I. EXECUTIVE SUMMARY

Philippine is one of South-East Asia country that have interest mostly in sport. The

most popular sport in Philippine is Basketball. Philippine itself already become four times

champion in Asian Basketball league that proves that Philippine become the most

powerful Basketball team in Asia and capable compete with American Basketball League

known as NBA.

Due to expantion, after done some analysis related to the country, the exporter could

decide Philippine as their target market in exporting their products. In geography side,

Philippine has strategic location to expand the product for the exporter. Made up of about

7,100 islands, the Philippines is on the southeastern rim of Asia and is bordered by the

Philippine Sea on the east, the South China Sea on the west, the Luzon Strait on the north,

and the Celebes Sea on the south. For the climate itself Philippines has a tropical

maritime climate and is usually hot and humid that suitable for Basketball player to play

outside. In addition Philippine has habit and lifestyle to play Basketball outside the

gymnasium that called “Street Basketball”.

To export the product, market reaserch in Philippine should be done, therefore all of

data of Philippine such as geographical, demographic, economic, politic, consumer habit

and lifestlye, channels and distribution that are available in the country, media,

technologies, others are being reported. Besides, to know well the competitors of our

product, the competitive analysis also have been done. Here we found that there are two

major competitor of sport shoes in Philippine, they are Adidas and Nike.

This marketing analysis also completed with the final part of the marketing analysis

itself which in this part more explanation of marketing mix are being reported. Here, the

description of Location of the country itself, population, economic growth, consumer

spanding and Philippines lifestyle are being reported, so the analysis could be completed.

II. INTRODUCTION

II.1. Product Description

The developing country like Philippines where their sport area also developing

because of the government mission to grow their national sports, that is reason why in

country market share analysis we choose Philippines.

There are five major sports in the Philippines. These

are basketball, boxing, billiards, football, and volleyball. Despite being a tropical nation, ice

skating is a popular sport in the Philippines. Sports such as athletics, weightlifting, aerobics,

and martial arts are also popular recreations.

Among the others there are: baseball, swimming, wrestling, underwater

diving, kayaking, sailing, windsurfing, cockfighting, horse racing, motor racing, rugby and jai

alai are also appreciated. With the sport of cockfighting being wildly popular in the

Philippines, attracting large crowds who bet on the outcome of fights between the birds, and

the sport itself a popular form of fertility worship among almost all Southeast Asians. Such

sports activity as the sport of cockfighting, related to ritual forms of worship as practices and

rituals of ancient worship intended for the blessings of the supernatural, as "in Indus Valley

and other ancient civilizations, mother goddess had been invoked for fertility and

prosperity" which included that religious cockfight lay as a prime example of "cultural

synthesis of 'little' and 'great' cultures" due to religious syncretisms causing the loss for some

of religious significance and hence a sport, while remaining for some as a form of ‘fertility

worship’ and still for others as Baal or Baalim.

On July 27, 2009, President Gloria Macapagal Arroyo signed Republic Act No. 9850

into law, declaring Modern Arnis as the Philippine National Martial Art and Sport. Arnis, a

form of martial arts, is the national sport in the Philippines. Among the most popular sports

include basketball, boxing, football, billiards, chess, ten-pin bowling, volleyball, horse

racing, and cockfighting. Dodgeball and badminton are also popular. Filipinos have gained

international success in sports. These are boxing, football, billiards, ten-pin bowling,

and chess. Popular sport stars include Manny Pacquiao, Flash Elorde, and Francisco

Guilledo in boxing, Paulino Alcántara in football, Carlos Loyzaga, Robert Jaworski,

and Ramon Fernandez in basketball, Efren Reyes and Francisco Bustamante in

billiards, Rafael Nepomuceno in ten-pin bowling, Eugene Torre and Renato Naranja in chess,

and Mark Munoz in MMA.

The Palarong Pambansa, a national sports festival, has its origin in an annual sporting meet of

public schools that started in 1948. Private schools and universities eventually joined the

national event, which became known as the "Palarong Pambansa" in 1976. It serves as a

national Olympic Games for students, competing at school and national level contests.

The year 2002 event included football, golf, archery, badminton, baseball,

chess, gymnastics, tennis, softball, swimming, table tennis, taekwondo, track and field, and

volleyball. Looked up in to the briefly explanation about Philippines history we know the

market of the sport shoes in Philippines have increase every years followed of the their

national sport such as basketball and football where both of two kinds of sports was become

the famous sport in Philippines and that is reason we choose the Philippines sport shoes

industry in our final project.

