Final Report Marketing MIX (NIKE V Adidas) PDF

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Report marketing on Nike vs Adidas...

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UNIVERSITI TEKNOLOGI MARA (UiTM) CAWANGAN MELAKA KAMPUS BANDARAYA MELAKA

OKTOBER 2020 – FEBRUARI 2021

MKT420 PRINCIPLE AND PRACTICE OF MARKETING

REPORT AND PRESENTATION MARKETING MIX (NIKE VS ADIDAS)

PREPARED BY : NAME: NUR ZAFIERA BINTI MAHAT AMIRA NURFARHANIS BINTI JAMALUDIN NURAIN MOHD YUSNI NURHAMI MAISARAH BINTI MUZAFFAR NURUL NADIRAH BINTI ABDUL RAZAK MUHAMMAD HAZIQ IMRAN BIN MOHD ZAINI

STUDENT ID: 2020872794 2020819212 2020618038 2020828446 2020846976 2020490198

REVIEWED BY: MADAM NUR SYUHADA BINTI MUHAMMAD

CLASS: BA2461A BA2461A BA2461A BA2461A BA2461A BA2461A

Table of Contents ACKNOWLEDGMENT......................................................................1 INTRODUCTION................................................................................2 1.0 COMPARISON OF THE MARKETING MIX (4P’S)..................4 1.1 PRODUCT......................................................................................4 1.2 PRICE.............................................................................................4 1.3 PLACE............................................................................................5 2.0 DIFFERENCE BETWEEN THE ONLINE PLATFORM.............7 3.0 CONCLUSION..............................................................................8 REFERENCES.....................................................................................9

ACKNOWLEDGMENT Firstly, Alhamdulilah. Thank you to Allah swt, who with His will allow us to complete our marketing assignment. Our gratitude and respect go to our lecturer, Madam Nur Syuhada Binti Muhammad for helping and guide us through this challenging route. Special thanks to our family and friends who gave us the spirit to succeed through this journey. The discussion we have with countless time is most of the precious moment until we made to finish this together. Finally, thank you for all the supports emotionally and financially from people around us.

INTRODUCTION Good marketing contains product, price, place, and promotion. These are essential elements that must be present to effectively promote a brand's unique value and help it stand out from the competition. Product refers to any item to satisfy the needs and wants of a target customer. It can be a tangible item, such as clothing items or intangible items, like a service. Product is everything that is made by the company to the target market. Price is the amount of money the customer must pay to obtain the product. It is the most important element in the marketing mix. Price did not only mean about monetary or a value of a product, it also means time or effort made by the customer as they are willing to expend to acquire the product. Place includes the activities of companies that provide a product to market to the consumers. It provides customers to access the product easily. In marketing, we need to come to the customer rather than they come to us. Lastly, promotion refers to the value of the product and to persuade the customer to buy it. An effective promotional effort contains a clear message that is targeted to a certain audience and is done through appropriate channels.

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1. BACKGROUND OF THE COMPANY (NIKE & ADIDAS) ADIDAS Adolf Dassler designed his first pair of athletic shoes in 1925 in a small German village. In 1949, he had set up his own company, called Adidas, and made three stripes that now marked the company's special shoes and clothing. Since its launch in 1995, Adidas has been the No.2 shoe company worldwide and had been operating in most countries. The main offers given by Adidas include shoes and clothing for sports such as football, basketball, and hockey, along with golf clothing. NIKE Bill Bowerman founded Blur Ribbon Sports in 1964 and became Nike Inc. in 1972, headquartered in Beaverton, Oregon. The founder [ CITATION The19 \l 1033 ]was Bill Bowerman is a track-and-field coach at the University of Oregon, and his former student, Phil Knight. Their first retail outlet was opened in 1966 and launched the brand Nike shoe brand in 1972. By the early 21st century, Nike had retail outlets distributors in more than 170 countries, and its logo, a curved check mark called the "swoosh" had been recognized. In the year 1996, the company created Nike ACG (all-conditions gear), which markets products for extreme sports such as snowboarding and mountain biking. In the early 21 st, Nike began selling sports-technology accessories such as portable heart-rate monitors and high-altitude wrist compasses.

