PROJECT REPORT ON MARKET COMPARISION OF NIKE AND ADIDAS
SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF THE DEGREE OF BACHELOR OF BUSINESS ADMINISTRATION 2011-14 Under the Guidance of: Submitted by: Ms. VANDANA DESWAL AMIT KUMAR JAIN Assistant Professor Roll. No: 0311201711 MSI BBA (General) 2nd Shift 3rd Semester
Maharaja Surajmal Institute C-4, Janakpuri, New Delhi-110058
STUDENT’S DECLARATION This is to certify that I have completed this Project titled “MARKET COMPARISION OF NIKE AND ADIDAS” under the guidance of “Ms. VANDANA DESWAL” in partial fulfillment of the requirement of the award of degree of Bachelor of Business Administration at Maharaja Surajmal Institute, Delhi. This is an original piece of work and I have not submitted it earlier elsewhere.
Date: 25-10-12
AMIT KUMAR JAIN
Place: NEW DELHI
ROLL. NO. 03121201711
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CERTIFICATE FROM THE GUIDE This is to certify that the project titled “MARKET COMPARISION OF NIKE AND ADIDAS” is an academic work done by “AMIT KUMAR JAIN” submitted in the partial fulfillment of the requirement for the award of the degree of Bachelor of Business Administration from Maharaja Surajmal Institute, C-4, JANAKPURI, Delhi, under my guidance & direction. To the best of my knowledge and belief the data & information presented by him in the project has not been submitted earlier.
Ms. VANDANA DESWAL ASSISTANT PROFESSOR MSI
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ACKNOWLEDGEMENT
First of all, I would like to express my thanks to Prof. AZAD. S. CHHILLAR (Director, MSI) for giving me such a wonderful opportunity to widen the horizons of my knowledge. In no small measures, I would also like to gratefully thank to all those who gave me constructive suggestions for the improvement of all the aspect related to this project. In particular, I would like to thank Ms. VANDANA DESWAL, my research guide for her valuable suggestions and guidance. I also owe a deep sense of gratitude to other faculty members for their continuous encouragement. Despite all efforts, I have no doubt that error and obscurities remain that seen to afflict all research project and for which I am culpable.
AMIT KUMAR JAIN Roll. No.: 03121201711
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TABLE OF CONTENTS ii. Acknowledgement iii. Student‟s Declaration iv. Certificate from the guide
1. Introduction a. Company profile
2. Research Methodology 3. Competitive Analysis 4. Marketing & advertising Strategies 5. SWOT Analysis 6. Data Interpretation & Analysis 7. Findings 8. Suggestions 9. Limitations 10. Conclusion 11. Bibliography 12. Annexure
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INTRODUCTION INDUSTRY OVERVIEW Indian leather industry is the core strength of the Indian footwear industry. It is the engine of growth for the entire Indian leather industry and India is the second largest global producer of footwear after China. Reputed global brands like Florsheim, Nunn Bush, Stacy Adams, Gabor, Clarks, Nike, Reebok, Ecco, Deichmann, Elefanten, St Michaels, Hasley, Salamander and Colehaan are manufactured under license in India. Besides, many global retail chains seeking quality products at competitive prices are actively sourcing footwear from India. The footwear sector has matured from the level of manual footwear manufacturing methods to automated footwear manufacturing systems. Many units are equipped with In-house Design Studios incorporating state-of-the-art CAD systems having 3D Shoe Design packages that are intuitive and easy to use. Many Indian footwear factories have also acquired the ISO 9000, ISO 14000 as well as the SA 8000 certifications. Excellent facilities for Physical and Chemical testing exist with the laboratories having tie-ups with leading international agencies like SATRA, UK and PFI, Germany. One of the major factors for success in niche international fashion markets is the ability to cater them with the latest designs, and in accordance with the latest trends. India, has gained international prominence in the area of Colours & Leather Texture forecasting through its outstanding success in Europe. Design and Retail information is regularly made available to footwear manufacturers to help them suitably address the season's requirement. The Indian Footwear Industry is gearing up to leverage its strengths towards maximizing benefits. Strength of India in the footwear sector originates from its command on reliable supply of resources in the form of raw hides and skins, quality finished leather, large installed capacities for production of finished leather & footwear, large human capital with expertise and technology base, skilled manpower and relatively low cost labor, proven strength to produce footwear for global brand leaders and acquired technology competence, particularly for mid and high priced footwear segments. Resource strength of India in the form of materials and skilled manpower is a comparative advantage for the country. The export targets from 2007-08 to 2010-11 as tabulated below reflects the fact that footwear sector is the most significant segment of the Leather Industry in India.
India has emerged in recent years as a relatively sophisticated low to medium cost supplier to world markets –The leather industry in India has been targeted by the Central Government as an engine for economic growth. Progressively, the Government has prodded and legislated a reluctant industry to modernise. India was noted as a supplier of rawhides and skins semi processed leather and some shoes. In the 1970‟s, the Government initially banned the export of raw hides and skins, followed this by limiting, then stopping the export of semi processed leather and encouraging local tanneries to manufacture finished leather themselves. Despite protestations from the industrialists, this has resulted in a marked improvement in the shoe manufacturing industry. India is now a major supplier of leather footwear to world markets and has the potential to rival China in the future (60% of Chinese exports are synthetic shoes). India is often referred to as the sleeping giant in footwear terms. It has an installed capacity of 1,800 million pairs, second only to China. The bulk of production is in men‟s leather shoes and leather uppers for both men and ladies. It has over 100 fully mechanised, modern shoe making plants, as good as anywhere in the world (including Europe). It makes for some upmarket brands including Florsheim (US), Lloyd (Germany), Clarks (UK), Marks and Spencer (UK). India has had mixed fortunes in its recent export performance. In 2000, exports of shoes were US$ 651 million; in 2001 these increased to 663 million but declined in 2002 to 623 million dollars. The main markets for Indian leather shoes are UK and USA, which between them take about 55% of total exports. India has not yet reached its full potential in terms of a world supplier. This is due mainly to local cow leather that although plentiful, has a maximum thickness of 1.4 – 1.6mm, and the socio / political / infrastructure of the country. However, India is an excellent supplier of leather uppers. Importation of uppers from India does not infringe FTA with Europe or the USA. The potential is set to change albeit slowly, but with a population rivalling China for size, there is no doubt the tussle for world domination in footwear supply is between these two countries.
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Few Interesting Facts:
The Indian footwear retail market is expected to grow at a CAGR of over 20% for the period spanning from 2012 to 2015. Footwear is expected to comprise about 60% of the total leather exports by 2015 from over 38% in 2008-09. Presently, the Indian footwear market is dominated by Men's footwear market that accounts for nearly 58% of the total Indian footwear retail market. By products, the Indian footwear market is dominated by casual footwear market that makes up for nearly two-third of the total footwear retail market. As footwear retailing in India remain focused on men's shoes, there exists a plethora of opportunities in the exclusive ladies' and kids' footwear segment with no organized retailing chain having a national presence in either of these categories. The Indian footwear market scores over other footwear markets as it gives benefits like low cost of production, abundant raw material, and has huge consumption market.
