A monopolistic industry is one in which multiple firms provide similar alternatives for their products or services. Although the barriers to entry are low, companies risk going out of business since monopolistic competition is strongly related to the brand differentiation business plan. Also, because barriers to entry are low, new enterprises can readily enter or exit this competitive market. Companies in the monopolistic competition have price control but a small market share. A monopolized competitive company perceives a demand for its goods between monopoly and competition.

The sports goods business has a segmented market with considerable competition in the market. The growth of the demand for sports products is one of the determinant variables. An example of a market structure like this may be in the sportswear market, Adidas and Nike. Companies use product differentiation to set their brands apart from their competitors. Advertising, distribution distinction, and product difference are all examples of ways to do this. Nike, for example, promotes the 'Just do it' campaign, while Adidas creates the 'Impossible is nothing' ad. Recognizability gained via marketing and advertising allows consumers to distinguish one brand from another and may persuade them to choose one over another. Adidas has sponsored some of the world's most famous footballers by endorsing famous athletes such as Toni Kroos, Paulo Dybala, and Paul Pogba.

·       Find more evidence on how sportswear stores in Singapore stand out from one another.

 

·       Find out more about the different types of sportswear stores in Singapore.

The main key characteristic in the footwear industry is innovation, ensuring new and creative ideas that best suit individuals with fashionable clothes and comfortable shoes. Sports apparel is also worn in strenuous physical activities such as workout sessions or while playing sports, providing wearers comfort and agility without forgoing any limitations. 

The second vital element in the sportswear industry is creativity, keeping the design up to date. Having enticed existing and attracting new customers to their store, consumers do not get tired of seeing the same products again. Furthermore, innovation enables businesses to develop fresh ideas keeping their users focused and engaged, which is critical to their success.

The sports sector is a large market with several competitors such as Adidas, Nike, Under Armour. The more sellers there are, the less power the seller can set/raise the price. As a result, Adidas must decrease the product price to make it more affordable to their consumers. Ensuring their product will meet the percentage of income where both the wealthy and the poverty can enjoy and acquire their products. Help enhance customer loyalty, as customers may perceive the product as inexpensive and are more likely to return in the future.

Marketing plays a vital part in generating more money, and different organizations employ various marketing tactics. Marketing tactics will influence the organization's sales and income greatly. Consumers will respond effectively with diverse marketing techniques. As a result, the greater the degree of information accessible between the customer and the organization, the more difficult it is to establish or increase product pricing.

https://profitworks.ca/blog/marketing-strategy/545-nike-strategy-how-nike-became-successful-and-the-leader-in-the-sports-product-market.html#:~:text=The%20Nike%20marketing%20strategy%2C%20in,through%203rd%20party%20retails%20stores.

https://www.marketing91.com/marketing-strategy-puma/#:~:text=PUMA%20distributes%20its%20offerings%20through,for%20its%20major%20wholesale%20accounts.

·       A general review of the footwear industry

 

·       What impact does characteristic play in pricing decisions?

The sportswear industry has risen over time, increasing health consciousness and physical activities such as jogging, yoga and swimming. According to statistics, Adidas profits grew in the first half of 2021 compared to the first half of 2020. Activewear is becoming more popular among consumers, resulting in an increase in demand. As a result, the size of the sportswear market will continuously rise between 2020 and 2026, with 64 % choosing to wear sportswear as their daily clothes. Thus, the sportswear industry's market would be boosted even further. In addition, Singapore's Health Promotion Board designed programs and events to raise awareness among Singaporeans, namely the National Steps Challenge, whose goal is to stay fit and healthy. Community marathons and cycling have grown in popularity. Thus, these activities will enhance the need for consumers purchasing sportswear to have comfortable footwear while participating in activities, increasing the demand for the sportswear sector.  

An increase in the demand for sportswear leads to changes in customer tastes and preferences. Adidas produces comfortable yet fashionable sportswear targeting the active athlete's market. Through sponsorship agreements with celebrities, customers are more willing to purchase products associated with them. Adidas uses a closed-loop business model, attracting eco-friendly customers, as shoppers will want more than just quality as some look for products that align with their values. Adidas shoes have become popular recently not only for sports purposes but also for casual and daily use.

