Comparative Analysis of Brand Management: Nike vs Adidas

This report provides a comprehensive analysis of brand management strategies, focusing on the competitive landscape of Nike and Adidas, two leading sportswear companies. The report begins by emphasizing the importance of branding as a marketing tool and its evolution in business practices, including its role in product differentiation, customer loyalty, and market entry. It then evaluates key components of successful brand management, such as brand promise, target audience, and brand awareness. The report further examines the key components of a successful brand strategy, including brand loyalty, public relations, and brand revitalization, with examples from Nike and Adidas. It then delves into different portfolio management strategies, brand hierarchies, and brand equity management of both companies. The report concludes with a critical analysis of portfolio management and brand equity models, offering a detailed understanding of how Nike and Adidas manage their brands in the global market.

BRAND MANAGEMENT

INTRODUCTION
Brand management plays an important role in defining the value of companies services. It
helps the firm in analysing its market reputation and measures of reputation. Therefore, it is
important for the organisation to manage brand name by implementing effective marketing tools
and techniques to enhance brand management. The report will evaluate brand management of
Nike and Adidas, the leading sportswear companies across the globe. The business of both the
enterprise is competitive with regard to customer and products because both the firms offers
similar type of products to buyers worldwide with differentiated quality and pricing. Further,
report will outline key components which of success brand strategy which helps the business in
managing its brand name and goodwill worldwide. Besides, it will identify article which will
consider strategies' portfolio management, brand hierarchy and brand equity management of
Nike and Adidas. Also, it will outline tools and techniques which are being used by the leading
sport wear company to measure their brand value and development.
SECTION 1
P1 Importance of branding as marketing tool and its emergence business practices.
Brand: It is the symbol, logo or the term which represents the products and services of
company. Brand name is the ultimate things which make differentiate between company and its
products in accordance to global competitors. Brand name is important because it plays crucial
role in simplify product handling, enable legal protection, provides identification and helps in
organising accounting (Du Preez and Bendixen, 2015). Apart from this brand name plays a major
role as it helps in deriving quality of products and services, increases competition and enable
different pricing strategy which creates entry barriers in market.
Branding is an important marketing tool because it itself is name which is promotion to
company. Further, branding is marketing tool as it establishes creditability of products and
services of firm. Moreover, the strategy which helps the company in connecting with consumers
emotionally. Branding is important marketing tool because it helps in developing loyal customer
base. Further, the brand name is itself a marketing tool which helps the firms in following:
 Gaining loyal customers: Brand name is important as it helps in deriving loyal
customers because it is the thing which implies buying decision of customer. Brand name
is the tool on the name of which firm is able to pay asked amount. It is the thing which
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helps in generating consumers trust due to which the companies are able to determining
loyal customers worldwide.
 Increasing customers: Brand value is the only thing which helps the firm in increasing
customer base. It is the strategy which helps in making competitor level strong for all the
rivalries of international market. This denotes the effectiveness of companies products
and services in global market.
 Entry barrier: It is most thing which is being faced by companies but the effectiveness
brand value helps in making entry easy in international market (Xu-ao, 2012).
 Differentiation in products and services: Brand name plays an important role in
differentiating between company and its products with regard to innovation and quality.
Differentiation in the products is the common thing which helps from in making its
services different for customers because it helps in gaining consumer trust and
establishing innovation.
M1 Evaluation of successful brand management
Key components of brand helps in evaluation of brand which comprise following factors:
 Brand promise: It is the major thing which denotes value and equity of brand. Promise
by brand is the only thing which helps the consumers in developing trust on company and
its products.
 Target audience: The patterns of targeting audience is the only concept which
demonstrate the effectiveness of brand value and marketing strategy of company.
 Brand reinforcement: It is the activity in which company focuses on targeting new
consumers in order to increases its market share and brand awareness.
P2 Key components of successful brand strategy.
Every big organisation have its own brad management and measurement approaches
which is followed by popular brand in the world such as Unilever, Adidas, Nike and some other
brands. Brad equity is an approach in which organisation make awareness of their brand name
among the peoples to attract their loyal customer towards the brand.
 Target audience: The foremost component of successful brand strategy is targeting
potential consumers. Therefore, for this the firm implements the use of segmenting
marketing and then targeting customers.
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 Brand promise: This is another component of brand strategy because it is technique
which helps the firm in gaining consumers trust. It is focused on delivering products as
per specification and requirement of buyers. Brand loyalty: The main components of successful brand strategy is that it totally reflects
by the customer attachment to make their customer more enforced in order to use
particular brand products continuously(Balmer, 2012). Brand loyalty is faithfulness
towards the brand of each customer of the company for frequently use of their product
and services sufficiently. Nike and Adidas both companies have splinted their brad
loyalty across the world by providing effective product and services across the world.
