Nike –The Company

If you have a body, you are an athlete. And as long as there are athletes,
there will be Nike.

The Nike mission:

To Bring inspiration and innovation to every athlete* in the world

* if you have a body, you are an athlete

The strategy

Nike stands to be the symbol of sports and fitness. And it’s a kind of
product where pull marketing strategy is applied more, rather than push,
this means that, people are attracted to buy product through sponsorships
and sports events rather than Nike offering various sales and discount. It
owns selling subsidiary namely Cole Haan Holdings Inc., Nike Team
Sports, Inc., Nike IHM, Inc., and Bauer Nike Hockey Inc to sell products
and raw material. The most popular product categories include the
following: Running, Basketball, Cross Training, Outdoor Activities, Tennis,
Baseball, Football, Bicycling, Volleyball, Soccer, Wrestling, Cheerleading,
Aquatic Activities, Auto Racing, Golf.

Ideally, the market segment of Nike is mostly those who are looking for
perfect product for their sports, fitness or work comforts. Segment covered
are professional and amateur sports players, school and college going
students looking for style and comforts and finally working class working
on fast pace jobs such as delivery boys, etc.

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Nike Advertising

After stumbling badly against archrival Reebok in the 1980s, Nike rose
about as high and fast in the ‘90s as any company can. It took on a new
religion of brand consciousness and broke advertising sound barriers with
its indelible Swoosh, “Just Do It” slogan and deified sports figures.

The Nike brand has become so strong as to place it in the rarified air of
recession-proof consumer branded giants, in the company of Coca- Cola,
Gillette and Proctor & Gamble. Brand management is one of Nike’s many
strengths. Consumers are willing to pay more for brands that they judge to
be superior in quality, style and reliability. A strong brand allows its owner
to expand market share, command higher prices and generate more
revenue than its competitors. With its “Just Do It” campaign and strong
product, Nike was able to increase its share of the domestic sport-shoe
business from 18 percent to 43 percent, from $877 million in worldwide
sales to $9.2 billion in the ten years between 1988 and 1998. Nike spent
$300 million on overseas advertising alone; most of it centered around the
“Just Do It” campaign.

The “Just Do It” campaign seemed to capture the corporate philosophy of

grit, determination and passion, but also infused it with something hitherto
unknown in Nike ads—humor. Nike had always been known for its
“detached, determined, unsentimental” attitude.

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Linking the product to consumer needs

Through its “Just Do It” campaign, Nike was able to tap into the fitness
craze of the 1980s. Reebok was sweeping the aerobics race and gaining
huge market share in the sneaker business. Nike responded to that by
releasing a tough, take-no prisoners ad campaign that practically shamed
people into exercising, and more importantly, to exercising in Nikes.

Celebrity endorsements also appealed to the consumers’ sense of

belonging and “hipness,” as Nike became a self-fulfilling image prophecy: if
you want to be hip, wear Nike; if you are hip, you are probably wearing
Nike. The “Just Do It” campaign was able to turn sweaty, pain-ridden, time-
consuming exercise in Nike sneakers into something sexy and exciting.
Perhaps most importantly, even those who were not in fact exercising in
Nikes (the vast majority) still wanted to own them. By focusing on the aura
and image conveyed by the fitness culture, Nike was able to attract those
who wanted the image without incurring the pain.

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The 4 p’s

In order to sustain and grow in the current segment group, it is required

that Nike continuous play around with 4 Ps method i.e. price, placement,
product and.

In price Nike has to come up with various options for those who are looking
for economical products and for those who are looking for reliable products
so that, it can deliver products to entire segment who want cheap product
and who want quality products. In order to achieve this Nike has to further
expand its production in Asia to get cheap product under high QC to offer
the products globally at economical prices that even buyers in Asian
countries can afford.

In placement, Nike has to open up stores and franchise to reach maximum

buyers and targeted customer in order to expand canvas of long term Nike
buyers. Further most, it should maximize the use of e-commerce, online
marketing, e-coupons, e-bay sells and such activities to attract online
buyers. Besides that various arrangement should be made to make the
whole range of products availability at convenient point for buyers to buy
from. Plus higher incentive should be offered to the franchise and resellers
to motivating them to increase the sales.

In product, Nike has to come up with new ideas, design and make of
product specializing for various sports, various gender, various ages so
that masses can be served and entire family would buy their sportswear
from Nike store instead of going to multiple store and in long run this would
also create a brand loyalty among the buyers.

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Nike has various sports products and these products should be made
more economical so that the masses could afford to buy it and at the same
time quality should be maintain enabling the brand loyalty to be strengthen
amongst the buyers.

In Promotion Nike has to still strength its Swoosh brand as the only brand
to cater entire demographic for their sports needs. It has real competitor
like Reebok, Addidas, etc who have the same quality and pricing strategy
and can overtake Nike at anytime if Nike does not propagate its products
to the target segment. For this Nike has to budget extra revenue for
sponsorships, sports events, advertisement, etc. This will maintain the Nike
visibility in the eyes of the customers. Besides promotions, Nike should
proactive communicate with the buyers directly enabling Nike to get first
hand feedback from the customer as finally they are the one who will buy
the products and they will jump to other brand if they would get product of
their choice at their convenient.

After retaining loyal customers, and attracting them to buy more of various
Nike products, then the second task is to attract new potential buyer.
Targeting customers could do arranging community could do this and this
based sports or young group sports and other such activity to bring all
potential customers at one place. And during this gathering discount
coupons or lucky draw of Nike products could attract potential customers
and will give them an opportunity to feel the comfort and fineness of Nike
products. Plus the selling subsidiary should also start going around sports
club, schools, colleges, university and all such places to promote the
product or in other words do direct marketing and find out what the
consumer are looking for and put it into process for future production.

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Overall Nike has very good reputation but this has to continue in front of
cheap Chinese sportswear and Korean brands that has very good
technical expertise and producing some of the excellent sports products.
Furthermore, Nike should also ensure that their loyal customers are not
lost while Nike searching for new market.

