SUPPLY CHAIN OF REEBOK

Submitted to: Submitted by:Ms. Preeti Singh Sudhir ChauhanSenior faculty

marketing R.No: 160(Delhi business school) Sec. : C

dbs

Delhi Business SchoolB-II/M.C.I.E., Mathura Road, New DelhiWebsite:

www.dbs.edu.in

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ABSTRACT

I did my retail project on – ‘supply chain of Reebok. In India Reebok operates in cash
and carry format as it is not an Indian company.Reebok’s stores are specialty store.
Reebok deals with following productssport shoes, sport apparels. (Sun glasses,
Watches, Carry Bags, Sportkits) Reebok is in vertical integration it is having its on
manufacturingunits and retail outlets as well.The objective of the research was to
understand supply chain of Reebok and operation of Reebok retail stores in India.
The secondary objective of the research was to understand the factors influencing
consumer purchasein Reebok shoes and Reeboks’s performance on those
parameters. It wasfound that the promotion strategy and location of the store is the
mostimportant factors that drive purchase.In this project I studied about marketing
strategies adopted by Reebok inIndian market. Reebok India ltd uses an integrated
promotion tool,Reebok use advertisement, personal selling, sales promotion and
internetmarketing to promote its products. In India Reebok is having a strongsupply
chain and customers can find Reebok products easily in market.This project helped
me to get an experience of research and inunderstanding the various theories
of books which I understood from thereal business world. It gave me a chance of
implementing my bookishknowledge.

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INTRODUCTION TO REEBOK

Reebok is an American-inspired, global brand that creates and marketssports and

lifestyle products built upon a strong heritage and authenticityin sports, fitness and
women’s categories. The brand is committed todesigning products and marketing
programs that reflect creativity and thedesire to constantly challenge the status
quo.

REEBOK'S VISION

Fulfilling Potential

Reebok is dedicated to providing each and every athlete - fromprofessional athletes

to recreational runners to kids on the playground -with the opportunity, the
products, and the inspiration to achieve whatthey are capable of. We all have the
potential to do great things. As abrand, Reebok has the unique opportunity to help
consumers, athletes andartists, partners and employees fulfill their true potential
and reachheights they may have thought un-reachable.

REEBOK'S MISSION

Always Challenge and Lead through Creativity

At Reebok, we see the world a little differently and throughout our history have
made our mark when we’ve had the courage to challengeconvention. Reebok
creates products and marketing programs that reflectthe brand’s unlimited creative
potential.

REEBOK'S POSITIONING

Celebrate Individuality in Sport and Life

Reebok understands that people are, above all, unique. Reebok’s

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positioning reflects this; celebrating the distinct qualities that makepeople who they
are - their unique points of view, their individual styleand their remarkable talents
and accomplishments. Reebok celebratestheir individuality, their authenticity and
the courage it takes to forgetheir own path to greatness. While some may call them
crazy or eccentric,Reebok calls them visionary and original.

REEBOK'S PURPOSE

To Empower Global Youth to Fulfill their Potential

Commitment to Corporate Responsibility is an important legacy andhallmark of the

Reebok brand. For two decades, Human Rights, throughthe Reebok Human Rights
program, was the primary focus of this effort.Reebok has expanded on what had
been built and created a GlobalCorporate Citizenship platform with a purpose for
the brand that will helpunderprivileged, underserved youth around the world fulfill
their potential and live healthy, active lives.

REEBOK'S BRAND TERRITORY

Having Fun Staying in Shape

Having Fun Staying in Shape comes to life through a fun, bold,provocative manner
expressed through fresh, eye catching imagerysigned off with a unique 'Reeword.'
The tone and manner allows theconsumer to look at sport and lifestyle through our
lens of 'Ree.'

