Marketing Approaches of Nike and Li-Ning
This category associated with athletic shoes is facing decreasing requirement because there is the particular rising popularity of alternative shoes or boots, resulting in more stress than ever before to be able to achieve high profit via effective global sourcing methods.
Nike, Inc. is the world’ h leading sports and physical fitness company, “with 2000 sales of $9 billion. ” The company has produced a strong commitment to sustainability in the word and action within the last several years. Three core values of the company are “honesty, competition, and teamwork”. Despite the size, Nike operates with a minimum of hierarchy. As a result, there is a lot of collaboration and consensus decision-making. Commonly placed values are imperative in that matrix organization. (Nike Official, 2008). Nike has a strong ability of Analysis and Development, its new style is always fashionable in appearance and expert in function, for instance, Nike dunks, Jordan shoes, Nike naval pilot one. Nike pas cher has been manufacturing across the Asian region for more than twenty-five years and presently there are over 500, 1000 people today who participate in the production of their particular products directly.
As described on Li-Ning company’s website (2008), LI-Ning Company Ltd. was founded inside Guangdong Province in 1990 by LI-Ning who was a new Chinese Olympic gymnast. It is one of the particular leading sports brand corporations in the PRC. It has its own branding, research and development, design, production, distribution and retail features. Li-Ning’ s creative logo is based on its own initial letters L and N. The Group’ s goods include sports footwear, clothing and accessories for sports activity and leisure use which usually are primarily sold below its own Li-Ning brand name (Li-Ning Company, 2008). The merchandise of Li Ning sports goods continue to become more popular in Tiongkok than those of overseas competitors.
Tactical marketing and planning
Most marketing companies operate according to elegant plans. Pride, Thiele, Waller, Elliott, Paladino & Ferrell, (2007) claim that strategic planning is the procedure for establishing an organizational mission plus formulating goals, corporate method, marketing objectives, marketing strategy plus a marketing plan. Based on Nike Official (2008), the mission of Nike is usually to be a company that much better than all the others in the particular sports footwear industry.
They hope in order to maintain their position simply by providing high quality and new fashion comfortable footwear to be able to consumers of all ages and lifestyles. They promise to help to make their products easily accessible worldwide through the use of retail outlets in addition to their company web web site. Nike’s management believes that will their success is based on the particular hands of our teammates, customers, shareholders and typically the communities in which these people operate. Meanwhile, the vision of Nike is to remain the leader in the industry. They continue to create quality products that they will have provided during the past plus meet the ever-changing requires of their customers, via product innovation.
In contrast, the primary objective of Li-Ning is to be able to increase its overall market share “from the existing 17% to 20% inside three years time” and protect its first place in China sportswear market in opposition to strong competition (Li-Ning Company). To achieve this aim, Li-Ning has to enhance the customers’ brand acknowledgement, rationalize market segments plus the mission of Li-Ning is through sports, these people “inspire people’s desire in addition to power to make discoveries. ” The vision is to be the world’ s top brand in the sporting activities goods industry.
The organization and its vendors, marketing intermediaries, customers, competitors and publics all operate in a large macroenvironment of forces that shape opportunities and pose risks to the organization”. The macroenvironment consists of half a dozen major forces, they are usually “demographic forces, economic forces, natural forces, technological forces, political forces, cultural forces” (Kolter, et al, 06, P. 81).
Assessing the demographic atmosphere entails observing and monitoring population trends. The group profile includes the sizing, age, density, location, intercourse, race, occupation along with other stats of the population (Shank, 1999). The changing age group structure of the human population is probably the important aspects. Determine 1 shows a diagram in which the ages and sexes for the Chinese population construction. As can be seen from the diagram, there exists a big population at the age group of 10-50 years older. (U. S. Census Agency, International Date Base, 2001). The movement of population is also a problem that both of these kinds of two companies should consider.
The economic surroundings is also an uncontrollable factor regarding sports marketers to consider. “The purchasing power is dependent on the income problem and the consumer spending patterns” (Shank, 1999, P. 78). As figure one. 2 showed that, the particular world’ s economy has grown rapidly in the past twenty years, because a result, people’s living standard and income possess increased as well. However , consumers’ spending patterns are more varied. That means the consumers have different require and tastes. These elements can be a risk to sports shoes firms.