COMPANY PROFILE ADIDAS In the small German village of Herzogenaurach the world began its love affair with Adidas (Ryno‟s Company History). In 1920, Adolf “Adi” Dassler brought to life those three little stripes. With his brother, Rudolph, Dassler manufactured his first sports shoe, made for training, after realizing the need for performance athletic shoes. In1948, the Dassler brothers separated to form their own two separate companies. Dassler formed Adidas and his brother formed Puma, both headquarters in Herzogenaurach.
The Adidas mission has changed little since founder Adi Dassler began making sports shoes in the 1920s: to be the best sports brand in the world. The history of Adidas is one of consistently meeting the evolving needs of the athlete. Focusing more on function and less on fashion, Adidas strives to provide athletes with shoes that can make a noticeable difference in their performance. Meeting athlete needs is what makes Adidas the best. Adidas America has continued to build on this history. In February of 1993, Adidas acquired Sports Inc., a US-based sports marketing company founded by former Nike executives Rob Strasser and Peter Moore. Sports Inc. had been working in conjunction with Adidas USA on the design, development, and marketing of the Adidas Equipment line. This line helped
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rejuvenate and reposition the Adidas brand in the United States by creating an exclusive line focused on fulfilling the functional needs of the athlete and by utilizing the best materials and athlete input in the tradition of Adi Dassler. It offered moisture management, thermal insulation, weather protection, ease of movement, and safety, helping the athlete to perform more efficiently. After the successful creation and launch of Adidas America General Information For over 83 years Adidas has been part of the world of sports on every level, delivering state-of-the-art sports footwear, apparel and accessories. Today, with total net sales of 6.1 billion and net income of 208 million, Adidas - Salomon is a global leader in the sporting goods industry and offers the broadest portfolio of products. Adidas-Salomon products are available in virtually every country of the world. Our strategy is simple: continuously strengthen our brands and products to improve our competitive position and financial performance. The company's share of the world market for sporting goods is estimated at around 15%. Activities of the company and its approximately 100 subsidiaries are directed from Adidas-Salomon AG's headquarters in Herzogenaurach, Germany. Also located in Herzogenaurach are the strategic business units for Running, Soccer and Tennis as well as the Research and Development Centre. Additional key corporate units are based in Portland, Oregon in the USA, the domicile of Adidas America Inc. and home to the strategic business units Basketball, Adventure and Alternative Sports. The strategic business unit Golf is based in California. The business unit Winter Sports is in Annecy, France. The company also operates design studios and development departments at other locations around the world, corresponding to the related business activity. Adidas-Salomon AG has approximately 13,400 employees worldwide.
Turnover and Brand Image The turnover of Adidas Company has grown to 16 Million US dollar in 2007-08. Almost 53% of the turnover is from sale of apparel and accessories with the rest from footwear. The Adidas brand is one of the most popular brands as determined by a within brand survey of sportswear brands in the year 2008.
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Future Plans TURNOVER IS EXPECTED TO RISE TO 18 MILLION US DOLLAR FOR ADIDAS INDIA IN 20012-013 CASH BREAK-EVEN IS FORECAST DURING CALENDAR YEAR 20012 AND AN OPERATING BREAK EVEN DURING 2013. THE OTHER ADIDAS – OWNED BRANDS, SALOMON & TAYLOR MADE ARE EXPECTED TO HIT INDIAN ADIDAS STORES DURING 2012 AND 2013.
NIKE: COMPANY PROFILE Nike produces 90 million pairs of sports shoes every year. In 1998, revenue increased by 4% to record $9.6billion, after revenue increase of 42% and 36% respectively in the two preceding years. Nike is still the number one produces of sports shoes, with Adidas close behind. Nike is not only the biggest producer of sports shoes, but also spends the largest amount of money on advertising and promotion. In 1998 the company spent $1.13 billion for this purpose. Famous sportsman such as Michael Jordan, Andrew Ages and Tiger woods‟ have their names linked with NIKE products and received, respectively $45 million, $10 million and $28 million in endorsements in 1998. The company designs and products shoes for just about every sport. Nike‟s presence in soccer (being the world‟s biggest sports) became stronger after entering into new partnerships with top European club teams such as FC Barcelona and AC Milan. At the 1998 world cup, six teams (Brazil, Holland, Italy, Nigeria, South Korea and the US of A) competed in the kits designed by Nike. In November 1999 Nike negotiated new contract with the Dutch sauces association KNVB, and the Dutch team will be playing with the swoosh on their shirts until 2009, for about 10 million guilders a years. Ever since the day 1971 when university of Oregon track coach Bill Bower man poured rubber into his wife‟s waffle iron, technological innovation has been the driving force behind Nike‟s success. Coach Bower man figured that every ounce he shaved of a miler‟s shoe would result in 200 fewer pounds lifted over the distance. His lightweight waffle sole become the foundation of Nike and revolutionized and entire industry. Bower man‟s waffle sole set the stage for an unrivalled tradition of innovation.
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THE MANUFACTURING PRACTICES OF THE FOOTWEAR INDUSTRY: NIKE VS. ADIDAS Steven Van Dusen The current manufacturing practices of the sneaker industry, in particular companies such as Nike, Reebok, Adidas, Converse, and New Balance, takes place throughout the globe. With the industry experiencing severe competition, and the product requiring intensive labor, firms are facing extreme pressure to increase their profit margins through their sourcing practices. The following paper will analyze the sneaker industry, while examining the multitude of viable manufacturing options, and critiquing their current manufacturing structure. Footwear Industry – Players, Revenues, Market Share To properly review the manufacturing in the footwear industry, it is necessary to first gain an understanding of the dominant leaders in the marketplace. The industry is currently experiencing hyper-competition, led by six main firms – Nike, Reebok, Adidas, Fila, Converse, and New Balance (see exhibit 1), with nearly $7 billion in revenues domestically. Nike is the industry leader, with a 47% market share, followed by Reebok, a distant second at 16%, and Adidas at 6% (see exhibit 2). This category is facing decreasing demand and the rising popularity of alternative footwear, resulting in more pressure than ever before to achieve high gross margins through effective global sourcing practices. Footwear companies have two basic options in the manufacturing of their products, they can both own and operate the factories that produce their products, or subcontract their products out to secondary manufacturers. These facilities can be located either domestically or internationally, and both present a myriad of positives and negatives. Firms that produce domestically benefit from ease of monitoring, skilled workforce, government stability, job creation, and well understood labor rules, while suffering from the relatively high wages required in the U.S. as compared to developing countries. By manufacturing products overseas, in particular in third world economies, tremendous efficiencies are gained in the form of reduced wages, but are countered by the increased difficulty of monitoring the quality of their products and the actual working conditions in the factories. Companies that are vertically integrated, who own and operate the factories where their products are manufactured, are faced with large capital expenditure requirements and the management of the factories themselves, resulting in lower profit margins.
