85
Project Report On Comprehensive Marketing Analysis Of Submitted in partial fulfillment of the requirements for the award of the degree of Bachelor of Business Administration (2007-2010) Submitted to: Submitted by: 1

Marketing Reebok

Embed Size (px)

Citation preview

Page 1: Marketing Reebok

Project Report

On

Comprehensive Marketing

Analysis

Of

Submitted in partial fulfillment of the requirementsfor the award of the degree of

Bachelor of Business Administration(2007-2010)

Submitted to: Submitted by:Dr. Rakesh Gupta Anshul AroraProject Guide Roll No: 0751921707

LALITA DEVI INSTITUTE OF MANAGEMENT & SCIENCES(Aff. to Guru Gobind Singh Indraprastha University)

1

Page 2: Marketing Reebok

ACKNOWLEDGEMENT

Nobody is born perfect in himself, it is some timely guidance, proper

teachings & blessings by the well wishers & seniors around us, who give

perfection & skills to make ourselves prepared for a walk on the path of

success. Through these lines I would like to extend my heartiest gratitude

for timely guidance & valuable information, which has contributed a lot

towards successful completion of my project.

I deem it a privilege to extend my special thanks to Rakesh Gupta

, my Project Guide for his whole-hearted support and valuable guidance,

which led to successful completion of my project. I am also thankful to my

colleagues and friends with whom I discussed the basic framework of this

project report and got several good ideas.

Hereby, I acknowledge the support of all.

Anshul Arora

BBA- 6th Semester

2

Page 3: Marketing Reebok

INDEX

Page No.

Reebok- History 5

Product Line, Product & Product’s Image 17

Organisational Structure & Organisational Structure 22

Advertising & Marketing 26

Swot Analysis 34

Buying & Selling Policy 39

Promotion 42

Training, Recruitment, Remuneration & Supervision 46

Selling Concept & Selling Methods 51

Layout & Display 55

Price Policy & Price Range 58

Sales Accounts, Cash Sales & Credit Sales 61

Achievements 63

Review 67

3

Page 4: Marketing Reebok

Name of

The Organization

4

Page 5: Marketing Reebok

DATE OF ESTABLISHMENT

AND

HISTORY OF THE ORGANISATION

The entire population of the world wears shoes. Once the

concept of wearing a pair of shoes was to protect the feet, but

as time passed, it became style. A lifestyle is the person’s

pattern of living in the world as expressed in activities,

interests and opinions. Lifestyle portrays the “whole person”,

interaction with his or her environment. Marketers have been

searching for relationships between their products and lifestyle

groups.

In an era of style, Reebok has created has created a niche

for itself among the young and old generation. It is a

multinational company that has become a part of peoples’

lifestyle around the world. In the case of the Indian population,

it has much interaction among the young generation.

Reebok, the leader of sports accessories in the world is a

well-known name in every household. It is one of the first

companies in the world to make shoes for special purposes for

5

Page 6: Marketing Reebok

example specially designed shoes for football, running,

basketball, cricket and tennis etc.

All the Reebok outlets in India and abroad are franchisees

and Reebok itself has a major role in their successful running.

Apart from these showrooms, it also supplies to retailers who

sell various other brands but it mainly concentrates in

franchisee showrooms.

Date of Establishment

Earlier there are a retain outlet in South Extension Part – II but

this retail outlet has been recently opened in South Extension

Part – I on 14th December 2001.

Normally the history of an organization is very important

aspect in the success of any retail outlet. Since Reebok has its

own brand image, which the company has built over the years.

This particular outlet has been able to attract a number of

customers through their attractive display and huge sales

promotional activities undertaken by Reebok itself.

6

Page 7: Marketing Reebok

Address and Location

The Reebok retail outlet, which I have chosen, is accessible to

the consumers who are living in South Delhi. The showroom is

situated adjacent to the Ring Road, at South Extension, Part I.

It is a huge showroom that keeps a wide range of shoes, and

other products. A number of people can be housed at the same

time on the floor of this Reebok showroom.

Address

Shop No. 5, Commercial Complex,

South Extension, Part-I

New Delhi.

The Franchisers of this showroom are

JEESE ENTERPRISES

Under agent – Teksons

7

Page 8: Marketing Reebok

TYPES OF RETAILERS

This Reebok showroom is a speciality store and is a

franchisee organization. The products are basically shoes,

apparels, sports equipment, health products etc. The horizon of

products is very limited, that is, there are only a few types of

product. According to the need of customers, specialty stores

are further divided into single-line stores, limited-line stores

and super-speciality stores. In today’s world, people love to go

and shop in a speciality store. In such a store, customers find

their own goods, although they can ask for assistance.

Customers complete their transactions by paying the cashier

for the item. The sales executives are kept to assists the

customers, who need assistance and information related to the

products.

Specialty Store: Narrow product line with a deep assortment,

such as apparel stores, sporting goods stores, furniture stores,

florists, and bookstores. A clothing store would be a single line

store, an men’s clothing store would be a limited line store, and

a men’s custom shirt store would be super specialty store.