III.CULTURAL ANALYSIS

III.1. Geographical Settings

III.1.1.Location and Size

Made up of about 7,100 islands, the Philippines is on the southeastern rim of Asia and

is bordered by the Philippine Sea on the east, the South China Sea on the west, the Luzon

Strait on the north, and the Celebes Sea on the south. Its land area, which is slightly larger

than that of Arizona, measures 300,000 square kilometers (115,830 square miles), and its

coastline is 36,289 kilometers (22,550 miles). The capital, Manila, is on the island of Luzon

in the highly urbanized National Capital Region, which is made up of 12 other urban areas

including the cities of Mandaluyong, Marikina, Pasig, Quezon, Kalookan, Valenzuela, Las

Piñas, Makati, Muntinlupa, Parañaque, and Pasay. The main financial district is in Makati

City.

III.1.2. Climate

The Philippines has a tropical maritime climate and is usually hot and humid. There

are three seasons: tag-init or tag-araw, the hot dry season or summer from March to

May; tag-ulan, the rainy season from June to November; and tag-lamig, the cool dry season

from December to February. The southwest monsoon (from May to October) is known as the

Habagat, and the dry winds of the northeast monsoon (from November to April), the Amihan.

Temperatures usually range from 21 °C (70 °F) to 32 °C (90 °F) although it can get cooler or

hotter depending on the season. The coolest month is January; the warmest is May.

The average yearly temperature is around 26.6 °C (79.9 °F). In considering

temperature, location in terms of latitude and longitude is not a significant factor. Whether in

the extreme north, south, east, or west of the country, temperatures at sea level tend to be in

the same range. Altitude usually has more of an impact. The average annual temperature

of Baguio at an elevation of 1,500 meters (4,900 ft) above sea level is 18.3 °C (64.9 °F),

making it a popular destination during hot summers.

III.1.3.Topography

The topography is extremely varied, with volcanic mountain masses forming the cores

of most of the larger islands. The range culminates in Mt. Pulog (elevation 2,928 m/9,606 ft)

in northern Luzon and in Mt. Apo, the highest point in the Philippines (elevation 2,954

m/9,692 ft), in Mindanao. A number of volcanoes are active, and the islands have been

subject to destructive earthquakes. Lowlands are generally narrow coastal strips except for

larger plains in Luzon (Cagayan Valley and Central Plains), Mindanao (Cotabato and Davao-

Agusan valleys), and others in Negros and Panay. Rivers are short and generally seasonal in

flow. Important ones are the Cagayan, Agno, Abra, Bicol, and Pampanga in Luzon and the

Cotabato and Agusan in Mindanao. Flooding is a frequent hazard. The shores of many of the

islands are embayed (Manila Bay is one of the finest harbors in East Asia); however, several

islands lack adequate harbors and require offshore lightering for sea transport. The only two

inland water bodies of significant size are Laguna de Bay in Luzon and Lake Sultan Alonto in

Mindanao.

III.2. Country’s Relevant History

The Philippines dominated basketball tournaments of the Far Eastern Championship

Games, finishing with a gold medal in all but one edition of the Games. Bowing only against

China in 1921 and settling for a silver medal finish. The Philippines also participated in the

first ever Olympic basketball tournament, finishing fifth with a 4-1 win-loss record. The

Philippine team won against Italy, Estonia, Mexico and Uruguay but failed to upset the

eventual champion Team USA. College and universities also started to embrace the sport of

basketball, incorporating the sport in their physical education curriculum. Similarly, the

collegiate leagues the National Collegiate Athletic Association (NCAA) and the University

Athletic Association of the Philippines were established in 1924 and 1938 respectively. In

1948, the Philippines became the first basketball team to score at least 100 points in Olympic

competitions, outclassing Iraq, 102-30.

During the 1960s, Philippine basketball became more concentrated in the collegiate

and Manila Industrial and Commercial Athletic Association (MICAA) wars that feature the

likes of Sonny Jaworski and Ramon Fernandez. In 1975, the Philippine Basketball

Association (PBA) was established. It was the first play-for-pay basketball league in Asia.

The early years of the PBA saw the rivalry of Jaworksi’s Toyota Super Corollas against the

Atoy Co-fueled Crispa Redmanizers.

