1. The Athletic Footwear Industry Jacob Angell Robert Carrozzo Kendrick Coq Jeremy Freeman

2. Agenda  Industry Structure  Background  Competition + Organization  Advertising Strategies  Brand Case Study (FIFA WORLD CUP 2014)  Analysis (Raw Data)  Recommendations

3. Athletic Footwear Industry  Why the Athletic Footwear Industry?  One of the strongest global markets  Highly competitive market  Success is closely related to the effectiveness of advertising strategies  Industry at a Glance (Nov. 2014)

4. Industry Timeline 1830-1870: Plimsolls Created 1895: First Running Shoe 1950s: Leisure Opportunities Expanded 1970s: Exercise Becomes Increasingly Popular Today 1870 1900 1950 1970 2015

5. Quick Figures: Industry at a Glance

6. Industry Production and Supply Chain

7. Distribution Manufacturer Retailer Customers

9. Understanding the Recession

10. Competition & Entry  For every dollar spent on the labor industry spends only 8 cents on capital  Level of technology change low  Difficult to enter

11. *Note: Reebok is owned by Adidas and therefore is not shown

12. Competition of the Industry  Larger companies rely on vertical integration—Nike  Smaller companies try to find niche markets—Under Armour  High concentration

13.  The industry is fairly concentrated  Fairly concentrated HHI, high CR4  Lots of companies with smaller market shares

14. Advertising Strategies Sponsorships/Events Celebrity Endorsements Social Media

15. Sponsorships & Events

16. Celebrity Endorsement

17. Celebrity Endorsements Today

18. Social Media  New definition of “word-of-mouth” advertising  Incorporation of campaigns into hashtags  Use consumers to sell the products  Instagram and Twitter

20. Nike  January 1964  Bill Bowerman and Phil Knight  Nike Swoosh  Brand Value - $19 Billion  Market Cap - $83.6 Billion

21. Just Do It Heroism  Find Your Greatness  Endless Possibilities  Never Not Running  Make it Count

22. Nike + Apple  Nike + iPod Sports Kit  Nike + Sportband Kit  Nike Sportwatch  Application that uses accelerometer built in phone  Created a Social Networking for athletes  Decrease advertising cost, increase efficiency

23. Adidas  Germany shoe manufacturer, 1925  Running/Training  Adolf “Adi” + Rudolf Dassler  Launched in U.S. in ‘68 and soon became leader in the industry  Three stripes brand recognition  1972 Olympic Games, Munich, Germany  Brand Value - $5.8 Billion  Market Cap - $16.8 Billion

24. All Day I Dream About Sports  “Play to Win”  “Impossible is Nothing”  “Adidas is all in” (more than sports)  Brand built on passion and sporting lifestyle

25. Adidas & Android  Adidas miCoach  World’s first web-based personalized training service

26. Case Study: FIFA World Cup 2014 Risk Everything All In or Nothing

29. Risk Everything  Targeted more players  Targeted host country of Brazil  12 million views  30:1 like to dislike ratio All In or Nothing  Official sponsor of World Cup  Targeted more teams instead of individuals  30 Million views  5:1 like to dislike ratio

30. Results Adidas = World Cup Nike = Global Market

32. Hero, Hub, Hygiene  Hero - Accelerates growth  Hub - Retains current subscribers  Hygiene - Attracts new subscribers

33. Raw Data Analysis

34. TV Ad-to-Sales  Low Ad to Sales Ratio  Reasons  Great brand loyality  Just TV ads for 2011  Advertise through other mediums  Hard break down the data for just atheltic footwear

35. The Ad Time Placement  Majority of Ads in the Afternoon (Noon-7PM)  Reason  After school and house moms  Second Highest is the Overnight  Reason  Late night shows  Younger audience

36. The Daily Ad Placement  Weekend  Highest ad counts  Kids home for school  More time spent in front of the TV

37. The Ad Seasonality  Spring Increase  Spring sports and outdoor activities  Back to School Increase  Fall sports and outdoor activities  Holiday Increase  Christmas presents

38. Ad Program Placement  Sports Center and Highlight Express  Target athletic audience  SpongeBob  Younger audience

39. Top Advertising  Major companies  Skechers top advertiser, but not top spender  Quantity over quality  Reebok top spender, but not top advertiser  Quality over quantity

40. Cost per Ad Time Slot  Nike  Has more 60 and 90 second ads  Targets prime ad slots  Skecher low cost per Ad  Adidas values the 30 Second Ads

41. Most Expensive Programs  Sports games are the most expensive times to advertise  The most targeted viewship

42. Recommendation: Global Global Focus Emerging markets in China and Brazil The global athletic footwear market was valued at $74.7 billion in 2011 and is forecast to grow at a CAGR of 1.8% to reach $84.4 billion in 2018

43. Recommendation: Women Opportunity in women’s athletic footwear 2013 – women’s apparel, footwear, equipment and other products made up < 25% of Nike’s revenue Plans for additional $3B grown in division by 2017 Exclusive women’s stores – Newport Beach, CA and Shanghai

44. Keep It Up! Continue with technological advancements and partnerships Continue event and celebrity sponsorships