reebok final report

REEBOK THE COMPANY

Reebok was founded in England in 1895 as JW Foster and Sons as a manufacturer of track shoes. It was renamed REEBOK in 1960.It is an American inspired Global brand that makes sports products so as to meet the aspirations of the customer who has an emotional value attached to it, the brand is committed to innovate and design products and marketing programs so as to be at par with the competitors.

REEBOK'S VISION

Fulfilling Potential Reebok is dedicated to providing each and every athlete - from professional athletes to recreational runners to kids on the playground - with the opportunity, the products, and the inspiration to achieve what they are capable of. We all have the potential to do great things. As a brand, Reebok has the unique opportunity to help consumers, athletes and artists, partners and employees fulfil their true potential and reach heights they may have thought un-reachable.

REEBOK'S MISSION

Always Challenge and Lead through CreativityAt Reebok, we see the world a little differently and throughout our history have made our mark when we’ve had the courage to challenge convention. Reebok creates products and marketing programs that reflect the brand’s unlimited creative potential.

REEBOK'S PURPOSE

To Empower Global Youth to Fulfil their Potential Commitment to Corporate Responsibility is an important legacy and hallmark of the Reebok brand. For two decades, Human Rights, through the Reebok Human Rights program, was the primary focus of this effort. Reebok has expanded on what had been built and created a Global Corporate Citizenship platform with a purpose for the brand that will help underprivileged, underserved youth around the world fulfil their potential and live healthy, active lives.

REEBOK IN INDIA

Reebok started its operation in INDIA in 1995 and it has dominated the India sports market with 51% market share far ahead of its competitors NIKE, PUMA etc. Reebok India has a PAN India presence with its branch offices in Mumbai, Kolkata, Bengaluru. It has always challenged and lean through creativity. It has introduced products in a wide range of sport shoe category from running, walking, aerobics, lifestyle, and newly introduced Runtone ready, Zigdynamic, Realflex etc. It celebrates individuality in sports and lifestyle. Reebok has introduced its internationally acclaimed fitness programs in India, conducted under the banner of Reebok Instructor Alliance, which is dedicated to fitness instructors, personal trainers and health club owners. Reebok has trained and certified more than 800 trainers till now.

REEBOK Strategy : To continue with the heritage and take the business forward, Reebok has developed a roadmap which targets the women and kids sports, Revive classics, challenge Men’s sports, Develop a variety of products.

Reebok has a Corporate Citizenship platform and encompasses four key areas:

Philanthropy:The Reebok Foundation focuses its philanthropy in communities where Reebok’s offices are located. They have worked with 500 non-profit organizations as a part of their social responsibility. The Foundation strives to promote social and economic equality by funding non-profit organizations delivering programs aimed at inner-city youth and underserved groups to empower youth to fulfil their potential and programs that provide youth with the tools they need to lead healthy, happy and actives lives.

Programming:They offer a wide range of programming designed to inspire and engage their employees including time off to volunteer, matching gift programs, and the REACH product donation program and through the Reebok4Real Human Rights Student Advocate Program.

Partnerships:They seek partnerships which reflect their commitment to being responsible and making a difference. These collaborations include working with the athletes and assets and an active sponsorship of the Avon Walk for Breast Cancer.

Sustainability:They take pride in their long standing efforts to set responsible workplace standards and to reduce their impact on the environment. As part of the Adidas Group, they continue to help ensure fair, safe and healthy factory conditions and believe that all workers involved in the production process deserve to be treated with dignity and respect. They also strive to reduce the environmental impacts through design process, day-to-day operations and in the supply chain.

REEBOK SUPPLY CHAIN

The majority of Reebok products are manufactured in approximately 724 independently-owned and operated factories around the world. These factories employ more than half a million workers. Reebok adopted the supply chain transparency in 2002.

Reebok stores are speciality stores. It is in vertical integration and has manufacturing units and retail outlets as well.

SUPPLIER RELATIONSHIPS

There are three main types of commercial relationships:

Direct relationships with contract factories They contract directly with some factories. These direct relationships account for 95% of footwear production by volume/spend. The Reebok country office in each location oversees this manufacturing.

Sourcing through agents Some orders are placed through agents, who select the factories subject to their approval. In footwear manufacturing most orders are placed directly, but they also work with three agents.

Subcontract factories Occasionally factories subcontract parts of an order to another factory.

The Reebok entered India with 80:20 JV with Phoenix Overseas Ltd Phoenix is Asia’s largest footwear manufacturer with a capacity of 1000 pair per day Reebok started with 13 retail store in India.

Company’s first concept store was launched in Delhi in 1999, named Planet Reebok. In Aug 2001 Reebok entered into retailing partnership with Bata India for sale of Reebok and Rockport footwear in Bata outlet. By 2001, Reebok with 65 exclusive stores and 700 shop-in-shops, had 55000 sq. ft of exclusive retail space in 78 cities. By the end of 2005, the company was retailing from 182 franchise stores. It also retails from 2000 multi-brand retail outlets.

