Dynamics of Marketing in Sport, Music, and Fashion
Industry overview
In the sports industry, there is always intense competition. This fierce competition has forced companies in this industry to be functional and stylish while ensuring that they survive the competition. Why the companies need to survive the competition is that the global sporting industry is very lucrative, with an estimated net worth of about USD 145 billion. It implies that the sporting industry accounts for over 2 % of the global economic activity. One of the ways that companies can use to remain afloat in this highly competitive industry is through marketing. Initially, marketing was just used as a tool for revenue increase as well as assisting with improving the commercial activities of a particular company. In sports marketing, three major types of sports marketing come up. First, there is marketing whose aim promoting participation in sports, marketing thatsupports the interest of fans. Lastly, there is marketing that enhances the consumption of products through sporting activities. In this paper, therefore, we are going to look at two companies, Adidas and Nike, that deal with sports gear, and compare the marketing practice between the two companies.
Comparison of market practice between Nike and Adidas
Nike Inc. was founded in the year 1972, the primary intention of designing, marketing, and distributing sports footwear, gear, and accessories for a variety of sport and fitness activities. It is feted to be one of the leading companies that deal with sporting accessories and equipment. It has itsheadquarter in Beaverton, Oregon, and its subsidiaries include Cole Haan, whose primary business is the distribution of luxury items like handbags and shoes.
Adidas, on the other hand, is a company the was started in 1949 by Adolf Dassler. Adidas is a sports gear productionbrand. Its product range includes athletic footwear; however, currently, they have also included the manufacture of products like bags, clothing, and other products. Thecompany only follows Nike Inc. in the production of sportswear. The subsidiaries of Adidas include Reebok, Rockport, and TaylorMade Adidas Golf company.
Research has shown that the two companies have almost the same marketing strategies, but the execution of these strategies is a little bit different. Both companies make a massive investment in technology, and they have a heavy reliance on technology in their development of new and innovative products.
Nike Inc. has a significant focus on the American markets, while the main market focus of Adidas is in the European market. In terms of production, Nike does not, in any way, produce its products. What Nike does is that it only designs, distributes, and markets its products. Production of Nike products is done through outsourcing their production to countries like China, Vietnam, and even Indonesia. On the other hand, Adidas undertakes all the production of its products in Germany. Still, in recent times, Adidas has adopted the outsourcing policy of Nike, and now they outsource production mostly to Asian countries.
The two companies do follow a premium pricing strategy, which, as explained by Kotler (2003), is a strategy where companies charge a price that is premium for their products. This strategy targets customers intending to develop some kind of intimacy with the product, which will inevitably lead to customers developing some type of loyalty.
The reason why Nike Inc. has been a dominant leader in the sports gear industry for some time is in terms of the service it provides to its elite customers. The competition between these companies has always been stiff, and it has still been based on the products that they produce. For instance, during the 2010 world Nike launched an advert whose theme was ‘write the future.” This advert received significant positive reception on YouTube. And Adidas was able to make a reply by having a two-minute advert that featured celebrities and movie stars. The comparison of the marketing practice of these two companies is further postulated by Umair (2010), by using their products. During the world cup of 2010, Nike Inc. managed to launch an elite series of products which t called Nike Tiempo Legend Elite. These were customized shoes that alit athletes like Fabregas and Christiano Ronaldo wore during this tournament. This kind of move significantly boosted its market presence.However, at the same time, the strategy of Adidas mainly focuses on the production of innovative products which are designed to meet the needs of the customers, rather than to invest in product endorsement. The company attempts to show its value through the creation of a line of high-performance products based on the needs of the consumers, and in this case, consumers will always come to the company and not the other way round. For instance, in the same 2010 world cup, Adidas was able to launch its collection that I called Adidas Adipure, which was also a series of products that famous players like Kaka and Messi woe during the same 2010 world. It is therefore clear that these two companies almost use the same promotional strategies like using significant tournaments, and famous athletes to promote their products.
The two companies also seem to practice market segmentation strategies in the Process of promoting their products. For instance, Nike uses this segmentation strategy to assist it in advertising and promoting its products through the signing of sponsorship dealswith elite players and teams. At the same time, Nike uses the differentiation strategy where, for athletes, products are produced in three ways. First, it provides products for males, females, and children.It also differentiates through the provision of accessories like apparel, gym bags, gloves, etc. Thirdly, the company has the license to manufacture other bands of products other than athletic products like the school’s supplies, timepieces, and even electronic media devices. In the same way, Adidas has also implemented a multiband strategy through diversification of its portfolio, which has allowed it to cater for almost all segments of the market from the athletes to nearly everyone. This strategy has helped Adidas keep its unique identity, which has helped it significantly to concentrate on its core competencies.
Section Two
Marketing Strategy of UGG.
There are various ways that the UGG fashion company has used to capture and retain the markets of its high quality, stylish, and affordable footwear. The company has been able to significantly capture the attention of children, men, and women. The company has shifted its image and its marketing concepts to the extent that it has become a household name. In this section, we are going to look at how UGG has managed to become a household name through the implementation of its marketing strategy. We are also going to look at how the company has implemented various considerations in product advertisement, which has contributed to the success of the company. We will also look at the socially responsible practices as well as the ethical practices that the company has used to boost its image. Lastly, we are going to elucidate the information and communication technologies that the firm has employed in the effort to effectively communicate with its customers as well as its other stakeholder.
The company, Decker Outdoor Cooperation, is one of the leading distributors, designers, and suppliers of footwear. It has it’s headquartered, Goleta California USA, and one of the most popular brands that it distributes is UGG. The UGG boot was founded in 1978, and by the 1990s, various celebrities had noticed the brand, and since then, the brand has become a household name. Currently, UGG designs and distributes footwear with the main focus on superior quality and craftsmanship, and it has an annual revenue of over a billion USD. The UGG brand has also put its tentacles in the animal welfare promotion by advocating the proper treatment of animals during the manufacture of its products. For instance, it sources its sheepskins form the sheep that had been reared for meat.