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Opportunities & Threats

Following are new opportunity verses threat for Nike in upcoming years

OPPORTUNITIES
The athletic footwear and apparel industries will benefit from the currently
strong economic backdrop in the United States. Spending is high and is
expected to result in sales growth industry-wide. Athletic shoes and
apparel has become a staple in wardrobes worldwide. This is due to both
the increasing numbers of people exercising and the trend towards casual
apparel.

Competition is fierce at all levels in within the industry, especially among

the leaders. This creates a sense of security for the companies that have
been able to create a niche. Cost cutting due to restructuring of operations
will give many companies the chance to price products more competitively.

One area in the industry that is ever changing is research and

development.

The strong departments will surely capitalize on the trends of tomorrow if

their efforts are successful. Increasing financial recovery in overseas
markets proves to be an area of expansion for the athletic footwear and
apparel industry. E-tailing, or customer-designed Internet merchandise, is
threatening the traditional distribution channels, thus eliminating the
"middle-man" distributors and allowing for increasing profitability.

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THREATS
The industry has reached a level of maturity. While style and technology in
athletic apparel and footwear has reached a leveling-off point, the
important aspect now is for companies to differentiate their lines.
Inflation is looming over the U.S. economy, which may spark a cutback in
consumer spending.

Consumers are becoming savvier and may lean towards discounted items.
In terms of market saturation, many of the key manufacturers in this
industry have been around for many years. Consumers may be scanning
the market for new and different footwear and apparel products.

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Reebok- the company

That’s how we’re starting to differentiate ourselves from other brands, by

being the confluence of lifestyle, entertainment, and sports. It is a complete
cultural connection. What we’re trying to do is be real to the whole sports
culture and community.
Harry Singh, Asia-Pacific Marketing Director

Since the beginning of the Fireman era in 1984, Reebok footwear and
apparel have been at home in sporting arenas around the globe. In 2003,
its global sales were close to $3.5 billion. Reebok International Ltd.,
headquartered in Massachusetts, is a leading global designer, marketer,
and distributor of sports, fitness, and lifestyle products. Reebok’s United
Kingdom-based ancestor company was founded for one of the best
reasons possible: athletes needed better shoes to run faster. Hence, in the
1890s, Joseph William Foster made some of the first known running shoes
with spikes. His handmade shoes became popular with the British top
runners, and soon the company had developed an international clientele of
distinguished athletes.

Reebok is the number two U.S. athletic shoe brand, behind Nike. In
addition to Reebok sportswear and accessories, Reebok offers the Greg
Norman line of men’s casual wears, Rockport walking and casual shoes,
and Ralph Lauren and Polo dress and athletic shoes. Reebok’s main
competitors are global athletic footwear and apparel manufacturers such
as Nike, Puma, and Adidas Salomon. Nike Inc., the Oregon-based
company, is perceived as Reebok’s main competitor.

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The American brand has been the predominant global market leader
except for the mid 1980s when Reebok managed momentarily to become
the number one sneaker manufacturer. Reebok’s two other main
competitors are the German brands Adidas and Puma. Interestingly
enough, two brothers started the companies. Adidas Salomon AG
(formerly known as Adidas AG), was founded by Adolf Dassler in 1948.

While Reebok has had a long-established presence as an athletic product

manufacturer, the new vision called for a decisive push into the fashion
arena, where shoes have become a key accessory of the consumer’s
image.

To that end, Reebok set out to capture the most lucrative piece of the
market, young males. This was a fashion-conscious and influential group
with which Reebok traditionally had only a fuzzy and inconsequential
relationship. Management decided that the new strategy should be
premised on making Reebok a “super cool” brand of the youth urban
culture worldwide.

Worldwide, Nike was far and away the leader with a 36.4% share of the
global market in 2003. This was more than triple the market share of
second-place Reebok (12%) and Adidas (9.1%). Naturally, Nike also
dominated the U.S. market with a 36% market share. Reebok was second
with 13%, followed by New Balance (11%) and Adidas (9%).

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Advertising:

Nike and Reebok are the two biggest athlete endorsers. The biggest shoe
endorsement deal ever made was between golfer Tiger Woods and Nike.
Nike agreed to pay Woods $100 million for a five-year contract. Reebok’s
most valuabe endorsement contact is with basketball player Allen Iverson.
Iverson is compensated $10 million per year for wearing Reebok products.
Reebok’s second-most significant endorsement deal is with Venus
Williams.

The female tennis player’s deal is ranked sixth with a $40 million contract
for five years. Overall sponsorship showed an increase from 2002, jumping
6.2% to $9.8 billion in 2003. In February 2002, Reebok launched RbK, a
collection of street-inspired footwear and accessories designed for young
urban consumers who sought to communicate their individuality through
cool, edgy, and authentic lifestyle products. RbK is a culturally relevant
collection that truly represents the fusion of street fashion, athletic artistry,
and hip-hop attitude. This casual, yet exclusive, fashion footwear collection
by RbK was to be available in limited distribution at high-end boutiques
worldwide.

Reebok’s “I am what I am” campaign is a significant shift for the sneaker

brand that first gained traction pitching subtly styled, lightweight shoes to
American women who embraced the aerobics phenomenon of the 1980s.
These days, however, there’s more money in selling to teenage males.
Reebok, which has also featured rapper Jay-Z, has gone further than
market leader Nike Inc. and other rivals in embracing hip-hop culture and
youth-oriented entertainment alongside athletics.

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New positioning

In February 2002, Reebok launched RbK, a collection of street-inspired

footwear and accessories designed for young urban consumers who
sought to communicate their individuality through cool, edgy, and authentic
lifestyle products. The RbK designs were to emphasize the passion points
that defined the youth culture—sports, music, technology, and
entertainment. RbK is a culturally relevant collection that truly represents
the fusion of street fashion, athletic artistry, and hip-hop attitude.