The store count as of now is more than 600. Reebok reaches out to its target customers through its 500 exclusive Reebok Stores, 200 Shop in the shop outlets & 2500 dealer outlets. The company has plan to tap tier II and Tier III cities. Reebok is planning to add around 60 lifestyle stores also. It has the largest retail store in Hyderabad in India.

Factories in INDIA

Sant Rubber Corporation Jalandhar City India - SubcontractSarup Tanneries Ltd. Jalandhar City India - Primary

REEBOK and its 4P approach in the Indian Urban Market

The marketing mix or the 4 Ps of Marketing are Product, Price, Place and Promotion.

Product Mix :

Reebok offers a wide range of Footwear for Men, Women and kids. It offers Athletic, Casual and Court in a varied colour range where it suits the demand of all sections of the consumers. The variety ranges from sober colours like black, brown, white etc to flashy pink, orange, fluorescent etc.

Performance line includes footwear designed for basketball, running, fitness, football, soccer, tennis, and other sports. The company distributes its products to athletic specialty stores and other retail shops, as well as to sporting goods stores, department stores, and shoe stores. It believes in innovation and creativity to compete in the market.

Reebok for Men: Reebok offers a wide variety of footwear for the Men. It constantly upgrades its shoes with new Comfort levels and offers in various designs, colors, sizes and prices. Eg. Reebok swing, Reebok cover point, Reebok sweep, Reebok Verona, Dhoni Trainer, Smooth fit select ride, etc.

Reebok for Women: Reebok offers a wide range of women footwear. Reebok offers: Easytone flips, Easytone go outside, runtone ready, realflex etc.

Price:

The prices of goods sold at Reebok.com are comparable to those sold by their retail partners, so as not to take away sales and revenues from their traditional channel partners. Reebok’s pricing is designed to be competitive to the other shoe retailers. The pricing strategy makes use of vertical integration wherein they own participants at differing channel levels or take part in more than one channel level operations. This can control costs and influence product pricing.

They have a varied price range depending upon the target consumers, their income and preferences. About 70% Sales from product priced below Rs 2000:-

Their main target was population of -

10 million with annual income of 45000(and above)- for medium priced shoes.

2 million with an annual income of 75000(and above)- for super premium shoes.

Partnership with Bata Shoes - Rs 900-2500

The prices for Sportshoe of men, women and kids vary from the range of approximately Rs 2000-10000.

Place :

Reebok shoes are carried by multi-brand stores and the exclusive Reebok stores across the globe. Reebok sells its product to about 20,000 retail accounts in almost 200 countries around the world. According to our survey we found out that availability of stores for reebok is not an issue and customers prefer to buy the sportshoes from a reliable store and also where they get the most updated variety of shoes. The showrooms are readily available in malls in the metropolitans and also in the tier 2 cities. They have campaigns to go rural also.

Promotion strategy:

Reebok has used various promotional tools to spread awareness among its customers about the new sportshoe launches and also its utility and its edge over the other brands. Because of the share of mind and heart it has managed to be a market leader with 51% market share. It offers discounts, vouchers, coupons on their shoes. Their discounts are seasonal and last for longer durations. They also have strategized and made the various important days like independence day, valentine’s day, Christmas etc to promote their brand and hence increase in sales. Apart from this, there are celebrity endorsements, road shows, sponsorship events, television commercials, print ads, billboards, alliance events. Reebok had separated 15% of its sales for its advertising and promotion activities.

Reebok Caters to two main types of consumers, the Performance Conscious Consumer and the Fashion Conscious Consumer. Their marketing scheme changes from time-to-time depending on the particular demand for the current campaign year.

Media vehicles:-Reebok uses various media tools to promote its brand and create awareness about the products. Reebok uses television commercials, print ads, billboards, online advertising, sponsorship events and various advertising campaigns for its promotion.

Print Media Advertising:- Print Media Advertising consists of newspapers and Magazines. It also includes outdoor bill boards, transit posters, the yellow pages, and direct mail.

Television Media:- Reebok had joined hands with various Television channels for its commercials. Reebok commercials aired during NBA Basketball games, TNT basketball games, ESPN basketball games and ESPN’s Sports Center. Reebok had enrolled various celebrities both from athletic and non-athletic background for its television commercials. The various ad campaigns were started for every launch of their new products. Time to time new commercials aired on TV.

Reebok campaign

In 2008, Reebok commercial of “Your Move” ad campaign featured celebrities like Bipasha Basu and Mahindra Singh Dhoni.

IN 2007, global campaign of “Two People in One”, television commercials include Rahul Dravid.

In 2007, “Run Easy” campaign, Indian cricket captain Rahul Dravid and wicket keeper M.S.

Dhoni featured in the Run Easy television commercials.

Bipasha Basu was also associated with the Toning shoe campaign.

Internet Advertising

Reebok.com sells the same products on their web site as they do in the stores, providing the users more ways of getting what they want. Reebok.com has not done much to promote its web site, but they do put their web site address at the bottom of all their television commercials and print advertisements. With Reebok.com being international, the marketing message will have to be localized and the choice of offline media will be determined on a country-to-country basis.