III.2.1.Recent Event

In 2000, the Philippine Basketball Association (PBA) celebrated its 25th anniversary

and named the "PBA's 25th Anniversary All-Time Team", the top 25 were – Johnny

Abarrientos, William "Bogs" Adornado, Ato Agustin, Francis Arnaiz, Lim Eng

Beng, Ricardo Brown, Allan Caidic, Hector Calma, Philip Cezar, Atoy Co, Jerry

Codiñera, Kenneth Duremdes, Bernard Fabiosa, Danny Florencio, Alberto Guidaben, Freddie

Hubalde, Robert Jaworski, Jojo Lastimosa, Samboy Lim, Ronnie Magsanoc, Vergel

Meneses, Manny Paner, Benjie Paras, and Alvin Patrimonio. Later, the PBA All-Star

Selection beat the FIBA Asia All-Star Selection, which was led by Filipino and MBA

superstar Rommel Adducul.

III.3. Political System

The Philippines has a democratic government in the form of a constitutional republic

with a presidential system. It is governed as aunitary state with the exception of

the Autonomous Region in Muslim Mindanao which is largely free from the national

government. There have been attempts to change the government to a federal, unicameral,

or parliamentary government since the Ramos administration.

The President functions as both head of state and head of government and is

the commander-in-chief of the armed forces. The president is elected by popular vote for a

single six-year term, during which he or she appoints and presides over the cabinet.

Thebicameral Congress is composed of the Senate, serving as the upper house, with members

elected to a six-year term, and the House of Representatives, serving as the lower house, with

members elected to a three-year term. The senators are elected at large while the

representatives are elected from both legislative districts and through sectoral

representation. The judicial power is vested in the Supreme Court, composed of a Chief

Justice as its presiding officer and fourteen associate justices, all of whom are appointed by

the President from nominations submitted by the Judicial and Bar Council

III.4. Population and Demographic

III.4.1.Total Population Size

Metro Manila is the most populous of the 12 defined metropolitan areas in the

Philippines and the 11th most populous in the world. As of the 2007 census, it had a

population of 11,553,427, comprising 13% of the national population. Including suburbs in

the adjacent provinces (Bulacan, Cavite, Laguna, and Rizal) of Greater Manila, the

population is around 21 million.

In 2030, the population of the Philippines will reach nearly 128 million, an increase of

32.1% from 2012. Population growth will be driven by increases in all age groups with

particularly fast growth in the 60+ age groups. However, the Philippines will remain an

overwhelmingly young country in 2030 with 71.4% of the population aged 40 years or under.

The urban population will overtake the rural population for the first time in 2016 and by 2030

it will make up 56.3% of the population.

III.4.2.Growth Rate

The population of the Philippines has been steadily growing for many years. In 2014,

it is the 12th most populated country in the world, between Mexico and Ethiopia, and

continues to grow at a rate of 1.89% per year. using the 1.89% growth rate, gives us a 2013

population of 98,734,798 and 2014 population of 100,617,630 in The Philippines. Based on

the 2010 census results, the population increased nearly 16 million from the 2000 census

results. The growth rate has slowed slightly from the previous census, down to 1.89% from

2.34%. The next census in the Philippines is scheduled for 2015.

III.4.3.Birthrates

As well as population growth in Philiphine, the birthrates of Philipphines definitely increase

that can become one of our opportunity to pentrate “League” to Philipphine. Here are the data

of population and birthrates in Philipphines.

III.4.4.Ethnicities

Unsurprisingly for a country that is made up of many islands, the Philippines contains a

diverse range of ethnic groups. The latest data available comes from the 2000 census, which

reported the following breakdown:

Tagalog, 28.1%

Cebuano, 13.1%

Ilocano, 9%

Bisaya, 7.6%

Hiligaynon, 7.5%

Bikol, 6%

Waray, 3.4%

Other, 25.3%

III.5. Economic Statistic and Description

III.5.1.Growth National Product (GNP) and Growth Domestic Product

(GDP)

The national economy of the Philippines is the 39th largest in the world, with an

estimated 2013 gross domestic product (nominal) of $272.207 billion. Primary exports

include semiconductors and electronic products, transport equipment,

garments, copper products, petroleum products, coconut oil, and fruits. Major trading partners

include the United States, Japan, China, Singapore, South Korea, the Netherlands, Hong

Kong, Germany, Taiwan, and Thailand. Its unit ofcurrency is the Philippine peso (₱ or PHP).

The Philippines is classified as a middle power.

A newly industrialized country, the Philippine economy has been transitioning from

one based on agriculture to one based more on services and manufacturing. Of the country's

total labor force of around 40.813 Million, the agricultural sector employs close to 32% but

contributes to only about 14% of GDP. The industrial sector employs around 14% of the

workforce and accounts for 30% of GDP. Meanwhile the 47% of workers involved in the

services sector are responsible for 56% of GDP.

