Athletic Footwear Final
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Transcript of Athletic Footwear Final
8/13/2019 Athletic Footwear Final
http://slidepdf.com/reader/full/athletic-footwear-final 1/20
Athletic FootwearIndustry Analysis
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Introduction•
The athletic footwear industry in India has witnessed aphenomenal growth of functional sportswear market in the
country.
• The athletic footwear industry in India has witnessed a
phenomenal growth over the past seven years and now
occupies a place of prominence in the Indian economy interms of its massive potential for employment generation and
export.
• The industry has witnessed brisk growth in the last few years
driven by the rising income levels, amending lifestyles and the
entry of foreign players in the industry post liberalization.• The ever increasing popularity of cricket along with growing
interest in sports such as football, hockey and tennis has
contributed to the to the growth of functional sportswear
market in the country.
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• The country is hosting a series of international
sporting events which is likely to boost the
industry and increase sports awareness.• In addition to this, Indian government is
increasingly focusing on sports promotion,
training and infrastructure, and exports of sports
goods which include sports apparel, footwear andaccessories.
• The restructuring and transformation of the
athletic wear industry from unorganized sector to
a professionally organized sector has also
esteemed the growth of the Indian market for
athletic apparels and footwear over the past few
years.
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Types of Shoes• Based on survey data by NPD group of purpose of athletic
footwear• Nearly 50% of sales is for “Casual Athletic” and “Running”
4
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Size of MarketATHLETIC FOOTWEAR
MARKET SIZE ESTIMATES
Pairs Sold in Millions
1998 1999 2000 2001
Men’s 155.200 161.661 170.316 175.010
Women’s 106.486 115.755 125.999 119.973
Children’s 106.508 102.986 111.676 106.961
TOTAL 368.194 380.402 407.990 401.943
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Size of Market
• The males’ segment of the athletic footwear
market have contributed significantly to the total
market revenue in 2012, with an active demand
for basketball shoes, lightweight running shoes,
training shoes and soccer boots. O
• n the other hand, the Athletic footwear market
has witnessed a strong demand for female
athletic shoes, especially from the school/college
going teens and young mothers.• While, teens primarily demand for training and
sports-inspired casual shoes for their outdoor
usage, mothers have showcased preference for
toning and running/jogging shoes.
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• Several factors, including a thriving middle-class
population, a paradigm shift in consumers’
attitude to health and fitness, an increase in the
number of sports events and the growth of
organized retail will drive the market.
• In addition to this, recent regulatory changes
made by the government on FDI in retail, passed
by the Union Cabinet, are expected to give a
further impetus to the organized athletic wearmarket in India.
Reasons for increasingMarket Size
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Market Share
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Market Share
• The global athletic footwear market was worth
USD 74.7 billion in 2011 and is expected to reach
USD 84.4 billion in 2018, growing at a CAGR of
1.8% from 2011 to 2018.• Asia Pacific is leading the athletic footwear
market with maximum share and is expected to
enjoy a 41.6% share of the market in 2018,
closely followed by Europe.• The North America market is growing at a
relatively slower rate, due to high labor cost, raw
material cost and strong competition.
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Reason For increase inMarket Share
• Factors driving the global athletic footwear
market include growing awareness about
healthy and active lifestyles, rising demand
for comfortable footwear, rising demandfor innovative footwear designs and
technology, growing population and rising
disposable income levels.
• The market is projected to grow at a CAGR
of 1.8% from 2011 to 2018, and is
expected to reach USD 84.4 billion in 2018.
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Consumer Purchasing Habits
– Traditional
• Mall
• Retail outlets
• Shoe store
– Non-traditional
• Internet, television
– Footwear is one of
fastest growing
categories ontelevision
– television reach 100
million homes
Source: Footwear Journal USA
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Consumer Purchasing Habits
• Who?
– Men spend more per pairand buy more pairs ofathletic footwear thanwomen
– Women’s and Children’s
shoe sales growing morerapidly than Men’s
– Nearly 33% of all athleticfootwear spending isdone by those aged 13-24
– Less than 30% of athleticshoes purchased are foruse in sports or fitnessactivities
• How?
– Internet
orders (via
websites)
– Telephone
orders
– Walk-in orders
(mall, outlets,
etc)
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Major Competitors
• Nike is an American MNC that is engaged in the design,
development and worldwide marketing and selling of
footwear, apparel, equipment, accessories and services.
•The company was founded on January 25, 1964 as BlueRibbon Sports by Bill Bowerman and Phil Knight, and
officially became Nike, Inc. on May 30, 1971
• The largest seller of athletic footwear and athletic apparel in
the world and a major contributor of sport equipments with
a revenue in excess of US$24.1 billion in its fiscal year 2012.• As of 2012, it employed more than 44,000 people worldwide.
The brand alone is valued at $10.7 billion, making it the most
valuable brand among sports businesses.
NIKE
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Adidas• Adidas is a German MNC that designs and manufactures sports clothing
and accessories
• It is the holding company for the Adidas Group, which
consists of the REEBOK sportswear company
• Besides sports footwear, Adidas also produces other
products such as bags, shirts, watches, eyewear, and other
sports- and clothing-related goods.
• Adidas is the largest sportswear manufacturer in
Germany and Europe and the second biggest sportswear
manufacturer in the world.
• Adidas was founded in 1948 by Adolf Dassler, following the
split of Gebrüder Dassler Schuhfabrik between him and his
older brother Rudolf.
• Rudolf later established PUMA which was the early rival of
Adidas. Registered in 1949, Adidas and Puma are both
currently based in Germany.
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Advertising by Adidas
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Advertising bySkechers
• Skechers makes an effort to maintain a trendy
and stylish brand image by using celebrity-driven
advertising,[1] and has promoted its product with
singers Brandy, Britney Spears, ChristinaAguilera, The Black Eyed Peas, Ashlee
Simpson, Carrie Underwood and David Cook;
actors Robert Downey Jr., Rob Lowe and Matt
Dillon; athletes Joe Montana, Karl Malone, Rick
Fox, Meb Keflezighi and Wayne Gretzky; and TV
personalities Kim Kardashian, Kris
Jenner and Brooke Burke.[2]
C tit B i
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Competitor BusinessStrategies
• Nike
– High quality
construction
– Innovative design
– Collection based
marketing
– Focus sales on
distributors, licensees,
and subsidiaries
• Adidas
– Form follows function
– Marketing
department begins
design process
– Greater emphasis
placed on design for
an athlete’s need
Source: Nike website and 10K and Adidas website
C tit B i
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Competitor BusinessStrategies
• Reebok
– Grow sales through
distribution channels
– Focus on relationship
with major sports
figures to enhance
brand image
– Resources devoted to
advertising through
various media
• Skechers
– Fashionable footwear
– Does not concentrate
on performance
– International
expansion by
leveraging domestic
brand image
– Building brand image
Source: Reebok and Skechers websites and 10K reports