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Comparison of Adidas and Nike Footwear

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Published: Mon, 19 Feb 2018

COMPARITIVE STUDY OF Brand of Leading Footwear Giants With special reference to Adidas and Nike

ABSTRACT

BRANDING

The 1980s marked a turning point in the competition of brands. Management came to ralise that the principlal asset of a company was in fact its brand names.

The brand is not the product but it gives the product meaning and defines its identity in both time and space. Too often brands are examined through their component parts: the brand name, its logo, design or packaging, advertising or sponsorship, the level of image and brand awareness or, more recently, in terms of financial valuation.

The brand is a focal point for all the positive and negative impressions created by buyer over time as he comes into contact with the brand’s products, distribution channel, personnel and communication. The brand continues to be, at least in short term, a byword for quality even after the patent has expired.

The brand performs an economic function in the mind of consumer and thus has a lasting and memorable effect on the company’s activities, be it as distributor or owner of the brand.

Legally a brand is simply a symbol which distinguishes a company’s product and certifies its origin and thus only obtains its value through registration and conformity.

In order to understand in what way a strong brand is a generator of growth and profitability, it is first necessary to remind ourselves of the fnctions that it performs with the consumers themselves, and which are the source of this valuable goodwill. Once these functions are valued, the consumer seeks out the brands and becomes attached, indeed loyal, to them and, in accordance with the valuation, is often prepared to pay more for the branded product. On the other hand, when these functions are either not fulfilled or not valued by the public, the attraction of the branded product decreases and its premium price becomes unacceptable.

Branding means much more than just giving a brand name and signaling to the outside world that such a product or service has been stamped with the mark and imprint of an organization.

Brands are a direct consequence of the strategy of market segmentation and product differentiation. It is no wonder that the word “brand” also refers to the act of burning a mark into the flesh of an animal as a means to claim ownership of it. Branding though, is not about being on top of something, but within something. The product or service thus enriched must stand out well if it is to be spotted by the potential buyer and if the company wants to reap the benefits of its strategy before being copied by others.

The brand should have its own specific point of view on the product category. It is this conception whichjustifies the brand’s exixstence, its reason for being on the market, and provides it with a guideline for its life cycle. A brand is both the memory and future of its products.

Products are mute: the brand is what gives them meaning and purpose, telling us how a product should be read. A brand is both a prism and a magnifying glass through which products can be decoded. Brands become credible through persistency and repetition.

What’s in a name? That which we call a rose by any other name would smell as sweet. – William Shakespeare

Shakespeare was wrong. A rose by any other name would not smell as sweet …. Which is why the single most important decision in the marketing of perfume is the name. – Al Ries and Jack Trout

An idea, in the highest sense of that word, cannot be conveyed but a symbol. – Samuel Taylor Coleridge

A brand is an external manifestation of what happens inside the organization. The brand is the most powerful asset of a company. It is the instrument by which the products move. It is the symbol of a company’s promise.

Branding is the process by which companies distinguish their product offerings from competition. A brand is created by developing a distinctive name, packaging and design, and arousing customer expectations about the offering. By developing an individual identity, branding permits customers to develop associations like prestige and economy with the brand. Buying a brand reduces the risk of the customer and eases his purchase decisions. Brand superiority leads to high sales, the ability to charge price premiums, and the power to resist distribution power. A brand is a distinguishing name or symbol (such as a logo, trademark, or package design) meant to identify the goods or services of either one seller or a Group of sellers. Its purpose is to differentiate the goods or services from the goods or services of the competitors. A brand gives signals to the customer the source of the product, and protects both the customer and the producer from the competitors who would attempt to provide identical products that appear to be same. The strength of brand is directly proportional to the expectations of the customer about it.

The brand is the culmination of all the activities of the organization. The brand name conveys the set of values and attributes embodied in the brand.

When we think of ‘M’ with curved top reminds us of the delicious burgers served at McDonald’s outlets. This is how a symbol reminds us of the brand when it becomes applicable in the whole universe.

A BRAND CONVEYS the following message

Ø Attributes: can be both specific and abstract. Size colour and weight are specific. McDonalds gives identification of pure and hygienic food served by it.

Ø Benefits: refer to the consumer perception of the needs that are being satisfied. McDonalds gives us healthy food, which is hygienic and ready to eat.

Ø Values: Wipro’s values are to deliver best products and services by applying these values.

Ø Culture: Mercedes represents German culture: organized and efficient and comfortable cars.

Ø Personality: Raymond’s fabrics provide a gentle, caring and lovable man’s look to its users.