Examples: Athlete’s Foot, Tall Men, The limited, and the body

Shop.

8

Page 9: Marketing Reebok

Franchise Organization: Contractual association between a

franchiser (manufacturer, wholesalers, service organization)

and franchisees (independent businesspeople who buy the

right to own and operate one or more units in the franchise

system). Franchising has been prominent in dozens of product

and service areas. Examples: McDonald’s, Subway, Pizza Hut,

Jiffy Lube, Meindke Muffers, 7- eleven.

The other various types of retailers around the world are:

Department Store: Several product lines—typically clothing,

home furnishing, and household goods—with each line

operated as a separate department managed by specialist

buyers or merchandisers. Examples: Sears, JCPenney,

Nordstrom, Bloomingdale’s

Supermarket: Relatively large, low—cost, low—margin, high –

volume, self-service operation designed to serve total needs for

food, laundry, and household maintenance products. Super

markets earn an operating profit of only about 1 per cent on

sales and 10 per cent on net worth. Examples: Kroger,

Safeway, Jewel.

9

Page 10: Marketing Reebok

Convenience store: Relatively small store located near

residential area, open long hours seven days a week, and

carrying a limited line of high turnover convenience products at

slightly higher prices. Many have added takeout sandwiches,

coffee, and pastries. Examples: 7-Eleven, Circle K.

Discount Store: Standard merchandise sold at lower prices

with lower margins and higher volumes. True discount stores

regularly sell merchandise at lower prices and offer mostly

national brands. Discount retailing has moved into specialty

merchandise stores, such as discount sporting goods stores,

electronics stores, and bookstores. Examples: All- purpose:

Wal-Mart, Kmart, Specialty: Circuit City, crown Bookstores.

Off-price Retailer: Merchandise bought at less than regular

wholesale prices and sole less than retail: often leftover goods,

overruns, and irregulars obtained at reduced prices from

manufacturers or other retailers.

Factory outlets are owned and operated by manufacturers and

normally carry the manufacturer’s surplus, discontinued or

irregular goods. Examples: Mikasa (dinnerware), Dexter

(shoes), Ralph Lauren ( upscale apparel).

10

Page 11: Marketing Reebok

Independent off-price retailers are owned and run by

entrepreneurs or by divisions of larger retail corporations.

Examples: Filene’s Basement, loehmann’s T.J.Maxx.

Superstore: Averages 35,000 square feet of selling

space traditionally aimed at meeting consumers’ total needs

for routinely purchased food and nonfood items. They usually

offer services such as laundry, dry cleaning, shoe repairs,

check cashing, and bill paying. A new group called “category

killers” carry a deep assortment in a particular category and a

knowledgeable staff. Examples: Borders books and Music,

Petsmart, Staples, Home Depot, IKEA, and the Super Bazar in

India.

Combination stores are a diversification of the

supermarket store into the growing drug-and-prescription field.

Combination food and drug stores average 55,000 square feet

of selling space. Examples: Jewel and Osco stores.

Corporate Chain store: Two or more outlets commonly

owned and controlled, employing central buying and

merchandising and selling similar lines of merchandise.

Strongest in department stores, variety stores, food stores,

drugstores, shoe stores and women’s clothing stores. Their size

11

Page 12: Marketing Reebok

allows them to buy in large quantities at lower prices, and they

can afford to hire corporate specialists to deal with pricing,

promotion, merchandising, inventory control, and sales

forecasting. Examples: Tower Records, Fayva, Pottery Barn

Retailer Cooperative: independent retailers who set up

a central buying organization and conduct joint promotion

efforts. Examples: Associated Grocers, ACE Hardware.

Consumer Cooperative: A retail firm owned by its

customers. In consumer coops residents contribute money to

open their own store, vote on its policies, elect a group to

manage it, and receive patronage dividends.

TYPES OF CUSTOMERS

A customer may be defined as a different set of persons

who may be differentiated according to their age groups,

tastes, choices and preferences, and buying power. There may

be different sets of customers. According to their age groups

the choices, tastes and preferences may differ in their

approach. For example, when we talk about a teenage girl and

a cricketer then their choices will be different in approach

12

Page 13: Marketing Reebok

depending upon their age group and the way they are living

their lives.

Humans are customers to the Industries. In the case of

Reebok a person who is willing to buy or wear a pair of Reebok

shoes is a customer.

Customers are increasingly expecting higher quality and

service and also some customization. They perceive fewer real

product differences and show less brand loyalty. They can

obtain extensive product information from the Internet and

other sources, permitting them to shop more intelligently. They

are showing greater price sensitivity in their search for value.

But in spite of this the Reebok outlet at South Extension

Part-1 has major customer penetration, says Mr. Navneet, the

manager of the outlet. This means the percentage of

customers who buy from the outlet again and again is very

high. Thus, they are loyal to the company and the product.

A business can be defined in terms of three dimensions:

customer groups, customer needs, and technology. Consider,

for example, a small company that defines its business as

designing incandescent lighting systems for television studios.