Brands

Reebok International

Rock Port

RBK CCM Hockey (World’s largest)


Greg Norman Apparel

Ralph Lauren Brand

The Hockey Company

Avia

Onfield Apparel

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

Athletic footwear

DMX2000

3D Ultralite

Ralph Lauren Apparel line

PRODUCTS

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6
HISTORY OF REEBOK

1890-1930'sJ.W. Foster and Spikes of Fire

Reebok's United Kingdom-based ancestor company was founded for oneof the best
reasons possible: athletes wanted to run faster. So, in the1890s, Joseph William
Foster made some of the first known runningshoes with spikes in them. By 1895, he
was in business making shoes byhand for top runners; and before long his fledgling
company, J.W. Foster and Sons, developed an international clientele of distinguished
athletes.The family-owned business proudly made the running shoes worn in
the1924 Summer Games by the athletes celebrated in the film "Chariots
of Fire.1950-1980A Gazelle Named Reebok, A Company on the MoveIn 1958, two of
the founder's grandsons started a companion companythat came to be known as
Reebok, named for an African gazelle. In 1979,Paul Fireman, a partner in an outdoor
sporting goods distributorship,spotted Reebok shoes at an international trade show.
He negotiated for the North American distribution license and introduced three
runningshoes in the U.S. that year. At $60, they were the most expensiverunning
shoes on the market.

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1980's

By 1981, Reebok's sales exceeded $1.5 million, but a dramaticmove was planned
for the next year. In 1982, Reebok introducedthe first athletic shoe designed
especially for women; a shoe for ahot new fitness exercise called aerobic dance.In
the midst of surging sales in 1985, Reebok completed its initialpublic offering (stock
symbol is NYSE: RBK). In the late 1980s,Reebok began an aggressive expansion into
overseas markets andReebok products are now available in more than 170
countries andare sold through a network of independent and Reebok-
owneddistributors.

1990's

In 1992, Reebok began a transition from a company identifiedprincipally with fitness

and exercise to one equally involved insports by creating several new footwear and
apparel products for football, baseball, soccer, track and field and other sports.
Thatsame year, Reebok began its partnership with golfer Greg Norman,resulting in
the creation of The Greg Norman Collection.

2000

In 2000, Reebok and the National Football League announced anexclusive

partnership that serves as a foundation of the NFL’sconsumer products business.
The NFL granted a long-termexclusive license to Reebok beginning in the 2002 NFL
season tomanufacture, market and sell NFL licensed merchandise for all 32NFL
teams. The license includes on-field uniforms, sidelineapparel, practice apparel and
an NFL-branded footwear and apparelcollection.

2001

In 2001, Reebok formed a long-term strategic partnership with theNational

Basketball Association under which Reebok designs,manufactures, sells and
markets licensed merchandise for theNBA, the Women’s National Basketball
Association (WNBA) andthe National Basketball Development League (NBDL), the
NBA’sminor league. Reebok also had exclusive rights, with limitedexceptions, to
design, manufacture, market and sell headwear, T-shirts, fleece and other apparel
products for all teams in mostchannels of distributions. In 2006, Reebok transferred
the NBArights to the adidas Brand.

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2002

In 2002, Reebok launched Rbk – a collection of street-inspiredfootwear and apparel

hook-ups designed for the young man andwoman who demand and expect the style
of their gear to reflect theattitude of their lives: cool and edgy, authentic and
aspirational.Inspired by street fashion, Rbk’s marketing is culturally relevant aswell.

2003

2003 was a landmark year for Rbk. Reebok formed anunprecedented partnership
with rap musician Jay-Z, whichincluded the design and marketing of the "S. Carter
Collection byRbk," which launched in April. With the partnership, Jay-Z becamethe
first non-athlete to have a signature athletic footwear collection.

2004

In 2004, Reebok became the world’s leading producer of hockeyapparel and

equipment with its acquisition of The HockeyCompany. The Hockey Company’s
brands, CCM, Koho and Jofa,are among the most respected in the sport.Reebok has
a long-term licensing agreement with the NationalHockey League, under which the
company serves as the supplier of authentic “on-ice” game jerseys to all 30 NHL
teams.

2005

In early 2005, Reebok launched Rbk Hockey, a new and innovativeline of ultra-high
performance hockey equipment, sticks and skatesand signed hockey phenom
Sidney Crosby, who has lived up to hisbilling as the league’s next great player. In
two short years, Rbk Hockey has become one of the most visible and in-demand
hockeybrands on the market.In 2005, Reebok launched its largest global integrated
marketingand advertising campaign in nearly a decade. "I Am What I Am" isa multi-
faceted campaign which links all of the brand's marketingand advertising efforts
under the "I Am What I Am" umbrella.

