Nike Competition Analysis
Essay by adriannepanah • October 15, 2018 • Case Study • 2,180 Words (9 Pages) • 1,172 Views
1. Competition Analysis
World Cup 1994 – United States
Positioning: Nike→ Innovator in football market by delivering high performing football products to consumers. Adidas→ Still the most popular brand in football, however no players wore Adidas cleats in the final match, instead 10 out of 22 of them wore Nike boots. Target Market: Nike→ Products were targeted towards anyone who was interested in running, basketball, tennis and cross training.
World Cup 1998 – Paris
Positioning: Nike→ Innovator in football with production of the Mercurial lightest weight football boot. Target Market: Nike→ 13-year-old football player and football fans lead to more revolutionary football style and pave way for new products to be introduced. Adidas→ Sticks to conservative product offerings and keeps targeting traditional consumers. Message: Nike→ Communicated and connected with football consumers who had a passion for a more creative, free-flowing, and fun-loving style of football play. Media Strategy: Nike→ Signed the Brazilian national team for sponsorship, and released their “Airport” add right before the start of the World Cup. The increase in South American players in European leagues lead to further media coverage for Nike boots. Adidas→ Remained traditional.
World Cup 2002 – South Korea/Japan
Positioning: Nike→ Became a technological innovator because of their ad which was posted on the then start-up website, YouTube. Target Market: Nike→ Targeted kids and young consumers. Message: Nike→ emphasized their products as revolutionary and innovative. They also used the internet and social networking sites to communicate with the young consumers in their context, in their language. Media Strategy: Nike→ Created their football channel on YouTube and uploaded their first ad, which garnered almost 20 million views in a few weeks. They also released the Nike Football website, which was the first Nike website to stand alone and be available globally and in multiple languages.
World Cup 2006 – Germany
Positioning: Nike highlighted a fun, creative approach to football, exemplified by the Brazilian national team’s style of play and by the products they were marketing. Meanwhile, Adidas was determined to shine in their hometown. Target Market: Nike was targeting young consumers, while Adidas were targeting Germans (from their home turf). Message: Nike→ Create a community of people deeply engaged in the game. Media Strategy: Nike→ Worked with Google to develop an interactive website called Joga.com. The website featured videos of global football stars performing various tricks with the ball. Adidas→ Official sponsor of the 2006 World Cup, exclusive use of Adidas footballs and apparel in the games, as well as Adidas billboards lined the pitches.
Nike’s determination to offer high quality, innovative products while communicating their passion in creating the best products through sponsorships allowed them to overcome their late entrance in the football industry. Nike first made a sound decision by partnering with Brazil’s national team when the team was starting to gain attention for their unique techniques and playing style. Second, video tactics used by Nike on TV and on Nike websites provided
consumers with visual, and spoken content, and helped raise brand awareness. Third, by participating in interactive marketing and allowing consumers to actively engage in their websites, created a stronger bond with their global consumers.
2. Marketing communications efficiency
Marketing-to- sales ratio
Nike | Adidas |
(2308/19083)= 0.12 | (2107/15012)= 0.14 |
Net income as a percentage of sales
Nike | Adidas |
(1487/19083)*100= 7.8% | (892/15012)*100= 5.94 |
Nike had a profit margin of 7.8% which means they made 0.078$ for each dollar spent, which is more than Adidas’ net income of sales of 5.94% (0.0594$ for every dollar spent). The marketing to sales ratio also indicates that Nike spent less in relation to revenue. Therefore, Nike’s marketing communications were more effective than Adidas’.
3. Target Market
13-year-old Target Market
Pros | Cons |
- At this age, 13-year old players have a couple of favorite players and aspire to play just like those players. They don’t have their own technique or style; instead, they try to imitate their favorite players’ style of playing football. - - If they develop positive feelings towards Nike at such a young age, it can create a greater customer lifetime value and share of customer. | - 13-year-olds at that age focus of imitation of players’ style and techniques; they don’t truly commit to any specific brand of football footwear/apparel and can be easily persuaded into wearing other brands. - - Football is still seen as a recreational sport rather than a passion; This age group is not yet fully committed to achieving a long-term goal of becoming a better football player. - Due to their young age, the 13-year-old target market heavily relies on adults for football related purchases, as well as for being driven to football practices, competitions, or recreational games. |
17-year-old Target Market
Pros | Cons |
- - The 17-year old consumer has a maturity and independence level high enough to make his/her own choices and opinions about football. - - This age group has a higher buying power; therefore, they can pick and truly commit to a brand that goes with their football beliefs and purchase it themselves without relying on adults. - - They are more in tune with the football world, already established the kind of football technique they use while playing and what kind of player they are. - The 17-year-old’s world revolves around football and the player now focuses on acquiring the best possible tools in order to continue improving their football skills. | - There is a great chance that the 17-year-old’s favorite player wears Nike’s competitor’s football boots. At that age, the young player already has a solid commitment towards a player or team; this might make it difficult for Nike to connect with some of their target market. |
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