13

Page 14: Marketing Reebok

Its customer group is television studios; the customer need is

lighting; and the technology is incandescent lighting. The

company might want to expand into additional business. For

example, it could make lighting for other customer groups,

such as homes, factories, and offices. Or it could supply other

services needed by television studios, such as heating,

ventilation, or air conditioning. Or it could design other lighting

technologies for television studios, such as infrared or

ultraviolet lighting.

Similarly, once the customers of Reebok were

sportspersons and athletes. It used to manufacture shoes

especially for this customer group. That is why, during the

eighties, Reebok launched a variety of sports shoes, which

gained a huge amount of popularity around the world. But as

time passed the company shifted its customers from sports’

specific to young teenagers, and adults. These people were

influenced by the new “fashion era” and Reebok started to

cater to these people also. Thus, Reebok shifted from the

specialist sports shoe market to the fashion-oriented market.

Moreover, apart from shoes it extended its product range by

14

Page 15: Marketing Reebok

adding products like apparels, sports equipment and other

health products.

This particular outlet has been successful in capturing the

market of adults and the fashion conscious teens. In brief, the

customers of this Reebok outlet are of the effluent class. The

outlet has been successful in collecting a considerable amount

of knowledge over the time about their market, brand

popularity and customers. The outlet passes this information to

the company. The company intern accumulates various

manufacturing processes that are important to fulfill their

customer’s needs and desires.

NO. OF EMPLOYEES

Employees have an important value in any form of

business, as they are the ones who make a valuable

contribution to upgrade the sales turnover for any organization.

It is hard to believe that an American Company, which

has a number of outlets around the world, has only six

employees in this outlet who are able to manage everything

efficiently. Among these six employees one is the manager -

15

Page 16: Marketing Reebok

Mr. Navneet, and three are sales representatives - Mr. Dinesh,

Mr. Sanjeev and Mr. Vishal. There is also one cashier and one

security guard. The sales representatives are of middle age,

which handle the customer service for the consumers. One

more person has been recently recruited to increase efficiency

in sales.

16

Page 17: Marketing Reebok

Product Line, Product

&

Product’s image

17

Page 18: Marketing Reebok

PRODUCT LINE, PRODUCT

AND

PRODUCT’S IMAGE

Reebok is known for its product. As Reebok’s products fall

under specialty goods, it is important to know about specialty

goods.

Specialty goods are goods with unique characteristics

or brand identification for which a sufficient number of buyers

is willing to make a special purchasing effort. Examples include

cars, stereo components, photographic equipment, and men’s

suits.

A Mercedes is a specialty good because interested buyers

will travel far to buy one. Specialty goods do not involve

making comparisons; buyers invest time only to reach dealers

carrying the wanted products. Dealers do not need convenient

locations; however, they must let prospective buyers know

their locations.

18

Page 19: Marketing Reebok

The product line of a Reebok retail outlet generally

consists of sports accessories. The product line is divided into

four sections:

1) Shoes

2) Apparels

3) Sports equipment

4) Exercising / health products

1) Shoes

Reeboks specialty is their shoes. They vary from shoes for

every day use to professional footwear. The outlet has

around 4000 different types of shoes. The outlet also sells

floaters and sandals which have gained a tremendous

amount of popularity among the youth.

2) Apparels

These include T-Shirts & shirts, track suits, shorts, socks

& caps which a quiet popular among teenagers,

sportsmen and professionals.

3) Sports Equipment

Sport equipment includes like Cricket bats & balls, Tennis

balls and gymnastic equipment.

19

Page 20: Marketing Reebok

4) Exercising / Health Products

It also sells exercising / health products like dumbles &

weights, skipping ropes etc.

Recently Reebok has launched its Iverson Collection which

consists of Tees, Singlets and 13 play off Basket Ball shoes.

PRODUCT IMAGE

Buyers respond differently to different products. Hence

every company tries to develop distinctive images for their

brand. Apart from Reebok many other sport companies like

Nike, have succeeded in convincing millions of young

consumers that a shoe is not simply a shoe, it is an attitude.

Identity and image needs to be distinguished. Identity

comprises the ways that a company aims to identify or position

itself or its product. Image is the way the public perceives the

company or its products. Image is affected by many factors

beyond the company’s control. The fact that image can have a

life of its own is exemplified by Nike’s problems in maintaining

its appeal to the fickle youth market.

20

Page 21: Marketing Reebok

Now the market is following perfect competition. There

are numerous buyers and sellers with no single firm able to

influence market prices. It is assumed that products are

identical in every respect and that the firm accepts the price

set by the market. Hence, the company likes to differentiate its

product by using latest designs with comfort.

The Reebok symbol represents Vector – an animal similar

to the Cheetah which runs very fast.

21

Page 22: Marketing Reebok

Organizational Structure or

Organizational Pattern

22

Page 23: Marketing Reebok

ORGANIZATIONAL STRUCTURE

OR

ORGANISATIONAL PATTERN

To achieve the targets of the company, it is very important to

have a healthy organizational structure with direct

responsibilities and powers to the various departmental hearts.

