Nike vs Adidas Essay
Nike vs Adidas
Nike, founded January 25, 1964, is one of the world’s best known and popular brands. Created by Bill Bowerman and Phil Knight, Nike has become one of the world’s largest athletic apparel suppliers and today markets it product under its own brand name which includes Nike Pro, Nike Golf, Nike Skateboarding and the infamous Nike Air Jordan. At the end of 2012 the company had an estimated net worth of $15.9 Billion had over 44,000 employees worldwide and raked #1 on the Forbs Top 10 Worlds Most Valuable Brands in Sports.¹ The company has two subsidiaries, Hurley International and Converse. The logo is identified as the Swoosh symbol, and anyone who sees it knows what the brand is. Nike officially became Nike, Inc. May 30, 1971 from the name Blue Ribbon Sports, and took its name from the Greek Goddess of Victory; it is an American multinational brand. Adidas is a multinational brand located in Germany that also manufactures sports apparel and accessories.
Founded in 1924 under the name Gebrüder Dassler Schuhfabrik, Adolf Dassler reformulated and registered the business as Adidas in 1948. Adidas is now the largest sports manufacturer in Europe and Germany and the second largest sports manufacturer in the world. Subsidiaries of Adidas are Reebok and Ashworth Golf Apparel, also known as Callaway, as well as the brands Rockport and FC Bayer Munich; a German Sports Club². As of 2012 Adidas net worth was estimated at $6.8 Billion Dollars, had over 46,306 employees worldwide and ranked #3 on the Forbs Top 10 Worlds Most Valuable Brands in Sports list.³ The brand is identified by the famous three parallel bars, and now features its name underneath its logo. Nike’s mission “to bring innovation and inspiration to every athlete in the world” is seen in its demographics profile and business strategy. Nikes current and loyal demographic is now aging, but that also creates a new opportunity to influence the new younger generations. Over the past 50 years Nike has targeted a loyal demographic of sports enthusiasts, athletes, gym regulars, brand consumers and image seeking buyers. Nike has a targeted customer of all ages with income levels starting at $15,000, that who are members of the upper middle, lower upper and upper class.
Both males and females are included in Nikes ever growing demographic and now spreads across nations with a growing population of India buyers and a now older marketing segment that targets 40-65 year olds.4 Nike has always focused on large demographics that includes all income levels. You can now go into stores like Target Corp. or Kohls department stores and find Nike on shelves for discounted prices. As mentioned before Nikes emerging presence in India is growing steadily. With the opening of a Nike plant in India, market segment growth is still yet to be determined. The brand has largely positioned itself in the minds of consumers as a high end product with quality designs and sports teams’ contracts as well as its sponsorship of select athletes. It has created a brand loyalty that can continue to achieve high profitability and sales volumes.
Nike has a 40% share of the sportswear market, the largest in the world, which helps its lead in the global markets. In a recent article published in Arab News dated March 15, 2014, Nike swooped the market share in Europe as well!5 With a rise in 8% of Europe’s market share, Nike is now the leader in sports apparel in the European segment; largely due to expansion of its India demographic as well as its continuous market penetration into the European runners markets and women’s demographic worldwide. Adidas has always had a strong European and German demographic and up until recently had a strong upper hand over competing brands in the European market segment. Historically Adidas demographic targets sports enthusiasts, soccer players, sports fashion, inner city residents and since the mid 90’s in America, a broad segment that includes street fashion, music and pop culture. Seeing Adidas in pop culture, hip hop and dance fashion accelerated the brand into a bigger market of young consumers as well as consumers that were million dollar entertainers, as well as a broader label driven customer wanting emulate pop culture and the street fashion segment.
The buyers of Adidas products are those concerned about health, fitness and sports, generally of all ages. Even in the midst of a recession Adidas was still turning profits because they “aren’t that expensive” said Adidas CEO in an article for the Wall Street Journal in August of 2011.7 In fact 2008 was one of Adidas strongest year to date. Adidas has remained second largest in the world. Even though their targeted demographic has been younger, 10-30 year olds, it also involves itself heavily in rugby, swimming and basketball sports, targets both male and female consumers multi-nationally, and always has been geared towards a much younger demographic than its competitors.8 The psychographics of Nike consumers has always been sports centric. Since the 80’s Nike has worked hard to turn its brand of sneakers to a broad sports culture.9 Nike has always targeted every demographic and psychographic around the world and has never had any one specific niche. Nikes consumers range from inner city kids and teens as well as those kids and teens who live in the suburbs. Nikes diversification includes full and part time athletes, people who want to just look like athletes and carry themselves as athletes. There are women and all sexes who wear the brand as well as people of all ages and sizes.
