Asics Company’s Analysis and Marketing Strategy

Introduction

ASICS is a global sporting footwear corporation based in Japan, known for their high-quality products, particularly for running. Its name is an acronym for the Latin phrase ‘Anima sana in corpore sano’ which means “healthy soul in a healthy body”, also the company’s slogan (Butt 2017). As a brand name, ASICS is well-known but remains relatively under the radar in comparison to its rivals in the sporting footwear industry such as Nike. Nevertheless, it has remained in the top of the industry based on performance and has recently revamped its brand image to expand its target customer demographic and becoming a more marketable brand. This report will conduct an environmental analysis and evaluation of current marketing strategies by ASICS and offer an exercise in introducing a new product into the brand’s line-up to examine its marketing potential.

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Environment Analysis

Marketing occurs in a dynamic environment which consists of various external and changing forces. Each aspect impacts the effectiveness of marketing activities in facilitating exchange, the transition of the product from the seller to the consumer. The marketing environment includes a range of political, legal, regulatory, societal, and technological forces. These can include political influences, legal policies, economic patterns, social trends, and technological enhancements. Each company and their marketing teams and campaigns must analyse and navigate these environmental influences to achieve success with respective strategies (Baines, Fill & Page 2013).

ASICS was originally founded in 1949 by Kihachiro Onitsuka in Kobe, Japan named at first named Onitsuka Co. Its first products were basketball and marathon shoes which were high-quality and innovative for their time. The company quickly took over the Japanese and Asian markets, eventually incorporating in 1977 to become ASICS (History n.d.). The company maintains a global presence with offices and stores on every continent and every major market in the world. It is publicly traded on the Tokyo Stock Exchange and its revenues exceed $5 billion (ASICS at a glance n.d.).

The company’s target market is individuals interested in quality athletic footwear, particularly for running, tennis, and volleyball as ASICS offers its primary products for these sports. It appeals to both amateurs and professionals and its recent marketing campaigns have been focused on supporting personal training and athleticism. Some of its products are also meant to be trendier and appeal to the luxury sports lifestyle and youth demographics. While ASICS continues to appeal to sneakerheads, it has moulded the brand to become flexible among audiences. However, its primary focus remains on the running market (Kinashi 2017). ASICS sells its products through physical and online retail through its own website and stores as well as authorized retail partners. Over the decades of the company’s growth, ASICS has developed critical relationships with various shoe and athletic retail partners crucial to its business model as there are mutual benefits (Verry 2019). Therefore, sales occur both directly to consumers and in batch orders to partner retailers. ASICS directly competes with other athletic footwear giants such as Nike, Adidas, and New Balance.

SWOT Analysis

Strengths Weaknesses
ASICS is a niche brand in athletic footwear. Primarily due to its leadership in innovation and quality. The company has a strong global presence and outreach, despite being niche. It is utilized by many professional athletes and sponsors international teams, giving recognition to the brand. Its innovation stems from significant resources invested and built from the ground-up in-house R&D teams. This allows the company to create new designs and appeal to consumer needs through leading technologies and collaboration with athletes. ASICS as a brand suffers some major fallbacks and weaknesses. The first is a lack of such a strong culture and brand recognition as its competitors, largely due to the fact it is a niche product. It is simply unable to connect to larger audiences like Nike that places its logo on everything from shirts and headbands to shoes. At the same time, any attempts to diversify the products will lead to brand dilution as ASICS has built its reputation on shoe technology and taking resources away from footwear in an attempt to expand the product portfolio may be difficult to address from a marketing perspective.
Opportunities Threats
In the everchanging market environment, particularly in athletic attire, there are ample opportunities for ASICS. One opportunity is to expand into emerging markets in countries such as India, China, Brazil, and Russia where sports are popular, and the economic growth is allowing for more consumers to purchase expensive footwear. The segmentation that ASICS offers provides an opportunity to build tailored products to specific markets to penetrate these emerging economies. Further opportunities arise in the digitization of the market and continued innovation that ASICS prides itself in. Investment in these aspects allows to potentially improve the brand image and attract new consumers. The primary threat for ASICS is its competition, both from mainstream brands as well as potentially counterfeits. Vendors may choose to sell counterfeit shoes under the ASICS brand in emerging markets discussed earlier, strongly impacting brand perception. Meanwhile, mainstream athletic brands are also heavily investing in shoe design and technology, even in the niche category of running, creating viable alternatives to ASICS and becoming a threat to take away market share. Another threat to consider is macroeconomic factors which may impact international trade, logistics, and consumer purchasing parity.

