Market Analysis of Reebok

7/20/2014 Market analysis of reebok
http://www.ukessays.com/essays/marketing/market-analysis-of-reebok-marketing-essay.php 1/12
Need help? 0115 966 7955
Enter your search terms.... Search
Print Email Download Reference This Send to Kindle Reddit This
Market analysis of reebok
Reebok the United Kingdom based ancestor company was founded in 1890 by J.W Foster, for one of the best
reasons possible athletes wanted to run faster (www.reebok.com). Since then Reebok has evolved itself through
various stages to become one of the top three market leaders in the sports shoes, fitness and apparels. The brands
success is built upon its creative designing and marketing strategy. The right balance between the designing and
marketing has taken Reebok to such height. McDonald, M (2000 p.5) defines marketing as process for
understanding markets, for quantifying the present and future value required by the different groups of customer
within these markets. Starting from its first hand made shoes to the recent innovative Easytone and ReeZig
footwear Reebok proved its individuality, authenticity and its creative thinking and potential. The company was taken
over by Adidas in 2006 which gave both Adidas and Reebok a strong market share to take on the common rival and
the market leader Nike. Though the company is taken over, Reebok and Adidas are still two different brands under
the group. Reebok has a strong hold in US market and sponsors for different sporting events like NFL, NBA, WNBA
and NBDL. Branded as a discounted shoe manufacturer in the past, Reebok has slowly changed its face to high
fashion, high comfort and premium product by raising its price in the market and incorporating new technologies for
the sports and fitness category. The latest launch in their product line Easytone and the upcoming ReeZig has got
more technical and design values, the technology which is actually designed by a NASA
engineer(www.corporate.reebok.com) and the re-launch of its classic models reveals the companys change in
focus. Reebok in the early 2000 started its marketing campaign with fusion of Sports Music and Technology
featuring industries best performers of the period, from music industry Jay-Z, Daddy Yankee, 50 Cent; top athletes
Allen Iverson, Donovan McNabb, Curt Schilling, Kelly Holmes, Iker Casillas and Yao Ming; screen stars Lucy Liu,
John Leguizamo and Christina Ricci; and skateboarder Stevie Williams., and Thierry Henry, Alexander Ovechkin,
driving ace Lewis Hamilton, MS Dohni and Nicole Vaidisova.
Easytone the companys launch of the year 2009 is its one of the most successful product line. Easytone feature
with first of its kind the balance pod technology, designed for womens fitness and sport. Reeboks commitment
towards women fitness and sport is long lasting from its first ever exclusive footwear for women Step introduced in
1989 which fore fronts the aerobic movements, and now the Easytone forefronts toning of lower abdomen parts like
the calf muscle, thigh muscle and the bum. Reeboks marketing approach for Easytone is take the gym with you
(www.reebok.com) which emphasis on women who were busy with their routine life but still wanted to maintain their
figure. Custom made shoes are also available by ordering and designing over the internet, which gives customers
the option of variety and uniqueness.
Marketing Environment
Macro Environment
Kotler, P., Armstrong, G. (2010) describes macro environment as a force which is more societal and affects the
micro environment directly. The global footwear industry is $196.25billion in 2009 with CAGR of 3.7% from 2005 to
2009(www.marketlineinfo.com). Reeboks international operations and its presence over 55 countries with different
cultural and economical background is a concern for its performance, with the present market scenario where the
European and American market is facing financial crisis, Reebok has got its major customers base in these regions
it faces major loss in sales, while the Asian market shows positive sign, Reeboks sales in India and china is second
to Nike, but the percentage contribution towards the revenue in international currency is low.
Reebok faces legal threats from its manufacturing units in South East Asia where they operate with cheap labours in
unethical work conditions. In general the sporting accessories are more famous among the 16 to 24 age groups.
The increase in number of unemployed and fresh graduates finding difficult to find jobs among this particular
category has caused a major concern for the industry, in addition to countries like UK where the government has
increased the tuition fees will be a major political and economical factor which affects the whole footwear industry.
The increase in raw material cost making the situation worse, which led to low stock maintenance and irregular
You are here: UK Essays Essays Marketing Market Analysis Of Reebok Marketing Essay
Tweet