As RbK was inspired by street fashion, the way the products were
marketed also needed to be culturally relevant. A new global marketing
campaign called the “Sounds & Rhythm of Sport” was launched in January
2002. The campaign aimed to revitalize the industry with a combination of
product launches, television and print ads, consumer and retail promotions
and celebrity events.

The campaign featured Reebok-sponsored athletes paired with many of

the music industry’s edgiest hip-hop and rap artists. Reebok also decided
to use some grassroots marketing to enhance RbK brand awareness,
particularly among young, urban-orientated consumers. This included
sponsoring the Entertainment Basketball Classic (EBC) tournament in
Rucker Park, in New York, the premier street basketball competition in the
country, and providing product samples to key trendsetters. Even in India,
reebok has kept its image and is engaging fitness freaks from the world of
stardom to publicise their products.

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Reebok in India

Manish Arora is the face that Reebok India Company has zeroed in to
extend its popular international ad campaign ‘I am what I am’ in India.
Reebok is collaborating with Arora on two fronts – not only is he the new
face of Reebok in India, he is also the designer of Reebok’s new range of
shoes called The Fish Fry Collection. As is known, Arora’s clothes are also
sold under the Fish Fry label, which he had launched in 2001. The Fish
Fry-Reebok collection is a rhapsody that harmonises colour, pattern and
trend with a strong individualistic character. Reebok has always pushed
the frontiers of design and style. The Fish Fry collection is yet another
example of a company that creates trends rather than following them.

The 12 designs done by Arora are a riot of colours and styles and what is
officially described as “ethno-fluorescence”. Arora has drawn inspiration
from the rich and complex tapestry such as Indian bazaars and
architecture to embellish this range of shoes for women. Available in
vibrant colours like violet, blue, pink, gold, silver, green and yellow, these
designs have been stylised in leather, suede and specialised fabric cloth.
Arora has also used Swarovski crystals in some of the designs to qualify
them as party shoes.

Reebok is amongst the leaders in athletic shoes and apparel. Reebok is

increasingly realising the importance of fashion that cuts across borders
and pulls people together. This is why Reebok is tapping into talent
worldwide and exporting them to all its markets. The price range for fish fry
is between Rs 6000 and Rs 20000.

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Global sports goods brand Reebok is optimistic on India. Reebok earns
60% of its revenue in India from footwear and the rest 40% from apparel.
They have about 120 stores in India. Reebok imports 50% of the footwear
and 45% of the apparel that it sells in India. Experts and trade think tanks
say there lies the problem and the red signal. Long term it is very difficult to
survive with a business model in India and China that requires 50% import
from other countries.

Bigger problem for Reebok is the India-China Free Trade Agreement that
looms as a threat for Reebok. The Chinese and Indian domestic
companies can very well compete. If the world accelerates into a
recession, Reebok will have a very tough time to compete Indian and
Chinese consumer goods deflation.

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Reebok SWOT

The internal strengths of Reebok relative to its competitions is all of the

following. First, the company's financial position is extremely strong. The
financial growth of Reebok has been phenomenal. According to Forbes,
the company enjoyed the highest growth rates from 1983-1987, and sales
have continued to increase since that. With very few manufacturing
facilities, Reebok has a high level of liquidity (current ratios exceeding 2.0).
Furthermore, earnings per share have increased, and revenues increased
from $12.8 million in 1983 to more than $1.8 billion in 1989. Furthermore,
the company has operated with minimal long-term debt, and has the
financial resources to invest in new market niches.

Secondly, Reebok International is more diversified than the competition.

The company markets a wide array of show-wear, which has been
possible by early strategic acquisitions of reputable companies. For
instance, Rockport is the most dominant brand in the walking shoe
industry. Also, Reebok is a clear market leader in the tennis shoe market.

In addition, Reebok's brand image stands for quality, the latest technology
and prestige.

The company has been in business for a longer time than any of the
competition, and the company has been able to create favorable brand
recognition. Moreover, Reebok's top management is highly marketing
oriented, and most of the key personnel come from a marketing
background. This is strength in this business, since the industry is market
driven instead of product driven. Also, an increase in demand is the
expected market trend.

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The weaknesses of Reebok International include all of the following. Firstly,
the management. After that Joseph Labonte and Mark Goldston both
reigned, Fireman is the chairman, president, and the CEO of Reebok. The
company is highly dependent on one single person, who will not be able to
effectively handle all of the required tasks.

Also, in the new reorganization, AVIA is no longer represented in group of

four operating corporate officers. This could cause internal tensions within
the corporation. There is a conflict of interest in the top management,
between the entrepreneurial like character Fireman and "the spirit of his
company." The resignations of Labonete and Goldston came as a result of
their management styles conflicting with those of Fireman. Moreover,
Reebok's main product-line weakness is in its apparel division.

The opportunities of Reebok are the following. Continue market

diversification and expansion into international markets in search for new
potential customers. Furthermore, by diversifying into multinational
markets it may be possible to pro-long the very short product life cycles in
the industry by manipulating the marketing of different product niches in
different nations.

For instance, if the sale of one product-line is declining in the USA, the
same product may be launched in South East Asia, and vice versa. The
financial strength of the company makes it possible for Reebok to continue
to ensure market leadership with effective research and development
strategies. It is very important in this industry t make sure that you are on
top-of-the-line in all products. There is potential for growth in the apparel
industry, and that Reebok should focus on merging or purchasing a well-
known apparel manufacturer. Reebok's strong product name should do
well on clothes and accessories.

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The external threats that are impacting on the company's operations are
concentrated to competitive threats, litigation's, and in the manufacturing
arena. First, the harsh competition from the main competitors in the
industry is significant. To keep-up with the competition's penetrating efforts
will cost a lot of money and put a lot of pressure on marketing and
research and development. Also, the short product life cycles play an
important role in the return on investment in a particular product line.
Furthermore, weakening markets may be a serious threat to Reebok. Are
people willing to invest hundreds of dollars into a pair of jogging shoes? In
a weakening economy that is highly questionable.

