How does sportswear market impact the nature of brand management?

To sump up previous articles, the sportswear market has increased since the 30 last years, with huge competitiveness and new consumer’s behaviors. In addition, sport becomes more global due to big events like The World Cup of Football or The Olympic Games for instance.

All these parameters of our market have impacted the nature of brand management of our main actors in different ways.

Firstly, the sportswear brands have to innovate creating and developing more collections in order to fight the competitive environment and to be at the top. So, companies do not hesitate to invest a lot of money in research and new technologies because they want to offer the best products and the best performance not only to professionals but also to amateurs of sport. For instance, Nike has launched Volt Collection with the Zoom Victory Elite baskets, which they are the lightest baskets in the world. Thanks to this product, people could improve his score.

Then, brands pay attention on the global events in specific sports. Indeed, they target football, rugby, tennis, cycling, F1 and swimming because they represent the most popular sports that people likes watching or playing. So, brands use sport events in order to associate their values to the associated sport.

In another way, sportswear brands sponsor some events so as to show quality and performance of their products and using the “naming” concept. Adidas was brand partner of all the selected players and staff of the French team in the Olympic Games in 2012.

Nowadays, sportswear brands do not show poster advertising only because there are too many brands present on events. So, brands have to bring added value to consumers or fans. This concept is called brand experience. The main aim is to touch consumers introducing and improving the every daily life of them. For example, Nike came to light the FuelBox experience during the World Cup of Football in 2014. 

Finally, sport attitude have influenced other sectors like fashion sector or luxury sector. So, brands, like Puma, adapt their offers associating sport and lifestyle in their collections.


Sources: 

• "Comment le marketing sportif peut-il contribuer au succès des nouveaux produits?", Pr Thierry Lardinoit and Pr Emmanuelle Le Nagard.
• "Sport, articles de sport et marché du sport", Jochen M. Schaefer, OMPI magazine, 2012.
• Sponsoring sportif, entrée dans une nouvelle ère", Jean Watin -Augouard, 2012.

How sportwear brands transform us into champions and reveal how male chauvinist we are

In every ages, every countries or every cultures, physical performances have been associated to greatness, entertainement and struggling for life. From the Olympic games of the Oldest Greece where Platon was a participant when he did not philosoph (he was known to have big shoulders and to use it well during fights) to the recent football world cup were every one could follow the performances of his favorite national team.Actually do you know someone or something disliking sport? We can all be reluctant to go jogging or going to the fitness center we paid a fortune. But even the most lazy one of us will admire sportsmen able of great physcicall performance. For example, your neighboor might not play football or running, but every saturday evening he is watching the champions league on TV dressed with his "Lionel Messi" shirt. 

Sportswear brands understood it : people want more than just admiring them. They can not be like their champion. If they can not be like them, they will look like them. It is like the prometheus myth. People stands as equal to gods they ideolize because they have fire like them.

When sportswear brands are sponsoring champions that is because they hope to sell articles with their name, their signature. This is not really the hobby of doing sport which requires those articles.

My neighboor has already 5 pair of running shoes but that is not the problem , he wants the new air Jordan shoes from Nike because he is sure in his mind he will look like the NBA player Micahel Jordan. 

                                                       This       

                                                                     MAKES ME HIM

 

In the case of sponsoring, males (teens to adults) are generally the ones targeted by brands because brands are sponsoring the greatest event of sports and the ones who makes the greatest physical performances, the best results: Men. It can look like sexism but brands are sponsoring events who are the most watched: World cup of football- World cup of Rugby- Super bowl and Olympic Games. In the first 3 cases players are men, we talk about Zidane, Messi, Chabal. Who watches feminin cup of rugby? feminin football matches? About Olympic Games even if it is mixt, every one remembers Usain Bolt, Christophe lemaître, Alain bernard because their performance in their category are superior to women performances in their category. Unfortunately this is how it proceeds in the mind of every one. Sport remains associated to a male-strong image in the mind of customer so sportswear brands adapt their products to the expectations of customers .

Edouard Lévêque

Sources: 

Les mouvements de mode expliqués aux parents,d'Hector Obalk, Alain Soral et Alexandre Pasche,1992

The Robust and Competitve Sportswear Market

The Global Sportswear Market 

Athletic apparel is a promising and robust industry. The trend toward healthier and active lifestyle is directly proportional to the growth of global market for sports apparel. This presents strong opportunity for the sports manufacturers. As we can see from the following chart, even though the size of the global sportswear industry was only $250 billion in 2013, much lower than the other consumer goods industries(like apparel and footwear, packaged food, consumer electronics), its 4.2% Compound Annual Growth Rate (CAGR) is breathtaking, reaching over $300 billion in 2017. That's why the retailers and brands have expanded their athletic wear lines from 10% to 30% in the past years. 

