INTRODUCTION:

1
INTRODUCTION: COMPARING STRATEGY

Nike and Adidas have almost similar strategies but different implementation methods. Both the
companies concentrate heavily on technology and strive to produce new and innovative
products. Nike focuses on the American markets whereas Adidas focuses on the European
market. Nike does not have any production plants as they only design, distribute and market their
products and hence they outsource to various countries in Asia, mainly Taiwan and Korea, which
outsource their production to China, Indonesia and Vietnam. Adidas on the other hand, carry out
alltheir production in Germany and recently has adopted Nike’s outsourcing policy by outsourci
ng toAsian countries. Nike and Adidas both follow a premium pricing strategy which according
toKotler, is a strategy where companies charge a premium price for their products.
Their competition is always intense and according to Anderson (2010) during the world cup
2010 Nikelaunched the popular “write the future”, three minute advertisement featuring world
cup starswhich was a major hit on YouTube and Adidas replied with their two minute video
withcelebrities like Snoop Dogg and Daft Punk into a famous scene from the movie Star
Wars. Nikesponsored nine teams whereas Adidas sponsored 12 team

Even though Adidas was the official sponsor of the World cup 2010, Nike attached an
LEDdisplay to a 30 story skyscraper in Johannesburg where soccer fans could write short
messagesusing popular social networking websites such as Twitter and Facebook and Nike put

2
ATHLETIC SHOES (INTRODUCTION)
An athletic shoe is a generic name for footwear designed for sporting and physical
activities. Athletic shoes, depending on the location and the actual type of footwear, may also be
referred to as trainers (British English), sandshoes, gym boots or joggers (Australian English)
running shoes, runners or gutties (Canadian English, Australian English, Hiberno-English),
sneakers, tennis shoes (North American English, Australian English), gym shoes, tennis, sport
shoes, sneaks, or takkies (South African English) and rubber shoes (Philippine English) caners
(Nigerian English).
!

USE IN SPORTS

The term Athletic Shoes is typically used for running in a marathon or half marathon, basketball,
and tennis (amongst others) but tends to exclude shoes for sports played on grass suchas
association football and rugby football, which are generally known as "boots", or in
NorthAmerica as cleats. Attributes of an athletic shoe include a flexible sole, appropriate tread
for the function intendedand ability to absorb impact. As the industry and design have expanded,
the term "athletic shoes"is based more on the design of the bottom of the shoe than the aesthetics
of the top of the shoe.Today's designs even include sandal, marry Jane and even elevated styles
suitable for running,dancing and jumping. The shoes themselves are made of flexible
compounds, typically featuring a sole made of denserubber. While the original design was basic,
manufacturers have since tailored athletic shoes for the different purposes that they can be used
for. A specific example of this is the spiked shoedeveloped for track running. Many of these
shoes are made up to a very large size because of athletes with large feet. High-end marathon
running shoes will often come in different shapessuited to different foot types, gait etc.
Generally, these shoes are divided into neutral,overpronation and underpronation (supination)
running shoes to fit the respective foot strike of the runners.

 THERE ARE A VARIETY OF SPECIALIZED SHOES DESIGNED FOR

SPECIFICUSES:

 Racing flats

3
  Track shoe

 Skate shoes

 Climbing shoe

 Approach shoe

 Wrestling shoes

 Cleats

 Football boot

 Dance Shoe

THE SNEAKER ERA

 The word sneaker is traditionally defined a shoe consisting of a solid rubber soleattached
to an upper made, usually, of canvas. While rubber soled shoes
called plimsolls had been in use for some time for aristocratic lawn sports, and KingHenr
y VIII was reported to have worn a sneaker-like shoe for playing tennis, thetrue life of the
sneaker did not begin until American inventor Charles Goodyear patented the process for
vulcanization of rubber. Until that time, the sneaker as weknow it now was simply not
possible. The oldest sneakers used for basketball arethought to be the Converse All Stars,

4
 first produced in 1917, but the SpaldingCompany produced shoes in 1907 specifically for
the game of basketball. Stillthese are not the oldest sneakers. A discovery at an estate sale
has led experts
to believe that the first basketball shoes were produced by Colchester Rubber Company
of Colchester, Connecticut who went out of business in 1893. Whilethere is no significant
evidence to point to the use of these shoes for basketball, itseems that shoes that were
produced just a few miles from the birthplace
of basketball just two years after the invention of the game would certainly have been
used for basketball.

 By the early 1900's, sneakers were being produced by small rubber companieswho
specialized in the production of bicycle tires. U.S. Rubber, a conglomerate of nine other
rubber companies, introduced Keds in 1916 while Converse introducedthe first mass
marketed basketball sneaker in 1917 with their introduction of theConverse All Star.
Other companies, including B.F. Goodrich and Spalding Co.,were producing tennis shoes
and smaller family-owned companies weremanufacturing early cleared shoes. At first the
market for sneakers was small and practically invisible, but after World War I, America
turned to sports and physicalhealth as a way to demonstrate moral fiber and patriotism.
The market for sneakers grew steadily as young boys lined up to by sneakers endorsed by
football player, Jim Thorpe and Converse All Stars endorsed by basketball player,
Chuck Taylor. In the 1920's and 30's, manufacturers added traction to the soles of
their sneakers and began marketing them for different sports. A major innovation of this
time was the production of distinct models for boys and girls. Sneakers wereknown for
comfort and used almost strictly for athletic endeavors.

 The revived Olympic Games provided exposure and heightened interest insneakers and
sports in general, leading to increased sales. It was at this time thatthe German sneaker
manufacturer, Adidas would be founded in Herzogenaurach.German manufactured sport

5
 shoes would dominate the market until the late 1960'swith the founding of current market
leader, Nike.

