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Sports Apparel Marketing Wars

By: Dylan Campany

11/27/2012

Table of Contents

Objective pg. 1

Introduction pg. 1-2

Nike pg. 2

Company Background pg. 2-3

International Marketing pg. 3-4

Global Success pg. 4-5

SWOT Analysis pg. 5

Adidas pg. 5



Global Success pg. 7-8

SWOT Analysis pg. 8

Under Armour pg. 8



Global Success pg. 11

SWOT Analysis pg.11-12

Conclusion pg. 12

Sports Apparel Marketing Wars

Objective:

The objectives of this research paper are simple. One objective is to show

the strengths and weaknesses for Nike, Adidas, and Under Armour by

completing a SWOT analysis for each individual company. Secondly, is to

determine which one of these companies are emerging as an overseas market

leader, as well as, establish which companies are considered not up to “par” with

the leading company. Also, is there substantial evidence that points to why one

company is having more success than the others? In other words, how are each

of the different companies implementing marketing strategies in foreign markets?

Finally, the last objective is to demonstrate what amount of success these sports

apparel companies are experiencing overseas. After answering these objectives,

hopefully a conclusion can be made regarding not only the future outlook for

sports apparel companies internationally, and what adjustments must be made

by certain companies in order to gain a higher percentage of the market share.

Introduction:

The sports apparel market is a multi-billion dollar market every year with

that number growing as more countries are becoming developed, companies are

now expanding operations overseas, and sport leagues are attempting to

globalize their sports. Millions of people across the globe play sports on a daily

basis, and with new products being introduced constantly along with growing

popularity of new sports in different global regions; consumers are always looking

for the next or new product in their sport of interest to purchase, especially if it

could perhaps boost performance. Also, with a global economy that is still in

recovery, consumers want to save money wherever possible, so if a sports

apparel company can gain control of a market overseas, it will benefit them

greatly following the recovery of the global economy as consumers’ purchasing

power increases. Nike, Adidas, and Under Armour represent three of the most

popular sports apparel brands on a global scale. Each of these companies must

implement a successful marketing strategy internationally if they are to be

successful at either becoming a marketing leader, or having a substantial share

of the market.

Nike:

Background:

In 1971 the Nike brand was officially created and based its headquarters

in Portland, Oregon. A year later Nike developed its unique logo the “swoosh”,

which has become universally recognizable with all Nike products, and began

production of the company’s first footwear (Nike.com 2012). Nike’s first line of

footwear turned out to be very successful and began to be used by several

athletes, who in turn, helped Nike transition into different product categories. In

the mid 1980’s Nike began investing in developing different footwear instead of

only the running shoes they were originally producing. While Nike was

considered behind the market leader for basketball footwear this quickly changed

following the shoe contract given to Michael Jordan by Nike in 1985 (Nike.com

2012). Similarly, Nike began producing cross-training footwear several years

later roughly around the time the cross-training market exploded. As a result Nike

became the industry leader, a title that the company has not given up since the

late 1980’s (Nike 2012). As Nike continued to be successful in the footwear

market, they began to reach agreements with sport teams and leagues, which

allowed them to develop new products for the sports, but also enabled Nike to

expand into different product segments such as uniforms and sports equipment.

International Marketing:

In 2003 Nike stated that the goal of the company was to become globally

successful, and for the brand to represent the same thing throughout all the

countries that the company was involved in (Andrews 2008). For this to be true,

Nike has tried to distance itself from political, social, or cultural issues, and stay

focused on simply promoting the company’s goals and products.

In 2002 the “Secret Tournament” campaign was Nike’s first truly

integrated, global marketing effort. “Secret Tournament” incorporated advertising,

the Internet, public relations, retail and consumer events to create excitement for

Nike’s soccer products and athletes in a way no single ad could ever achieve.

This new integrated approach has become the cornerstone for Nike marketing

and communications (Nike.com 2012). This global marketing strategy was

successful because it reached out to over 30 different countries because it was

used during the World Cup soccer tournament. Furthermore, it was successful

because soccer is considered the most popular sport in the world, and the

tournament was televised to millions of people who were exposed to the different

Nike products.

In the past decade social media has become a great tool for companies

advertising departments. With millions of people across the globe registering with

different social media websites it has paved the way for sports apparel

companies to use that as a way to promote products to consumers. Also, this has

allowed companies such as Nike to spend less advertising money through

television and become more selective with their commercials. In the past couple

of years Nike has taken advantage of this growing trend and altered their

marketing strategy accordingly. For example, in 2007 Nike created the T90

Football boot campaign, which used short “teaser” commercials during England

football matches (Bernardin 2008). These commercials attempted to promote

viewers to log onto Nike’s website in order to see the rest of the commercials,

and eventually view the company’s products.