It is now days, very difficult to handle the various departments

centrally, thus the practice has become to have various

departmental heads having their functions defined.

As far as organizational structure of a Reebok showroom is

concerned, it is very small. In the top level, there is one

manager whose role is to manage everything, right from sales

operations to handling grievances of customers and

employees. The manager himself handled both the selling and

purchasing departments. He exercises strategic supervision

and discharges his fiduciary responsibilities towards the

customers.

The middle level management consists of the sales

representatives and the cashier. The two sales representative

23

Page 24: Marketing Reebok

of the company look after the necessities of the customers. As

far as the customers of Delhi (who buy from them) are

concerned, are educated and do not need too much assistance.

Hence, the sales executives don’t face major problems in

selling the products.

The lowest level consists of the security. There is only one

security guard in the showroom. The manager says, “We do not

need more guards as there is no threat of any type within the

showroom.” This is the grassroot level of organizational

structure in case of this Reebok showroom.

24

Page 25: Marketing Reebok

ORGANISATION STRUCTURE

MANAGER

(Top level management)

SALES REPRESENTATIVES

(Middle Level Management)

SECURITY GUARD

(Low Level Management)

25

Page 26: Marketing Reebok

Advertising

&

Marketing

26

Page 27: Marketing Reebok

ADVERTISING & MARKETING

Advertising is omnipresent. It is every where. Advertising

is a powerful tool of business and marketing. But some others

say that advertising manipulates our needs and makes us buy

things, which we do not want.

Advertising is considered so powerful that doing business

today without advertising is like looking at a girl in a dark room.

Countering claims about the powerful persuasive nature of

advertising is one of the most notorious sayings in world of

advertising; “I know half the money I spent on advertising in

wasted; but I can never find which half.”

Advertisers spend huge amount of money on advertising.

In fact, the total estimated expenditure on advertising in India

in the year 2000 is projected to make the full contribution to

sales and profit. Well-planned and executed research is

essential to pinpoint assess within the advertising effort that

need improving. Otherwise mistakes or shortcomings in

advertising will badly affect sales measurements which are

thought to be a major yardstick for advertising effectiveness.

27

Page 28: Marketing Reebok

This would be true only when advertising is the dominant

contributor to sales, where sales response is immediate. But

since advertising does not work alone, sales record can not be

the role measure of advertising effectiveness. So evaluate

methods of measuring advertising effectiveness are adopted.

Reebok, the U.S. Company, has been advertising and

marketing since its inception. Reebok undergoes a tremendous

amount of advertising through television, video, newspapers

and magazines etc. Thus, the company itself promotes the

various outlets. Reebok uses many cricketers like Rahul

Dravid, Yuvraj Singh, Dinesh Mongia for its advertisements in

TV, Newspapers, magazines, and video etc. Through such an

advertising strategy, Reebok has been able to influence the

young generation in a big way.

Recently, Reebok has undergone a major advertising

campaign to launch its “Iverson Collection”. For promoting this

campaign, company has signed Dinesh Mongia, the new cricket

star who has gained tremendous amount of popularity in such

a short span of his career.

Specimens of advertisements by Reebok are given in the

following two pages

28

Page 29: Marketing Reebok

In the case of the retail outlet

The retail outlet itself also does advertising which is

mainly done through hoardings, boards and local

newspapers.

29

Page 30: Marketing Reebok

MARKETING MIX

Marketers use numerous tools to elicit desired responses

from their target markets. These tools constitute a marketing

mix.

Marketing mix is the set or marketing tools that firm

uses to pursue its marketing objectives in the target market.

McCarthy classified these tools into four broad groups

that he called the four Ps of marketing: product, price, place,

and promotion. The particular marketing variables under each

p are shown in figure.

30

Page 31: Marketing Reebok

The Four P components of the Market Mix

Marketing Mix

Product

Product

variety

Quality

Design

Features

Brand Name

Packaging

Sizes

Target

Market

Price

List Price

Discounts

Allowances

Payment

Period

Promotion

Sales

Promotion

Place

Channels

Coverage

Assortments

Locations

Inventory

Transport

31

Page 32: Marketing Reebok

Services

Warranties

Returns

Credit Terms Advertising

Sales Force

Public

Relations

Direct

Marketing

Marketing mix decisions must be made for influencing

the trade channels as well as the final consumers. The Figure

above shows the company preparing an offering mix of

products, services, and prices, and utilizing a promotion mix of

sales promotion, advertising, sales force, public relations,

direct mail, telemarketing, and Internet to reach the trade

channels and the targets customers.

Typically, the firm can change its price, sales force size,

and advertising expenditures in the short run. It can develop

new products and modify its distribution channels only in the

long run. Thus the firm typically makes fewer period-to-period

marketing-mix changes in the short run than the number of

marketing –mix decision variables might suggest.

