comparative study between Fila and Reebok

8/16/2019 comparative study between Fila and Reebok

1/56

COMPARATIVE STUDY BETWEEN FILA AND REEBOK

Page 1

1.1 OVERVIEW OF BRANDED SHOE INDUSTRY

The branded shoes market consists of the total revenues generated through the sale of

all type of men’s, women’s and children’s shoes. The global figure includes the

Americas, Asia Pacific and Europe. Americas consist of Brazil, Canada, Mexico and

US, while Asia pacific consist of Australia, China, India and Japan. Europe comprises

of Czech Republic, France, Denmark, and Germany etc.


2/56


Page 2

1.2 GLOBAL SCENARIO

Branded shoes is huge and increasingly diversified business driven by a host of

demographic lifestyle, and fashion trends. It would not be exaggerating to say that

globally the branded shoes industry is having expanding market rather it is axiomatic.

As the world population increases so the living standards of people rise thus increasing

the demand of branded shoes. According to SATRA (Shoe and allied trade research

association, UK) the global trend of branded shoes industry are as follows.

Top branded shoe companies :

1. Nike

Nike is an American company founded in 1964 as Blue Ribbon Sports. It changed its

name in 1978 to Nike, who is the Greek goddess of victory. Its “Just Do It” slogan and

swoosh logo are some of the most recognizable marketing items in the world today. It

is considered to be the leading supplier of athletic shoes and apparel. Its first endorser

was Ilie Nastase, a tennis star back in the 1970s from Romania. It also had legendary

track athletes in its roster, including Steve Prefontaine, Carl Lewis, Jackie Joyner-

Kersee and Sebastian Coe. The company’s signing of Michael Jordan, however,

proved to be its biggest coup.

2. Adidas

Adolf Dassler established Adidas in 1948 in Germany. It can trace its roots, however,

to 1924 when the Gebruder Dassler Schuhfabrik was founded by Adolf and his

brother, Rudolf. The two split up in 1949, however, with Rudolf establishing Puma.

The basic design of Adidas is the three parallel bars, which is also incorporated in the

company’s logo. Its endorsers include legendary basketball players like Pete Maravich,

Kareem Abdul-Jabbar, Jerry West, James Worthy, John Havlicek and Elgin Baylor.

Current athletes on its roster include Lionel Messi, Kaka, Lucas Moura, David

Beckham, Derrick Rose and Dwight Howard.


3/56


Page 3

3. Reebok

The company was founded in 1895 as J.W. Foster and Sons in England. It came from a

desire by the founder to create a spiked running shoe for his sons. In 1958, his

grandsons, Joe and Jeff, renamed the company as Reebok, which is the Afrikaan

spelling of rhebok, a type of antelope or gazelle native to the continent. Paul Fireman

brought it to the United States in 1979 after seeing a pair in an international trade

show. Endorsers include Eli Manning, Phillip Rivers, Peyton Manning, Tim Lincecum

and Justin Verlander. Reebok has been a subsidiary of Adidas since 2005.

4.Puma

Following the disagreement between Adolf and Rudolf Dassler, Adolf formed Adidas

in 1948 while Rudolf countered with Ruda. He later changed it to Puma.

The brothers had hit a goldmine before the split when they convinced Jesse Owens to

wear their shoes in the 1936 Summer Olympics in Berlin. Afterwards, the brothers

started to grow apart. Both became members of the Nazi party, but Rudolf blamed his

brother for his arrest by American soldiers. The two brands became bitter rivals and

divided their town. Even their sons got involved after Puma violated an agreement not

to outdo each other in trying to get Pele’s endorsement in the 1970 World Cup. Its

other endorsers included Eusebio, Johan Cruyff, Joe Namath and Walt Frazier.

5. Converse

Marquis Mills Converse established the company in 1908 as the Converse Rubber

Shoe Company. In 1915, it began making tennis shoes. A company milestone occurred

in 1917 when a basketball player named Charles H. Taylor walked into its office

because of sore feet. He designed a high-top sneaker that became the classic we know

today as “Chuck Taylor.” It was the shoe worn by Wilt Chamberlain when he scored

100 points in an NBA game in 1962. Michael Jordan was also wearing a Converse

when he converted the winning basket in the 1982 NCAA finals. It was the official

shoes of the NBA for a long time, with legends like Magic Johnson, Larry Bird and

Julius Erving all wearing it. Sadly, it has now disappeared from the league. The last


4/56


Page 4

player to wear a Converse on the court was Udonis Haslem, but he switched to Li-

Ning in November 2012. Nike has owned Converse since 2003 after a $305 million

buyout.

6. Fila

Fila Ltd. was established in 1911 in Italy. It is known for its logo that features its name

in snakelike letters. It used to be endorsed by Boris Becker and Bjorn Borg. It

collapsed in 2003, however, forcing it to sell to a hedge fund company. Fila Korea,

however, was a distinct company and it bought all the rights to the company in 2007.

7. K-Swiss

The brothers Art and Ernie Brunner of Switzerland founded k-Swiss in Los Angeles in

1966. It was the first company to create leather tennis shoes. The white stripe on white

leather design was considered a classic, so much so that Steven Nichols bought out the

company in 1986. Popularity further increased with their “Put Your Spin on It”

campaign that allowed users to customize the stripes’ color.

8. Asics

It is an abbreviation for “anima sana in corpore sano,” which is Latin for a healthy soul

in a healthy body. It was established in Japan in 1949 as Panmure Co. Ltd. Endorsers

include Newcastle, Sunderland, Leeds and Aston Villa football teams.


5/56


Page 5

1.3 INDIAN SCENARIO

The Branded shoes Industry is a significant chunk of the Leather industry in India.