The most serious threat however is NAFTA. Since Reebok is

manufacturing most of its products in South East Asia, local content laws
of production may seriously impact on the company's profitability. High
tariffs and other non tariff regulations may be imposed on the company
foreign manufactured goods. In 1991, the USA alone accounted for 69
percent of Reebok's total sales

Also, manufacturing and labor costs will increase in South East Asia, and
Reebok will confront higher costs of goods sold accounts, which will
directly impact on the net income.

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Adidas- The company

For over 80 years the adidas Group has been part of the world of sports on
every level, delivering state-of-the-art sports footwear, apparel and
accessories. Today, the adidas Group is a global leader in the sporting
goods industry and offers a broad portfolio of products. Products from the
adidas Group are available in virtually every country of the world. Their
strategy is simple: continuously strengthen their brands and products to
improve their competitive position and financial performance.

Adidas Footwear, apparel, and hardware such as bags and

balls

TaylorMade- Golf equipment, golf apparel, golf shoes

adidas Golf

Maxfli Golf balls, irons and accessories

Reebok Footwear, apparel, and hardware

Activities of the company and its more than 80 subsidiaries are directed
from the Group's headquarters in Herzogenaurach, Germany. Also located
in Herzogenaurach are the strategic business units for Running, Soccer
and Tennis as well as the Research and Development Center. Additional
key corporate units are based in Portland, Oregon in the USA, the domicile
of adidas America Inc. and home to the strategic business units Basketball,
Adventure and Alternative Sports. Adidas-Salomon International Sourcing
Ltd. (aSIS), a fully-owned subsidiary headquartered in Hong Kong, is

18
responsible for worldwide sourcing.In 2006, the new adidas Group has
more than 25,000 employees.

Adidas Brands

Adidas has a clear mission – “to be the leading sports brand in the world”.
To accomplish this mission, the organization at adidas is matched to the
needs of three groups of sport-oriented consumers: The Sport
Performance division is aimed at meeting the sport-specific needs of
athletes at all performance levels. Sport Heritage targets trendsetters who
seek sport-inspired streetwear with an authentic origin, and Sport Style
focuses on young cosmopolitan consumers who look for exclusive,
fashion-oriented sportswear products. This three-divisional approach helps
us to develop and market innovative products to best meet the needs of
today‘s diverse consumers.

Adidas Sport Performance: Focusing on Functionality and Innovation

Adidas Sport Performance focuses on offering functional and innovative

products in all their sports categories. The top five priorities are football,
running, basketball, tennis and training. Adidas currently holds the number
one or number two position globally in each of these categories. Exciting
new products are introduced within these categories every season. In
2006, their major initiatives will include the extension of their global
“Impossible Is Nothing” communications campaign, special attention to the
football, running and basketball categories as well as continued efforts to
commercialize our major promotion partnerships.

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Adidas Sport Heritage: Continued Growth Worldwide
Over the past five years, sports lifestyle has been the fastest-growing
segment in the sporting goods industry. And their goal is to be the brand of
choice in the global sports lifestyle market. This division, started in 2000,
has become a more than € 1 billion segment for adidas, which is now one
of the key trendsetting brands in the market for the sports lifestyle
consumer.

Selective distribution to prevent dilution of the brand plays a major role in

the development of this division. Their ambitious own-retail strategy will
also help them to further commercialize this success. In 2006, they will
further sharpen their market segmentation with exciting new concepts to
directly address today’s lifestyle consumer. Additionally, they will expand
their apparel offering and the distribution to directional accounts.

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Adidas Sport Style: Expanding the Power of the Brand
The adidas Sport Style division is entering its fourth year in 2006. At
adidas, they know that niche marketing is increasingly important and
that successful brands are those which can reach not only larger
audiences but also small and influential ones.

Their Y-3 collection, developed with designer Yohji Yamamoto, is helping

them extend the product appeal to cosmopolitan consumers who are
looking for exclusive, style-leading active sportswear products. The
collection is limited to fashion-oriented accounts in Europe, North
America and Asia. Influential designs combined with the highest quality
standards clearly distinguish Y-3 from any other product in the market.
With Y-3, the adidas brand has distinctly established itself as a design
leader in the industry. Yamamoto’s strong presence in this area allows
them to expand the power of the adidas brand to help reach out to
style setters and fashion industry visionaries.

Reebok International Ltd.

The Reebok Brand is a leading worldwide designer, developer, and

marketer of sports, fitness, and casual footwear, apparel, equipment and
accessories that combine the attributes of athletic performance and style.
Reebok Brand products are segmented into four brand groups:

Sport Fusion is about delivering innovation by combining athletic

performance and style into exciting new products for global youth.
Sport Performance is focused on leveraging our authenticity in sports and
fitness by developing products that enhance the performance of athletes
around the world.

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Sport Lifestyle builds upon the equity of our Classic and Women's
heritage to create new products that define and connect to the athletic
lifestyle trends of the world. Kids is focused on connecting the brand to
global youth and building an affinity with the next generation of consumers.

Reebok has exclusive partnerships with many of the top professional

sports leagues in the world, including the National Football League (NFL),
National Basketball Association (NBA), National Hockey League (NHL)
and Major League Baseball (MLB). Reebok has the exclusive rights to
manufacture, distribute and market official NFL, NHL and NBA products
and supplies the uniforms the NFL, NBA and the on-ice jerseys for the
NHL. Reebok also has the exclusive footwear rights to the MLB.

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In addition, through its acquisition of Montreal-based The Hockey
Company in 2004, Reebok is the world’s largest designer, manufacturer
and marketer of hockey equipment and related apparel under some of the
world’s most recognized hockey brand names: CCM, Jofa and Koho. In
2005, Reebok introduced Rbk Hockey, a new and exciting entry into the
hockey equipment and apparel market. Reebok is a world leader in the
design and innovation of skates, sticks, helmets, protective equipment
products and related apparel. Nearly every player in the National Hockey
League, as well as players in all other professional and amateur hockey
leagues, use Reebok products.

