Table of Contents
Brand relationship: Resonance
Points of parity (POP) and Points of difference (POD)
Conclusions and Recommendations
Table of pictures and figures
APPENDIX 1 - Demographics
APPENDIX 2 - Perceived Brand Knowledge and Occasions for Buying
APPENDIX 4 - In-depth interview questions
APPENDIX 5 - Survey - Sportswear & Sports equipment brands
The Sportswear industry in Portugal in the year 2015: The economic downturn is over; Portuguese economy is recovering. This positive economic trend also influenced the sportswear industry, which grew by 2% to a total market volume of 775 m. EUR
The clear industry leader with a market share of 24% is Nike Retail BV. Nike managed to build up a really strong brand in Portugal over the past years. One of the key success factors for the brand image has been using Cristiano Ronaldo, the sports idol of Portuguese people, as a brand ambassador. In the shadow of Nike, also the second force in the industry, Adidas managed to grow by 6% in 2015.
The prospects for the sportswear industry are optimistic. Nike and Adidas are expected to stay the most popular brands with their technological innovations, heavy marketing campaigns and focus on outstanding designs (Euromonitor International, 2016b).
This report is neither about Nike nor about Adidas. It is about a brand that is quite different but at the same time a direct competitor of those brands: Decathlon. Decathlon is acting in two major areas: Sportswear and Sports equipment. Regarding its strategy, the size of the stores and the range of the product offer, Decathlon differs a lot from Nike and Adidas. But surprisingly, Nike and Adidas are seen as the main direct competitors of Decathlon by Portuguese consumers. In Portugal the brand is mostly perceived as a sportswear brand. The second big section, the sports equipment product offer, seems not to be a strong enough differentiator to position Decathlon in another direction.
Clearly, for Decathlon, with its different focus, it is hard to compete with the leading brands in their strong area of sportswear. The key could be in differentiating from these brands and focusing on different areas with more promising potential (e.g. use the growing popularity of outdoor activities).
This report should analyse the current brand perceptions of Portuguese consumers about the brand Decathlon, find strengths and weaknesses in the current positioning and give recommendations for Decathlon on how to improve their current situation in the market by building a stronger brand.
Part of the Oxylane Group, Decathlon is a privately-held company engaged in the retailing of sports accessories (MarketLine, 2016). The company’s first store was opened in 1976, near Lille, in France, and it was driven by the concept of making sports items affordable to a large number of consumers (Euromonitor International, 2016a), ranging from sports lovers to beginners.
In Portugal, Decathlon opened its first store in 2000, in Amadora (Decathlon, n.d.-c), and in 2014, Decathlon Portugal (hereafter “Decathlon”) launched its online store decathlon.pt, that is currently also accessible through a smartphone app. Today, the company has 25 Decathlon stores, 3 Decathlon Easy, 1 Spot across the country, as well as one national supply centre in Setúbal.
Decathlon’s products’ offer is a mix of the company’s own brand, known as “Marca Paixão”, and of other international brands in the area of sportswear and sports equipment (Fonseca, n.d.). Some of the products sold by the company are produced in Portugal, as it is the case for 50% of the bicycles sold by Decathlon throughout Europe. B’Twin, Tribord, Quechua, Artengo, Domyos and Fouganza are some of the exclusive sub-brands that Decathlon has. Apart from its actual products, Decathlon also offers various services to its customers, such as in-store personalization and repair services as well as a flexible return policy (Fonseca, n.d.).
Its two core values rely on vitality and responsibility, trying to give their consumers products made on the basis of continuous improvement and innovation and also working permanently to ensure safety and reliability to their customers and collaborators.
Moreover, they commit to make clear to their stakeholders that their current strategy goes through an effort to be environmentally conscious, dedicated to the continuous development of their collaborators and also contribute to the social development of local communities and sports’ organizations (Decathlon, 2016). Hence, the brand makes an effort to transmit a human trait, based on the respect and concern for their internal and external clients.
Regarding the engagement with their stakeholders, in Portugal, Decathlon has a community blog where are posted information about the company, social events, technical recommendations for sports practice, innovation in their products, among others.