 World War II interrupted production of sneakers for the public as factoriesswitched to

produce items in support of the massive war effort and raw materials became scarce.
After the cessation of hostilities, the slow rise in the popularity of sneakers resumed.
Another major brand, Puma, was also founded at this time after Rudolph Dassler split
with Adi Dassler in a feud. Rudi Dassler set up shop acrosstown and the Puma brand
was born.

THE SNEAKER ERA PART II


The 1950's witnessed another increase in the amount of leisure time available tofamilies.
The Baby Boom began and sneakers officially became the choice shoefor American
youth as school dress codes relaxed. Hollywood officiallysanctioned this fashion with a
string of movies featuring actors in sneakers,including James Dean and his Converse Jack
Purcells in West Side Story. Sales of sneakers soared to 600 million pairs a year in 1957,
leading leather shoemanufacturers to issue ads claiming that sneakers were bad for
children's feet andthe sneaker manufacturers to respond with claims that sneakers cured
thesyndrome of "inhibited feet".

 Sneakers were imported from Japan in the early 60's, but accounted for only asmall
portion of the market until Nike founders Phil Knight and Bill Bowerman began

6
 importing Tiger shoes under the name Blue Ribbon Sports. Sneakers cameinto their own
in the 70's as jogging became the new fashionable sport and createda need for a special
shoe used just for the purpose of jogging. Technology createda need for exercise apart
from work and the shoes to perform this exercise.

 Until this time, manufacturers had been concerned with high production, but nowthey
began to focus on marketing shoes for a lifestyle purpose.

 Shoes for walking, running shoes, football shoes, basketball shoes-- every sport needed
itsown shoes- and then you needed another pair of sneakers for just casual wear. By the
80's,sneakers were everywhere. Woody Allen wore them to the ballet, Led Zeppelin wore
them intheir 1976 documentary, and Dustin Hoffman wore them while playing reporter
Carl Bernstein inthe movie All the President's Men. The shoes originally developed for
sports became themainstay for most people. Nike and Reebok were the market leaders
while older brands Adidasand Converse were nearly in ruins. Newer companies came in
and out of fashion and the industry began shelling out large amounts of money for sports
endorsements. A major footnote in the Sneaker Era is the signing of basketball player
Michael Jordan to acontract with Nike to produce and endorse his own signature line of
shoes. Today, the NikeSwoosh and the Jordan Jumpman are icons and require no
introduction

 SNEAKER CULTURE
Sneaker collectors, called "Sneakerheads", use sneakers as fashionable items. Casual
sneakerslike the Air Force One (Nike) or Superstar (Adidas) have become icons in
today's pop culture.Artistically-modified sneakers can sell for upwards of $500.

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 SNEAKER TECHNOLOGY

When it comes to sneaker technology, shoes are divided into three major areas: the upper, themidsole,

and the outsole. Depending on the materials and combinations used, one model of sneaker can vary

greatly from another.

 THE UPPER

Uppers, the top part of the shoe with the laces, fancy designs and bright colors that holds the shoe

together, usually come in one of three materials, leather, synthetic leather, and mesh. Special editions,

retro and vintage models, Converse and casual shoes like the Nike Vandal, the Air Force 1, and the

Nike after Party for women may have a canvas upper. The most famous shoes to have an all canvas

upper are the Converse All Stars.

 THE MIDSOLE

Midsoles are used to cushion and provide support and protection for the foot. There are four types of

materials used in commercially produced sneakers. Midsoles are often constructed of a combination of

materials. Midsole materials are Pylon, polyurethane, Pyrite, and EVA.

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  THE OUTSOLE

The outsole, the part of the shoe that comes in contact with the ground, provides durability and its the

first stage of cushioning for the shoe. Patterns on the outsole vary according to the needs of the sport.

The five most commonly used materials for outsoles are as follows:

BRANDS

 List of athletic shoe brands, large brands include:

1) Adidas

2) ASICS

3) Clue

4) Converse

5) DC Shoes

6) Fila

7) Goal

8) Heels

9) K-Swiss

10) Kids

11) Keen

12) Lactose

13) Lonsdale

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 14) Mizuno

15) New Balance

16) Nike

17) Pony

18) PF Flyers

19) Puma

20) Reebok

21) Saucing

22) Sperry Top-Sider

23) Star bury

24) Supra

25) Vans

SPORTS SHOE GUIDE

The runner with the spikes should feel that he had more grip on the track.
The following table provides details about specific sports shoes. When viewing the
tableconsider how much trainer technology has advanced in the last 100 years

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High Jump
 This type of shoe has a muchthicker sole.

 This gives maximum supportand comfort.

The shoe is lightand flexible which helps
theathlete achieve speed over ashort distance
before jumping.

 This shoe has to have spikes.The spikes at the

front helpthe athlete to gain speed in therun-
up. The four spikes t theheel provide grip
when theathlete takes off.

Javelin  This type of shoe has to berobust and durable.

Athletesdrag their feet along theground
during the throw.

 As a result the shoe has to bemade from a

tough,hardwearing material.Support is
crucial.

 Javelin shoes look more like boots with

protection aroundthe ankle. Most of
themfeature strapping.

 This prevents the foot frommoving in the

shoe

Jumps and pole vault  These events require speed bothon the ground
and in the air.In most cases straps
havereplaced the laces.

 The sole tends to be both firmand flexible

allowing extra bounce in the jump. Thespikes
are once again veryimportant.

 They provide the grip before the jump.

Notice the spikes tendto be just at the front of
theshoe.

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The Throws  The shoe has to allow theathlete to throw and
spin. Ahooked strap over the toehelps to
prevent the feet frommoving sideways during
the build up to the throw.

 These types of shoes do nothave spikes but

have a hardsole. This lengthens thelifespan of
the shoe.

 The sole tends to have circular grooves on the

balls of thefeet. These help the athlete tospin

Sprinting  This type of shoe has to belightweight and

offer flexibility at the front.

 They all tend to have spikes,which are

located at the front.