 Support from key sources:

 To find out more about report writing:

·       Size of the market worldwide.

 

·       How may Adidas' endorsement of the Singapore Health Promotion Board help their business?

 

·       To determine the factors that influence consumers' decisions to purchase sports shoes.

4) Supply determinants that apply to the product/service/industry 

According to a report, businesses utilize Twitter to market their business, such as Nike, Adidas, and Under Armour, which has experienced success in leveraging technology to promote their businesses while lowering their reliance on labour. By using technology to market their business by advertising discounts on specific products online. In terms of Adidas goods, they promote themselves using a combination of offline and online methods. Adidas has a large following on their social media platforms posting new products, providing regular updates. Through offline Channels, Adidas reaches out to customers through television commercials, out-of-home advertising, and event sponsorships to market its products. The company has partnered with well-known athletes. Thus, Technological advancements that ensure efficient manufacturing will cause a supply curve to move to the right. Consumers will want more of the goods at a lower price as the cost of production falls. Consumers may buy more products at reduced costs.

Price fluctuations will impact the supply of goods. Competitors such as Nike, Puma and Under Armor sell similar footwear such as running shoes, sneakers, and sliders as a substitute for the customers. According to our research between Adidas and Nike, Adidas products are not as affordable as their competitor. The affordability rate for Adidas is 57%, while Nike's is 66%. Consumers may choose Nike over Adidas as it is an alternative at a lower price.

Adidas and Nike are two substitutes. If the price of Adidas increases, the consumer will shift their choice from Adidas to Nike. The demand for Nike will increase in the market. With the unsold Adidas shoes in the market, the sellers will reduce their prices to clear out the unsold stocks. If the pricing of Adidas shoes decreases, the quantity demanded will again increase. When the pricing of the Adidas shoes is higher, consumers may choose to buy from Adidas' competitors, such as Nike and Under Armour, due to the price-related items kept in supply.

·       Data on the impact on technology and how it helps businesses.

 

·       The graph on increasing technology for some sport-wear businesses 

The price elasticity of demand considers the income elasticity of demand measures to changes in the price of goods and services offered. The closer the product fulfils the needs and wants as a good, the more price elastic the product is.

Inelastic items classify as necessities. It is not something individuals can or will go without a price change, having a minor impact on consumer demand. Elastic products classify as luxury goods. A price rise for goods has a considerable influence on consumption.

Adidas shoes are price elastic since they are considered premium goods. For example, the demand for Adidas limited-edition sneakers is sensitive to price fluctuations since potential buyers might avoid the product if it is deemed excessively pricey. As a result, when the price of an Adidas limited-edition sneaker rises, people will either buy fewer or move to similar alternatives that are deemed more affordable. 

According to our findings, the price elasticity of demand for a good, with many substitutes available, is high. Hence, Adidas product price elasticity will be affected by the availability of substitutes. 

In the sportswear market, footwear from Nike and Adidas are both prices elastic. Both companies allow runners to run and so satisfy similar demands and desires. When the cost of the alternative falls, Adidas demand will decrease, and vice versa. Several available substitutes will make the demand curve highly elastic as responsiveness to changes in price attracts immediate changes in customer behaviour such as purchasing patterns. A minor change in price in Adidas footwear leads to a significant difference in quantity demanded in other substitutes that sells similar footwear at a lower price.

Each firm creates a unique experience and visual appeal for its customers. Adidas' tagline is "Always assisting our customers in reaching for the best". Nike's tagline is "To inspire and innovate for every athlete on the planet". Under Armour's tagline is, "passion and a never-ending quest for innovation make all athletes better". As a result, some consumers will shift their tastes and preferences to new product brands based on their more appealing slogans. Consumers will not create a natural habit with Adidas' products as several brands whose slogans, designs, prices and colours will draw them to other brands like Nike or Under Armour. The demand for Adidas goods has decreased. If the prices of Adidas shoes rise, demand for shoes will reduce by more than the proportion accordingly.