Marketing concepts and Principles.
The success of the brand UGG at the loyalty that it enjoys form its customers can be attributed to its nature of adapting quickly to the changing consumer market. The brand has paid closer attention to proper segmentation, product positioning, as well as market targeting, which has significantly contributed to the success of the brand. Through this, the UGG has managed to create a brand for ladies whose lifestyle is sporty, relaxed, and comfortable. In their marketing campaigns, UGG identified one crucial thing. It noticed that more women were interested in its products more than men, and it wanted to harness this so that it could gain a higher market share. However, at this time, the company’s financial ability was not that strong, but it was confident that the marketing strategy would work. It took to Vogue Magazine despite its economic challenges, and this sparked great media attention towards the brand. The brand has also utilized male celebrities to leverage the male market.
The success of the brand can also be attributed to consumer education. UGG noticed that the brand was being affected by the issue of copycat, and there before, it sought to educate its customers on the ethnicity of their brand. It trained the customers to be particular with quality, the design, as well as the status of the footwear. However, the presence of extremely high-level copycat brands is still a problem for the UGG brand. Therefore, the company has implemented a strategy of PR relations that are targeted to engage key influencers in the industry and also be able to trigger consumer action.
It should be noted that the footwear market is continually changing, and this can cause a severe problem to UGG if the brand does not implement an effective marketing strategy. The footwear market has experienced changes in terms of seasonality, changing fashion trends, as well as the evolving lifestyle of its customers. Changes in the economy are also bound to cause some stability problems to the brand if it doesn’t change its marketing strategy. Therefore, UGG has ensured that it is perfect in repositioning the brand, and this has helped it in recapturing its market share. This has also improved the customer loyalty of the brand, which has significantly improved the revenue of the brand. For instance, the brand has changed focus to include the rugged but sophisticated men, and this has paid off handsomely since the brand has been able to catch the attention of a large segment of men across America and the globe at large. This strategy has helped to make UGG as one of the most successful fashion brands in the world.
The consideration of the market mix.
Place
The success of the UGG brand can be attributed to the range of the marketing processes and techniques that it has utilized to influence the consumer choice of the UGG products. The first technique is to focus on the product. The UGG brand has significantly emphasized on the design and development function of all the products that it deals with. This design and development function is performed by both the development staff within the brand, as well as by freelance designers. The brand always does a constant review of the cost and accessibility of raw materials, so efficiency, consistency, and quality are always guaranteed. The design and development department always ensures that it develops new footwear designs that are trendy and appealing to its consumers in the ever dynamic market place. The brand is also very particular with quality control and assurance so that the brand products always exceed the expectations of the customers. The company has a team of inspectors that carefully oversee that production process, and these inspectors are in charge of performing quality assurance inspections. Through these interventions, the brand can create and maintain brand loyalty and expand its product lines.
Place.
The UGG brand has adopted the Direct to Consumer placement strategy. The main components of the DTC business strategy are the retail stores as well as the E-Commerce websites. Due to the evolving nature of the brand, the websites and the retail stores are significantly intertwined, and they enormously depend on each other. The consumers of the brand products have an opportunity of interacting with the products in the physical stores, as well as on the websites before they can make any purchasing decision. Various methods have been implemented by the brand to ensure that inventory productivity is improved. One of the ways is through the UGG Rewards loyalty program, which rewards customers who have made recent purchases as well as combining their points. On the other hand, the physical store allows the customers to be exposed to the brand’s range of products, which goes a long way impacting the customers as well as informing them of the retail prices.
Price
It is no secret that the UGG boots and authentic, and their quality is superior. However, the brand has to price its products at a level that meets the expectation of the customers while maintaining the high quality of the products. In this regard, therefore, the UGG brand has implemented a pricing strategy known as marketing skimming for new products. In this strategy, UGG sets high prices for new arrivals. Through this strategy, the brand can attract its target market at these prices. Also, when the demand for a particular boot increases, UGG implements an approach known as a market penetration price, which aims at attracting a broader market for the boot at this set price.
Additionally, due to the durability and the quality of its products, the UGG brand can implement value-based pricing for its products. The brand has also introduced the psychological pricing of the products that it deals with. Through this strategy, the consumers are made aware that the product is worth the price through its classification as high-end footwear.
Promotion
It has been noted that bloggers and social influencers are trusted by consumers more than the brands themselves are trusted. Therefore, in its marketing strategy, the UGG brand has used the credibility of social media influencers as well as bloggers to expand the brand’s social media presence. The brand has a “UGG Creative Council,” which is a group of 8 bogglers who have significant influence, not only on footwear but also on art music, fashion, and food. These bloggers and influencers can create product awareness and well as maintaining the loyalty of the existing customers owing to the trust that these bloggers have with customers.
Social responsibility issues.
The marketing strategy of UGG includes conducting is business in a socially responsible way. Therefore, as a global company, the UGG brand has a firm belief in socially responsible business which cares for the environment, assists community as well as inspires that younger generation for posterity. The brand is keen at looking deeply on how the activities of the brand impact on customers, employees, communities, and the natural environment. The company supports an organization that deals with poverty eradication and environmental protection. The UGG brand takes immediate and effective measures in the elimination of forced labor and modern slavery, human trafficking, and child labor, among other CSR activities. All these measures have helped to establish the UGG brand as one of the leading fashion brands. It should also be noted that the UGG brand significantly employs the use of information technology in conducting its business, which gives it a competitive edge against its industry competitors.
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