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Nike vs. Adidas Competitive Recommendations/Analysis

Dear Sirs:

Nike currently employs an incredibly effective marketing and advertising campaign that has resulted in the corporation maintaining the number 1 spot in sales for athletic wear nationally and globally. Part of Nike's success lies in its creative use of marketing tools such as the "Just Do It" campaign to attract new consumers. Consumers continue to come back for product year after year, because of exceptional service, quality control measures and product differentiation.

The report below details a market analysis for Nike compared to the number two competitor, Adidas. Among the findings discussed are the differing marketing and advertising strategies Nike has successfully used to beat out the competition. Part of Nike's success as mentioned above is due to the creativity utilized in marketing campaigns. Nike has also actively sought out celebrity endorsements and sponsorships, which has resulted in positive associations with the product nationally and worldwide.

Also discussed is the global positioning of the Nike product in Europe, Asia-Pacific, the Middle East and Netherlands. Part of the success of Nike Corporation may be attributed toward its efforts at understanding global consumer wants and desires. As a result of this research, I have discovered that Nike pays attention to global customer wants including a European desire to purchase and wear Western style active wear. This trend is evident regardless of a consumer's interest in athletic wear. Celebrity endorsements have proven beneficial in this area as well.

Nike has expanded its product line to include specialization in gender specific product wear and children's/teen footwear. I would recommend pursuing the market for specialized women's products even further in the near future. Sales of women's shoes have progressively increased over the last several years. As of yet there are few athletic wear retailers if any that have successfully broached this market, and this area represents a wide area for potential growth for the company.

Part of Nike's success is due to its commitment to specialization of product. For this reason I would not recommend that Nike branch out into too many other areas, such as offering additional excessive accessories or lines of other sportswear such as hockey products as Adidas recently did. Nike has purchased some subsidiaries that offer specialized lines, including some golf products, hockey wear and luxury sports wear. In this respect Nike has been successful, and the subsidiaries operate utilizing their own names still. Adidas has recently ventured into other territories, having similarly partnered with a major European corporation to sell accessories and other specialty types of sports products.

Part of Nike's success is also due to Nike's global presence. Its website is extraordinarily user friendly, and portrays the message that Nike Corporation is interesting in promoting global partnerships, not just selling products. This is a definite advantage Nike has over Adidas. More regarding these observations are reported below.

ANALYSIS NIKE/ADIDAS Presented By:

MARKETING STRATEGIES/ADVERTISING STRATEGIES

An effective marketing strategy must "continuously engage in competitor analysis" in an effort to increase competitive advantage (Cheung, 1995:1). Nike has engaged in stringent competitor analysis since opening its doors to the public in the early 1980s. The marketing strategies and advertising strategies employed by companies include "principles of cost leadership, product differentiation and specialization and focus of value and disciplines" (Cheung, 2003:1). Nike has become a market leader in part because of "its creative advertising strategy," which utilizes the market slogan "Just Do It," which has successfully resulted in acquisition of potential customers (Cheung, 2003:1). Nike's advertising campaign is by far the most creative, and the advertising campaign has dominated competitors such as Adidas (Cheung, 2003:1). Nike also portrays the image that it is not just interested in selling products, but also in building strong relationships and networking with international clients.

Nike strategy incorporates "strong brand control, endorsements, and tailoring of product for individual consumers" (Porter, 2002: 19). Nike also still employs "grassroots strategies such as promotions in local clubs and leagues," which was a primary marketing tool from the beginning of the company (Porter, 2002: 19). Adidas has focused primarily on producing professional quality athletic wear for the European market. It has also sought out celebrity endorsements and does participate in some tailoring of products for individual customer desires, though not to the extent or with the same amount of success as Nike has.

Nike also utilizes differentiation from competitors by promoting the idea of product specialization as a primary marketing strategy. Nike has come to be known as a sports company, offering a variety of products related to sports, not just footwear. The footwear that Nike does offer however is highly specialized, as evidenced by its new emphasis on lines of product wear dedicated to gender specific products and age related products. Nike has also enlisted the assistant of celebrity personalities, such as Michael Jordan, to successfully advertise and promote...