 

·       The trend of Adidas shoes compared to other competitors

 

·       How does consumer's income will cause a change in demand

·       Purchasing power of Adidas competitor (Nike, Under Armour)

One interesting fact about the sports industry is the sports apparel/footwear sold by Adidas, Nike and Puma are similar a minor change in price in Adidas footwear such as hiking prices too much might lead customers to opt for an alternative. These companies spend many of their resources on advertising to make their products stand out. 

 2) Image

The Ultraboost is a high-performance training shoe that may be used for both competition and training. It is designed to provide comfort and responsiveness to the wearer. The shoe was theoretically made for women because Adidas discovered that 50% of all runners are female. And the majority of trainers were created by and for males. Having both male and female influencers wear the shoes, as mentioned before, will draw a lot of attention to the sneaker. Specifically attracting the attention of female consumers to purchase the shoe, as trainers are now utilised for more than one purpose, whether casual or strictly for running. By enlisting the help of influencers (those with a large or small following) on other platforms such as Instagram or TikTok to post a review or a photo. Can draw interest and potentially turn into a trend on any of the social media platforms.

On the side of the shoe are the distinctive 3 stripes, and on the tongue is a cushioned logo. The three stripes are designed in some style on most shoes to let others know they are from Adidas. Apart from the company logo or name, it is the most recognisable component of the design. Above the midsole of the shoe, the word "ULTRABOOST" denotes which design it is. Many consumers who are familiar with Adidas would know which brand it belongs to or can quickly look it up.



3) Service

Adidas uses applications to increase consumer loyalty. The app includes a personalized newsfeed, a chatbot to handle customer concerns, and a full online store. The app's newsfeed, which features things like new product launches and events, will prioritize topics the users already indicated an interest in Adidas. Personalization features will be dependent on inputs such as prior purchases and changes to the user profile, such as the user's birthday or gender. For example, if they previously purchased running shoes, it will expose more running-related material, yet, if the app has identified them as a sneakerhead, it will notify them of the next hot drop.

Adidas works with influencers on an "Affiliate Program" to promote Adidas latest products such as the UltraBoost product line on various social media platforms such as Instagram, Facebook, and YouTube. The influencers will earn a commission each time a visitor clicks via an affiliate link to www.adidas.com and makes a purchase. Adidas' influencer marketing success story is well known, and it encouraged many other small to mid-sized firms to use the power of influencer marketing to boost their brand value.

They work with everyone from singers to actresses to athletes for example popular celebrities such as Selena Gomez, Lionel Messi, Mesut zil, Naomi Campbell, Paul Pogba, Mohamed Salah, Javier Chicharito, and many others. They wanted to convey the message that they are more than just a sporting team. Another motivation for this is to obtain amazing popularity and followers on their social media platforms, which they have done successfully.

4) Competitors (Nike)
 
Product

Nike uses polyester, rubber, EVA foam, cotton, synthetic leather and leather for their materials. They also develop new materials and processes to generate less waste. The Flyknit technology uses 100% recycled polyester for all the core polyester in Flyknit shoes. Flyleather, launched in 2017, is made from at least 50% recycled leather fibre and Nike Grind, a suite of premium, recycled regenerated materials to reduce waste and deliver performance for the footwear at the same time.

Image

Nike has redefined itself from another typical shoe company to an athletic and fitness lifestyle brand. The Swoosh has become renowned worldwide and is one of the most valuable and successful brands today. As one of the best-represented, culturally understood, and most symbolic companies in the world and history, Nike redefined the power of a brand image. Nike's logo stands for many qualities that people strive for in life: dominance, authenticity, innovation, winning, and performance. Its ability to encapsulate these values in its brand image enables consumers to identify with Nike.

Support from key sources
https://purpose.nike.com/waste

https://conceptdrop.com/blog/27-the-importance-of-branding-how-nike-re-defined-the-power-of-brand-image/

Adidas' full-year revenues in 2020 fell 16% year on year to 19.8 billion euros (23.6 billion dollars) due to the global outbreak of the coronavirus pandemic, which "seriously damaged" sales. The gross margin shrank by 2.3 percentage points to 49.7%. Other operating expenditures as a proportion of sales increased 4.9 percentage points to 46.5%, owing mostly to higher operational overhead costs as a percentage of sales. The operating margin for the firm fell 7.5 percentage points to 3.8%, indicating a lower gross margin and other operating expenditures as a proportion of sales. The unfavourable impacts of the coronavirus pandemic have a substantial influence on financial outcomes. The company's net income from continuing operations fell by 78% to € 429 million. Caused a large number of temporary shop closures. Both Adidas and their partner-operated in a major traffic drop within the remaining store fleet, resulting in a negative impact on their sales growth. More than 70% of our global retail fleet was shuttered at the height of the worldwide lockdown measures in April.