Note that the four Ps represent the sellers’ view of the

marketing tools available for influencing buyers. From a

32

Page 33: Marketing Reebok

buyer’s point of view, each marketing tool is designed to

deliver a customer benefit. Robert Lauterborn suggested that

the sellers’ four Ps correspond to the customers’ four Cs.

Four Ps Four Cs

Product Customer solution

Price Customer cost

Place Convenience

Promotion Communication

Winning companies will be those who can meet customer

needs economically and conveniently and with effective

communication.

The marketing mix of Reebok has a focused market. It

also has been campaigning on the product, price, promotion

and place.

33

Page 34: Marketing Reebok

SwotAnalysis

34

Page 35: Marketing Reebok

SWOT ANALYSIS

Internal Environment Analysis (strengths/weaknesses

Analysis)

This is one thing to decide attractive opportunities and

another to have the competencies to succeed in these

opportunities. Each business needs to evaluate its internal

strengths and weaknesses periodically. It can do so by using a

form like the one shown in the marketing Memo “Checklist for

Performing Strength/Weaknesses Analysis”. Management—or

an outside consultant—reviews marketing, financial,

manufacturing and organizational competencies and rates each

factor as a major strength, minor strength, neutral factor,

minor weakness, or major weakness.

Clearly, the business does not have to correct all its

weakness, nor should it gloat about all its strengths. The big

question is whether the business should limit itself to those

opportunities where it might have to acquire or develop certain

strengths. For example, managers at Texas Instruments (TI)

split between those who want TI to stick to industrial

electronics (where it has clear strength) and those who want

35

Page 36: Marketing Reebok

the company to continue introducing consumer electronic

products (where it lacks some required marketing strength).

Sometimes a business does poorly not because its

departments lack the required strengths but because they do

not work together as a team. In one major electronics

company, the engineers look down on the salespeople as

“engineers who couldn’t make it”, and the salespeople look

down on the service people as “salespeople who couldn’t make

it”. It is therefore critically important to assess

interdepartmental working relationships as part of the internal

environmental audit.

Strength

Reebok’s name has excellent branding and a high quality

image. People buy Reebok because its quality and

reliability. Consumers know they will get satisfaction by

wearing this brand.

Dealers and salesman who sell Reebok’s product are

knowledgeable and well trained in selling

36

Page 37: Marketing Reebok

It has an excellent service network. This enables the

outlet to stay ahead of competition, both in terms of

quality and pricing by ensuring timely supply of each and

every item needed in the showroom.

Teenagers and the young generation are crazy about this

product.

Reebok has its factory situated in Bijwasan, N.Delhi. This

helps to cut down the cost of production, which in turn

reduces the price of the products, as the company

doesn’t have to import their products from outside.

Weaknesses

It faces a lot of competition like Nike, Power, Phoenix etc.

In some places it has not been able to compete with the

Indian sports shoe manufactures because of it’s high

prices.

Its high prices have limited their range of customers.

Reebok caters to only the higher middle class and top

class of the society.

37

Page 38: Marketing Reebok

Opportunity

The fickle and design. This is because of the conscious

nature of the target market of young teenagers and

adults who like to buy the latest fashions.

Moving from the specialist sports shoe market to the

young and adult market.

New and innovative sports shoe designs.

Threat

The biggest threat is the popularity of other

manufactures.

For example: Companies like Nike have given major

sponsorship for cricket and other sports. Nike has also bought

the television rights for many cricket tournaments over the

years. Reebok has to increase its popularity on a regular basis.

38

Page 39: Marketing Reebok

Buying

&

Selling Policy

39

Page 40: Marketing Reebok

BUYING & SELLING POLICY

The Buying and Selling policy of this Reebok showroom

to be very simple. However, it would be better to know some of

the sales models used by various companies. Following are the

four models:

Models

1. Markov-process model: This model shows the

probability of moving from a current state to any future

state. Example: A branded packaged-goods manufacturer

can determine the period to period switching and staying

rates for her brand and, if the probabilities are stable, the

brand’s ultimate brand share.

2. Queuing model: This model shows the waiting times and

queue lengths that can be expected in any system, given

the arrival and service times and the number of service

channels. Example: Supermarkets can use the model to

predict queue lengths at different times of the day given

the number of service channels and service speed.

3. New-product pretest models: This model involves

estimating functional relations between buyer states of

40

Page 41: Marketing Reebok

awareness, trial, and repurchase based on consumer

preferences and actions in a pretest situation of the

marketing offer and campaign. Among the well-known

models are ASSESSOR, COMP, DEMON, NEWS, and

SPRINTER.

4. Sales-response models: This is a set of models that

estimate functional relations between one or more

marketing variables—such as sales force size, advertising

expenditure, sales-promotion expenditure, and so forth—

the resulting demand level.

Although, this unit is not using any special model of sales,

but it maintains its record on sales. They daily update their

accounts regarding their buying and selling.

41

Page 42: Marketing Reebok

Promotion

42

Page 43: Marketing Reebok

PROMOTION

Promotion includes all the activities the company

undertakes to communicate and promote its products to the

target market. Atlas has to hire, train, and motivate

salespeople. It has to set up communication and promotion

programs consisting of advertising, sales promotion, public

relations, and direct and on-line marketing.