Global Success:

Nike has been a very successful company in terms of globalizing their

brand. Currently, Nike has merchandise being sold in countries all over the world

and in a variety of different retail stores. Also, last year Nike’s global profits

increased by 16 percent, which was, the highest increase in fifteen years

(NikeInc.com 2012). It currently has approximately 92 percent of the athletic

footwear market share in the United States, and roughly 28 percent of the market

share (5 percent behind Adidas the leader) in Great Britain; who possibly has the

most prosperous economy in Europe presently (Bernardin 2008, Dawes 2009).

Also, it appears that Nike is on track to become the market leader for almost all

of Asia, as more commercials of popular athletes such as LeBron James and

Kobe Bryant appear and sales for Nike products continue to increase.

S.W.O.T. Analysis:

The advantages Nike currently possesses that has allowed the company

to become the global market leader in athletic footwear comprise of its consistent

success with the company’s marketing strategies, the wide range of footwear

options, the technological advances in footwear manufacturing, and the high

quantity of different distribution networks the company has created over the past

couple of decades (Lechner and Boli 2008). While Nike is considered by many to

be the company that can’t be matched, it must still be open to new ideas and be

aware what their competitors are doing. Nike’s current weakness is its lack of

market share in performance enhancement clothing that Under Armour has a

control of. Also, Nike must attempt to repair some of its image after some

controversy in the past decade involving the manufacturing centers the company

possesses in countries that are not economically robust (Lechner and Boli 2008).

In the next couple of years Nike has an opportunity to expand its athletic

footwear market control, if they can continue promoting their products

successfully in countries that are becoming more economically prosperous,

especially Asia. They also have the potential to take some of the market share

away from Under Armour if they begin to devote some of the company’s

resources towards developing high performance athletic clothing.

Adidas:

Background:

Adi Dassler is considered the original founder of Adidas sportswear when in

the 1920’s he developed shoes for running (Runau 2011). Throughout Adidas’

history the company has made several purchases of other companies or brands

to expand their product range, and market share. The various acquisitions

Adidas has made include the addition of Reebok, which was once a very

competitive, well known company in the global market. The addition of Reebok

helped Adidas become more competitive on a worldwide platform, have well-

defined and complementary brand identities, a wider range of products, and a

stronger presence across teams, athletes, events and leagues (Runau 2011).

Today adidas’ products range from footwear and apparel to equipment for

various sports, with the targeted athletes being runners, football players,

basketball players, and cross-trainers. As a result of the company globalizing and

selling different products, Adidas now ranks 71 on the list of the top 100 global

brands (Dawes 2009).


Adidas is a multi-cultural company who attempts to successfully market

their products to not only countries who experience a great deal of economic

success but also, the company markets to smaller less “developed” countries.

Adidas has attempted to promote their products by using a specialized marketing

strategy that focuses on the world’s most popular sport, soccer. In 2007, Adidas

initiated a marketing plan titled 180 Amsterdam (Bernardin 2008). This marketing

plan brought some of the most popular and highest paid soccer players in the

world to local Adidas stores in smaller European markets. Following this

marketing campaign, Adidas experienced a great deal of positive feedback for

promoting a fun atmosphere for consumers that they shot videos of customers

experiences and broadcasted twelve different episodes on the company’s

football website (Bernardin 2008). Another example of an Adidas soccer

marketing strategy was the Adidas Predator Cup the company held in Germany,

which is considered one of the more developed and prosperous countries in

Europe. According to Adidas the soccer tournament was held to, “reconnect the

youth of Germany with Adidas and soccer through friendly matches between

friends” (Wohlfeil and Whelan 2006). These two different marketing campaigns

provide Adidas with possible future success in different countries by attempting

to gain a positive brand image with the younger generations in Europe.

Global Success:

Adidas has a relatively small market share in the United States and in turn

the company has concentrated a lot of its business operations on marketing in

European countries. Adidas has a great deal of money invested in soccer athletic

products because as noted above, the most popular sport in the world and

especially Europe is soccer. Notice figure 1 below; in Great Britain Adidas is

currently the market leader in part due to its successful marketing campaigns

using soccer players and teams, but also because of the high level of consumer

loyalty the company has (Dawes 2009). While adidas is not the leader in the

sports apparel global market, it is the market leader for several countries and are

considered to be the most popular brand in Europe along with Puma due to the

company’s soccer products and promotion.

Figure 1

S.W.O.T. Analysis:

Adidas is one of the most successful global brands due to the company’s

successful marketing of products, and the wide variety of products the company

currently is producing and selling. The current problem for adidas is that they are

currently behind Nike in terms of athletic footwear, and trail Under Armour by a

considerable margin in the performance enhancing clothing industry. On the

other hand, the company is very successful in Europe and appears to have a

very loyal consumer base. In the next couple of years there is an opportunity for

Adidas to try and emerge as a market leader in developing countries, and the

company still has the potential to gain more of a market share of the performance

enhancing clothing similar to what Under Armour produces since this market is

fairly new.