Support from key sources:

https://www.mti.gov.sg/Newsroom/Press-Releases/2021/02/MTI-Maintains-2021-GDP-Growth-Forecast-at-4_0-to-6_0-Per-Cent

2) Inflation

Singapore experienced a core inflation of 1.6% in November 2020, the core inflation mainly reflects the increase in services inflation and does not include accommodation and private transport costs. Singapore experienced headline inflation of 3.8% in November 2020, it was the highest it has ever risen since February of 2013. Stronger personal transport inflation and higher core inflation led to the drastic rise.

The average inflation rate for footwear was 2.70% per year. Such a rate indicates significant inflation. Therefore, the same footwear purchased in 1935 for $20 would be equivalent to $197.09 in 2021. Inflation for footwear was lower than the overall inflation rate of 3.53% in the same period. 

The virus's rapid spread in 2020 prompted global industry shutdowns, resulting in lower consumer demand and diminished industrial activity while the majority of mankind was on lockdown. Supply chains that were disrupted as a result of the global health crisis are still recovering. Due to a variety of problems, including labor shortages and a lack of critical components and raw materials, producers and distributors of goods are unable to generate or provide as much as they did previous to the epidemic.

Adidas shoes are manufactured primarily from synthetic materials, such as plastic, nylon mesh, and polyurethane foam, which are in short supply due to the Vietnam factory closures from the pandemic. Transport has also become more expensive, with container costs increasing 500% from before the pandemic. Costs incurred rising and raw materials become scarcer, sellers being forced to raise their prices and, ultimately consumers are paying higher prices on all fronts. 

Support from key sources:

https://www.channelnewsasia.com/singapore/singapores-core-inflation-16-november-2397811?cid=internal_mcdrecs_02012022_cna#mdcrecs_s

https://fashionunited.uk/news/fashion/sneaker-prices-are-rising-at-the-fastest-rate-of-inflation-in-20-years/2021101458419

https://www.cnbc.com/2021/10/18/supply-chain-chaos-is-hitting-global-growth-and-could-get-worse.html

3) Unemployment

The pandemic has had a significant impact on employment in all service industries. As overall activity declines, labor demand falls dramatically across most sectors of the economy, with employment plummeting at a record pace in 2020 and continuing poor in 2021 in industries that have been delayed due to the coronavirus outbreak. The impact has been notably severe on the retail industries and has been disproportionately worse for low-income earners on sales, and service workers. A rise in retail unemployment shows that it is related to firm closures; nevertheless, government assistance such as the "Job support scheme" helps to prevent the large spike in unemployment.

The pandemic has resulted in a labor shortage in retail companies such as Adidas, Nike, and H&M due to record low unemployment. Jobs are numerous, and retailers will have a more difficult time hiring and retaining good workers. As unemployment falls, shops will find it increasingly difficult to find the number of skilled people they require to fill jobs, and many positions may go unfulfilled. Unemployed workers, on the other hand, have fewer chances of finding work because they must compete with qualified workers. The above demonstrates cyclical unemployment, which is the overall unemployment that derives directly from economic ups and downswings. During recessions, unemployment rises, while during economic expansions, it falls.

According to the Ministry of Manpower, the unemployment situation improved further in April 2021. The progressive decline in unemployment rates indicates that the economy is beginning to recover from the effects of COVID-19. Unemployment rates for residents and citizens fell by 0.1 percentage point to 3.9% and 4.1%, respectively. The overall unemployment rate remained constant (2.9%). This was attributed to the economic crisis caused by the pandemic, which resulted in sector restructuring and an uncertain global economic outlook.

Support from key sources:

https://unece.org/sites/default/files/2021-11/Session_1_Singapore%20paper.pdf