India ranks second among the branded shoes producing countries next to China. The

industry is labour intensive and is concentrated in the small and cottage industry

sectors. While leather shoes and uppers are concentrated in large-scale units, the

sandals and chappals are produced in the household and cottage sector. India produces

more of gents branded shoes while the world’s major production is in ladies branded

shoes. In the case of chappals and sandals, use of non-leather material is used to

manufacture these in the domestic market.

Reputed global brands like Florsheim, Nunn Bush, Stacy Adams, Gabor, Clarks, Nike,

Reebok, Ecco, Deichmann, Elefanten, St Michaels, fila, Hasley, Salamander and

Colehaan are manufactured under license in India. Besides, many global retail chains

seeking quality products at competitive prices are actively sourcing branded shoes

from India.

Top branded shoe companies in India:

Major companies such as Bata, Reliance Footprint, and Liberty have been increasing

their stores in a frenetic pace in the last couple of years. They have also started to open

largest outlets in the smaller locations.

The biggest retailer of shoes in India is Bata India. Rajeev Gopalakrishnan, the

organization’s MD, has stated that the greater the competition has led to the companies

to improve their offering at a quicker pace compare to before.

At present Bata and Liberty are opening 100 stores on a yearly basis. In the last 3 years

Metro shoes have opened approximately 200 stores, while Louis Philippe has come up

with 20 to 25 outlets in that time. Reliance footprint has been opening around 9 stores

per month and for Woodland the yearly rate is within 60 to 70.


6/56


Page 6

Following are the leading shoe brands of India:

1. Reebok

Reebok is one of the leading global brands for lifestyle and sports products. It has a

commendable tradition and is one of the most authoritative brands in this domain. The

brand is focused on creating products, which show the wish and originality needed to

constantly come up with new challenges for the established norms. Its shoes are

available in the following categories:

Men’s

Girls

Women’s

Sports

Boys’

Classics

2.Bata

Bata India is the biggest maker and retailer of shoes in the country and belongs to the

Bata Shoe Organization. It was established during 1931 as Bata Shoe Company Private

Limited. Its Batanagar manufacturing facility is also the first of its kind in India to

have been given the ISO: 9001 certification. Its major product categories are:

Women

Kids

Men


7/56


Page 7

3.Nike

Nike is a global footwear, accessories, apparel, services, and equipment brand that is

based at Portland, Oregon. It is the global leader in athletic apparel and footwear as

well as sports equipment. Its revenue is presently US$ 24.1 billion and it has at least 44

thousand employees around the world. Its present worth is approximately US$ 10.7

billion making it the top sports business brand in that regard. It is a Fortune 500

company as well.

Nike offers shoes in the following categories:

Men

Men’s training

Women

Women’s training

Kids

Golf

Running

Skateboarding

Basketball

Snowboarding

Football

Surfing

Soccer

Tennis

4.Adidas

Adidas is one of the most popular shoe brands in India and its sneakers, fashion

oriented, and sports shoes are highly sought after. The company was founded by

Dassler brothers – Adi and Rudolph – who came up with the first soccer shoes that had

studs.


8/56


Page 8

Its shoes are available in the following categories and more:

Women

Adventure

Men

Outdoor

Girls

Sneakers/canvas

Boys

Sandals

Casual

Slippers

Sports

Chappals/sandals

5. Liberty

Liberty Shoes has been in the business for more than 5 decades and is globally known.

At present its yearly revenue is at least INR 600 crore and it is one of the leading 5

global makers of leather footwear. It operates in 25 countries including France,

Germany, and Italy and has 150 distributors, at least 6000 multi brand showrooms, and

400 exclusive outlets around the world. It has also received the ISO 9001:2000 official

recognition. Its shoes are available in the following ranges:

Men

Boys

Women

Girls


9/56


Page 9

6. Woodland

Woodland is owned by Aero Group that has been in the business of outdoor shoes

since the early 50s. The brand was introduced during 1992. At present, the brand has

350 exclusive outlets across the world and is present in at least 3000 multi brand stores

in several countries.

The major product ranges of Woodland may be enumerated as below:

Boots

Casual

Shoes

Women’s

Sandals

Climbing

Slippers

Trekking

Men’s


10/56


Page 10

CUSTOMER PERCEPTION ABOUT INDIAN BRANDED

SHOE

India is on the verge of a retail boom fuelled by fast evolving lifestyles and

behavioural changes towards shopping. With changing retail landscape, Indian

footwear industry is set for a phenomenal growth in future1. The Indian footwear

market recorded total revenues of $4.10 billion in 2009, representing a Compound

Annual Growth Rate (CAGR) of 9.3% for the period spanning 2005-20092. It is

forecasted to grow with a CAGR of 9.4% in 2009-2014.

Nature of the Indian Footwear Market

Indian footwear market is ‘Brand driven’ and Organised players dominate the sales.

Category motivators identified are namely price, looks, brand name, style, variety and

durability. The Indian Footwear market can be segmented as shown in Exhibit 1

below:

Exhibit 1 Indian Footwear Market Segments by Price

In terms of usage, Sport shoes are the largest selling sub-category. Attitude towards

specific brands plays a very important role in customer decision making in this sub-

category. Exhibit 2 shows the market segmentation based on product use.


11/56


Page 11

Exhibit 2 Indian Footwear Market Segments by Usage

Bata, incorporated in 1931, is a household name in India though headquartered in

Lausanne, Switzerland. Bata has a nation-wide presence and has strong attitudes

associated with it. Bata enjoys a top-of-the-mind recall in formal wear shoes category

that has been through intergenerational classical conditioning. Bata is a big player in

footwear retail market housing numerous brands like Bata, Comfit, Marie Claire, HushPuppies etc.


12/56


Page 12

India’s footwear retail Entry: Opportunities, Issues and

Challenges

India is the second largest footwear manufacturer in the world, next only to china.