III.5.2.GDP per Capita

The Gross Domestic Product per capita in Philippines was last recorded at 1501.83

US dollars in 2012. The GDP per Capita in Philippines is equivalent to 12 percent of the

world's average. GDP per capita in Philippines averaged 1009.11 USD from 1960 until 2012,

reaching an all time high of 1501.83 USD in 2012 and a record low of 696.02 USD in 1960.

GDP per capita in Philippines is reported by the World Bank.

III.5.3.Inflation Rate

The inflation rate in Philippines was recorded at 4.50 percent in May of 2014.

Inflation Rate in Philippines averaged 8.90 Percent from 1958 until 2014, reaching an all time

high of 62.80 Percent in September of 1984 and a record low of -2.10 Percent in January of

1959. Inflation Rate in Philippines is reported by the National Statistics Office of Philippines.

III.5.4.Employed Persons

The number of employed persons in Philippines increased to 38665 Thousand in the

second quarter of 2014 from 36420 Thousand in the first quarter of 2014. Employed Persons

in Philippines averaged 28811 Thousand from 1986 until 2014, reaching an all time high of

38665 Thousand in the second quarter of 2014 and a record low of 18567 Thousand in the

second quarter of 1986. Employed Persons in Philippines is reported by the National

Statistics Office of Philippines.

III.5.5.Unemployment Rate

Unemployment Rate in Philippines decreased to 7.0 percent in the first quarter of

2014 from 7.50 percent in the fourth quarter of 2013. Unemployment Rate in Philippines

averaged 9.01 Percent from 1994 until 2013, reaching an all time high of 13.90 Percent in the

first quarter of 2000 and a record low of 6.30 Percent in the third quarter of 2007.

Unemployment Rate in Philippines is reported by the National Statistics Office of

Philippines.

III.6. International Trade Statistics

III.6.1.Major Export-Dollar Value and Trend

Exports in Philippines decreased to 4543641.35 USD Thousand in April of 2014 from

5279266.33 USD Thousand in March of 2014. Exports in Philippines averaged 1313922.21

USD Thousand from 1957 until 2014, reaching an all time high of 5340847 USD Thousand

in September of 2010 and a record low of 23000 USD Thousand in October of 1957. Exports

in Philippines is reported by the National Statistics Office of Philippines.

III.6.2.Major Import-Dollar Value and Trend

Imports in Philippines increased to 5424977.56 USD Thousand in March of 2014

from 4787993.39 USD Thousand in February of 2014. Imports in Philippines averaged

1550111.62 USD Thousand from 1957 until 2014, reaching an all time high of 5954820 USD

Thousand in January of 2014 and a record low of 37084.30 USD Thousand in February of

1963. Imports in Philippines is reported by the National Statistics Office of Philippines.

III.6.3.Balance of Payment

Current account balance (BoP; US dollar) in Philippines was last measured at 7078000000 in

2011, according to the World Bank. Current account balance is the sum of net exports of

goods, services, net income, and net current transfers. Data are in current U.S. dollars.This

page has the latest values, historical data, forecasts, charts, statistics, an economic calendar

and news for Current account balance (BoP - US dollar) in Philippines.

III.7. Currency Strenght and Stability and current rate of Exchange

The Philippine Peso increased to 43.85 in June from 43.84 in May of 2014. Philippine

Peso averaged 47.09 from 1998 until 2014, reaching an all time high of 56.34 in October of

2004 and a record low of 37.84 in May of 1999.

III.8. Consumer Spending

Consumer Spending in Philippines increased to 1212937 PHP Million in the first

quarter of 2014 from 1200467 PHP Million in the fourth quarter of 2013. Consumer

Spending in Philippines averaged 858503.91 PHP Million from 1998 until 2014, reaching an

all time high of 1212937 PHP Million in the first quarter of 2014 and a record low of 583959

PHP Million in the first quarter of 1998. Consumer Spending in Philippines is reported by the

Philippine National Statistical Coordination Board.

III.9. Language

There are between 120 and 170 languages spoken in the country. Most of them have

several varieties (dialects), totaling over 300 across the archipelago. Since the 1930s the

government has promoted the use of the national language, Filipino, based on

Tagalog. Visayan languages (also called Bisaya or Binisaya) are widely spoken throughout

the Visayas and in some parts of Mindanao. Ilokano is the lingua franca of Northern Luzon.

English is considered an official language for purposes of communication and

instruction. Consequently, it is widely spoken and understood. The other non-indigenous

language with a certain degree of acknowledgement is Spanish.