Share
We provide custom model essays to help students get great
grades. Read more >
Looking for examples of our actual custom work written by
professionals. Click here >
We also offer a wide range of other services from dissertations to
presentations. View all services >
supply to the channel. The footwear industry is always subjected rapid changes in customer needs and the changes
are more oriented toward the socio-cultural forces, Reebok adapted to those variations in socio cultural forces by
combining the product with Music and sport in US market, fitness and sport in the European market and sport and
entertainment in Asian market.
Figure 1: Macro Environment
Reeboks Easytone is designed with the technology which is never been used before and sets a landmark in the
sports shoe market. Easytone is designed to comfort with Moving Air Technology, while most of the other
competitors do have similar technologies Reebok should really look into more innovative and sophisticated
technology which will be the unique selling point in the competitive market.
Micro Environment
Every brand has its own unique selling point which targets the particular category of customers, in general the
footwear industry customers can be categorised into Performance conscious consumers like runners, aerobics,
players, athletes, and exercisers and Fashion conscious customers who buy for style and comfort. Customers buy
products that has value and satisfaction among the range available in the market, Kotler, P et al.(2009).
Figure : Micro Environment
Reebok Easytone is designed and marketed to the fitness loving womens segment. With the strategy of launching a
new product every year with newer technology and invention, Reebok has always targeted the focus group, and so
as Easytone targets the fitness loving women. Reebok has always positioned itself as customer centric, which caters
the needs and requirement of the focus group, though it has the diversity in product when compared to its
competitors. Because of the diversity in its products Reebok has always been in competence to different
competitors in different category and product range. The main competitors are Nike, Adidas and Puma. Reebok
sells through various channels, which includes the retail outlets, Reebok concept showrooms, franchisee outlets and
associated sponsored sporting organisation.
Marketing Mix
The primary objective of an organisation is to offer a product which has a competitive edge or differential advantage
over its competitors, Brassington, F., Pettitt, S. (2006). This can be achieved by marketing mix which is studied with
the basic research on 4Ps.
Product
Product management has always been the core factor in the marketing mix, which involves the basic understanding
and the requirement for launching the new product in the market and then developing it with the right marketing
strategy which benefits the organisation and then manufacturing in the right way which benefits both the
organisation and the society. The organisation should transfer its knowledge into product which will be a drive for
growth, John A. Quelch (2006).
Figure 3: BCG Matrix,( source:www.reebokeasytone.net)
Reebok has the strategy of launching one core product every year, and the launch of Easytone is for the year
2009, it was the critical time to launch any new product because of the economy, hence Reebok has to come out
with a very strong product and marketing strategy. The tangible attributes has to be so strong and the message was
clearly sent out with Easytone with its high fashion, design and technology. The footwear is innovative and new to
the market, designed in a way that it gives us the feeling of walking in the soft sandy beach and the science behind
is when we walk on the sandy beach its hard to keep the balance hence we work hard to keep the balance which in
turn burns the calories of calves, hamstring and the gluteus maximus muscles. Reebok has also ensured that
Easytone is available across the globe and the visibility of it is more in the retail outlets, which created awareness
and also a noise in the market about the new product with new technology and performance. Though Reebok claims
theoretically it can prove that, by using Easytone will tone the legs 26% more when compared to other sport or
fitness shoes, there are still controversies about the actual performance of the product. Reebok did break the
controversies with the total sales of Easytone worldwide, this proved practically the strength of marketing strategy by
Reebok and the performance in the market. On the other hand with all the controversies the general image of the
brand which changed over the period of time from a discounted brand to a respected brand, contributed to the
overall performance, which has also bought value to the brand, Easytone has got its uniqueness and feature to rock
the market. The strength of the product always lies on its core benefits, the core benefit of Easytone is fitness in the
simple way, which is a necessity and hence has its value anticipation and demand. The actual product which is built
upon its core benefit is its features style and quality and as an augmented product Reebok gives warranty up to
three months and any after sales issue has been taken to R&D department for rectification and thus by giving the
customer the maximum benefit and trust in the product. The Easytone can be classified as speciality goods, where
grades. Read more >
Search UK Essays
Writing Services
Essay writing
Dissertation writing
Assignment writing
All Services
Free Content
Essay Help
Referencing Guides
All Free Resources
About UK Essays
About Us
Is this cheating?
Contact Us
ORDER NOW
INSTANT PRICE
UK Essays Services Instant Price Order Now Essays Dissertations Quality Contact Account
in an extensive market research was done which gives customer the maximum benefit by using the product. After
the successful launch of Step in 1989 and Easytone in 2009, both products have shown its individuality and very
minimum level of competition from other brands, which gives the product a cutting edge and the customers
reluctance to go for any other brands.
Product Life Cycle
The product life cycle gives the clear picture of the stage in which the product is, the four stages are Introduction,
Growth, maturity and termination. Determining the stage in which the product belongs will decide the marketing
strategy to follow Kotler, P (2003). For the footwear industry the entire product life is short because of the new
trends in the market, different categories in the customer base and due to wear and tear because of the regular
usage. Any new product that is launched should differentiate itself from the others and should have uniqueness.
