Yeezy Boost 350 vs Nike Airmax: Current Market Situation
Yeezy Boost 350 vs Nike Airmax
Assignment and points
1. Executive Summary 5 points (5-10 sentences)
Summary of the main goals and recommendations of the plan for management review, helping top management to find the plan's major points quickly.
2. Current Marketing Situation 15 points (1-2 pages)
• Market description: define the market and major segments, then reviews customer needs and factors in the marketing environment that may affect customer purchasing.
• Product review: with a detailed description of the product and its characteristics
• Competition Review: Identify and offer a brief overview of at least 3 competing solutions, as well as explanations for how your product will compete with them. *Note substitutes from other firms or existing offerings from your firm are as valid as direct competition.
3. SWOT Analysis 10 points (Approximately 1 page)
Assess major strengths and weaknesses of your product and company, as well as external threats and opportunities. Identify at least 3 considerations for each letter/area of the analysis.
4. Objectives and Issues 10 points (Approximately 1 page)
• Objectives: The specific marketing goals (i.e. sales, brand awareness, market share, etc.) that the company would like to attain during the following two years.
• Issues: Any key potential issues that may inhibit achieving your stated objectives.
5. Marketing Strategy 20 points (2-5 pages)
The marketing strategy that helps you create customer value and relationships. How will the company create value for customers in order to capture value in return?
• Value Proposition: Answer the customer’s question of “Why should I buy your product rather than a competitor’s?” What benefits will the product promise to deliver? – Discuss at least 3 benefits the product will deliver. Also, develop a tagline/slogan for the product.
• Differentiation: What unique qualities/features of the offering will you emphasize in order to stand out from competitors?
• Positioning: Describe the branding image strategy for product. What will you emphasize in order to create a distinct impression in customers’ minds?
• Product Strategy: Decisions on packaging, labeling, logos, color schemes, warranties
• Pricing: What price(s) you are going to charge and rational for why.
• Place(ment): Describe the distribution strategy for this product.
• Promotion: Identify at least three promotional tools to be used as part of this strategy.
6. Action Programs 5 points (Approximately 1 page)
• Concrete/Specific marketing actions that you plan to take within the first year.
• What will be done? When will it be done? Who will do it? How will it be done?
7. Budget 5 points (1 paragraph with calculations)
Estimate expected revenues (forecasted number of units sold and the average net sales price) and expected costs of production, distribution, and marketing. Difference = projected profit.
8. Monitoring and Control 5 points (Approximately 1 page)
How you will monitor the progress/results of this plan and adjust course if needed?
9. Recommendations and Conclusion 5 points (Approximately 1 page)
State your top 3 recommendations for this product offering (*Note - can be things you’ve already mentioned in the paper, this just puts them here in a convenient place) and provide a brief 1-2 paragraph conclusion to wrap up the paper.
Yeezy Boost 350 vs. Nike Airmax
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Executive Summary
The sneakers market is quite large and by 2013 it was worth more than $23 billion dollars with positive growth trend in the United States, and even higher growth at the global level at an estimated 40% compared to 30% in the US since 2004. Majority of the people that by sneakers are those that train for sports, professionally or simply casual. The Yeezy Boost 350 is a sneaker that embraces technology and innovation compared to the Nike Air max. The Boost shoe from Adidas offers knit technology, breathability, comfort, durability and quality. Despite the fact that is quite expensive, the product has great potential in the market with estimated profits at $2 billion dollars.
Current Market Situation
Market Description
The sneakers market is formed of persons that love sports or that are actively involved in the sports. These are shoes that include trainers and athletic shoes, worm for their comfort (Molloy & Teyhen, 2010). Sneakers are designed is a manner that ensures that the person wearing them does not just enjoy the aesthetics, but also the practicality of the shoes. These are shoes that are highly developed with some of the most sophisticated software and massive research. For a company like Adidas and Nike, they invest massive amounts of resources to the research and development sections of their business. This is to make sure that they come up with the next best footwear that clients can were as they train. The shoes have to be very flexible and take into account the comfort of the customers (Molloy & Teyhen, 2010). As such, the company has to be precise on the various aspects of the shoes and the customer needs.
By the year 2013, the sneakers industry was worth more than $ 22 billion dollars in the United States. In the last few decades, the industry has experienced massive growth (Powell, 2014). Various companies have joined the industry and the competition has been building up, from the various players reigning in the market. Companies have to come up with quality and innovative products to make sure that they maintain their market share. Customers want the best out of the footwear that they buy. Since the year, 2004 the industry has experienced more than 30% in growth in the United States (Powell, 2014). Internationally, the industry has grown quite fast, with more than 40% (Powell, 2014). However, it is important to note that the American market has been the largest contributor to the industry relative to the sales. This means that the United States is the largest market for the sneakers (Powell, 2014). Companies such as Adidas have for the longest time concentrated to selling their products in the United States relative to the level of adoption of the new designs and products.