 They are able to cope with lotsof different

types of surfaces.Most Olympic

 Athletes have their shoesspecially made

Long Distance  These shoes have to be bothdurable and

flexible. Comfortis a real priority, also
thisabout the sweat factor.

 A mesh is sometimes added inthe upper part

of the shoe toallow the foot to breathe.

 The cushioning is also veryimportant.

 Spikes are sometimes added butare not

essential.

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 INTRODUCTION TO ATHLETIC FOOTWEAR INDUSTRY

Market Analysis

The U.S. market for athletic footwear includes all producers of non-cleated, rubber
and plastic footwear
designed in an athletic style or for athletic use. The industry is a collection of smaller,
segmented, yet often overlapping markets, defined by both the price and the purpose of the
shoes. For instance, there are mini-markets for shoes designed for each of many sports andother
purposes: basketball, running, walking, tennis, and casual wear. The greatest
overlap between these categories is between performance shoes and casual wear. Many people w
ear running shoes or basketball shoes on a daily basis in a non-athletic setting. One can walk or
play basketball in running shoes. Therefore, there is some degree of overlap between most
segments.The industry is

dominated by a few large firms, while the majority of other players haveless than 5% market
share. The graph below shows the market share breakdown by sales volumefor 2004, before the
merger of the #2 and #3 firms, Adidas and Reebok

This graph shows market share after the merger of Adidas and Reebok

13
These firms fight for market share through non-price competition, on strategies such
asstrengthening brand image and increasing product proliferation. The success of each firm
isgreatly dependent upon its marketing campaigns. The brand image of the major firms is
created by extensive marketing campaigns and celebrity endorsements. Consumers associate
themselveswith a particular brand and tend to stick with the brand with which they are
comfortable. Entry tothe industry is difficult as brand loyalties are high.

The United States is the world’s largest importer of athletic footwear, which is
primarilymanufactured in Asian nations. The graph at right shows the trend in US footwear
productionand imports. Most firms design the sneakers and outsource their manufacturing to
foreign producers. The sneakers are then distributed to major retailers and are sold to the consum
er through a variety of channels. The following provides an analysis of Porter’s Five Forces
relatingto the athletic footwear industry; internal rivalry, entry barriers, substitutes and
complements,supplier power, and buyer power.

It is easy to become the market leader or the market challenger for organizations but
sustainability is the primary concern and hence organizations focus of the sustainability

14
becoming up with strategies that will make their position sustainable in the long run. Nike’s
future plans are to focus on the environment and production of eco friendly products.
They mentioned in their 2005 and 2006 Corporate Responsibility Report that they will become
carbon neutral by2011 by reducing their Caron Dioxide emissions. They have decided to design
all Nike brand footwear in ways through which they can reduce waste production during product
design
and packaging. They will eliminate the use of volatile organic compounds and use moreenviron
mental friendly material in their products and be carbon neutral by 2011. Adidas on the other
hand became the official sportswear partner of the London 2012 Olympic Games. The London
Organizing committee for the Olympic Games and Paralympics Games (LOGOC) has few
regulations which all of its partners are obligated to follow. These obligations are focused
towards the environment. Adidas, being a partner of LOGOC has to follow all these regulations
as their future plans are to be the official sponsor of almost all major events in the world, and in
order to achieve this goal their strategy is to produce environment friendly goods as well. They
have to ensure that all their products are produced with environment friendly materials, which
would protect the human health and the environment and their packaging should also
be produced with materials that can be recycled. Hence we can see that both the future plans of
Nike and Adidas are quite similar

AIMS AND OBJECTIVES OF THE REPORT

 To learn about strategy and strategic management of 2 companies of same industry.

 The strategies have been compared on the basis of athletic footwear industry.

 To study the demand of which company products are more and methods used by themto
attract the market.

 To understand the competition between two Giants in the market.

15
 To measure the effectiveness of advertisement / promotional activities for a
competing product class and corporate advertising.

 To understand and measure various factors that affect brand-building, brand re-call
andfinally the choice of customers while buying it.

 To understand the competition between Nike and Adidas.

 To understand Athletic footwear industry.

 To know how they face their competitor’s strategies.

 To know how they survive in the cutthroat competition.

 As there is competition, which factor differentiates them from each other is shown inthe
report.

 To learn, how these companies have dealt with critical situations they faced in past.

16
LITERATURE
REVIEW

17
 1. Yee and Sidek (2008)

INVESTIGATED how the respondents are influenced by factors of brandloyalty towards

sportswear brands. Previous research adopted seven factors to test in theMalaysian environment.
The seven factors of brand loyalty are brand name, product quality, price, style, promotion, and
service quality and store environment. Brand name has shown strongcorrelation with brand
loyalty. In order to increase customer satisfaction and drive them to
be brand loyalists, marketers are encouraged to develop aggressive marketing programs; there is
positive and significant relationship between factors of brand loyalty (brand name, productqualit
y, price, style, promotion, service quality and store environment) with sportswear brandloyalty.
Study of more focused factors that are appropriate to the Indian environment isrecommended in
order to obtain accurate information.

2. Young, Song and MacLauchlan (2008)

Examined how consumers’ brand preferences and price sensitivities evolve as their levels of
experience increase in outdoor sports gear categories. It is proved that how consumers evolve
along discrete latent states that represent their experience and knowledge levels, and how this
corresponds to changes in preference parameters. In our empirical estimation and evaluation of
the model we utilize customer membership data from large outdoor and sporting goods retailer.
Existing single-category Hidden Markov approaches require a rich purchase history and do not
work well for the types of durable product categories in an area such as sport climbing, as typical
customers make relatively few purchases in any single category, even over long periods of time.
For this reason we use a multi-category framework in which unobservable experience levels are
inferred by leveraging information from multiple categories. Using Hierarchical Bays estimation,
account for initial consumer heterogeneity as customers first take up the sport at different skill
levels. This also allows us to account for consumer heterogeneity in transition probabilities as
customers accumulate experience and knowledge at different rates. We model the latent states to
follow a Markov chain with a transition probability matrix that is specific to individual
customers, and is a function of their cumulative purchases in each category. Thus, we are able to

18
identify the typical brand(s) purchased by customers at different stages of their
experience. We find empirical evidence thatcustomer who are beginners or are new to sport
climbing will prefer certain brands whilecustomers who have more experience or knowledge of
the sport will prefer other brands. Themulti-category approach allows us to determine which
product category is most indicative of astage of a consumer’s evolution.