III.10. Philippines Lifestyle

 One of the possible locations to meet the people of the Philippines and to discover

parts of the daily life of many Filipinos,  is the market. The local markets in a big city or

regional town are most of the time crowded and colourful. The sellers, young or older, will

welcome foreigners in their stall. They are always prepared for a friendly talk, even if you

don't buy. 

The Philippines is one of the developing countries where the sellers don't molest a

foreigner in an attempt to sell. Most of the Filipinos speak English rather good, so,

communication is not a problem. 

III.11. Availability of Distribution Channels

III.11.1. Retailer and Wholesalers

Shopping malls play an important role in the Philippine economy. Major Philippine mall

chains are located around the country, such as SM Supermalls which has over 43 shopping

malls around the country. Another major mall chain is Ayala Malls, which has 14 shopping

malls serving nationwide. The Philippines has also other major mall chains such as

Robinsons Malls, Walter Mart malls, Gaisano malls, Ever Gotesco Malls, Isetann and many

more.

IV. COMPETITIVE ANALYSIS

4.1. COMPETITIVE BRANDS AVAILABLE IN THE MARKET

4.1.1. Nike

Nike is the one of the biggest competitiors in Philippines sport shoes market. It holds

the biggest market in Philippine even in the world. High number of innovation make NIKE

become superior brand in the world.

Nike Philippines Inc maintained its leadership since 2004, steadily improving its

performance over the years to post a 3% value share in 2012. The company’s products enjoy

extensive distribution in department stores and its own brand stores making them widely

available to consumers. Its footwear, which caters to men, women and children, is not only

stylish, but has beneficial features as well. Endorsements by local and foreign professional

athletes have contributed to brand appeal. All these factors contribute to wide consumer

preference for the brand which stands for high quality and excellent performance, sealing its

leadership in footwear.

Nike Philippines Inc had the highest value sales in 2012 at 32%. Its success is due to

the company’s continuous innovation in material and product construction, while at the same

time ensuring that its products remain stylish. The popularity of the brand among professional

athletes also serves to influence consumers’ preference towards the brand. Its sponsorship of

the college basketball teams of Ateneo, La Salle and FEU are effective promotional

campaigns in making its brand visible; especially among the youth who are most active in

different sports. Nike’s footwear and clothing are likewise available not only in its own stores

but also through other specialty shops, department stores and sports goods stores.

Nike SWOT analysis :

Strenght :

Nike is a very competitive organization. Phil Knight (Founder and CEO) is often

quoted as saying that ‘Business is war without bullets.’ Nike has a healthy dislike of is

competitors. At the Atlanta Olympics, Reebok went to the expense of sponsoring the

games. Nike did not. However Nike sponsored the top athletes and gained valuable

coverage.

Weaknesses :

The organization does have a diversified range of sports products. However, the

income of the business is still heavily dependent upon its share of the footwear market.

This may leave it vulnerable if for any reason its market share erodes.

The retail sector is very price sensitive. Nike does have its own retailer in Nike Town.

However, most of its income is derived from selling into retailers. Retailers tend to

offer a very similar experience to the consumer. Can you tell one sports retailer from

another? So margins tend to get squeezed as retailers try to pass some of the low price

competition pressure onto Nike.

Opportunities :

Product development offers Nike many opportunities. The brand is fiercely defended

by its owners whom truly believe that Nike is not a fashion brand. However, like it or

not, consumers that wear Nike product do not always buy it to participate in sport.

Some would argue that in youth culture especially, Nike is a fashion brand. This

creates its own opportunities, since product could become unfashionable before it

wears out i.e. consumers need to replace shoes.

There is also the opportunity to develop products such as sport wear, sunglasses and

jewellery. Such high value items do tend to have associated with them, high profits.

The business could also be developed internationally, building upon its strong global

brand recognition. There are many markets that have the disposable income to spend

on high value sports goods. For example, emerging markets such as China and India

have a new richer generation of consumers. There are also global marketing events that

can be utilised to support the brand such as the World Cup (soccer) and The Olympics.

Threats :

Nike is exposed to the international nature of trade. It buys and sells in different

currencies and so costs and margins are not stable over long periods of time. Such an

exposure could mean that Nike may be manufacturing and/or selling at a loss. This is

an issue that faces all global brands.

The market for sports shoes and garments is very competitive. The model developed by

Phil Knight in his Stamford Business School days (high value branded product

manufactured at a low cost) is now commonly used and to an extent is no longer a

basis for sustainable competitive advantage. Competitors are developing alternative

brands to take away Nike’s market share.

As discussed above in weaknesses, the retail sector is becoming price competitive. This

ultimately means that consumers are shopping around for a better deal. So if one store

charges a price for a pair of sports shoes, the consumer could go to the store along the

street to compare prices for the exactly the same item, and buy the cheaper of the two.

