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The dominating brands, Nike and Adidas, both lead the industry because of their ... While both Nike and Adidas aim to reach their target audience through.
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Adidas versus Nike Consumer Tendencies, Preferences, and Influences Madeline Ettinger EUSA Author Note Madeline Ettinger is a student at EUSA. Correspondence concerning this article should be addressed to Madeline. Email: ettin103@mail.chapman.edu
2.2 Graphics and Analysis: Of the 114 responses 49 respondents were female and the other 64 were male Over 85% of our respondents fell between the ages 14-27, representing each companies inclination to market towards the youth. The majority of our respondents were individuals who had completed or were in the process of completing an undergraduate degree.
The majority of the 114 responses were from American citizens. 84.8% of responses were from Americans, 3.6% were from Europe, 10% from Canada, and .9% from SE Asia. 75 respondents said that they owned Adidas, while 38 said they did not.
over the two market leaders, Nike and Adidas. There is a somewhat even bell curve representing how much company ethics affect purchasing decisions. 43.9% said that they actively did not feel company ethics changed their purchasing, 28.1% said they did not feel one way or the other, and 28.1% said that they took company ethics into regard when making purchasing decisions.
The majority of respondents, 57.1%, claimed that sports teams actively did not change their purchasing choices. 23.7% believed that sports teams had no relation to their athletic wear preference, and only 19.3% believed that sports teams sponsorship affected which athletic brand they purchased.
3.0 Moral Ethics of the Company In the early 2000s, corporate social responsibility gained importance as more companies found ways to incorporate ethics into their standards. According to research from Mintel, in the United States, 56 percent of consumers stop buying from companies they believe are unethical (Bonetto, 2015). To take it a step further, 35 percent of consumers stop buying from brands they believe are unethical even if there is not an available substitute brand (Bonetto, 2015). A study done in the United Kingdom indicates that 51% of consumers find ethical credentials to be important when choosing an apparel retailer (Is Ethical Retailing Real?, 2016). These statistics demonstrate the value of moral behavior in the business world. A majority of consumers nowadays are making purchasing decisions and giving their loyalty to brands that prioritize ethical business practices. Sales and consumer relevance will decrease for companies that do not pay attention to these trends. In order to demonstrate that a company is ethical, proper marketing is necessary to reach the consumer and generate awareness. Successful brands “consider alternative methods to showcase their ethical efforts, such as content marketing showing the full scope of a brand’s actions and participating in related grassroots efforts” (Bonetto, 2015). The following paragraphs will analyze specific moral ethics of both Nike and Adidas. The Nike code of conduct states: “NIKE is committed to socially responsible sourcing practices. We are driven to do not only what is required by law, but also what is expected of a leader.” In 1991, Nike received major backlash after Jeff Ballinger published a report outlining the poor working conditions and low wages in their Indonesian factories. This put Nike in the spotlight for poor ethical behavior and people continually scrutinize the company for potential relapse. Nike was initially slow to respond to this report, but has since made strong progress in changing their reputation and ensuring they practice corporate social responsibility. Initial efforts to change these conditions included increasing monitoring efforts, raising the minimum wages, and increasing factory audits. Today, Nike is considered among the top sustainability leaders in its industry and has made positive changes in their practices, but they still have ways to go before they can truly be considered a sustainable company. The positive acts they took to become more environmentally friendly includes using organic and recycled cotton and polyester, implementing a waste and water reduction strategy in its supply chain, and making a public commitment to reduce its carbon emissions by over 50% by 2025 (Robertson). On the negative side, Nike has yet to remove hazardous chemicals from its supply chain which is dangerous for the workers surrounded by them (Robertson). Regarding recent labor conditions, the company received the top score in the 2017 Fair Labor Association Workplace Code of Conduct Ethical Fashion Report. However, they still have minimal worker empowerment initiatives within the supply chain and received a much lower score for improving living wages. With an annual revenue exceeding 30 billion, Nike is taking the right