Under Armour:

Background:

In 1995 Kevin Plank a player for the University of Maryland wanted to

develop a new piece of clothing that would remain light and collect less sweat

during athletic games. Following graduation Kevin Plank began to develop

several prototypes for his new clothing and had the shirts tested by former

teammates who were either still playing football in college or had entered the

National Football League (N.F.L.) (UnderArmour.com 2012). After receiving

positive feedback about the proposed product and making alterations to the

prototype, Kevin started up his business at home and within the first year of

operations agreed to terms with the Georgia Tech football team to sell them the t-

shirts. Shortly after the contract agreement with Georgia Tech, other major

Division I football programs and about a dozen N.F.L. teams signed up with

Kevin’s business (UnderArmour.com 2012). Under Armour has since found great

success in the sports apparel industry with its headquarters now being located in

Baltimore, Maryland, and the business Kevin Plank started up changing to a

corporation with publically traded stock on Wall Street. While the company is still

focused more on performance clothing, they have begun to branch into new

product categories such as footwear.


As mentioned previously, the increasing amount of people around the

globe registering with social networking websites has presented opportunities for

sports apparel companies to use them for promotional purposes. Under Armour

stated when it first entered the sports apparel industry that the goal of new

product promotions is to create a buzz with the release, and get people talking

about the releases and benefits of using these products (Kraft and Lee 2009).

The increase of social networking websites has made this marketing strategy

very successful and easy-going for Under Armour to promote their products. This

is especially true since many people who use these websites are using them to

keep up with their favorite athletes, or celebrities.

Under Armour has several popular athletes such as Anquan Boldin and

George St. Pierre who help endorse the company’s products, and are idolized by

millions of people across the globe (UnderArmour.com 2012). An athlete such as

George St. Pierre who is a fighter in the Ultimate Fighting Championship offers

domestic and international exposure for Under Armour’s products because he is

originally born in Canada and the fights he participates in are hosted in a variety

of countries, and are aired live on television in many countries. Therefore, with

Under Armour’s products and logo being exposed to millions of people across

the globe it provides a great opportunity for the company to become successful

globally.

Under Armour’s success by using a word-of-mouth marketing strategy has

allowed the company to create different marketing plans as a result. Most

recently the company has began signing agreements with different sport teams

internationally such as Aries F.C. from Greece (UnderArmour.com 2012).

Another new marketing development for Under Armour has been using different

retail companies such as Dick’s Sporting Goods and Foot Locker to help

distribute the company’s products on a global basis (Subramanian and

Gopalakrishna 2012).

Global Success:

In 2010 Under Armour sold it’s products in approximately 20,000 stores

globally according to the companies annual business report (Subramanian and

Gopalakrishna 2012). Adidas director of American apparel said; “We’re not taking

this lying down… It’s a war!” when referring to Under Armour’s rapid success in

both the United States and global markets (Kraft and Lee 2009). Under Armour is

experiencing a great deal of success in the global market since the company has

commenced globalizing its products. Currently, Under Armour is dominating the

sports performance clothing apparel global market with approximately 75 percent

of the total market share (Kraft and Lee 2009).

S.W.O.T. Analysis:

The strength of Under Armour comes from its dominant control of the

sports performance product sales. Under Armour is the leader in the sports

apparel industry in developing performance related clothing. Tests have indicated

that compared to the average competitors performance clothing, Under Armour’s

clothing released 40 percent more moisture and keeps the users body about 3.5

degrees cooler (Subramanian and Gopalakrishna 2012). However, Under

Armour does have its weakness’ especially with their footwear products.

Currently, Nike and Adidas make up a majority of the athletic footwear market

share on a global level, leaving Under Armour with very little room to enter the

market. Nevertheless, Under Armour is beginning to create athletic footwear

along with several other products in attempt to expand the company’s global

market share. In the next couple years an opportunity exists for the company to

enter more international markets following its domestic success in the Unites

States, and if they continue to develop and enhance the new products they are

creating.

Conclusion:

Nike, Adidas, and Under Armour are all very successful companies,

especially in terms of marketing their products internationally. As of right now,

Nike is the industry leader in athletic footwear, and Under Armour is the industry

leader for sports performance clothing with both companies having a very loyal

customer base. Adidas remains a middle-line competitor in the sports apparel

industry, as they are a very successful company but are trying to keep up with

both companies on different products. The next decade should be very

interesting in the sports apparel industry as new markets for these companies

are targeted and new products are developed. Also, Under Armour is one of the

newest companies in the industry, but have experienced a great deal of success

since the company’s creation and it’s competitors in the industry are already

beginning to recognize the potential threat Under Armour may become in the

near future.

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