 Brand awareness: For effective establishment of brand awareness of on the customer
mind. Each company must need to think about to their works and objective by which they
are doing their existing business. They need to analyse their purpose of doing business in
the market then they need to focus on satisfaction of customer needs in effectively. There
are several successful branding strategies which are following by Adidas and Nike both
companies in order to increase their brand awareness across the world by proving
effective product and services to fulfil needs of each their loyal customer.
 Public relation: Enhancing relationship with customer and developing customer service
is the priority of companies to maintain its brand sustainable. Brand Revitalization: This strategy is major component of company as it helps in
maintaining and developing market position of firm.
 Perceived brand quality: These elements of brand equity refers to the reasons to buying a
product of particular brand by their loyal customers in the market effectively. Quality is
main factor which maintain the brand loyalty and equity as well in the market by
providing effective services to their customers (Christiaans, 2012). Nike and Adidas both
are providing quality of services to their customers in order to increase their market sales
and brand equality among to their loyal customers. For instance: iPhone is a popular
brand which is known as smartphone selling company in the market but it is also selling
computes and iPad as well. So their brand awareness can increase selling of their other
products in the market effectively.
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 Treating Brands as assets: The continuous pressure of the work and maintaining the
brand image in the market in which Company has fear to lose the brand asset due market
fluctuation.
 Cash:Lack of funds for executing marketing is the cash situation where the managers
need to focus on managing and framing short term funds.
M2 Examples
 Nike and Adidas both companies are known as quality of shoes producing companies
across the world. Both companies are playing leading role in order to manufacturing
shoes in the company. With the help of quality of sports shoes provided by Nike and
Adidas both companies are increasing brand equity in the market at several stages. They
are using innovative techniques while manufacturing different kinds of shoes in the firm
so that it makes unique image of the company in the market. This is the approach by
which their loyal customer attract to the product and services provided by Nike and
Adidas both corporations. They utilising these kinds of strategies in the business in
context of building their attractive brand awareness and effective managing their brand
equities in the market efficiently as well (Fisher and Vallaster, 2010). Nike and Adidas
both is the competitive brand which have their own vales and existence.
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Illustration 1: CBBE Pyramid
Source: CBBE Model. 2017
SECTION 2
P3 Different strategies' portfolio management, brand hierarchy and brand equity management.
Portfolio Strategies: Portfolio strategies assist the firms in evaluating competition of domestic
and global market. The strategies assist Nike and Adidas in determining growth opportunities of
market. There are different portfolio strategies which are used by company to determine the
value of its products and market competition (Rosenbaum-Elliott, Percy, and Pervan, 2015).
Allocation of assets: Allocation of asset is important as it helps in determining long term
performance of company. It is important because it helps in determining negative and positive
deviations of asset which can be risky for business operations.
Passive portfolio management strategy: This strategy is customer orientation and is related
demands for the companies products.
Market theory: This strategy helps the firms in determining changing trends of market.
Analysis of these fluctuation helps in firm in managing competition and changing customer taste
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and preferences. Focusing on this strategy helps Nike and Adidas in reducing the chance of
uncertainties which arise due to turmoil (Vigneron and Johnson, 2017).
Indexing: This is the technique which denotes market requirement which assist the company in
service products according to the needs and wants of customers. In this, the ultimate focus of the
company is to make buyers happy keeping in mind price and quality.
Brand hierarchy Adidas
Brand-hierarchy of Adidas is based on corporate culture which enable vertical communication
in company. In accordance to management to Adidas tall communication helps in establishing
strict control over company and process.
 As per this structure the management believes that this communication make easy flow of
communication to all department which assist in reducing the chance of communication
gap.
 Further, this style helps in dealing with competition effectively.
 It is followed in Adidas as it helps in managing business functions effectively in
synchronised way. In this the level of Adidas are divided into three levels that is top
level management middle level management and lower level (Vigneron and Johnson,
2017).
 As per this structure the role and responsibilities of each department are segregated
according to skills and abilities of employees.
 In this the work of employees is equally divided and distributed which reduces the chance
of favouritism and biasses.
 In this hierarchical structure of Adidas the ultimate powers are in hands of chief
executive.
 The chief executive is connected with chiefs corporate communication officers ad general
counsel. Furthermore, there are many individual like, head of global brand, members of
global sales etc. (Renton, Daellenbach and Richard, 2017.).
 Apart from this the vice chair person of Adidas is responsible for making sure that all the
management functions are effectively performed in order to track employees and
business performance.
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 Hence, all the major decision of company are handles by vice chair person. In this the
management ensures that all business activities are changed keeping in mind interest of
employees.
Brand hierarchy Nike
 Brand hierarchy of Nike is focused on horizontal structure in which every individuals is
allowed to interact with each other. Therefore, in this structure the of Nike every
department and its functions are interlinked to each other.
 The horizontal structure of Nike helps the management in establishing effective
communication and analysing problems at initial level.