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The Evolution of Manufacturing in Third World Countries As the economies of countries around world expand, so does their ability and skill level in all facets of manufacturing. Beginning in London in the early 1900‟s, and followed through to the present day, manufacturing in its simplest form consists of light manufacturing, which uses unskilled labour to produce items such as shirts, shorts, and jeans. As the economy develops along with the skill of manufacturing, countries begin moderately technical light manufacturing, which includes footwear, outerwear and, performance sportswear. The next step in this growth involves the production of technical consumer products such as radios, calculators, and wristwatches. With the most developed economies gaining high levels of technical expertise, manufacturing grows to include technical durables, which includes automobiles and computers. This progression represents the advancement of economies throughout the world today, and provides the reasoning behind sneaker companies manufacturing beginning in the United States and Germany, and passing through Japan, Korea, and Taiwan, to its present day central areas of China, Indonesia, and Vietnam. As these three countries progress over the next decade, and large amounts of new capital is pumped into their economies, their standard of living will rise along with their manufacturing expertise. Companies will be forced to relocate their manufacturing in countries such as Cambodia, Pakistan, and underdeveloped regions of Africa in search of lower wages.
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Nike Nike currently enjoys a 47% market share of the domestic footwear industry, with sales of $3.77 billion. Nike has been manufacturing throughout the Asian region for over twenty-five years, and there are over 500,000 people today directly engaged in the production of their products. They utilize an outsourcing strategy, using only subcontractors throughout the globe. Their majority of their output today is produced in factories in China, Indonesia, and Vietnam, but they also have factories in Italy, the Philippines, Taiwan, and South Korea. These factories are 100% owned by subcontractors, with the majority of their output consisting solely of Nike products. However, Nike does employ teams of four expatriates per each of the big three countries (China, Indonesia, Vietnam), that focus on both quality of product and quality of working conditions, visiting the factories weekly. They also developed their code of conduct in 1992 and have implemented it across the globe, as its goal is to set the standard for subcontractors to follow if they wish to do business with Nike. However, due to a manufacturing network of this magnitude, they have faced numerous violations involving factory conditions and human rights issues, which have been widely publicized. They have responded to these issues through the Andrew Young report, the Dartmouth Study, and Ernst & Young‟s continual monitoring, but are still approximately two years away from completely addressing these problems throughout the globe.
Adidas Adidas is currently enjoying the fastest growth of any brand domestically, with a market share of 6% and revenues of $500 million. They have been shielded from bad publicity by the two Goliath‟s of the industry, Nike and Reebok, and are reaping the rewards substantially. They have adjusted their manufacturing strategy, from a vertical operation in Germany in the 60‟s and 70‟s, to an outsourcing focus today throughout Asia. Unlike the big two, they do not have a code of conduct, and their factories are considered to be the worst in the industry. It is just a matter of time before they are exposed, with an underground swelling of negativity already occurring today. In order to avoid the negative effects and lost revenues that Nike and Reebok have received, they need to immediately begin to take a proactive stance in regards to the working conditions of their factories.
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RESEARCH OBJECTIVES & METHODOLOGY RESEARCH OBJECTIVE To study the marketing of Adidas and Nike and also about the current condition of Adidas & Nike in market To find out why Adidas and Nike are main competitors. To find out that how Adidas hold to the market and what are the areas in which Adidas can improve. The various aspects related to the marketing strategy of Adidas and to make further suggestions for its improvement. A study to provide insight into the benefits of marketing techniques adopted by companies and its effectiveness in the footwear industry. To study the footwear industry in India with reference to Adidas and Nike shoes. To get the customer, dealer and retailers perceptions To know the Industry‟s internal and external environment by knowing Strength, Weaknesses, Opportunities and Treats. To analyse the current scenario to find out the future prospect of casual shoes market. Space planning solutions to optimize sales, margins and consumer loyalty
METHODOLOGY DATA COLLECTION METHODS: The sample size taken was 100 consumers Sample unit – Shoes Company (Adidas Shoes, Reebok, Bata, Adidas and Nike) The Area chosen was Delhi. The data was collected by means of a) Questionnaires b) Interviews (formal & informal)
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QUESTIONNAIRES Questionnaire prepared was open ended, structured, and disguised. The Questionnaire was designed in such a way that it catered to every aspect of the research objective. It was disguised as the consumer was kept unaware of the product for which the research was being conducted. Before filling up the Questionnaire, it was thoroughly discussed with them and their views were noted down in the form of facts (answers) in the Questionnaire.
INTERVIEWS Interviews just like informal discussions were pre-planned. Infact interviews only led to informal discussions. Interviews were formal and in some cases, this was the initial step which led to second & third meeting with the interviewee and they were able to part with the information freely and informally with the researcher. Interviews were pre-planned (after taking an appointment with them in many cases) very formal and structured. When this was through, they were asked to fill in one chart with parameters of a footwear industry giving their rankings. It helped in finding out their awareness level and needs.
INFORMATION 1. 2. 3. 4. 5. 6. 7.
Facts Quasi-facts The awareness of the people Their needs Demands Satisfaction with the product Opinions
SAMPLING Sampling done was stratified random sampling. It was random because consumers were not determined, they were divided into groups and this was done only to explore the dimensions of the target market.
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CONSUMER GROUPS Consumers were divided into 3 groups and thereafter the study was done. The three groups are as follows: 1. School & college going students – Graduates, fresh graduates, post-graduates & freshly employed youth (08-23 yrs.) 2. Young employed people – Businessman, Executives and professionals like chartered accounts, Doctors, Advocates, etc. (23-25 yrs.) 3. Middle-aged well settled senior Executives, Businessman, Advocates, Doctors, etc. (35 yrs. & above) This grouping was done in order to know the general preferences of different age groups.
COMPETITIVE ANALYSIS MARKETING & ADVERTISING ASPECTS MARKETING STRATEGIES: AN OVERVIEW OF ADIDAS
Market research is a method of collecting data which will make you (as a business) more aware of how the people, you hope to sell to, will react to your products or services. Market research will answer questions like: Whether your products or services are needed Who might want to buy your products What age, sex, income occupation etc. are the people I want to sell to. If there are changes taking place and how this might affect what you sell How well your products or services might sell How much demand there is for what you hope to sell What price would people be prepared to pay
Conducting market research There are number of ways in which you can carry out your research but you need to carefully consider why you made this choice and what you hope the evidence will suggest to you. Questionnaires and personal interviews are one of the most common ways in which you can conduct market research, and there are many methods of gathering data this way: Direct Interview, Mail Survey and Telephone interview. Depending on the type of data you hope to collect will have an impact on what you choose to use. I have made use of two type of survey methods, questionnaire and mail survey. I have asked some question about the company my mail and also by direct contacts. The Question I have asked are given in “questionnaire part” below.
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The Marketing Mix (The 4 P's of Marketing)
Marketing decisions generally fall into the following four controllable categories: Product Price Place (distribution) Promotion The term "marketing mix" became popularized after Neil H. Borden published his 1964 article, The Concept of the Marketing Mix. Borden began using the term in his teaching in the late 1940's after James Culliton had described the marketing manager as a "mixer of ingredients". The ingredients in Borden's marketing mix included product planning, pricing, branding, distribution channels, personal selling, advertising, promotions, packaging, display, servicing, physical handling, and fact finding and analysis. E. Jerome McCarthy later grouped these ingredients into the four categories that today are known as the 4 P's of marketing, depicted below:
The Marketing Mix These four P's are the parameters that the marketing manager can control, subject to the internal and external constraints of the marketing environment. The goal is to make decisions that centre the four P's on the customers in the target market in order to create perceived value and generate a positive response.
