Marketing Report and Marketing Campaign Proposal
Nottingham Trent University School of Art & Design Hong Kong Design Institute
ifb
ba
2018 / 2019
Module: Fashion Brand Marketing and Promotion
IVE
Module reference: FASH30067 Module Leader: CHAN, Marco
Fashion Brand Marketing and Promotion Declaration This submission is the result of my own work. All help and advice other than that received from tutors has been acknowledged and primary and secondary sources of information have been properly attributed. Should this statement prove to be untrue, I recognise the right and duty of the Board of Examiners to recommend what action should be taken in line with the University’s regulation on assessment contained in its handbook. I confirm that this work has gained ethical approval and that I have faithfully observed the terms of the approval in the conduct of this project. Tsang Wing Yan Signed ………………………………………………………………(Full Name)…………………..………………………… 7/12/2018 Date ………………………………………………………………………………………………………………………………… (Word Count:_____3849_____)
Content Executive Summary Situation Analysis 2.1 Company Overview 2.2 Context 2.3 Target Customer 2.4 Competitor 2.5 Collaborator Brand Health Audit 3.1 Brand Health Prism 3.2 SWOT Analysis Market Targeting Marketing Strategy Implementation Timeline Conclusion Image Reference References Bibliography
Executive Summary This report is going to research on the situation of Reebok and context in the recent market, finding out the opportunities and threat of Reebok. A new marketing campaign will be then suggested based on the analysis to enhance its strengths and improve the weakness.
Situation Analysis Company Overview
Reebok is an England athletic footwear and apparel global brand founded in 1958 by Joe & Jeff Foster. Reebok is known for their repositioning. They created an union jack flag logo, then changed to a vector logo and finally settled down to the 3 sides delta logo. It can be separated to three sections of Reebok’s market position.
1895 - 1986
1986- 2014
2014 - Present
At the beginning of the establishment of Reebok, they were developing the fitness market, released their first aerobic shoes called “The Freestyle” for women in 1982. Started from 80s, an increasing number of women were involved in sports by a rising fitness trend. People are crazy about aerobic. The trend helped Reebok getting a big success of the “The Freestyle”. The release of aerobic shoes fulfilled the demand of fitness shoes in the market while the fitness trend was going viral. This big success made a rapid growth of annual sales revenue, it was increased from 4 millions US dollars to 1.4 billion US dollars.
After then, it was the second section of Reebok. Reebok grew so fast in 2000 to 2004 in the professional sports area. They were the exclusive apparel outfitter and sponsor of National Basketball Association, National Football League and National Hockey League. Moreover, Reebok signed a lot of famous athletes such as Yao Ming. They also created many iconic and innovative sneakers like Pump series which still famous now. However, Reebok was chased by Nike and gradually went down. To compete with the surging competitor Nike, Adidas acquired Reebok as a subsidiary with a deal of $3.8 billion to against them. Nevertheless Reebok did not back on track after the acquisition. The sales kept going down, it decreased 14% within 2 years.
Under the decreasing reputation and sales performance, Reebok made a big decision to go back to fitness market. Their mission is to become the best fitness brand of the world. Reebok emphasizes on the balance of physical, mental and social, spreading out the message of “fitness is a way of life�. Therefore, Reebok transformed their position of comprehensive sports brand to a fitness lifestyle driven brand. In the head quarter or Reebok, there is even a full equipped gym room to encourage staff to workout. Besides, unhealthy food such as fried food is not allow to sell there. It showed that Reebok is building up the healthy lifestyle image, they are telling the public that Reebok is the comrade in your fitness life rather than an ordinary sports brand. To expand the market share, reaching the mass market is the best way. Therefore, Reebok are focusing on not only fitness, but also running and walking products.
According to the First Half Year Report 2018 of Adidas group, Reebok brand revenues declined 2%. The net sales dropped from 179 millions euro in 2017 to 163 millions euro (Fig. 1 Business performance in Asia-Pacific, 2018). Although the net sales dropped, there was a growth of running and training categories showing that the current market position is right. Reebok should focus more on running products reaching the mass market, also the specialised products for training and fitness. Apart from that, the net sales of Reebok was much lesser than Adidas. Reebok is still too far from being a strong brand as Adidas or other competitor. They are lagging behind, having not much reputation in Hong Kong when compared with other sports brand.