Evaluation of Current Strategy and Performance

At the beginning of the decade, ASICS unveiled its growth plan for the upcoming years. The strategy is to focus on its primary business domains of athletic footwear, sports lifestyle, as well as health and comfort (ASICS Unveils New Five-Year Strategic Plan, ASICS Growth Plan (AGP) 2015 2010). The underlying policy to the company’s actions is to act with a customer-centric mindset. This approach will be defined through products that the company pledges to innovate and integrate in order to address various customer needs that have been identified in various markets, as well as being aware of feedback, sales, and innovative values that come as a result of such products. Furthermore, ASICS seeks to redefine its organizational capacities worldwide. As a multinational global corporation, ASICS has headquarters and access to markets in practically every region of the world. ASICS recognizes that each market may differ in consumer needs, but also strives towards interregional cooperation to scale the effectiveness of its operations. Therefore, ASICS has focused its strategy on effective global management, global focus products such as apparel, and expanding its existing categories in running and athletic lifestyle as well as potentially introducing new categories of outdoor, casual, and “smart” footwear (ASICS Corporation 2010).

In the past couple of years, ASICS has undergone a complete brand shake-up to refresh its marketing strategy and appeal. Overhauling the marketing strategy went alongside the company’s expansion in open dedicated retail stores. Executives at the company recognize that although ASICS does have recognition for quality, it has historically maintained a poor emotional connection with customers. This is evident in communication which fails to effectively translate the purpose of its marketing campaigns and new products to consumers. ASICS hopes opening more retail stores which provide an opportunity for direct brand communication to improve this. Furthermore, the company has launched marketing campaigns such as “I Move Me” that encourages consumers around the world to actively engage with ASICS platforms and understand the company’s core DNA of performance sports and running. The current strategy for ASICS currently is to ensure that every expression of the brand for the company is consistent and effective, while the customer experience is seamless across retail and platforms (Vizard 2017).

Already having established a certain reputation as a running brand, ASICS wants to broaden the appeal and expand its presence in markets for outdoor wear and fashionable athletic attire that is becoming more popular, particularly in young consumers. ASICS growth performance has been generally stable, although admittedly sales have stalled at ¥400.1 billion due to consumer trends, causing the company to revise its plan for 2020 from ¥750 billion in net sales to only ¥500 billion. However, ASICS is on track to meet a 7% operating income ratio and a 10% return on investment (ASICS 2018). Its priority allocation of resources has been focused on large markets such as the United States and China as well the development of e-commerce and marketing.

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Analysis of Competitive Advantage and USP

As mentioned previously, ASICS is facing intense competition in the athletic attire and footwear market from global brand name giants such as Nike and others. Since ASICS is primarily focused on footwear and does not offer much other athletic wear like most of its competitors, the company has to differentiate itself significantly and offer a competitive advantage. The USP of ASICS can be attributed to its innovation in shoe technology and design which impacts performance and quality.

