Overview and comparison between product launches and key differences in marketing strategies of Nike Space Hippie Collection and Adidas Ocean Plastic Shoes
Main Company:
Nike- Space Hippie Collection
Competitor Company:
Adidas- Ocean Plastic Shoes
Similar Product from both companies:
Shoes made from recyclable or scrap material
Target Audience:
The primary target audience being targeted through Nike’s initiative of Corporate Social Responsibility (CSR) and environment sustainability is the “green consumers”. These are people who are more conscious about the environment. Sustainable companies, products and initiatives are gaining popularity because of their environmental benefit. They want to buy something they need while at the same time contributing to the environment. Also, the pandemic has brought intense focus on the world’s environmental issues. Nike has realized this and put significant work to become more sustainable while designing their products.
Adidas has come up with a new shoe that is made up of entirely of ocean plastic. They hope to attract a new target market with this product - “green consumers”.
Marketing Mix (The 4 P’s) (Nike):
Product- Nike is using factory scraps and recycled “space waste yarn” to create its new brand of sneakers. One of it named the Space Hippie Sneakers. The aim is to reduce the carbon impacts of its products.
Each of the four different designs in the segment- named Space Hippie 01, 02, 03 and 04 are made from scrap metal, which the brand has named “space junk”.
The upper part of Space Hippie along with Nike’s Flyknit design sneakers is knitted from what Nike calls “space waste yarn”. This is made from 100% recycled material including plastic bottles, T-shirts, and textile scraps.
Promotion- The Nike Vaporfly 4% Flyknit running shoe was recently permitted for use and advertised at the Tokyo 2020 Olympics and at the brand’s international forum, which took place in New York in the first week of February 2020. The forum was a way for the brand to boldly present exactly what was to come with talks surrounding its sustainability efforts and impact on the planet, and product reveals. Nike had top sportsperson like Michael Jordon and other top celebrities market its new product line at the launch giving people and its targeted customer segment even more incentive to buy their products.
Place- Nike is using three distribution channels to market its product:
a) Selling to wholesalers in the US and the international market.
b) Direct-to-consumer (DTC) sales, which include in line and factory retail outlets and e-commerce sales through www.nike.com
c)Sales to global brand divisions
Price- Nike has priced this new collection of environmentally sustainable sneakers in between $130 to $180.
Marketing Mix (The 4 P’s) (Adidas):
Product- Adidas has launched three new editions of its popular UltraBoost shoe, primary made from ocean debris. The reuse value on average can be said to be equivalent to 11 plastic bottles per pair and feature laces, heel lining and sock line covers that are made from recycled material.
These shoes have been manufactured and launched in collaboration with environmental conservationists Parley for the Oceans.
Promotion- The adidas X parley ocean plastic collaboration is showcased specifically on - https://www.adidas.com/us/sustainability-parley-ocean-plastic
In addition to this, Adidas is using digitalization as a key part of its marketing strategy to market this product line, especially to green consumers. The company spends 90% of its marketing budget on digital campaigns and social media.
Place- Adidas also added Instagram checkout feature recently into its distribution network, which led to 40% increase in its sales. There is nothing wrong with replicating the same on Facebook and Snapchat.
Price- The price range that has been set on these shoes is between $160 to $220.
Pain Points:
1)One of the main pain points of the green consumer is Greenwashing, which can be described as a situation in which a company states they are acting sustainable when in reality, they are not.
Value Statements (Nike):
- The company’s statistical analysis is being shared publicly. Nike disclosed that when mixed with other design elements, its shoe upper consists of a total of 90% recycled content. This basically makes the customer feel assured.
Value Statements (Adidas):
- They have incorporated the recycled loop theory in partnership with environmental activists which aims to eliminate the use of virgin polyester by 2024. As soon as consumers see “made with recycled material” tag, it gives them a positive feel especially when you have an environmentalist organization working in collaboration.
2) Consumers want their product packaging (shoes) to be environmentally friendly.
Value Statements (Nike):
- Nike has changed its operations pertaining to the weight and size of its packaging, replacing plastic bags with paper versions both in its stores and deliveries. Nike’s chief sustainability officer Noel Kindler said packaging is one of the areas that Nike is trying to remove its carbon footprint. He said that the company is targeting phasing out single-use plastics by 2030.
Value Statements (Adidas):
-The regenerative loop cycle under the Adidas sustainability strategy which states made with nature and reflects on their ambition that every Adidas product can return to nature discourages the use of plastic or non-biodegradable material packaging.
Promotional Tactics (Nike):
1)Nike has incorporated a network of renewable energy facilities to power its factories and offices in which the shoes are bring produced, another positive for green consumers. Renewable energy is also the steppingstone to lower carbon footprint.
2)Nike is bringing in the concept of circular economy, which will basically eliminate waste and pollution from their manufacturing efforts, another attractive point for the green consumers.
3)The mission statement that Nike has targeted in its initiatives going forward, aiming to create a healthy planet by making a positive impact in communities where we live and work, and by making products responsibly and more sustainably, everything which is appealing to a green consumer.
Promotional Tactics (Adidas):
1)Adidas is in compliance with eight sustainable development goals (SDGs), which is higher than most of its competitor, compared to Nike’s 5. These metrics are in alignment with the green consumers choices.
2)Adidas has clearly laid out its targets to both consumers and workers of reducing water use, energy, plastic, paper, materials, and CHG emissions.
3)The circular loop that Adidas plans to embody. This category includes products that are designed to have multiple life cycles, including their ocean plastic shoe line. This basically translates into a reusable product line for the customer.
Differentiation:
Product attribute: Product Variety
Adidas has though launched some pretty impressive sustainable initiatives but has a very limited product portfolio especially for green consumers with only the ocean plastic product line being currently launched. While Nike has already launched four different products within the same brand line and multiple environmentally friendly brand lines being advertised in the market today.
Product attribute: Product Design
Nike has rethought and moved away from the conventional design for its green consumers. It has come up with a totally different and exhaustive way of material sourcing, basing it on the In-Situ Resource Utilization (ISRU) used for space travel but made from materials found on the planet. Adidas have made a great effort of turning marine pollution like plastic bottles into shoes but have only changed the material and incorporated that into their already existing design which can be more customized in terms of the foam, which gives the green consumers more comfort options and flexibility in choosing the design of their choice.
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