Nearly 58 percent of the industry, which is by and large labour intensive and

concentrated in the small and cottage industry, which is by and large labour intensive

and concentrated in the small and cottage industry sectors, remains unbranded.

However, as part of its effort to play a lead role in the global trade, the Indian leader

industry is now focusing on key deliverable of innovation design, state of the art

production technology and unfailing delivery schedules.

Customer Segments

Retail footwear segment in Indian is very price sensitive and has been steadily growing

over the year. Major part of the demand is met by the unorganized sector and still there

is a shortfall of 300 million pairs. Branded shoe market only account for 20% of the

entire market. While international brands largely dominate the higher end of the

spectrum, the lower end of the market is dominated by home-grown players as well as

unorganized players. While men's footwear is the biggest target category (contributing

almost 48%), children's (11%) and women's lifestyle footwear (41%) is not behind in

the race.


13/56


Page 13

Segment wise classification of price ranges in the men’s footwear segments:

Segment wise classification of women footwear segment:

The kid’s footwear segment is one of the fastest growing segments in India. The Indian

kid’s footwear segment is highly fragmented and dominated by the unorganised sector.

The branded kid’s footwear segment has a big card to play as India has the world’s

largest child population. The overall kid’s retail segment has a robust mar gin of 20 –

25 % which is huge potential opportunities for organised branded retail footwear

players. S&M is one of the players who have ventured into kids wear segment which

has 27 exclusive outlets through franchise model. S&M sees a huge potential with age

group of 3 – 16 years kids segment in the domestic market after the economic

slowdown in the international market that hit the company’s revenues has now been

targeting the growing consumers market of India. It has set up store in store format for


14/56


Page 14

optimised revenue flow. The store in store format of business model has been the trend

among many retail footwear players in India.

Disney kid’s is another international brand which has forayed into exclusive kids shoes

in India and has targeted kids within the age group of 5-10 years. Disney shoes have a

tie-up with Sierra Industrial Enterprises to manufacture and market Disney shoes for

kids in India. Disney aims to become the market leader in the kid’s footwear segment

in India.

The Disney shoe collection will include boots, sandals, slippers and sports shoes for

boys and girls. The footwear’s has a price range from Rs 150 – Rs 850. Disney has

targeted malls across the country and in prominent chain stores such as Lifestyle, Loft,

Shopper’s Stop, Pantaloon and Central.

Bata is one of the oldest brands which have a more than 50% share in the executive

segment. As the young Indian executive class matures in terms of quality, design and

brand, the preference will be more towards branded footwear

and the growth is expected to be high in this segment with the migration of people

from villages to cities for better career and profession. The footwear retail segment is

currently one of the most organised sectors within the retail domain. However, this is

purely due to the highly organised nature of the men’s footwear segment. The

women’s category is largely unorganised, in fact close to 95% of the category is

unorganised. With respect to the rest of the world, this is an anomaly as the women’s

category is majorly organised and forms a big chunk of the market. Thus for us as

retailers in the women’s footwear category, the market is still largely untapped and

hence a big opportunity for growth. At present, almost all of the organised retailers in

the women’s footwear category are located in the metros and Tier I cities and towns.

The Tier II and Tier III towns have over the last few years seen a spurt in income

driven by the service industry boom. Hence these towns definitely are a potential

target.

Major challenges in running domestic retail:

a) Retail presence: till recently, most companies invested in own stores as the means

to grow and expand. With commercial rents increasing in last few years, capitalrequired for expansions was a bottleneck.


15/56


Page 15

b) Credit Management: Brands that had no local presence, but preferred the third-

party retail route had to face the challenge of receivables, often the credit period as

high as 120 days.

c) Brand: Many of the leather firms are SME’s, have great experience in trading and

vendor management, but completely lack brand building experience. Even when

attempts were made, they lacked focus and consistent efforts, thereby diluting the

impact.

d) Low IT investment: Except the major leather manufacturers, none of the

companies had an ERP connecting POS data so as to effectively manage inventories.

It was not common to have round the year discount offerings to get over the

inventories.


16/56


Page 16

2 FILA

2.1About FILA:

:

When the Fila brothers first opened shop in 1911 in Biella, a small town in the

foothills of northern Italy, they had no idea how far their legacy would travel.

Originally in the business of creating quality textiles for local townspeople, the

brothers sought to produce fabrics that combined luxury, art and utility, drawing

inspiration from their homeland to create product as exquisitely textured and evocative

as the Italian landscape: the austerity of the Alps, the fluidity of the hills and the

boldness of the Mediterranean coast. Today, as we celebrate the 102nd anniversary of

Fila, we are proud to say that their vision lives on in our company. From the craggy

peaks of Mount Everest to the illustrious lawns of Wimbledon, the name Fila echoes

an unmistakable legacy of excellence, born through decades of innovation and

unswerving dedication to provide premium sportswear crafted to be exceptional as its

wearer.

The story of Fila's transformation into a leading global designer of high-end sportswear

has been one of continual evolution driven by a philosophy of innovation that lies at

the heart of our most successful designs. In 1923, the brothers officially established the

expanding family-run textile business as a high-quality knitwear manufacturing

company, entering into a limited partnership named Maglficio Biellese. Through the

years, the business grew beyond the borders of Biella to become a well-known quality

knitwear producer for Italy. In 1942, the company merged with the Fratelli Filacompany, and by 1972 the company had sales of over one billion lire and a total


17/56


Page 17

workforce of more than 250 people. Wishing to further expand the company,

Giansevero Fila hired Enrico Frachey as the managing director of the firm in 1968.

Frachey shared Fila's vision and it was his creativity and managerial resourcefulness

that ultimately transformed Fila into a global sportswear brand.