steps, but has the power to make significant improvements in their corporate social responsibility for the future. The Adidas code of conduct states: “Adidas stands for building better communities by encouraging tolerance, solidarity, and fair sport. Sport is in our company’s DNA and playing fair holds equally true for sport as it does in business. We believe in hard work, discipline and preparation. We believe in making the right decisions.” In the realm of sustainable work, Adidas makes many more public efforts than Nike. They recently partnered with an ocean conservation group, Parley for the Oceans, in order to produce a variety of products made from recycled waste from the sea. Additionally, they made a public commitment to reduce their waste production, energy consumption and water use by at least 20 percent by 2020 (Robertson). They are also a part of the founding members of the Better Cotton Initiative and the Sustainable Apparel Coalition. For labor conditions, they received the top score for their Supplier Code of Conduct and publicly lists most of their suppliers to ensure quality (Robertson). However, like Nike, the brand has few worker empowerment initiatives and low wages. According to our survey, 32% of the respondents reported that they take corporate social responsibility into consideration when making a decision about which brand to buy from. By understanding the consumers’ mindset and opinions on purchasing from socially responsible corporations, companies can better their resources in order to increase consumer loyalty. In the athletic wear industry, this is important knowledge because there is a lot of talk of sustainability in products and labor condition problems. If companies take initiative to ensure their consumers are aware they are making advances in their corporate sustainable efforts, there chance for success increases. 4.0 Target Audience and Demographic Nike segments their target audience into three groups: women, young athletes, and runners. The women’s line has been crucial to the economic success of Nike in the past two years, adding 2 billion in revenue. The rise in athleisure lead to the advent and sale of a couture line for Nike. They now sell lace trimmed jerseys, skirts, and fashionable leggings perfect for running errands or going out to brunch (Lutz, 2015 1-3). Nike targets women interested in this trend, who tend to be in their 20’s-30’s. This segment market also assist in the marketing for their second division: young athletes. By roping young to middle aged women into buying Nike, Nike also secures the purchase of athletic wear or these womens kids. It is crucial for Nike to access the young athletes category. This means sponsoring local leagues, clubs, and federations (Lutz, 2015 1-3). The more young athletes wear Nike, the more they follow sports teams that are sponsored by Nike. This leads to lifelong customers and increased brand loyalty. The final sub sector is runners. Nike’s initial foundation was on high performance gear. They attempt to keep this goal alive through their running lines such as LunarTech. They constantly are putting out new more technologically improved gear to keep consumers interested and at peak performance. Nike knows that their consumers
they are stylish. Their younger target audience is highly influenced by these stars and thus is more inclined to purchase Adidas after seeing their idols flaunting the brand. This is crucial with the rise of social media advertising. 5.0 Social Media Influences Both Adidas and Nike are brands based off their influencers and athletes. Many consumers are attracted to these brands because of the lifestyle that they promote and the social status that it communicates. This major keystone to the brands appeal can be attributed to their social media. As Alison McCarthy explores in her article What a Teen Wants Young People Worldwide Skip Online Ads; teens are often much less likely to interact with online advertisements. They have significant less patience for viewing ads, and will skip the advertisement if given the chance to decide against using the platform. Online advertisements consist of video, autoplay, in-banner, non skippable pre roll, and mobile app pop up ads. This means for brands to be attractive to younger users they must present their advertisements in a way that does not feel like separate branding. The more an ad can blend into the content that people are already consuming, the fewer barriers they will have towards it. McCarthy found that “approximately 56% of 16- to 1 9 - year-olds said the same… 47% of teens skipped ad whenever they can… where only 40% of 20- to 34-year-olds did” (McCarthy, 2017 1-4). Because both Nike and Adidas target consumers ages 15-40 they must center their advertising around social media. This is much more interactive and influential for this age of consumers, they are more likely to feel personally connected to the material and thus, be more likely to interact. While both Nike and Adidas aim to reach their target audience through social media, they do so in different ways. Figure 1. During European Championship of 2016 Nike and Adidas were the two biggest sponsors. The differences between the sponsorships were deemed “official vs. unofficial.” Nike sponsored a number of
teams, as well as one of the biggest athletes: Cristiano Ronaldo. Ronaldo is used by Nike as an influencer and is personally sponsored by them, while he is seen as one of the best athletes of his time, he is also a crucial marketing influencer for Nike. He has over 145 million followers on Instagram, 123 followers on Facebook, and 75.7 million followers on twitter. When he posts, not in his Juventus jersey, the images are branded featuring Nike. Adidas is the official sponsor of the teams that have won the Championship over the past five years. While Adidas financially focuses on sponsoring teams, they have invested in influencers such as Pogba. Similar to the influence Ronaldo has, Pogba drives his followers to purchase Adidas products through his social media posts. He utilizes hashtags in tandem with his posts that highlight Adidas products. Both Adidas and Nike were strategic when sponsoring this sport. While this is only the third most popular televised sporting event (after the olympics and the Super Bowl) football is a national adored and watched sport. Thus, sponsoring teams or players