Product Decisions
The term "product" refers to tangible, physical products as well as services. Here are some examples of the product decisions to be made: Brand name Styling Quality
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Price Decisions
Some examples of pricing decisions to be made include: Pricing strategy (skim, penetration, etc.) Cash and early payment discounts Price flexibility Price discrimination
Distribution (Place) Decisions
Distribution is about getting the products to the customer. Some examples of distribution decisions include: Distribution channels Market coverage (inclusive, selective, or exclusive distribution) Warehousing Distribution centres Transportation
Promotion Decisions
In the context of the marketing mix, promotion represents the various aspects of marketing communication, that is, the communication of information about the product with the goal of generating a positive customer response. Marketing communication decisions include: Promotional strategy (push, pull, etc.) Advertising Personal selling & sales force Sales promotions
ADVERTISING As per Adidas advertising can get results in a promotion blend. Good results are obtained at a cost of course. The amount spent in the Unites States for advertising is growing. Continuously, from World War II to 1980 it went from $1 billion to $50 billion. Adidas also spends nearly $2.9 million on its advertising throughout the world. Adidas in India is spending almost $17 million on advertising. The heavy weight players like Sachin Tendulkar, Leander Paes and Mahesh Bhupathi are already attached with their ad-campaigns.
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PRICING: Adidas is clear; it wants to become the no. one sports brand in India, a choice brand for all brands. So far so good, but how will it tackles a price conscious market like India? Adidas feels that being a high energy business Adidas introduces 600-700 articles every six months – enables the brand to remain fresh and bring on an international and Indians the brand from the price stand point. Price, that‟s the most critical factor in the Indian context. Adidas believes it has to deliver a functional at an affordable price. It‟s a tough job – to maintain the integrity of the performance and still come out with a product a right price point. Globally shoes start at $50. But in India as the perceived need is lower, you have to make the product more affordable. To tackle this, Adidas came out with speed 2000, a product priced at Rs.995 with the help of local and Hong Kong source people. Adidas however feels that it‟s just the matter of time before India coverage‟s the world on this front. It is very difficult to operate on a lower price point and maintain integrity of product, but it‟s been barely 3 years since the sports market has taken off. The original sector is just 20% of the total market and 80% of the volumes comes from sporty shoes. But our market is producing products at a price that is relevant to the consumers. Adidas feels that as the volume go up, Adidas will try and work out price points as people graduate with better understanding of quality and price perception. Volumes are bound to go up. Adidas started at the time when India had no strength out in the sports products market in 1989 – 90. It‟s then licensing partner Bata, and it had limitations of what it could have put behind the brand. So company took the next best step when the licensing agreement ended to take a bigger share in business. To conclude we can say that Adidas is putting all efforts to bring down the price consciousness in the Indian market. Company is trying to make products, which are easy to afford and still maintain the integrity of their performance. Growth has been phenomenal for Adidas even given the base is small. In 2002 Adidas grew by 25%, 2003 by over 50% and this year Adidas is expecting more than 50% in terms of value in both shoes and apparel, while the industry growth as a best case estimate has been 20-25%.
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ADIDAS OTHER STRATEGY Only now, the setting is not the playground or the track or the court, it is the urban landscape – with its omnipresent traffic jams, crowded streets and so forth. This way, Adidas becomes a part of life anyone‟s life. You don‟t have to be the high-voltage performer to be a part of the Adidas family. And it goes beyond that – Adidas becomes something that makes you better. Not just as an athlete, but as a sports person, a better human being. One of the advertisement: The spot featuring Boldon, shows him chasing a thief (who‟d stolen a TV set when its owner was in the bath) through the dark streets. To help a man (the owner, in a towel) in distress. And he uses all the power that he can, to do what he has to do and what he needs to do. And Adidas helps him perform better, than he would otherwise have been able to. This is perhaps shown in an oblique way when the spot ends at the feet of Boldon and the bather. One is wearing a pair of Adidas shoes while the other is barefoot. Adidas makes you better, goes the base. In short, the other man could have done as well as Boldon. The bather reads any man. Any man who wears Adidas. And Adidas goes beyond athletic performance – it becomes everyday life. In stark reality. Though humorously and light, it has a deep meaning.
THE ADIDAS LOGO
The “Trefoil” was adopted as the corporate logo in 1972. It represents the heritage and history of the brand. In 1996, it was decided that the Trefoil would only be used on heritage products. Examples of product featuring the Trefoil logo include the Stan Smith, Road Laver, A-15 warm-up, and Classic T-shirt. Equipment The Adidas Equipment line was launched in 1991. This line of footwear and apparel represents the most unique and functional of Adidas products. Equipment is the ultimate expression of what is uniquely possible by design when form follows function. In January 1996, the Three-Stripe brand mark became the worldwide Adidas corporate logo. This logo represents performance and the future of the Adidas brand. This logo is used in all advertising, printed collateral and corporate signage.
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Since 1949, the Three-Stripes have been an integral part of our brand and product designs. This trademark has become synonymous with Adidas and its dedication to producing high-quality athletic products to help athletes perform better.
MARKETING & ADVERTISING STRATEGIES OF NIKE In the late 20th century American, the cultural capital of corporations had replaced many human forms of capital. As we but, wear, and eat logos, we become the henchmen and admen of the corporation, defining ourselves with respect to the social standing of the various corporations. Some would say that this the new form of tribalism that is sport corporate logos we ritualize and humanize them, we redefine the cultural capital of the corporations in human social terms. I would say that a state where culture is indistinguishable from logo and where the practice of culture risks infringement of private property is a state that values the corporate over the human. In light of the rash of killings over Nike shoes in 1991 and the continued market dominance of the brand, clearly Nike exerts a significant social and psychological force on the American consumer. It is my assertion that Nike appeals to a buying public that treats fitness as a worthy individual foal which simultaneously imparts social identification. The question remains how? Nike ads, when first released were “treated like new plays or books”. Concerning semiotic analysis informs this discussion and stands as a great study aid interesting read).