Reebok continues to expand its product scope through a strategic

licensing program, pursuant to which its technologies and/or trademarks
are licensed to third parties for fitness equipment, sporting goods,
accessories, sports and fitness videos and related products and services.

The Rockport Company designs, produces and distributes specially

engineered comfort footwear for men and women worldwide under the
ROCKPORT brand, as well as apparel and accessories through a
licensee. Rockport was founded by father and son Saul and Bruce Katz in
1971 and became the first company to use the platform and comfort of an
athletic shoe and incorporate it into a dress and casual shoe.

Drawing upon its heritage of engineered comfort and commitment to

innovation, Rockport designs footwear, apparel and accessories with
advanced technology, durability, quality, value and style. Products are
segmented into Performance, Casual, and Dress. Apparel is segmented

23
into Performance and Casual. Reebok International Ltd. acquired Rockport
in 1986.

Greg Norman Collection is a leading worldwide marketer and distributor

of men’s and women’s golf apparel and men’s sportswear targeting active,
sophisticated men and women aged 35-55. The Collection, inspired by one
of the world’s leading golf professionals, has become a complete lifestyle
brand.

The Greg Norman Collection reflects his adventurous spirit and elegant
style while capturing his enthusiasm for a unique design sensibility. In
addition to the golf and sportswear lines, the Collection also offers
accessories and corporate programs.

OnField is Reebok’s sports licensed operating unit that manages the

company’s sports licensed products and partnerships with the NFL, NBA,
WNBA, NBDL and IRL. With manufacturing facilities in both Mattapoisett,
Massachusetts and Indianapolis, Indiana, OnField is responsible for
manufacturing, distributing and marketing NFL and NBA products. Created
in March 2001, OnField’s mission is to redefine, redevelop and maximize
the long-term potential of the licensed properties.

TaylorMade-adidas Golf TaylorMade-adidas Golf, which changed the

game of golf by bringing the metalwood to the masses 27 years ago, today
enjoys the reputation as the number one driver brand in golf and strives to
continually extend its position as the best performance brand in golf. Yet
the organization’s success reaches far beyond that single category. Every
brand under the TaylorMade-adidas Golf umbrella is synonymous with
authenticity, innovation and quality, be it TaylorMade metalwoods, hybrids

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and irons, Rossa® putters, Maxfli® and Noodle® balls, or adidas Golf
footwear and apparel.

Adidas Golf Adidas Golf is the fastest-growing footwear and apparel

brand in golf, as a result of our steady commitment to developing great-
looking, great-feeling, performance-enhancing products that we view as
“equipment for the body”. This includes golf wear such as ClimaCool® for
warm weather comfort, Clima Compression for cool weather comfort and
ClimaProof® for all-weather comfort, and footwear such as Tour Metal,
Torsion® Euro, Driver Isabelle and the groundbreaking Tour 360. adidas
Golf apparel and footwear is the choice of athletes such as Sergio Garcia,
Sean O’Hair, Kerry Perry, Peter Lonard, Hidemichi Tanaka, Paula Creamer
and Natalie Gulbis. It is also favored by a growing number of dedicated
amateurs as sales of adidas Golf equipment rose significantly in 2005 for
the second year, and we expect continued success in 2006.

Maxfli In 2005, we saw the introduction of the BlackMAX®, a threepiece

urethane ball that combines tour-caliber spin and distance with a softer,
more satisfying sound and feel. The popular Noodle® franchise,
synonymous with “long-and-soft” performance, was reinvented in 2005 and
now consists of the original Noodle®, the Longest Noodle®, the Softest
Noodle® and Noodle Ice™.

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Brand Ambassadors

Adidas India Marketing Pvt. Ltd, had signed on footballer Baichung Bhutia
as one of its brand ambassadors.

The company's existing brand ambassadors include cricketers Sachin

Tendulkar, Virender Sehwag, Zaheer Khan and Ashish Nehra.

Bhutia has a `multi-year' contract with Adidas, a press release said.

According to the release, Bhutia will endorse the entire range of Adidas
products from sports footwear and apparel to accessories.

Adidas has held a long-standing tradition in the hip hop community,

starting with pioneers Run-D.M.C. to recently acquired spokesperson
Missy “Misdemeanor” Elliot.

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PUMA- Mission Statement

“To be the most desirable Sports lifestyle brand”

“To be the first truly virtual sports company”

Brand Strategy
Since setting the objective in 2002 of becoming the most desirable Sports
lifestyle brand in the world, PUMA has consistently focused on building its
brand through quality distribution. The elements of strict distribution,
innovative products and a strong dedication to the sports heritage are
fused into every item bearing the PUMA logo. Together with innovative
marketing campaigns that speak subtly rather than shout, and a tightly
monitored licensing program PUMA will continue its strategy of becoming
the most desirable Sports lifestyle brand.

Corporate Strategy
PUMA’s industry is one that does not pause. As a result of orienting their product
and marketing initiatives towards PUMA’s mission statement they have
established Sports lifestyle as a unique, lasting and trend-setting concept
in the marketplace. The current Phase III of the long-term development
plan focuses on ensuing PUMA’s longevity and establishing a strong basis
for sustained growth. By not reaping short-term gains at the expense of
long-term growth potential, PUMA continues to position itself as the leading
brand in the Sportlifestyle segment.

Regarded as the first truly virtual sports company, PUMA’s corporate

structure facilitates growth and rapid adoption of best practices. Their
strategically placed decentralized hubs have allowed them to create
competency centers close to areas where actions are carried out.

27
United with a strong investment in IT systems, they are driving down
development and lead-times in order to better service the target consumer
needs.

The company was founded in 1924 as Gebrüder Dassler Schuhfabrik in

Herzogenaurach, Germany by Rudolf Dassler, the brother of Adolf "Adi"
Dassler, who founded competitor adidas. The company now operates a
virtualized corporate structure, using electronic communications to
disperse the organization across the globe.