REEBOK IN RURAL MARKET

Rural marketing involves the process of developing, pricing, promoting, distributing rural specific product and a service leading to exchange between rural and urban market which satisfies consumer demand and also achieves organizational objectives. It is a two-way marketing process wherein the transactions can be:

1. Urban to Rural

2. Rural to Urban

3. Rural to Rural

To reach the rural market reebok is utilizing the 4A strategy which includes :-

Availability:

Reebok, has built a strong distribution system which helps its brands reach the interiors of the rural market. To service remote village, stockiest use auto rickshaws, bullock-carts and even boats in the backwaters of Pondicherry. Reebok has used a hub and spoke distribution model to reach the rural villages which is the future growth driver. To ensure full loads, the company depot supplies, twice a week, large distributors which who act as hubs.

Affordability:

Reebok, among the first MNC’s to realize the potential of India's rural market, has launched a variant of its largest selling shoes brand. Reebok has addressed the affordability issue in the market by lowering its price and making it affordable.

Acceptability:

Rural market has a different set of consumers and product must be made available that suits their requirements.. The company tied up with NGOs and offered reasonably-priced policies in the nature of group covers. With large parts of rural India inaccessible to conventional advertising media — only 41 % rural households have access to TV — building awareness is another challenge.

Awareness :

The rural consumer has the same likes as the urban consumer — movies and music — and for both the urban and rural consumer, the family is the key unit of identity. However, the rural consumer expressions differ from the urbans. Outing for the former is confined to local fairs and festivals and TV viewing is confined to the state-owned Doordarshan. It is a challenge for the company to spread awareness.

SWOT ANALYSIS

STRENGTHS Consideration of comfort along with

technological development

Special collection for tier- I and tier- II cities for being cost effective.

Icons of different fields as Brand Ambassadors.

Multiple Retail Channels. For e.g. Department stores, Sporting goods, Specialty retailers, Company-owned stores, Licensees.

Strong customer relationship management.

WEAKNESSES

Heavy dependency on footwear sales.

Unavailability of middle and low prices collection everywhere.

Electronic media promotion is still less in frequency.

Rely too much on retail stores to sell products.

OPPURTUNITIES

Increasing kids market is yet another opportunity for Reebok Juniors.

Increasing awareness for differentTechnologies among the consumers.

IPL and Force India gaining popularity in India.

Increasing disposable income of Indian consumer.

THREATS

Increasing competitor’s market share.

Competition offered by Chinese products.

Increasing product range and design variety for competitors.

Better supplier base of competitors.

SEGMENTATION-TARGETING-POSITIONING STRATEGY OF REEBOK

SEGMENTATION STRATEGY

Reebok is the market leader in sports shoe industry in India. After reebok entered Indian market, they used exclusive strategies according to the Indian consumer’s needs, wants and demands to segment, target and position itself. Although it had the first mover advantage , but it still has maintained its numero - uno status in the market via its efficient and effective innovative marketing strategies.

Segmentation forms the initial step of any marketing strategy where the firm divides the market into small market segments where the consumers have similar kind of needs and the firm can cover a substantial amount of market by a single strategy specific to the market segment. There are many bases for market segmentation, we will focus on the variables/bases reebok has used along with the reasons for using them –

BASES/VARIABLES FOR SEGMENTATION

REASONS FOR USING THE VARIABLE

Geography Consumer needs for the attributes of the product will be different for different geographical locations. E.g. Delhi and Sikkim

Demographico Age Consumer expectations from the product will

be different for different age groups. E.g. product design and other attributes will be different for kids and an adult

o Gendero Income Consumer’s buying power also plays an

important role in market segmentation, especially in India, as consumers in India are very price-sensitive

Psychographic Reebok focuses mostly on the lifestyle of the consumer, as the buying pattern depends on what the consumer will use the product for

Benefits sought This is the most important, most profitable and the most difficult variable to discover as it covers what the consumer wants or expects from the product

Usage rate Marketers need the information about the usage rate of a product in the market segment to judge the market growth and opportunities of the market segment.

GRAPH 1: Factors for purchase of sports shoes for consumers

TARGETING STRATEGY

After segmenting the market, marketer’s next job is to select which markets to enter and which not to. This process is called MARKET TARGETING, where the firm selects the market on the basis of segment size and growth, segment structural attractiveness and company objectives & resources. Reebok has been very specific when it comes to targeting strategy.

Reebok has used differentiated marketing along with micro marketing for targeting its market segments. For Example, Reebok segmented its market according to income group, age and gender, the specific strategies are shown below:-

According to Income group, reebok had a target of 10 million people with annual household income of Rs. 45000 and above for the middle priced product and 2 million people with annual household income of Rs.75000 and above for premium priced products.

According to Age group:- Reebok found the growth opportunities in the kids market segment and to effectively/efficiently tap that market potential, Reebok further segmented the market into two segments i.e. kids in the age group 3-7 years and 7-12 years and introduced different products according to different income groups and provided special stores for these products. E.g. sports lovers( Type of specialty store for high- income group), betts and betts ( for low-income group).

According to gender:-Reebok similarly entered into the women’s market and became the market leader there by introducing a special product line and store for women’s sports footwear. E.g. Reetone.

