefore, there would not be any ROI through
promotional efforts.

To ensure this does not occur, Li-Ning needs to be strategic in producing promotional material. By
creating strategies with potential consumers in mind and researching buying behaviours, this will aid in
an increased revenues, which will reap long-term benefits.

Li-Ning – Marketing Plan 14

 Evaluation
Marketing objectives can only be accomplished by creating a brand concept that is received well in the
US market. With heavy promotion that is strategically placed in areas that are popular with our target
market, such as basketball leagues and the 2012 Olympics, Li-Ning should be able to grow stronger in
the US.

Cost-Benefit Analysis
Qualitative

Costs Benefits
 Endorsements to professional athletes  Increased publicity
(NBA, NCAA)  Garner US consumers’ attention
 Advertising: print, TV, social media  Improved brand image
 Sponsoring sport teams: Olympics, NCAA

Quantitative

Year 1 TOTAL
Benefits
Increase in Revenue $ 16,400.00 $ 16,400.00

Present Value Benefits $ 15,465.20 $ 15,465.20

Advertising Costs
Television Ads $ 3,000.00 $ 3,000.00
Print Ads $ 1,000.00 $ 1,000.00
Social Media Promotion $ 750.00 $ 750.00
Total Advertising Costs $ 4,750.00 $ 4,750.00

Endorsement and Sponsorships Costs

Olympic Teams $5,000.00 $5,000.00
Basketball Leagues $ 10,000.00 $ 10,000.00
Total Endorsement and Sponsorships Cost $ 15,000.00 $ 15,000.00

TOTAL COSTS $ 19,750.00 $ 19,750.00

Total Benefits - Total Costs -$ 4,284.80 -$ 3,350.00

Cumulative Net Cash Flow -$ 4,284.80

PV Total Costs $ 4,284.80 $ 4,284.80

Return on Investment (ROI) 83.04%

Net Present Value $ 11,180.40

Li-Ning – Marketing Plan 15

 At first glance, it appears that the costs outweigh the benefits of increasing awareness. However,
intangible benefits must be considered as this is a strategy that will pay dividends for many years to
come. As a result, it does make sense for Li-Ning to pursue a strategy that focuses on increasing
awareness. While a loss in the first year is predicted, it is reasonable to assume that the benefits of this
years’ spending will be realized in the years to come.

Li-Ning – Marketing Plan 16

Appendix
Income Statement
Li-Ning's Consolidated Income Statement US Portion
2011 Total 2011 US Good 2011 US Bad
2009 2010 (forecast) Scenario Scenario
Revenue ¥ 8,386,910.00 ¥ 9,478,527.00 ¥ 10,712,225.85 ¥ 107,122.26 ¥ 94,785.27
Cost of Sales ¥ -4,417,046.00 ¥ -4,996,928.00 ¥ -5,652,938.51 ¥ -56,529.39 ¥ -59,963.14
Gross Profit ¥ 3,969,864.00 ¥ 4,481,599.00 ¥ 5,059,299.16 ¥ 50,592.99 ¥ 44,815.99

Distribution Costs ¥ -2,152,150.00 ¥ -2,511,175.00 ¥ -2,930,093.11 ¥ -29,300.93 ¥ -30,134.10

Administrative Expenses ¥ -602,929.00 ¥ -618,280.00 ¥ -634,021.85 ¥ -6,340.22 ¥ -7,419.36
Other Income ¥ 127,111.00 ¥ 194,631.00 ¥ 298,016.90 ¥ 2,980.17 ¥ 1,946.31
Operating Profit ¥ 1,341,896.00 ¥ 1,546,775.00 ¥ 1,782,934.67 ¥ 17,829.35 ¥ 15,467.75
Finance Income ¥ 7,422.00 ¥ 14,917.00 ¥ 29,980.72 ¥ 299.81 ¥ 149.17
Finance Costs ¥ -66,188.00 ¥ -52,178.00 ¥ -41,133.49 ¥ -411.33 ¥ -626.14
Finance Costs-Net ¥ -58,766.00 ¥ -37,261.00 ¥ -23,625.60 ¥ -236.26 ¥ -476.97
Profit before Incom e Tax ¥ 1,283,130.00 ¥ 1,509,514.00 ¥ 1,775,839.17 ¥ 17,758.39 ¥ -1,261.98

Income Tax expense ¥ -313,799.00 ¥ -377,378.00 ¥ -453,838.78 ¥ -4,538.39 -

Profit for the year ¥ 969,331.00 ¥ 1,132,136.00 ¥ 1,322,285.08 ¥ 13,222.85 ¥ -1,261.98

