SPORTS BRANDS IN BRAZIL A STRATEGIC FOCUS 2011 www.gsnsports.com.

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PRESENTATION

In order to generate an overview of sports brands presence in the Brazilian market the research SPORTS BRANDS IN BRAZIL: A STRATEGIC APPROACH 2011 includes a brief analysis of performances, strategies, positioning and actions related to key players in the segment.

Copyright Global Sports Network (GSN) 2011 Frederico Mandelli Guaragna Business Intelligence Manager JUNE 2011

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Adidas has posted an average double-digit growth in Latin America and will focus its marketing efforts in World Cup and Olympic sponsorship activation to increase revenues in Brazil. The group expectation is to increase its national market share - currently 20% - and achieve a turnover of U.S. $ 700 million in the country until 2014 - which would result in an increase of 5% to 8.5% on the Brazilian representativeness market in German brands total global revenue.

Within a bold position Adidas aims to improve communication with young people thereby justifying its greater attention on investments in social media.

NIKE HAS PLAN TO 2014-2016

In contrast Nike also provides marketing strategy based on increasing sport consumption trends before plan the mega events happening in Brazil. Sponsor of the Brazilian Soccer Team the U.S. brand will have a privileged position in the 2014 World Cup and is already studying the possibility of supporting some form of confederation to be present at the Olympic Games.

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Believing in the potential of the Brazilian market - representing 21% of revenues in Latin America - Nike bets on promising segments such as "running" and extreme sports "Nike 6.0" to win the leadership.

After learning during start up operational Puma is considered solidified in Brazil. Occupying the third spot in the global sporting competition the Italian brand had rapid penetration in the Brazilian market through its differentiated positioning fashionable sportswear. Consolidated the original objectives Puma turns marketer with the challenge of becoming more accessible to gain market share without compromising the ideals of the brand.

Weakened internationally after its sale to Adidas Reebok remains strong in Brazil with a share of 15%. This fact is consistent with its presence in domestic football - currently the only brand provides material for the Premier League teams and Australian but the goal should continue to be female audience. Umbro already acquired by Nike has slowly loses visibility focusing on developing high technology products mainly in football.

ITALIAN BRANDS WEAKENED

If the British brands have remained in operation after being built by Germans and Americans the Italian manufacturers seek to reinvent themselves for not having the same fate.

The Diadora which had already applied for bankruptcy and was acquired by GEOX continues its global challenge of rejuvenating the brand and product portfolio review with indecision on how to add technology to the segment of sports fashion.

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FILA QUALIFY ITS PRODUCT MIX

Prestigious brands in Italy Kappa and Lotto have difficulties in following the development of the Brazilian market since the financial capacity constraints that prevent larger investments in marketing, research and development - key to local competitiveness which also does not run with the Italian Fila . A strategy to qualify its products and thus increase prices gradually yielding results for the Italian group which trades on average more than 2.2 million pairs of shoes and making almost $130 million annually in Brazil. www.gsnsports.com.br

JAPANESE TECHNOLOGY

Innovation in conjunction with a business based on marketing activities direction of aimed to meet specific niches can be an effective alternative to the definitive consolidation of a mark in the industry. In this sense there are examples of success from one of the largest global technological poles - Japan.

With a policy of continuous investment in research and products development Japan's Mizuno and Asics have managed to create an identity strongly linked to the public by constantly running articles launches high performance.

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MARKET FOCUS AND DIRECTION

The focus will allow Mizuno and Asics both remain as leaders in this segment despite the change to a more aggressive competitive posture of Nike, Adidas and Olympikus in running mainly targeting Brazil. Already the U.S. Speedo not turn away from its core business and concentrating its activities only in aquatics now with greater participation of the Italian Arena.

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The heating of the Brazilian economy stimulates new players entry in order to increase revenue and reduce negative impact that European crisis is affecting businesses. However the lack of knowledge of Brazilian market peculiarities - particularly as regards the logistics and distribution - has been an impediment to the entrants.

Even in Latin American Joma and Mitre have not found an efficient way of operation as Arena, New Balance, Saucony, Ironman, Babolat, Avia are on the business sustainability in the country surpassed process by Spalding and Wilson in the past decade.

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BRAZILIAN BRANDS REINVENT ITSELF

While the market came with the harassment of foreign brands in the country the Brazilian manufacturers find ways to ensure competitiveness in the segment are reinventing themselves. Investment technologists, product development and media are vital for sustaining the local operation.

Nevertheless, pressured by international players the Brazilian sports brands enhance its competitiveness in foreign trade primarily in Latin America considered the second largest market in the continent.

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TECHNOLOGICAL IMPROVEMENT

Isolated leader in sports footwear market in the country Olympikus continues to pursue strategic planning for technological improvement of its product line to raise the brand status in consumer perception. Heavy investment in sports sponsorships, media advertising - currently Olympikus is the largest advertiser in its segment - and at points of sale complement the marketing plan to make the impressive Brazilian brand in Brazil and Latin America.

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Since these guidelines were drawn by Vulcabrs - current manufacturer - Olympikus's revenues growing an average of 12%. In 2010 the brand has achieved a turnover of $750 million - to include foreign markets -. The models innovations success like Jet Tub and Zomax contributed to an increase of 74% of net sales in the last four years - now accounted for 17 million pairs of shoes sold annually. The central positioning in high technology results in a significant increase in the average selling price of the shoes Olympikus retail.

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REBORN, REBUILD A BRAND VALUE

Traditional in the market Topper and Penalty identified the need for a new visual identity as a way to communicate new positioning. Both banking on expanding the range of sports footwear, equipment and supplies, expanding its products portfolio to different modalities. Investments in creative campaigns whose bid valuation of brands "really" national aims to establish emotional connections with the public and aggressive pricing strategies are adopted by Topper and efficient Penalty in the face of fierce competition in the domestic market.

Focus on global expansion - exports to 80 countries - Topper has joined its operations in Mercosul and looking to enhance capabilities and improve-commercial area. In Argentina the manufacturer is a leader in its segment with 32% market share while in Brazil despite being released 36 years ago does not exceed 7%. With a sports sponsorship policy investment aligned with strategic objectives Topper managed to increase sales by 15% in Latin America last year.

EXPANSION TO LATIN AMERICA

For Olympikus the decision to explore Argentinean market in is one of the preparatory steps for ambitious planning towards brand internationalization in North American soil. In just three years of operation in the neighboring country, Olympikus already has 5% market share and as Penalty and Topper aimed much of its marketing dollars to activation campaigns in the sports environment.
Penalty already decided to increase its manufacturing capacity in Argentina and open office in Spain on the opportunities in the industry. Currently revenue from exports to 18 countries represents 27% of total sales of the brand belonging to the group Cambuci.

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DOING BUSINESS WITH BRAZIL

The GSN provides consulting solutions in several areas important to the effective entry of its brand in Brazil such as:

Business Plan

Strategic Plan

Trading

Sales Strategy

Market Research

Logistics & Market Research Distribution

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Centro Empresarial CittAmrica Av. das Amricas 700 - Bl. 6 - Sl. 228/234 Barra da Tijuca - Rio de Janeiro - RJ (55) 21-2495-1716 gsnsports@gsnsports.com.br Frederico Mandelli - fredericomandelli@gnsports.com.br

@gsnsports

Mdia Esportiva I Gesto Esportiva I Marketing Esportivo I Gesto de Carreira