Such consumer price sensitivity is a potential external threat to Nike.

4.1.2. Adidas

Adidas AG  is a German multinational corporation that designs and manufactures

sports shoes, clothing and accessories based in Herzogenaurach, Bavaria, Germany. It is

the holding company for the Adidas Group, which consists of the Reebok sportswear

company, TaylorMade-Adidas golf company (includingAshworth), Rockport, and 9.1%

of FC Bayern Munich. Besides sports footwear, Adidas also produces other products such as

bags, shirts, watches, eyewear, and other sports- and clothing-related goods. Adidas is the

largest sportswearmanufacturer in Germany and Europe and the second biggest sportswear

manufacturer in the world, after Nike.

Adidas was founded in 1948 by Adolf Dassler, following the split of Gebrüder

Dassler Schuhfabrik between him and his older brother Rudolf. Rudolf later

established Puma, which was the early rival of Adidas. Registered in 1949, Adidas and Puma

are both currently based in Herzogenaurach, Germany.

The company's clothing and shoe designs typically feature three parallel bars, and the

same motif is incorporated into Adidas's current official logo. The company revenue for 2012

was listed at €14.88 billion.

SWOT analysis :

Strengths

The Adidas Innovation Team is responsible for the R+D within the company, which

is split into 3 focus groups Apparel, Footwear and Hardware. As well as this they

have links to several established research partners such as University of

Loughborough, The University of Michigan and Waseda University (Tokyo)

Adidas has a youthful appeal which is evident through many of its marketing

campaigns. Where they jump from scenes and settings such as football to nightclubs

with various celebrity endorsements giving off the message that Adidas is suitable

everywhere.

The Adidas Group owns several sporting brands, including Reebok and Taylor Made.

Reebok is seen as a cheaper and less of a premium brand. Because of this it allows

Adidas to release any significant breakthroughs in R+D through the Reebok brand

slightly behind the release through Adidas. They are able to do this cheaper than a lot

of the competition for people who take sport less seriously. This also halves the R+D

costs between the two brands.

As well as sponsoring individual sports personalities like David Beckham and Reggie

Bush, Adidas also sponsor major organisations such as FIFA and UEFA competitions,

the NBA and the Olympics. By making these actions Adidas increase their product

awareness globally and raises its customer base.

Adidas is the world’s second largest producer of Sporting apparel. At the moment it

lacks only behind Nike. This is mainly due to Nike’s overwhelming market share of

the US; But Adidas’ takeover of Reebok has allowed the group to increase its share of

the US market. However Adidas leads in Europe, being the largest producer in

France, Germany and Japan, the leading markets outside of the US.

Adidas is one of the most recognisable brands globally. Combine this with being one

of the global market leaders gives them a significant edge

Adidas has a Global Presence with over 2400 stores worldwide in a variety of regions.

These alone account for nearly €2.8bil.

Weaknesses

Adidas outsources 97% of its global production to 3rd party manufacturers based

largely in Asia. With 35% of this going to china. This has been done to reduce costs

due to the laidback labour laws. However it causes several problems, concerns have

been voiced before about the quality of the products being produced in Asia. As well

as this the lack of labour laws, especially with children working in the factories opens

Adidas up to all sorts of criticism.

Opportunities

Adidas has recently undertaken a massive restructuring of its global operations,

moving from a vertically integrated brand structure, to a function related structure.

This includes a global sales and brand functions, which is responsible for both brands.

It has also closed a lot of its regional headquarters, allowing for a more centralised

structure.

Sponsorship of global sports events which improves the company’s global brand.

These include an 11 year sponsorship on the NBA, the 2012 GB Olympic Games and

the continued sponsorship of the FIFA WC.

Reebok has in recent years undergone a slight revival in its fortune and has started

posting growth. This is highly encouraging for Adidas, for whom Reebok had been a

dead weight since their 2005 acquisition. Reebok has several innovative product

advances for which they are ahead of the curve and Adidas needs to capitalize on

these to stay successful.

Threats

Competition is highly intense in the sports apparel and footwear market. Adidas faces

competition from its direct competitors such as Nike and Puma. But as the market has

become increasingly fashion orientated Adidas faces competition from designers such

as Hugo Boss and Lacoste.