Unlocking Nike‟s Ads I plan to work with a small number of Nike ads that speak to the entire genre, though a thorough analysis would include the Air Jordan series, the womenoriented “Empathy” campaign, and All Conditions Gear ads to name dew. I hope to incorporate a wider variety of Nike advertisements at a later date. Nike‟s ads, like any other businesses require interpretation. Some of this reading goes on at the conscious level, some unconsciously. As opposed to extremist on either side of the interpretive question, I fall most nearly to the constructivist point of view in that I view meaning as interplay between text and the reader. Chandler writes, “Texts are full of indeterminacy‟s which require the reader‟s active interpretation. We must draw not only on our knowledge of language, but on our knowledge of the world. ”
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Thus, readers of advertisements bring with them a surface knowledge of the language as well as a set of preconceived ideas about how to relate the ad to themselves. These mental templates are known as schemata. Examples of these may include ideas of the rebel, corporate businessman, or mechanics‟ garages. Ads work on a variety of different levels including, but not limited to, sign typology, paradigmatic meaning, psychological appeals, emotion, roles, values/beliefs, and knowledge. Again, the impact of an ad comes from the interplay between these various aspects of makeup and the reader‟s own notions about him/herself and the world. So, taking the “Test Your Faith” ad as our first example: Straight off, the reader finds him/ herself thrust into the schema of religious worship. Not only must the viewer literally look up to the runner, but he/she receives the imperative to “Test your faith.” The runner pictured appears in the midst of a run and rests easy in the knowledge of his own god- like attention to fitness. Likewise, the runner has no identity beyond his role in the ad. That is, we cannot see his face, giving him an added element of the unknown divine. The reader feels cowed looking from a subordinate position at the figure of the runner in his element. The text implies a direct connection between exercising (in this case, reining) and religious questioning the writers seem to suggest an element of transcendence possible in exercise, as well as the need to continually question who we are in relation to our gods and what we hold most sacred. For the runner in the ad, exercise in the object of sanctity. Yet the reader might inhabit a different role by placing themselves as the runner in the ad itself. Transported from reading a magazine to the middle of a run, filled with the sensual pleasure of using one‟s body, the reader identifies him/herself as the „tester of faith, „And finding the purity of exercise within the soul, the reader can accept a measure of hearty self-congratulation. A slightly dissimilar angle for interpretation would be to imagine the set of causes or drives that propelled the runner in the ad from his home to the streets for a run. The measure of the individual in contemporary society rests upon the extent to which they exercise their body. Seeing the runner engaged in a long run should impel the reader to imagine their own set of values and desires. What would it take to get them on the streets for a run? How important is exercise to that person? The ads place fitness as a top priority and suggest that the reader must acknowledge the fitness culture, even if they do not take an active part. Finally, the gritty grey and white tones of the advertisement insinuate a harsh world in which running becomes an escape. Reading the ads, perhaps themselves members of such a life, viewers will immediately seek the release and redemption that running and exercise offer.
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Moving on to another example of running advertising, we look at “You either ran…” Again placed in the dichotomy between athletes and spectators, the reader need only answer one question. Have I run today? Respondents will fall neatly into two categories and can take with them the requisite set of emotions set of emotions that came with their answer. Identification and affiliation with others, approval, self-worth, and pride all spring from the answer “yes.” Meanwhile, shame (first and foremost) and ostracization from the „in crowd‟ leave a bitter taste in the mouths of those answering „on.‟ Placing the runner against a neutral background gives the appearance of a void in which must be placed the sum of viewers‟ athletic endeavours. They will be judged and given admittance or refusal to the world that Nike‟s runner inhabits. The world of the as is composed of little more than the runner and the bland sky behind him. For the reader, the added force of the text almost taunting, by now makes the point clear. You must belong. Katz assert that “Nike‟s ads in track and field and running [magazines] have long been acknowledged to be as much away to support the sport‟s means of communication as ways to sell gear” (119). While this may be letting Nike off a bit easy, the advertisements above demonstrably speak to an elite group of readers well-versed in the intricacies of running. All these factors tie into the on-going cultural formation of the fit body discussed in this project‟s. During the late 1980s, Nike attained a relative saturation of the U.S. market for athletic goods and apparel, leaving Nike executives wondering „where do we go from here? Appealing to a higher sense of excellence (are, to borrow another Greek word married to the philosophy of Nike), Nike hoped to inculcate a sense of individual accomplishment possible on sport as well as play into that very same sense already budding in the breasts of consumers. Herein lays another example of the indivisibility of the fitness culture and Nike‟s place in it. Phil Knight on marketing: “What Nike does well is to interpret what people are doing, what they‟re interested in and we‟ve been lucky enough to align ourselves completely with what we perceive” (Katz 1994: 150). But one should not imagine Nike as a mere reflect of popular culture, as the advertising example above relate. In fact, Jensen (Advertising Age, 12/16/96) ingénues Nike‟s marketing formula to consist of the integration of the swoosh into the cultural fabric of sports and harnessing of its emotional power. Originally, Knight hated ads and spent must more on promotions. For example in 1976, only $100,000 was allocated for advertising versus $310,000 for promotion (Strasser & Backland, 1994:239). Knight and the other Nike executives knew well “the importance of owning athlete endorsed apparel…to youth for the sense of cultural power and belonging it imparted” (Wilson & Sparks, 1996:415). And who can deny the success of such long-term promotional efforts as the Nike Air Jordan campaign.
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SWOT ANAYSIS ADIDAS Strengths: The main strength of Adidas is his Product Quality. The quality and the material uses in Adidas are very good. The company has a good brand image in the market, the publicity and the advertisement is also very good and lastly company holds a healthy market share in the market. Adidas Shoes is a very competitive organization. Phil Knight (Founder and CEO) is often quoted as saying that 'Business is war without bullets.' Adidas Shoes has a healthy dislike of its competitors. At the Atlanta Olympics, Reebok went to the expense of sponsoring the games. Adidas Shoes did not. However Adidas Shoes sponsored the top athletes and gained valuable coverage. Adidas Shoes has no factories. It does not tie up cash in buildings and manufacturing workers. This makes a very lean organization. Adidas Shoes is strong at research and development, as is evidenced by its evolving and innovative product range. They then manufacture wherever they can produce high quality product at the lowest possible price. If prices rise, and products can be made more cheaply elsewhere (to the same or better specification), Adidas Shoes will move production. Adidas Shoes is a global brand. It is the number one sports brand in the World. Its famous 'Swoosh' is instantly recognizable, and Phil Knight even has it tattooed on his ankle.
Weakness: The major weakness in the Adidas is that the manufacturing of the products of Adidas is not done in India itself it is being import hence the cost become high and the margin of profit becomes low that‟s why company must give a deep thought on manufacturing their products in India. Another major weakness in the company is that it is not catering to all the segments which I have already discuss above, If these two weakness in the company can be eradicated then the company may earn high profit and better market status. The organization does have a diversified range of sports products. However, the income of the business is still heavily dependent upon its share of the footwear market. This may leave it vulnerable if for any reason its market share erodes.
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Opportunities: Adidas does have many products for the urban segment or poor people, but there is hardly any product or we can say that there are no products for this segment. India is more a rural country, in the total population of India major part of population lives in rural area and these people cannot afford the costly products of the company like Adidas hence company must target this particular segment they must introduce the shoes and other product according to their demands. And also price is one of the major factor which may influence this type of segment hence company should make their policy accordingly. Company must also consider the rage of products as compare to Nike and Reebok. In my opinion the company must introduce more rage or more variety in the market to compete with their competitors and also the customers have more choices to choice the product from. Product development offers Adidas Shoes many opportunities. The brand is fiercely defended by its owners whom truly believe that Adidas Shoes is not a fashion brand. However, like it or not, consumers that wear Adidas Shoes product do not always buy it to participate in sport. Some would argue that in youth culture especially, Adidas Shoes is a fashion brand. This creates its own opportunities, since product could become unfashionable before it wears out i.e. consumers need to replace shoes. There is also the opportunity to develop products such as sport wear, sunglasses and jewellery. Such high value items do tend to have associated with them, high profits. The business could also be developed internationally, building upon its strong global brand recognition. There are many markets that have the disposable income to spend on high value sports goods. For example, emerging markets such as China and India have a new richer generation of consumers. There are also global marketing events that can be utilized to support the brand such as the World Cup (soccer) and The Olympics.