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1.0 COMPARISON OF THE MARKETING MIX (4P’S) 1.1 PRODUCT

Nike and Adidas were in the same category and both of them were top brands of sport, however, they have different from their product. Adidas was frequently used for a soccer or tennis player because they have better shock absorption. Meanwhile, Nike was familiar with a person who loves basketball and running due to their light technology of shoes that help them to move comfortably in a long distance.[ CITATION cla19 \l 17417 ] Compared to Nike, Adidas produces four times product more than Nike. It has 2625 product than Nike which only produce 643 sports products.[ CITATION Tonil \l 17417 ]. Because of this, Adidas has higher productivity than Nike. Nonetheless, Adidas product was known for comfortable shoes as they used boost technology that using thermoplastic polyurethane (TPU) which makes their product ultra-convenience because it is compressed under pressure for better shock absorption.[ CITATION Mel17 \l 17417 ] In 2012, Nike produced an inner cushioning and midsoles it’s their product.[ CITATION Kei13 \l 17417 ] By this, Nike managed to catch up with Adidas' technology. Besides, Adidas slows in the newest trend compared to Nike because they focus on producing products that nature friendly. For example, Adidas cooperates with Parley which used recycled polyester in their shoes such as Edge Lux 4 Primeblue shoes for protecting the oceans by end plastic waste.[ CITATION Adi20 \l 17417 ]

1.2 PRICE For pricing, Nike Inc always sets the price according to the estimated value of the product. Two pricing strategies are applied in Nike Inc that is value-based pricing strategy and premium pricing strategy. In value-based pricing strategy, the company will look at the perception of the customer to understand the value of the product. This value is determined by the maximum price that consumers are willing to pay for the company’s products (MBA Skool Team, 2020). Using this pricing strategy, it is easier for the company to increase sales and company profit. The second strategy is premium pricing strategy. The company will use a 4

high price for high-quality products. One of the ways to use this strategy is collaborating with celebrities or another premium brand like Nike x Kanye West or Nike x Dior (Lawrence Gregory, 2018). The image of the brand will make consumers stay to buy the product and support this premium price. As for Adidas, there are three pricing strategies that the company used which is skimming pricing, competitive pricing, and high low pricing strategy. Skimming pricing is where the new product is unique and advanced introduced in the market. The product that usually uses skimming price is Adidas clothes and the price is high because of the brand equity in the market (Heartofcodes, 2018). Target customers are upper-middle-class and upper-class customers. The next strategy is competitive pricing, the company will use competitors such as Nike and Puma in setting up a price (Bhasin, 2018). This type of pricing usually uses to introduces regular products. The last strategy is the high low pricing strategy, the company offers promotional discounts by offering lower and attractive prices. Sales will increase due to the big demand from buyers (Abhijeet Pratap, 2017).

1.3 PLACE Retail outlets are the most important locations at which Nike products are available since they are strategically placed and available to diverse markets worldwide (M.Shahbandeh, 2020). To maximize its brand, Nike continues to develop retail alliances and they are mainly dedicated to open more shops such as Nike's online shop in more markets in more than 45 countries. North America is the biggest market for Nike because they are originally from United States of America [ CITATION Jos19 \l 17417 ]. Nike has founded 40 retail partners, including online eCommerce players and physical stores, such as JD Sports and Amazon who provide the best access to their target consumers and who can bring best-practice consumer service to the brand, including exclusive and more marketing dollars [ CITATION Pam18 \l 17417 ] While Adidas is more concentrated on placing at a profitable place (Department, 2020). Adidas has more facilities in Europe. This is because Adidas is from Germany and the largest manufactured shoes in Europe (Adidas, 2020). Adidas believes that factors like cities and open source will drive their brand's desirability. They are designing individual styles for major cities like Tokyo, New York, and London. It also includes updating its stores to produce a more quality shopping experience. Adidas also continues to introduce products 5

developed in collaboration with athletes and high-profile designers such as Beyonce and Lionel Messi. Compared to Nike, Adidas is facing a supply chain issue that causing a big problem to their sales growth. This problem starts when their suppliers in Asia have not been able to keep up, especially as the company has expanded from high-end products into more mid-priced clothing ranges in the U.S. market. Adidas also had focused on a short-term trend for fashion shoes in Europe too much. So, in recovering the loss, Adidas has put a big focus on the U.S. market in recent years [ CITATION Emm19 \l 17417 ]. For Adidas, their main market is west Europe.

