Advertising Strategies of Adidas and Nike
Adidas and Nike are two global leading sport apparel corporations. These two companies are constantly competing in the industry. They have a number of similar and different attributes, which makes both the corporations unique despite the fact that the two produce sports clothes, equipment and accessories. The paper will analyze these two leading companies in the sports apparel product group, as well as the companies’ marketing types, pricing, and client-focused advertising strategies.
Promotional Strategies of Nike and Adidas
Nike had utilized numerous promotional strategies in order to become the global headmost designer, seller and distributor of sports footwear, apparel, and accessories (Frisch, 2013, p. 23). The major promotional strategy used by the company concerns its concentration on innovation and focus on the research and development department, which helps the company be profit making in the end (Frisch, 2013, p. 40). The company promotes itself through the footwear, apparel and athletic equipment, which can lower or liquidate injuries, assist in athletic implementation and maximize comfort (Frisch, 2013, p. 41). Nike seriously relies on strategic outsourcing (Frisch, 2013, p. 41). The company’s long-run sustainment is promoted though Nike’s concern about global warming. Nike has decided to concentrate more on the product design procedure reducing toxics and wastes wherever possible (LLC, 2014, p. 15). In fact, the promotional strategies of Adidas and Nike sports giants are quite similar, but the first concentrates more on the broad differentiation strategy (LLC, 2014, p. 17).
Adidas also focuses on innovation attempting to create new products, services and procedures in order to cope up with the competition. The facts demonstrate that Adidas strategically decided to shift from a vertically integrated brand structure into a functional multi-brand structure in order to surpass the Nike and Reebok brands (Borowski, 2013, p. 8). This has helped in creation of a number of global sales functions, which are accountable for commercial activities and marketing of the brand (Borowski, 2013, p. 8). Adidas also implements a multi-brand strategy by having a diversified brand portfolio, which allows the company catering for all portions of the market starting from players and ending with ordinary users. Adidas also embraces e-commerce in attempt to become more effective and appealing to more clients as e-commerce makes purchasing more accessible for company’s customers (Borowski, 2013, p. 10).
Thus, the companies have almost analogous strategies but discrepant execution methods. Both the market giants focus heavily on technology and attempt to create new and innovative products. Nevertheless, Nike concentrates its promotional strategies on the American market while Adidas promotes its products more in the European market (LLC, 2014, p. 17).
Marketing Information Usage for Differentiation
The facts show that a company can obtain a greater rate of possible profit over its competitors in one of two methods. It either can equip analogous product or service at a decreased cost, or it can supply a product or service, which is demarcated in such a manner that the client is ready to pay a price premium (LLC, 2014, p. 4). Nike has used its generic business strategy for its product demarcation (Frisch, 2013, p. 12). Thus, the company can stress on the major differentiation strategy constituents including branding advertisements, product design, exceptional customer service, high caliber products and innovative product developments. In general, Nike is believed to be the leader of industry in regard to product differentiation (Frisch, 2013, p. 4). Product differentiation can assist a company in an attempt of boosting its profit via marketing of various products. This also allows reducing the hazard ration as if one product fails, there are numerous other products to compensate for this loss. In fact, the company designs the majority of its footwear for athletic purposes. While attempting to diversify its products, Nike can utilize marketing information in an attempt to sell a large percentage of their products for casual and leisure purposes.
On the other hand, Adidas can use marketing information for differentiating its product on three major segments. Firstly, it can concentrate on emphasizing the fact that it manufactures sports goods for three various categories including men, women and children. The company carefully analyzes the groups on the ground of requirements, physiology, design preferences and choice tendencies (Borowski, 2013, p. 7). Secondly, Adidas can also differentiate its products by focusing on the ability to produce a number of footwear accessories and apparels including sports balls, gloves, bags, skates, etc. Finally, the company can stress its capacity of providing every kind of sports equipment for soccer, basketball, football, tennis, golf, aquatic sports, etc.
