Introduction
Nike decided not to manufacture Manchester United’s football kit after 13 years of cooperation. After the ending of the contract, Adidas became the new Manchester United’s football kit manufacturer for the following 10 years from next season. It also broke the Real Madrid’s £31 million biggest club deal which was also signed by Adidas before (Wilson, 2014). Sponsored deal publicly in advance for Manchester United will bring unprecedented good news for Adidas due to Manchester United’s fans' groups spending power and brand loyalty. International sponsorship on a valuable commodity markets have absolute influence on the market. Since football has a unique market, this business decision will affect Nike in various marketing way. This …show more content…
According to BBC news, before Adidas decided to sign the sponsorship with Manchester United, Adidas had spent a total of £10 million more on sponsorship than Nike among the top 10 European football clubs (Karmali, 2014). Although Nike still supplies shirts for 26 clubs and Adidas’s only has 18, the amount of money that generates for shirt sells mainly comes from the top tier football clubs due to 80/20 Pareto Principle. Apparently Nike has a decrease in market share in football shirt sale. The fact that Adidas is signing a 10-years sponsorship; it shows that Adidas no longer look into short term return but a long term marketing tactics. According to Yahoo finance and borse-frankfurt stock market information website, Nike had experienced a 2.25% price drop from July 9th, 2014 (Date that Nike announced the break of sponsorship) to July 16th, 2014 (Date that Adidas announced the break of sponsorship) (Yahoo Finance, 2014) and Adidas experienced a 2.73% price increase after the closing of the deal (Borse Frankfurt, 2014). The price drop indicates that the stakeholder of Nike is experiencing a decrease in stock value which represents the market and population is affected by Nike’s marketing decision making. This suggests that Adidas is planning a long-term football club market penetration as they also have an immediate return in terms of sponsorship and stock price while Nike is losing the market and experiencing a downfall in market control. Nike no longer dominates the football shirt sell market, losing their market value and affects the stock
Nike decided not to manufacture Manchester United’s football kit after 13 years of cooperation. After the ending of the contract, Adidas became the new Manchester United’s football kit manufacturer for the following 10 years from next season. It also broke the Real Madrid’s £31 million biggest club deal which was also signed by Adidas before (Wilson, 2014). Sponsored deal publicly in advance for Manchester United will bring unprecedented good news for Adidas due to Manchester United’s fans' groups spending power and brand loyalty. International sponsorship on a valuable commodity markets have absolute influence on the market. Since football has a unique market, this business decision will affect Nike in various marketing way. This …show more content…
According to BBC news, before Adidas decided to sign the sponsorship with Manchester United, Adidas had spent a total of £10 million more on sponsorship than Nike among the top 10 European football clubs (Karmali, 2014). Although Nike still supplies shirts for 26 clubs and Adidas’s only has 18, the amount of money that generates for shirt sells mainly comes from the top tier football clubs due to 80/20 Pareto Principle. Apparently Nike has a decrease in market share in football shirt sale. The fact that Adidas is signing a 10-years sponsorship; it shows that Adidas no longer look into short term return but a long term marketing tactics. According to Yahoo finance and borse-frankfurt stock market information website, Nike had experienced a 2.25% price drop from July 9th, 2014 (Date that Nike announced the break of sponsorship) to July 16th, 2014 (Date that Adidas announced the break of sponsorship) (Yahoo Finance, 2014) and Adidas experienced a 2.73% price increase after the closing of the deal (Borse Frankfurt, 2014). The price drop indicates that the stakeholder of Nike is experiencing a decrease in stock value which represents the market and population is affected by Nike’s marketing decision making. This suggests that Adidas is planning a long-term football club market penetration as they also have an immediate return in terms of sponsorship and stock price while Nike is losing the market and experiencing a downfall in market control. Nike no longer dominates the football shirt sell market, losing their market value and affects the stock