POSITIONING STRATEGY

There are many positioning statements for Reebok like-

Premium quality brand at a reasonable price. Brand that fits me

But Reebok wants to position itself as “A FITNESS BRAND” and for achieving that in india it has continuously been informative and innovative in its strategies. For an effective communication to its consumers it has used various promotional strategies and has made it presence felt by continuously increasing its reach, Reebok has 220 Retail outlets and its products are also available in over 2000 multi- brand outlets. For its positioning statement, reebok has signed different ambassadors for different sports, e.g. M.S.Dhoni for cricket, Tiger woods for Golf and many more.

GRAPH 2: Price ranges for consumers to purchase sports shoes

COMMENTS ON THE SEGMENTATION –TARGETING- POSITIONING STRATEGY OF REEBOK

The biggest strategical advantage of Reebok over its competitors strategy has been:-

Its understanding of the consumer needs of the market segment, its response for the changing needs and introduction of new products to the market and the efficient use of its supply chain to make it to the market as soon as possible.

The continuous market development along with the product development to complement it has also been one of the biggest strength of Reebok’s success in india. E.g.” Reetone” , product for women sports shoe market and opening new stores specifically for women’s sports-wear.

Understanding the Indian consumer. E.g . reebok realized that a broader forefoot suits more to Indian consumer, hence they developed all the shoes that had a broader forefoot to suit the Indian consumer.

Provided premium quality at a reasonable price. E.g. Reebok realized that the Indian consumer is highly price-sensitive and diverse, hence it provided a range of products under different price range.

We can conclude that reebok has efficiently segmented the market and targeted the most proficient market and positioned itself as “a premium brand at a reasonable price”

GRAPH 3: Current positioning of different sports shoe brands in INDIA

GRAPH 4: Intended positioning of different sports shoe brands in INDIA

Active

Women Oriented

Passive

Men Oriented

Nike Ree

bok

Sports Fitness

Casual

Active

Women Oriented

Men Oriented

Passive

FitnessSports

Nike Reeb

okCasual

PORTER’S FIVE FORCE MODEL

NEW ENTRANTS –

There are many barriers to entry preventing new entrants from capturing significant market share. Today’s athletic shoes are highly technical. An extremely large capital investment is required for new firms to open athletic shoe factories and conduct research and design to create a popular athletic shoe.The aggressive marketing campaigns turn their products into household names making it arduous for new firms to compete.Athletic shoe manufacturers greatly attempt to differentiate their products from all shoe manufacturers.

If they are a startup firm, it is extremely difficult to get shelf space at major shoe retailers. If the firm is currently in the dress shoe industry, and is entering the athletic shoe industry, they may use their existing connections to easily access athletic shoe distribution channels.

Switching costs are very low for the athletic shoe industry.

Many athletic shoe customers are brand loyal and are reluctant to try a new athletic shoe. Government policy is a low entry barrier, as all manufacturers in every industry are subject to factory safety laws.

RIVALRY AMONGST EXISTING FIRMS -

In the athletic shoe industry, corporations are mutually dependent. A competitive move by one firm directly effects competitors, forcing retaliation or counterefforts. For example, Reebok’s expansion of the women’s walking shoe, inspired other firms to follow.

The number of competitors is stable, partially due to high entry barriers. This adds to the rivalry among existing firms. Manufacturers watch each other carefully and make appropriate countermoves to match a competitor’s move.

The rate of industry growth is stable, but the quest for global market share is eminent. This increases global rivalry. Product characteristics are related to market share. Name recognition alone sells athletic shoes. The larger the market share, the greater advertising capabilities and hence increased name recognition.

Athletic shoe manufacturers relentlessly try to minimize fixed costs. Many shoe manufacturers (unorganized sector) reduce their costs by assembling athletic shoes abroad where labor is less expensive and tax laws are minimal. This increases rivalry, when manufacturing savings pass to the consumer.

Capacity has minimal impact on rivalry, because most firms have means to manufacture the demanded amount of athletic shoes.This ability to meet demand reduces market because most firms overproduce and drive down the selling price.

Low exit barriers and diversity among competitors has minimal impact on profit potential. If the athletic shoe industry becomes too unprofitable, firms could switch to other shoe markets. Additionally, diversity among firms is small because every firm follows one another.

The rivalry among existing firms is high where weak firms are easily acquired by fierce competitors. This may have a high impact on profit potential.

BARGAINING POWER OF BUYERS -

Buyers have high switching costs in regards to opportunity cost. If an athletic shoe retailer decided to drop one of the popular athletic shoe brands, their sales would fall due to high consumer brand loyalty. Most buyers have a medium profit margin so price sensitivity of buyers is moderate. In the athletic shoe industry, price increases pass to the consumers.

The overall impact from buyer’s bargaining power to profit potential is moderate.

BARGAINING POWER OF SUPPLIERS -

Athletic shoes are manufactured primarily from raw materials including rubber, leather and nylon. These materials could be classified as commodities, where the manufacturing process adds to their value. For this reason, the suppliers have limited bargaining power, and little impact on profit potential.

