How should Reebok get its market share back?
Reebok International Ltd. is a distributor of sports, fitness, and lifestyle products, and its main products are athlete shoes. Reebok footwear and apparel have been an international brand since 1984. In 2003, its worldwide sales were about $3.5 billion. It is a number two brand in the athletic shoe market in U.S., however, the industry in growth rate is decreasing (Zerio 2005). In this paper, I would like to present the best way for Reebok to market their products in such industry situation.
The Problem Statement
Considering the changing urban culture and the athletic shoes market, determine the best way for Reebok to approach the marketing of its products to the urban market and worldwide.
Summary on the Situation
Reebok offers three other brands besides its sportswear and accessories line; Greg Norman (men’s casual wear), Rockport (walking and casual shoes), and Ralph Lauren and Polo (dress and athletic shoes). Reebok has more than 205 retail stores and sponsors sports stars such as Allen Iverson (a NBA basketball player) and Venus Williams (a tennis player) (Zerio 2005). Reebok has a long-term long-term strategic partnership with the National Basketball Association under which Reebok designs, manufactures, sells and markets licensed merchandise for the NBA, the Women’s National Basketball Association (WNBA) and the National Basketball Development League (NBDL), the NBA’s minor league (Reebok International n.d.).
In 2002, Reebok launched a new collection, RbK, which was street-inspired footwear and accessories designed for young urban consumers who sought to communicate their individuality through cool, edgy, and authentic lifestyle products (Zerio 2005). Reebok rolled-out an integrated marketing campaign that fused together sports, music, technology and entertainment, and was designed to connect the Reebok Brand to millions of new consumers around the world (Reebok International n.d.). RbK carried the Ice Cream footwear collection. The Ice Cream collection was produced by Pharrell Williams, the music producer and artist of the groups Neptunes and N.E.R.D. (Reebok International n.d., Zerio 2005) This collection was available in limited distribution at high-end boutiques worldwide (Zerio 2005).
Athletic Shoe Industry
In the global athletic shoe industry, the traditional competitors of Reebok are Nike, Puma, and Addidas Salomon. There are also new rivals; high-end fashion brands. Prada, Hermes, Chanel, and Max Mara introduced new casual sporty lines which include city/street business. They concentrated on the style, not the athletic performance (Zerio 2005). The sales of athletic shoe industry in U.S. is increasing between 1999-2002, but the market share growth is decreasing over 6%. The major players expected the 2004 Olympic Games to have a favorable impact on growth. As a category, the athletic footwear market grew about 5% over the previous five years, while the casual sector grew more than 45% (Zerio 2005).
The U.S. and Western European markets were similar in sales and market share growth but there are difference between consumers in U.S. and Europe. The U.S. consumers buy athletic shoes for fashion use, whereas 80% of athletic purchases in Europe were for athletic use (Zerio 2005). Thus, Reebok must come up with a marketing campaign which can approach two ways; fashion and athletic quality.
The sales of Reebok is not decreasing from 2001-2003 but as the market is not growing, it is losing the market share (Zerio 2005). Thus, at this point, Reebok needs to find how to market its products to a broader market or introduce products to new target.
Alternative #1: Remain as it is and be on the plan it has.
(Here, the current Reebok’s plan is to market to young urban males, focus on fashion and athletics in the U.S. and Europe respectively using celebrities for endorsement. In other words, Reebok is becoming a “super cool”...
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