the athletic footwear industry jacob angell robert carrozzo kendrick coq jeremy freeman
TRANSCRIPT
The Athletic Footwear IndustryJacob AngellRobert CarrozzoKendrick CoqJeremy Freeman
Agenda Industry Structure
Background Competition + Organization
Advertising Strategies Brand Case Study (FIFA WORLD CUP 2014)Analysis (Raw Data) Recommendations
Athletic Footwear Industry Why the Athletic Footwear Industry?
One of the strongest global markets Highly competitive market Success is closely related to the effectiveness of
advertising strategies Industry at a Glance (Nov. 2014)
Industry Timeline
1830-1870: Plimsolls Created
1895: First Running Shoe
1950s: Leisure Opportunities Expanded
1970s: Exercise Becomes Increasingly Popular
Today
1870 1900 1950 1970 2015
Quick Figures: Industry at a Glance
Industry Production and Supply Chain
DistributionManufacturer
Retailer
Customers
Customers
Understanding the Recession
Competition & EntryFor every dollar spent
on the labor industry spends only 8 cents on capital
Level of technology change low
Difficult to enter
*Note: Reebok is owned by Adidas and therefore is not shown
Competition of the Industry
Larger companies rely on vertical integration—Nike
Smaller companies try to find niche markets—Under Armour
High concentration
The industry is fairly concentratedFairly concentrated HHI, high CR4Lots of companies with smaller market shares
Advertising Strategies
Sponsorships/Events
Celebrity EndorsementsSocial Media
Sponsorships & Events
Celebrity Endorsement
Celebrity Endorsements Today
Social Media
New definition of “word-of-mouth” advertising
Incorporation of campaigns into hashtags
Use consumers to sell the products
Instagram and Twitter
Nike January 1964
Bill Bowerman and Phil Knight
Nike Swoosh
Brand Value - $19 Billion
Market Cap - $83.6 Billion
Just Do ItHeroism
Find Your Greatness
Endless Possibilities
Never Not Running
Make it Count
Nike + Apple
Nike + iPod Sports Kit
Nike + Sportband Kit
Nike Sportwatch
Application that uses accelerometer built in phone
Created a Social Networking for athletes
Decrease advertising cost, increase efficiency
Adidas Germany shoe manufacturer, 1925
Running/Training
Adolf “Adi” + Rudolf Dassler
Launched in U.S. in ‘68 and soon became leader in the industry
Three stripes brand recognition
1972 Olympic Games, Munich, Germany
Brand Value - $5.8 Billion
Market Cap - $16.8 Billion
All Day I Dream About Sports
“Play to Win” “Impossible is Nothing” “Adidas is all in” (more than sports) Brand built on passion and sporting lifestyle
Adidas & Android Adidas miCoach
World’s first web-based personalized training service
Case Study: FIFA World Cup 2014
Risk Everything All In or Nothing
Risk Everything Targeted more players Targeted host country
of Brazil 12 million views 30:1 like to dislike ratio
All In or Nothing Official sponsor of World Cup Targeted more teams instead of
individuals 30 Million views 5:1 like to dislike ratio
ResultsAdidas = World Cup
Nike = Global Market
Hero, Hub, Hygiene
Hero - Accelerates growthHub - Retains current subscribersHygiene - Attracts new subscribers
Raw Data Analysis
TV Ad-to-Sales
Low Ad to Sales Ratio Reasons
Great brand loyality Just TV ads for 2011 Advertise through other mediums Hard break down the data for just atheltic footwear
The Ad Time Placement Majority of Ads in the Afternoon (Noon-7PM)
Reason After school and house moms
Second Highest is the Overnight Reason
Late night shows Younger audience
41%
8%27%
24%
Time of Day of Advertising
Afternoon
Morning
Over Night
Prime
**Across the whole industry from the raw data
The Daily Ad Placement Weekend
Highest ad counts Kids home for school More time spent in front of the TV
SUN MON TUE WED THU FRI SAT0
2000
4000
6000
8000
10000
12000Day of the Week
Tot
al A
d C
oun
t O
ver
a Y
ear
Per
iod
The Ad Seasonality Spring Increase
Spring sports and outdoor activities
Back to School Increase Fall sports and outdoor activities
Holiday Increase Christmas presents
Nov-10 Jan-11 Feb-11 Apr-11 Jun-11 Jul-11 Sep-11 Nov-11 Dec-11 Feb-120
100
200
300
400
500
600
700Advertising Over a Year Period
Tot
al A
ds
per
day
Ad Program Placement Sports Center and Highlight Express
Target athletic audience
SpongeBob Younger audience
SPORTSC
ENTER
HIGHLIG
HT EXPRESS
SPONGEBOB SQ
UAREPANTS
AVATAR: THE LAST
AIR
BEND
FAIRLY O
DDPARENTS
DRAGON BALL Z K
AI
NFL TOTAL A
CCESS
ICARLY
COPS 2.0
PHINEAS A
ND FERB0
500
1000
1500
2000
2500
3000Top 10 Programs
Tot
al P
rogr
am C
oun
t O
ver
a Y
ear
Per
iod
Top Advertising Major companies
Skechers top advertiser, but not top spender Quantity over quality
Reebok top spender, but not top advertiser Quality over quantity
Skechers
Reebok Asics Nike Adidas New Balance
Under Armour
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
Total Seconds Advertising
Reebok
Skec
hers
Nike
Adidas
Asics
New B
alance
Puma
$- $5
$10 $15 $20 $25 $30 $35 $40 $45
Top Spenders OverallT
otal
Dol
lars
Sp
ent
over
a Y
ear
Per
iod
(M
illi
ons)
Cost per Ad Time Slot Nike
Has more 60 and 90 second ads Targets prime ad slots
Skecher low cost per Ad Adidas values the 30 Second Ads
Nike Reebok Adidas Skechers $-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000 Average Cost per Ad Time Slots
15 Second Ads
30 Second Ads
Overall
Most Expensive Programs
PROFESSIO
NAL FOOTBALL - ...
COLLEGE BASK
ETBALL - GAM
E
PROFESSIO
NAL BASK
ETBALL - ...
DRAMA/A
DVENTURE
CHILDRENS/
FAMIL
Y ENTERTAI...
SITUATIO
N COMEDY
SPORTSC
AST $-
$500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 Cost Per Second of Ads
Cost Per Sec
Sports games are the most expensive times to advertise The most targeted viewship
Recommendation: Global Global Focus• Emerging markets in China and Brazil• The global athletic footwear market was valued at $74.7
billion in 2011 and is forecast to grow at a CAGR of 1.8% to reach $84.4 billion in 2018
Recommendation: Women• Opportunity in women’s athletic footwear• 2013 – women’s apparel, footwear, equipment and other products
made up < 25% of Nike’s revenue• Plans for additional $3B grown in division by 2017
• Exclusive women’s stores – Newport Beach, CA and Shanghai
Keep It Up!• Continue with technological advancements and partnerships
• Continue event and celebrity sponsorships