Research the impact to China domestic brands when Nike sales cheap Nike shoes in China.
We believe that Nike is the current pricing strategy in China, so that business can not enter the second and third tier cities, domestic brands are actively expanding in these cities. In this report, we consider the second and third tier cities for Nike will launch lower-priced nike air max 2009 footwear, as well as the initiatives on the apparel industry in China the potential impact of sport.
UBS proprietary model to assess the ability to digest the cost of decline.No money, have to have strokes. For the vast majority of enterprises in Liaoning, if not become a Games sponsor, also can use the “ambush marketing” to advertising purposes. The so-called ambush marketing, is sponsored by non-sponsors to carry out the object associated with the marketing activities to consumers “mistakenly believe” their products are closely associated with sporting events, this has obvious commercial activity, “parasitic.” South Africa World Cup, ambush marketing is widely used, a dazzling variety of Chinese and foreign enterprises. Liaoning enterprises may wish to learn the recipe for the National Games to warm up, look for feel.
The first one, to dominate. Coca-Cola sponsors the World Cup, Pepsi spread through large-scale investment to the distracting effect. South Africa World Cup, Pepsi invited Kaka, Lionel Messi starred in commercials and other stars side by side, so that the audience memories. National Games, Liaoning enterprises through advertising, events, etc., leveraging force, with the sponsor ranks to try compete with similar enterprises.
Manufacturers in the industry to discuss and, we created a unique value chain model to view the decline in the value chain the ability to absorb the cost. We conclude that Nike footwear products have the ability to set at very competitive price of 300 yuan / double. We also give the two companies successfully penetrate both examples of high-end and low-end market.
Short-term effects: higher average selling nike air max 90 price of domestic brands or will be most affected.
We think: if Nike decided to lower the price of products sold in China, the average price of high domestic brands such as Li Ning, Kappa, and other short-term are the most affected, because the second and third tier cities, some consumers may turn to select resistant grams.
Long-term effects: fear of being against domestic small and medium sized brands.Just before the conference call, Nike had just announced in May a “five-year plan” is expected in Greater China revenue growth of 10% or more. Analysts, Anta Magang dealers see this plan the first time, feel a little surprised. Because from February 2009 to February 2010, Nike’s revenue in Greater China and 12.77 billion U.S. dollars, also fell by 4%. “Now the proposed increase of 10%, this is a radical plan.” Magang said.
He was to believe that Nike will certainly be some new initiatives launched. He wrote in his blog, for example, Nike will market and the third line for the second-tier market low-priced products accordingly, from the hands of domestic brands to capture market share, “This is Li Ning and Anta, and all sporting goods manufacturers are a terrible thing. “
We think that if Nike can successfully penetrate the second and third tier cities, part of the brand image of domestic brands in general may be out of the market. We believe that 3.5 billion annual marketing budget of -5 million small and medium brands in the country and less likely to Nike, Li Ning and Anta (these marketing costs each year over 10 billion) competition. Despite the short term may suffer nike air max 24-7 a heavy blow, but we have a marketing budget that substantial domestic brands should be able to resist, “reached the” low-end market, Nike, Anta is still our first choice in the industry.
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