Promotional and Advertising Strategies: Adidas versus Nike
This paper discusses Nike and Adidas as the two greatly popular companies within the product category of sports apparel. These companies deal with games’ footwear with Adidas being the second major sporting goods company internationally after Nike, Adidas enjoys a market share of 22% whereas Nike enjoys 33%. The two companies have dissimilar target customers across the globe with Adidas targeting individuals in sports of ages between 12 and 34 years; the target sports for Adidas are gymnasium, basketball, tennis, and football. On the other hand, Nike targets individuals of ages 18 to 35 years and is more popular when judged against Adidas due to its several celebrity supports, with the major target being basketball teams. The major market of Nike is the US (Larson, 2011). Apart from competing globally, the two companies have Europe as a vital market. Apart from competition between Nike and Adidas being high, many competitors in the market encompass Reebok and Puma to mention a few. This paper discusses marketing with respect to sports apparel and compares and contrasts the advertising, pricing, and customer-centered promotional approaches that Nike and Adidas use.
Comparison and Contrast
Both Nike and Adidas employ nearly similar kinds of promotional strategies with the two benchmarking one another, using online marketing, magazines, television, and billboard advertisements to promote their sports apparel. Whereas the target customers of both Nike and Adidas in addition to the brand building approach implemented by the two companies are similar, Nike and Adidas are investing increasingly in their promotional strategies with the purpose of drawing more clients and eventually to boost their development. Regardless of the strong competition, Nike and Adidas have persistently experienced a considerable development in the course of the last two decennia. Nevertheless, the development of both Nike and Adidas is associated with e-commerce and web marketing. Online marketing has improved the triumph of these companies, leading to the augmented sales and simultaneously decreasing the operating cost (Carrillat, Colbert, & Feigné, 2014). For Nike and Adidas to control the entry of other rivals in the marketplace, they have the capacity of swaying the price of their products; hence, they can have a competitive benefit over the possible competitors venturing into the industry.
In their appealing promotional strategies like making their online sites eye-catching for online customers, Nike and Adidas present a broad variety of products, encompassing sporting equipment, footwear, attire. However, at times the customer service with respect to web marketing could be simple to obtain and could prove unsupportive from time to time. The two companies also enjoy powerful distributional conduits that they manage. Moreover, the two companies are inventive in the designing of the sports apparel (Heine, 2013). There is sometimes the depiction of negative representation of the companies, particularly when their overseas companies place their workers under deprived working environments. Occasionally, the two companies fix high prices to their products, which is attributable to the provision of technical services. Tough competition is another difficulty that Nike and Adidas are compelled to endure. In addition, the two companies employ celebrities in their advertisements, which could sometimes bring about the generation of negative representation, particularly when a given celebrity used engages in immoral conduct.
The major difference in the promotional strategies employed by Nike and Adidas lies in their use of dissimilar celebrities in the advertisement of their products (Luo, Raithel, & Wiles, 2013). Additionally, the companies pursue dissimilar support policies where Adidas concentrates on sponsoring a team and different events whereas Nike centers on different stars of soccer, golf, and basketball to mention a few. For instance, Nike offered sponsorship to Michael Jordan to become a Nike player and join many others that had as well been sponsored by Nike. In this regard, the image of Nike gained great reputation following the sponsorship of Michael Jordan and the company remains among the companies that have had their footstep in all sports leagues internationally. On the other hand, Adidas chose David Beckham to be their brand ambassador in addition to many other celebrities in all regions to promote the products of the company. There is also the dissimilarity between Nike and Adidas is in their promotion messages, the two companies use similar scoop and scale though they communicate using dissimilar messages.
The intended customers of Nike are individuals that are engaged in running and basketball as their sporting activities while Adidas, on the contrary, focuses on creating its market domination amid those that are engaged in football and tennis. The operations of Nike are headquartered in the US, whereas those of Adidas are located in Germany (Larson, 2011). In this regard, Adidas mostly centers its endeavors in Europe whereas Nike concentrates in its domestic market in the US. While the resources of Nike are obtained from Korea, the ones of Adidas are obtained from Asia (Larson, 2011). For many years, Nike has moved its concentration to football with the purpose of acquiring the global reputation, similar to the way Adidas leads in the international football marketplace. The football market is normally deemed the international sport. While Nike has been constantly changing the design of its footwear to stay ahead of its rivals, Adidas has been continuously trying to cut down the production outlay and time with the aim of becoming more effective. Adidas is working hard to enlarge its market appeal with respect to sports footwear and equipments while Nike leads the market in promotion and marketing tactics.
Application of Marketing Knowledge to Achieve Competitive Benefit
A company within the sports apparel could employ marketing knowledge with the purpose of achieving a competitive benefit over its rivals through sponsoring local sports competitions in the unexploited markets to create brand recognition with the intended customers and attract more customers in those markets. For instance, big sections of Asian and African markets are unexploited, and there is no dominating company such as Nike and Adidas (Carrillat, Colbert, & Feigné, 2014). The company could also persuade the customers in the unexploited markets by creating a low price and high quality opinion and could develop its market segment that will act as a foundation to make its products achieve competitive benefit over those of its competitors on an international level.
