The Difficult Brand Revitalization of Li-Ning

Topics: Marketing, Brand, Brand management Pages: 8 (1955 words) Published: February 26, 2012
Marketing Case Study: The Difficult Brand Revitalization of LI-NING Introduction
The case study explores how LI-NING brand which has been the No.1 domestic sporting goods brand was revitalized to satisfy the development objective of the company and to meet the challenge of the changing market. This report first introduces the company and its brands. Following this section, SWOT model is applied to analyze the situation faced to the company before the brand revitalization. The specific comparison of the brand STP strategy and 4P tactic before and after the brand revitalization is in the next section followed by the evaluation of this event. The report concludes with the proposition that instead of simply revitalizing the brand, the company should differently operate two brands to maintain the dominance as the top of sporting goods industry.

Introducing LI-NING Co., Ltd. and Its Brands
LI-NING Co., Ltd. commenced business in 1989. The “LI-NING” trademark was also registered in the same year. The company sponsored the Chinese delegation for Barcelona, Atlanta, Sydney and Athens Olympics in 1992, 1996, 2000 and 2004. It was officially listed on the Main Board of the Hong Kong Stock Exchange in 2004, becoming the first Chinese mainland sporting goods company listed in Hong Kong. In 2005, LI-NING Brand was awards as My Favorite China Brand. The company adopts a multi-brand business development strategy. In addition to LI-NING brand, it also operates the other 5 brands, including Z-do, Double Happiness, Kason, lotto, AIGLE. The data in Figure 1 clearly indicates that LI-NING is the core brand of the company since its revenue accounted for more than 90% of the total revenue of the company between 2006 and 2010. Figure 1: The Percentage of Revenue by Brand (From 2006 to 2010)

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100.00% 90.00% 80.00% 99.60% 70.00% 60.00% 50.00% 97.60% 95% 91.7% 92.1% Other Brands LI-NING Brand

2006 2007 2008 2009 2010

Source: The 2010 Annual Report of LI-NING Co., Ltd.

The Original STP Strategy of LI-NING Brand
Since 2005, LI-NING brand had been positioned as a brand which represented charm and fashion. The target market was the consumers born in 1980s, earning medium income and living in first-tier and second-tier cities. The brand slogan ‘Anything is possible!’ sounds heart-stirring. However, this positioning was not strong so that the consumers born after 1970 actually consisted of 50% of the real market. Also the brand was more popular to the consumers lived in the second-tier and third-tier cities than to their counterparts in the first-tier cities.

The Situation Faced by LI-NING Co., Ltd. before Brand Revitalization Why the company planed to revitalize LI-NING brand? Was it just because the brand’s image was needed strengthened? It was a strategy formulated under complicated situation. The situation analyzed via SWTO model is as follows: l

Strength-The dominance in the aspects of popularity and market share had made the LI-NING the NO.1 domestic sporting goods brand. LI-NING brand had a large number of loyal customers aged from 30 to 40. Compared with other domestic competitors, the brand had the most extensive distribution channels and the largest marketing budget.

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Weakness-LI-NING’s brand image was blurry, as the products were too expensive for customers in high-growth second--tier and third-tier cities, and too cheap to be considered a top-end brand in first-tier cities. Brand aging had blocked the expansion in the youth market.


Opportunity-The sporting goods industry in China continued to grow. The youngsters born after 1990 gradually became the major strength in this market.


Threat-Sporting goods market growth rate in China dropped from 30% in 2008 to 15% in 2010. The competition within this industry continued to intensify. The costs surged due to...
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