THREAT OF SUBSTITUTES -

Athletic shoes are designed to improve comfort and personal safety during periods of increased movement. Substitutes for athletic shoes are using other forms of shoes, or going barefoot(rural areas). A large population of athletic shoe consumers wear athletic shoes strictly because they are comfortable. Comfortable dress shoes or sandals are equally interchangeable with minimal switching costs. If the athletic shoe is used for sports, then there are relatively few substitutes. Given these reasons, the threat of substitute products is moderate and the impact to profit potential is moderate to high.

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PEST ANALYSIS

POLITICAL

Reebok policy is to control and monitor hazardous substance to protect human health and

environment one of those is to eliminate PVC making progress in finding substitutes like

polyurethane, ethyl vinyl, silicones thermoplastic rubber.

Reebok also provide training sessions on employment standards and HR systems, health and

safety is important for the company.

Establishing teams to manage and monitor SARS in Asia factory, washing stations,

disinfectant units.

Finally Reebok protects and supports the rights of its employees by following all the current

employment laws.

Excise and customs duty for sports shoes raw materials has decreased providing a relief

ECONOMICAL

As a multinational company Reebok helps countries to decrease unemployment byincreasing every year the number of employees.

Labor salary is high in Germany and France but not so expensive in China (Suzhou). This is the reason that most of factories located in Asia.

Reebok sponsored kits for Indian Premier League teams, such as the Royal Challengers Bangalore, Kolkata Knight Riders, Rajasthan Royalsand Chennai Super Kings in the first edition of the league held in 2008. However, for the second edition held in 2009, the sponsorships includedRoyal Challengers Bangalore, Kolkata Knight Riders, Chennai Super Kings, Kings XI Punjab kits.

SOCIAL

Reebok products declare in any raise, age, religion, and lifestyle, always in fashionwith special design in any of product. Focus in people who like sports and athletes,almost everybody can purchase Reebok products. Usually men and women from urban sector with an annual income of 1.5 lakhs are users of Reebok . Frequent users are those with an annual income of 5 lakhs or more .

As a crucial component of Reebok’s Global Corporate Citizenship Platform, the Reebok Foundation focuses its philanthropy in communities where Reebok’s offices are located. The Foundation strives to promote social and economic equality by funding non-profit organizations delivering programs aimed at inner-city youth and underserved groups to empower youth to fulfill their potential – programs that provide youth with the tools they need to lead healthy, happy and actives lives.

Through Reach, the Reebok Employee Charitable program, the brand is committed to empowering and encouraging Reebok employees to get involved and make a positive difference in their communities. Through modest financial Reach grants made available to Reebok’s full time employees for qualified non-profit organizations (restrictions apply), the company invites its employees to “reach” beyond their own personal means to support a cause that is important to them and their family.

We seek partnerships which reflect our commitment to being responsible and making a difference. These collaborations include working with our athletes and assets and an active sponsorship of the Avon Walk for Breast Cancer.

TECHNOLOGY

R&D teams at Reebok create footwear, apparel and hardware with the primary focus on developing products that provide maximum performance, comfort and fit for the consumer. Teams are structured along the brand’s product category focus in addition to certain cross-category groups such as the Reebok Advanced Concepts (RAC) team. Activities are

http://en.wikipedia.org/wiki/Kings_XI_Punjab

http://en.wikipedia.org/wiki/Chennai_Super_Kings


http://en.wikipedia.org/wiki/Kolkata_Knight_Riders

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http://en.wikipedia.org/wiki/Rajasthan_Royals

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primarily located in Canton/Massachusetts, USA to facilitate close collaboration with the respective product marketing teams. In order to include production considerations early in the process, a new development centre was opened in Vietnam close to the brand’s sourcing base in the middle of 2009.

In 2009, Reebok launched several new product initiatives which had an important influence on the brand’s sales development, in particular in the Women’s Fitness category. At brand Reebok, 64% of ordered footwear was launched in 2009 (2008: 66%). Only 14% of ordered footwear products were related to products introduced three or more years ago (2008: 14%).

In 2009, Reebok launched the EasyTone™ shoe featuring “moving air” technology. Balance pods located in the sole of the shoe create natural instability with each step. The proprietary technology was worked into the shoe without compromising the look. The need to constantly rebalance weight tones the wearer’s butt and leg muscles with every step. Going forward, Reebok will build on the success of the EasyTone™ and further expand its offering in this emerging category see Reebok Strategy. As a result, we expect to sell several million pairs of toning products in 2010.

Also, in 2009 Reebok launched JUKARI Fit to Fly™, a new gym workout developed in cooperation with Cirque du Soleil. It uses a specially designed trapeze-shaped piece of equipment called JUKARI FlySet™ for an effective total body workout through cardio, strength, balance and core training.

RECENT DEVELOPMENTS

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In April 2008 Reebok launched its online store in UK and France.[10] In January 2009

Reebok had extended the store to Germany, Austria, Netherlands, Belgium and Ireland

and had also introduced YourReebok – an application to design your own Reeboks.[11]

For the 2008–09 season, Reebok created the Reebok Edge 2 uniform system, for National

Hockey League's players. The league adopted the jersey and now all teams sport the new

style for both their home and away jerseys.

In July 2007, Reebok launched its Lifestyle Footwear Collection in association

with Daddy Yankee's new album. In December 2007, Reebok launched the GOAL

Collection of football gear on the release of the Indian football movie Dhan Dhana Dhan

Goal.