There is a specific segment of the market that they relies on to buy the shoes. The majority of persons that buy the shoes include people that are constantly training for sports (Leach, 2015). This includes persons that take part in sports professionally or as a social event, which is part of their hobbies. For the professional athletes such as in the basketball, athletics, tennis and soccer. In the case of the persons that are not involved in the professional realm, this segments involves persons that are active in some sports activities such as, running, playing basketball, tennis, going to the gym and walking. As such these are a basically activities that may be directed at the health benefits associated with exercise or the casual enjoyment of a hobby (Runner's World, 2013). There is also a third segment that involves persons that would want to wear the products for the casual appeal associated with the image that the shoe brings out. Some of the shoes, relative to the fact that they are associated with certain personalities as a marketing technique, tend to attract persons that would be proud to be associated with the celebrity. The largest majority of the customers for the sneakers come from the middle class, which is persons with a regular income and can afford to buy accessories (Molloy & Teyhen, 2010). Some of the main factors that affect the reception of a product in the sneakers’ market include the level of comfort that the product offers. This relative to the fact that shoes are designed to offer maximum comfort, whether worn for sport or simply casual. Durability of the product also affects the rate at which a sneaker is bought in the market (Powell, 2014). Clients want to now that the shoes that they are buying is going to last them for as long as they need. Having a shoe that will not for example last three training sessions of relative strain, is a disadvantage to the customers as they have to look for another. The value for money is also crucial, as customers are looking to maximize their money’s worth for a quality product that best suits their interest or exceeds them. It is also crucial for the product to be quality, such that it is made of quality material that match the value (Powell, 2014).
Product Review
The Yeezy Boost 350, is one of the products that Adidas have used the endorsement of a celebrity to boost the level of sales and adoption in the market. This has been a common trend in the industry where musicians and sports personalities endorse product to give them a mark of quality and social appeal. This means that this is a sneaker that is designed with a social appeal in mind, such that, they take on a fashion statement other than the fact that they are shoes that the customers can use for their daily training. The Boost has come out as one of the best works by Kanye West a musician. The shoes is basically a knit sneaker, which means that it has the top part as knit material. The idea behind the knit technology is relative to the level of comfort that the material offers to the customers. This means that shoes fit in the foot easily without any level of strain or discomfort even while putting them on. Due to the fact that, the top material is knit, this also means that the shoes are breathable (Leach, 2015). This means that the shoes have some element of letting in air and out through the material. Given that the shoe is design for training activities, this could easily cause the shoe to accumulate sweat and a humid environment around the foot which may lead to odor. This is an element that Adidas has put into a lot consideration allowing the users to enjoy the shoe and their activities without the worry of developing smelly fit from sweaty shoes (Runner's World, 2013). The sneaker takes on a low top design to maximize on the level of fit for the customers, whether they are using the shoe for sports or for casual wear. Using advanced technology, the company invested in new soles that are not only light weight also offer excellent cushion. This element provides the customers with extra soft padding to make sure that the lower parts of the feet are extremely comfortable.
Competition Review
One of the greatest rivals to Adidas is Nike and they also have some winning products that have placed a lot of pressure on adidas. One of the competing products to the Adidas Boost is the Air Max from Nike. Unlike the previous running shoes, the Air Max is the first shoe that does not come with the foam filled midsole. This means that the midsole on the Air Max has been completely removed to give room for a complete design that offers quality comfort and flexibility (Runner's World, 2016). The new design offers a different approach where instead of the midsole sitting in on top or below the EVA foam, the entire air unit seats within a plastic that is also transparent. Relative to the fact that the plastic material is quite rigid, the shoe offers reasonably high level stability (Runner's World, 2016). Given that the Boost is more comfortable from the knit material, it is going to appeal to more customers than the competition. Relative to the fact that, the Boost offers easy wear element from the material of choice, it does not in any way expose the customers to blister risks (Best running shoe reviews, 2014). At the same time it does not expose the users to smelly feet from the air flow through the knit. While the Air Max may have appealing aesthetics, it does not have the social appeal created by the endorsement (Runner's World, 2016).
SWOT Analysis
Strengths
The company has a number of strengths and among them is the fact that there is an existing distribution network which is very robust (MBA Skool-Study.Learn.Share., 2016). The company has at its disposal the ability to distribute its products through their online platform, their stores, supermarkets and malls among others. The network cover the global market with more than 2400 stores, where customers can access the latest products such as the Boost with great convenience. The company also has a strong financial background which account for more than $4.3 billion dollars. As such they have the financial resources to use at the disposal. Relative to the fact that, the brand has a global presence and is associated with a mark of quality, the company benefits with heritage and legacy (Marketing91.com, 2015). Like in the case of the Boost, the company has established strong and reliable collaborations where they get their products endorsed by celebrities such as the case of the Boost and the artiste Kanye West. They have also in the past and in some of the cases on going, sponsored sporting organizations such as NBA, FIFA, EUFA and even at the Olympics thereby increasing the level of brand awareness.
Weaknesses
Due to the fact that the company relies heavily on research and technology to bring about innovative products to the customers, they also suffer from premium prices. This means that the products are only available to few customers around the globe. In search of low labor costs and the availability of raw materials, the company outsources most of its production processes to third party manufacturers. Most of the third manufacturers are in Asia and this raises the risk of dependency. It also means that th...