Attributable to:
Equity holders of the com pany ¥ 944,524.00 ¥ 1,108,487.00 ¥ 1,300,912.87 ¥ 13,009.13 -
Non-controlling interests ¥ 24,807.00 ¥ 23,649.00 ¥ 22,545.06 ¥ 225.45 -
-

In USD
Li-Ning's Consolidated Income Statement US Portion Notes:
2011 Total 2011 US Good 2011 US Bad
2009 2010 (forecast) Scenario Scenario  In thousands of RMB & USD (000s)
Revenue $ 1,283,381.74 $ 1,450,423.16 $ 1,639,206.22 $ 16,392.06 $ 14,504.23  Numbers from 2009 and 2010 are from Li-Ning’s total
Cost of Sales -$ 675,905.21 -$ 764,639.92 -$ 865,023.96 -$ 8,650.24 -$ 9,175.68
Gross Profit $ 607,476.53 $ 685,783.24 $ 774,184.08 $ 7,741.84 $ 6,857.83
“Consolidated Income Statement” that were originally in
$ - $ - $ - $ - $ - RMB’000s (Chinese currency); includes all sales
Distribution Costs -$ 329,326.30 -$ 384,265.02 -$ 448,368.71 -$ 4,483.69 -$ 4,611.18  ¥1 = $0.153022 USD; the conversion rate used
Administrative Expenses -$ 92,261.40 -$ 94,610.44 -$ 97,019.29 -$ 970.19 -$ 1,135.33
Other Income $ 19,450.78 $ 29,782.82 $ 45,603.14 $ 456.03 $ 297.83  Assuming all costs linear, everything grows/declines at a
Operating Profit $ 205,339.61 $ 236,690.60 $ 272,828.23 $ 2,728.28 $ 2,366.91 constant rate, 1% of total values attributable to US
Finance Income $ 1,135.73 $ 2,282.63 $ 4,587.71 $ 45.88 $ 22.83
operations
Finance Costs -$ 10,128.22 -$ 7,984.38 -$ 6,294.33 -$ 62.94 -$ 95.81
Finance Costs-Net -$ 8,992.49 -$ 5,701.75 -$ 3,615.24 -$ 36.15 -$ 72.99  2011 sales
Profit before Incom e Tax $ 196,347.12 $ 230,988.85 $ 271,742.46 $ 2,717.42 -$ 193.11 o Good scenario is characterized by growth equal to
$ - $ - $ - $ - $ -
Income Tax expense -$ 48,018.15 -$ 57,747.14 -$ 69,447.32 -$ 694.47
total company growth
Profit for the year $ 148,328.97 $ 173,241.71 $ 202,338.71 $ 2,023.39 -$ 193.11 o Bad scenario is characterized by zero growth
$ - $ - $ - $ - $ - (values equal to 2010 values) and 20% greater
Attributable to: $ - $ - $ - $ - $ -
Equity holders of the com pany $ 144,532.95 $ 169,622.90 $ 199,068.29 $ 1,990.68
costs
Non-controlling interests $ 3,796.02 $ 3,618.82 $ 3,449.89 $ 34.50 o Total market forecast from Euromonitor "Clothing
and Footwear in the US "Market Data" Section,
2010 2011
table 9
Total Market(forecsast-US$Billions)328,100,000,000.00 337,600,000,000.00
2010 Market Share 0.000044206741
2011 Market Share Good 0.000048554687
2011 Market Share Bad 0.000042962771
SWOT Details

Strengths

 quality products
o shoes; thin, light, durable, waterproof
o sports equipment
 continuously growing & at a rapid pace in Asia9

Figure 3 - Li-Ning's Growth

 strong sales ($1.255 billion in revenue in fiscal 2009)20

 sponsors teams in China, Brazil
 advertised at Beijing Olympics
 niche leader in Asian sports equipment (badminton, ping-pong)
 people are asking about the product when they are in the stores and see it (US) because of how
they look
 some have considered the quality to be better than Adidas

20
Li-Ning Company Website - http://www.lining.com/EN/investors/inside-4_1.html
 Weaknesses

 not well known in US

 lack of employees in US; 28 employees in US vs Nike’s 7000
 product may just be too generic, there is no “cool” or “wow” factor
 niche product - not enough variety for US market?
 transition from China to US market: different culturally
 lack of availability in US21
o in Champs and Foot Locker
o online store
 not well established brand personality
 only 1.1% of revenue comes from outside of the domestic market

Opportunities

 NBA athletes, or any athlete support22

 looking into shoes that support the ankle (safety over appearance)23
 provide consumers more information about their product
 resources about their product is very limited
 information is also limited
 can capitalize on markets not yet popular in North America. (ie badminton, table tennis)
 “made in China” image improving24
 consumer expenditure in related categories is increasing
 Canada’s footwear market is growing5