The web allows for a global marketing approach and perspective (Mang, 3). The soccer campaign for example, has an international emphasis, as evidenced by the incorporation of global content integrated onto the website (Mang, 3). Nike's foreign global competitors in this market include Adidas and Mizuno (Mang, 3).
Recently Nike launched a campaign entitled "Nike vs. Evil" from its Amsterdam office (Mang, 3). In this campaign, soccer fans endorsing Nike battle Satan, as this campaign spreads the message that and belief that "Nike must dominate soccer to have global credibility" (Mang, 3). Nike is a big fan of promoting the service of people; its website states that the corporation has a "genuine, altruistic reason to be: the service of human potential" (Nike, 2003).

Adidas has been competing recently in advertising during world events, such as recently at the World Cup in 1998. Adidas advertised throughout Europe after the 1998 World Cup when the Adidas sponsored France soccer team beat out Brazil (Tkacek, B5). The Adidas campaign is not as broad focused as the Nike however. Celebrity endorsements have been utilized, but the names of celebrities supporting the Adidas campaign have not stuck out in consumers minds as much as those of Nike endorsers, such as Michael Jordan.

MARKETING SEGMENTATION

The Nike name is well-known in over "80 countries, six continents" (Nike, 2003).

Nike "owns facilities in Oregon, Tennessee, North Carolina and the Netherlands" and operates in "excess of 80 factory outlets and 15 Niketowns" (Nike, 2003:3). The corporation also has several administrative and sales offices throughout the U.S. The World Headquarters is housed in Oregon, the European in the Netherlands office (Nike, 2003:3).

Typically Nike stores offer "30,000 of selling space in its Niketowns" (Nike, 2003:3). The company is also branching out and has opened two NIKE goddess stores, which sell sports footwear exclusively for women (Nike, 2003:3).

Some other marketing trends and segments include movement into gender specific athletic wear, teen footwear; children's footwear and team wear (MRC, 2000).

Adidas has been focusing on a comeback in the area of market segmentation, focusing on team sponsorship and a "recent WNBA sponsorship" wins to raise "brand awareness" (MRC, 2000). Adidas also offers products in several different countries, though not to the extent that Nike does. Currently Adidas does not differentiate between different retail outlets and opportunities such as Niketown.

Table 1: Nike Vs. Adidas Products/Markets Analysis

Nike and Adidas offer very similar products, though Nike has a wider influence within the market. Adidas is close behind in the number 2 slot however, and is becoming better known as a producer of fine quality performance products.

NIKE Products

Adidas Products

NIKE Markets

Adidas Markets

NIKE Services

Adidas Services

Athletic Footwear

Athletic Footwear

U.S.

U.S.

Specialty Women's Line

Hockey Accessories

Cotton/Organics

Eyewear

European

Europe

Luxury Sports

Sport Team wear

Women's Specialty

Watches

Asia Pacific

Middle East

Teen Lifestyle Selection

Apparel

Men's Apparel

Netherlands

Sport Team wear

Designer Footwear

Women's Apparel

Middle East

Golf

PARTNERSHIPS

Nike has partnered with a variety of other companies to expand their market reach beyond just sports (Nike, 2003:3). These companies include: "Cole Haan, which offers "luxury footwear and accessories;" Bauer, which is based in Montreal and manufactures hockey equipment; freedom.of.choice, which is a teen lifestyle brand; Converse, which is a global footwear brand that produced all star and other sport footwear" (Nike, 2003:3). Nike has also branched out into separate business units that include Nike Golf (Nike, 2003:3).

Adidas recently won a large partnership with a European company that markets various sports accessories. Adidas recently made a $1.3 billion dollar purchase of a French Sport equipment maker, Salomon (Woodruff, 1998) which will likely expand its already large market, putting more pressure on Nike to compete. The company specializes in ski equipment, golf clubs, bike products which will likely boost sales for this company in Asia and North American, where Adidas could use a boost (Woodruff, 1998).

CONSUMER BEHAVIOR

More than 3/4ths of consumers actively seek out and purchase specific athletic footwear (MRC, 2000). Nike dominates the market with approximately 24% of consumer draw (MRC, 2000). Casual sneakers are among the more popular type of athletic footwear, with 28% of consumers purchasing casual footwear each year (MRC, 2000). The population breaks down as follows:

Chart 2:

Data Information Source: MRC, 2000. Consumer Buying Behavior Patterns.

The market growth for sales in athletic shoes is expected to grow to 44 billion in the year 2004 (MRC,…