The Importance of Customer-Oriented Innovations to the Athletic Footwear Industry Leaders

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Nowadays, sports celebrity endorsements are nothing new. But back to 1984, when NIKE signed the first contract with Michael Jordan, it was definitely a revolutionary innovation about marketing activities in the sport industry of that time. The power of his endorsement reached a summit when in 1995 he announced his return to the National Basketball Association (NBA) after his first “retirement” –stock prices of the endorsed companies showed dramatic increases. (Mathur, Mathur & Rangan, 1997) It is noticeable that Adidas’ recent cooperations with super popular singing artists, Kanye West and Pharrell Williams, have been innovative updates for endorsements, which not only have expanded the candidates of endorser from sports stars to artists, but also have engaged them into major design of the products. Such initiative could be treated as the combination of product-oriented innovations and marketing-oriented innovations, which has helped the shoes that these two celebrities endorse supplant the Air Jordan as the prime status symbol among sneakerheads. As Holt and Featherstone argued and cited by Bai Y., Tan J., Chio TM., and Au R. (2009), the explanation of the popularity of such special designed products probably is that in the modern society, more and more people are taking consumption as an autonomous space where themselves are not limited by traditions or social environments, and as a place where to improve and express themselves regardless of age or class origins. (P. 254， Para. 2)

However, Some people argue that the leaders of the footwear industry should focus on diversification strategies, such as multi-brand and integration, to set up barriers, collect market share and then obtain competitive advantages. Through multi-brand, for instance, a company can have a diverse brand portfolio so as to cater pervasive market segments, keep a unique identity and zero in core competencies. (Hussain, et al., 2015, P.171) Actually, Adidas has been executing the multi-brand strategy to some extent ever since 1979 when the Original brand was born. Currently, It has sub-brands such as Performance, Original, Style, and the Reebok acquired in 2005, if counted in. Yet, such strategy didn’t help the 97-year old company keep leading the industry, especially after the rising of NIKE, who contrary united all its product lines with the single Swoosh logo. Despite all the above goodnesses of the multi-brand strategy, the adopter also runs the risk of cannibalizing, which means one brand offsets the sales from another brand within their portfolio, especially when those brands operate in the same industry and are in direct competition. (Mason and Milne, 1994)

Competitions in the athletic footwear industry never stop, and neither do the steps of innovations in this industry. Not like those industry participants who just meet customers’ needs, these leaders create needs through proactive innovations. As NIKE’s founder Phil Knight once said, there are 7-year brand cycles in the industry. Maybe not so precise on the number of years, but when we look back for a long time into the history, we can see that Adidas and NIKE have owned the leadership alternatively, since the 1940s. Therefore, it is not surprising that to defend its present number one position, facing with Adidas’ boost tech, Nike has continuously issued 3 new mid-sole tech—the VaporMax, the ZoomX and the React Foam—in a short half year.

References

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