Easytone launched in July 2009 with more anticipation and excitement in the market, took up the pace immediately
because of the marketing activity carried out by Reebok prior to its launch, the launch was a grand one with star
studded performance and celebrities form various industries took part in it.
Figure 4: Easytone PLC Stage
The growth stage of Easytone in terms of sales is pretty much vertical and by end of 2009 it reached the maturity
phase. Reebok focused on different strategy during its various course of the stages, during the introduction stage
Reeboks marketing objective was totally to build a strong brand image and expand its market share to the next level,
Easytone was priced at the higher end, since its targeted to the focus group, the fitness loving women segment,
during the growth phase Easytone penetrated through the focus group, where some of the customers were brand
loyal to Reebok, Reebok has the strong product mix, when Easytone was in its matured stage Reebok introduced its
next model the ReeZig, targeting the male segment, thus by lining up its product in the market and continuously
creating the awareness targeting various categories of the customer base. Since the Easytone is targeted to the
focus group, Easytone positioned well itself as a fitness wear and pioneered in its category.
Later in its matured stage Reebok repositioned its product focusing not only on the busy working women category
who could wear it for their work place, they also started focusing on the regular women category who does workout
everyday by launching different variants like ReeInspire, ReeFlipflop, Go Outside, Rush, Diva and also introduced
custom designs, were customers can design from the various patterns available in their website and can choose the
colours also. New Products are key to companys continued survival, (Lancaster, G., & Reynolds P, 2005, p.108).
Within the product line Reebok developed various products and introduced in different stages which enabled them
to actually extent the product life cycle. Countries in Asia Pacific and Middle East are very slow in responding to new
product particularly in footwear industry, where they used to wait and watch if the product is really worth and
anticipate for price drop. Reebok extended its Easytones product life by launching it in these regions with a time
gap, after proving it successful in US and the Europe market.
Pricing
The variants within the brand and the competition play a major role in pricing the Easytone, been branded as the
discounted sales brand in the past, Reebok changed its face by changing its pricing methods, sports and fitness
industry customers will always look out for the latest technology and high comfort brand were they give less
importance to cost. Though they will compare with the other brands with the same features, low priced products
which claim to have the innovative and most effective technology will always create a lack of confidence to the
customers. According to McDonald (2000, p.352) pricing may influence the other marketing mix also. Reebok priced
its Easytone in the higher end when compared to its previous fitness shoes for women like Step or Pump, in
competition to the other brands with similar product features though William j. Stanton (1994 p.335) says that for a
new product to take a high market penetration should price its product relatively low when compared to other
brands.
Figure 5: Easytone Pricing Strategy
grades. Read more >
grades. Read more >
Enter your search terms...
Search
In the early 2010 Easytone price was dropped marginally when it reached the maturity stage, the marginal decrease
in its price was effective to its secondary market like Asia pacific and Middle East markets, which is competitive to its
regional players, the secondary market customers have always been wait and watch customers where the always
believe in the bargain purchase, while the primary market customers are the early responders. Reducing its price
was marginal, Reebok was so conscious of not falling back to its earlier brand image, also it exploit the actual
market opportunities by acquiring customers out of its focus group. The pricing factor though didnt affect much of
its primary market, its influenced the secondary market. With regards to market penetration Reebok had a different
strategy by introducing one pound shoes in the tertiary market like Bangladesh and African countries. Easytone is
also priced up when compared to the other product line because of its additional features and the latest technology.
When pricing internationally they adopted the polycentric pricing where the regional office decides the price, this is
easily achievable because of the production unit is present in the Asian subcontinent where pricing in relative to
expenses is made, which is a biggest advantage to easily price polycentrically. Easytone is made available by
ordering online with a price discount, which saves the overall expenditure for the management of retail outlets and
showrooms, which is passed on to the customers.
Promotion
Reebok started its promotional activity for Easytone even before the launch, in order to create awareness. The
promotional activities were concentrated towards the technology the main features and the advantage of using the
product, since the product is targeted towards the focus group, fitness loving women, most of its promotion activity
featured young women with tonned legs and bum, which stimulated the customers mind. The advertisement by
Reebok for Easytone created a shock among the viewers, but still its shock averts are not new, it depends on the
market, the products speciality and the circumstance of social priorities, Evans M., & Moutinho L. (1999, p123).
Figure 6: Easytone communication strategy
Reebok spent most of its money in media advertisement which created awareness amongst the focus group and
also regular viewers who were also simulated to use the product. This is a major success for Easytone as it
captured the core strength or the unique feature of the product fitness and beauty. Easytone targeted the creamy
layer of the customer group, women between the ages 16 and 24, and their ad campaign has always been different
to different product lines, when it first started it marketing campaign with Reebok Planet in 2005, then in 2006 they
tie up with Thierry Hendry and Ryan Giggs for their campaign I am what I am, and further on like Pump Up, your
Move, Because life is not just a spectator sport which feature Lewis Hamilton showing his fitness skills with
Reebok, and now for the Easytone take the gym with you which sends out a clear message to the focus group,