Threats: Adidas does not have strong distribution network as compare to Nike and Reebok in India. Nike has more number of retail outlet then Adidas and Reebok has a unique distribution network, the company Reebok not only use its outlet for the sale of their product but also use some other shoes company outlet like “Bata”. In a Bata showroom u can find Reebok shoes and other products. But this is not a case with Adidas hence Reebok has an extra advantage over Adidas. Adidas Shoes is exposed to the international nature of trade. It buys and sells in different currencies and so costs and margins are not stable over long periods of time. Such an exposure could mean that Adidas Shoes may be manufacturing and/or selling at a loss. This is an issue that faces all global brands.
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The market for sports shoes and garments is very competitive. The model developed by Phil Knight in his Stamford Business School days (high value branded product manufactured at a low cost) is now commonly used and to an extent is no longer a basis for sustainable competitive advantage. Competitors are developing alternative brands to take away Adidas Shoes‟ market share. As discussed above in weaknesses, the retail sector is becoming price competitive. This ultimately means that consumers are shopping around for a better deal. So if one store charges a price for a pair of sports shoes, the consumer could go to the store along the street to compare prices for the exactly the same item, and buy the cheaper of the two. Such consumer price sensitivity is a potential external threat to Adidas Shoes. 'If you have a body, you are an athlete' - Bill Bowerman said this couple of decades ago. The guy was right. It defines how he viewed the world, and it defines how Adidas Shoes pursues its destiny. Ours is a language of sports, a universally understood lexicon of passion and competition. A lot has happened at Adidas Shoes in the 30 years.
SWOT ANALYSIS: NIKE Strengths: Nike is the world‟s no. 1 shoemaker. It designs and sells shoes for a variety of sports including baseball, golf, cheerleading, volleyball, tennis and football. Nike uses a “Make to Stock” customer order which provides a fast service to customers from available stock. Nike operates Nike Town shoe and sportswear stores, Nike factory outlets and Nike Women shops. Nike sells its products throughout US and in more than 180 countries. Nike is strong at research and development, as is evidenced by its evolving and innovative product range. They then manufacture wherever they can produce high quality product at the lowest possible price. Nike is a global brand. It is the number one sports brand in the World. Its famous „Swoosh‟ is instantly recognizable, and Phil Knight (Founder and CEO) even has it tattooed on his ankle.
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Weaknesses: The income of the business is still heavily dependent upon its share of the footwear market. This may leave it vulnerable if for any reason its market share erodes. The retail sector is very price sensitive. However, most of its income is derived from selling into retailers. Retailers tend to offer a very similar experience to the consumer. So margins tend to get squeezed as retailers try to pass some of the low price competition pressure onto Nike.
Opportunities: Product development offers Nike many opportunities. The brand is fiercely defended by its owners whom truly believe that Nike is not a fashion brand however consumers that wear Nike product do not always buy it to participate in sport. In youth culture especially, Nike is a fashion brand. This creates its own opportunities, s There is also the opportunity to develop products such as sport wear, sunglasses and jewellery. Such high value items do tend to have associated with them, high profit The business could also be developed internationally, building upon its strong global brand recognition. There are also global marketing events that can be utilised to support the brand such as the World Cup (soccer) and The Olympics.
Threats: Nike is exposed to the international nature of trade. It buys and sells in different currencies and so costs and margins are not stable over long periods of time. Such an exposure could mean that Nike may be manufacturing and/or selling at a loss. This is an issue that faces all global brands. The market for sports shoes and garments is very competitive. Competitors are developing alternative brands to take away Nike‟s market share.
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DATA INTERPRETATION & ANALYSIS The following is the analysis that is based on the responses filled in by the consumers in the questionnaire. It is calculated with the help of frequency tables, bar graph, pi-charts, etc. all close-ended questions have been included as a part of the analysis and the analysis of the face to face interaction and the analysis of the close-ended questions from the base for recommendations. 1. Income Level (Per Month) of Respondents: 0% 4%
21%
75%
2. Brand Preference Preference
Adidas 14% Nike 44%
Red Tape 14%
Levis 12%
43.5% prefer Nike
12.5% prefer Levi’s
16% prefer Sarita Knitting
14% prefer Red Tape
14.5% prefer Adidas
Sarita Knitting 16%
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< 5000 5000 - 10000 10000 - 20000 >20000
3. Parameter for choosing the brand
Price 15%
Quality 26%
Comfort 27% Style 32%
32% choose on style basis
27% choose on comfort basis
15% choose on Price basis
26% choose on quality basis
4. Buying Place Buying Place Company Outlets 18%
Multiple Brand Outlets 46%
18% from company outlets
46% from multiple brand outlets
36% from exclusive brand outlets
Execlusive Brand Outlets 36%
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5. Visits to the outlets
Every Week Twice in a 6% Month 12%
Once in a Months 82%
82% visits once in a month
12% visits twice in month
6% visits every week
6. Response time taken by company in case of defective products? Response Time
1 Week 27% More than 1 27% Week 40% Less than 1 Week 33%
33% customer thinks company takes less than 1 week time in case of any defective product
27% thinks company takes 1 week.
40% thinks company takes more than 1 week.