Both the objective data and the actual consumers’ beliefs regarding the subject indicate that Nike is one of the main competitors of Decathlon in Portugal, and it is forecasted to remain so, with 11 stores in Portugal and being the leader in sportswear the Portuguese industry as of 2015. On one hand, Nike has been able to strengthen its image over the past years by constantly launching new products, by having a large offer of products which does well in both sports apparel and footwear, and by sponsoring the national football team and the star athlete Cristiano Ronaldo.
Innovation is Nike’s identity and its strategy also goes through a strong engagement with its consumers, as it focuses on transmitting motivation and sustainable initiatives with the goal of increasing sports activities amongst people and as a practice that needs to be started from a young age (Nike Investors, 2016). Not only the message conveyed in this sense can be seen through the website, but there are also several apps that the brand uses to benefit its users during their practices. More than selling sports items, Nike strives to provide good experiences and services to athletes. Moreover, it is extremely active in terms of product innovation and customization, showing adaptation to the customers’ needs and tastes.
“We create innovative, must-have products. We build deep, personal connections with consumers. And we deliver an integrated marketplace with compelling retail experiences.” (Nike, 2016)
Being the no.1 Sports Brand in the world (Forbes, 2015), extremely innovative, endorsing star athletes and with a big brand power, its products have a high-end image and premium prices that contribute for the success experienced by the brand (Market Realist, 2014).
Adidas group has a diverse brand portfolio made of 3 major brands: Adidas, Reebok and tailor-made Adidas golf. In Portugal there currently a total of 7 stores.
In 2015, in Portugal, Adidas was able to reduce the gap with Nike by increasing its sales by 6%.
This leap was made possible by Adidas’ sponsoring of FIFA, UEFA confederations and the SL Benfica as well as by redeveloping its national website (Euromonitor International, 2016b).
Like Nike, this brand also bets on innovation of its products and “creating the new” is the main motto of its strategy. Sport is its core competency, and through it, Adidas associates with sustainable initiatives, follows fashion trends and cooperates with celebrities in creating new collections. It is part of their strategy to provide a fast response to its customers’ needs, be located on the top locations worldwide and be an open source to athletes, consumers and partners in order to improve brand awareness (Adidas Group, 2016).
Regarding its engagement with customers, this brand also has a blog where it posts all sorts of publications meant for sports, career development, events, etc.
As for pricing, the strategy goes from competitive pricing addressed to Nike, Puma and Reebok customers to a skimming strategy for new products and unique offers in the sports industry. Overall, the target consumers of Adidas are high-end customers and the upper middle class (Marketing 91, 2014).
In Portugal, there are several competitors to Decathlon, being Sport Zone one of the most important, as it is considered a direct competitor for the fact that its offer is the most similar to Decathlon and both target the same market segment. This brand was inaugurated in 1997, and currently has the biggest chain of sports stores in Portugal with over 70 facilities countrywide.
Betting on innovation, this brand looks to provide to their customers the best brands and products at the most competitive prices.
Sport Zone also produces and sells its own brands, like Berg or Doone, and similarly to Decathlon, they also provide advantages to their customers such as lifelong warranties and other membership benefits. Their mission is based on promoting sports practices and creating strong relationships with the surrounding community.
In order to engage with its customers, this brand is widely present in social networks and has also informative posts and advices for several types of sports practices. It is also associated to Portuguese stylists, such as Katty Xiomara, on the creation of trendy and fashionable sports clothes.
The following exploratory study about the brand Decathlon aims to understand what Portuguese consumers know, think and feel about the brand Decathlon.
In order to get the information about those customer perceptions and feelings, different research methods were used. First, a qualitative research in the form of seven individual semi structured in-depth interviews (Aaker, 2011) was conducted. The interview guide hereby followed Keller´s Costumer-Based Brand Equity Pyramid and contained four questions about each of its six elements: Salience, Imagery, Performance, Feelings, Judgements and Resonance (Keller, 2001).
Secondly, in order to quantify the insights of the in-depth interviews and draw valuable conclusions, a quantitative research was performed. Therefore, an online survey was built and distributed via the online research software Qualtrics. In total, the survey had 199 respondents, of which 159 completed the survey. As just a small minority of the respondents were foreigners who live in Portugal, it was decided to focus only on insights from Portuguese consumers. This left 144 valid responses.