The principal objective of the outlet is sale-promotion.

Sales-promotion objectives are derived from broader promotion

objectives, which are derived from more basic marketing

objectives developed for the product. The specific objectives

for sales promotion vary with the target market. For

consumers, objectives include encouraging purchase of larger-

size units, building trial among nonusers, and attracting

switchers away from competitors’ brands. For retailers,

objectives include persuading retailers to carry new items and

higher levels of inventory, encouraging off-season buying,

encouraging stocking of related items, offsetting competitive

promotions, building brand loyalty, and gaining entry into new

retail outlets. For the sales force, objectives include

encouraging support of a new product or model, encouraging

43

Page 44: Marketing Reebok

more prospecting, and stimulating off-season sales. See the

Marketing Memo “Sales Promotions as Brand Builders”.

Coupling the new Nike Air shoe with advertising featuring

Michael Jordan was a touch of marketing inspiration. The US

basketball star, top of his chosen sport, was signed up to

promote the new product in a multimillion- dollar deal that

added a new dimension to sports sponsorship. The marketing

campaign developed links between Nike and Jordan’s athletic

ability and image. Reebok hit back with its own design, the

Reebok Pump shoe, but it was forced to use Shaquille O’Neal, a

major basketball star but second to Michael Jordan. Thus

around the turn of the decade, Nike’s market share rose from

25 percent in 1989 to 28 percent to 21 percent.

Building on this success, Nike realized that such

promotion provided powerful support for the brand. Over the

next few years, this was enhanced by the heavy funds Nike

was prepared to invest. For example, in 1995 Nike invested

almost US$1 billion in sports marketing compared with

Reebok’s spending at around US$400 million. This investment

in sports marketing was much higher than previous sums. It

44

Page 45: Marketing Reebok

was developed after Nike had assessed the results of its heavy

advertising campaigns earlier in the 1990s.

45

Page 46: Marketing Reebok

Training,

Recruitment, Remuneration

&

Supervision

46

Page 47: Marketing Reebok

TRAINING, RECRUITMENT,

REMUNERATION & SUPERVISION

“Training refers to the teaching / learning activities

carried on for the primary purpose of helping members of the

organisation to acquire and apply the knowledge, skills,

abilities & attitude needed by that organisation”

Many companies send their new representatives into the

field almost immediately, supplied with samples, order books

and a description of the territory. Much of their selling is

ineffective. A vice president of a major food company once

spent a week watching 50 sales presentations to a busy buyer

for a major supermarket chain. Here is what he observed:

The majority of salesmen were ill prepared, unable to

answer basic questions, uncertain as to what they wanted to

accomplish during the call. They did not think of the call as a

studied professional presentation. They didn’t have a real idea

of the busy retailer’s needs and wants.

47

Page 48: Marketing Reebok

Today’s customers expect salespeople to have deep

product knowledge, to add ideas to improve the customer’s

operations, and to be efficient and reliable. These demands

have required companies to make a much higher investment in

sales training.

Today, new sales reps may spend a few weeks to several

months in training; the median training period is 28 weeks in

industrial-products companies. Training time varies with the

complexity of the selling task and the type of person recruited

into the sales organization. At IBM, new reps receive extensive

initial training and may spend 15 percent of their time each

year in additional training.

Sales training programs have several goals:

Sales representatives need to know and identify with the

company.

Sales representatives need to know the company’s products.

Sales representatives need to know customers’ and

competitors’ characteristics.

Sales representatives need to know how to make effective

sales presentations.

48

Page 49: Marketing Reebok

Sales representatives need to understand field procedures

and responsibilities.

Reebok does train its employees with the help of latest

techniques like cassette tapes, videotapes, CD-ROMs etc. A

trainee can practice sales calls with a screen actor who

portrays a buying executive in a particular industry. The actor –

buyer responds differently depending on what the trainee

says.

Recruitment is the process of discovering sources of

manpower to meet the requirement of staffing schedule and to

employ effective measures for attracting that therefore

manpower in adequate numbers to facilitate effective selection

of an efficient working force.

Recruitment is carried out through common sources -

Such as:-

Advertisements,

State employment Exchange Agencies

Private employment Agencies

Present Employees.

49

Page 50: Marketing Reebok

Reebok outlets generally recruit its employees through

Advertisements, Private employment agencies and Present

employees.

Remuneration

The salary of the salesman is decided both by the owner

and the manager of the outlet on the basis of their experience,

capabilities, way of talking and presenting the product to the

customers and way of convincing the customer etc. Above all

this work performance of a salesman decides what salary he

may get.

The salesmen are also given commission if they exceed the

target sale. Bonus is also given to the salesmen once a year on

Diwali.

Supervision

The manager Mr. Navneet does the work of supervision. He

keeps a regular check whether the customers have any

problems with the salesman. He sees to that the salesman

treats every customer equally and nicely.

