Nike vs. Adidas: Competitive Marketing Analysis & Strategy

Introduction and Overview

Nike currently employs an incredibly effective marketing and advertising campaign that has resulted in the corporation maintaining the number one spot in sales for athletic wear both 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 return for products year after year because of exceptional service, quality control measures, and product differentiation.

The report below details a market analysis for Nike compared to its 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 noted 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 brand associations both nationally and worldwide.

Also discussed is the global positioning of Nike's product in Europe, Asia-Pacific, the Middle East, and the Netherlands. Part of Nike Corporation's success may be attributed to its efforts at understanding global consumer wants and desires. Research indicates that Nike pays close attention to global customer preferences, including a European desire to purchase and wear Western-style active wear — a trend evident regardless of a consumer's personal interest in athletics. 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 and teen footwear. Pursuing the market for specialized women's products even further in the near future is strongly recommended. Sales of women's shoes have progressively increased over the last several years, and as yet there are few athletic wear retailers that have successfully addressed this market. This area represents significant potential growth for the company.

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

Nike's global presence is also a key contributor to its success. Its website is extraordinarily user-friendly and conveys the message that Nike Corporation is interested in promoting global partnerships, not just selling products. This is a definite advantage Nike holds over Adidas.

Marketing and 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 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" — a campaign that has successfully resulted in the acquisition of new customers (Cheung, 2003:1). Nike's advertising campaign is by far the most creative and has consistently dominated competitors such as Adidas (Cheung, 2003:1). Nike also projects the image that it is not just interested in selling products, but also in building strong relationships and networking with international clients.

Nike's 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 company's earliest days (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 participates in some tailoring of products for individual customer desires, though not to the same extent or with the same level of success as Nike.

Nike further differentiates itself from competitors by promoting product specialization as a primary marketing strategy. Nike has come to be known as a sports company offering a variety of sports-related products, not just footwear. The footwear it does offer is highly specialized, as evidenced by its emphasis on gender-specific and age-specific product lines. Nike has also enlisted celebrity personalities such as Michael Jordan to successfully advertise and promote its products (Cheung, 2003:1).

Nike uses the web as a means to distribute its soccer advertising campaign and strategy, allowing for a global marketing approach and perspective (Mang, 3). The soccer campaign has an international emphasis, as evidenced by global content integrated into the website (Mang, 3). Nike's foreign competitors in this market include Adidas and Mizuno (Mang, 3).

Nike launched a campaign entitled "Nike vs. Evil" from its Amsterdam office (Mang, 3). In this campaign, soccer fans endorsing Nike battle Satan, spreading the belief that "Nike must dominate soccer to have global credibility" (Mang, 3). Nike is a strong proponent of promoting human service; its website states that the corporation has a "genuine, altruistic reason to be: the service of human potential" (Nike, 2003).

Adidas has been competing in advertising during world events, most notably at the 1998 World Cup. Adidas advertised throughout Europe after the 1998 World Cup when the Adidas-sponsored French soccer team defeated Brazil (Tkacek, B5). The Adidas campaign is not as broadly focused as Nike's, however. Celebrity endorsements have been utilized, but the names of celebrities supporting the Adidas campaign have not resonated with consumers as strongly as those endorsing Nike, such as Michael Jordan.

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 maintains several administrative and sales offices throughout the United States, with its World Headquarters in Oregon and its European headquarters in the Netherlands (Nike, 2003:3).

Market Segmentation and Partnerships

Typically, Nike stores offer "30,000 square feet 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). 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 market segmentation, concentrating on team sponsorship and a "recent WNBA sponsorship" to raise "brand awareness" (MRC, 2000). Adidas also offers products in several countries, though not to the extent that Nike does. Currently, Adidas does not differentiate between retail outlets and opportunities the way Nike does with Niketown.

Nike and Adidas offer very similar products, though Nike has a wider market influence. Adidas holds the number two slot and is becoming better known as a producer of fine-quality performance products. Nike's product range includes athletic footwear, cotton and organic apparel, women's specialty wear, designer footwear, and golf equipment, serving markets across the U.S., Europe, Asia-Pacific, the Netherlands, and the Middle East. Adidas offers athletic footwear, eyewear, watches, men's and women's apparel, with market reach in the U.S., Europe, and the Middle East. Nike's services include a specialty women's line, luxury sportswear, a teen lifestyle selection, and sport team wear, while Adidas services include hockey accessories and sport team wear.

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

Adidas recently made a $1.3 billion purchase of French sports equipment maker Salomon (Woodruff, 1998), which will likely expand its already large market and put additional pressure on Nike to compete. Salomon specializes in ski equipment, golf clubs, and bike products, which will likely boost Adidas sales in Asia and North America — markets where Adidas could use a stronger foothold (Woodruff, 1998).