In June 2007, Reebok announced Scarlett Johansson on its array of brand ambassadors.

Johansson promotes the Scarlett 'Hearts' Rbk" collection, a 'fashion-forward, athletic-

inspired' footwear targeted at the Indian market.

http://adidas-group.corporate-publications.com/2009/gb/en/structure-and-strategy/global-brands-strategy/reebok-strategy.html

For the 2007/08 season, the National Hockey League introduced a new uniform system

league-wide, designed and manufactured by Reebok and called Reebok Edge. The new

uniforms include new fabrics which are said to repel water and sweat more effectively.

Most players have avoided comment, but some have commented that the Edge system's

improved water repelling abilities leads to gloves and skates becoming saturated and

uncomfortable during play.

In late 2006, a court case began between Liverpool FC, the winners of the 2005 UEFA

Champions League while wearing Reebok's kit, and Reebok. Reebok claimed that

Liverpool cost them £7m because of a delay in confirming the renewal of

the Carlsberg sponsorship deal, which meant a delay in releasing the away shirt for

2005/06 (the last that Reebok would make for them)The kit that was eventually released

was very similar to the away kit for 2003/04. Liverpool subsequently switched

to Adidas for their official kit following Adidas' acquisition of Reebok.

In November 2006, the National Basketball Association and Women's National

Basketball Association switched from Reebok to Adidas branding on authentic and

replica jerseys because that brand is better known outside North America and the UK.

In October 2006 Reebok launches its first blog, "I am what I am"[12] in Spanish.

On March 23, 2006, Reebok recalled 300,000 charm bracelets that contained extremely

high levels of lead. The bracelet has a heart pendant at the end that is printed with the

name "Reebok." It allegedly caused the lead poisoning death of a 4-year-old child who

swallowed it.

In August 2005, one of the company's largest rivals, Adidas, announced that it would

acquire Reebok for $3.8 billion. The deal was completed in January 2006.[

COMPETIOR ANALYSIS

MARKET SHARE OF DIFFERENT SPORTS SHOE

The organised and unorganised sector break up is given below:

Organised37%

Unorganised63%

Market Share

CHART 1: Market share of organised and unorganised sectors in Indian Footwear market

The major brands in sports shoe market in India are Reebok, Adidas, Bata, Khadim, Liberty, Puma, Nike and

reebok32%

adidas30%

bata7%

khadim 4%

liberty3%

puma 9%

nike15%

Market Share

CHART 2: Market share of different brands in Indian sports shoe market

PRODUCT CATEGORY:

TABLE 1: The following table gives the breakup of different products for different brands classified on gender:

Reebok Adidas Nike Puma

Zig tech Footware Basketball Cricket Football

RealFlex Footware Football Football Running

MenReebok Crossfit Golf Running Sailing

Basketball Running Golf Running Training Motorsport Tennis Rugby Outdoor BodyTrain

Other sports Social

Toning footware

Fluid trainer

No categorisation Football

Zig tech Footware

Adizero TR W Running

WomenRealFlex Footware Golf

Reebock Crossfit Motorsport

Social

The strength or unique feature of each brand is highlighted in above table.

PRODUCT FEATURES

Reebok (Price range INR 1040 to INR 5000)

Women’s Sport and challenge in Men’s Sport

With a holistic approach to fitness, Reebok provides consumers with proprietary technologies based on the three key elements of total fitness: strength, conditioning and flexibility. Through a focused approach to these elements, Reebok has developed three key product concepts:

Toning (launched in 2009) ZigTech (launched in 2010) RealFlex (to be launched in 2011)

These three product concepts are designed and will be commercialised across genders.

Strength: leveraging leading position in toning

In 2009, Reebok launched the EasyTone footwear collection that is designed to help tone key leg muscles. EasyTone is based on Reebok’s proprietary “Moving Air” technology. It involves two balance pods under the heel and forefoot of the shoes that create natural instability with every step, forcing the muscles to adapt. Building on the success of EasyTone, in 2010 Reebok expanded its footwear offering into running with RunTone and training with TrainTone. The brand also expanded its toning reach with a new offering of lifestyle, athletic and dress shoe models to capture additional consumer segments and distribution channels. Reebok will evolve the toning platform for 2011 with the launch of the “Tone while you live” campaign. This campaign features inspirational EasyTone fans from around the world who fit fitness into their busy lives with EasyTone footwear and apparel.

Conditioning: successful market launch of ZigTech

In spring 2010, Reebok introduced its second innovative technology with ZigTech, an innovative running and training shoe concept for conditioning activities. ZigTech not only created outstanding buzz among consumers. Reebok’s ZigTech footwear utilises a unique “Zig-Zag” geometry that delivers energy transfer back to a runner’s running stride. Its unique sole propels the runner forward and is designed to help reduce muscle fatigue in shins.

Reebok’s strategy is to expand the ZigTech platform across categories in order to build ownership with this iconic geometric shape. The brand also extended ZigTech into Kids, capturing this young and influential consumer in a highly relevant way. In spring 2011, the next category-specific evolution of ZigTech for men and women will follow with the launch of ZigTech Nano, a lower-profile version of the original ZigTech. The ZigTech concept will be supported by an integrated global marketing campaign “ReeZig – More Energy” in 2011.