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2006

In January 2006

, adidas-Salomon AG acquired Reebok,

forever altering the worldwide sporting goods industry landscape. Firemangot his
start working for his family's fishing tackle business. He’ssold fitness giant Reebok
to Adidas for $3.8 billion .Shortly after the close of the acquisition, Reebok Chairman
and CEO PaulFireman announced he was leaving the company to pursue
other interests, and Paul Harrington was named President and CEO of the Reebok
brand.

2007Reebok launched Run Easy, one of the most comprehensiverunning campaigns

in the brand’s history. The goal of thecampaign was to inspire consumers around
the world to fulfill their potential and celebrate their individuality.In addition,
Reebok's partnership with the National Hockey Leaguetook center stage with the
unveiling the Rbk Edge UniformSystem, a complete, team-wide redesign and re-
engineering of theNHL uniform, and the opening of the NHL Powered by Rbk
retailstore in New York City.

Reebok also launched its "There are Two People in Everyone"marketing campaign
for the second half of 2007 in select regions.The campaign, featuring international
sport stars such as AllenIverson, Yao Ming, MS Dohni and Nicole Vaidisova, declared
thatthere is more to an athlete than his or her sport.

2008

Reebok’s global marketing campaign, ‘Your Move’ launched inMarch of 2008 and
evolved Reebok’s positioning as the brand thatcelebrates individuality and supports
those who choose to do thingstheir way.

In the summer of 2008, Reebok and driving ace Lewis Hamiltonannounced a multi-
year partnership at a spectacular 3-D event inAmsterdam, home of Reebok’s
European Headquarters.

2009
In February 2009, Reebok launched the Jukari Fit to Fly workout, thefirst in a series
of initiatives to come out of a new, long-term partnershipwith Cirque du Soleil. Jukari
Fit to Fly makes fitness fun again byintroducing a new way to move.Also in 2009,
Reebok made a pledge to tone the butts and legs of womenaround the world with
its innovative EasyTone footwear.

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Logo Development

A.B.C.

OUR SUPPLY CHAIN

The majority of Reebok products are manufactured in approximately

724independently-owned and operated factories around the world. Thesefactories
employ more than half a million workers.A factory is defined as a manufacturing
facility that: cuts, sews, screen-prints, embroiders dyes, outsole
placement/injection, stock-fits, andwashes, assembles, or packages at a primary or
subcontract facility.

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SUPPLIER RELATIONSHIPS

There are three main types of commercial relationships:

Direct relationships with contract factories

We contract directly withsome factories. These direct relationships account for 28%
of apparel and95% of footwear production by volume/spend. These factories are
oftenpart of a large company with factories in several locations. The Reebok country
office in each location oversees this manufacturing.

Sourcing through agents

Some orders are placed through agents, whoselect the factories subject to our
approval. Most of our apparelmanufacturing in Asia is purchased through agents. In
footwear manufacturing most orders are placed directly, but we also work withthree
agents.

Subcontract factories

Occasionally factories may subcontract parts of anorder to another factory.

Reebok has classified its retail stores in following three categories

A store

deals with new products and normally these stores do not provideany discount on
products as the products are new in market. In IndiaReebok is having 30 % of

type stores.

B store

deals with only old products which they get from the franchiseesafter a poor
demand of these products. B stores sales those products on ahigher discount rate.
Reebok is having 10 % of B stores in India.

A plus B store

deals with both new and old products, thus it is acombination of A and B. in India
Reebok is having 60% A plus B stores.

WHERE ARE OUR SUPPLIERS?

Footwear

Reebok uses footwear factories in 14 countries. Most factoriesmaking Reebok

footwear are based in Asia—primarily China (accountingfor 51% of total footwear
production), Indonesia (21%), Vietnam (17%)and Thailand (7%). Production is
consolidated, with 88% of Reebok footwear manufactured in 11 factories, employing
over 75,000 workers.

Apparel

Our apparel supply chain is larger, with factories in 45countries. The process of
purchasing products from suppliers is organized

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by region. Most (52%) of our apparel sold in the US is produced in Asia,with the rest
coming from countries in the Caribbean, North America,Africa and the Middle East.
Apparel sold in Europe is typically sourcedfrom Asia and Europe. Apparel sold in the
Asia Pacific region is typicallyproduced by Asian-based manufacturers.