50

Page 51: Marketing Reebok

Selling Concept

&

Selling Methods

51

Page 52: Marketing Reebok

SELLING CONCEPT AND SELLING METHODS

THE SELLING CONCEPT

The selling concept holds that consumers and

businesses, if left alone, will ordinarily not buy enough of the

organization’s products. The organization must, therefore,

undertake an aggressive selling and promotion effort.

This concept assumes that consumers typically show

buying inertia or resistance and must be coaxed into buying. It

also assumes that the company has a whole battery of

effective selling and promotion tools to stimulate more buying.

The selling concept is practiced most aggressively with

unsought goods, goods that buyers normally do not think of

buying, such as insurance, encyclopedias, and funeral plots.

These industries have perfected various sales techniques to

locate prospects and hard-sell them on their product’s benefits.

The selling concept is also practiced in the nonprofit area

by fund-raisers, college admissions offices, and political parties.

A political party vigorously “sells” its candidate to voters. The

52

Page 53: Marketing Reebok

candidate moves through voting precincts from early morning

to late evening, shaking hands, kissing babies, meeting donors,

and making speeches. Countless dollars are spent on radio and

television advertising, posters and mailings. The candidate

flaws are concealed from the public because the aim is to make

the sale, not worry about post purchase satisfaction. After the

election the new official continues to take a sales-oriented

view. There is little research into what the public wants and a

lot of selling to get the public to accept policies the politician or

party wants.

Most firms practice the selling concept when they have

over capacity. Their aim is to sell what they make rather than

what the market wants. In modern industrial economies,

productive capacity has been built up to a point where most

markets are buyer markets (the buyers are dominant) and

sellers have to scramble for customers. Prospects are

bombarded with TV commercials, newspaper ads, direct mail

and sales calls. At every turn, someone is trying to sell

something. As a result, the public often identifies marketing

with hard selling and advertising.

53

Page 54: Marketing Reebok

But marketing based on hard selling carries high risks. It

assumes that customers who are coaxed into buying a product

will like it; and if they don’t, that they won’t bad-mouth it or

complain to consumer organizations and will forget their

disappointment and buy it again. These are indefensible

assumptions. One study showed that dissatisfied customers

may bad-mouth the product to 10 or more acquaintances; bad

news travels fast.

Selling Methods

Direct selling: At this showroom of Reebok only direct counter

sales takes place. No commodity is sold on our installment

basis. No credit sales take place and there is no home delivery

service.

In case of counter sales, first of all the bill is made, of which

one receipt is given to the customer and the other is with the

cashier, who after checking the total article purchased by the

customer and counting the total amount of the bill, will give the

delivery. No orders are accepted through telephone or mail

order service. Credit cards like Visa, American Express etc. are

accepted.

54

Page 55: Marketing Reebok

Layout &

Display

55

Page 56: Marketing Reebok

LAYOUT AND DISPLAY

Layout and display are among the most important factors

of sales promotional activities. It is done to attract and catch

the eyes of the people about the kind of products and variety

of products in which the outlet engages. Layout includes the

interior display of goods. On the other hand, display or window

dressing is the exterior show up of the outlet.

The moment we enter this outlet all we think about is –

SPORTS. There is a huge display board at the entrance, which

is very colorful and attractive.

The customer/visitor is so stunned by seeing the display

of the product that they hardly consult the sales executives.

The outlet adopts the powerful mode of visual presentation

rather than scripts. Visual presentation is much powerful than

any printed material.

Shoes are kept on attractive racks so that the customer

can touch, feel and try out the shoes. There are three or four

mannequins, which are dressed attractively with apparels

made by Reebok. Shirts and shorts are also on racks and there

56

Page 57: Marketing Reebok

is also a try room where the customer tries out the garments.

Thus the customer can be fully satisfied by trying out

everything which he buys from the showrooms.

57

Page 58: Marketing Reebok

Price Policy

&

Price Range

58

Page 59: Marketing Reebok

PRICE POLICY AND PRICE RANGE

Price Policy : Price policy calls for the producer to establish a

price list and schedule of discounts and allowances that

intermediaries see as equitable and sufficient.

Price Decision

Prices are a key positioning factor and must be decided in

relation to the target market, the product-and-service

assortment mix, and competition. All retailers would like to

achieve high volumes and high gross margins. They would like

high Turns x Earns, but the two usually do not go together.

Most retailers fall into the high-markup, Earns, but the two

usually do not go together. Most retailers fall into the high-

markup lower-volume group (fine specialty stores) or the low-

markup, higher-volume group (mass merchandisers and

discount stores). Within each of these groups are further

gradations. Thus Bijan’s on Rodeo Drive in Beverly Hills prices

suits starting at $1,000 and shoes at $400. At the other

extreme, Odd Lot Trading in New York City is a superdiscounter

that sells odd lots and closeouts at prices below those of

normal discounters.