The 20th century saw a new form of individual expression rise to international

prominence: sports - and particularly tennis - were becoming the epitome of grace,

style and an example of the robust vivacity of the human spirit. As of the company

prepared for its bold debut into the sportswear industry, Frachey tasked two men with

ensuring its success: the innovative designer Pier Luigi Rolando, the artist behind our

most iconic designs, and Alessandro Galliano, the superbly knowledgeable

engineering director. Inspired by Frachey's own climbs on the cliffs near Biella,

Rolando and Galliano began their work with the understanding that sport is life

expressed through motion, and that sportswear must complement, not overpower, the

athlete. They set to work creating fabric designed to mirror the movements of the

athletes themselves, adhering smoothly to the body like a second skin yet providing a

sense of total freedom.

The product of this collaboration was our premiere outerwear collection, which

debuted in 1972. Rolando's designs, utilizing wool and cashmere in novel ways,

created a line that quickly became renowned for its seamless combination of grace and

vigor. The following year, our name was firmly established through the sports apparel

industry with the introduction of the now legendary "White Line" Collection. Named

as a respectfully irreverent jab at the traditional product lines and the ubiquitous

presence of all-white garments that had long dominated tennis apparel, the White Line

Collection was a fusion of the provocative and exemplary. The Collection,

aesthetically astonishing in its novel design and unconventional use of vibrant colors,

yet beautifully simple in its effectiveness and function, immediately took the world by

storm. The premiere collection marked the dawn of a new era, not just in Fila's history,

but in the sportswear industry as a whole. While others saw contradiction, Fila became

the brand that catered both to the exceptional athlete and the cosmopolitan individual,

ever conscious of the latest and boldest innovations in fashion. The White Line

Collection made a statement as audacious and respectfully irreverent as its new


18/56


Page 18

designs: Classic doesn't have to mean conservative, and timeless designs can still be

contemporary.

Fila has enjoyed a special relationship with remarkable athletes, pioneers marked as

much by indomitable passion as incomparable performance. Beginning with our debut

on the courts with tennis greats Adriano Panatta, Paolo Bertolucci and the

incomparable Bjorn Borg, we have had the fortune of helping extraordinary

individuals accomplish some of history's most iconic sports achievements. We

followed Borg as he ascended to the pinnacle of sports history, the F-Box logo proudly

displayed on his signature polo and headband, winning five consecutive victories at

Wimbledon and firmly establishing his legacy as tennis' most dominant and unique

player, both in terms of technique and style. In 1986, when Reinhold Messner reached

the treacherous summit of Everest, fueled by the spirit of adventure and the

determination to be the first to scale the titan without the aid of additional oxygen, he

wore high-tech mountain gear designed by Fila. Thirsting for more, he proceeded to

scale 13 peaks of the Himalayas, leaving his indelible mark on the history of

mountaineering and raising Fila and iconic F-Box logo proudly to the highest peaks of

the world. We slid down the slopes with Ingemar Stenmark in his pursuit of 86 World

Cup titles. We graced the greens of British Opens and two Masters Titles with Tom

Watson, skirted the frosty trails of Italy with Alberto Tomba and arched triumphant on

the shoulders of Monica Seles and Guillermo Vilas. And we were there in 2009 when

Svetlana Kuznetsoza won the French Open.

Fila has been especially proud to support Kim Clijsters, first as she made history by

coming out of an eighteen month retirement to win back to back US Opens in 2009

and 2010, becoming only the second mother to win a Grand Slam in the Open era and

following in the footsteps of former Fila athlete and mother Evonne Goolagong-

Cawley, who was the first. In 2011, our 100th anniversary year, Kim started out

strong, winning the 2011 Australian Open, wearing a replica of one of Goolagong-

Cawley's iconic outfits from the early 80's. With the announcement of Clijsters’

retirement after the 2012 US Open, Fila designed a special commemorative “Trophy

Collection” for Clijsters to wear at the last Grand Slam tournaments of her illustrious

tennis career. Fila unveiled a special patriotic performance tennis apparel collection, inAugust 2012, which was worn exclusively by Fila athletes representing their countries


19/56


Page 19

on the courts of the All England Lawn Tennis and Croquet Club during the London

Games. Fila also outfitted the South Korean and Hong Kong delegations at the London

Games.

In addition, Fila continues event sponsorships of the BNP Paribas Open in Indian

Wells, California, the Sony Open in Miami, Florida and the Hall of Fame Tennis

Championships in Newport, Rhode Island, the Porsche Tennis Grand Prix and the

BMW Open in Germany, as well as partnerships with the Van der Meer Tennis

Academy in Hilton Head, South Carolina, the John Newcombe Tennis Ranch in Texas

and the Junior Tennis Champions Center.


20/56


Page 20

2.2 MARKETING MIX

1) Product:

Fila has main 3 products

a.

Athletic shoes

b. Clothing

c. Accessories

Fila manufactures all kind of shoes as well as slippers and sandals.

The main product of Fila is Athletic shoes.

.The men's Fila line of sportswear includes clothing for such sports as tennis, running,

cross training, basketball, golf, swimming, and Fila's own line of clothing.

The women's Fila line of sportswear includes clothing for such sports as tennis,

running, cross training, golf, swimming, and Fila's own line of vintage clothing.

Fila has everyday footwear for children of all ages, from infants to youth.

2) Price:

The recent tough overall economic scenario, with the rupee to dollar exchange rate at

an all-time high, is affecting most sportswear brands in India, including Fila. Most of

the components that go into the making of branded international shoes are imported,

which have forced players like Fila to go for a price hike on its fall-winter product

lines.