FACTORY LIST

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15
MAJOR PLAYERS IN THE INDUSTRY

Nike

Bata

Puma

Relaxeo

Lotto

Fila

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Volume of purchase (for all members)

Volume of purchase is mainly depends on demand forecasted for thegiven period of

time. Demand for shoes varies from store to due to thefactors influence the demand
like location, sales persons, and storeambiance etc. Usually Franchisees owners
purchase 10 to 20 percentmore than the projected demand for the shoes. Quantity
purchase is alsoinfluenced by the funds available to the store owner.

Demand forecasting methods

Reebok use time series forecasting method for forecast the futuredemand. In time
series forecasting method they use exponentialsmoothing method to see the effect
of other factors on demand.The

exponential smoothing

is an averaging method that reacts morestrongly to recent changes in demand by

assigning a smoothing constantto the most recent data more strongly; useful if
recent changes in data arethe results of actual change (e.g., seasonal pattern)
instead of just randomfluctuations.Demand forecasting for the franchisees done by
the Reebok India ltd bythe above method.

Stock replenishment cycle and methods

Stock is purchased on the basis of demand forecasted for the givenseason. As the
Reebok distributors’ warehouses are not so far from thestore in Delhi, it takes less
time to transport the goods to stores so thestore owners maintain the inventory as
convenient to them.

Budget allocation

Reebok allocates a big amount to its advertisement campaign becausethere is

strong competition with Nike and puma. Reebok is a well knownglobal brand and on
the way to achieve the highest position in sport shoesindustry. Reebok spends
about $215 million in its advertisements.Reebok spends 22% in TV broadcast, 20%
on news paper, 5% oninternet, 8% 0n radio, 12% customer magazine, 15% direct
mail, 8% onyellow pages, 4% business publication, 6%on others of its
promotionalbudget.

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Promotional schemes

After the acquisition of Reebok by Adidas they were in the head lines of TV news
and news papers. This creates awareness among people free of cost for a Reebok
and Adidas. It also creates a strong perception incustomers mind.Reebok is using
integrated promotion tools. Reebok is having a goodbrand value in India. Reebok is
in top companies providing comfortablesport shoes and apparels.Reebok is using
famous sports players and actors (M.S. DHONI,YUVRAJ SINGH, and BIPASA
BASU) in its advertisements. Reebok ismanly use TV and Print media for its
advertisements.In sales promotion Reebok provides discounts on its shoes and also
usethe scheme of giving free gifts or products on higher purchase.Reebok also
sponsored the events and games to create awareness amongmass peoples. Reebok
use internet marketing to sale and promote itsshoes as well.

How goods are transported between the supply chains

In supply chain the retailer order the required quantity to the distributor and it is the
responsibility of distributor to transport the product to thestore location. But when
distributors purchase the stock from Reebok India ltd it is again responsibility of
distributors to transport the stock from Reebok warehouse to own warehouse or
store.

Display decisions

A retail display is a merchandising display that attractively showcaseshop inventory

or featured products. An immense number of products inthe retail market are
competing for attention. And the offer of newproduct seems to increase day by day.
It’s good to know that at least 60%of purchases are decided right in the store,In
display decision manly new and highly demanded products arehighlighted in store.
As the demand and trend change the location of products in store also change.
Retailers display the products in suchmanner that influence the buying decision of
the customers.Right choice of retail display and retail space design will help
storeowners to differentiate from other stores and persuade shoppers to comein,
stay longer and come back.

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Total sales and profits from shoes

Total sale of shoe for a month varies from 3.5 lacks to 6 lacks.A franchise owner of
Reebok gets 20 percent of profit on M.R.P. of theshoes. In this 20percentage he can
offer 5% to the customer at the time of bargaining to make the sale. So a shoes pair
of 6000 M.R.P. he gets in4800.After paying the expenses of stores like electricity
bill, sales personssalary etc remaining is the net profit for the store owner.Thus the
net profit for the owner varies from 38,000 to 65,000 per month.