Fig. 1 Business performance in Asia-Pacific
Situation Analysis Marketing Stategy
Reebok has 6 main products line separated the product category by sports types. They have quite a lot cooperator and collection such as Les Mills, CrossFit and UFC. A new Les Mills training shoes called Ultra Circuit TR Ultraknit was recently released in Hong Kong. Using the ultraknit weaving technology, the shoes are more easy to fit and breathable. The feature technology used in their products are flexweave. Speed TR Flexweave is built for training; Fast Flexweave for running and training; Fusion flexweave for fuses style and performance; Nano 8 flexweave is for crossfit. Reebok fully utilised the technology in the footwear for different occasion. Another special technology is the motion sense technology used in PureMove Bra. It provides flexible support and comfortable movement to women. Reebok actually has quite a lot of new technology and innovative ideas to apply into the products. They make every products have a unique function and selling point. Regarding the size and products stocking level, They usually display 5-6 pieces for each item on the floor (Fig. 2-4 Store Visit, 2018). Moreover, it is hard to find S size apparel even in womenswear as they tend to put M-XL sizes on floor. It may affect the fitting experience of female customers.
Fig. 2 Tsang Wing Yan, 2018, Store Visit
Fig. 3 Tsang Wing Yan, 2018, Store Visit
Fig. 4 Tsang Wing Yan, 2018, Store Visit
To promote the products, Reebok endorsed different celebrities. Gal Gadot, Gigi Hadid and Nathalie Emmanuel are invited to try on the new PureMove Bra for the promotion. For the Les Mills series, Nina Dobrev, who is an Canadian actress and former Olympic gymnast, is invited as the spokesperson. In addition, Reebok recently cooperated with Victoria Beckham and released a collaboration. With the endorsement of Victoria Beckham, Reebok can approach more female customer as she is the ideal women of most of the female. It also shows that Reebok is targeting and developing women’s sportswear market now.
In the Asia area, the new spokesperson of Aztrek OG is a popular Korean idol group called Wanna One. The shoes are more emphasized on the design instead of function. It shows that Reebok is trying to make their running shoes more fashionable and stylish so as to attract the young generation. On the other hand, they launched number of yoga workshops only for girls and crossfit experience day for university students. In short, Reebok tends to target youngster and women. They also try to spread the message of their belief “fitness is a way of life” by giving workout experience of crossfit and yoga.
Regarding the pricing strategy, they use value-added pricing for the functional and new technology products such as the puremove bra, it is more expensive than basic sports bra. The customer may doubt about the product quality with cheap price but claimed in good function. Therefore, value-added pricing is used for functional and feature products. It gives confidence to customer that the product is in good quality and function, as the price is relatively higher due to the new technology and the innovation. On the other hand, psychological pricing is also be used. Setting the price $599 rather than $600 (Fig. 5 Price tag), giving a sense to customer which is cheaper to attract them to buy. This increased their motivation on purchasing the products.
Fig. 5 Tsang Wing Yan, 2018, Price tag
Reebok has 7 branches in Hong Kong which are located in Causeway Bay, Admiralty, Central, Tsim Sha Tsui, West Kowloon and Tsuen Wan centralized in high traffic district, and some are in middle level shopping mall such as Sogo Department store and Harbour City. Quite a lot strong competitors are located near Reebok, For example, Puma and Nike are located opposite Reebok in Fashion walk in Causeway Bay. Additionally, some products are available in sports retail store including Wan Kee, Marathon Sports, Gigasport, Catalog, C.P.U, Sportshouse. Reebok has quite a lot distribution ways.
Nike
Puma
Reebok
Causeway Bay Fashion walk
Situation Analysis Context
Doing yoga and fitness is all the rage in recent years, girls are more concern about their health and body.
