Marketing Mix Strategies of Nike and Reebok in India - Essay Example

? “Case Study: Nike and Reebok” Module Marketing mix is a very important part in crafting marketing strategy of a company. Many companies who donot focus on their marketing mix well enough face troubles. There are a lot of perils for a company that does not devise an excellent marketing mix strategy for its target customers. There are also a lot of examples of firms that despite of having a good product went out of business because their marketing mix efforts was not good. Many firms achieved great success from their average products because their marketing mix catered efficiently to the needs of the target customers. In the case of Nike and Reebok, it is also more about the marketing mix strategies of the two brands than their product offerings. Both companies were producing excellent products, but the differentiating factor between their success and failure had has been their marketing mix strategies. Reebok was a quick learner and it quickly shifted its focus on the marketing mix of its product, whereas it took several years for Nike to adjust its marketing mix in India. Indians are different from the other nations of the world, just like other nations are different from Indians, and hence every nation in the world has different preference in terms of prices they are paying for a category of product, the place they want to buy the product from, and the marketing efforts that would arouse them to make a purchase. Examining the marketing strategies of Nike and Reebok, one can see that their products are almost similar. Both businesses are in the business of producing sportswear and lifestyle product. Similarities between the two companies do not end here. Another common factor between the two giants in sportswear industry was their willingness to target the elite or premium sector of the society. Both company opposed the strategy of targeting masses and instead went for targeting the elites of the society. However, it is also very clear from the case that Nike was not able to replicate the success of Reebok. The reasons for the failure of Nike lie more in their inefficient or flawed marketing mix strategies than their market offerings. Examining the other elements of the two marketing mix and probing the difference between the marketing mixes of Reebok and Nike brings us to the “Place” factor of the marketing mix. Place, in the marketing mix, is defined as a physical and virtual channel from which customers want to make the purchases of a product. In other words, it is the marketing channel that a company decides to use for selling its product. The major difference between the two marketing mixes here was the entry of these two companies. Reebok entered as a joint venture, whereas Nike started by acquiring a license with Sierra. Both strategies might look equally good, but there is a big flaw in the Nike’s entry strategy. First of all, most of the decisions regarding Nike’s products were taken by Sierra. It is very difficult to make sure that Sierra was taking the same actions as Nike wanted to take in the India market. Since Nike and Sierra are different brands having different objective incompatibility in their thinking would have existed. Sierra plans might not be compatible with Nike objectives and Sierra would have to take into account other factors before making Nike’s decision. In fact, Sierra was unable to market the product well. It was also unable to develop an efficient marketing channel like Reebok. Reebok on the other hand entered the market and made its own decisions. Hence, there was a clear sense of direction for the company regarding what it wants to achieve in the market. Reebok kept a wider distribution channel as compared to Nike. When Reebok had more than 500 outlets and 1500 distributor outlets, Nike just had 75 specialist outlets and around 200-300 distributor outlets. Hence, they were not reaching enough consumers in the Consumer Transformation Funnel. Reebok also took an excellent decision of marketing its products in Bata outlet and selling its products through them. This made them accessible to additional 60 Crore people. As a result of this Reebok flourish and acquired the market leader position. The deeper analyses also show that it was R&D and adaptation of products in Indian market context that helped Reebok achieve such a fast growth. The introduction broad shoes to fit the Indian market were an initiative that was well received by the Indian consumers. However, Nike was unable to show the same levels of adaptability and lost out to Reebok. Nike continued to focus on NBA, Tennis and Golf even ten years after it entered India. Indians are not very enthusiastic about these sports. They have passion for cricket only. Nike took too long to understand that whereas Reebok developed cricket-centered marketing campaigns to win over the people towards their brand and this resulted in positive brand building by the company. Nike showed some aggression and obtain license as a cricket kit manufacturer for the Indian team, but it was too little too late. Reebok countered it with making players under contract to use Reebok bats. This improved the visibility of the brand and again Reebok strategy outperformed what Nike was doing. Another factor that played an important role in the success of Reebok is its focus on children and women markets. It knew that Indian have a strong culture where family comes above one’s oneself. Indian men will forego a purchase of an important item, just to let their children and wives buy a luxury item. This is why Reebok targeted these two segments. They used Bipasha Basu as their brand ambassador for the women segment and used schools to promote their products in children through below the line marketing efforts. Reebok used the schools to make Reebok shoes compulsory for children as a part of their uniform and this strategy helped them achieve great growth in the segment. However, it again took Nike very long to target these segments. In fact, Nike was unable to target the lucrative children segment because it was “overpriced” as compared with competition and as a result lost out on an important segment that has played its part as a engine of growth for Reebok. In the end, it can be concluded from the case study that the difference between Nike and Reebok over the years had been their adaptability in the Indian culture. Reebok was able to adapt to the Indian culture far more quickly than Nike and as a result achieved great financial strength and emerged out as a clear leader in the segment. Nike was too slow. It did too less too late. This resulted is loss of effectiveness of much of its marketing efforts. Nike did what Reebok had already done in marketing years back. Hence, they lost out to Reebok because their marketing efforts weren’t as effective or as appealing as Reebok. References: Works Cited Daft, R 1994, Management, The Dryden Publishing, New York. Read More