Rajiv Bajaj CEO of Fila India, r eveals that the challenging economic environment is

affecting the business, “but we have taken that in our stride and moved on.” But since

the company is still in a brand-building phase, it is not planning to pass on all the cost

to consumers, and is looking at working around its sourcing pattern to stave off cost

pressures. The Fila sportswear products’ prices range from Rs.1,700 to Rs.5,000. The

apparel range starts from Rs.700 and goes up to Rs.4000, while the most popular

accessory bags start at Rs.999 and go up to Rs.1,999. Footwear contributes the lion’sshare of its revenue at 70%.


21/56


Page 21

PRODUCT RANGE

Fila Orlem Running Shoes Rs.1328

Fila Diablo Tennis Sneakers Rs. 1608

Fila UltraLite Training Shoes Rs. 2799


22/56


Page 22

Fila Adrine Running Shoe Rs. 2999

Fila Shake N Bake Running Shoes Rs. 3399

Fila Memory Aerosprinter Running Shoes Rs.3999


23/56


Page 23

3) Place:

Fila’s competition is intense with the likes of Adidas, Nike, Reebok, Bata and Pumacalling the shots. Also ruling the roost are many leading domestic brands like Liberty,

Woodland, Sreeleathers, all of which have been growing their competence and trying

to grab a bigger pie in the regions they dominate. In such a crowded market Italian

brand Fila made a quite entry in India three years ago, and has since been trying to find

its feet in a tough marketplace.

CEO Bajaj informs that the aim is to reach 100 exclusive stores across cities be it

metros, mini-metros, and tier 2 and tier 3 cities, over the next three years. Fila will also

ramp up its store presence from the existing 1,800 locations to over 2,500 stores during

this period.

4) Promotion:

The company is trying to tap youths in the 18-35 years category, and to sharpen its

appeal in its TG it has signed on swashbuckling cricketer Virender Sehwag as its brand

ambassador for the next three years. “Sehwag’s association is a good fit for Fila, as his

fan following is very high among the target audience we are looking at – youths in the

age group 18-35 years in the metros and tier 2 and tier 3 cities,” says Bajaj. The

company also sponsors the Mohan Bagan soccer team and is trying to position itself as

sportswear brand with a lifestyle angle to it, more on the lines of Puma, which has

courted widespread success in India recently. For its marketing operations, Fila will be

using print, TV and online media for advertising (the popular youth mediums), and plans to have TVCs featuring brand ambassador Virender Sehwag. Virender Sehwag

Fila's first ever Indian brand ambassador


24/56


Page 24

2.3 FILA Competitors

The Shoe Industry consists of a multitude of footwear manufacturers, wholesalers, and

retailers. The major wholesalers in the U.S. market are owners of a brand name and

typically source their shoes from independent manufacturers. The retail segment of the

industry ranges from owners of large multinational chains to small local businesses.

Many shoe companies operate in both the retail and wholesale arenas. Shoe companies

covered by Value Line generally adhere to the standard industrial page format.

Competitive Landscape

Taken as a whole, the Shoe Industry could be described as mature. However, barriers

to entry are far from insurmountable. Since demand is largely driven by fashion and

demographics, newcomers with a hot product may thrive at the expense of a fading

rival. Indeed, the profitability of individual companies depends on their ability to

design attractive footwear lines and remain at the forefront of consumers'consciousness.

There are three major product categories within the Shoe Industry and the dynamics of

each may differ. The athletic shoe segment, which makes up about 30% of footwear

sales, is highly concentrated, as the largest companies comprise a vast majority of the

market share. Two players (Nike and adidas) dominate this category, with the giants

slugging it out over sponsorship contracts with star athletes and snuffing out the

competition using their economies of scale in distribution and marketing. Men's and

women's casual and dress shoes make up about 40% of the market (15% men's and

25% women's, respectively). The companies within these categories tend to be smaller

than their athletic counterparts and compete on the basis of superior design. Thus, the

market for men's and women's shoes is much more fragmented, consisting of a myriad

of bit players. Women's shoemakers, in particular, must be lean and flexible to meet

the changing tastes of their consumers. Demand here can be fairly cyclical, but the ebb

and flow of performance can be attributed more to the individual product portfoliorather than macroeconomic factors. The economy does play a role in demand, though,


25/56


Page 25

particularly for products that are more up-market. The remaining 30% is comprised of

various niche product categories and boom-or-bust novelty designs.

The major competitors of fila are Nike, Adidas, Reebok and Puma.

This merger is indeed a success which has achieved significant sales growth. Merger

of Adidas & Reebok complement each other in competing with their competitors,

Nike; and is more cost efficient and beneficiary to both brands with Reeboks strong

presence in US market and the global recognition of Adidas.

Players :

Nike

Adidas

Reebok

Bata

Liberty

Puma


26/56


Page 26

2.4 Logo Of FILA

DESIGN ELEMENTS OF FILA LOGO

The Fila logo is one of the most popular logos ever created. It has been worn by many

of the world’s best athletes – a fact that significantly strengthens the brand internally

and externally.

Shape of the Fila Logo:

The present Fila logo remains strikingly memorable, largely due to the cleverly artistic

treatment of the letter F. The symbol comprises of snakelike letters which give it a

highly futuristic and elegant look.

Color of the Fila Logo:

The red bar makes the initial unique in the Fila logo, and represents vitality, vigor and

passion. On the other hand, the blue color represent trustworthiness and reliability of

the brand.


27/56


Page 27

3 Reebok

3.1 ABOUT REEBOK

1890-1930's

Reebok's United Kingdom-based ancestor company was founded for one of the best

reasons possible: athletes wanted to run faster. So, in the 1890s, Joseph William Foster

made some of the first known running shoes with spikes in them. By 1895, he was in

business making shoes by hand for top runners; and before long his fledgling

company, J.W. Foster and Sons, developed an international clientele of distinguished

athletes. The family-owned business proudly made the running shoes worn in the 1924

Summer Games by the athletes celebrated in the film "Chariots of Fire."

