Question

Scoring Goals around the World

Nike, a ferociously competitive marketing powerhouse, is the number one shoe supplier for virtually every major sport . . . with the exception of the world’s most popular game: soccer. That honor goes to German rival Adidas, which rakes in 38% of worldwide soccer-related sales versus Nike’s 31% share.

But Nike aims to change those numbers with an aggressive, multi-pronged marketing push. In a 2005 letter to its retailers worldwide, Nike declared that its Spring 2006 line would be the platform for “launching Nike into the No. 1 soccer brand in the U.S. and the globe.” Nike told its retailers to “prepare yourself and your business for a historic ride.”

Adidas, for its part, shows no fear. Brand president Erich Stamminger declared, “Soccer is the lifeblood and the backbone of our brand…we can comfortably say that we are going to win this battle.” A brief overview of their strategies:

Strategies of Adidas:

Adidas has locked down sponsorship of the World Cup tournaments through 2014. In addition to a powerful advertising presence, this means that billions of television viewers—plus the millions of people attending the games in person—will only see Adidas signage in the stadiums and Adidas balls on the fields. The sponsorship package also allows Adidas to sell “official” World Cup products, such as the 15 million World Cup soccer balls that they expect to ship in 2006 alone.

For the 2006 World Cup, Adidas also paid for additional rights to completely shut Nike out of all TV advertising for all 64 games broadcast in the English language in the United States.

On the 2006 digital front, Adidas bought sole sponsorship rights in the footwear category on three hugely popular soccer Websites (plus, of course, their strong presence on the official World Cup Website).

But Adidas’ most powerful weapon may be their soccer boots themselves. Building on growing worldwide demand for customization, Adidas introduced the +F-50 soccer shoe that users can configure every time they play in response to their playing conditions and style preferences. Early signs suggest that the shoes will be a huge hit.

Strategies of Nike:

While Adidas has locked Nike out of World Cup sponsorship since 1994, Nike has always found creative ways to crash the gate. In 1994, for instance, Nike surreptitiously dropped about 150 free, branded caps at a major World Cup game in Orlando, Florida. The limited edition hats quickly generated more buzz than money could buy. At the 1998 event in France, Nike brought free soccer clinics to 50,000 French kids, and set up a high profile, interactive “Nikepark” in Paris. And after the 2002 World Cup in Japan and Korea, Nike had such a strong underground presence, that more British consumers thought Nike was the official sponsor than thought Adidas was.

But Nike’s edge seems sharpest in the digital realm. In late 2005, Nike released a digitally altered Internet-only ad called Ping Pong, featuring Brazilian soccer superstar Ronaldinho performing virtually impossible soccer feats. The compelling viral video was viewed 12 million times in its first 7 months on the Web.

Nike’s biggest digital coup may be its new social networking site, Joga.com. Built in partnership with Google and modeled after MySpace, Joga.com is a “community that focuses on one topic and one passion: soccer.” The site is available in 140 countries in 14 languages. In just three months Joga.com garnered about 800,000 members from around the world, and Nike claims that it adds a new member every eight seconds. The site is just one dimension of Nike’s innovative “Joga Bonito” campaign, which means “Play Beautiful” in Portuguese and features legendary soccer players from a range of different countries.

You Decide

After reviewing both strategies, which company do you believe will dominate global soccer in the long term? Why?

What recommendations would you make for each company to improve its competitive strategy in this arena? Be sure to provide a strong rationale.

Do you see any ethical issues in Nike’s attempts to undermine Adidas’s official sponsorship of the World Cup? Why or why not?

Answer 1