Flexibility: introducing RealFlex

In 2011, Reebok will introduce its third pillar, supporting flexibility and natural movement. RealFlex is engineered with 76 independent “sensors” that help promote the natural movement of your feet. These sensors are positioned to flex and move throughout the stride while providing protection under the feet. RealFlex provides Reebok with a unique point of view in the fast-growing lightweight running and training category. And just like ZigTech and Toning, RealFlex represents a distinctive visual DNA as well as a highly relevant, functional consumer proposition. Reebok also demonstrates its commitment to this fitness and training area through the creation of innovative workout experiences such as its partnership with Cirque du Soleil and

the roll-out of the Jukari training programme. In 2011, Reebok will expand its fitness footprint around the world through an innovative, back to basics grassroots movement.

Revive Classics

Reebok Classics leverages the fitness attitude and roots of the brand into the lifestyle segment. Classics targets consumers who want to be “fit for the street” and value trend-right products that fit their mobile lifestyle. In 2010, the foundation and strategic direction of the Classics business was further defined, which has laid the groundwork for Reebok Classics to re-emerge in 2011. The key product concept in 2011 is Reebok Lite. This collection modernises Reebok’s Classics offering by combining lightweight, trend-right materials and Reebok’s proprietary technologies. The result is a range of products that provide supreme comfort, technical details and a distinctive aesthetic appeal. This new product collection will be highlighted through an integrated global marketing campaign.

STRENGTHS

Consideration of comfort along with technological development

Special collection for tier- I and tier- II cities for being cost effective.

Icons of different fields as Brand Ambassadors.

Multiple Retail Channels. For e.g. Department stores , Sporting goods, Specialty retailers , Company-owned stores , Licensees.

Strong customer relationship management.

WEAKNESSES

Heavy dependency on footwear sales.

Unavailability of middle and low prices collection everywhere.

Electronic media promotion is still less in frequency.

Rely too much on retail stores to sell products.

Bad working practices in their manufacturing units.

OPPURTUNITIES

Increasing kids market is yet another opportunity for Reebok Juniors.

Increasing awareness for differenttechnologies among the consumers.

IPL and Force India gainingpopularity in India.

THREATS

Increasing competitor’s market share.

Competition offered by Chinese products.

Increasing product range and design variety for competitors.

Increasing disposable income of Indian consumer.

Better supplier base of competitors.

ADIDAS (Price range INR 685 to INR 5999)

Micoach

Create a plan:

From training to tennis, miCoach has a custom plan get to the top of your game whatever the sport.

Start Training:

MiCoach workouts are based on four color zones personalized ones cardio or strength and flex plan. MiCoach keeps the cardio workouts in check with real-time audible feedback.

Track your progress:

Online, miCoach syncs so one can check the stats, enter strength and flexibility data, track progress and get coaching feedback for every workout. On the go, miCoach Mobile puts instant feedback and workout analysis.

Basketball

Crazylite:

This basketball shoe was designed from the barefoot up and the results were astonishing, 9.8 ounces of pure lightweight performance.

Running

Adizero feather: Lightest ever 190 g.

Supernova:

Streamlined for a more powerful,more comfortable stride, these Adidas Supernova. Sequence 4 shoes step you into an anatomical GEOFIT construction and a breathable air mesh upper. These running shoes also protect your joints with impact-absorbent adiPRENE cushioning and TORSION midfoot support.

Response:

When the run off the beaten path, these adidas RESPONSE Trail 18 shoes strengthen the stride with their responsive FORMOTION design, impact-absorbent adiPRENE cushioning and TORSION midfoot support. These trail running shoes are also miCoach compatible.

Adistar:

For smooth landings, these adiSTAR Salvation 3 adidas running shoes feature a unique FORMOTION design that adapts to the ground every step of the way. Plus they support your stride with a TORSION midfoot and impact-absorbent adiPRENE cushioning.

Women footware:

These lightweight, slim and comfortable adidas training shoes are specially designed for a woman's foot. The adiZero Training shoes feature a breathable mesh upper, EVA cushioning and TPU heel support

STRENGTHS

In many events is the biggest sponsor

Brand recognition and reputation

Strong control over its own distribution channel

No bad reputation like child labor or environment pollution

Diversity and variety in products offered on the web

WEAKNESSES

High prices in some products

E-commerce is limited to USA

The direct sale to consumers is creating conflicts with its own resellers

Online customer service not "helpful" or easy to find.

OPPORTUNITIES

Increased female participation in athletics.

Collaborate with other online retailers to offer Adidas products.

Possibility of outsourcing the web development and e-commerce to a third party developer.

THREATS

Nike’s strong reputation in the sports shoe industry.

Increase in the Price of Raw materials

Continuing challenges in import/export duties.