An executive for ASICS was quoted when asked about the company’s USP, “At ASICS, we take pride in the fact that it is a true performance-oriented brand. While other companies have branched out to include lifestyle segments, we have a single point focus here at ASICS and that I think is what is unique about us” (India Blooms News Service 2018, para. 6). Various technologies offered in ASICS shoes such as a gel which is able to significantly cushion the impact, a design that offers increased stability, and the use of materials which make the sneakers extremely light are all innovations offered by ASICS running shoes. This has been the unique selling point for their products which appeals to the dedicated athletes and shoe enthusiasts that value the highly technical approach.

This directly translates into the competitive advantage offered by ASICS. The product offered by the company is traditionally known to be of a higher quality than other brands as the shoes are developed and built to sustain an intense and high level of training. Particularly in the running focus of athletic footwear, the quality and innovation which offers protection and comfort put ASICS at a competitive advantage in certain market segmentation. ASICS attempts to leverage this competitive advantage by marketing and appealing strongly to professional and elite athletes which then become associated with the brand name. However, marketing to the casual runner, ASICS inserts its products with the hopes that the quality and comfort of its athletic footwear will lead to brand loyalty since shoes at this level are expensive and consumers seek out durable products.

Product Rationale and Specification

Examining the current market and positioning of ASICS, it can be argued that it may be viable to introduce a new innovative product to its range. The product should be developed and launched under the sports lifestyle branch. ASICS has already entered the market and experienced some success with its ASICS Tiger brand, particularly the Onitsuka Tiger shoes. Investing heavily into this range is both part of ASICS’ long-term strategy as well as accounting for consumer trends (ASICS 2017). ASICS which is not traditionally known for its style is attempting to achieve a “cool” factor among younger American consumers. It is a pivot point in the initiatives that the company is undertaking to diversify its range and brand name recognition in the attempt to avoid decline among stalling sales (Green 2017). Due to the niche and limited product range of ASICS, each new offering is inherently exciting, offering an opportunity to redefine the brand and attract new consumers, which the company should take advantage of in order to capitalize on its competitive advantages.

The sneaker industry is currently being rapidly overtaken by the “athleisure” trend where the athletic shoes are comfortable for everyday wear beyond sports. These shoes would not be fitting for professional competitions, but they serve a dual purpose of being worn both during moderate activity as well as everyday locations such as schools or the office. Performance sneakers are struggling in an industry which now appeals to consumers through design and comfort (Bain 2018). Therefore, it is rational for ASICS to introduce a product in this life of its footwear and gradually begin widening its brand appeal and sneaker range.

The new product would be an innovative lifestyle shoe which would incorporate ASICS technology, high-quality, and a design that would stand out but remain practical. The goal is to allow consumers to understand the appeal of the ASICS brand of comfort and quality, which would produce footwear that is both appealing to wear on an everyday basis while remaining durable, a characteristic that consumers desire at such price points. The shoe design would create a hybrid between lifestyle and performance sneakers. Although likely to sacrifice some technical parameters, the new ASICS product should adopt the shape, colour, and lacing design which is visually stunning and fitting in daily environments (Lappe 2018). The benefits of this product for the consumer is the ability to wear the same shoes for various activities and maintaining the footwear support and comfort that the ASICS technology can offer.

Segmentation Targeting & Positioning

ASICS traditional consumer base has been consistent with running enthusiasts and athletes which value the brands quality, comfort, and innovation. Some of the less technical sneakers appeal to older audiences with ASICS commonly known as the “dad” shoes in the market. However, with this product, ASICS is attempting to change this perception and must appeal to a completely new demographic of under-25 youth and teens. However, it is still possible that the traditional consumer segments of the brand will also buy the new sneakers as they retain much of ASICS qualities while introducing a more vivid design.