Ø User: Barbie’s indicate that its user would be a small kid and not a teenager or an old man

A successful brand has several essential attributes. The presence of most of these attributes can guarantee long-term eminence of the brand.

· The brand provides the benefits that customer desire. Customers buy a brand because its attributes, its image, its service and many other tangible and intangible factors create an attractive whole.

· The brand stays relevant.

· The pricing strategy is based on consumer’s perception of value. The company has to arrive at the right blend of product quality, design, features and price. Value pricing should not be adopted at the expense of essential brand-building activities. Whatever price the company decides to charge, it should be able to demonstrate that customers are deriving value from it in proportion to the price they are paying.

· The brand is properly positioned. Successful brands keep up with competitors by creating points of parity in those areas where competitors are trying to find an advantage, while at the same time creating points of difference to achieve advantages over competitors in some other areas.

· The brand is consistent. Maintaining a strong brand means striking the right balance between continuity in marketing activities and the kind of changes needed to stay relevant.

· The brand portfolio and hierarchy should make sense. The Gap’s brand portfolio provides maximum market coverage with minimal overlap. Banana Republic serves the higher end, the Gap brand covers the basic style and quality segment, and Old Navy serves the mass market. Each brand has the distinct image and its own source of equity. Brand at each level of the hierarchy should contribute to the overall equity of the portfolio through their individual ability to make consumers aware of the various products and foster favourable associations with them.

· The brand makes use of and coordinates a full repertoire of marketing activities to build equity.

· Brand managers understand what the brand means to consumers.

LITERATURE REVIEW

Define the Market

Market is the place where the sellers and buyers meet. It does not have any demographic limits.

Market research

· Market research gives the knowledge about customers, its attitude, approach. Market research is collection of data which will make a person (as a business) more aware of how the people, you hope to sell the product of the company to, will react to your products or services.

Conducting market research

There is no uniform way of conducting market research, yet there are number of ways in which we may carry out your research but we need to carefully consider the reason of this choice and what you hope the evidence will suggest to you.

There are various methods but 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 of person.

Marketing mix

The Marketing Mix (The 4 P’s of Marketing)

In marketing decisions we are to take decisions about the four following categories:

· Product – which is produced by the company

· Price – which is charged by the company

· Place (distribution) – where it is sold by the company

· Promotion – what is done to increase sales of the company

These four P’s are those parameters that the marketing manager can control, subject to the internal and external constraints of the marketing environment.

All the four elements of the marketing mix for a target market should reinforce one another and contribute positively to company’s value proposition for the target market. The correct process to get its marketing mix right is that the company decides its positioning and sets each element of the marketing mix to conform to its positioning. Most companies start with fixing their marketing mix elements individually and only much later in their evolution do they consciously think about positioning. Different elements of the marketing mix send conflicting signals to the customers. Customers are confused about the company’s true positioning. Such companies are not reaping the values that they could have from their marketing mix as customers pay less to compensate for the conflicting signals they get from one of the elements of the marketing mix. When customers get conflicting signals from the store, they always look to bargain for a lower price. If the same product had been sold from a branded store, all the four elements of the marketing mix would have presented a consistent image of high quality and premium product. Customers would not have bargained.

Product Decisions

“Product” means to tangible, physical products as well as services. Here are some examples of the product decisions to be made by the marketing manager:

· Brand name

· Styling of the product

· Quality of the product

Price Decisions

Marketing manager is to decide which pricing policy is to be decided by him for his product range so that consumer is satisfied and he is not losing profit. There are no fixed rules to be followed. Some examples of pricing decisions to be made include:

· Pricing strategy (skim, penetration, etc.)

· Cash discount and early payment discounts

· flexibility in pricing of the product of the company

· Price discrimination

Decision about Distribution (Place) of Product

Distribution means the process of delivering the goods to its customers. Some examples of distribution decisions include the following:

· Distribution channels

· Market coverage (inclusive, selective, or exclusive distribution)

· Warehousing arrangement

· Distribution centers of the company

· Transportation

Promotion of goods

It represents the various aspects of marketing communication. It is the communication of information about the product to generate a positive customer response. Marketing communication decisions include the following items:

· Promotional strategy (push, pull, etc.)

· Advertising of the product

· Personal selling & sales force

· Sales promotions

Swot analysis

S – Strength

W – Weakness

O- Opportunity

T- Threat

This is very important for the company because it tells the weakness and the strong points of the company and if company then it is easier for the company to operate and also the profits as well as the market share of the company get increased so that it gets some synergy in its operation.

Brand Image

Brand image relates to the customer’s perception of the brand. Brand image can be defined as the set of beliefs held about a particular brand. Brand image is the sum total of impressions that consumers receive from many sources, all of which combine to form a brand personality. Brand image is also described as the way in which a particular brand is positioned in the market, i.e., hoe the consumer perceives the product.