4.2. FEATURES

4.3. Pricing

N

O

SHOES BRANDS PRICE IN

USD

PRICE IN

PESO

1 Nike 239 5,497

2 Adidas 219 5,037

Nike Box Packaging Adidas Box Packaging

Nike Adidas

1. Basketball

2. Running

3. Football

4. Casual

1. Basketball

2. Casual

3. Running

4. Football

5. Adidas Originals

6. Adidas NEO

4.5. Promotional Strategy4.5.1. Nike

Nike's marketing strategy is in many ways the reason for the companies success. Nike

is now positioned as a premium-brand. Nike draws customers with a marketing strategy

centering around a brand image which is made up of a unique logo and the advertising

slogan: "Just do it". In many ways NIKE promotes its business through T.V. ads, magazines,

and with many player sponsorships. 1982 was the year Nike aired its first ever T.V. ad during

the New York marathon. Since then, Nike has won two Emmys in best commercial; these

two commercials were "The Morning After" and "Move".

A big part of Nike is their player sponsorships. Without any of the sponsored players,

Nike would not have been have become the strong competitor they are today in the sporting

goods industry. One of main reasons behind Nike's success all started with one guy as the

face of the company, and he still is to date. In 1984, Nike sponsored Micheal Jordan to be a

Nike player and be part of many other athletes before him. Nike's image grew rapidly for

many years after the sponsorship of Michael Jordan and Nike remains one of the only

companies to have their foot print in every sports league around the world.

Nikes main target markets are athletes and sports fans. A reason behind Nike targeting

sports fans is because many of the products they sell are stylish products; from shoes, to

clothing, and team jerseys. One does not need to be an athlete to wear their products. Nike

does focus on athletic people by supplying them with equipment and clothing to play the

sports they love to play.

4.5.2. Adidas

Conditions and the same strength as Nike did to capture the consumer interest. Adidas

did not just spend more money. They made an impact with brilliant executions. They made

TV and other advertising campaigns. The company communicates their heritage of

innovation, technology and big success stories Adidas tried to spread meanings like “We

know then- we know now” and “There is nothing between you and success, so exceed your

own expectations and limitations” and “Earn it”. The success was obvious and after hard

work and striving toward a top position in the industry Adidas was back in business

The TV commercial is generally considered the most effective mass-market

advertising format, as is reflected by the high prices TV networks charge for commercial

airtime during popular TV events. The majorities of television commercials feature a song or

jingle that listeners soon relate to the product. Adidas has a large amount of TV commercial

advertisements in the world wide TV network like BBC, CNN etc.

This type of advertising focuses upon using celebrity power, Advertisers often advertise

their products, for example, when celebrities share their favorite products or wear clothes by

specific brands or designers. Celebrities are often involved in advertising campaigns such as

television or print adverts to advertise specific or general products.Adidas use David

Bekham as their brand ambassador and many more celebrities in every region to promote

their product.

4.6. Local Brand Competitive Analysis

Philippine footwear manufacturers are usually scattered all over the archipelago,

however, major players in this sector are found in Metro Manila, Central Luzon and in the

CALABARZON region. They are classified as either micro, small, medium and large

enterprises. They manufacture leather and non-leather footwear products including sports

footgear, special use shoes, sandals, slippers and footwear accessories.

The Philippines used to have a sizeable number of footwear manufacturers that are

usually home-operated enterprises. However, they were overshadowed by their cheaper

foreign counterparts. This affected the said sector and most of them are traders at local

department stores and boutique increased their purchases of low-cost footwear from countries

such as China where their margins are higher.

Marketing Structure

Local Demand

Most of the local footwear manufacturers serves only the demand from local market for the

following reasons:

1. higher profit margin

2. lack of machineries/equipment in order to meet the demand of global markets

3. smaller manpower to meet the demand of global markets

4. failure to be matched with foreign footwear companies/shops for possible licensing

agreements

Domestic players rely on direct selling boutiques, and department stores to sell their products.

Few enterprises have their own stores. The industry’s highest production is during the months

of October, November and May. This can be attributed to Christmas and school opening

seasons. The lowest is during the month of July, caused by clearance and inventory sales.

World Demand

Only several Philippine footwear brands have survived the influx of low-priced imported

footwear products and remained active in exporting their goods to foreign markets such as

GB Shoes and Rusty Lopez. Some exporters were able to maintain licensing agreements

with manufacturers of foreign branded shoes like Florshiem. At present, the Philippine export

performance in footwear is being driven by Sports and Special use footwear. Orthopedic

shoes and leather footgear are among the footwear products under these categories.

In order to promote Philippine footwear in the world market, manufacturers/firms participate

in trade fairs, business missions, and Internet or online brochures/catalogues.