1950-1980

In 1958, two of the founder's grandsons started a companion company that came to be

known as Reebok, named for an African gazelle. In 1979, Paul Fireman, a partner in an

outdoor sporting goods distributorship, spotted Reebok shoes at an international trade

show. He negotiated for the North American distribution license and introduced three

running shoes in the U.S. that year. At $60, they were the most expensive running

shoes on the market.


28/56


Page 28

1980's

By 1981, Reebok's sales exceeded $1.5 million, but a dramatic move was planned for

the next year. In 1982, Reebok introduced the first athletic shoe designed especially for

women; a shoe for a hot new fitness exercise called aerobic dance. The shoe was called

the Freestyle™, and with it Reebok anticipated and encouraged three major trends that

transformed the athletic footwear industry: the aerobic exercise movement, the influx

of women into sports and exercise and the acceptance of well-designed athletic

footwear by adults for street and casual wear. Explosive growth followed, which

Reebok fueled with new product categories, making Reebok an industry leader.

In the midst of surging sales in 1985, Reebok completed its initial public offering

(stock symbol is NYSE: RBK). A year later, Reebok made its first strategic

acquisition, The Rockport Company. Rockport was a pioneer in using advanced

materials and technologies in traditional shoes and the first company to engineer

walking comfort in all types of dress and casual shoes. In the late 1980s, Reebok began

an aggressive expansion into overseas markets and Reebok products are now available

in more than 170 countries and are sold through a network of independent and Reebok-

owned distributors.

Creating innovative products that generate excitement in the marketplace has been a

central corporate strategy ever since Reebok introduced the Freestyle. In the late

1980s, a particularly productive period began with The Pump® technology and

continues today, with breakthrough concepts and technologies for numerous sports and

fitness activities.

1990's

In 1992, Reebok began a transition from a company identified principally with fitness

and exercise to one equally involved in sports by creating several new footwear and

apparel products for football, baseball, soccer, track and field and other sports. That

same year, Reebok began its partnership with golfer Greg Norman, resulting in the

creation of The Greg Norman Collection.


29/56


Page 29

In the late 1990s, Reebok made a strategic commitment to align its brand with a select

few of the worlds most talented, exciting and cutting-edge athletes. Since then, the

company has focused on those athletes who represent the top echelon of sports and

fitness.

1999-2000

In 1999-2000, Reebok and the National Football League announced an exclusive

partnership that serves as a foundation of the NFL’s consumer products business. The

NFL granted a long-term exclusive license to Reebok beginning in the 2002 NFL

season to manufacture market and sell NFL licensed merchandise for all 32 NFL

teams. The license includes on-field uniforms, sideline apparel, practice apparel and an

NFL-branded footwear and apparel collection.


30/56


Page 30

3.2 MARKETING MIX 1) Product:

Reebok offers a wide range of footwear, clothing and accessories for both men andwomen in the footwear product mix it Athletic, casual and court in a colour range like

black, brown, grey, white, blue pink. The footwear mix is offered both in men andwomen.

The Reebok Brand focuses on 3 product lines

1. Performance and classic

2.

Product line features street footwear

3. Appearl and accessories

Reebok for Men:

Reebok offers a wide variety of footwear for the Men. It constantly upgrades its shoes

with new Comfort levels and offers in various designs, colours, sizes and prices.

The various footwear from Reebok are:

Reebok swing, Reebok cover point, Reebok sweep, Reebok Verona, Dhoni

Trainer, Smooth fit select ride, Hex ride radiate SF, Reebok supreme.

Reebok for Women:

Reebok offers a wide range of women footwear. Reebok offers: Premier kfg, Premier

road plus, Verona, Hexride ready, Jungle low, Rang de Basanti, Rangela,

Swades,Black, Satyam Shivam Sundaram, Cirque du solei boot, Easy tone flips, Easy

tone go outside


31/56


Page 31

2) Price:

The prices of goods sold at Reebok.com are comparable to those sold by their retail partners, so as not to take away sales and revenues from their traditional channel

partners. Reebok’s pricing is designed to be competitive to the other fashion shoe .Reebok as a brand commands high premiums.Ree bok’s pricing strategy makes use ofvertical integration in pricing wherein they own participants at differing channel levelsor take part in more than one channel level operations. This can control costs andinfluence product pricing.

Product Range:

Reebok Extreme Speed Lp Running Shoes Rs.1999

Reebok Round Town Lp Running Shoes Rs.2299

http://web.syr.edu/~cshim/Report.htmlhttp://web.syr.edu/~cshim/Report.html


32/56


Page 32

Reebok Pacific Run Lp Running Shoes Rs. 2999

Reebok Royal Cljogger Running Shoes Rs.3999

Reebok Runtone Plus Encyst 2.0 Running Shoes Rs.8999

Reebok Pr Trinity Kfs Lp Running Shoes Rs.9999


33/56


Page 33

3) Place:

Reebok shoes are carried by multi-brand stores and the exclusive Reebok stores across

the globe. Reebok sells its product to about 20,000 retail accounts in almost 200

countries around the world. In the international markets, Reebok sells its products

through independent distributors ,licensees and subsidiaries. It could be established in

Pondicherry to the urban areas as making it available in showrooms and outlets.

4) Promotion:

Reebok provides great deals on quality footwear, apparel, and fitness equipment for

women, men, and kids. Reebok sports and lifestyle products are built on commitmentto creativity and the desire to constantly challenge the status. The company uses

various promotional tools to bring awareness among its customers. It offers discounts,

vouchers, coupons and customer made sneakers on their products. Apart from this,

there are celebrity end or segments, road shows, sponsorship events, television

commercials, prints ads, billboards, alliance events. Reebok had separated 15% of its

sales for its advertising and promotion activities.