3. Krishna (2012)

focused on attitudes and behavior on the concept of the youth’s buying behavior
towards branded sports shoes, different consumers have got different decision making process.
The buyer’s ultimate goal is to buy the product of qualitative, quantitative with
low/bestaffordable price. In order to identify different kinds of consumer’s behavior towards
buying of different branded shoes and Nike sports shoe. Investigator has carried out buying
behavior of youth and different kind of consumer behavior models, literature and theory of
consumer behavior; and finally, analyzed and concluded.

4. Yoh, Mohr and Gordon (2012

): investigated factors that influence Indian teens’ athleticfootwear purchase. Four hundred and
fifty-six teens participated in the study. Throughout thereview of related literature and the
conduction of a pilot study, seven characteristics were considered; price, color, style, brand
name, comfort, quality, and celebrity endorsement. It indicated that gender played a significant
role in the purchasing behavior of Indian teens. Male teens stated that comfort and quality are the
most
important factors while female teens revealed that style and color are more important factors than
any other factor. Marketers and advertising managers of athletic shoes companies should utilize
the findings of this study to communicate with teen consumers more effectively. Sportswear,
including sports shoes, becomes a common and popular category because it gives young people a

19
more relax lifestyle and greater versatility and comfort. It is believed that consumers prefer
products of developed countries to products of developing or underdeveloped countries.

5. Ko, Kim and Hoon (2008)

tried to compare consumer behaviors for sports shoes

between Nike and Adidas. Their research model analyzed relationships among country-of-
origin, perceived quality, perceived price, brand image and purchase intention for sports shoes in
Koreaand China.. Brand image was found to play an important role in influencing perceived
qualityand perceived price in Nike and Adidas respectively. Perceived quality was found to
influence positively purchase intention in both countries. Perceived price was found to negativel
y influence purchase intention in case of Nike.

NIKE VS ADIDAS (COMPARISON)

ADIDAS

 Adidas is competence in all sectors of sports.

 A.d.i.d.a.s –A ll Day I Dream About Sports or from the original German founder of the
company, Adolf "Adi" Dassler, more likely considering the companyhistory and its
German origins

 Adidas – AdiDassler

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NIKE –

Nike came from the Greek name for the Goddess of Victory

MOTTO

Adidas ' motto is " Impossible is nothing."

Nike'smotto is " Just do it

SPONSORSHIP

Sports/Entity Adidas Nike

 UCLA
1) Universities
 University of Kansas  USC

 "T-Mac"(TracyMcGrady)
 "Agent 0"(GilbertArenas)
 "KG"(Kevin Garnet)
 Tim Duncan
2) Basketbal  Chauncey Billups
 Dwight Howard
 Josh Smith
 "Vincinaty"(VinceCarter)

 Reggie Bush
3) Football
 Mario Williams

21
  Adrian Peterson

4) Golf  Sergio Garcia  Tiger Woods

5) Boxing  "PacMan"(MannyPacquiao )

 Novak Djokovic  Roger Federer

6) Tennis  Jo-Wilfried Tsonga  Rafael Nadal

 Fernando Gonzalez  Maria Sharapova

 Fernando Verdasco  Juan Martin Del

Potro

 Derek Jeter (JJ)

7) Baseball

22
  Kaka  C.Ronaldo

 Messi  Ronaldo de
8) Soccer Assís
 Gerrard Moreira(aka.
Ronaldinho)
 Beckham
 Fernando torres
 Lampard
 Wayne rooney
 Raúl  Zlatan
Ibrahimovic

 Didier drogba

Difference between Nike and Adidas

Both Nike and Adidas are well known sportswear firms that have become household names
of sorts throughout many parts of the world. The undisputed giants of the sportswear and sports
equipment industries, consumers can generally expect quality products from the two
brands. Nevertheless, there are instances wherein one may be the better option over the other,
and the factors that go into making such a decision do not always have anything to do with the
quality of the products. Let's take a look at some of the factors that may influence your

Sponsorships and Market Focus

Nike has always come in ahead of Adidas in terms of celebrity sponsorships, although to itscredi
t, Adidas has taken considerable steps to narrow the gap. Nike still has the edge over its

23
competition in terms of sales however, and it remains to be seen whether Adidas will catch up
any time soon. In terms of market focus, Nike has a more varied line-up, comprised of basketball
and running shoes, as well as cross-training products. Among the different brands under the Nike
umbrella are Umbra, Converse and Cole Haan. Adidas for its part currently offers products that
are geared primarily towards the soccer, tennis and general athletics markets. Among the
companies in Adidas' roster are Reebok, Taylor Made and Rockport.

Market Strategies

Nike remains firmly focused on the domestic market, although it has made inroads into thelucrat
ive international soccer market fairly recently. The company is also considered largely
responsible for the frenzy of athlete sponsorship that the industry is known for today. All of
thistles in with Nike's dominance of the advertising and marketing aspects of the business, a hold
that the company will likely retain for the foreseeable future. Adidas on the other hand has
traditionally focused on the European market, although it is a formidable name in the rest of the
world as well. This is mainly due to the company's affiliation with soccer, which is widely
considered to be "the" International sport. The company has recently taken steps to increase its
marketing and advertising budget, and has even made in roads into the lucrative sports
equipment and sportswear markets.