The company changed its name to PUMA Schuhfabrik Rudolf Dassler in

1948, and became a public company in 1986, listed on the Börse München
and Frankfurt Stock Exchange.

Today, PUMA AG has approximately 3,200 employees and distributes its

products in more than 80 countries. For the fiscal year 2003, the company
had a revenue of €1,274 million.

Like Adidas, Puma is considered part of the old school hip-hop and graffiti
culture of the 1970s and 1980s, and it remains very popular within that
culture to this day. It can also be noted that Puma owns a 65% market
share in sneakers to Mexican Americans in the male 12-25 age group.

Marketing
In 2003 PUMA’s global advertising campaigns aimed at communicating a
singular and unique message to their consumer base. Consistent with the
nature of the products, the images placed emphasis on subtle humor and
light discourse. Center stage in the second half of 2003, was PUMA’s
“Hello” campaign that strived to solidify the brand’s personality to a growing
consumer audience. The series, shot by famed photographer Jürgen Teller,

28
captures the subjects at innocent and unguarded moments that highlight
the playful exuberance of everyday life.

By sharing an intimate and candid moment, PUMA applauds self-discovery

and conveys a simple message without using overt advertising tactics as a
means of overpowering the audience. The soft product focus, and “Hello”
tagline aim to nurture an emotional bond through the use of fun and light-
hearted imagery and to establish PUMA’s openness as a brand.

In contrast, by marrying the elements of sport and fun, PUMA’s 4some

concept exemplified the company’s devotion to its strong sport heritage.
Held in six key cities across Europe, with a growing roster expected for
2004, 4some is a four-woman team based competition involving running,
swimming, cycling, and football. Communicated as a time to have fun,
learn and compete, 4some targeted the recreational female athlete who
regards physical health as only one element of well being.

Launched in June of 2003, PUMA’s football advertising campaign, “My

PUMAs,” features some of the sports most recognized names in a series
of TV and print ads that aim to commutate the powerful bond that is formed
between an athlete and their PUMA shoes. The ads are true to PUMA’s
underlying philosophy of mixing it up, by contrasting professional athletes
with sport inspired lifestyle product.

In celebration of the Women’s World Cup, and in continuation of the soccer

and Far East themes that began with the Cellerator Shudoh range, PUMA
developed Shudoh Tang, a limited-edition Sportslifestyle shoe.

29
The shoe, limited to 888 pairs sold out within hours and provided incredible
brand exposure through a stable of the world’s best and most charismatic
female players who wore the shoe during the tournament. Their
partnership with the Jamaican Athletics Association continues and
welcomed 2003 with a flying start via a massive brand campaign featuring
Jamaica’s unique blend of sport and lifestyle. From humorous print and TV
spots, to a brilliant debut in Paris at the IAAF World Championships we
showed the world yet another unique PUMA approach to sport. Through
global coverage and a strong television platform our campaigns have
continued to turn heads and provide a unique dimension to our brand’s
identity.

PUMA India

German sporting goods firm Puma planned to introduce a larger range of

products in India through its newly launched subsidiary Puma Sports India
Pvt Ltd. About 250 products in footwear, 200 in apparel and 100 in
accessories will be launched in the country, Puma said in a statement. The
products will be in line with its international range in sports, lifestyle and
fashion.

The products is made available at all different price points already

available in the market.

Puma has been selling in India for the past three years through multi-brand
retail stores supplied by its franchisee Planet Retail Holdings, known
earlier as Planet Sports India Pvt Ltd.

30
Earlier this year, India allowed 51 per cent foreign direct investment in
retailing by firms which sell only a single brand.Puma plans to open stores
in India with retail and wholesale partners and expects to open the first one
in the second quarter of 2006. Puma, known for its trademark leaping red
cat logo, expects India to account for a large part of its 875 million euro
($1.05 billion) revenue target from the Asia-Pacific region by 2010, he said.

Their phase-IV global plan is to become the most popular sports lifestyle
company in the world and India is part of that. They have a phased long-
term business plan which was kicked off in 1993.The first three phases
involved establishing a strong financial footing, improving brand equity and
generating growth.

Puma has benefited from its sports-lifestyle fashion thrust. To fight off Nike
and Adidas, which just bought US, rival Reebok, Puma plans to spend 500
million euros in the coming years to enter new markets and make
acquisitions.

Italia
Encompassing more than just on-the-field sporting goods, PUMA’s
partnership with Gli Azzurri and Barrett draws inspiration from the fact that
Italy personifies elegance and flair. As such, the collection mirrors Italian
style by establishing items appropriate for the divergent lifestyles of its
fans. Above all, Italia builds upon its predecessors – Cameroon and
Jamaica – delivering yet another creative punch by establishing the first
relationship of its kind, in which a single brand successfully meets the
differing needs of on and off the pitch attire.

31
Mahanuala
Created specifically for the physical practice of Yoga and other mind-body
sports, mahanuala offers an accessible alternative to PUMA’s nuala line.
Designed in cooperation with Christy Turlington, mahanuala encompasses
a complete collection of apparel, footwear and accessories that are crafted
from performance and natural fabrics. The collection, viewed as “clothes to
move in”, embodies the yoga lifestyle by providing users with flexibility and
comfort in a product that retains a feminine and refined touch.

Complete Running
PUMA’s Complete Series is the latest chapter in the company’s long
history of making high performance running products for the serious
athlete. Featuring PUMA’s innovative Cell Technology, which
simultaneously provides cushioning and support, the Complete Series
meets the needs of every runner, from the novice to the Olympic
champion. In 2004, the launch of duoCell, which builds upon the concepts
of Cell technology, will ensure that PUMA remains at the leading edge of
running performance.

