The price strategy of International sports brands
More and more foreign sport brands have aimed their target to the second and third tier markets. In fact, Adidas after suffering from the inventory crisis of Beijing Olympic, has taken a more concrete action to the second and third tier markets. In the past, mostly dealers will be granted the right to operate in these cities. But now, Christophe Bezu who the leader of Adidas in China makes a decision Adidas will directly control those markets. Meanwhile, management also needs to be become "a bit more of China", in his understanding, the Adidas localization not only need more rapid and more depth, but also more dimensions, such as recruit more local employees, and closer interaction with the Government, to send more managers to actively communicate with local dealers.
When the local brands LiNing, Anta are having a consolidation in the second and third tier markets, preparing for entering the positions that originally belong to the foreign markets. This is one of motivations which Christophe Bezu advocates to build the counter in the second and third tier markets of China, first-line urban edge is diluted, if not expansion, Adidas will lose access to the timing of second and third tier markets.
Applied to the price leverage by international brands, is likely to give active local sports brands with pressure by lowering the threshold price and occupy a part of their "sphere of influence." No matter Anta with the Chinese Olympic Committee, Pick hands NBA, and LiNing sponsors the foreign sports teams and sports stars, currently their brand image is not compared to the international brands. Prices to international brands, is bound for increasing a lot of difficulties to the Chinese sports brands with premium products through a variety of means, because of the psychological aspects of consumers will be "stubborn" to be taken for granted that the domestic brands and international brands to maintain a certain price low.
Thus, the international brand is likely to bring such a situation with lowing price, a part of customers consume domestic brands had turned to international brands, and the original international brands consumers because there is no better choice and have to choose international brand.
For the brands, price reduction is a kind of risk, no speaking of the profit has become small, if there is something without dealing correctly, is likely to damage the image of international brands. Prior to this, conflicts between Adidas and dealers stems from the price reduction: Olympic inventory backlog, dealer in order to clear inventory, at greatly reduced, but afraid of damaging the Adidas brand, Adidas only forced to interfere. However, as far as the new president of Adidas China, Christophe Bezu concerned, Adidas must first solve rooted problems in the second and third line city. In this sort, he decided to risk to reduce prices, sacrifice the interests of the company, undertook the pressure that it was difficult to take short-term earnings. "This sacrifice is temporary." Christophe Bezu said, "We do not mind changing a little image in China, about Adidas brand."
International brands take action to low price, must be bound of bringing the challenge.
About author: Alma Cheney, is from U.S.A, a lively girl. She enjoys everything fashionable Mbt Shoes and vanguard, she likes shopping online, nearly all the thing she wears are purchased online store, for example the shoes Mbt Chapa GTX Shoes, clothes and other accessories Mbt Kimondo Shoes.