Cultural and social developments also influence the marketplace of sports products. Today sports and youthfulness are symbolic of many people’s core values. More and more people pay interest to sports activities (figure 1 . 3). Sports exercise seems to be growing in popularity as a result regarding the renewed emphasis on loved ones values. As an outcome of this the industry of sports wear gets larger and larger, simultaneously the sale of running shoes is increasing rapidly (Li-Ning Company).
The micro environment is made up of the forces close up to the organization that affects its ability to be able to serve its customers—the organization, suppliers, marketing intermediaries, client markets competitors and different publics. ” (Kolter, ou al, 2006, P. 78)
The suppliers are an important website link in the organisation’s total customer ‘value delivery system’, they provide the assets needed by the organsiation to produce its items and service. Nike plus Li-Ning both chose establishing countries the biggest dealer market because of the lower cost and large amount of resources. As a company that wants to earn more profit, Nike reduces its costs as it also has some supplier market in South Africa where there is one of the cheapest labors force in the world. But simultaneously Nike also is surrounded by some ethical issues.
Competitor is one of the micro-environment facets need to consider. Davidson, Simon Gottschalk, Hunt, Wood and Griffin (2006) declare an organization that wants to be successful must have 3 distinct characteristics:
- They may be of value to the customer
- They are better than that of the many other competitors
- They are difficult to imitate or replicate Nike and Li Ning have the same competitors like Reebok, Adidas, Fila, Converse, and New Balance.
All of them are playing an important part in the sports world. Kotler, et al(2006) define marketing intermediaries help company to promote, sell and distribute its products to final buyers. They include resellers, physical distribution firms, marketing service agencies and financial intermediaries. Nike maintains more than 100 countries targeting its primary market regions: United States, Europe, Asia Pacific, and the Americas. Furthermore, the public force expecially government policy is another element of microenvironment factors. Some policies are protecting domestic market such as Chinese government made some policy to encourage Li-Ning which is Chinese brand.
SWOT analysis is a very useful and popular planning tools that product manager use to determine the situation of the product. Pride, Sellit, Rundle-Thiele, Waller, Paladino and Ferrell (2006, p. 34) describe a SWOT analysis can assist with the marketing planning process by addressing conditions that need to be considered in the creating of the marketing plan. By recognizing an organization’s pros and cons, it is possible to match capabilities with external opportunities and threats and develop strategic to assist the organization to compete effectively in the market place.
Market segmentation is dividing the while market into direct groups of buyers who might require separate products or marketing mixes, and also it’s the process of analysis is customers into groups depend on their various needs, behavior or characteristics. (Kotler et al. 2006, P231).
- Geographical segmentation
- Demographic segmentation
- Psychographic segmentation
- Behavioral segmentation
The importance of market segmentation results from the fact that the buyers of a product or service are no homogenous group. Actually, every buyer has individual needs, preferences, resources and behaviors. Since it is virtually impossible to look after every customer’ s individual characteristics, marketers group customers to market segments by variables they have in common. These common characteristics allow developing a standardized marketing mix for all customers in this segment. For basketball shoes the most crucial factor should be considered is the demographic segmentation. Shilbury, Quick and Westerbeek (2003 P. 66) believe that “most essential demographic determinants being gender, age, religion, income, occupation, level of education, marital status, geography, and stage inside the family life cycle”.
Although all demographic variables are crucial, the age and life cycle, gender and income have the greatest effect on sport consumption. Base around the age and life cycle and gender factors Nike divide their basketball shoes into a few different groups such as 15-24 years old children and 24 years old male and female. The main market is the girls at age of 15-24. Li-Ning also uses the same way to divide its running shoes market. Income can divide market into a few different groups, Nike focus on the middle and above middle class meanwhile, Li-Ning focus on the middle.
Psychographic segmentation dividing a market into groups according to social class, life style or personality characteristic (Kotler, Adam, Brown, & Armstrong). Socioeconomic classes have a strong effect on performance in clothing. people’s economic situation will affect product choice, it will have a strong influence on people consider buying an expensive new basketball shoes or running shoes or buy cheaper one or do not buy it. Because of this Nike and Li Ning usually setup their shop in big city or some rich town.