Fitness Brand Reebok has roped in Bollywood beauty Nargis Fakhri as their newfitness brand ambassador for its all new women’s category ’Studio’. Reebok will

redefine the brand through focusing on apparels, trainers for dance, aerobics, and yoga.

Speaking about this association Adidas Group India Managing Director Erick Haskell

said that Reebok is dedicated on making fitness ambitious and fun and Nargis Fakhri is

the perfect epitome for this purpose. He is optimistic that with this brand Reebok will

jump to the next level. Reebok will soon launch a campaign with Nargis, which will

showcase the beautiful actress/talent’s dancing, & fitness skills as well.


34/56


Page 34

Nargis Fakhri Reebok’s new fitness brand ambassador

Media vehicles:-

Reebok uses various media tools to promote its brand and create awareness

about the products. Reebok uses television commercials, print ads, billboards, online

advertising, sponsorship events and various advertising campaigns for its promotion.

Print Media Advertising:-

Print Media Advertising consists of newspapers and Magazines. It also

includes outdoor bill boards, transit posters, the yellow pages, and direct mail.


35/56


Page 35

Television Media

Reebok had joined hands with various Television channels for its commercials.

Reebok commerci als a ired during NBA Basketb all games, TNT basketball

games, ESPN basketball games and ESPN’s Sports Centre.

Reebok had enrolled various celebrities both from athletic and non-athletic

background for its televi sion comm ercials. The var io us ad camp aigns were

started for every launch of their new products. Time to time new commercials

aired on TV. Several tie-ups were made with different television channels for

its advertising.

Internet Advertising

Reebok.com sells the same products on their web site as they do in the stores,

providing the users more wa ys of get ting what th ey want. Re eb ok. com has not

done much to promote its web site, but they do put their web site address at the

bottom of all their television commercials and print adve rt isements. Wi th

Reebok.com being international, the marketing message will have to be

localized and "the choice of offline media will be determined on a country-to-country

basis.


36/56


Page 36

3.3 Competitors of Reebok

Reebok faces the heat from brands like Nike, Puma and Fila etc.

Branded shoe market is very competitive these days and everyone wants to survive and

gain more profit and goodwill.

Top competitor of Reebok are :

Nike

Fila

Puma


37/56


Page 37

3.4 Logo History

The Reebok logo holds a unique place in sports world and is undoubtedly among the

most popular apparel logos ever created. The original Reebok logo depicts the Union

Jack, por traying the company’s humble beginnings in Bolton, England in 1895. In

1986,Reebok unveiled a second emblem, often termed as “the vector”. The emblem

was introduced to symbolize a new era of “performance” product. Its design was

inspired by the cues on the product, often called the “side stripe – cross check”.

In 1996, the Reebok logo underwent only a few minor changes. Reebok took a big step

in 1998 and took away their logotype, while using only the “cross check” which

appeared on their products very aesthetic. In 2000, the company once again took out

the logo and used only logotype, which was further modified and made more modern

in 2002.

In 2004, the logotype, too, was discarded, and the cross check was reissued. To attain a

bigger link to the youth market, the company brought in a new tier of product called

“Rbk” in 2001. The wide success of this rebranding made Reebok to look at its overall

branding scheme and learn that the future of the brand would be more effectively

depicted by this new logo. The “Rbk” logo was created by the Arnell Group

http://arnell.com/http://arnell.com/http://arnell.com/


38/56


Page 38

.

Celebrating the 50th anniversary of the brand name in 2008, Reebok brought back its

brand identity from Rbk to Reebok. While Rbk worked for their brand identity, the

culture and the business, Reebok is timeless and manifests the company’s high values.

The current Reebok logo design features a new font that is modern yet simple,

complementing the brand identity and reflecting the brand values


39/56


Page 39

4.1 Research Study

PRIMARY DATA

Research objective:

The objective of research is to understand customer preference towards Fila and

Reebok shoes.

Research Methodology:

The research is descriptive research wherein on-field survey is done with the help of

questionnaire.

Research sample:

50 respondents were selected for research and the survey held only for those people

who go to gym on regular basis.

Research limitations:

Only 50 respondents were selected for the survey due to geographical constraints


40/56


Page 40

4.2 Analysis and Interpretation

In this research it is observed that buyers in age group of 18 – 25 years were

40% of the total buyers whereas buyer in age group of 25 – 35 is 45%, in 35-

40 is 11%, and buyers above age of 45 is 4%.

It shows that majority of the buyers fall in the age group of 18-25 and 25-35i.e. total of both is 85%

40%

45%

11%

4%

Age group

18-25 25-35 35-45 above 45


41/56


Page 41

In this 70 % of respond had said yes and remaining 30% said no.

From here onwards the further survey is conducted with this 70 % responder

who said yes

70%

30%

Do you prefer wearing branded shoes

Yes No


42/56


Page 42

30% of responders are regular user of branded shoes.

From the 70 % of responders some said that they wear branded shoe only few

days a week. i.e. 50%as most of them are working and as they can wear

branded sport shoe only on casual day.

20% of responders fall on occasionally because they do not afford to wear

expensive branded shoe daily.

30%

50%

20%

How often do you wear branded shoe?

Regularly Few days a week occasionally


43/56


Page 43

Television and internet advertisement of branded shoe plays major role with

combine 75%. Most people use social networking sites regularly which gives

them information about the brands of shoe.

Whereas hoarding helps a company to attract 10 % response and word of

mouth with 15% response .

45%

30%

10%

15%

From where do you come to know about

these brand?

Television Internet Hoardings Word of Mouth


44/56


Page 44

In today’s date Nike is most trusted shoe brand along with Adidas and Reebok.

While Puma and Fila gaining some trust from their customers.