and the line of celebrity includes Kelly Brook in UK, Bipasha in India.
Figure 7: Pounds spend for advertisement
Though Easytone spent more in media advertisement, it focused on other promotional activities also, like print, out-
of-home, digital and in-store executions. Reeboks spent in sales promotion is as much as it spent in media
advertisement, the promotions were mainly aimed towards churn in customer and creating demand in the market,
they have also launched online blogs to create a customer database and to get feedback from customers and to
develop the product further according to their requirements. Though as a brand Reebok has very good promotions
by sponsorship Easytone has its limitations were it could not enter in to the sports category, they have to rely more
on the entertainment sector to promote the product. Easytone in Reeboks concept store was given the priority and
merchandising was also primarily focused on Easytone, with all the above factors it created a pull strategy in the
market. The Easytone advert in most of the places were considered unethical and also caused a negative impact on
the product, which many of the viewers considered too much. But still as a campaign Easytone had a successful
period and sales through their communication strategy.
Place
Reeboks access to the target market is one of its successes, because of the growing awareness among the
customers, right customer in right attitude should be targeted, and also knowing the potential of individual market in
a global environment.
Figure 8: Sales region wise(2009), source: (www.marketlineinfo.com)
Knowing about the social and cultural behaviour of the local market before positioning a product is vital for planning
a marketing strategy, Lancaster G., & Reynolds P (2002). Reeboks decentralised operations allowed the local
management team to target the local customer base. Reeboks channel structure is simple when compared to its
sister company Adidas, from manufacturing unit to its different warehouses in different regions and the to its retail
outlets like speciality sports retailers, online retailers, concept stores, and other retailers. Reebok retail outlets has
got a better image in terms of its merchandising and product placements, because of its simple structure in reaching
the end customers the logistics is also made simpler and will be faster.
grades. Read more >
SWOT
Strength
Unique Product features
Celebrities and sports stars endorsed to brand
Balance pod technology
Media advertisement
Concentrated on focus group
Manufactured in Asia
Brand loyal customers and awareness
Custom made shoes
Prime location in retail and concept stores
Only for women category
Premium pricing
Weakness
Targets only focus group
Only for women category
No further development to the product
Single product line
Mostly relied in retail sales
Premium pricing
Controversial advertisement
Discounted retail sales
Vertically integrated brand
Opportunity
Developing the product
Untapped markets
Unisex models
Focus on emerging market
Wholesale market
Integrated marketing campaign
Threats
Manufacturing units in Asia and Cambodia
Competitors variants
Competitors pricing
Counterfeit and replicas in secondary market
Manufacturing standards
Decline in footwear sales
Recommendation
Based on the critical analysis done with SWOT, the following recommendations are suggested. Starting from the
priority matrix of nine and urgency and importance level three, Reebok though having some very unique featured
Easytone, variants among the product is very less when compared to the other brands in the same category, still
Reebok can claim that it has custom made shoes which gives customer the variation and to their likeness, the basic
product is the same, which will not change the mindset of the customer. Reebok have to develop new variants within
the product line in order to satisfy all its customer needs. Reebok has very good secondary market but with regards
to Easytone there is a large potential in secondary markets which they had missed out as they concentrate mainly
on their low range products which put them in second to NIKE, but lose their position in terms of product like
Easytone which has technical values and change the brand image from discounted brand to high street fashion,
sports and fitness brand, which can be overcast by more ethical media averts and focusing on the fitness loving
women category in these markets. The other weakness of Easytone is its vertical integration, where it does not
involve any whole selling like its sister concern Adidas, this make them to rely on its retail outlets for its maximum
sales where as other brands have horizontal integration which spreads their market area, Reebok should come out
of its present integration and spread its market area which in turn will create more opportunity for sales and market
share. In terms of new product development, like the fusion of music, sport and entertainment, Reebok should try
combining sport, fitness and casual models. Easytone concentrates only on it focused group which is an advantage
to maximise it sales but should also think of the other segments like the male fitness loving groups, though by its
advert and promotions the product in not much relevant to male segments, still using Easytone tone your leg, calf
muscle and hamstring. This would have put Easytone on the wider market and increased sales. The adverts should
have casted both male and female models where the male segments concentrate on the calf and hamstring, the
female segments with butt. In the era where the macro elements talk more about environment and human rights and
work ethics Reebok should have adopted to those factors much earlier wherein it wouldnt have faced legal and
ethical threats, having manufacturing units in Asia and Pacific regions will provide them with cost effectiveness, but
always have the risk of standards in manufacturing and work culture, the recent change in their work environment
ethics will clear any further damage to the brand but still whatever it faced will always impact the future market. By
changing the pricing strategy where it priced premium price for Easytone had a negative impact in the market, the
change in pricing methods should have happened in slow phase, rather than suddenly increasing its price because
of its innovative technology and feature. Though this created a new brand image in the market customers were
ready to wait for the price fall, which they have always experienced with Reebok in the past.
Appendix 1
SWOT Analysis - Matrix
SWOT
VS
Urgency
Importance
Probability
Priority (9-max, 1-min)
S O
1
1
3
3
3
9

