Chapter 2
Literature Review The review of related literature would focus mostly on journals that would help establish the main focus of this study. It would help enhance the knowledge being known already by the people when it comes to the brand loyalty of sneaker heads or people who loves shoes towards the brand Adidas. The researchers have identified specific factors that are important in building up this study.
Brand Loyalty Based on Miller, Washington (2015-2016) millennial tends to buy more what is on trend. If you want your business to entirely thrive you have to make sure that you can adapt to that type of system. You have to know what is trending in this point of time and you must adjust to it. You must also establish your social
…show more content…
Sportswear including sports jacket, footwear, shorts, caps and many other types of apparel is very common nowadays because many people have been wearing them for quite some time. Any interna-tional sportswear brands could learn from the worldwide leading sportswear brands, such as Nike and Adidas, and build brand loyalty for the customers with the same quality as the best sportswear. The researcher believe if many sportswear brand could learn from the factors influencing brand loyalty towards sportswear, any sportswear brand could build the brand loyalty in big cities by separating the 7 main factors building the brand loyalty toward a sportswear brands, such as Product Quality (PQ), Style (ST), Brand Name (BN), Store Environment (SE), Service Quality (SQ), Sales Promotion (SP), Price (PR) with the Brand Loyalty (BL) …show more content…
according to Lawrence, Gregory (2015) Nike uses the value-based pricing strategy to ensure growth in its sales and profits. This element of the marketing mix identifies the prices the company applies to maximize profits while attracting the desired share of the market. In using the value-based pricing strategy, Nike Inc. considers consumer perception about the value of its products. This value is used to determine the maximum price consumers are willing pay in buying the company’s sports shoes, apparel and equipment. In 2014, the company successfully increased its selling prices and generated higher sales and revenues. This trend continues, as the firm enjoys increasing sales revenues while gradually increasing its prices. Based on this element of the marketing mix, Nike Inc. successfully uses the value-based pricing strategy to maximize its profits while emphasizing the high value of its
Nike is a household brand name not only in the United States but also throughout the world, although roughly half of sales are sourced in the United States (Brick). This dominance in North America, an area which represents $108.7 billion of the $282.3 billion worldwide, is key in the overall evaluation of the Nike assets (Euromonitor 1). Nike’s position of industry power is supported through their innovation in design as well as notable sponsorships and collaborations with professional athletes and tech companies like Apple. Their event and team sponsorships also elevate Nike to an elite level (4). However, competitors in this industry are quickly gaining momentum. For example, Under Armour has experienced notable growth in the past five years, and adidas continues to grow their presence in the United States. This has detracted some of the Nike dominance in the U.S. market
In order to boost revenue, management decided to develop more athletic-shoe products in the midpriced segment which are sold for $70-$90 a pair. As for the cost side to be considered, Nike planned to exert more effort on expense control. The company executives forecasted that their long-term revenue-growth targets of 8% to 10% and earnings-growth targets of above 15%.
Nike’s goal is to remain unique and different from others in terms of the items offered on the market. Arguably, Nike belongs to a monopolistically competitive market as there only a few organizations with the ability to regulate the amount charged for their product which means they cannot make their prices high as this is likely to make customers move on to other available choices (Nike, Inc., 2012). However, Nike can find a balance between the prices to charge for their products and remaining competitive with other companies in the industry. Nike has formed a distinction between the appearance and performance of their footwear and that of their competitors. Although products are differentiated from other companies, they still influence each other because they are items of the same
Only a week earlier, on June 28, 2001, Nike had held an analysts' meeting to disclose its fiscal-year 2001 results.1 The meeting, however, had another purpose: Nike management wanted to communicate a strategy for revitalizing the company. Since 1997, its revenues had plateaued at around $9 billion, while net income had fallen from almost $800 million to $580 million (see Exhibit 1). Nike's market share in U.S. athletic shoes had fallen from 48%, in 1997, to 42% in 2000.2 In addition, recent supply-chain issues and the adverse effect of a strong dollar had negatively affected revenue.
There are as many brands as there is ants in the world, but the two brands that pop out are adidas and nike. Those two brands have been going head to head for ages to see who is the better brand. It’s been tested, compared, and debated which brand is better. Whether it’s the quality of the materials or the cost of it, the debate is ongoing. Both brands have been fighting for the top ever since they were both created and I don’t blame them it’d be fantastic to be the best brand in the world. When Nike and adidas are contrasted, it becomes clear that the Adidas brand are better for the overall consumer and enhances sport performance than Nike.