Brand image is a set of associations, usually organized in some meaningful way. Brand image is the understanding consumers derive from the total set of brand-related activities engaged by the firm. Implicit in all the above definitions is that brand image is a consumer-constructed notion of the brand. Consumers ascribe a persona or an image to the brand based on subjective perceptions of a set of associations that they have about the brand. For example, Lexus may be associated with lixury and status, while Volvo may have safety associations in the mind of the customers. McDonald’s may be associated with a symbol such as the Golden Arches, or children may link the fast food giant to a place where they can have fun.

The key difference between the brand image and brand identity is that whereas identity stems from the source or company, image is received by the receiver or the consumer. Brand message is packed or wrapped in terms of brand identity, and it is unpacked or unwrapped by the consumer in the form of brand image. Identity represents the firm’s reality while image represents the perception of the consumer.

Brand attitude

Attitudes towards brand are dynamic, and are learnt over a period of time. Therefore, each encounter of the consumer with the brand either reinforces the existing attitude or forces him to re-evaluate it.

Consumers form attitudes about brands to consumption for several reasons:

· They simplify complex subjects

· They protect self-esteem

· They help us adjust to world

· They allow us to express fundamental values.

There are three main sources of attitudes:

· Direct experience with the brands and situations

· Explicit and implicit learning from others about the brand

· Personality development

Attitudes are not observable. Attitudes relative to purchase behaviour are formed as a result of direct experience with the product, word of mouth, exposure to mass media advertising, the internet and direct marketing.

Attitudes are not synonymous with behaviour though they may result from behaviour. Attitudes have consistency, though they are not permanent, and can and do change. Once attitude develop, they are not always easy to change. Often the goal of marketing is to change attitude about a brand or a company.

Attitudes occur within a situation. From a marketer’s perspective, it is important to consider the situation in which the behavior takes place, or one might misinterpret the relationship between attitude and behavior.

Branding for a business means one need to stand out from the herd when it comes to business. Branding makes the company stronger and more adaptable than your competitors. Brand gives the business an immediate advantage because it is a backbone, or a frame work, on which company hangs its products.

Brand gives awareness of the product to the customer. A branded business carries with it an ideology. If people know the brand they know the company and what it stands for. A brand carries with it the power to inspire and influence your customers. Brand creates a set of subconscious associations in minds of the customers of the company and sets you apart from the herd.

Brand gives the customer satisfaction, surety about the following:

1. Quality of product of company

2. Reliability of product of company

3. Customer service (after sales /before sales)

4. Uniformity of material, size etc.

Advertising campaigns uses the following for their product

1. Their Logos

2. Their Slogans

3. Their Promises

We absorb every day that a lot of advertising promotion – Logos, slogans and associated advertising methods (particularly background music) stick like mud. “Ek idea jo apke duniya badal de” “I’m loving it”… can name the brands.

Company need to grab its audience and need to keep them until they are fully aware that it exists and that it mean business.

It is advisable for the company not to copy its competitors, be original instead ­ look to companies that inspire you for inspiration.

There are some other ways of advertising but Word of mouth is by far the most effective form of advertising. People ignore Pop-up windows, but they’ll listen to their best friend. If company provides a quality service people will recommend for it to the other prospects and help to make them customers.

If company can provide quality at decent price customers will come back, inspiring customer loyalty is part of a strong brand identity.

If company is lacking to shape its business, it may want to hire a professional to help shape your business model, or to improve its advertising scheme.

Company should not limit itself; putting blinkers on is a way of staying focussed; but it also leads to missed opportunities of growth.

INTRODUCTION

Brands in today’s intense global economy are strategic assets and a key source of competitive advantage. A brand’s equity adds or detracts from the power of the brand. It must be managed and leveraged to produce strong long-term performance and lasting revenue growth. Strong brand-building and measurement skills are crucial to achieve these critical objectives in today’s fiercely competitive global economy.

The brand performs an economic function in the mind of consumer and thus has a lasting and memorable effect on the company’s activities, be it as distributor or owner of the brand.

Brands create market segmentation and product differentiation. “Brand” also refers to the act of burning a mark into the flesh of an animal as a means to claim ownership of it. Branding though, is not about being on top of something, but within something. The product or service thus enriched must stand out well if it is to be spotted by the potential buyer and if the company wants to reap the benefits of its strategy before being copied by others.

