Comparative Analysis: Presentation By: Zenith Dhaubhadel ACL I

Outline Structure and rationale of study The research problem Objectives of study Importance of study Limitation of study Introduction of the company STP (Segmentation, target market, Positioning) Target marketing Positioning Marketing Mix SWOT Analysis Industry Five forces of Nike and Adidas

Structure and rationale of study Rationale of this study was to know about scenario of both Nike and Adidas. It covers the study of demographic profile of the customers, acceptance level of the customer, and the competitive strategies followed by one company to overcome the other.

The research problem Lack of information regarding both companies in Nepal. The company was hesitant to provide the information about the company and annual sales revenue. Lack of brand awareness amongst the customers.

Objectives of study Comparatives analysis of both companies. To know leading brand in Nepal. To know which product is more preferable.

Importance of study Adidas and Nike are the major brand in sportswear industry. The study was very important to acquire the actual information on the promotional strategies and purchasing behavior of the buyers. The study helps know the actual status of the company and their marketing strategies in Nepal.

Limitation of study The outlet employees were hesitant to provide us with the information about the total annual sales and about the company, information provided cannot be assured to be as 100% true.

Introduction of the rival Companies Adidas is a German sportswear manufacturing company which was founded in 1948 by Adolf Dassler. Registered in 1949. Adidas is currently based in Herzogenaurach, Germany. The company is the largest sportswear manufacturer in Europe and the second-biggest sportswear manufacturer in the world. The company produces athletes’ shoes, sports apparels like t-shirt, trousers and jackets, sports equipment, and accessories like bottle, socks, eyewear etc.   Fig: Net Sales of Adidas

Adidas in Nepal The brand Adidas was introduced in the Nepalese Market in 1998 by Mr. Sanjeev Tuladhar, the owner of G.Q Collection in New Road. In Nepal, there are six showrooms of Adidas, with five showrooms in Kathmandu only and one in Pokhara.

Fig: Sales/ Revenue of Nike over the years. The company was founded on January 25, 1964 as Blue Ribbon Sports by Bill Bowerman and Philip Knight and officially became Nike, Inc. on May 30, 1978. The company is headquartered near Oregon. The company manufactures athletes’ shoes, apparel, accessories, and equipment. Fig: Sales/ Revenue of Nike over the years.

Nike in Nepal Nike was launched in Nepal on 28 May, 2001 by Avenue Marketing Pvt. Ltd The first showroom of Nike was established at Durbar Marg. It has three outlets in Kathmandu.

Segmentation of market- Adidas Adidas is a leading sportswear retailer in the country. Outlets in major streets of Kathmandu. Product ranges from 4490 to 11000. It a very expensive brand to afford for Nepalese standards. More than 80% of total customers are male and remaining 20% are female. Very few customers of age lesser than 25, because of this age group dependent on their parents. Most of the customers are of above the age of forty.

Segmentation of market- Nike Leading sportswear retailer in the country. Outlets in Durbar Marg, Bluebird Mall,Tripureshwor and Kumaripati. Products ranges from 4990 to 14990. It is more expensive than the Adidas. The buyers mostly come from a wealthy family due to expensive products. Out of total buyers, 70% are male and only 30% are female. Buyers Segmentation on the basis of age group: 15-25………………. 40% 25-35………………… 20% 35- Above………………… 40%

Target marketing Adidas: The targeted group come from middle class, upper middle class and upper class family. The monthly income of the individual should be more than 20,000 atleast. Mostly products targeted amongst the age group of forty and above. Nike: Very innovative and fashionable shoes. Targeted buyers of Nike are those from middle class, upper middle class and upper class families. The starting price of Nike shoes is more expensive than that of Adidas the buyers who are dependent to their parents are less likely to purchase the product. The buyers of age below 20 visit the retailers with their parents.

Positioning- Adidas Adidas has positioned itself as the leading sportswear brand having stronger connection with sport. Adidas positioned themselves as a brand for people who want success and they used great athletes, shown wearing Adidas products and tried to convince average people that they will be successful if they wear the right clothes. The brand has positioned itself as the performance enhancer or booster for the inspiring athletes. Adidas also have their own tagline “Nothing Is Impossible”. It has created its own identity among its buyers.

Positioning- Nike Pioneer in sportswear manufacturing industry. Positioned its product as the best alternative for those athletes who want stylish, comfortable, fashionable and trendy footwear and other apparels. The tagline ‘Just Do It’ has helped position the brand better among the buyers.