The Regional Sportswear Market 

The North American occupies the largest market value size by far following by the Western Europe and Asia Pacific. But Asia Pacific market has the higher CAGR growth (6%) than Western Europe market (3%) from 2012 to 2017. The vast potential market expansion of Aisa Pacific owes to the rising demand of these countries : China, India and Australia.

When we come to the specific country,we can see that USA is the largest sportswear market whose sales reached 35% of the global sales in 2012, following by China, Japan, Brazil, several EU countries and Russia.

The Sportswear Market Leaders

The athletic apparel market is highly competitive.The global sportswear companies include Nike, Inc,Adidas Group, Reebok International Ltd., Pumas SE, Bauer Performance Sports Ltd., HanesBrands Inc., lululemon athletica Inc., Under Armour Inc., and VF Corporation, ASICS Corporation, and so on. The top 10 sportswear brands in 2014 based on the sales and revenue data are following (from top 1 to 10) : Nike, Adidas, Puma, Asics, New balance, Reebok, Converse, Fila, K-Swiss, Umbro. And the four main key players are Nike, Adidas, Reebok, Puma.

Edit by Mengdi LI

Sources: 

http://seekingalpha.com/article/2285343-north-american-sportswear-sector-time-to-get-fit

http://go.euromonitor.com/rs/euromonitorinternational/images/the-sportswear-revolution-global-market-trends-euromonitor.pdf?mkt_tok=3rkmmjwwff9wsrolvarnzkxonjhpfsx57+4vx6w1lmi/0er3fovrpufgji4dscnmi+sldweygjlv6sgfqrdamatv0bgkwhg=

http://www.reportlinker.com/ci02121/Sport-Clothing-and-Accessories.html

http://www.ukessays.com/essays/marketing/sports-apparel-industry-caters-to-the-demands-of-clothing-and-footwear-marketing-essay.php

http://www.mbaskool.com/fun-corner/top-brand-lists/10237-top-10-sportswear-brands-of-the-world-2014.html

Similarities and differences Nike/Adidas

Both companies produce practically identical product lines of sport footwear, apparel and equipment. They propose pretty the same services, for instance, personalization of sneakers and clothes, gadgets, applications. 

As for the score in Global Brand Simplicity Index* in 2013, Nike took #27 and Adidas ranking was #33.

Nike and Adidas have quite similar marketing strategies, but their methods of implementation are different. Nike focuses more on North American market, whereas Adidas is more presented on European one. Nike does not have any production plants, they outsource to Asia, mainly Taiwan and Korea. Adidas executes its products in Germany, and just recently started to pass some sourcing to Asian countries.

One of the key factors of Nike’s marketing campaign is to sponsor popular sportsmen and teams, such sport celebrities as Cristiano Ronaldo, Rafael Nadal and a football team Manchester United etc. As they are extremely popular worldwide, it encourages Nike’s sales to go up.

Adidas sponsoring is about big events and organizations, for instance, FIFA, EUFA Champions League and Summer Olympics.

Nike proposes clothes, shoes and accessories for running, skateboard, football, basketball, training, tennis, golf, American football and snowboarding. Anyhow their main target markets are basketball and running. Nike’s markets used to be domestic (USA), but in recent years they expanded internationally.

Adidas offers everything for football, running, basketball, training, golf, rugby, natation and tennis. Key markets are soccer and tennis. They are always based in Europe and well known internationally. 

Sources:

http://www.nike.com/fr/fr_fr/

http://www.adidas.fr

www.wikipedia.com

www.champion.ie

* Demonstrating the impact of simplicity on revenue, loyalty and innovation.

The sportswear market stands face to the crunch

   During periods of economic crisis, the luxury market is well known to florish whereas traditional sectors decline. Actualy it seems that the sportswear market show good results in spite of the shrink of the purchase power of people. We can focus on the case of France: the sportswear market reached 9,6 billion of euro in 2012 (+3% compared to 2011) and 9,7 billion in 2013. These good results can be explained by 3 factors:  good distribution channels , a wide range of prices proposed by brands and the permanent innovation from the leading brands.