30%

25%

20%

15%

10%

Which of these brandsaccording to you is

trustworthy?

Nike Adidas Reebok Puma Fila


45/56


Page 45

40% of responders wear sport shoe of Nike whereas 25 % wear Adidas.

15% people uses Reebok sport shoes whereas 10 % people uses Fila sport

shoes.

The remaining 10 % includes brand like Puma, converse, Liberty etc.

25%

40%

15%

10%

10%

Which brand of sport shoe do you wear?

Adidas Nike Reebok Fila Others


46/56


47/56


Page 47

Most people goes for quality and brand image of a shoe company.

Nike will be the best example for this question.

30%

35%

20%

15%

What features do you consider while

purchasing a shoe?

Quality Brand Image Style Price


48/56


Page 48

35% People make purchase by their own decision while 40% make purchase with the

help of the opinion of their friends.

35%

40%

20%

5%

What motivates you to make your purchase?

Self-decision Friends Peer group celebrities


49/56


Page 49

Most people like to purchase branded shoe from shopping malls and internet.

Whereas 20% and 5% people like to purchase branded shoe from departmental

store and discount retailers respectively.

45%

30%

20%

5%

where do you usually purchase branded

shoes?

Internet Shopping mall Departmental store Discount retailers


50/56


Page 50

35% people buy branded shoe in 1000-1500 price range whereas 40% people

buy branded shoe in 1500-200 price range.

While only 10% people buy branded shoe in a price range that is above 3000.

35%

40%

15%

10%

What is your price range when you buy a

shoe?

1000-1500 1500-2000 2000-3000 Above 3000


51/56


Page 51

According to the survey Nike and Adidas has best design in current market of

branded shoe.

While Reebok and Fila also have good reputation about the design of their

shoes.

25%

30%15%

30%

Which brand has better shoe designs?

Reebok Nike Fila Adidas


52/56


Page 52

4.3 CONCLUSION

Branded shoes are the brand registered in the minds of all young people. It’s the brandswhich speak about trust for the products it provides. The brands are so much registered

in the mind of people that when shown are easily recognized.

In India the perception of branded shoe companies have been changed in recent years

due to changes in lifestyle, earning extra money, desire to use branded shoe products

etc. Even the school kids are attracted towards branded sport shoe due to the attractive

advertisement.

Young generation wants to purchase branded sports shoe because changes in lifestyle

and people who promotes the brand are their role model.

This study found that Reebok was perceived as a reliable and trendy brand.

Comparatively Reebok has better marketing strategies than fila. Reebok does more

promotional activities than Fila whereas Fila have been gaining some goodwill in

Indian market.

To overcome this problem Fila has to do more and more promotional strategies. Fila

has to gain customer’s attention towards their brand. Both Fila and Reebok has almost

same product line and price range but the only thing is that Reebok has better

marketing planning and development than Fila.

According to the survey conducted by me Reebok is more trustworthy and reliable

brand than Fila. Both the brands are not market leader but they are slowly and steadily

growing in branded shoe market. Nike and Adidas are most favourite brands of many people.

It is very clear from the study that Reebok is well ahead of Fila. Reebok is clearly a

front runner along with Nike, Puma and Adidas etc. Whereas Fila has to focus more on

their product line and marketing strategies.


53/56


Page 53

Reebok and Fila both are tough competitors for Nike, Adidas and puma. Both Fila and

Reebok has to improve their operations and product line. They can gain extra market

share by providing shoe at reasonable price as most of the potential buyers belongs to

middle class and higher class family, middle class people cannot afford to purchase

high priced branded shoe. So both Fila and Reebok has to produce low cost branded

shoe which would have reasonable price in market. They can also improve the quality

of their product. They have to produce more products for young customers as most of

the potential buyer of branded shoe belongs to the age group from 14 to 30 years of

age.


54/56


Page 54

4.4 BIBLIOGRAPHY

BOOK

Marketing Management Phillip Kotler

Websites

http://www.fila.com/History/History%20of%20Fila,en_US,pg.html

http://www.famouslogos.us/fila-logo

http://en.wikipedia.org/wiki/Fila_(company)

http://www.famouslogos.us/reebok-logo

http://en.wikipedia.org/wiki/Reebok

http://www.adidas-group.com/en/

http://www.fila.com/History/History%20of%20Fila,en_US,pg.htmlhttp://www.fila.com/History/History%20of%20Fila,en_US,pg.htmlhttp://www.famouslogos.us/fila-logohttp://www.famouslogos.us/fila-logohttp://en.wikipedia.org/wiki/Fila_(company)http://en.wikipedia.org/wiki/Fila_(company)http://www.famouslogos.us/reebok-logohttp://en.wikipedia.org/wiki/Reebokhttp://en.wikipedia.org/wiki/Reebokhttp://www.adidas-group.com/en/http://www.adidas-group.com/en/http://www.adidas-group.com/en/http://en.wikipedia.org/wiki/Reebokhttp://www.famouslogos.us/reebok-logohttp://en.wikipedia.org/wiki/Fila_(company)http://www.famouslogos.us/fila-logohttp://www.fila.com/History/History%20of%20Fila,en_US,pg.html


55/56


56/56


5. How satisfied are you with your branded shoe that you wear most often as mentioned

Satisfied Somewhat satisfied somewhat dissatisfied Dissatisfied

6. What features do you consider while purchasing a shoe?

Style Brand image Quality Price

7. What motivates you to make your purchase?

Self-decision Friends Peer group Celebrities

8. where do you usually purchase branded shoes?

internet shopping mall Departmental store Discount retailers

9. What is your price range when you buy a shoe?

1000-1500 1500-2000 2000-3000 Above 3000

10. Which brand has better shoe designs?

Fila Reebok Puma Nike other

THANK YOU

Documents

comparative study between Fila and Reebok