Currently Nike is focused on further developing its apparel lines than its shoe lines to reach even further market segments. With all of the information, secondary data, published articles, blogs, essays and the like there is a ton of information about Nike and its marketing segmentation. Because of their large advertising budgets and the ability to penetrate deep into the minds of their loyal consumers, Nike has expanded its marketing tactics further to include mobile device users, mothers, special needs kids and has made purchasing power among these psychographic profiles in greater demand. Also, youth wanting to jump into the sports image of the likes of Michael Jordan, Tiger Woods and others has made them loyal brand seekers of everything Nike; ranging in ages 12 to 17 years old, one of the now current highly fueled marketing segments of this sports apparel and shoe brand. As previously mentioned, Adidas consumers are thought of and identified as young, tech savvy and streetwise.
The average Adidas consumer emulates and participates in street fashion, street art, street culture, hip hop, pop and diverse inner city culture. Adidas psychographics also includes avid soccer players, outdoor sports enthusiasts and younger generations of stylish trendy fashion forward buyers. Because Adidas price point is so affordable, practically anyone can buy and wear this brand of shoe, track suit, hoodie or jacket, and because Adidas is more affordable than its competitors it can easily penetrate more markets more easily, which has contributed to its success as being the #2 leader in the sports apparel industry. Adidas consumers like to be in the public eye, are artists and sports players, entertainers and mothers. The image and lifestyle portrayed is unlike any of its competitors. You will see Adidas in night clubs and basketball courts as well as on young female runners to male break dancers. The diversification and young generation that wears Adidas for years over is what separates it and defines it as a successful brand that continues having success every single year and over generations.
Buying any brand is always a matter of personal preference and loyalty. Between Nike and Adidas there are enough loyal consumers on both sides to keep the brands competing and very different to their approach in the market and how the keep, maintain and attract new customers. For Adidas it’s the lower price point. Nike specializes in making their brand more attractive by placing itself as a more luxurious brand that makes it a bit more expensive than Adidas. The marketing segments of these two brands couldn’t be more different. Nike seems to target everyone. Its brand is so vast that it has literally something for everyone. Adidas on the other hand targets a much younger consumer with a particular view point and lifestyle; 12-35 and street wise. However, both brands see the value and profits to be made in the young generation of today’s new consumers and are both equally fighting to gain that share of the market. Nike and Adidas both keep growing and outrank every other brand out there; Nike being #1 and Adidas ranking in at #2.
Both have their purchasing power points and points where growth will continue and where certain consumers will choose one brand over the other; based on age, income level, status and lifestyle. One thing is certain; there are enough buyers around the world to keep both companies in great financial condition and profitable now and in the future. Both have substantial advertising budgets and are continually looking for new ways to reach customers through technology and expand its customer base around the globe by penetrating markets in third world countries that are growing bigger economically by the hour as well as through new lifestyles emerging in modern culture and technologically based societies.
1 -“Nike Inc.” Wikipedia. Web 14th March, 2014.
2 – Wikipedia. Web. 14th March, 2014.
3 – “The Forbes Fab 40 the World’s Most Valuable Brands” Forbes. Web 14th March, 2014. http://www.forbes.com/sites/mikeozanian/2012/10/17/the-forbes-fab-40-the- worlds-most- valuable-sports-brands-4/
4 – SlideShare. Web 14th March, 2014.
5 – “Nike takes Market Share from Adidas in Europe” Home. Web 15th March 2014. http://www.arabnews.com/news/473876
6 – Dow Jones & Company. The Wall Street Journal. Web 15th March, 2014. http://online.wsj.com/news/articles/SB10001424053111904787404576528210699811114 7 – “Who is Adidas Target market Today?” Ask. Web 15th March 2014.
8 – “Adidas Cultural Factors” eHow Web 16th March, 2014.
9 – “Nikes use of Psychographic Data” Lots of Essays. Web 15th March, 2014.
10 – “Nikes use of Psychographic Data” Lots of Essays. Web 15th March, 2014.