From the Jeong Da-yeon to Coffee Lam, Hong Kong women are always care about how to make themselves more slim and fit. In 2012, Jeong Da-yeon was going viral because of her own aerobic methods. She was a 46 middle-aged mother, but she successfully lost weight from 68kg to 49kg within 3 months. Women in different ages were following her fitness DVD to lose weight. Nowadays, another fitness influencer in Hong Kong appeared who is called Coffee Lam (Fig. 6 Elle.com.hk, 2018), a former actress and a yoga instructor now. She has 457,000 followers on Instagram. Most of the comments in her photos are asking about fitness problem. Young girls to pregnant women are all keen to learn her yoga classes. As she was pregnant 10 months before and now born a baby, more and more young mother ask for her fitness method. Under this yoga trend, Reebok has an advantage to promote their yoga products and their fitness beliefs.
In the current fashion trend, “Athleisure� trend is coming up. People love to wear sneaker which is originally for workout in daily life. Sneakers became versatile to mix-and-match with diverse types of apparel such as dresses, and in any occasion. As said as South China Morning Post, the iconic tennis sneaker Stan Smith has became a daily sneaker wore everyday except playing tennis. Following the recent trend, it is also not difficult to find the Athleisure phenomenon. For example, the Triple S of Balenciaga and Flashtrek of Gucci are bringing sneaker in daily life fashion.
#Athleisure
According to the statistic on Trading Economics (Fig. 7 Trading Economics, 2018), there is 8.1% increase in Hong Kong retail trade within 1 year. Clothing and footwear categories got a rebound, it was -0.6% in 2017 and now increased to 3.8%. It demonstrated that the fashion retail sales are rising in Hong Kong.
Fig. 7 Hong Kong Retail Sales Year-on-Year
Based on Hong Kong Trade Development Council, the 201 8 GDP is predicted to rise 3-4% (Fig. 8 Hong Kong Trade Development Council, 2018). The value of retail sales in nominal terms rose 9.5% in August 2018 compared with last year. The unemployment rate was slightly decreasing from 2016. It is 2.8% (Fig. 9 Hong Kong Trade Development Council, 2018) in 2018 being the lowest rate within 20 years. About the tourist arrivals, there is a drop from 58,500,000 in 2017 to 41,960,000 people in 2018 (Fig. 10 Hong Kong Trade Development Council, 2018). In a whole, Hong Kong people are still in a good living environment. According to the maslow's hierarchy of needs, people seek for self-fulfillment needs after satisfied with the basic and psychological needs. Therefore, if Hong Kong people are in low unemployment rate and higher GDP, they will seek for materialistic things. This is good for the retail industry.
Situation Analysis Target Customer
Reebok found the niche market as their new target within the established market. They changed their target customer along with their brand repositioning, and to develop their own uniqueness so as not to fall behind their parent company Adidas and competitors. Reebok is targeting the millennials aged 18-38 years old in middle social class and mainly focus on female now. The target customer is usually higher diploma or university student to college graduated and interested in fitness. From the promotion strategies of Reebok, it is obvious that they are approaching young people, for example, the workshops for students and the famous K-pop celebrity to be the spokesperson. The target customer of Reebok love doing gym, crossfit and yoga in order to keep fit and keep healthy. They engage in physical activity at least twice a week. Stylish and design are the factor under their consideration of purchasing sportswear. The millennials are willing to spend money on having a better life such as joining gym room and fitness course, travelling and food.
#Gym Room #Styling
ic
#Geograph Hong Kong
Gender: female
#Demogr aphic
Age: Millennials aged 18-38 years old Income: $8000-20000 Education level: university student to college graduated Occupation: Any
#Psychographic Fitness enthusiast Member of fitness centre or fitness course Pay attention on healthy Love travelling and food Challenge-loving
#Lifestyle and Behaviour Engage in physical activity at least twice a week Follow what the influencers do
Situation Analysis Competitor
As a sportswear brand, Reebok has a lot of strong and outstanding competitors including Nike, Puma and Skechers. Among them, Nike is the largest competitor. Nike and Skechers are American brands, Puma is from Germany. Nike is known for the basketball sneaker such as Air Jordan. Reebok used to be contended with Nike through the Insta Pump Fury OG. It was a bombshell in that generation. Although Reebok had a glorious time before, they were defeated by Nike as time goes by. In compare with Reebok now, Nike is more professional to provide excellent function and wearing experience of basketball shoes to customer even the athletes. Nike also got very good reputation from them.
