Marketing Plan: Li Ning to Be the Number one in China Sportswear Market

Marketing Plan: Li Ning to be the number one in China sportswear market

1.0 Executive Summary

The primary objective is to increase Li NingЎ¦s overall market share from the current 17% to 20% in 3 years time and defend its first place in China sportswear market against strong competition. To achieve this goal, Li Ning has to improve the customers brand perception, rationalize market segments and invest in Mega cities and first tier cities.

2.0 Situation Analysis

As the dominant local brand in China sports market, Li Ning is facing intense competition from its multinational competitors. Li NingЎ¦s growth rate is 23%p lower than NikeЎ¦s and 13%p lower than AdidasЎ¦.

Li Ning owns a well-established distribution channel, a powerful R&D team, and broad brand awareness in the China market. All these factors provid Li Ning with the opportunity to achieve a larger market share in ChinaЎ¦s booming sporting goods market, which is expected to grow to, conservatively, 55 billion RMB by 2008.

2.1 Market Summary

By focusing on University students and second and third tier cities and by underestimating the stronger purchasing power and trend-setting effect of Mega and first tier cities, Lin Ning has lost market share in the first tier cities. Moreover, other local brands like Anta and Double Star are threatening Li NingЎ¦s market share in second and third tier cities.

On the one hand, Li Ning should keep the current market territory. One the other hand, Li Ning should step into mega- and first tier cities and extend the market segment it is targeting to the population of age 25 to 34, to the portion that has a higher income and is also active in sports.

In terms of brand positioning, Li Ning needs to put international feeling over oriental theme. Though distinctive, the oriental theme is not effective in satisfying customerЎ¦s Chinese perception for success, fashion and keeping-ahead. A reinforced international branding could fill customerЎ¦s perception better and attract more customers.

2.2 SWOT Analysis

Strength

1. Dominant local brand in China

2. Distribution channel

The 3373 stores across China will facilitate Li NingЎ¦s further marketing penetration and its advantage over Nike (1,200 stores) and Adidas (1,400 stores).

3. Modern organizational structure and healthy financial condition

4. Well-established R&D team and database specialized on Chinese feet peculiarities

Weakness

1. Customers are not sufficiently attracted to the Lin Ning brand, especially in the high-end market segment.

2. Target market limited to college and university students (age 17-24)

Opportunity

1. Gain market share in Mega and first tier cities in China.

2. Reinforce brand awareness through 2008 Olympic Game

3. Become one of the strongest international brands in Chinese consumersЎ¦ eyes.

Threat

1. Competition from strong multinational brands and local brands

2. Competition from Nike and Adidas in second and third tier cities. They are expanding distribution channel across China aggressively. (exhibit 1)

3.0 Marketing Strategy

3.1 Market objectives:

Become number one company in the China sports wear market by increasing market share to 20% in 3 years and gaining sale revenue of 11billion RMB in 2008 (exhibit 2)

2.2 Product segmentation

Sport shoes: Keep focusing on running shoes. Based on the preferences and popularity of the sports in China, Li Ning should focus on running, basketball, table tennis and badminton shoes.

Sport apparel: Reinforce sales by offering wide portfolio of products in existing stores; target higher end market by

2.3 Target Market:

Demographic focus: 1. Students 14~24 2. Young professionals 25~34

Geographic focus: 1. Second and third tier cities 2. Mega and first tier cities

3.3 Product positioning:

Li