Outsourcing Policies

Nike isn't really a production company

Per se
, and almost all of its products are outsourced to various countries in Asia, particularly Taiwan
and Korea, which in turn outsource production to still other Asian countries, among them China,
Indonesia and Vietnam. The company does have home office in Beaverton, and it is there that
Nike products are designed, developed and marketed. Adidas recently adopted a similar
approach, with virtually all the design and development

24
work being handled in Germany, and production being outsourced to Asian countries as well. Th
ismove has helped Adidas remain competitive in the industry.

Similarities and Differences

Nike

 More focused on the local market.

 More effective advertising and marketing.

 Recently updated the look of its line.

 Offers custom product lines.

 Excellent website support for custom options.

 All production is outsourced.

Adidas

 More focused on the European market.

 Specializes in soccer, tennis, and athletics.

 Recently expanded its product line to include sports equipment and clothing.

 Recently updated its production for increased efficiency and cost effectiveness.

 Production is outsourced to Asian countries.

25
CASESTUDY

The World Cup Brand Winner: Adidas or Nike? With approximately 2.6 billion people worldwide
following the 2010 World Cup, the spectacle has been a field day for marketers, each trying to
connect their brand with the strong emotions fans have for their favorite teams. But the stakes are
particularly high for those brands that actually sell football gear. Two contenders, Adidas
and Nike, each have a shot at becoming undisputed market leader when the whistle blows on
July 11 and the final game concludes. Coming into 2010, their records show them evenly
matched: each is estimated to have earned$1.5-1.7 billion in football merchandise sales in 2008
and 2009, and each controls about a third of the total market.

Adidas is playing its tried and tested strategy of being the official FIFA sponsor of the World
Cup games. This means the referees wear Adidas uniforms, the footballs are Adidas-branded and
televised ads for football apparel and equipment during matches can only be, you guessed it,

for Adidas. Moreover, Adidas is the official sponsor for 12 of the 32 teams playing in the World
Cup — so the uniforms of teams such as Germany, Argentina, and Spain (all of which advanced
to the quarter finals) were emblazoned with the Adidas logo. Given the shutout sponsorship
strategy by Adidas, Nike has had to fight back using different tactics. Back in the 2006 World
Cup games, it tried an end-run using digital technology, tapping into consumers' new penchant
for online social networking. Collaborating with Google,

Nike created the world's first social network for football fans, which it named Joga.com (in
reference to the Brazilian phrase joga bonito, which means "play beautifully"). The site featured
discussion groups on various teams, games, and players, and video clips of Nike-sponsored
football stars performing awe-
inspiring moves. Fans, thought Nike, would flock to the site as a place tocommune with like-
minded individuals all over the world, and their enthusiasm would make the videos go viral.
Although Nike came out of the 2006 World Cup in decent shape, thanks in part to the fact that

26
puma-sponsored (and not an Adidas-sponsored) team won the championship, its digital strategy
didn’t deliver as much lift as it hoped. The vision of millions of fans heavily engaged with the
Joga website (while subtly being reminded of the Nike brand) didn't quite materialize.

The problem, so it would seem, was that while Nike's move recognized consumers' shift to newm
edia and technologies, it did not capitalize on the deeper and less obvious changes in
consumer expectations, attitudes, and behaviors that accompanied that shift. Fast-forward to the
2010 World Cup games. Once again Nike faces the Adidas official-sponsor shutout approach,
and once again Nike opts for a digital offense. Only this time, its marketers take a very different
approach. On May 20th, several weeks before the games began, Nike released a three-minute
video ad called "Write the Future" on its Face book page. The well-crafted ad features some of
football’s most famous players (all in Nike gear) imagining what their future would be if they
were to make or fail to make a certain play in the game. In less than a week, the number of Nike
followers on Face book doubled, driven by the desire to see the ad and pass it along. But "Write
the Future" is not just a static ad. Fans are given tools to edit the spot — and their edited versions
compete for votes from appreciative peers. Meanwhile, a "Write the Headline" opportunity via
Facebook and Twitter gives fans an even bigger opportunity to see their creativity in lights; it
invites them to post a short grabber of a phrase reporting on the future of a player. The
most popular of these are displayed in a bright LED light show (visible from 2.5 kilometers
away) on Johannesburg’s fourth largest building, which Nike has taken

over. Nike also supported its online campaign with "Write the Future" elements in more tradition
almedia. Although it could not advertise during the televised games, it ran a 30-second version
of the "Write the Future" ad on shows airing at the same time on other channels, and on
soccer matches prior to the start of the games. The television spots included a tout to pique fans'
interest in seeing the full three-minute version online. The success of the campaign is
indisputable. Five weeks after its debut, the online spot has been viewed by over 20 million
people.

According to a Nielsen survey that tracks brand buzz (by examining brand references in blogs,
online message boards, and social networking sites), as of mid June, Nike enjoyed more than

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double the share of buzz associated with the World Cup than its rival Adidas (30.2% share of
buzz vs. 14.4%, respectively).What are the keys to the upset? Clearly the campaign's success
owes much to its creative execution and fit with Nike's brand image. But the new factor here is
that it corresponds very well with how consumers have evolved in the digital age. Considered
more broadly, Nike’s “Write the Future" campaign is a good example of a company figuring out
how to size up a trend and find the right application of it to its business. (This is the focus of Luc
Mathieu’s and my article in the current issue of HBR,

"Are You Ignoring Trends that Could Shake Up Your Business?")Back in 2006, Nike had
perceived that social networks were in vogue, but thought it would be sufficient simply to create
one to capitalize on that trend. By 2010, it had thought more deeply about the implications of
that trend: those consumers had come to expect a much more active role in the content they
engage with. They now want to customize content and products to fit their preferences and
personality, get immediate feedback on their actions and opinions, and be rewarded for their
contributions. They derive great satisfaction from being first to discover things and disseminate
them to others. They resent any perceived lack of transparency from the

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 RESEARCH
METHODOLOGY

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Research methodology is a strategy that guides a research in providing answers to research
questions and for this, research survey is being done. “Accuracy of the study depends on the
systematic application of the method”. The researcher has to decide the method to be used that
helps him to get a desired direction in a systematic way.