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7. Customer Satisfaction with services provided by the company? Service Satisfaction NO 2%
YES 98%
98% customers are satisfied with the services provided by the company
2% are not satisfied
8. Customer Satisfaction with the sales personnel of the outlets? Satisfaction with Sales Personnel
NO 7%
YES 93%
93% are satisfied 7% are not satisfied
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1. RANKING OF BRANDS Adidas Levis Sarita Knitting Red Tape Nike 2. By 50 customers on the parameters: Quality Style Comfort Price Service Advertisement LEE COOPER Quality Satisfactory (D) Poor (E) Good © 4% 0% 6%
Very Good (B) 42%
Very Poor (F) 0%
Excellent (A) 48%
42% customers are satisfied with the services provided by the company
48% are not satisfied
6% services provided by the company
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P RICE Very Poor (F) Satisfactory 0% (D) 6%
Good © 56%
Poor (E) 0% Excellent (A) 14%
Very Good (B) 24%
60% customers are satisfied with the services provided by the company
20% are not satisfied
20% services provided by the company
Service Very Satisfactory Poor (D) Poor (E) (F) Good © 4% 0% 0% 8%
Very Good (B) 48%
Excellent (A) 40%
50% customers are satisfied with the services provided by the company
30% are not satisfied
20% services provided by the company
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COMFORT Satisfactory (D) Very Poor (F) 0% 0% Good © Poor (E) 6% 0%
Very Good (B) 46%
Excellent (A) 48%
40% customers are satisfied with the services provided by the company
30% are not satisfied
30% services provided by the company
A DVERTISEMENT Poor (E) 4% Satisfactory (D) 11%
Very Poor (F) 0% Excellent (A) 33%
Good © 6% Very Good (B) 46%
Excellent (A)
32%
Very Good (B)
44%
Good (C)
6%
Satisfactory (D)
10%
Poor (E)
4%
Very Poor (F)
0%
29
Red Tape Quality Satisfactory (D) 4%
Poor (E) Very 0% Poor (F) 0% Good © 12%
Excellent (A) 48% Very Good (B) 36%
E XCELLENT (A)
48%
V ERY G OOD (B) 36% G OOD (C)
12%
S ATISFACTORY (D)
4%
P OOR (E)
0%
C OMFORT Satisfactory (D) 4%
Poor (E) 0%
Very Poor (F) 0% Excellent (A) 24%
Good © 28% Very Good (B) 44%
Excellent (A)
24%
Very Good (B)
44%
Good (C)
28%
Satisfactory (D)
4%
Poor (E)
0%
Very Poor (F)
0%
30
Services Poor (E) 0% Very Poor (F) 0%
Satisfactory (D) 16%
Excellent (A) 28%
Good © 24% Very Good (B) 32%
Excellent (A)
32%
Very Good (B)
28%
Good (C)
24%
Satisfactory (D)
16%
Poor (E)
0%
Very Poor (F)
0%
Advertisement Very Poor (F) 2% Poor (E) 10%
Excellent (A) 12%
Very Good (B) 20%
Good © 16%
Satisfactory (D) 40%
Excellent (A)
40%
Very Good (B)
20%
Good (C)
16%
Satisfactory (D)
10%
Poor (E)
0%
Very Poor (F)
0%
31
SARITA KNITTING Quality Satisfactory (D) Good © 0% 12%
Poor (E) Very Poor (F) 0% 0%
Very Good (B) 32%
Excellent (A)
56%
Very Good (B)
32%
Good (C)
12%
Satisfactory (D)
0%
Poor (E)
0%
Very Poor (F)
0%
Excellent (A) 56%
C OMFORT Satisfactory (D) 4%
Poor (E) 0% Very Poor (F) 0% Good ( C) 16%
Excellent (A) 48% Very Good (B) 32%
Excellent (A)
48%
Very Good (B)
32%
Good (C)
16%
Satisfactory (D)
10%
Poor (E)
0%
Very Poor (F)
0%
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Price Poor (E) 0%
Very Poor (F) 0%
Satisfactory (D) 12%
Excellent (A) 36% Good ( C) 24% Very Good (B) 28%
Excellent (A)
36%
Very Good (B)
28%
Good (C)
24%
Satisfactory (D)
10%
Poor (E)
12%
Very Poor (F)
0%
Service Satisfactory (D) 4% Good ( C) 14%
Poor (E) 2%
Excellent (A) 36%
Very Good (B) 44%
Excellent (A)
36%
Very Good (B)
44%
Good (C)
14%
Satisfactory (D)
4%
Poor (E)
0%
Very Poor (F)
0%
Very Poor (F) 0%
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Advertisement Very Poor (F) 10% Poor (E) 20%
Excellent (A) 8% Very Good (B) 12%
Good ( C) 14% Satisfactory (D) 36%
Excellent (A)
8%
Very Good (B)
12%
Good (C)
16%
Satisfactory (D)
10%
Poor (E)
20%
Very Poor (F)
10%
LEVI‟S Quality Satisfactory (D) 6%
Poor (E) 0%
Good ( C) 41%
Excellent (A)
22%
Very Good (B)
31%
Good (C)
41%
Satisfactory (D)
6%
Poor (E)
0%
Very Poor (F)
0%
Very Poor (F) 0% Excellent (A) 22%
Very Good (B) 31%
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Comfort Poor (E) 7%
Very Poor (F) 3%
Satisfactory (D) 10%
Excellent (A) 34%
Good ( C) 22%
Excellent (A)
34%
Very Good (B)
24%
Good (C)
22%
Satisfactory (D)
10%
Poor (E)
7%
Very Poor (F)
3%
Very Good (B) 24%
NIKE Quality Satisfactory (D) 4% Good ( C) 12%
Poor (E) 0%
Excellent (A) 48% Very Good (B) 36%
Excellent (A)
48%
Very Good (B)
36%
Good (C)
12%
Satisfactory (D)
4%
Poor (E)
0%
Very Poor (F)
0%
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Very Poor (F) 0%
Comfort Satisfactory (D) 4%
Poor (E) 0%
Very Poor (F) 0%
Good ( C) 24% Excellent (A) 60% Very Good (B) 12%
Excellent (A)
60%
Very Good (B)
12%
Good (C)
24%
Satisfactory (D)
4%
Poor (E)
0%
Very Poor (F)
0%
PRICE Satisfactory (D) 0% Good ( C) 10%
Very Good (B) 30%
Excellent (A)
60%
Very Good (B)
30%
Good (C)
10%
Satisfactory (D)
0%
Poor (E)
0%
Very Poor (F)
0%
Poor (E) 0%
Excellent (A) 60%
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Very Poor (F) 0%
Advertisement Satisfactory (D) 0% Good ( C) 10%
Very Good (B) 30%
Excellent (A)
60%
Very Good (B)
30%
Good (C)
10%
Satisfactory (D)
0%
Poor (E)
0%
Very Poor (F)
0%
Poor (E) 0%
Excellent (A) 60%
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Very Poor (F) 0%
RECOMMENDATIONS Both Company should strengthen its distribution network Opening of company owned showrooms is recommended as it should be a place to showcase the latest products I recommend the both companies should concentrate in rural areas which it has neglected a lot. I mean smaller cities as the growth potential lies there.
LIMITATIONS 1) It‟s tough to find data on company was not ready to share data with me. 2) Time was a constraint. 3) Adidas were apprehensive in divulging the details about company and its marketing strategies thus we tried to get the data from advertisement agency articles and net. 4) With the environment being prone to high vitality thus relevance of this project after six months is a questionable thing. 5) The focus of study is local in nature as mobility was a problem.