At the focal point of the 2003 athletics year - the IAAF World
Championships in Paris - Complete products were instrumental at bringing
victory to Jamaica’s athletic team. A top finish was also captured in the
3000-meter steeplechase, and later in the year at the IAAF World Half
Marathon Championships. Tanzania won the team ranking by placing 3
athletes among the top 5 finishers. Additionally, product was showcased at
all the major marathons from New York to London, Boston, Berlin and
Paris.

32
PUMA Motorsport
Delving deeper into the world of professional motorsport, PUMA has
solidified its position as a leader in this dynamic field. Throughout the year
we enlarged our range of partnerships to encompass not only BMW
Williams and Mild Seven Renault in F1, but also Ford Team RS in Rally
Racing and AMG-Mercedes in the DTM German Touring Championships.
These additions, coupled with Travis Pastrana in Motocross, span F1,
Rally Racing and Touring Car, broaden the spectrum of disciplines that
PUMA competes in and have helped the brand establish credibility and
leadership in both the professional and lifestyle motorsport markets.

Success in the motorsport arena was not limited to our lifestyle collections
but also showed substantial spillover onto the racetracks and rally courses.
Sauber Petronas, Jordan and Ford Team RS enjoyed podium finishes and
provided excellent brand exposure as teams and crews are outfitted with
PUMA product. Especially in the field of motorsport the past twelve months
have shown that PUMA’s commitment to alternative sports and mixing the
influences of sport and fashion have been pivotal in developing new lines
of business.

Jamaica
Puma`s partnership with the Jamaican Athletics Association got off to a
flying start in 2003 when PUMA launched a massive brand campaign
featuring Jamaica’s unique blend of sport and lifestyle. From humorous
print and TV spots, to a grass-roots “assault” on Paris at the IAAF World
Championships that culminated in a wild reggae party attended by over
4,000 athletics fans, they showed the world yet another unique PUMA
approach to sport.

33
With the Summer Olympics on the calendar for 2004, showcasing
Jamaica’s legendary relay teams, the Jamaica story is just getting warmed
up.

Realizing that Jamaica’s potential lies in the young generation, PUMA’s

partnership with the Athletic Association reaches beyond the athletes du
jour. PUMA has committed itself to help develop talent in those with a
passion for athletic endeavours. To that end, we are a proud sponsor of the
Jamaican Development Program, which provides underprivileged,
promising athletes with footwear, equipment, training and other assistance,
allowing them to reach their fullest athletic potential.

Nuala
Now in its eighth season, nuala continues to exemplify PUMA’s trademark
fusion of fashion and sport. Inspired by the yoga lifestyle, nuala’s designs
are timeless, yet modern, and focus on achieving the ultimate synergy
between comfort and function. The collection embodies a subtle
sophistication that offers flexibility and freedom from traditional clothing
constraints, while incorporating only the best materials and craftsmanship.
Viewed as clothes to live in, nuala caters to the active woman and marks a
continuation of the long-standing partnership between Christy Turlington
and PUMA.

S+arck
PUMA’s most recent collaborative partnership with world-renowned
designer Philippe Starck explores new design directions, while
incorporating Starck’s minimalist design hallmark. By drawing on Starck’s
talent, the partnership brings together unapparent personalities to create
products that are strikingly modern, yet refreshingly simple.

34
Retail Initiatives
Via the continuation of our retail initiative and opening of additional stores
PUMA has taken a decisive step forward in the development of the brand.
Acting as both a laboratory for detecting consumer sentiment as well as an
established lifestyle resource, PUMA boutiques offer us an unparalleled
opportunity to showcase the brand as they see fit. Most importantly, their
boutiques provide them with an ideal setting for offering the hallmark
Sportlifestyle collection in its entirety.

Looking forward, PUMA’s retail strategy acknowledges that consumers

have a myriad of options when it comes to shopping, as such they are
strengthening their commitment to animating the experience and making
PUMA stores a destination in themselves. A refitting of select stores with
interactive displays, groundbreaking concepts, and even the namesake will
redefine what it means to shop.

S.A.F.E.
Recently updated, PUMA Perspectives report focuses on the company’s
continued commitment to sound and ethical environmental practices.
Expanding on its predecessor, Perspectives highlights the manner in which
corporate activities are founded on the belief that PUMA, as an
international player in the sporting goods industry, embraces its
responsibilities to establish equitable standards, sustainable practices and
most importantly improve the well being of all stakeholders.

35
Puma@Corporate Social Responsibility
As a testament to Puma`s dedication to the field of social and
environmental responsibility PUMA is proud to have been added to the
Kemper/SNS “Smaller Europe SRI (Social Responsibility Investment)
Index.” Commencing at the beginning of 2004, PUMA has joined the Fair
Labor Association (FLA). The FLA is an organization dedicated to the
improvement of working conditions worldwide. In establishing this
partnership PUMA has freely and willingly opened itself up to external
monitoring by independent and FLA accredited institutes. This step marks
a quantum leap in establishing transparency and accountability with regard
to their operations.

At PUMA they strongly believe that our financial success is hinged on our
ability to contribute positively to the environment in which we operate. By
investing in our relationships and surroundings we are paving the way for
long-term growth. As we have demonstrated in the past our goal of
becoming the most desirable sporlifestyle brand in the world is not
governed exclusively by financial considerations.

36
DATA ANALYSIS

37
 `Measurement of Customer Preferences`

Q1. Do you wear/ use sports goods and accessories?

Yes
No (please proceed to question 4)

Question 1

20%

Yes No

80%

Out of the total of 71 respondents, 20% said they did not use any kinds of
sports wear or goods. 80% however, used sports goods. Thus, we can
infer that the usage and acceptance of sports goods in Delhi & NCR is very
high. This however, cannot be generalized for a larger mass as the sample
size has been extracted from a particular region only.

38
If yes, which of the following do you possess?
Clothes
Accessories (sippers, wrist bands, deodorants, etc)
Shoes
Rackets, bats, hockey sticks, etc.

Question 1(A)

60
49
50
41
40 35
28
30

20

10

0
clothes access shoes rackets

From the above graph it is clear that shoes remain the most preferred
sports accessory. Clothes came in next with 41 respondents admitting to
own them.

