Why Does Lining, A Domestic Old Brand, Always Lose The Enemy Of Nike And Adi?

Situation

Gymnast

He became a Chinese hero in 1984, when he won 6 medals at the Losangeles Olympic Games.

The Olympic Games were the first summer Olympic Games in New China after a lapse of 32 years.

In 1990, Lining founded his own sportswear company, Li Ning Co (Li-Ning).

Li Ning Co is a blockbuster. In 1999, the company's revenue in China amounted to 700 million yuan.

(Nike) and

(Adidas) more than two times the income of the two companies in China is 300 million yuan and 100 million yuan respectively.

Challenge

The consumption power of the middle class consumers in China is growing, and they favor foreign brands, plus the popularity of basketball and soccer in China (Nike's main basketball related products, while Adidas's main soccer related products), which makes Nike and Adidas sell more in China than Li Ning Co.

Strategy

Initially, the target market overlap between Li Ning Co and foreign competitors was very low.

Li Ning Co sells mass market casual wear. Nike and Adidas sell professional standard sportswear. Li Ning Co is the market leader of China's two or three tier cities, Nike and Adidas are the market leaders of Beijing and Shanghai.

But in 2001, when China won the right to host the 2008 Olympic Games, the Chinese interest in sports reached a new height.

Li Ning Co is trying to emulate the marketing strategy of foreign competitors.

Brand ambassadors: overseas companies employ star athletes as brand ambassadors, such as Nike signing with American basketball player Michael Jordan (Michael Jordan), Adidas signing up with Kobe Bryant (Kobe Bryant).

Nike has also signed with three Chinese sports stars who have been successful in the world. They are hurdler Liu Xiang, tennis champion Li Na and NBA star Yao Ming.

Since Lining was the most important brand ambassador of Li Ning Co, consumers began to associate Lining brand with gymnastic supplies.

Sponsorship: Nike mainly sponsors basketball activities, and Adidas focuses on football.

The Li Ning Co sponsors are traditional Chinese sports strengths, such as diving and gymnastics, but these movements do not appeal to young people as much as football and basketball.

After its initial public offering (IPO) in 2004, Li Ning Co bought the NBA logo and its athletes' rights in marketing and advertising in China.

But it only sponsors low profile teams and activities.

Lining ignited the torch which marked the opening of the 2008 Beijing Olympic Games, but Adidas won the sponsorship of the Olympic Games, which allowed the company to provide clothing for the Chinese team.

Logo and slogan: Li Ning Co's "L" brand logo is strikingly similar to Nike's "Swoosh" logo. At the same time, its "all possible" (Anything is Possible) slogan is not much different from Nike's "want to do" (Just Do It).

In 2010, the Li Ning Co launched a new effort to attract the post-90s generation.

But the new slogan, "Make the Change", does not inspire the enthusiasm of the target audience, but also alienates the old customers who are already in their prime.

Price fixing: Lining raised the price in 2010, but the high-end customers found that the quality of Nike and Adidas was still better, while the middle and low end customers chose other cheaper domestic brands.

Result

At the end of 2005, Li Ning Co had 3373 stores, and three years later developed 6245 stores, including new stores opened in the Olympic Games city.

Although Li Ning Co's revenue surged 54% in 2008, which surpassed Adidas, the latter went ahead of Li Ning Co in 2010.

Inflation and slower economic growth are beginning to affect consumer confidence.

In 2011, the overall growth of sportswear sales dropped from 20% in 2010 to 13%.

The sales revenue of Nike, Adidas and Li Ning Co in 2011 were 2 billion, 1 billion 700 million and 1 billion 400 million US dollars respectively.

In the first half of 2012, sales of Nike and Adidas increased, while sales of Li Ning Co declined.

lesson

Li Ning Co failed to adapt to the development of the market, and its location puzzled consumers.

The company's logo and advertising language are too similar to competitors, which makes consumers think it is an imitator.

Brand Company must understand its audience and innovate to cater to the changing tastes of consumers.

If a brand wants to raise its price, it must improve its quality accordingly.