NIKE (Price range INR 1775 to INR 12000)

STRENGTHS

Lean organization

Brand Name

Leads international business operations through acquisitions and re-branding

Financially Strong

Effective Research and Development

Effective promotional activities

WEAKNESSES

Unwilling to disclose to disclose partnering companies

Use of Contract manufacturers makes it difficult to control quality of production and create financial problems due to foreign currency exchange rate fluctuations

Use of sports stars who fail to perform, retire or become injured

could adversely affect Nike image

Heavy dependency on athletic footwear sales

OPPORTUNITIES

Nike must focus on Growing ecommerce, it will have positive effect.

Can grow in new and emergingMarkets.

Women demand for athletic footwear is increasing significantly.

Using eco-friendly projects

Customer use of company’s products change from athletic purpose to a fashion item.

THREATS

Negative publicity feedback

Strong Competitors

Piracy of footwear and apparel designs could decrease sales and adversely impact image.

Political unrest in the supplier countries

Perpetual Map

MARKETING STRATEGY

Reebok:

In the initial years when Reebok was launched, the product offering was dominantly for the male consumer. At the time, sports and fitness was predominantly a male activity. However, there was always the realisation that there is a female consumer who lives an active lifestyle -- who walks regularly, or even works out -- and who could be attracted with Reebok’s product offerings. Reebok adapted the format of all its stores and introduced a women's collection and created a small corner with 20-30 SKUs in apparel and shoes. It worked out well and soon women's business was 15 per cent of their main business. Marketing to women took the grass-root path. Reebok has certified 700 trainers in India.

Adidas:

The Adidas India Marketing franchise, as a part of the Adidas Group strives to be the global leader in the sporting goods industry with sports brands built on a obsession for sports and a sporting lifestyle. The sports goods franchise is a consumer focused organisation and therefore wishes to continuously improve the quality, look, feel and image of its products. The sportswear business organizational structures match and exceed consumer expectations to provide them with the highest value.

The Group is an innovation and design leader who seeks to help athletes of all skill levels achieve peak performance with every product it brings to market. It is a global organization that is socially and environmentally responsible, creative and financially rewarding for our employees and shareholders. The Group is committed to continuously strengthening its brands and products to improve the competitive position.

Dedicated to consistently deliver outstanding financial results, the Group’s goal is to lead the sporting goods industry with brands built on a passion for sports and a sporting lifestyle. A consumer-driven company that does everything strengthen and develop its brands to maximize the Group’s performance.

The acquisition of Reebok extended its global position, gaining a broader presence in key markets, product categories and consumer segments. The combined strengths aim to widen the profile we have with consumers and enhance brand profitability by execution of a well-defined strategy. The integration of Reebok has given the Group additional insights to the best-in-class techniques and processes across its entire organization

Nike:

Nike, the largest seller of athletic footwear and athletic apparel in the world with subsidiaries

in over 200 countries across the world, has attempted to keep itself on the cutting edge of

technology. Nike has been launching new technically advanced shoe models from time to

time, backed by innovative advertisements, celebrity endorsements, successful associations

(college teams) and event sponsorships.

When it faced a crisis in the late 1990s, Nike decided to strengthen its management, overhaul

its information systems, and streamline supply chain management. Since then, Nike has been

achieving rapid growth by using aggressive marketing tactics.

However, Nike still faces many challenges in the wake of changing fashion trends, the falling

sale of its higher- priced shoes, and increasing competition.

GREY MARKET

Grey market share is about 63% of the Indian sports shoe market till 2010 and expected to

grow by 4-5% by 2015. Indian sports shoe market is 7% of the Rs.15000 Cr Indian footwear

market with CAGR of 8.8% and expected to reach by Rs.20000 Cr by 2015. Some of the data

of the grey sports shoe market in some of the regions is provided below:

Delhi : Rs. 250-300 Cr

Chandigarh : Rs. 100-130 Cr

J&K : Around Rs. 60 Cr

Uttar Pradesh : Around 600 Cr

Northern region of India(J&K, Haryana, Himachal Pradesh, Delhi, Punjab, Uttaranchal, Uttar

Pradesh) : 30- 40 % of grey market

COMMENTS ON COMPETITIVE ADVANTAGE OF REEBOK

Quality and price both play a very important role in the customer buying process in India and

as it is visible from the perpetual model that Reebok has a clear advantage in both these

attributes. Reebok focus on the middle income buyer also, which is a burgeoning class in

India, and capitalises on increasing women sports shoe market which is not that significant

for its competitors. The product differentiation of Reebok is based on technology rather than

on sports, as is the case with its competitors, and hence enjoys maximum customer

satisfaction. Reebok has started to tap the potential kids sportswear market. The competitive

advantage that Reebok relishes the most is its supply chain, Research and development

department and its understanding of customer needs.

RECOMMENDATIONS:-

Tap the high-income group by bringing high priced shoe. Indian consumer’s purchasing power is increasing, so the high-priced shoe will be a big contributor to the revenue.

Increase the product-line for kids sportswear market in India. Promotions through internet and other media channels should increase. Lucrative offers like sale on product, purchase coupons etc. on regular bases to retain

customer loyalty. Tie-up with different sporting and fashion events to promote its new products. Capture the highly growing rural marketing with low- and medium- priced products

as the rural market purchasing power is increasing along with strengthening its supply chain.

reebok final report

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