4
2
3
3
1
7

grades. Read more >
2
2
1
2
1
4

8
3
2
3
2
7

11
3
2
3
1
6

5
4
3
3
2
8

4
4
3
3
3
9

2
5
2
2
1
5

4
5
2
2
1
5
WO
1
1
3
3
2
8

1
2
3
3
3
9

2
2
2
2
1
5

3
1
3
3
2
8

3
3
3
3
2
8

3
4
2
2
1
5

4
6
3
3
1
7

5
1
3
2
2
7

5
3
2
2
2
6

6
5
3
3
2
8

7
6
2
2
2
6

8
4
3
3
3
9
S T

1

0

3
2
3
2
2
7

5
2
2
2
2
6

11
3
3
2
1
6

11
4
2
2
2
6

8
4
3
2
2
7

6
5
Print Email Download Reference This Send to Kindle Reddit This
3
3
2
8

7
5
3
3
2
8
WT
1
1
3
3
2
8

4
3
2
2
2
6

6
5
3
2
2
7

4
8
2
2
2
6
Bibliography
Sign in or Post as Guest 1 person listening
0 comments
Order Now Instant Price
submit Tweet 0 0
Share This Essay
To share this essay on Reddit, Facebook, Twitter, or Google+ just click on the buttons below:
Request Removal
If you are the original writer of this essay and no longer wish to have the essay published on the UK Essays website
then please click on the link below to request removal:
Request the removal of this essay.
More from UK Essays
Free Essays Index - Return to the FREE Essays Index
More Marketing Essays - More Free Marketing Essays (submitted by students)
Marketing Essay Writing Service -find out more about how we can help you
Example Marketing Essays - See examples of Marketing Essays (written by our in-house experts)
Newest | Oldest | Top Comments

Share
Copyright 2003 - 2014 - UK Essays is a trading name of All Answers Ltd. All Answers Ltd is a company registered in England and Wales Company Registration No: 4964706.
VAT Registration No: 842417633. Registered Data Controller No: Z1821391. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ.
Fair Use Policy Terms & Conditions Privacy Policy Cookies Complaints Fraud About us Free Resources Sitemap Language
Join us on Google+ Find us on Facebook Follow us on Twitter

+ Follow Share Post comment as...

Market Analysis of Reebok

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Market Analysis of Reebok

Uploaded by

Copyright:

Available Formats

7/20/2014 Market analysis of reebok

You might also like