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Therefore, the target segment would be middle class and upper-middle class youth that can afford sneakers in the $150-300 range. This product will not be marketed as athletic footwear; thus, it will not be appealing to those seeking high-performance sneakers. Instead, the segmentation would focus on daily consumers seeking out stylish athleisure footwear. Shoes that can be worn in everyday settings such as schools, jobs, streetwear, and other contexts making them comfortable and visually appealing. In terms of geographic contexts, ASICS will attempt to appeal to the United States and Canada market segments where athleisure is most popular. According to Dibb et al. (2012), this means utilizing a concentrated targeting strategy which allows a company with limited resources to compete with much larger organizations. This is the case with ASICS attempting to expand in this market where it only holds a small share in comparison the likes of Nike but allows for a potential to adapt to consumer behaviours and win back some market share.

In marketing, positioning is a critical aspect which builds off the consumer segmentation and value proposition. Positioning is the manner in which a product is defined by consumers in its vital attributes and the place it takes in relation to the competition when viewed by a consumer. Marketing methods, strategies, and slogans play a large part in this in the long-term since brands can take years to establish a new position in a consumer’s mind. Positioning maps are used to plan strategies and differentiation, effectively attempting to find a good position for the product and brand in the context of price and orientation between performance and luxury (Kotler & Armstrong 2018). For ASICS and this new product, there stands a unique challenge of reorienting the brand’s positioning. It must shift away from a performance-based approach to a more luxury and style aspect while maintaining a similar price point with adequate margins. The positioning that ASICS can take with the new product can be among the lines of “a performance-quality design for your stylish streetwear,” emphasizing the quality that the brand offers while focusing its target segmentation and product.

Marketing Objectives

As mentioned previously, introducing a new product allows ASICS to introduce a new marketing campaign that helps to reinterpret its mission. The company is no longer content or experiencing such growth adhering to its traditional running roots. The primary objective of the marketing team is to increase the mainstream appeal of the brand and expand the footprint in markets where ASICS commonly falls behind competitors such as the United States. In the short-term, the objective for ASICS remains to increase brand awareness by implementing new initiatives, introducing a modernized and digitized approach to marketing, and involving well-known celebrities for endorsements in order to increase traction (Pasquarelli 2017). A new product allows to launch any new marketing strategies and redefine the brand name. Meanwhile, long-term objectives are focused on acquiring a greater market share through appeal to new demographics for the company. Through this and continuous consumer retention and support, the sales will increase with potential profitability in the long run. In the current position that ASICS is in the lifestyle footwear market, it is vital to take on a strategic approach to marketing and long-term product introduction.

Another objective, particularly for the new product, is to increase the perceived value added to the consumer. This has been a strong suit for ASICS in its niche running segment which has resulted in a good reputation for the brand. However, the important step is to transition this highly-technical value into lifestyle sneakers that mostly younger demographics wear. This requires a significantly different approach to marketing the shoe specifications and characteristics. The value added in the lifestyle segment is focused on visual appeal, design, and potentially “smart” features that have been introduced by brands such as Nike (DeLeon 2019). The shoe becomes less about performance but more about looks and design. In the lifestyle context, the value added is essentially how much recognition and style the sneaker design will bring to the consumer along with comfort in most daily environments that can rapidly shift from casual to active footwear. Customer value is critical to marketing efforts as it results in significant returns on investment, both through profits and market share as well as a dedicated following.

An objective would be to achieve the annual sales goals set out by ASICS through 2020 and increase the company market share by 10% globally. As mentioned, the company seeks to expand its retail presence thus using visual merchandising and direct-to-consumer contact as part of its strategy. ASICS should take advantage of its competitive advantage in innovation and apply it to the lifestyle product. It stems from its mission and approach to product development that results in some of the most efficient and high-quality products. ASICS attempts to build upon its technological advances and push the limits of design and innovation (ASICS n.d.).