Behavioral segmentation dividing a market into groups based on consumers’ knowledge of, attitude towards, uses for and responses to a product. In order to creative high loyalty both Nike and Li-Ning set some VIP card for their high loyalty consumers that offer some special discount and service.
Target market segments
Trying to sell to everyone can be wasteful, as not everyone would demand. Targeting offers the possibility of reducing waste and maximizing market response. “Target market is a specific group of customers on whom an organization focuses its marketing efforts” (Pride, Thiele, Waller, Elliott, Paladino, & Ferrell, 2007). The selection of the appropriate target audience follows the process of segmentation. Because of its main target market is young adults, Nike’ s primary starting point for expanding the market will select the youth. Also the consumers upon the market have personality characteristics such as love sports, strong sense associated with revered hero and sports activities stars, lively thinking plus imagination. Meanwhile, Li-Ning centers on its domestic market which proves efficiently. Due to the fact China has got the largest population across the world various nations have different preferences. Moreover, Li-Ning is China’s own brand that guard by Chinese government plus consumers.
Concentrating on Technique
The number of strategies may help guide a manager’s choice of target market segments. “Three of the more common of these are usually mass-market, niche-market, and growth-market strategies”(Walker, & Boyd, the 90s, P187). The marketing corporation can adopt one of three market-coverage strategies: “undifferentiated marketing differentiated marketing or even concentrated marketing” (Keith, 2k, PP398-399). Both Nike and Li-Ning use differentiated advertising strategy, because basketball shoes or boots and athletic shoes can vary in design, both of these a couple of products are in the mature stage f item life cycle, for golf ball shoes and running sneakers market their customers’ needs are different. These aspects above are all appropriate for they to employ differentiated marketing strategy, yet at the same moment their main competitors furthermore use the same method that brings some challenges for Nike and Li Ning.
Marketers can follow several positioning strategies. They can position their item on specific product features, usage occasions as well or the need these people fill or the advantages they offer. “A product can be positioned directly in opposition to a competitor. Finally, typically the product may be positioned for different product classes”(Kotler, ou al. 2006, P234). Presently there are a few way of positioning, available rules of marketing Kotler, ou al. (2006, p234) write that “Company can position products on specific item attributes, products can become added to the needs they will fill and also the benefits these people offer, products can end up being positioned on the specific classes of users, the product can be positioned straight against a competitor, finally the product can be situated for different product class”. Choosing and implementing a positioning should identify a new positional direction.
“The positioning task consists of three steps: identifying the set of possible competing advantages on which to build a position; selecting the right competitive advantages; and effectively communicating and providing the chosen position in order to the market” (Kolter, ainsi que al. 2006, P235) Compare with other basketball companies Nike’s competitive advantage is typically the high brand reputation, very good design and advanced technological innovation. So Nike’s positioning technique mixed by all these types of strategies has been defined above and it is usually dominated by the strategy place the product for several courses of users and certain product attributes. Li-Ning’s competitive advantage is the cheaper price and good quality, in addition, it use all regarding the five strategies, yet it is dominated from the approach of positioned upon the benefits they offer.
In conclusion, for Coleman and Li Ning to be able to gain a successful market within the sportswear world will be not so simple. There are so many aspects they need to consider, such because the macroenvironmental and microenvironmental forces. It is a good choice to work out a new wonderful SWOT analysis in order to assist inside building a smart strategic marketing and planning. Determine the market segments and then chose the right focus on market, then implement appropriate targeting and positioning strategy are also the important steps for Nike and Li Ning.
Coleman and Li-Ning have currently done some good efforts regarding these a few factors, but for long period successful advantages they need to do. From this particular report it is effortless to find there usually are still some drawbacks inside Nike and Li-Ning. Nike pas cher as a ‘big brother’ in the sports very good market also face some ethic issues that might deduct the reputation associated with its brand, such because the issue of applying cheaper labor force. Inside the sensitive circumstance within nowadays Nike need to avoid this debate problem. Nike also should overseas its target market in order to achieve more business. Li-Ning as a leader of Chinese sports goods organization, it also need in order to explore more new items to gain a bigger market scale and build new technology in order to catch up with typically the fast development of the particular world.
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