Uses of Consumer-Oriented Promotions
The facts demonstrate that consumer-oriented sales promotions, which incorporate price reductions, vouchers, rebates and other incentives, can assist Adidas and Nike in becoming progressively significant as emulation elevates in the sport apparel industry and competitors use promotions on a regular ground (LLC, 2014, p. 17). The long-term impacts of Nike and Adidas customer-oriented promotions can have both negative and positive ramifications. Thus, when customers understand that they are able to find a voucher or a sale, they become hardened to such incentives. On the one hand, constant sales and vouchers can make customers more loyal. On the other hand, these customer-oriented promotions can negatively influence companies’ bottom line. It is much better to use specific loyalty cards as the primary incentive, which attracts customers more effectively. This is a new and better method of rewarding loyal and regular customers. For example, the style and design of Adidas allow the company to utilize skimming and competitive prices as well as competitive pricing. The target customer of the company comrises the upper to middle class combined with high-end clients (LLC, 2014, p. 18). Therefore, Adidas should not utilize penetrative pricing as this strategy might affect the brand equity. In contrast, Nike can utilize regular sales and value-added promotions as they can positively influence the company’s bottom line. Sales bring short-term impacts for the company as they increase the profit during the sales period. Value-added promotions create long-run impacts as they allow building continued relationships with the customer at the same time boosting company’s brand identity (Shpanya, 2013).
The market giants have different pricing decisions. For instance, Adidas has adopted a premium pricing strategy in order to cope with its competitors (Shpanya, 2013). Such premium pricing provides the company’s consumers with more incitement to buy over Adidas competitors in the face of Nike, Puma, Reebok, etc. (Shpanya, 2013). The facts demonstrate that the greater price informs customers about the fact that the company produces products of a better quality. Thus, Adidas performance technology is believed to be constantly promoting (LLC, 2014, p. 12). In fact, the company can allow itself to charge premium prices due to the fact that it proposes a discrepant, higher-end ‘lifestyle’ than its emulators (Shpanya, 2013).
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Nevertheless, the pricing strategy of Adidas for all its products incorporating athletic footwear requires more flexibility as it is greatly strict. This is a great weakness in regard to Adidas pricing decisions and in overall price-conscious economy. The competitors might utilize adapted pricing strategies (Shpanya, 2013). In addition, Adidas pricing strategy allows Nike (the main competitor of Adidas) to make use of penetrating attack markets with decreased prices or market skimming tactics. The last two allow the company (Nike) to stay involved in the constant evaluation of its price, which allows ensuring that its products stay emulative, especially at the point of their sale (Shpanya, 2013).
The Most Effective Advertising Medium
There is no doubt that Television and E-commercials are the most effective advertising medium for any huge company in the sport apparel industry (Williams, 2015). The Television and Internet commercial is typically admitted to be the most efficient mass-market advertising medium. Nevertheless, this type of medium is also the most expensive; therefore, only huge corporations can allow it (Williams, 2015). The advertisement medium charges high prices, especially during the specific commercial airtime during popular TV and particularly sport events. The major part of television or Internet commercials represents a particular song or jingle, which the audience easily and quickly connects to the specific product or company (Williams, 2015). Both companies understand this; thus, they have a huge quantity of TV and e-commercials, particularly in the global-wide networks including BBC, CNN, etc. (Williams, 2015).
Television typically provides an advertiser with a possibility to address to the audience in order draw its attention. Sport events, which are broadcasted on TV, are the best opportunity for sport apparel companies to advertise their products. This is a time when such advertisement is adequately perceived and accepted. In addition, the audience watching sports events is interested in sports apparels and adequately reacts to such advertisements. In addition, the facts demonstrate that television viewers are more inclined to “tune into” an advertisement completely (Williams, 2015). Therefore, TV and e-commerce is believed to be the best option for both companies in regard to advertising.
The current paper compared promotional strategies of Adidas and Nike demonstrating that the majority of them are similar. It also recommended two methods, in which the companies can utilize marketing information to differentiate themselves. The paper proposed specific consumer-oriented promotions and analyzed pricing decisions made by both companies. Finally, the paper defined TV and E-commercials as the most effective advertising medium for Adidas and Nike performing in sport apparel industry.