The marketing goals are: Increase customer retention, Increase eCommerce Sales, Increase our Community Involvement. The first goal specifically works towards reaching 60% repeat sales through different promotional strategies like emotional marketing and sponsoring different professional athletes. Customer retention is extremely important to maintain Nike’s market leader position. Increasing eCommerce is a major focus for Nike. Last year we were able to increase our eCommerce sales by a profitable 51%. Our second goal is to continue this trend by increasing online sales by 50% every year for the next four years. It is our belief that doing so will solidify Nike as a leader in the online athletic market. Nike truly believes that sport can change
When comparing prices, consumers can find the exact same style Nike boot in Adidas and pay a lower price. Essentially what the consumer is paying extra for is the Nike brand. Looking back at my journal you can see I wore the Adidas boots one time, then went out and bought Nike boots. “Brand loyalty is based on an emotional connection toward the brand and a conscious commitment to find this brand each time the consumer purchases from this category.” 112 Brand Promotion I could have worn the Adidas boots for free but I spent the time and money to go purchase the Nike brand. “brand loyalty and advertising work together to create another important economic effect related to pricing flexibility and profits. When consumers are brand loyal, they are generally less sensitive to price increases for the brand.” 45 Advertising and Integrated Brand Promotion Being able to raise prices but still keep the consumer market is very valuable. This is one of the main reasons brands strive to have brand loyal
Nike’s positioning in the market has more of a mass appeal compared to their main competitor Adidas who strive to make products for elite athletes. The positioning strategy for Nike is currently working at a satisfactory level as Nikes global annual sales between 2013-2014 was reported as 27.8 billion (Statista, 2014) compared to Adidas’ 19.95 billion (Statista, 2014). The global market for sports apparel is expected to grow at a compound annual growth rate of 4% between 2012-2019, Nikes compound annual growth rate during 2010-2012 was 12.3% which is an excellent result as the brand’s growth was larger than the market as well as outgrowing Nike’s closest competitors Adidas, Puma and Asics (Forbes,
Nevertheless, Nike is an extremely diverse company with outstanding organizational structure, impressive marketing strategy, and innovative products. The organizational structure of the Nike Corporation helped them become a leading innovator for the world with creative apparels and shoes. Their intelligent marketing strategies assist them in advertising their products to motive their customers and sell them. Their innovative product motivates customers with great performance footwear and quality designs to take on any obstacles. The Nike Corporation discovers various ways to improve their organizational structure to inspire the world.
Companies use a collection of brand equities to represent their products in the market (Voolnes, 2012). Brand equity refers to the commercial value that is derived from the perception of consumers on any given brand name of particular products in the market as opposed to the product itself. Ataman (2003) notes that the effect to the consumer is in the brand name and not the product itself. Companies use logos, trademarks and a collection of other symbols to present this information to the customers. The use of these symbols is meant to try and capture the customer mindset so that they can be thinking about the company products at all times through the items they possess at home (Estes, Gibbert, Guest, & Mazursk, 2012). This can well be explained by use of the customer-based brand equity model that brings together the requirements for a publicly renowned brand in the market.
Nike is the largest seller of athletic footwear and apparel in the United States. Nike Company sell their products to retail accounts, through NIKE owned on line and factory retail stores and NIKE owned internet websites which they refer to collectively to as their direct consumer operations. However, through a mix of independent distributors, licensees and sales representatives in virtually all countries around the world, Nike goal is to deliver value to their shareholders by building a profitable global portfolio of branded footwear, apparel, equipment and accessories. Nike strategy is to achieve long-term revenue growth by creating innovative to their products (Nike,
Nowadays, there are so many famous sportswear companies that exist in the market globally, which make people have more product varieties that they can choose. In addition, most of those companies have become very important for its host countries, in terms of supporting their economic development. Yet, the existence of those companies can also possibly bring some problems to the host countries, as well as negatively affect the countries’ people (Pettinger, 2008). In order to explain it better, the existence of Adidas in Indonesia is used in this report to give more information about what makes Adidas becomes a successful company in the world, as well as providing problems that Adidas has in Indonesia.
As Generation Y, we are 63 million members strong and spend more than a billion dollars annually (Marketsource). With such spending power it is easy to see why companies choose us as their target market. We have grown up in a "'consumption culture" are "taught that (we) will be satisfied if we purchase products to fill our wants and desires" (Youth in the Third Millennium). Perhaps this need to buy things is only a progression ...
When discussing the topic of millennials or formally known as Generation Y, most will receive two different sides. Depending on who is asked, millennials range from 1980-2000 mostly making them made up of teens to 20’s. Millennials today are either looked at as the narcissistic generation, or they get classified as educated and skilled. While today’s world is mostly revolved around a technology or social based atmosphere, this gives managers a new way they need to cope with the new generation of upcoming employers. With always having technology in their lives this helps give the two sides of how millennials are viewed. On a positive and supporting standpoint, millennials being so technology driven helps businesses
From the study it is clear that people often purchase branded products since they are aware of the brand performance or perhaps they have a good past experience about the brands. This makes customer’s become loyal with the specific brand.