A Comparative Analysis of Reebok and Nike Target Audiences and Marketing Strategies

Executive Summary

Reebok and Nike have similar target audiences, both in sportswear and apparel industries. Nike founded in 1964 in the US is comparatively younger compared to Reebok, which traces its history to Joseph Foster developing specialty spiked running shoes in England. Compared to Reebok that focuses on the fitness culture inspiring the extreme lifestyle, Nike has marketed its products as aggressive, individualistic, and go-getter athlete a well as wanting to break all the barriers to be successful.

Brief Introduction

Nike was listed as most valued company in apparel and footwear in 2019 with market share of 27.4% with sales of 11.8billion whereas as Reebok sales has remained steady approximately $480 million since 2005. In 1980s, Reebok led the market selling more products and being valued higher than Nike but failure to recognise the changing consumer need and rebranding to capture the changing environment saw drop in market share and product sales.

Comparative study of customer analysis and advertising tactics

At the heart of product sales and market share is consumer awareness of the product. Consumer awareness does not capture the extent to potential buyers are aware of presence of a product, include the quality and effectiveness but also company’ understanding of the needs and preferences of the target population shown by degree to which it addresses their needs. According to Honka et al. (2015), one approach in which business entities can let potential consumers be awareness of the product is putting forth and promoting respective product or services. Fundamentally, such as techniques as advertising through radio, newspapers, TV, campaigns, social media, word-of-mouth, and social media are core in propelling a product and setting market awareness. Although marketing and branding are concepts used to drive product awareness, the latter is rooted what the product is encapsulating quality, features, name, and symbol which uniquely differentiate it from others in market segment (Klimchuk, and Krasovec, 2013; Clifton, 2011). Whereas, marketing captures the ways in which a company pushes a product to be known by potential consumers (Hsu, 2011; Kotler, and Armstrong, 2010). For instance, making a product to have unique characteristics and qualities such as Air Jordan, a shoe product produced by Nike Inc. makes it a brand by itself but making consumer be aware of availability of a products such clothing, footwear, and apparel being produced and sold by a company is marketing.

Brands and their History timeline

Nike Inc. first ran a TV advertisement in 1982 concentrating on the sponsorship and endorsement by celebrity athletes. Romanian tennis player, Ilie Natase, was the first athlete to be recruited and endorse the Nike products (Weiden, 2016). In 1986, the company recruited Michael Jordan to sponsor and later sell it products, primarily shoes wear, and currently it has signed celebrities such as Tiger Woods (PGA), Russell Wilson (NFL), Christiano Ronaldo (Football), LeBron James (NBA), Rafael Nadal (ATP). Air Jordan, embodying the attribute of greatness, quality, athleticism, and cultural identify was created and brand to reflect the greatness and fame of Michael Jordan, the basketballer. In 2019, the Jordan brand made 8% of the company, had a revenue of $3.1 billion, and reporting a 10% growth rate

On the other hand, Reebok, an independent subsidiary of Adidas (acquired in 2005), is an apparel and footwear company. As a marketing strategy, the company sponsors the number of sports and athletes such as UFC and CrossFit. (47% of the Indian footwear and apparel market. Additionally, it has segmented the market based on age, gender, socioeconomic, and needs such as fitness, adventure, and sporty (D'Mello, 2003). By understanding that consumers are unique, it strive to celebrate authenticity and individuality hence embracing such slogan as #FitToFight aim to inspire women to be socially, mentally, and physically fit and readiness to fight. In branding, in 2017, Reebok was vote the most valuable brand globally, valued at $1.2 billion (Statista, 2019). In addition to using celebrity endorsement, the company adopted such campaigns as “Your move” and “Run Easy” emphasising on a running as a social and fun activity, and ‘Be more human’ exploring the strength in teamwork. Essentially, the company has positioned and branded itself in the fitness industry.

Customer analysis tactics

Core to success of a marketing or branding strategy is reach to the right consumers. According to Hawkins and Mothersbaugh (2010) and Hoffman et al. (2010), effectiveness of marketing in measured by ability to identify, satisfy, and retain customers. The identification aspect encompasses understanding on what the consumers need and want as well as the way in which to reach them through consumer segmentation. While Reebok focuses on fitness and performance sportswear, Nike Inc. develops and markets its products majorly as sporting gear and apparel targeting sportswear segment, cultural identity, and 15-45 year audience, and through branding such as Air Jordan sneakers, the company have creates a cultural identify, personality of products, and connection with consumers (Bain, 2019; Badenhausen, 2020).

As pointed by Armstrong et al. (2018) and Paul et al. (2010) consumers’ consumption behaviour is largely driven by individual needs and wants. As such, effective organizations’ marketing strategy starts by identify those needs and then working on ways of meeting satisfactorily. In essence, Nike is lauded for having a deep understanding of and prioritising on the consumers’ needs during strategizing and implementation of marketing strategy (Reddy, G., 2017. Brohi et al. 2016). It is worth noting that reviews, critics, monitoring, and recently big data are some of the ways in which a business gets to know the needs of the consumer. Service and product quality, connectedness with the consumer, innovation, and loyalty. The Just Do It slogan is perceived as pushing the ability of athletes to achieve greatness and success. 1990 Nike focused on cultural sensation by moulding itself as a fashion through such products as Air Jordan that result in increased product sales and increased market share (Katumba, 2018; Danziger, 2018). It adopted marketing approach that included signing and endorsement by celebrity athletes, developing personality that consumer could identify with, and reach target consumer through TV commercials.

In 2000, Reebok market share stood at 12% in the US largely attributable to focusing on urban styling and clothing, and recruitment of celebrities such as Iverson to endorse (Forbes, 2000). The strategy was targeted at young consumers to buy Reebok sneakers products. This came after survey indicated 54% young people had bought Nike products while only 16% bought Reebok. Moreover, Reebok invested hugely on technology and advertisement ($196 million) focused on innovate the quality and catch up with Nike’s product quality and consumer perception (Forbes, 2000). In 2000s, Reebok strategy focused on performance sportswear while at the same time moving to fitness positioning, branded gyms and gym equipment, and entry into classic range and new street inspired reebok range aimed at creating an product identity and personality. A strategy that led to passing $3bn and 16% rise in sales in 2002. However, in the same year, Nike sales remained high at $9.8bn attributable to product segmentation and targeted approach (Russell, 2019). In 2017, Nike was valued at $25billion while Reebok valuation stood at $0.88billion. Crothers (2020) linked these huge differences to the strategic marketing and branding approach.

Conclusion + Recommendation

Marketing and branding have significant influence on product sale and market share. Reebok strategy of rooted on “changing the way people perceive, define, and experience fitness” has been a driven force in creating, developing, and implementing approach of reaching to consumers. In addition to expanding branding approach (Air Jordan brand), Nike continued to recruit celebrity athletes (Cristiano Ronaldo, Serena Williams, Tiger Hoods, and LeBron James) who are regarded as individually driven individuals and symbol of greatness. However, Reebok has rebranded and reposition into fitness industry and emphasising on uniqueness of everyone.

Through marketing and branding, business entities should focus on establishing the need of the target consumers and then come up with strategy to addressing those needs as well as ways of exploring those needs.

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