Why Nike’s brand is 25 times more valuable than Reebok
Nike is way ahead of its competitors in the sportswear industry. It is interesting to compare Nike with rival Reebok and see how different marketing strategies have lead to differences in brand value creation over the years.
Looking at Nike’s brand architecture, we can see that Nike products are aimed at the individualistic, aggressive, go-getter athlete who just wants to win all the time and break all barriers in terms of achievement. Nike manufactures the best quality shoes for a variety of sports, and also tries to integrate its products with best-in-class technology.
Tracking performance regularly with technology is important for top athletes who want to improve their individual performances. Nike provides emotional benefits like a feeling of enhanced performance, inspiration and elevation.
Reebok’s brand strategy has been more wavery. Currently, Reebok is the official footwear and apparel sponsor for UFC, CrossFit, Spartan Race, and Les Mills. It has personified the essense of an intense fitness lifestyle.
They are trying to stand out by catering to social fitness subcultures like spartans. Reebok products have tough looks to inspire that extreme lifestyle. They inspire emotions of originality and being social.
Nike is the most valuable sports brand with a valuation of $23B in 2015 interbrand survey. In 2014, Reebok has a brand value of $0.88B. The year-on-year increase of Nike’s brand value by around 16% shows the underlying strength of Nike’s Brand Architecture.
The urge to win and break all limits in sports in a fundamental tendency of all achievers and this is the aspect of human psychology Nike appeals to. The entire brand architecture has been built around inspiring incredible achievement.
Nike’s hugely successful “Just do it” slogan inspires athletes to transcend all barriers. The tie up with the world’s most premium brand, Apple, further enhances Nike’s brand value and perfectly resonates with Nike’s core values.
Reebok, on the hand seems to cater to a human psychology that is more transitory in nature. This has caused Reebok to remain inconsistent with its branding strategy over the years and and has caused great erosion of brand value and market share.
We can conclude that Reebok’s brand essence of “Extreme fitness as a lifestyle” is not persuasive compared to Nike’s essence of “Breaking all barriers”.
Hence, we can see that even though Reebok used to lead Nike in sales in the 80’s, Nike has rapidly increased its brand value with the support of its incredible brand architecture.