A) METHODOLOGY ADOPTED IN THIS REPORTQUESTIONNAIRE DESIGN:

The questions were designed in an easily understandable way with the help of our teachers, so
that the respondents may not have any difficulty in answering them. The questionnaire contained
10 questions. This has to be done to get opinion of the people regarding the Nike & Adidas and
the ongoing competition between them and which is preferred more.

RANDOM SAMPLING:

Sampling
Can be defined as a part of population. Thus random sampling may be defined as the selection
of a portion from the whole population in which each elements of the population has an equal
chance of being selected. A more please definition is that each element in the population has a
non-zero and known probability of selection a randomly drawn sample is an unbiased sample. In
this research survey 50 people were surveyed at random to get the relevant information.

SAMPLE SIZE:

The sampling techniques used in this project are probability sampling techniques and the
methods used in cluster sampling.

SAMPLING UNIT:

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The respondents who were asked to fill out questionnaires are the sampling units. These
comprise of students, Gym trainers, athletes, people with specific brand preferences etc.

SAMPLE SIZE:

The sample size was restricted to only 50 between age group of 15-35, which comprised of
mainly peoples from different regions of India.

SAMPLING AREA:

The area of the research was Mumbai, India

B) DATACOLLECTIONSTRUCTURED QUESTIONNAIRE

In this collection data, structured questionnaire is used as a tool by asking a set of standardized
questions to know the perception of the giants regarding footwear industry of the masses. And
which is better Nike or Adidas.

INTERVIEW

The next step involved in collecting information requires discussion with people. Thus valuable
information was gathered informal friendly talks with the people.

SECONDARYDATACOLLECTION

Various websites & magazines were consulted to collect literature relevant to the topic.

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IMPORTANCE OF THE STUDY

The study was considered significant for the following reasons:

 Understanding of dynamics in marketing of sport shoe was facilitated.

 Sports shoe manufacturers could understand the demands of consumers
 Feedback derived from consumers to shoe manufacturers was made possible.
 Helpful for budding shoe companies to understand the preference patterns of consumers

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DATA ANALYSIS

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Data

I looked into Nike and Adidas for comparison because these two main brands have the
most shoes merchandise on Finish Line as seen below:

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I also decided to focus my remaining comparisons on running and casual type sneakers
because Nike and Adidas produced most of their athletic shoes in these categories. This
data again reflects the rising popularity in at leisure because these types of shoes are worn
most in at leisure.

Across the board, Nike has 2-3x more merchandise on Finish Line as compared to Adidas.
Consequently, one would expect Nike to have more reviews and ratings.

However, the table below shows that Adidas has 3-6x more reviews on
average even though it has one third less inventory. This shows that Adidas
might be the more popular brand.

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I first investigated the pricing strategy between the two brands. Adidas and Nike have
similar price ranges ($50 to $250) for their running and casual shoes. Shoe pricing doesn’t
have a strong correlation to the number of reviews and ratings.

Reviews

Notice on the left graph, several Adidas sneakers have above 500 reviews and one with
around 2500 reviews, indicating many consumers are willing to spend from $100 up to
$200 for a pair of running or casual sneakers.

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The individual pricing distribution further shows that, regardless of ratings and reviews,
Adidas has a higher price margin for its running shoes based on the shifted median. Nike
could possibly increase its price margin for running shoes to capitalize on the market.

Reviews and ratings are the best indicators of how customers feel about products. The
reviews distributions are all similar – except for Adidas’ casual sneakers. A considerable
amount of shoes have around 500 or more reviews. Adidas has a strong casual shoes
pipeline and a large demand for casual sneakers appear to exist.

As for ratings’ distribution, Nike has a higher variance (ranging from 3.5 to 4.5 stars)
compared to Adidas’ ranging from 4 – 4.5 stars out of 5 stars. Nike’s high variance could

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mean that more Nike’s sneakers are either a hit-or-miss, whereas Adidas’ shoes have a
more consistent quality.

Note that the data points below only include shoes with at least 20 reviews so that the
distribution would not be significantly skewed based on a few people’s opinion.

Word Cloud

Further insights can also be obtained from the actual context of reviews. A word cloud
analysis was performed to determine the frequency of words used for low and high rated
shoes.

The word “narrow” appears frequently in one of Nike’s low rated running shoes as shown
below. From the reviews, customers find the cut to be narrower than other sneakers. Nike
should ensure the designs for their sneakers have a more comfortable fit.

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An example of a word cloud for top selling shoes with the most customer reviews is shown
below. “Comfortable”, followed by “style” and “classic” are defining words that describe
all top-selling shoes from Nike and Adidas. These features are of the utmost importance to
consumers when choosing a pair of shoes, regardless of brand.

Popular Shoes

Additionally, when I looked at the top ten selling shoes for both brands, many of the shoes
came from the same series. Both companies seem to have the same strategy in producing
more models of the same series to capitalize on their popular series that already have an
existing consumer base.

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In addition to looking at text descriptions on popular shoes, I want to find out when the
reviews were written, which could reflect purchasing trends and seasonality.

Nike

When I looked at one of Nike’s top selling shoes – the men Nike’s Roshe – I found that,
most of the reviews were written in 2015. A closer look reveals that, most of the reviews
were collected as part of a promotion (those colored in orange). The lack of reviews at
other times indicates the shoes were only purchased when promoted. Finish Line’s sales
strategy seems effective, but this specific pair of shoes might be over-priced since
customers are only buying it during sales.