in this event spreads the brands name across the globe. They are able to reach an unlimited global audience. Nike, by focusing more of their budget on sponsoring a few big name athletes is a less official sponsor of the European Championships but is able to create more a personal connection with consumers. The emotional appeals created by their advertising strategy result in loyal consumers. The target demographic for athleisure, younger consumers, must tailor their advertising to the lifestyles of the target population. Younger consumers are more likely to engage with relatable content, and are less interested in banner or pop up ads. As Straubhaar explored in his text, Media Now , integrated marketing communication, or IMC, is currently the most influential way for companies to reach their consumers. This allows them to use an assortment of media channels in order to tailor their media communication and thus maximize the reach of their advertising (Straubhaar, 2000 184-185). This can be seen with Nike and Adidas sponsored athletes because their advertisements show up on their ideal targeted consumers news feeds; this delivery channel limits consumer barriers. Through creating emotion appeals with the players followers the athletic brands are able to secure a more personal relationship with their target population. One marketing tactic that Adidas excels in is expression a passion for a specific sport. They not only sponsor teams and players but really focus on showing how crucial soccer is. This evokes nostalgia in consumers and develops a positive emotional appeal. The greater the personal connection a consumer has with a brand, the more likely they are to engage in the desired behavior of purchasing. Social media is especially influential when trying to target younger audiences to behave, understand, or believe something specific. Nike is successful with their younger target audiences because they funnel everything to their app. The put out interactive advertisements that directly translate into revenue by linking the consumer to an application, where they are able to purchase the goods. Adidas does not link their various social media platforms; thus compartmentalizing and limiting their customers. A consumer that follows Adidas on twitter may not see the same ads as a consumer who follows them on
In the last three World Cup finals (2010, 2014, 2018), Nike and Adidas have each sponsored three of the six total finalists; this means that not only are they close in total number of teams sponsored, they are also close in number of competitive teams sponsored as well. Both companies see a boost in their sales during World Cup season as fans of each country either look to support their team, or are inspired to purchase gear after seeing their performance. As previously mentioned, the World Cup is the third most viewed sporting event in the world, meaning it is one of the most effective and far reaching platforms the companies use. Particularly in Europe football fans are rabid and tune in to all of their team’s matches, providing more opportunity for exposure. Based on current rankings from footballdatabase.com, of the top twenty football clubs in the world nine are sponsored by Nike compared to only five by Adidas. Similarly, of the top twenty five players in the world, fifteen have ties to Nike. This is significant as better clubs with star players are given prime broadcasts with wider reach. Nike is able to capitalize on this fact as their clubs and athletes have been performing better in recent years. The international and multi league nature of professional football has played a major role in helping both companies penetrate and permeate across the European market. While football is the largest sport internationally, Nike and Adidas rely on their partnerships with different leagues to market within the United States. While Adidas is the official jersey sponsor for the NHL, Nike holds that title for the NFL as well as recently securing a deal with the NBA; a league that had long partnered with Adidas. This was a huge get for Nike as both the NFL and NBA dwarf the NHL in total viewership and fandom. Nike’s new partnership with the NBA has also come in tandem with a new line of “city edition jerseys” that they release for each NBA team every year. In addition to making their
traditional night to night home and away jerseys, each year Nike designs a brand new jersey for each team. Leading up to the release of these jerseys are teasers and press runs, and when they drop social media is abuzz for the next few days discussing the best of the best. These fan favorite jerseys are an effective way for Nike to not only generate sales revenue (new jerseys every year means they are more likely to be bought than a traditional jersey), but also to get digital exposure. Nike has also been more successful in their sponsorships of individual NBA players as well. The two undisputed best players in the league; LeBron James and Kevin Durant, each have their own line of signature shoes with new designs being released each year. Within the last few years, James also signed a lifetime deal with the brand rumored to be worth over one billion dollars. Nike also has two other perennial MVP candidates Anthony Davis and Giannis Antetokounmpo under their umbrella and may look to begin product lines for them as well. Adidas sponsors some well known NBA players however has also had some bad luck with their biggest signings. While the reigning MVP James Harden is an adidas athlete, his shoe releases have failed to generate the same buzz as his Nike counterparts. Derrick Rose was the youngest MVP of all time however injuries have plagued his career and