Puma is more stylish in compared with the professional sports brand. One of the feature product is “Creeper” designed by singer Rihanna in 2015. It was said as “Crowned Sneaker of the Year” in Footwear News Achievement Awards, and brought a big profit for Puma. Puma did very great in the celebrity endorsement by using their reputation to promote the brand. Rihanna even wore the apparel of Fenty X Puma to the New York and Paris Fashion Week. Puma also succeed in running products by signing young athletes such as Jamaican sprinter Nigel Ellis.
Skechers is a lifestyle and performance footwear brand emphasising healthcare, latest trends, technology and comfort innovations. They target the young people and quite popular among them. The sales of skechers keep boosting as stated on their official website. Although it does not has longer history than Reebok, it is still a growing competitor in lifestyle sports brand aspect.
In short, Reebok has strong competitors in functional and fashionable sportswear market. Reebok are still not better enough than Puma and Skechers in a fashion prospect, neither the technological and functional products of Nike.
#Positioning Map Function
Style
Situation Analysis Collaborator
As Reebok was back to focusing on fitness products, they partnered with CrossFit, a fitness company. The rise of crossfit in recent years brought benefit to reebok. In 2013, they also got another new partner, Les Mills, which is a company providing fitness workouts. Besides, Reebok is now sponsoring footwear, uniform and apparel to Ultimate Fighting Championship(UFC). Except the own store in Hong Kong, Reebok also distributes products through wholesalers with Wan Kee, Marathon Sports, Gigasport, Catalog, C.P.U and Sportshouse. Reebok also get into Sogo Department Store, Harbour city and Lane Crawford. Therefore, Reebok actually has supportive collaborators from different company.
Brand Health Audit Brand Identity Prism
About the culture the brand want to project to public, Reebok is delivering a message of changing the lives through sport. They defines sports as fitness. Reebok also emphasises the balance on physical, mental, social, and be more human.
Reebok claimed their products are comfortable and considerate such as the PureMove Bra which is especially designed for women to eliminate the uncomfortable feelings. They are also projecting the innovation technology of the products to create shock absorption, light and breathable.
The self-image of Reebok is healthy, positive. Reebok is tough and powerful when facing the challenges. They enjoy workout and feel relaxed with it.
In the external environment, customers feel comfortable when wearing Reebok. They prefer Reebok as an affordable sports brand and mostly choose their products for running. The historic and iconic product such as Pump Fury has high reputation, but people think that they stopped in the pass and no big improvement. To compare with the design and technology with other brand, they are still weak and lagging behind.
Concerning the public relation, Reebok partnered with CrossFit since 2011. Then they also cooperate with Les Mills. Reebok formed a Team Reebok to hold different experience day and workout workshop for interested people to join. Through the activity, Reebok provides professional trainers to teach the participant the right crossfit exercise.
Brand Health Audit SWOT Anaylasis
Looking to the strength of Reebok, They are good at holding different free workshop, experience day in different kind of fitness activities for specific group of people. It helps promoting the fitness activities and spread the message of healthy life that they emphasise in their brand vision. Moreover, Reebok has a wide range of distribution. Except their own independent stores, customer can also buy products from many other retailers such as Gigasports which facilitate customer from different district.
However, even they do a lot promotion workshop, they are still weak
when
comparing other brands. As mentioned in the financial status of Reebok, they are falling behind the parent company Adidas. Combining the report data and the reflection of Reebok from public, they do not have high reputation. Although Reebok is doing quite good of their every products which all having specific function and selling point, people are still prefer other bigger sports brands.
In view of the rising yoga trend and athleisure phenomenon, this an opportunity for Reebok to develop their products. For the yoga trend, Reebok has the superiority as they already has a fitness product line and workshop. Therefore, it is not difficult to approach that group of people. They can sponsor the influencers to seek for more awareness and strengthen their fitness image, as well as to convince more people choosing Reebok for yoga. They can also provide them yoga classes to build up relationship and loyalty through the communication between trainers and participants.
About the threat of Reebok, it will be the imitation market in China. With no doubt that China embraced a lot manufacturing process from many different brands, so they know well the product producing procedure. Some of them will even buy the real product for reference. Then they use the cheaper material and cut some of the procedure to lower the cost of product. Finally, they sell the imitation products. If people are not care about the fake product, they will definitely purchase the imitation for cheaper price. It will affect the sales of brand in a certain level.