 This structure of company helps in reducing the chance of mismanagement which helps
in promoting interaction of every employee. This structure provides the biggest
advantage to company as it helps in developing informal formal both type of
relationships.
 Further, in Nike employees are assigned task as per project and for managing project
there is responsible department manager who ensures all the employees ate performing
their job functions effectively.
 Apart from this there is CEO of Nike who is alone responsible for making all decision
which reduces the chance of favouritism and biasses in management (Adidas Corporate
Hierarchy, 2017).
 The mini distribution of project and task assist Nike in enabling systematic flow of
business operations.
 With this hierarchical structure it has been noticed that Nike is known as global
competitor which is the biggest advantage for organisation that helps it in managing
success business operations worldwide.
M3 Critical analysis of portfolio management and brand equity
Keller's Brand equity model is termed as Customer based brand equity, the model assist the firm
in determining the brand equity and value for customers. Nike and Adidas implements the use of
this model as it assists in determining everything which is related to buyers demand and
preferences. The model is shape of pyramid and offers stepwise process to company like, first it
is focused on discovering of identity, in which the company ensures the products of firm are
according to needs and wants of customer and further it ensures the buyers are aware about the
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products offered by company (Pulligadda, Kardes and Cronley, 2016). This step of model helps
the firms in determining values of products and brand for customers. Meaning in which it is
focused on evaluating meaning which is conveyed by company and its products to consumers. It
helps in determining the effectiveness of companies performance. In this Nike and Adidas focus
on evaluating whether the buyers are satisfied with companies and products. This step of model
helps the firm in determining loopholes.
Response: This plays an important role as it is related to feedback comments attained by
company. It helps the firm in making changes in services and its products as per the customer
feedback. Therefore, this step of model helps the firm in maintaining stability in business
operations.
Resonance: It is related to bond of customers with company. Further, it helps in deriving
purchasing decision of buyers with company.
P4 Management of brands in collaborative and partnership at domestic and global level
Extension strategies
Nike and Adidas both are
doing great in global market
with online and offline
presence. Extending the use of
different strategies assist the
firms in managing their brand
name. To enhance the value of
its products the companies are
focusing on increasing their
physical presence across the
globe.
Reinforcement And
Revitalisation
Reinforcement is the practice
which assist the organisation
in maintaining brand equity. In
this the ultimate focus on Nike
and Adidas is to ensure that
the consumers have
appropriate knowledge and
information about the products
and sports accessories.
Reinforcement plays and
important role at the time of
changing taste and preferences
of customers, innovation and
developing competition
Partnership and
collaboration
Adidas follow partnership
style and collaboration style of
business. In this the firm has
complied its business functions
with rebook which is also
sports wear company. Reebok
and Adidas implements
strategies by combining their
products and logos, symbols
and marketing. These are
many cities and regions across
globe in which Adidas and
Reebok owns same store. In
this the efforts of both the
companies are collaborative
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Extension strategies are as
follows:
Creating value for
shareholders is the biggest
strategy which helps Adidas
and Nike in enhancing its
business operations.
Developing team is the major
strength of Adidas and Nike
which helps the organisation in
extending its brand function
and maintaining heritage of
firms products and services.
Implementing the use of
Corporate social responsibility
practices is the biggest
extension strategy which assist
the companies in managing
brand vales and goodwill
(Rutter, Roper and Lettice,
2016.).
(Ronson, 2016.).
Revitalisation Strategies
These strategies of Nike and
Adidas comprise:
Innovation: In this the firms
focuses on establishing
innovation in products in order
to attract large population at
one time. This helps the
company in establishing its
strong growing presence in
market. Further, innovation is
the tool which helps Nike and
Adidas in preserving heritage
of their sports wear.
360 degree Communication:
This the strategy which helps
the companies in connecting
with all the stakeholders that is
employees, shareholders and
which assist them in effective
communication. Moreover, it
is easy for the companies to
provide differentiated products
to consumes by combining
their efforts. The company
enhances its operation with the
help of shared perspective and
enhancement.
Apparently, style of
management of Nike is of
collaborative in which
company performs functions
individuals by collaborative
with only Nike team across the
globe. The firm believes on
creating awareness among
consumers to enhance value of
its sports products and
services.
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Unique product portfolio is
another strategy which helps
the firms in enabling consumer
response by promoting the
value of products and services.
management. In accordance,
communication is the tool
which helps in establishing
effective interaction between
stakeholders which helps in
removing various hindrance.
With the help of this
communication the company is
bale to determine preferences
and choices of partners,
customers and all the public
which is connected to
company as it products.
Implementing new distribution
channels: New distribution
channels assist the company in
reaching to customers easily. It
helps in making easy
availability of products and
services for worldwide buyers.
Therefore, implementing new
distribution channels act as
tonic for the growth and
development of company.
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