59

Page 60: Marketing Reebok

Retailers must also pay attention to pricing tactics. Most

retailers will put low prices on some items to serve as traffic

builders or loss leaders. They will run storewide sales. They will

plan markdowns on slower-moving merchandise. For example,

shoe retailers expect to sell 50 percent of their shoes at the

normal markup, 25 percent at a 40 percent markup, and the

remaining 25 percent at cost.

Some retailers have abandoned “Sales pricing” in favor of

everyday low pricing (EDLP). EDLP could lead to lower

advertising costs, greater pricing stability, a stronger image of

fairness and reliability, and higher retail profits. General

Motors’ Saturn division states a low list price for its cars and its

dealers don’t bargain. Wal-Mart also practices everyday low

prices. Feather cites a study showing that supermarket chains

practicing everyday low pricing are often more profitable than

those practicing sales pricing.

Price Range : The price range of this Reebok Retail Outlet is

different in the case of apparels and shoes. For apparels the

price range is from Rs. 379 to 1400. In the case of shoes price

range is from Rs. 990 to Rs. 7990.

60

Page 61: Marketing Reebok

Sales Accounts, Cash Sales

&

Credit Sales

61

Page 62: Marketing Reebok

SALES ACCOUNTS, CASH SALES

AND CREDIT SALES

In this Reebok outlet, the cash book is a self record and all the

sales proceeds are entered into the cash book. The auditor

annually checks these entries of accounts at the end of every

financial year. No discount is given to the customers as Reebok

has fixed prices. This outlet also does not carry out credit sales.

62

Page 63: Marketing Reebok

Achievements

63

Page 64: Marketing Reebok

ACHIEVEMENTS

As a retail outlet :

Since the history of this retail outlet is very small, its

major achievement is attracting almost all type of customers is

such a short time. Another achievement of this outlet is that

customers come to this outlet not only to buy shoes but

apparels and other sports accessories. Customers of South

Extension now know that they will be satisfied if they buy from

this outlet as they can buy original Reebok products. Moreover,

the customer can try out whatever he buys. Thus the outlet has

achieved a good name in the market.

As a company:

Nike was profitable and continuing to develop its role as a

specialist US sports shoe manufacturer with no production

facilities in its home country. Then along came competition in

the form of a new sports shoe manufacturer, Reebok. From a

start-up company in 1981, Reebok went into battle against

Nike under its founder and chief executive, Paul Fireman.

Reebok launched a strong and well-designed range of sports

shoes with great success. By the mid-1980s, Reebok had

64

Page 65: Marketing Reebok

equalled Nike’s annual sales in a fierce competitive battle. In

1987, Reebok was clear market leader with sales of US$991

million and a market share of 30 percent, compared with Nike

sales of US$597 million and a share of 18 percent.

Part of the problem and opportunity for both

manufacturers was the fickle and design-conscious mature of

the target market: young, hip teenagers and adults buy the

latest fashions. Both Nike and Reebok realized that, in order to

build volume, it was necessary to move from the specialist

sports shoe market to wider adoption by this much target,

fashion-aware teenage and young adult market. This was the

battleground that was initially captured by Reebok with good

products and a campaign of public relations that was highly

disrespectful of Nike. Mr. Fireman criticized Phil Knight as being

‘just a shoe guy’ who saw himself as being ‘a big-time presence

in sports’. In response, Mr. Knight responded by saying that he

‘hated’ his competitor and that ‘the most innovative piece of

R&D equipment they have is the copy machine’. One author of

a book on Nike commented: ‘Paul Fireman was installed as a

devil figure inside Nike, and he remains a dark presence to this

day’.

65

Page 66: Marketing Reebok

To hit back against Reebok, Nike then began to invest

considerable sums on developing new and innovative sports

shoe designs. The most successful of these was begun in the

late 1980s, the Nike Air shoe. ‘It was an intuitively simple

technology to understand’, said John Horan, publisher of sports

Goods Intelligence, a US industry newsletter. ‘It’s obvious to

consumers that if you put an airbag under the foot, it will

cushion it’. But it was not until 1990 that the Nike Air shoe was

launched and began to deliver success for Nike. Thus the

1980s were both the decade of difficulty and the time for

renewal. Nike had learned about the heat of competition and

the need for innovation and continual R&D in its shoe designs.

66

Page 67: Marketing Reebok

Review

67

Page 68: Marketing Reebok

REVIEW

Reebok has been successful in maintaining its brand

image and brand positioning among the Delhites and the Indian

Consumer. But, there is a wide range of Indian population who

prefer to buy and wear Indian shoes as they are available at

cheaper prices. In spite of this the Reebok outlet in South

Extension is considerably doing well as far as sales is

concerned.

The outlet has been able to live up to the expectations of

consumers as far as quality and service is concerned. On the

other hand the management has been able to run its operation

in the minimum possible cost; for example employing only

three sales representatives who handle all the sales

themselves.

68

Page 69: Marketing Reebok

BIBLIOGRAPHY

www.reebok.com

http://en.wikipedia.org/

http://books.google.co.in/

www.google.com

www.topmensmagazines.com

Various first hand data provided by personnel at Reebok

Showroom, South-ex

69