39
Q2.Rank them(4-1) in order of your preference?(4 given to the most
preferred brand)
a. Nike
b. Adidas
c. Reebok
d. Puma

Question 2

45
40
35
30 Nike
25 Adidas
20 Reebok
15 Puma
10
5
0
1 2 3 4

In the light of the above question, Nike hails as the most preferred brand
with more than 2 respondents ranking it at 4. This is followed by Adidas at
3, Reebok and then puma.

This can also be verified from the secondary data that states Nike as world
no. 1, followed by Adidas and Reebok.

40
Q3.Do you go to your most preferred brand for all your sports goods
needs?
a. Yes
b. No

Question 3

28%

Yes
No

72%

It is evident from the above graph that most people flock to their most
preferred brand for all their sporting good needs. We could also infer from
this that brand loyalty does exist to some extent in this category. However,
only 28% said that they do not buy all their accessories from the same
brand. This could be tapped on to make more customers loyal and
committed to the brand.

41
Q4.What are the various factors that you’ll consider while choosing a
Sportswear/shoes Brand?

Because of its
a. Brand`s reputation & trust
b. High quality products
c. Variety in merchandise
d. Conveniently located stores
e. Well placed merchandise in the store-bright store
f. Brand`s personality in sync with your persona
g. Gives you a `high` being the proud owner of a high class brand.
h. Friendly sales people

Question 4

4% Brand reputation
14% 20%
Quality
Variety

12% Convenience
Well placed prdts
1% Brand personality
26%
8% A feeling of association

15% Friendly staff

42
The quality of the product remains the most sought of attribute for the
purchase of the product. Consumers also look at the variety offered by the
brand and the reputation, which in turn affects purchase.

This can also be supported by the fact that Nike’s reputation has led it to
become the number one brand.

Consumers also bought products because of the association it go with its

self. However, the survey did not reflect that well placed products and
friendly salesmen had a great affect on the purchase decision.

43
 ‘Need for customer service’

Q1. Do you think sports wear brands should have toll free numbers
(helplines) ?
a. Yes
b. No

Question 1

44% Yes

56% No

The result clearly indicates the people would want to make use of the toll
free number for various enquiries.

44
Q2. What type of a sports wear store do you prefer shopping at?
a. Self service
b. Sales force assisted

Question 2

Self service

51% 49%
Sales force
assisted

The above results indicate the need for a good sales force, which has, is
knowledgeable and friendly. And this again substantiates the need for a toll
free number as it also shows the inclination of the people to ask for
assistance.

45
Q3. Do you
a. Ask for advice from the sales people, as they know the product
b. Choose what you feel

Question 3

48%
52% a
b

The above results indicate that although people like choosing what they
feel like, but at the same time the need for the sales force assistance
cannot be ruled out.

46
Q4. If there were to be a help line number, would you use it?
a. Yes
b. No

Question 4

41%
Yes
No
59%

The above data clearly indicates the need for a toll free number for a
sportswear/shoes brand.

47
Q5. What would be the probable questions you’d want to get answers
to, in case there was a toll free number facility provided by the
sportswear/shoes companies ?
The answers were
 Where is the nearest outlet located?
 Price related questions
 Do factory outlets offer good quality?
 Is the quality worth spending on?
 Which is a better shopping option-malls or exclusive outlet?
 Durability of the product
 Exchange policy/return issues
 Which shoe would fit me the best?
 What effect does a particular shoe have on my body structure?
 Whether a particular shoe is available in my size?
 Where would it be available?
 If a particular product is out of stock when would it be available?
 When would the new collection be available?
 Which shoe type goes for which purpose?
 What kind of material do use for which purpose?
 If the design can be personalized
 Variety of the product in the same category?
 Discount offers
 Availability of sport specific shoes?
 Opening time of stores
 What is in?
 When is the end of season sale?
 Stain removal

48
  Shoe care/polish
Q6. What is your favourite pair of shoes?
a. Sandals
b. Flip flops
c. Floaters
d. Sneakers
e. Platforms
f. Boots
g. Formal shoes
h. Slipper
i. Other

Question 6

35

30

25

20

15

10

0
a b c d e f g

The above data indicates that people like sneakers and floaters the most
and then sandals and boots, which means these sportswear/shoes are
catering to the most lucrative market of the whole footwear market.

49
Q7.For what all purposes do you use sports goods?
a. Workout/exercise
b. Playing
c. Casual wear/club wear
d. All of the above

Question 7

45
40
35
30
25
20
15
10
5
0
Working out Playing Casual All of the above

So from the above analysis it is clear that sportswear /shoes are needed
more by people for the basic purpose of workout and exercise.

50
Q8. Where are you most likely to go shopping for sports goods?
a. A mall
b. The factory outlet
c. Assorted shoe store
d. Sporting goods store
e. Internet
f. Catalogue
g. Other

Question 8

0%
1% 0%
Mall
28%
36% Factory Outlet
Assorted Shoe Store
Sporting goods store
Internet
10% Catalogue
Other
25%

The results show that people like to go for various brands under one roof
i.e a mall. Then only if they have a specific need, they would go to a
particular sports goods store .The catalogue system is not much prevalent
yet in India, hence it is rated the least.

51
 CONCLUSION

After completing the analysis, we can conclude that brands like Reebok,
Nike, Adidas and Puma should look into opening a call centre. The
research reveals that there are a lot of querries that need to be answered.
Some times a lot of buyers are only in a mood of shopping and do not pay
heed to issues like stain removal, shoe care, etc. They pay attention to suh
issues only when the situation arises.

Also, it would only become more convenient for the buyers to get product
related information over the telephone. They would not have to travel all
the way to a store to see if a sale is on or if the product line has been
updated.

Thus, a toll free number can prove to be very beneficial to such companies
and can also lead to increased brand loyalty, since the customers can be
made to feel cared for all the time.

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