In the case of another top-selling Nike shoe – the, women’s Nike Huarache – most reviews
were posted at the end of 2015 and gradually decreased through mid 2016. The promotion
started mid 2016 following this decline and lasted for almost 2 years up until the beginning
of 2018. Finish Line may have over-projected on the sales of Nike Huarache as a result.

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Adidas

For Adidas, none of the reviews for its top shoes – ultraBOOST and Super Star – were
posted during a promotion. A substantially larger number of reviews were written starting
from 2017 for both top selling Adidas sneakers. The quick and successful rise of
ultraBOOST and Super Star in the past two years can be attributed to celebrity and fashion
girls’ endorsements. In addition to Super Star, most of the reviews were posted during June
to October, which shows that people tend to buy casual street shoes during summer months
as they transition from heavier winter shoes/boots.

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42
43
FINDINGS

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 1. Price Premium

Nike in terms of satisfied and loyal customers are willing to pay a price premium, while
Adidasleads with loyal but less satisfied then Nike customers. In addition, Adidas prices are
alsomarginally less

2. Satisfaction / Loyalty

In terms of satisfaction, Nike leads with both very satisfied as well as satisfied
customers.Dissatisfaction level is low. Adidas dissatisfaction level is also less but
not more than Nike

3. Perceived Quality

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 Here again, Nike edges out Adidas in terms of Product quality. But in terms of Product
design perceived Quality is better than Nike

4. Perceived Value

The consistent responses by Adidas users perceive it as a value-for-money service. Nike

is perceived to be a bit expensive by its customers than Adidas.

5. Brand Personality

The brand personality of Nike comes across as an exciting and competent brand. Its vibrancy
appeals to the customers who relate to the advertising messages. But Adidas is also emerging asa
better brand with some good promotional strategies.

6. Brand Awareness

Brand awareness of the respondents was high with most being aware of both Nike and Adidas.
So the spoils are even for both the Brands here. Comparing the overall findings we see that Nike
leads in four brand equity measures (satisfaction/loyalty, perceived quality, leadership &
popularity, market share). The other three measures (brand personality, brand awareness, market

46
price and distribution coverage) have beenshared by both Adidas and Nike.To conclude, the
Brand Equity of Nike is higher than Adidas, though marginally

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CONCLUSION

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On the basis of the results of this study it was concluded that customers of Mumbai
prefer wearing sports shoes on regular basis for various purposes other than gym. Not only is it
used by athletes, but also teens and mid age group. Adidas and Nike brands were highly
preferred at the cost of Indian made shoes like ASE, Action and others. Particular brands were
preferred because of its perceived quality and durability by the consumers. Least importance was
assigned to price, variety or safety provided by the sports shoes to the consumers in this study.
The brand name and image attracted consumers and they felt that the preferred brand reflected
their personality. The consumers were contended with the materials used and color options
provided by their
preferred brands. There was complete agreement on the satisfaction with the quality of preferred
brandsports shoes. They perceived that the style of the preferred brand was suitable to them and
also believed that the style of their preferred brand has distinctive features. They agreed that the
behavior of salesperson of the store was friendly and courteous. There was agreement by a large
number on the impact of celebrities on purchase of sport shoes. It was also believed that the
increase of price hindered their ability to purchase. Sportspersons agree that the preferred
brand provided goods value for buyers money. They also agreed on satisfaction with the price ra
ngeand disagreed on purchase of another brand of same quality with lesser price. This exhibited
their strong association with the brand and their loyalty. It is noteworthy that many of the
respondents provide importance on the price of sports shoes of their preferred brand. Respondent
s weredetermined not to switch over their preferred brand sport shoes under normal
circumstances and they expect some sort of discount to be offered

SELECTIVE REVIEWS OF PEOPLE WORLWIDE

Nike

 “Adidas are spending more time blogging that being athletes”

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  “When I look into new basketball shoes, I’ve always liked the Nike
Brands, because they seem to have more heel and ankle support,
but when I try to order online (which is how I purchase my B’ball shoes), I can never find
my size 11 in stock.

 “Between the two (Nike & Adidas), Nike”

Adidas

 “Adidas all the way, there is no shoe in the market, which is more comfortable, and
pocket friendly than Adidas. The shoe is reliable, trendy and sporty all the same.”

 “I grew up a fan of Nike; I am becoming more of an Adidas fan by the minute.”

 “Mark Zuckerberg! His name is usually followed by the word “Adidas”

 “I’m a tennis sneaker kind of girl, but for my golf shoes, I bought the Adidas. It has a
built in arch support which is great when you are walking 18-holes, carrying full set
of clubs on your back, I needed the extra support!”

HARD TO COMPARE DIFFERENT STYLES

 “Nike is hard core technology for sports: it’s Nike Plus, it’s Dry Fit, and it’s Air. It’s
innovation. Adidas is different. Their products are more focused in style:Adidas
Originals, Adidas Stella McCartney, Adidas Y-3. What’s also very significant about the

50
 two brands is their communication: Adidas is “impossible is nothing”, is about
empowering people (which by the way is not very far from Nike positioning in the
eighties). Nike is all about winning. About being the best.”

 “In my honest opinion, that’s where the difference lies in my eyes. Nike appealsto the
hardcore sport goers who thrive on competition and want the ‘best’ whencompeting,
which Nike has well promoted themselves as; as being the ‘best’ andthat you’ll win with
them”.

 “Adidas has long appealed to a large demographic of consumers, from

athletic people to hip-
hop dancers. They’ve created a more ‘chill’ feeling around their products that personally
makes me feel and look relaxed but trendy at the sametime. ‘Impossible is Nothing’ has
been a great campaign that appeals to the Average Joe who always wanted to make it big
and sees that it is possible for anyone.”

DIFFERENT SPORTS / FUNCTIONALITY

 “Nike, I have great products from them for basketball and other competitivesports. Adidas,
I have for working out, running and notably casual wear”.