Marketing Mix Place Adidas is the country’s’ leading sportswear retailer and seller. It has sports shoes, casual shoes, slippers, sneakers, trekking shoes, golf shoes, football shoes. Different Sports apparel like t-shirts, jackets and track suits are available in the store. Nike has different innovative and trendy products. The products of Nike are more preferred by the youths. The Nike Store has its products in four categories Footwear (Shoes, Sandals, Slippers, sneakers) Apparel (T-shirt, Jackets, Trousers) Accessories (Caps, Socks, Bags, Wrist Band) Equipment ( Exercise Kits, Yoga Mats, Water Bottle, Football)

Marketing Mix Price Price of Adidas product available in the country are very reasonable and competitive. The price of different product of Adidas is as follows Shoes (4490-11,000) T-shirt (1200-5000) Jackets (4000-12000) Trousers (1500-5000) Nike has slightly more expensive products than that of Adidas. The price of different products of Nike is as follows Shoes (4990-14,990) T-shirt (1590-4490) Jackets (2990-13990) Trousers (2290-4990)

Marketing Mix Place Adidas has 5 stores in Kathmandu and one store in Pokhara. The Adidas has its stores at DurbarMarg, Putalisadak, Bluebird Mall, New Road, Jawalakhel and one recently opened in Pokhara. Nike has its stores only at Kumaripati, Durbar Marg and Bluebird Mall. Adidas has competitive advantage over Nike in terms of place.

Marketing Mix Promotion Adidas does a massive marketing campaign. As a part of Corporate Social Responsibility, Adidas in joint collaboration of Maiti Nepal collects old and used shoes from its customers and give them cash discount in returns. The collected old and used shoes go to Maiti Nepal and distribute the shoes to the needy one. This campaign is done in every two years. Adidas is the uniform sponsor of National Football Team and National Cricket Team. Nike on other hand has not done anything so far for the promotion of the brand in Nepal.

SWOT Analysis ADIDAS Strength Biggest sponsor of the sport events. Brand recognition by three strips. A diverse range of products and other clothing line. Obeying environmental laws and has never been accused for pollution. Introduces new products keeping in view the response of the customers. Several Adidas outlets. Prices are very competitive to Nike. Sponsors uniform to National Football Team and Cricket Team. Weakness High prices for some products. Lacks E-commerce in Nepal.

SWOT Analysis Opportunity Increase female participation in athletes. Uniform sponsorship to different other sports in the country. Launching of E-Commerce in the country. Cost advantage over arch rival Nike. Threat Intense competition from Nike and Puma. Expensive products. Easy availability of duplicate product which therefore becomes less inexpensive. Lack of Brand Awareness.

SWOT Analysis NIKE Strength No. 1 Sports brand in the world. Very strong slogan “Just Do It”. International brand recognition and reputation. International branding, sponsoring the well renowned athletes. Trendy and fashionable which makes it the first choice for the youths. Weakness Very few promotional campaigns in Nepal to create brand awareness. Have no sponsorship in any sports in the country. Reported to have applied child labor in Pakistan and Cambodia to produce soccer balls.

SWOT Analysis Opportunity Diversifying into different other products like sport sunglasses and other accessories. Sponsoring different events or teams for awareness. Enter the market more aggressively with different innovative marketing campaign. Getting into Corporate Social Responsibility. Threat Intense competition from archrival Adidas and Puma. Expensive product compared to that of Adidas. Availability duplicate and cheaper products in the market. Competitors are becoming very aggressive and creating high quality products that are taking profits from Nike.

Industry Five forces of Nike and Adidas Barriers to Entry - Low Due to the large market scale of both Nike and Adidas, these firms are able to control their costs to retain performance advantage over emerging competitors in the industry. Both brand names are very strong so other brand will fear to compete with them. So, it is difficult for other new companies to enter the market and compete with them.

Industry Five forces of Nike and Adidas Bargaining Power of Buyers - High Large number of buyers relative to the number of firms in this industry. Therefore, companies like Nike and Adidas must continuously market their product and differentiate their brands against competitors, in order to increase sales and market share.

Industry Five forces of Nike and Adidas Bargaining Power of Suppliers - Low There are many suppliers in this industry. As raw materials are available abundantly in the market place, Companies such as Nike and Adidas have a definite advantage and power over their suppliers. Suppliers become dependent on these firms as their means to survival. As firms are able to switch between suppliers quickly and cheaply, due to the globalize networks of cheap labor on various continents.

Industry Five forces of Nike and Adidas Threats of Substitutes - Low Consumer substitutes for athletic footwear products are low because there are little alternatives to switch in the market. Consumer will not switch to other substitute unless they are confident about the substitute product quality.

Industry Five forces of Nike and Adidas Rivalry among Existing Competitors - High The rivalry among existing competitors in the footwear industry is quite high. There is more focus on as e-commerce as their global reach has expanded through all continents. Online selling has helped firms increase sales minimizing operating costs. Competition is fierce in the footwear industry and those who dominate or lead the market do so with high capital expenditures, aggressive sales and marketing strategies, and strong brand identity.

Conclusion Both Adidas and Nike target their product for middle and upper class. Adidas has certain comparative edge over Nike because of the high scale of marketing campaigns and sponsorship they offer which results in high brand awareness. In international market, Nike is still on the top over Adidas due to its various marketing strategy. Adidas plans to top Nike in upcoming Olympics 2012 in London.

Thank You!!!