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Market Targeting Based on the analysis on Reebok’s marketing strategies, they are expanding their brand to a young female fitness market. Therefore, they should mainly focus on the Generation Z female. About the Generation Z, they are mostly university students and having a part-time job with around $3000-$10000 income a month. They attach importance to physical exercise. In order to show their personality, they always wear brand logo t-shirt or hoodie. They love sharing their life on social media.
Marketing Strategy The new marketing strategy should improve the brand promotion, because Reebok does not have iconic or impressive promotional campaign in Hong Kong. It is recommended to hold a new promotional campaign in order to enhance the brand image on health and fitness, also to raise awareness form target market. The promotional campaign theme may emphasize on living a more healthy life physically, mentally and socially. First of all, based on the research finding in company overview, Reebok’s headquarter does not allow any unhealthy food such as sugary beverages, candy and fried food selling there. It showed that Reebok not only emphasize on fitness, but also a healthy diet lifestyle. Taking the idea from not selling junk food, it is suggested to create a healthy drinks vending machine. There will also be a screen on the vending machine playing the new products information and introduction, lookbook and advertising video. After building the specialised Reebok vending machine, they can put one in the 9 universities in Hong Kong. Since Reebok is targeting young generation especially students, university is a good location to reach target market as there is full of young people. Moreover, most of the vending machine in university is selling unhealthy drinks and snack, students do not have a healthier choice. Putting a sports brand vending machine there can raise their awareness, and give a new and healthy choice of drinks for them. In addition, Reebok can spread the message of balancing the diet to have a healthy life.
Vending Machine
Screen For showing promotion video
On the packaging of healthy drinks, there will be a bold Reebok logo and a lucky draw information on the back. About the lucky draw information, it is a QR code linking to the lucky draw website. When the students scan the QR code, they will instantly know whether they can get the prize. Regarding the prize, the grand prize will be 4 lessons yoga classes or crossfit workout classes to be chose by them. In view of the current yoga trend, young girls are interested in doing yoga and fitness exercises, the free classes can provide them a chance to learn from the professional trainers. Yoga can help practising physical health and beauty, mental health and spiritual relax. It is a suitable activity for girls to live healthier, relax the stress from study and create beautiful body line. It is suggested to invite Coffee Lam, a yoga influencer and trainer, to be the trainer of the classes. She is popular among girls. On the other hand, if prize winner is male, he can choose crossfit classes which he may be more interested in. Through the classes, Reebok can strengthen their brand image into a lifestyle sports brand that they aim to be, and really achieve the mission and vision they stated. Furthermore, with the free classes, Reebok can encourage and provide experience to target customer. It may motivate them to start a fitness life, then they will need the fitness apparel. Therefore, Reebok will be the choice for them as they are influenced by Reebok. This is a step by step promotional campaign to first raise the awareness, enhance a strong brand image, then expand the market and finally increase the sales.
Reebok Healthy Drinks Packaging
REEBOK
BEST BEFORE DD.MM.YY TT05 00186307 10 23. 12. 19
Scan The QR Code for a
LUCKY DRAW!!!
Prizes: 1. Yoga / crossfit free classes (4 lesson) 2. $100 coupon 3. Reebok headband 4. Reebok socks
Another prizes of the lucky draw are HKD$100 coupon, Reebok’s socks and special edition headband for the campaign. Winner of the prizes can get the prizes in any Reebok retail stores. Through the coupon giveaway, it can attract people to make purchase of Reebok so as not to waste the coupon. Besides, people will be encouraged to visit Reebok retail store since they need to get the prizes in retail store. They may then look around the store and check out the products. It may bring sales to the store by distributing low cost socks and headband.
Concerning the amount of each prizes, there will be 80 tickets for the yoga and crossfit classes. Both yoga and crossfit classes will be separated to 4 small classes including 10 students. Each classes have 4 lessons every week. About the $100 coupon, it will be 50 quota. As for the socks and headband, there will have 200 pieces of each items. The vending machine will be put in 9 university for 2 weeks.