Brand equity

It means to the value inherent in a brand name. This value stems from the consumer’s perception of the brand’s superiority, the social esteem that using it provides, and the customer’s trust and identification with the brand. For corporate world, their most valuable assets are their brand names. Well-known brand names are referred to as megabrands which attracts the customers.

Companies prefer to leverage their brand equity through brand extensions rather than taking the risk launching a new brand. Brand equity is most important for low involvement purchases such as inexpensive consumer goods that are brought routinely and with little processing of cognitive information.

Brand equity enables companies to charge a price premium – an additional amount over and above the price of an identical store brand. A relatively new strategy among some marketers is co-branding (also called double branding). The basis of co-branding, in which two brand names are featured on a single product, is to use another product’s brand equity to enhance the primary brand’s equity.

Brand loyalty and brand equity increases market share and profits are increased.

Definition of Brand Equity

Brand equity is the value and power of the brand that determines its worth. The brand equity can be determined by measuring;

· The price premium that the brand charges over unbranded products;

· By assessing the additional volume of the sales generated by the brand as compared to other brands in the same category;

· Returns to shareholders;

· Assessing the image of the brand for various parameters that are deemed important;

· Assessing the future earning potential of he brand;

Various activities of the firm determine brand equity. These activities may enhance or diminish the brand value. Activities that are synchronous with the overall vision for the brand enhance equity, and any activity that goes against this overall vision reduces brand equity.

The customer-based brand equity framework defines customer-based brand equity as the differential effect that consumer knowledge about a brand has on the customer’s response to marketing activity. Positive customer based brand equity results when consumers respond more favourably to a product, price or communication when the brand is identified than when it is not. Sources of brand equity occur when consumer are aware of the brand and hold strong, favourable and unique brand associations. Any action that a firm takes as part of its marketing programme has the potential to change consumer knowledge about the brand in terms of some aspects of brand awareness or brand image. Managing brand equity, however, requires more than taking a long-term perspective. Brand equity must be actively managed over time by reinforcing the brand meaning and if necessary, by revitalizing the brand.

Who should be involved in process of building brands?

Brand managers were originally dominant in brand building. However, the traditional brand manager concept has been criticized since changes in the external environment and within the firm raise doubts about its appropriateness. Limitations in the brand management concept have resulted in the move to categry management. In some firms the CEO is in charge of brands, which is advantageous as CEOs have authority, a long term perspective and control over resources. CEOs also have many objectives and may be subject to performance measures which conflict with the aims of building a strong brand. As such the “brand champion”, a senior executive with sole responsibility for managing and building one particular brand, is emerging as an alternative. However, as the role of marketing departments has declined branding mayhave ceased to be their sole responsibility.

External parties may also be involved. Agencies attract employees who are interested in brand strategy, and these employees often develop brand strategy toolkits and gain insight and experience because of their exposure to different brand and brand contexts.

Consumer involvement is also critical.

Stages in building a successful brand

· Identify external opportunities

· Identify internal capabilities

· Define the brand and develop a brand concept

· Consider feasibility of brand

· Ensure internal commitment

· Position and differentiate the brand

· Structure organizational resources

· Market testing

· Operationalization

The brand concept is based on the consumer needs that a brand can satisfy. A brand with a functional concept is designed to solve externally generated consumption needs. A brand with a symbolic concept is designed to associate the individual with a desired group, role or self image. A brand with an experimental concept is designed to fulfill an internally generated need for stimulation and/or variety.

Brand identity originates from the company, i.e., the company is responsible for creating a differentiated product with unique features. The marketing mix strategy plays an important role in establishing a brand identity. The four Ps – product, promotion, price and place- can play an important role in this process.

Brand identity is the common element sending a single message amid a wide variety of its products, actions and slogans. This is important since the more the brand expands, the more customers are inclined to feel that they are, in fact, dealing with several different brands rather than a single brand. Through brand identity, a company seeks to convey its individuality and disinctiveness to the relevant public. It is through the development of this identity that managers and employees make a brand unique. The brand identity is made up of the following components:

· Brand vision

· Brand culture

· Positioning

· Personality

· Relationships

· Presentations

“Brand equity” has two components, we can more easily determine a reliable way to measure brand equity, and to track changes in brand equity over time. The components of brand equity are:

a) retention and attraction of customers,

b) stem from people’s experiences and

c) perceptions of a brand.

How should brand equity be reinforced over time? How can marketers make sure that consumers have the desired knowledge structures such that their brands continue to have the necessary sources of brand equity? In a general sense, brand equity is reinforced by marketing actions that consistently convey the meaning of the brand to consumers – in terms of brand awareness an brand image – as follows:

· What products does the brand represent; what benefits does it supply; and what needs does it satisfy?