 Many of the responses were in favor of other brands we haven’t discussed,mainly New
Balance.

 “New Balance for the win. NB finally figured out that sneakers are a fashionmarket and
have been making some very cool looking NBs–but on top of that, New Balance are
comfortable and don’t fall apart like a lot of hipper brands”.

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  As you can learn from the above reactions (we presented only few sampleexamples),
opinions about the leading sporting shoe are indecisive. I’m sure tenyears ago – we would
have heard Nike’s fans shouting much louder.

Adidas is in fact bringing new challenges:

 Adidas bought Reebok.

 Adidas carrier – David Beckham has significant mark on Adidas brand.

 Adidas and Nike show a close fight over global market share.

 Adidas is successfully communicating a stylish atmosphere.

Adidas to overcome Nike, once we spotted that the discussion over the two leading brands in
the blogosphere is becoming very similar in its volume.

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While for some it was hard to admit that Nike is losing its dominancy, most of the comments we
received were in fact supporting initial assumption that Nike is facing hard competition coming
from Adidas. We profiled your evidence and personal preferences in favor of Nike, in favor of
Adidas, and those found it hard to take one side only

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RECOMMENDATION
S

54
Following recommendations are recommended on the basis of the findings of this study:

 The results of the present study may be helpful to upcoming sports

marketing professionals in order to enhance their sales.

 The results of the present study shall guide the sports manufacturers and franchisein
making their product better.

 A similar study can be conducted on National and International levelsportspersons. The

study in future days may include vast area not just limited a particular region.

 The tool used in the study may be made systematic by using Likert Scale for assessing
the perception of the consumers.

 Adidas should undertake more celebrity endorsements and should increase their quality.

 Nike should lower their prices to reasonable to meet larger markets of customers.

 On the basis of this research, it is found that both the companies have cut throat
competition; both the companies should promote their products which are in great
demand.

 Adidas should change its strategies in order to reach up the level of Nike, and to promote
well in most parts of the country.

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 Nike should not only target high level customers, but also mid income group for specific
periods to increase sales.

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REFERENCES

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WEBSITES

 http://www.press.adidas.com/en/

 http://www.jdsports.co.uk/whatsnew.aspx?id=5375.

 http://www.press.adidas.com/en/DesktopDefault.aspx/tabid-4/79_read-8621/.

 http://www.fashiontrendsetter.com/content/fashion_events/2008/Adidas-Denim- by-
Diesel-in-store-event-p1.

 http://www.jdsports.co.uk/whatsnew.aspx?id=5508

 http://www.champion.ie/

 "Adidas Orginals - Extended House Party Film". http://www.adidas.com.

 http://www.adidas.com/campaigns/originalsss2009/content/#/lifestyle/full-length-film.

 http://www.channelseven.com/newsbeat/99features/news19990624.shtml,October 2003

 http://www.urlwire.com/newsarchive/062499.html, October 2003

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  http://www.adidas-salomon.com/en/news/archive/2000/2000-07.asp, October 2003

 http://www.adidas-salomon.com/en/overview/welcome.asp, October 2003

 http://www.adidas-salomon.com/en/investor/strategy/default.asp, October 2003

 http://www.adidas-salomon.com/en/investor/reports/default.asp, October 2003

 http://www.adidas-salomon.com/en/overview/history/default.asp, October 2003

 http://www.cybersource.com/solutions/success_stories/nike.xml, October 2003

 http://www.nike.com/nikebiz/nikebiz.jhtml?page=1, October 2003

 http://www.nike.com/nikebiz/nikebiz.jhtml?page=15, October 2003

JOURNALS

 Adidas, Annual Report 2002

 Adidas, Annual Report 2001

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 Nike, Annual Report 2002

 Nike, Annual Report 2001

 Industry Sector Analysis of Sporting Goods, U.S. and Foreign CommercialService,

199Multex Fundamentals / ProVestor Plus Company Report, Nike Inc.,October
2003ShoeStats 2002, AAFA, January 2003

 Bheri, G.C. (2004) Marketing research 3rd ed. New Delhi: Tata McGraw-HillPublishing
Co.Ltd. 2. Cadogan, J. W. and Foster, B. D. (2000) RelationshipSelling and Customer
Loyalty: An Empirical Investigation, MarketingIntelligence and Planning, 18, 185- 199.

 Chaudhuri, A. and Holbrook, M.B. (2001) “The chain of effects from brand trustand
brand affect to brand performance: The role of brand loyalty”. Journal of Marketing; 65
(April): 81-93. 4. Ko, Eunju., Kim, Kyung, Hoon., Zhang, Hao.(2008) “A Cross Cultural
Study of Antecedents of Purchase Intention for SportsShoes in Korea and China”, Journal
of Global Academy of Marketing Science,Vol-18(1), PP: 157-177.

 Krishna, Srungaram, Narsimha, Vamshi. “Assessing Youth’s Buying Behaviour towards sports
Shoes” (A Case Study of Nike)” Master’s degree level Dissertationsubmitted to
University of Halmstad, School of Business and Engineering for thedegree of Master of
Science in International Marketing, reviewed on 23-03-2012 at hh.diva-
portal.org/smash/get/diva2:238641/FULLTEXT01

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 Reichheld, F,F, and Sasser, W.E. (1990) “Zero Defections: Quality Comes toServices”,
Harvard Business Review, September-October, 105-111.

 Yee, W. F. and Sidek, Y. (2008) “Influence of Brand Loyalty on Consumer Sports”, Int. Journal of
Economics and Management 2(2); 221-236.

 Yoh, Taeho., Mohr, Mike. & Gordon, Brian. (2012) “The Effect of Gender onKorean Teens' Athletic
Footwear Purchasing”, The Sport Journal, Vol 15.

 Youn, Nara., Song, Inseong., MacLachlan, Douglas. (2008) “A Multi-categoryApproach

to Modeling Consumer Preference Evolution:

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