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The sportswear giant is targeting a bigger share of both the lower and upper ends of the market. Has it got the balance right?Reebok had some time back hired an international agency to help it identify locations for its stores on the basis of income pockets. The agency devised a plan that looked good on paper: Divide each city according to the postal codes.
The assumption was that people covered by one post office would have somewhat similar incomes. Within no time it was proved that the formula will not work. The Greater Kailash post office in New Delhi, for instance, is a high-income neighbourhood but also includes the mid-income locality of Zamroodpur. Should Reebok then put up a store there or not? What products should it stock?
For Reebok, the country's largest seller of sportswear and apparel, this is a challenge it has to wrestle with every day. It wants to become a mass-market brand, and the location of stores holds the key to that. This, mind you, is not the first time that its market research and assumptions have gone awry.
When it first entered India in the early-1990s, it had assumed that every car owner could be a potential buyer for expensive Reebok sneakers. It proved to be a gross overestimation of the market's potential. Little did it realise that cars were bought on installments here, and a large number of drivers didn't own the cars — these were provided by the office!
But it has got over the initial hiccups. Though fourth in the global sweepstakes after Adidas, Nike and Puma, it leads the pack in India with a 53 per cent share of the branded sports footwear market (estimated size: Rs 3,500 crore per annum).
In fact, India is the only market in the world where Reebok has such dominance in the market place. So much so, two of its Indian honchos — Muktesh Pant and Sidharth Verma — were given prestigious assignments abroad. Though the brand is owned by Adidas, it was decided to let it run as an independent entity in India, lest the momentum be lost.
http://www.business-standard.com/india/news/reebok-straddles-massclass/395093/