   In France sportswear items are sold by 2distribution channels mainly : Mass retailing and specialized stores. In 2013, the 4000  specialized stores of Decathlon, Go Sport, Sport 2000 and Foot lockers sold for 7 billion of euro of sports items. Mass retailing stores sold 2 for billion of euro. Generally specialized stores and mass retailing stores are often located close. Thus, we have to pay attention to the fact that consumers tend to purchase more on the internet to waste less time. Internet is starting to compet with these 2 traditionnal channels with 700 million of euro of items sold.So we can asset that sports products are easily reachable for consumers.

   Moreover, people matched budget barriers for non food products. Among the sportswear items, people can find different ranges of prices from a same brand. As the leading brands have to compet with cheaper competitors, they do not only focus on premium products. For running , you can find Adidas shoes going from 60 euros to 450 euros. The average price for running shoes is 100 euro.So people make choice between non product food and can find easier to select 89 euro shoes rather than a 300 euro TV according to Adidas CEO Herbert Hainer.

   Then, according to J.Schumpeter, companies have to innovate in order to solve financial crisis. If leading brands succeed , that is because they invest a lot in R&D. Adidas is developping with the chemist BASF a material called Boost in order to improve the quality of the running shoes. In 2013, Adidas CEO Herbert Hainer declared they expected to sell 1 million of running shoes with these technology up 2015.Nike keep improving its running shoes with its "Flyknit Texture Knit 3D" so that football players had a better agility. All these investements in running and gym shoes might explain why shoes are the main drivers of profits on the sportswear market.

Edouard Lévêque

Sources:
http://www.entreprisesdusport.com/fr/marche-du-sport/chiffres-clefs/
http://www.lefigaro.fr/societes/2013/03/26/20005-20130326ARTFIG00328-adidas-n-a-jamais-ete-en-aussi-bonne-sante.php
http://www.nike.com/lu/fr_fr/c/football/innovation

Very special year for the sportswear industry

Sportswear market had a very intense year: big sport international events like Winter Olympic Games in Sochi and Workd Cuo in Brazil are always a great opportunity for sportswear brands to remind about themselves again. 

Thanks to big sport events only in a few weeks after the beginning of the year it was pretty much obvious that the sportswear industry will get in retail spotlight. The global sport products market was expected to grow by &% attracting more and more new companies to join the competition. 

Both Sochi Olympic Games 2014 and World Cup 2014 s boosted sales in quarter 4 in 2013, 1st and 2nd quarters 2014 and made the buyers feel more comfortable spending money for the sportswear. 

Not only giants of the industry like Nike, Adidas, Puma or Reebok perform very actively during this intense period but other brands got activated as well! Even such retaikers such as H&M, Uniqlo and Primark that have never positioned themselves as a sportswear brands has also aimed sportlovers this season launching the new own-brand collections of sportswear for lower prices than Nike or Adidas.

The attention that this industry gets this year has become very attractive for the “newcomers” to this market: with lower prices comparing to the industry leaders, fashion aspect, sport mainstream and brand recognition can make these new sportswear ranges very profitable for the companies. But that also makes the competition in this industry even stronger. 

Sources: http://www.verdictretail.com/retailers-are-right-to-tackle-the-uk-sportswear-market-in-2014/

http://uk.reuters.com/article/2014/01/09/uk-olympics-hm-idUKBREA0813820140109

http://ca.reuters.com/article/sportsNews/idCABREA0L12620140122

The World Cup of Football was highly profitable for Nike

According to the article from the newspaper LesEchos.fr of september the 28th titled "Nike profite à fond d'un effet coupe du monde" : the World Cup of Football was very profitable for Nike.
The value of the market shares of Nike have grown  of 12,3% after the publication of the results of this summer. Sales jumped from $6,97 billion in summer 2013 to $7,98 billion this summer 2014.
This growth is explained by a growth of 32% of the sales in Europe : Nike was the partner of 10 football teams against 8 teams for Adidas.
Nike took the advantage on Adidas thanks to the World Cup of Football but not only. Adidas has difficulties to compete because of Reebok bought in 2006 and the golf brand TaylorMade whose sales dropped about 14% in the USA. In order to be back in the race , Adidas has the intention to boost its marketing budget. But nothing is certain for now, hedge funds would tend toget shares and then fire the actual CEO Herbert Hainer.

Edouard Lévêque

 Source: Karl De Meyer "Nike profite à fond d'un effet coupe du monde", Les Echos.fr, Sept 2014