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CONCLUSIONS & IMPLICATIONS Both companies Adidas and Nike have always been driven by its Value-for-money strategy. The company needs to identify critical success factory and work assiduously towards achieving it. As the world grows to become one, many problems will arise that cannot be solved. One of the primary challenges associated with globalization is balancing conflicting and competing objectives. In the case of Adidas, it has faced such problems already and how they have dealt with them is with flexibility and calmness. Despite what could be higher costs, Adidas has chosen to stick with their human right codes and Standards of Engagement rather than continue to be associated with subcontractors who treat works in inhumane ways. As Adidas has grown worldwide, it has had to deal with problems of heterogeneity vs. homogeneity. In other words, in an increasingly heterogeneous and global world, diversity in the workplace has appeared to emerge as an issue. Companies, including Adidas are no longer homogenous in the sense that their companies have grown worldwide. And as a result, Adidas has had to make worldwide headquarters and produce information and products in several different languages. Having to spread its workforce, Adidas has come to depend on intangibles. The knowledge, worldwide experience and diversity that an Adidas employee can bring to the table are valuable. Recently, how successful companies are in the global world is increasingly derived from intangibles, such as these, that organizations cannot own. Adidas is greatly affected by these external influences since indeed it is a global company. For some it is not common knowledge that Adidas is a German company. This is a result of good global business. Adidas has created a product that is global and with that diversity and knowledge greatly affect the company. Adidas must be able to easily adapt to different cultures and must be culturally aware when conducting business. The long list of Adidas subsidiaries where it conducts business proves that Adidas is constantly adapting to cultural changes and must be extremely diverse. Because of this necessity, knowledge is greatly valued. Great changes occur in this industry and as a result, new ideas, intuition and inspiration are an asset that is a necessity in this industry and to remain a global company. Who leads this knowledge and maintains diversity are the managers, yet they too are facing new changes. The world-economy is now passing through the recession period. So it is very difficult either to predict future trend or to decide strategy to boost up export sales. This global recession has also affected the leather footwear industry. But considering it as a temporary phase we can derive some important conclusions like below: India has a booming garment and shoe market. In various cities there, new shopping malls have sprung up one after another and sellers compete to exhibit latest products while consumers exhibit eager demand for brand products. Many brands expand their businesses through franchised operation, particularly garment and shoe brands. By 2012, franchised operation is expected to hit 6% in growth rate, amounting to USD 17
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billion in total value. This means that this market will create substantial opportunities related to franchised operation. According to insiders, almost all international garment and shoe brands are gloating over the Indian market or negotiating with large textile and garment companies there concerning franchising agreement. With the entry of many large international brands into Indian market, India is beginning to formulate specific laws and regulations concerning franchised operation. Organized retail scale in India only occurs recently. Adidas is one of the first brands to implement franchised operation and currently, almost all sports shoe brands, including Reebok, Adidas and Nike, are operated in this mode. Indian high-end sports shoe and garment market is expected to achieve 20% growth rate this year. The current market is shifting from low-price shoes to medium and high-end products, thus attracting a lot of foreign shoe brands to open stores in India. Recently, Clarks opened its exclusive shoe store in India and other brands such as Lotto, Marco Ricci, Valis and Tommy Hilfiger have achieved outstanding performance. Most international shoe brands enter Indian market through different retail channels, including exclusive stores and stores dealing in multiple brands. Indian high quality shoe market promises great potential. India has a population of one billion. If every Indian buys a pair of Rs. 1000 shoes, this makes a huge market. Sports shoe market is also experiencing a booming growth. Many international brands such as Action, Adidas and Nike are planning to expand market in India. Holding 47% market share in Indian high-end sports shoe market, Adidas already has about 30 stores there and is planning to open a new store every week to fully cover large and small cities in India. These new stores are mostly franchised stores. India is one of their largest and fastest-growing markets, and it is no problem soliciting franchised operators there. The only problem is that there are too many candidates for them to select.
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BIBLIOGRAPHY Book/Magazines Referred:
Berry L.L (1995), “Relationship Marketing of Services-Growing Interest, Emerging Perspectives”, Journal of the Academy of Marketing Science. Homer, P., Kahle, L.R., (1988), “A structural equation test of the value-attitudebehavior hierarchy”, Journal of Personality and Social Psychology, 54, 638-46. Howard J. (1989), Consumer Behaviour in Marketing Strategy, Englewood Cliffs, NJ, Prentice Hall. Kotler, P. (1997), Marketing Management: Analysis, Planning, Implementation and Control, Prentice-Hall, Englewood Cliffs, NJ. Kotler, P. (2000), Marketing Management, Millennium Edition, Prentice Hall of India Pvt. Ltd., New Delhi. Berry L.L (1995), “Relationship Marketing of Services-Growing Interest, Emerging Perspectives”, Journal of the Academy of Marketing Science. Homer, P., Kahle, L.R., (1988), “A structural equation test of the value-attitudebehaviour hierarchy”, Journal of Personality and Social Psychology, 54, 638-46. Howard J. (1989), Consumer Behaviour in Marketing Strategy, Englewood Cliffs, NJ, Prentice Hall. Kotler, P. (1997), Marketing Management: Analysis, Planning, Implementation and Control, Prentice-Hall, Englewood Cliffs, NJ.
Websites referred: www.researchandmarkets.com www.google.com www.adidas.com www.nike.com
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ANNEXURE QUESTIONNAIRE 1. Income Level (Per Month) of Respondents: 5000 0000 20000 20000 2. Brand Preference Sarita Knitting Levis Lee Cooper 3. Parameter for choosing the brand Style Comfort Price 4. Buying Place Company Outlets Exclusive Brand Outlets Multiple Brand Outlets 5. Visits to the outlets Every Week Twice in a Month Once in a Months 6. Availability of Products YES NO 7. Response time taken by company in case of defective products? More than 1 Week
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Less than 1 Week 1 Week 27% 8. Customer Satisfaction with services provided by the company? Yes No 9. Customer Satisfaction with the sales personnel of the outlets? Yes No Lee Cooper Price Excellent (A) Very Good (B) Good (C) Satisfactory (D) Poor (E)
Service Excellent (A) Very Good (B) Good (C) Satisfactory (D) Poor (E)
Comfort Excellent (A) Very Good (B) Good (C) Satisfactory (D) Poor (E)
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Services Excellent (A) Very Good (B) Good (C) Satisfactory (D) Poor (E)
Price Excellent (A) Very Good (B) Good (C) Satisfactory (D) Poor (E)
Advertisement Excellent (A) Very Good (B) Good (C) Satisfactory (D)
Poor (E)
SARITA KNITTING Quality
Excellent (A) Very Good (B) Good (C) Satisfactory (D)
Poor (E) C OMFORT
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Excellent (A) Very Good (B) Good (C) Satisfactory (D)
Poor (E) Price Excellent (A) Very Good (B) Good (C) Satisfactory (D)
Poor (E) Service Excellent (A) Very Good (B) Good (C) Satisfactory (D)
Poor (E) A DVERTISEMENT
Excellent (A) Very Good (B) Good (C) Satisfactory (D)
Poor (E) Levis Quality Excellent (A) Very Good (B)
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Good (C) Satisfactory (D)
Poor (E) C OMFORT
Excellent (A) Very Good (B) Good (C) Satisfactory (D) Poor (E)
NIKE Quality Excellent (A) Very Good (B) Good (C) Satisfactory (D) Poor (E) C OMFORT
Excellent (A) Very Good (B) Good (C) Satisfactory (D) Poor (E)
Very Poor (F) S ERVICE
Excellent (A) Very Good (B) Good (C)
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Satisfactory (D) Poor (E)
Very Poor (F) Price Excellent (A) Very Good (B) Good (C) Satisfactory (D) Poor (E)
Very Poor (F) Advertisement Excellent (A) Very Good (B) Good (C) Satisfactory (D) Poor (E)
Very Poor (F)
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