Monday, August 11, 2008
What paper tiger shoe companies do to gain market share
Both adidas and Nike have introduced new shoes for the 29th Olympiad with Official sponsor, adidas reporting 17 new designs more than they did for the 2004 Athens Games. The new shoes are designed for specific events/sports but somewhat surprisingly the majority will never make it to store shelves. The reason for this is a major switch in marketing strategy from the Sydney Olympics when footwear companies were keen to align their products with Olympic winners and more importantly with record breakers. Unlike the impact of the new racer suits for swimmers, there have been over fifty-four world records broken since the Speedo LZR Racer was launched, sport shoe innovations have not translated into improved performances and athletic records have not fallen as anticipated. This has caused footwear companies to be wary of factious claims, like our “shoes shave times,” and the giants of the industry are more content to cloth the masses in lifestyle attire which is altogether more profitable. The Olympic Games represents the biggest catwalk for shoes in the world and the race to secure top market position in the lucrative Chinese market is the ultimate glittering prize of the Beijing Olympics 2008. It is estimated sales of sport shoes and associated attire in China alone this year will exceed $2 billion US. Presently Nike has the lion share with adidas trailing their rivals behind the scenes both have been beavering away opening new outlets in China and heavily promoting their wears through personality endorsements and other sponsorships. By the end of this year adidas will have opened 5,000 Chinese stores and Nike will have 4,000 outlets. Adidas-Salomon is an official sponsor of the Beijing Olympics but Nike their main rival is not and whilst adidas has always had a close association with sports and the Olympics, on the world market who outsells them. What’s more recent surveys conducted in China indicate the vast majority of consumers care little for who supports the Games and are brand loyal buyers who prefer what they knows as opposed to what is promoted in heavy advertising. It appear Nikes stealth by aligning with individual Chinese sport federations, and teams as well as high profile individuals like, gold medallist hurdler, has paid off. As official sponsor adidas have outfitted more than 3,000 of the estimated 10,500 athletes and more than 600,000 members of Chinese Olympic delegation and organizing committee. adidas subsidiary Reebok, is outfitting 250 athletes whereas, Nike will cloth athletes from 100 countries competing for medals in 32 sports. Adidas may yet have the last laugh because as part of their sponsorship they shall clothe all medal winners at their presentation. The company paid a reported $80 million US for the privilege.