Join Hands With NBA PEAK: The Advanced City Goes Abroad Again.

hand in hand

How to rush into the higher end market with the domestic sports brand in the two or three line city?

Unlike Nike ADI, which was seen in China's sporting goods market five years ago, it is now everywhere.

The number of shops and advertising density is only the most intuitive feeling of consumers.

In fact, by the third quarter of 2010, the total number of stores was over six thousand, and the number of domestic sports brands with annual sales of over three billion has increased to five. They rely on the two or three tier cities' wage earners to grow and expand.

The differentiated market strategy of guerrilla warfare has directly changed the competitive situation of China's sporting goods market.

While winning the collective victory, the competition among domestic brands is also becoming more intense.

The prominent contradiction is that, compared with international brands, domestic brands from market positioning to target customers, and even marketing strategies are almost the same, homogenization and market overlap is even more serious.

Now, the main brand of basketball equipment, Jinjiang brand PEAK, which is based on the market segmentation, is gradually becoming a dark horse.

In fact, in the early days of brand development, facing the fierce competition of the first tier cities, the domestic brands in the initial stage can only make a detour and take the two or three line cities as their main battlefields.

Regardless of price or product, the domestic sports brands represented by Jinjiang are welcomed by consumers in these regions.

This strategic layout has made the domestic sports brand stand firmly in the two or three tier cities.

Even in the period of global financial crisis, the momentum of rapid growth has also maintained.

However, the lack of discourse power in the first tier cities has made the local brands seeking greater development in an awkward position. In particular, some first-line brands have completed the listing and financing, and after entering the capital operation competition, there is an urgent need to open the first tier urban market.

PEAK has chosen a strategy of diversification to start the battle of the city.

In September 2010, PEAK officially signed WTA to enter the field of tennis.

According to Xu Zhihua, the chief executive of the company, at least 130 million Chinese are interested in tennis. Five million of the fans often play tennis, and most of them are in China's first tier cities.

This time cut into the tennis market, while maintaining the development of the two or three line market, it is easy to realize the expansion in the first tier cities by upgrading the brand.

The company's strategy of "encircling the cities in the countryside" is different from that of most of them in reducing profit margins. Xu Zhihua said that the reason for PEAK's profit increase was mainly from the increase of unit price, but the advantage of cost reduction was not obvious.

"From the current strategy, we have much room for improvement in gross margin, and gross margin will reach 40% in the end."

Xu Zhihua said.

In the new product research and development efforts, PEAK also substantially increased the number.

R & D is the soul and the contribution rate to sales promotion is very important.

Xu Zhihua said.

PEAK's investment in R & D has reached about 1%, which is the cost of researchers.

Outside the city, PEAK is still considering "going abroad".

Like many domestic sports brands, PEAK is quickly familiarity with domestic consumers by sponsoring NBA, especially the Houston rockets of Yao Ming.

Through effective marketing in NBA and basketball, PEAK has achieved good results in fierce market competition.

In 2009, the annual turnover of the company increased by 51.6% and landed at the Hong Kong stock exchange, formally moving from resource and market internationalization to capital internationalization.

Although it is well known after joining NBA, PEAK's international journey is far ahead.

First of all, the operation of the international market. At present, whether it is a NBA market partner or a FIBA Asian regional strategic partner, PEAK's international promotion is going to be a high-end line. But according to Xu Zhihua's thinking, in the production, marketing and brand operation system of five continents across Europe, the United States, Asia, Africa and Australia, the market concentrated by Asian and African Latin American developing countries is the focus of its deep reclamation.

The promotion of developed countries focuses on brand awareness, and promotes the expansion of domestic and developing markets. Before the international market generates profits, the domestic market, especially the two or three tier cities, will become a "blood bank" for PEAK global brand promotion.

The Asian Games marketing perfectly confirms Xu Zhihua's idea.

At the Asian Games in Guangzhou, PEAK worked with six national sports delegations, including Iraq, Lebanon, Tajikistan, Palestine, Iran and Kyrgyzstan.

The goal of consolidating the Middle East market and expanding Western Asia and Central Asia is self-evident and coincides with its overseas marketing layout.

"PEAK is expanding its agents in the Middle East and West Asia. The local market demand is very conducive to the development of sports brand. PEAK will continue to exploit the resources of international events to pry the development of these markets.

Through the sponsorship of international sports events, PEAK brand's overseas visibility can be established, which can not only stimulate potential consumption, but also stimulate the confidence of local dealers.

Company chairman Xu Jingnan said.

Sales growth and value enhancement are coming from differentiated brand marketing: sales in the third quarter of 2010 increased by 13% compared with the same period last year, while the amount of orders in the first, second quarter of 2011 increased by 25% and 24% respectively compared with the same period in 2010.

After that, PEAK intends to go further.

Xu Zhihua said that the company will set up a R & D center and sales company in Losangeles. "In order to strengthen communication with Americans, the head of PEAK's construction of the US branch is dedicated to learning English in half a year to achieve a free expression."

As Xu Zhihua said, "not everyone is suitable for Mercedes Benz, BMW, PEAK is to provide sports products like TOYOTA for the public."

Perhaps this is the advantage of the basketball specialist.