1.2. Market Condition Faced

1.2.1. Transport Available in Philippines

Transportation in the Philippines is relatively underdeveloped, partly due to the

country's mountainous areas and scattered islands, and partly as a result of the government's

persistent underinvestment in the nation's infrastructure. In recent years, however, the

Philippine government has been pushing to improve the transportation system in the country

through various projects.

Jeepneys are the most popular mode of public transportation in the Philippines, they

have also become a ubiquitous symbol of the Philippine culture. Another popular mode of

public transportation in the country is the motorized tricycle; they are especially common in

rural areas. Trains are also becoming a popular mode of public transportation in the country

especially in the bustling metropolis of Manila. The Philippines has three main railway

networks: the LRT and MRT which only serves Metro Manila and the Philippine National

Railways which also serves the metropolis and some parts of Luzon. Taxis and buses are also

important modes of public transport in urban areas.

The Philippines has 12 international airports, and has more than 20 major and minor

domestic airports serving the country. The Ninoy Aquino International Airport is the main

international gateway to the Philippines.

1.2.2. Communication Available in Philippines

The Philippines has a sophisticated cellular phone industry and a high concentration

of users. Text messaging is a popular form of communication, and in 2007, the nation sent an

average of one billion SMS messages per day. Over five million mobile phone users also use

their phones as virtual wallets, making it a leader among developing nations in providing

financial transactions over cellular networks. The Philippine Long Distance Telephone

Company commonly known as PLDT is the leading telecommunications provider. It is also

the largest company in the country. There are approximately 383 AM and 659 FM radio

stations and 297 television and 873 cable television stations. Estimates

for internet penetration in the Philippines vary widely ranging from a low of 2.5 million to a

high of 24 million people. Social networking and watching videos are among the most

frequent internet activities.

1.3. Media that can be used to reach target market

1.3.1. Radio

1.3.2. TV Channel

1.3.3. Newspaper

Abante 

Abante Tonite

Bugso 

Bagong Tiktik

Balita

Bandera

Bomba Balita

Bulgar

Hataw

Mindanao Star

Pilipino Star Ngayon

Pinas

PM (Pang-Masa)

Saksi sa Balita

Sikat

Sagad

Taliba

Tanod

The Daily Sun

Tumbok

Ratsada

Remat

RECOMMENDATION

Philippine is one of the most powerful economic in Southest Asia with high Gross

Domestic Product, Income per Capita, stability in economic conditions and another economic

factor that can effect to the market. Another thing that have to be considered is population

which is Philippines population definitely increse in recent years. There are several things

that have to be considered by the sport shoes exporter if they want to enter Philippines

market.

First, they have to know that Philippines people are really interested in playing the

basketball, therefore, the exporter can export their products especially for basketball shoes to

Philippine. In addition, most of Philippines people also interested in playing footbal.

Therefore, this kind of information can become consideration for the exporter.

Second, Philippines has very good economic situation either in Government income

or personal income. They have Personal income around 1501.83 US dollars in 2012. Not only

that, the consumer spending in Philipines definitely increased 1212937 PHP Million in the

first quarter of 2014 from 1200467 PHP Million in the fourth quarter of 2013. This data

showed us that Philippine has good economic condition.

Third, the inflation rate in philippine is really stable. The inflation rate in Philippines

was recorded at 4.50 percent in May of 2014. In addition, the exchange rate of Philipines

Currency which is Peso has good stability which is The Philippine Peso increased to 43.85 in

June from 43.84 in May of 2014

The last but not least is about the competitive analysis. There are several sport shoes

product in Philipine either local product or International product such as Nike and Adidas as

the biggest Competitor. This quite harder for the exporter to compete with these two products

because they have became the most popular brand in the world. However, it’s not impossible

if the exporter can compete with these two prodcuts if they have good marketing strategy and

positioning.

Therefore, with a lot of research that we did, there are a lot of possibality for the

exporter to enter Philipines market especially for sportshoes market.

REFERENCES :

- http://priscillamulianto.wordpress.com/2010/09/07/league-sepatu-lokal-berkualitas/ - https://suite.io/john-louie-ramos/54g529s

- http://en.wikipedia.org/wiki/Basketball_in_the_Philippines - http://en.wikipedia.org/wiki/Philippines - http://www.euromonitor.com/philippines-in-2030-the-future-demographic/report

- http://en.wikipedia.org/wiki/Demographics_of_the_Philippines

- http://www.tradingeconomics.com/philippines

- http://www.nationsencyclopedia.com/economies/Asia-and-the-Pacific/

Philippines.html#ixzz35d0JsTXK

- http://www.Nike-wiki.com

- nus adidas .blogspot.com/p/ promotion - strategy .html