How Does The High-End Brand Go Through The Slump Swamp Dual Brand Strategy Suitable For The Downturn Nike?

China

In the market, there has been a spectacle for a long time: no matter how fierce the promotional campaign of other brands is, Nike can always free itself from the world.

However, this situation has changed suddenly in the near future.

Nike's earnings report said:

The stock has risen by 20%.

In order to increase sales, Nike's promotion will gradually normalize.

Nike, the darling of the sporting goods market, has also been involved in the increasingly popular promotional battle with the decline of the overall economic situation.

The change of Nike makes people find an important proposition: the bad economic situation is a more severe test to the high-end brands in the market.

Because the price orientation of consumers is getting stronger and stronger.

The brand premium will be significantly reduced.

If the high-end brand is involved in the promotion war, it may damage its brand positioning.

It can be said that in the economic downturn, how to deal with the strategy of high-end brands is a technical problem.

To this end, the reporter interviewed Mr. Rees, the father of positioning, to explore the positioning problem of high-end brands in the economic downturn.

Nike of "two days"

Reporter: now, in order to digest inventory and increase sales volume, Nike has begun to get involved in promotional campaigns with its peers in the Chinese market. This is very rare for Nike. How do you evaluate Nike's market change?

AI Rees: high-end brands like Nike are involved in the promotional battle with their peers. No matter whether they are directly priced or discounted, they are wrong.

But on the other hand, some high-end brands will make another kind of mistake - they are priced too high to maintain sales in the market.

Sooner or later, prices have to be cut to maintain sales.

The above two situations of high-end brands should be reconsidered.

SterneAgee analysts think: "Nike has so far failed to locate the high-end footwear in China". Why do you think Nike will encounter such a problem in China? Is today's involvement in the promotion war even more important for brand positioning?

AI Rees: usually, a brand builds its high-end positioning through public relations or public relations planning, rather than advertising.

Relying solely on high pricing is no way to build high-end positioning.

You need to create a lot of PR and PR events before you can make high prices.

Of course, involvement in promotional campaigns will weaken the high-end positioning.

On the other hand, although the performance of Nike in China is open to question, its overall performance in the global market is very good. Some important initiatives are worthy of efforts to build high-end brand enterprises.

For example, Nike has been committed to product innovation, and its public relations have been very effective.

Its Lunar buffer technology, which debuted at the 2008 Beijing Olympics, has now developed into a $1 billion 500 million product line.

Sales of product lines based on this technology alone exceed the Li Ning Co's $1 billion 400 million sales last year.

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In addition, Nike launched the Flyknit ultra light sneaker technology at this year's London Olympic Games.

The product line based on this technology is also attacking the market.

It can be said that in the global market, Nike's marketing strategy and market performance is still excellent.

In the May 2012 fiscal year, Nike's sales reached $24 billion 100 million, an increase of 15.7% over the previous year.

This is Nike's biggest growth rate in the past 10 years.

Therefore, if Nike has problems in the Chinese market, it will also fail to implement its measures in other markets in the Chinese market.

Dual brand strategy suited to downturn Nike

Reporter: a common problem is: at present, including China's economy, the world economy is in a difficult period, and consumers are more careful than ever.

What kind of price adjustment and marketing strategy do you think Nike should have in the future?

Rees: first of all, the price of the brand should be consistent.

If Nike thinks its brand is priced too high in China, it should lower prices and permanently lower prices, not to cope with economic hardships.

The worst thing a brand does is change prices constantly according to the changing economic situation.

In many cases, in order to cope with the adverse and long-term economic situation, a better strategy for enterprises is to maintain a premium on your high-end brand and introduce a less expensive brand at a lower price.

In the long run, brand opportunities exist in almost every category of products, both high-end and low-end.

A company with two brands has the ability to lead both ends of the market at the same time.

The worst part is the middle part of the market.

Because consumers want the best (high-end), or the cheapest (low end) product.

Few consumers will think, I want a product that is not very good or bad.

How high-end brands go through the depressed swamp

Reporter: some analysts think that Nike's business situation may go down in a relatively long period? What are your suggestions for Nike's marketing strategy?

Ai Chis: we haven't seen the evidence that Nike is going downhill in addition to China.

If Nike applies its strategy in the Chinese market to other countries, the brand may be weakened together with its financial situation.

Here are some suggestions for leading brands in all categories, including Nike in the Chinese market.

1., setting up a high price, but not too high.

Look at Apple Corp's pricing for iPad.

Before iPad launched the market, many industry experts believe that the pricing date for Apple Corp is $1000.

As a result, iPad's basic pricing in the US market is about $500.

This price means that competitors can not sell their products substantially on the basis of iPad prices.

2. expect competitors to introduce lower price competitive products, but never do such a thing yourself.

If your brand is recognized as a leading brand, competitors will have to sell enough products in order to be based on the market and make profits. This is likely to be a price reduction measure, which will be more beneficial to the leading brand.

The relationship between Nike and Adidas is like this. Compared with Nike, the second brand Adidas often reduces its price.

This is why Adidas's profit margin is only half of Nike's.

3. don't lower your price to match your competitors' pricing.

No brand can occupy 100% market share.

When a leading brand cuts prices in order to meet its competitors, there will be two situations: (1) the leading brands become weaker, which may be the changes of Nike in the Chinese market; (2) competitors are forced to depreciate more substantially, so no one gains.

4. when the current economic situation is difficult, do not reduce the price.

It should be expected that sales will drop, be prepared, and wait for economic recovery.

When the economic situation is bad, the leading brand should pay attention to: protect your brand is more important than your market share.

In the long run, the most important asset you may have is a powerful brand.

5. consider launching second brands in the same category.

For any company, an important long-term strategy is to have two brands: one to occupy the high-end market and one to occupy the low-end market.

This will make the leading brands occupy a very favorable position, but few companies really implement this strategy.