dulled his stardom. Other big names have left the brand in favor of Nike and other competitors in recent years as well. Both brands have been hurt by the reemergence of Puma as a force in the basketball world as they signed some of the top draft picks this year as well as two rising stars Terry Rozier and Demarcus Cousins, both of which would have been big pulls for either company. The gap is even wider in the NFL as Under Armor and other brands cut into the space that Adidas ideally would like to occupy. While Nike is home to most of the biggest names in the sport: Odell Beckham Jr, Drew Brees and (infamously) Colin Kaepernick, Adidas’s only real household name is quarterback Aaron Rodgers. Adidas has again been plagued by injuries as some of their biggest NFL signings like Adrian Peterson and Robert Griffin III saw their primes cut short (Revolvy, 2018). Uncertainty is the biggest risk that these companies run by sponsoring athletes and teams. Injuries, sub par performance, and waning interest in a specific sport can cause once lucrative deals to become a financial burden for the company. All of these factors have to be taken into account when deciding what athletes and sports each company wants to respectively pursue. Luck plays a major role as many of these athletes get sponsored at a young age and brands have to hope they pan out, and while some do others are forgotten. Both companies have received backlash for backroom deals made with college athletes before they are allowed to be sponsored. They look to secure commitment from top prospects prior to going professional. Additionally, as these deals are unofficial there are many cases of athletes taking money from one brand or the other and leaving for a competitor when the time to sign actually comes. While all of these risks have to be factored in, deals made within the sport sector are the engine that drives these companies.
very similar marketing techniques, both Nike and Adidas find ways to position themselves differently to the consumer. Our research showed audience’s felt more connected to Nike’s advertisements. This demonstrates the brand’s ability to sell a lifestyle to the consumer rather than a product. People feel more emotionally invested in the message Nike conveys and thus find their advertisements more compelling. This is not to say Adidas is ineffective, but rather their message does not relate to as wide of an audience. 8.0 Brand Popularity in USA and Europe While Adidas has done their best in recent years to chip away at Nike’s market share, they still fail to overtake their big brother on a global scale. Nike’s unprecedented network of sponsorships, partnerships, and other business dealings enables them to maintain global superiority in the the athletic wear market. As of 2018, Nike’s market value remains almost double that of Adidas: coming in at $28. and $14.3 billion respectively (Duncan 2018). Similarly, Nike holds nearly three times the market share of the sports apparel market in the United States with 9.5% while Adidas has only 3.3%. Nike is a sportswear juggernaut and it will take a lot for anyone to dethrone the king, but Adidas has been making strides to do just that. Their expansion into streetwear, primarily by teaming with Kanye West and creating the Yeezy brand, has been one of their most successful endeavors towards that goal. Originally a partner of Nike, West’s switch was very public and resulted in a public feud that included West creating a song detailing how Yeezy had jumped over the Jumpman. This references Michael Jordan and his Jordan brand shoes, a subsidiary of NIke; West is making the case that Yeezy and the Adidas brand have surpassed them. And while the numbers don't back it up yet there is reason for Adidas to be hopeful. Over the past few years Adidas has seen growth in their sales while Nike has slowed down. During the first quarter of 2018 Adidas saw a 21% net sales increase while Nike lost about 6%, a significant victory for the German based company (George-Parkin 2018). In this same vein Adidas already reigns supreme over Nike in European markets; this likely stems from the fact that Adidas is a German brand and has remained closely aligned with football in Europe. As of 2014, Adidas’ share of the Western European Sportswear market was 13.2% with Nike trending upwards at 12.4% (Team 2014). Adidas’ prevalence in Europe has been one of their largest boosts in their chase to take the global sportswear crown from Nike. As both companies continue their foray into other foreign markets like Asia and South America, their battle for market share will wage on. 9.0 Conclusion Our results from our primary and secondary research surprised us. We expected Nike to be the most prevalent response in our survey, but Adidas competed in most instances. Less people were influenced by sponsorships and moral ethics of the company than we expected as well. This could be due to many factors such as age and education level. Additionally, more respondents answered that social
media does not influence their views on the company’s brand. These surprising results demonstrate that marketing is one of the most important aspects for a company in the athletic wear industry. The target audience’s in this market do not pay a lot of attention to moral ethics or sponsorships as much as they do advertisements. Our results show that more people feel connected to Nike advertisements, showing their approach to emotional appeal is most effective. Additionally, since not as many people follow these social media accounts as we thought, this means these companies need to allocate their funds towards other types of marketing in order to reach their audiences.