21
Li-Ning USA - http://www.li-ningusa.com/
22
Brettman, Allan. Li-Ning makes a move into U.S. running shoe market –
http://proxy.lib.sfu.ca/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=aph&jid=MAC&site=eho
st-live
23
Flores, Gerald. Bouncing Back - http://www.li-ningusa.com/xcms_entry.php?xcmsentryid=14
24
Himelfarb, Ellen. ‘Made in China’ is finally cool –
http://www.cnngo.com/shanghai/shop/chinese-design-made-china-renaissance-807794

Li-Ning – Marketing Plan 19

 Figure 4 - Projected Consumer Expenditure on Clothing and Footwear

 running, basketball, cross-training, walking shoes = top-selling categories of athletic footwear in

the US
 men and children’s shoes = significant growth in near future
 chance to establish a fresh brand image

Threats

 against very strong competitors in North America (Nike especially)

 the competition is well established = difficult to break into the market
 poor brand image of Chinese products; low quality because “made in China”25
 basketball is a 6 to 9 month business
 Americans spending less because of recession (thinking about their purchases)26
 Other Chinese company Luyou has signed a shoe deal with Steve Nash27

25
Interbrand. Made in China 2008: The Challenge for Chinese Brands Going Global -
http://www.puromarketing.com/files/estudio-interbrand-made-in-china-2008.pdf
26
China sports brand tries to break into US Market - http://www.li-ningusa.com/xcms_entry.php?xcmsentryid=10
27
Kirby, Jason. China hits the hardwood – Maclean’s 1/24/2011 Vol 124 Issue 2

Li-Ning – Marketing Plan 20

Li-Ning – Marketing Plan 21
 10
Figure 5 - Consumer Segmentation

Figure 6 - Household Income

Positioning Strategy

Raw data was collected on March 8, 2011 from Li-Ning’s two distribution channels: Champs28 and East
Bay29. Information on basketball and running shoes were collected because they are the two types of
shoes that Li-Ning is currently offering in the United States.

On these websites, consumers have the ability to rate the shoe on a 5-star scale. This scale was used to
quantify consumers’ perceptions of the products’ quality. Li-Ning is known in China for the quality
products, so this should be translatable in its move into the US market.

Price was determined through the average of the shoes based on brand. This aligns with Li-Ning’s
current position as a low price product for consumers to purchase.

28
Champs Sports – http://www.champssports.com
29
Eastbay Official Site – http://www.eastbay.com

Li-Ning – Marketing Plan 22

 Brand Type of Shoe Price Rating Source
Adidas Basketball 99.99 4.7 Champs
Adidas Basketball 89.99 5 Champs
Adidas Basketball 74.99 4.4 Champs
Adidas Basketball 49.99 4.4 Champs
Adidas Running 129.99 3 Champs
Adidas Running 79.99 5 Champs
Adidas Running 99.99 4.7 Champs
ASICS Running 124.99 4 Champs
ASICS Running 109.99 5 Champs
ASICS Running 99.99 5 Champs
ASICS Running 89.99 4.6 Champs
ASICS Running 89.99 4.7 Champs
ASICS Running 84.99 4 Champs
Li-Ning Basketball 89.99 5 Champs
Li-Ning Basketball 69.99 4 Champs
Li-Ning Basketball 69.99 4 East Bay
Li-Ning Basketball 89.99 5 East Bay
New Balance Running 265 5 Champs
New Balance Running 199.99 3.3 Champs
New Balance Running 134.99 5 Champs
New Balance Running 129.99 5 Champs
New Balance Running 104.99 5 Champs
New Balance Running 94.99 2.5 Champs
New Balance Running 79.99 4.7 Champs
Nike Basketball 159.99 5 Champs
Nike Basketball 119.99 4.2 Champs
Nike Basketball 139.99 4 Champs
Nike Basketball 139.99 4.9 Champs
Nike Basketball 129.99 4.3 Champs
Nike Running 159.99 5 Champs
Nike Running 119.99 4.6 Champs
Nike Running 99.99 4.2 Champs
Nike Running 99.99 4.3 Champs
Reebok Basketball 99.99 4.2 Champs
Reebok Basketball 49.99 4.5 Champs
Reebok Basketball 39.99 4 Champs
Reebok Running 79.99 4.7 Champs
Reebok Running 79.99 4 Champs
Figure 7 - Raw Data of Multiple Brands

Brand Average Quality Average Price

Adidas 4.46 89.28
ASICS 4.55 99.99
Li-Ning 4.50 79.99
New Balance 4.36 144.28
Nike 4.50 129.99
Reebok 4.28 69.99
Figure 8 - Calculated Averages based on Raw Data

Li-Ning – Marketing Plan 23