· How does the brand make those products superior? What strong, favourable and unique brand associations exist in the minds of consumers?

Both of these issues- brand meaning in terms of products, benefits and needs as well as brand meaning in terms of product differentiation – depend on firm’s general approach to product development, branding strategies and other strategic concerns.

The most important consideration in reinforcing brands is the consistency of the marketing support that the brand receives – both in terms of the amount and nature of marketing support. Brand consistency is critical to maintaining the strength and favourability of brand associations. Brands that receive inadequate support, in terms of such things as shrinking research and development or marketing communication budgets, run the risk of becoming technologically disadvantaged or even obsolete.

Consistency does not mean, however, that marketers should avoid making any changes in the marketing programme. On the contrary, the opposite can be quite true – being consistent in managing brand equity may require numerous tactical shifts and changes in order to maintain the proper strategic thrust and direction of the brand. There are many ways that brand awareness and brand image can be created, maintained or improved through carefully designed marketing programmes.

Brand loyalty occur when a customer makes the choice of purchasing one brand from among a set of alternatives consistently over a period of time. Brand loyalty is usually rated as the most important indicator of brand equity.

“Loyalty is a dual edged sword, an opportunity for those that consistently deliver on their promises; high risk, for those who don’t.”

(Martin Hoffmitz, Executive Vice President)

“Loyalty is developed in the absence of something better.”

(Justin Lees, Commercial Controller)

BRAND EQUITY & BRAND LOYALTY MEASUREMENT AND MANAGEMENT

Companies work hard building the strength of their brands to earn more profits. Bottom line job of marketing is to Build a brand, cultivate its strengths, prune its weaknesses, and make it more valuable to its owners. Marketing does ultimately work in concert to make a firm’s brands more valuable.

Ways to Measure Brand Equity

Measuring of brand equity establishes a baseline and track changes in its brand equity over time. Company must consistently work to improve the strength of its brands. it must trace progress, or risk “flying blind.” Changes in a quantitative measurement of brand equity can show the company the effects of its work, and aid in setting marketing and management priorities in the next business planning cycle.

A company measures its brand equity to aid in assigning a monetary value to a brand. Wall Street measures the strength of a brand by looking primarily at current and historical financial measures, with minimal use of information directly from the “voice of the marketplace” (i.e., current and prospective customers).

LOYALTY IN THE MARKET PLACE

Whether husbands are loyal to their wives or not, whether employees remain loyal to their employers or not, marketers are realising the need to have a large number of loyal customers. The purpose of any organisation does not end with just getting the customers. Retaining them in their fold is an equally important task. No successful company is satisfied if a customer buys the product of the Company just once or twice. He/She must be made to buy the same brand again, and again. This is should be the core strategy for many of the fast moving consumer goods. Often consumers may not be aware of even the total set of brands available in the market of the product category under consideration. Again, they do not consider for choice all the brands they are aware of. They have an evoked set or a consideration set of brands within which they normally switch from one to another. Consider the case of toilet soaps. There are any number of toilet soaps available in the market. But consumers usually choose from their evoked set only. Suppose, the evoked set of brands for toilet- soaps for a consumer consists of Hamam, Rexona and Lux, she will buy only from these three brands. At the same time, she may buy one particular brand more often than other brands in the evoked set, which is a different issue to be taken up later.

Footwear Technologies

adiprene

Ø Shock absorbing material under the heel.

Ø Provides heel cushioning and stability.

Ø Provides extra absorption of harmful impact forces.

Ø Adds stability a ground contact.

adiprene

Ø
Elastic material under the forefoot.

Ø Allows a more efficient push-off.

Ø Retains natural forces at toe-off for added forefoot efficiency.

Ø Maximizes energy use.

torsion

Ø Helps control of the natural independent rotation of the heel and forefoot.

Ø Creates stability and control.

Ø Helps the forefoot adopt to surfaces easily.

Ø Maintains mid-foot support.
Traxion

Ø Lugs in shoe bottom provide optimal ground penetration and maximum grip.

Ø Lug placement optimizes comfort while increasing surface contact.

Ø Adds stability at ground contact.

Ø Meets the specific needs of different sports and surfaces.
Pro-Moderator

Ø Usage of TPU as lightweight mid-sole support system reduces weight of shoe giving greater mobility.

Ø Improved durability of mid-sole adds to life of shoes providing consistent and stable run.

Ø Direct moulding on mid-sole frees your foot from thick inserts giving improved toe-all.
GeoFit Frame

Ø An Internal footwear technology that enhances fit and comfort by placing padding in anatomically correct areas.

Ø Every piece of anatomically moulded padding follows the form of the foot, evenly distributing pressu


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