Another way that the company could employ marketing knowledge to achieve competitive benefit over its rivals is through targeting unexploited sports. Volleyball, cricket, rugby, and cycling are some of the biggest unexploited marketplaces for sports apparel and footwear and are popular in many countries across the globe. Therefore, the company could target such untapped sports with more concentration and influential approaches. By targeting the untapped sports, the company could create its segment and take a leading position early enough (Carrillat, Colbert, & Feigné, 2014).
Applications for Customer-Centered Advertising
In sports apparel, sponsoring events could aid a company in both short and long-term (O’Reilly & Lafrance, 2013). A company could sponsor different local events such as regional football competitions, organizing sports questions competition platforms in big towns, and other local events to advertise the products directly to consumers by marketing the events as events as sponsored by the company. The company could also use such events to offer publicity and gain opinions from the consumers on improvement of the quality of its products. Moreover, the company could donate some funds to boost the events and attract many people. In so doing, the company will gain reputation in local communities that will become familiar with its sports apparel and collectively (in the long-term) the company will gain reputation internationally.
Another use for consumer-oriented promotions is the application of advertisements in televisions and newspapers to draw a great number of customers in the short-term. The long-term impacts of advertisements in TV and newspaper hold both positive and negative implications that companies have to mull over when preparing their marketing strategies. These consumer-oriented promotions could make sales get lost in the bound of unchanging advertisements in televisions and newspapers. To prevent the consumer clog, sports apparel companies ought to be innovative and ensure continuous improvement of their advertisements (Hessman, 2014).
Tactical Manner in Nike’s pricing Conclusions
Nike has arrived at its pricing via value based pricing and price leadership strategy where it sets the prices of its products anchored in the value the consumers put on the products. Nike has used a lot of funds to advertise its products as best of the range, and consumers that purchase the brands with the Nike symbol are ready to pay high prices irrespective of the real value of the products. Consumers that take the products of Nike to be of high quality will constantly pay their high price as they become associated with the products and the apparent value they signify (Luo, Raithel, & Wiles, 2013). The main challenge is that the readiness of the consumers to pay a given price varies between consumers, regions, and nations (dependent on real and current requirements) so that a proper value-based pricing permanently is impracticable. Therefore, the price of Nike’s products is changeable dependent on the type, size, or nation.
Measures Companies within Sports Apparel Might Take
Other companies within sports apparel may perform more actions that are pertinent to the green environment such as “create green” with the intention of achieving competitive benefit. For instance, the companies could create representative brands of green environment and demonstrate that they are not just concerned with considerable profit but as well interested with concerns of the environment. The companies could center on offering other environmentally-friendly products and not just sports apparel, for instance, bicycles and containers. This could go a long way to resolving the difficulties of less diversification for the companies (Cornwell, 2014). Moreover, the companies could work towards replacing plastic bags with recyclable bags for their packaging, which apart from being more environmentally-friendly could decrease the funds of making plastic bags.
Another action would be carrying out some design assessments for elder group and other consumers to make some appropriate and unique brands. Furthermore, the companies could carry out online survey in sites such as Twitter and Facebook to receive response from consumers and their sentiment when utilizing their products and apply the proposals and creativities received from consumers to make brands that meet their needs (Parsons, 2013). For instance, the products of Nike and Adidas target the teenagers and youth (people aged ten to thirty-five years), and other companies could come up with products that target the people in that age bracket as well as those above 35 years. Moreover, the companies could come up with a sports drink having collaborating 100PLUS with the intention of breaking through the narrow diversification and toward diversity of options for the consumers. In this regard, the companies could create partnerships to decrease overall production costs such as labor and resources to mention a few.
Medium of Advertisement
Online marketing denotes the most efficient promotion method for companies in sports apparel that could be employed between the company and the public in general. An effectiveness of web marketing lies in its ability to utilize a campaign approach at the cheapest possible outlay and risk investment to capitalize on sales potential and obtain a great return on investment (income). Web marketing is to some extent cheap when judged against other advertising mediums. Cost-efficient approach and well-designed campaign platform make online marketing reach a diverse target consumers (it can be received nearly everywhere across the globe) for an inexpensive outlay. Another effectiveness of web marketing as an advertising medium is that it can be executed much easier and faster than any other advertising medium, getting to the targeted audience real time (Hessman, 2014). Online marketing are easier to follow and report thus permitting the optimization of expenditure and increasing the return on investment with time. In particular, online marketing offers the ease in management and flexibility concerning the people that receive the message, the time, location, and number of times to view the advertisement and no other medium of advertisement provides such control regarding the advertisement spend.
Adidas and Nike companies successful and leading in sports apparel with Nike having a greater competitive advantage. The competitive benefit relished by Nike is associated with its inventiveness and status for the quality of its products. With respect to sports apparel, Nike and Adidas assure the consumers that they will satisfy them with quality and comfort. Some of the measures that companies within sports apparel might undertake to achieve competitive benefit encompass targeting untapped markets. Nike has settled on its pricing via value based pricing and price leadership strategy. To sum it up, online marketing indicates the most efficient promotion technique for companies in sports apparel since it is cheaper, easier, and faster.
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