Competitors’ analysis

Reebok faced primary competition from industry leader NIKE, after Nikepuma is also
a strong competitor of Reebok in shoe industry.Adidas’ acquisition of Reebok
developed increased opportunities toachieve competitive advantage through
branding. The Reebok brand alsogain sustainable competitive advantage through
increased brandrecognition. Globally, Reebok will benefit greatly from
Adidas’distribution around the world.Combined R&D helped speed development of
cutting edge technologies,an important feature of the increasingly fast paced
industry. Expeditedresearch developed higher consumer demand for innovation
across allbrands, putting pressure on Nike’s R&D capabilities.

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SWOT ANALYSIS

Strength:-

Size & strong brand awareness and perception.

Wide range of celebrity associated sponsorship

It's strong position in the women's sector

Research and development

Marketing

Weaknesses:-

Too much reliance on retail stores to sell products.

poor employment practices at overseas manufacturing sites

High % of upper management turnover

Dependency on Footwear sales

Opportunities:-

Emergence of more Sporting events


Women’s Marketplace

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

College/Pro Sports

Reebok is also leveraging the digital space to control distributionand build direct
consumer

Broaden market expected from convergence of broadcasting,telecom and

entertainment industry (reality shows)

Threats:-

Strong competition.

Rising price of row material

Chinese products

Global/Domestic Economies

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CONCLUSION

From the field-study conducted at the Reebok showroom located at shinebag , Srita
Vihar, New Delhi I was able to conclude that people buyReebok products mostly
because of comfort and they mostly go for thequality & brand value of the product.
The ‘after-sales’ service providedalso acts as a factor for the purchase decision.The
product quality & comfort along with style & promotional strategiesof using sports
celebrities as their endorser has helped Reebok gain thesignificant market share.We
conclude sustainable competitive advantage will be achieved relativeto Nike,
especially in regards to increased branding. However, Adidas-Reebok will not
achieve a higher market share over Nike immediately,due to the length of time
branding requires. After analyzing financialstatements from all three companies, as
well as conducting severalanalyses, including the industry, customers, competitors,
and marketingstrategies, it is clear to us that Adidas-Reebok strategically will
bepositioned better than Nike.

REFERENCES

Internet:

www.google,comwww.Reebok.comwww.wikipedia.orgwww.scribd.com

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Books:

Philip Kotler Principles of MarketingKotler Marketing ManagementPryank Azad retail

Management

Questionnaire

QUESTIONNAIRE FOR RETAILERSName :Mob. No. :

1.

How many customers you have in a day?

2.

What type of shoes do they prefer?

3.

What is the pries range of your products?

4.

Do they ask for other brand?

5.

How much units you purchase in a month?

6.

How much units get sold from them?

7.

How you forecast the demand?

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8.

What role do you play after the sales?

9.

According to you who are the main competitor of Reebok?

a.

a) Organized market b) unorganized

10.

What suggestions would you like to give to Reebok?SignatureThank you for

spending your precious time answering this Questionnaire.

QUESTIONNAIRE FOR CUSTOMERS

Name :Mob. No. :1.

Do you prefer branded products?a) Yes b) No c) Not often

2.

Have you ever visited Reebok outlet?a) Yes b) No

3.

Do you feel Reebok shoes are easily available in the Market?a)Yes b) No

4.

Which motivates you to go for Reebok?a) Brand image b) quality c) price d)

comfort e) others

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5.

How do you gather information about Reebok?

a.

Family& friend b) advertisementc) Personal experience d) Impulse purchase

e) others

6.

Which of these factors affect your purchase decision?

a.

Assortment b) Brand name

b.

Quality d) Ambience

7.

What do you think of product after purchase? [Post purchasebehavior].

a.

Good b) Excellentc) Satisfactory d) poor

8.

Which one you will prefer?a) Reebok b) Nike c) Puma d) woodland e) other

9.

Whether you are a frequent user of the product.

a)

Often b) occasionalc) Not a user d) never heard of.

10.

How would you rate Reebok?

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a) 1 b) 2 c) 3 d) 4 e) 5

11.

What suggestions would you like to give for

Reebok? SignatureThank you for spending your precious time answering this
Questionnaire.

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Questions & Comments

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