Marketing Strategies

Marketing Mix

Product The product is the innovative athletic lifestyle footwear which is a combination of sneakers and streetwear. It is a tangible object which utilizes the high-quality design and innovative technologies offered by ASICS while introducing a new look and refreshes the product line for the company.
Price The price will be on par with other luxury lifestyle high-quality sneakers from competitors, ranging in the $150-300 range. It is high enough to be differentiating and meet appropriate margins, but low enough to be affordable for middle-class consumers without closing out significant market segments due to pricing. As common with other ASICS shoes, different versions of the product will be sold depending on the characteristics.
Place Alongside with its attempt to directly relate to consumers, the product will be marketed and sold in ASICS retail stores and its athletic partners. E-commerce options will also be available for online ordering of the sneakers and potentially virtual customization. As ASICS is attempting to aggressively enter the market, it will use intensive distribution methods to ensure availability to consumers.
Promotion Heavy investment of the promotional budget will go towards digitization and online marketing where the target segments can be most easily reached. Promotion is the advancement of a product through public advertising. Using social media, celebrity endorsements, and social initiatives for the product will be vital to this marketing mix (Connelly 2016).

Recommendation

A critical aspect of a competent marketing strategy is utilizing and implementing the marketing mix. ASICS is at a crossroads in its brand recognition and marketing potential as it seeks to redefine and innovate. The recommendation is to take advantage of the quality which the product and brand offer and aggressively market under a lifestyle brand. Other companies such as Nike have heavily invested in advertising and endorsements which makes their brand so recognizable and “cool.” With its product, ASICS should adopt a similar strategy with a twist and emphasis on its uniqueness, high-tech designs, and Eastern roots, all aspects which Western consumers tend to gravitate towards.

Conclusion

ASICS is a multinational athletic footwear brand that originates in Japan and maintains a global presence. It is known for its high-quality and technical sneakers, aimed at professional athletes and runners. It maintains a competitive advantage through its running shoes that is its primary consumer segment. However, stalling sales and an outdated brand model is forcing ASICS to innovate and adapt to the trends of athleisure footwear. Introducing new products in this line-up and redefining its brand name through active streetwear marketing initiatives may be beneficial. It is vital for the company to expand its horizons, product offering, and consumer base while remaining true to its roots and innovations.

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Reference List

ASICS n.d., About ASICS, Web.

ASICS 2017, First us ASICS Tiger concept store to open in New York’s Soho district, Web.

ASICS 2018, ASICS annual report 2017, Web.

ASICS at a glance n.d., Web.

ASICS Corporation 2010, ASICS unveils new five-year strategic plan, ASICS Unveils New Five-Year Strategic Plan, ASICS Growth Plan (AGP) 2015 2010, Web.

Bain, M 2018, ‘Athleisure has overtaken athletics in the sneaker industry’, Quartz, Web.

Baines, P, Fill, C & Page, K 2013, Essentials of marketing, Oxford University Press, Oxford, UK.

Butt, H 2017, ‘Asics welcomes new global brand portfolio’, Transform Magazine, Web.

Connelly, T 2016, New Asics ad campaign aims to promote the brand as more than just running, Web.

DeLeon, J 2019, ‘Nike ushers in new era for fashion tech’, Vogue Business, Web.

Dibb, S, Simkin, L, Pride, WM & Ferrell, OC 2012, Marketing concepts and strategies 6th ed., Cengage Learning, Hampshire, UK.

Green, D 2017, ‘The ultimate ‘dad shoe’ company is making big bets to be cool’, Business Insider, Web.

History n.d., Web.

India Blooms News Service 2018, Japanese sports footwear and apparel brand ASICS arrives in Kolkata, Web.

Kinashi, R 2017, ASICS races to a build a stronger brand message, Web.

Kotler P & Armstrong G 2018, Principles of marketing 17th ed., Pearson Education, Hampshire, UK.

Lappe, M 2018, Everything you need to know about lifestyle vs. performance sneakers, Web.

Pasquarelli, A 2017, ASICS pivots from shoe company to health and wellness brand, Web.

Verry, P 2019, Here’s why Asics is so valuable to retail — and always has been, Web.

Vizard, S 2017, Asics in biggest brand shakeup in 25 years as it looks to broaden appeal, Web.

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