1.4 PROMOTION Nike depends on the effective promotion of its products to maintain a strong brand image. Nike's doing promotional activities through digital marketing which promotes its products through Youtube, Instagram, and Facebook reaching out to millions of its fans[ CITATION Lia20 \l 17417 ]. Nike also does public relations by sponsor events for marathons, international events such as the NBA basketball championship, and provide financial support. Moreover, Nike heavily relies on advertisements to attract customers. Nike uses celebrities to represent product such as Ronaldo and Roberto Carlos as their brand ambassadors. Besides, the company uses personal selling to persuade target consumers to buy its products at retailers. Occasionally, Nike also applies for sales promotion by doing discounts and special offers to attract more customers and generate more sales. Compared to Adidas, which is the most popular amongst its rival for its excellent sales' promotional activities. As they claim that they are responsible for the encouragement of the customer to buy their products. Adidas believes sales promotion tries to compliment the company's selling efforts. Adidas promotes itself through advertisements on TV, online, billboards, and so on. Adidas is known for its ads which are well made, very creative, and filled with energy. These ads attract the customers towards the brand by sending the right marketing message to the customer[ CITATION Hit18 \l 17417 ]. With this Adidas’ tagline "impossible is nothing" was also released. They are also featured in various game advertisements like Sony play station[ CITATION MBA202 \l 17417 ]. Moreover, Adidas also does public relations by sponsors leading players and teams in different sports segments such as Real Madrid, France, Great Britain, England, and South Africa, and several

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others[ CITATION Hit18 \l 17417 ]. These promotional activities are to create brand awareness and as a way for their message is communicated to their customers

2.0 DIFFERENCE BETWEEN THE ONLINE PLATFORM 2.1 SOCIAL MEDIA Social media are important in attracting target audience nowadays. For Nike, they have 126 million followers on Instagram while Adidas only has 25.9 million followers. This big gap shows that Nike's target audience always wants to get new information about their latest product by following their Instagram rather than Adidas's target audience. However, Nike rarely updates new information on their social media while Adidas always gives new information to their customers. Both companies in doing marketing through online platforms also different. Nike's advertisement in social media more to story-telling with a purpose to humanize their brand like Nike launch their new product Nike's hijab featuring Zahra Lari [ CITATION Sha17 \l 1033 ]. While Adidas create hype via social media once, they release a new product. 2.2 E-COMMERCE For e-commerce, Nike makes it easier for the buyers to do the payment online with the option of guest checkout. It is a speed and distraction-free user experience. They also offered free shipping delivery when the buyers making payment. Once the buyers added item to the cart, there are pop-up states that gave free shipping[ CITATION Chr14 \l 17417 ]. While Adidas, the buyers only know the shipping cost only when they add to cart the item. The buyers find it inconvenient especially when the shipping cost is too pricy. However, when it comes to customer service in the website, Adidas is more efficient on handle it than Nike. A lot of customers complained that Nike is often late in responding to their customer service. 2.3 CAMPAIGN Both companies often do a campaign to gain new buyers or fans on social media. The purpose of the campaign is more to spread awareness at the same time raise the brand name. For Nike, they have held Risk Anything Campaign for 2014 and 2018 World Cup, #JustDoIt campaign, #Breaking2 campaign, and many more. When Nike held #JustDoIt campaign, Nike received 170,000 Instagram followers, 2 million Twitter mentions and 25 million 7

Youtube views[ CITATION Tam18 \l 17417 ]. While Adidas has held #MyNeoShoot campaign, All-in or nothing challenge, and Boston marathon campaign. For Tango Squads Campaign, Adidas received 6 million viewers on Youtube[ CITATION Tam18 \l 1033 ]. From this campaign, they gain a lot of attention and new followers. It can be said that it was good for their online platform.

3.0 CONCLUSION Even though Nike’s sales are higher than Adidas, Adidas is more superior online marketing mix. It can be shown on how Adidas’s websites are friendly user except about shipping. Adidas is more efficient in handle customer service than Nike and they also often offer sales on their websites to attract buyers. Adidas also makes sure their customers get all the information needed and update their new product frequently. In a conclusion, Adidas has a better online platform rather than Nike.

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