Implementation Timeline First of all, the promotional team will customise 9 vending machines, then they will ask for the healthy drinks from wholesaler and repackage it into Reebok’s drinks. Meanwhile, they need to prepare a promotional video which will be played on screen of the machine, and the promotion advertising on social media. The promotional video will be showed on Instagram to inform people about the promotional campaign. After that, the 9 healthy drinks vending machine will be put in each universities for 2 weeks. Finally, it is the last stage of the promotional campaign. After 2 weeks, the prize winners can get the prizes and start the yoga and crossfit classes.
Reebok Vending Machine in Your Area~!
Preperation of the vending machine Promotion of the event (Advertising on Instaram story)
Enjoy the healthy drinks and play the lucky draw!!!
$100 Coupon
Campaign period Free Yoga ”‘••Ƥ– Classes
Free classes lessons
January Reebok Socks
Reebok Headband
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February
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April
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Conclusion To conclude, Reebok had repositioned the brand into a fitness brand emphasising physical, mental and social balance. They aim to be the best fitness brand. However, Hong Kong people actually not really know many about their brand position. Reebok did a lot promotion on the new products and sales promotion, but they do not really showing the brand identity, but only aim for boosting the sales. What Reebok need to do is to enhance their brand image in Hong Kong, to let them immediately associated to Reebok when talking about fitness brand. To compete with the strong competitor, Reebok need to first consolidate their brand status in fitness area, just like what Nike are doing in the basketball area. Therefore, the campaign can help Reebok to build up distinct brand image and position in fitness and healthy lifestyle.
References Linksports, The Upswing of Reebok with the Power of CrossFit, Spartan and UFC [Accessed 23 October 2018] AdAge, Change: Reebok Logo Indicates Shift From Pros to Crossfit [Accessed 23 October 2018] Adidas Group, History [Accessed 20 October 2018] Boston Job Source, Reebok Company Profile [Accessed 20 October 2018] Mainline Menswear Blog, The History of Reebok Footwear [Accessed 22 October 2018] Shihuo, Is Reebok Coming Back on Track? [Accessed 22 October 2018] CB, Reebok is Backing to Fitness [Accessed 22 October 2018] Adidas Group, First Half Year Report 2018 [Accessed 21 October 2018] ELLE Online Editorials, Exclusive interview: From a Patient to a Healthy Life! Coffee Lam teaches you 10 methods to be fit [Accessed 21 October 2018] Trading Economics, Hong Kong Retail Sales YoY [Accessed 21 October 2018] Hong Kong Trade Development Council, Economic and Trade Information on Hong Kong [Accessed 21 October 2018] Referral Candy Blog, Reebok Marketing Strategy – How Reebok Relaunched and Became Cool Again [Accessed 21 October 2018] Zhihu, What is Reebok? [Accessed 21 October 2018] Zhihu, How is Puma? [Accessed 21 October 2018] Marie Claire (HK) Edition, PUMA X RIHANNA “Creeper” [Accessed 22 October 2018] Skechers, Brand | Skechers Corporate (SKX) [Accessed 23 October 2018] South China Morning Post, How Sneakers Became the Heart and Sole of Today’s Lifestyle [Accessed 23 October 2018] South China Morning Post, Gen Z are driving China’s consumer trend with impulse buying and instant gratification [Accessed 23 October 2018] CIPD, How to engage Generation Z – and why it’s vital to the future growth of organisations in Hong Kong [Accessed 23 October 2018]
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Skechers, 2018, Brand | Skechers Corporate (SKX) [Online] Available at: http://about.skechers. com/brand/ . [Accessed 23 October 2018] South China Morning Post, 2018, How Sneakers Became the Heart and Sole of Today’s Lifestyle [Online] Available at: https://m.scmp.com/magazines/style/fashion-beauty/article/2163253/h ow-sneakers-became-heart-and-sole-todays-lifestyle [Accessed 23 October 2018] South China Morning Post, 2018, Gen Z are driving China’s consumer trend with impulse buying and instant gratification [Online] Available at: https://beta.scmp.com/business/china-business/article/2108141/gen-z-are-driving-chinas-con sumer-trend-impulse-buying-and [Accessed 23 October 2018] CIPD, 2017, How to engage Generation Z – and why it’s vital to the future growth of organisati ons in Hong Kong [Online] Available at: https://www.cipd.asia/news/hr-news/engage-generation-z-hong-kong [Accessed 23 October 2018]