The interview guide as well as the structure of the survey can be found in Appendix 4 and 5.
Regarding demographics and psychographics, the main information that can be extracted from those results is that near 85% of the respondents were women, about 79% were aged from 19 to 35, close to 69% had earned at least a bachelor’s degree, about 59% were working while 37% were studying, 59% were single, and 81% had a disposable income of less than € 1000 per month (See Appendix 1).
Keller describes brand salience as a part of the brand identity and as aspects of customers’ awareness of a brand (Keller, 2001). The research of Van der Lans, Pieters and Wedel (2008), on the other hand, defines brand salience as “the extent to which a brand visually stands out from its competitors”. This study will mostly neglect the visual components of the brand and rather focus on the Customer-Based Brand Equity by Keller.
According to Keller, building brand salience for a company is the foundation to achieve the desired brand identity. Again, this is linked to guiding the customer´s brand awareness. Brand awareness describes the ability of a customer to recall and recognize a brand and is divided into the two dimensions’ depth and breadth. Depth hereby stands for the extent to which the brand is “top of the mind” whereas breadth defines the situations in which a brand is recalled (Keller, 2001).
Brand salience is especially important for influencing the brand associations that drive brand image and feeling as well as getting into the customer's consideration set when he or she makes a purchase decision (Keller, 2001).
In the following research, brand awareness, both in terms of depth and breadth, was measured through a cued recall question (see Figure 1), so if a respondent was able to recall the brand when being faced with the product category as a cue (MacInnis, Shapiro & Mani, 1999), and through Q7, in which the respondents were asked in which occasions they considered buying from Decathlon. The evaluation of Portuguese customers’ brand awareness of Decathlon was completed with a question about their perceived brand knowledge, which arises from companies´ efforts to build up sufficient brand awareness and the right brand image (Aaker, 1996; Keller, 1993).
When analysing the brand salience of Decathlon, it can be noticed that Decathlon is not the top of mind brand for Portuguese consumers when it comes to sportswear (see Figure 1). This finding could have resulted due to the fact that the question especially asked for sportswear and left out the second big section of Decathlon, which is sports equipment. Nevertheless, even more surprisingly when seeing the results of the breadth of Decathlon´s brand awareness, sportswear appears to be the top occasion for Portuguese consumers when considering buying at Decathlon (see Appendix 3). This clearly shows that Decathlon has a disadvantage against Nike when it comes to brand awareness.
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Figure 1. Q1 Imagine you want to buy new running shoes and new sports trousers. Which brand would be your first choice? Where you would buy those products?
Also in terms of brand knowledge, Nike is perceived to be better known than Decathlon (see Appendix 2). The two other main competitors of Decathlon, Adidas and Sport Zone are almost on the same brand awareness level as Decathlon, but far behind the leader Nike.
Further occasions, in which Portuguese consumers consider buying from Decathlon, are for sports accessories (2nd highest ranking), followed by sports equipment (3rd) and outdoor activities (4th). Despite that, Decathlon is not at all associated with trendy clothes. Sneakers also seem to be rather purchased elsewhere by the bigger majority of Portuguese people (see Figure 1). Aligned with the insights of the qualitative research, this result leads to the conclusion that Decathlon is perceived as a brand for practical sportswear, sports equipment and accessories and not as a brand for buying fashionable clothes. Although with its different focus, Decathlon, in the minds of the Portuguese consumers, is still compared in the same category with Nike and Adidas.
Following salience on Keller’s customer-based brand equity pyramid, there are two very important building blocks: performance and imagery. Both aim at helping companies establishing a brand image in customers’ minds (Keller, 2001).
In Keller’s approach, Brand Performance “is the way the product or service attempts to meet customers’ more functional needs.” (Keller, 2001) It can be divided into five major benefits and attributes:
a) Primary Characteristics and Supplementary Features of the Product
Decathlon aims to deliver its customers a good quality over money. With 28 points of sale in Portugal, they aim to provide high quality sportswear and equipment for people to enjoy the practice of sports. From Q11 (Appendix 5), it can be seen that respondents on average agree with the statement that Decathlon brand has good quality (70 out of 100).
b) Product Reliability, Durability, and Serviceability
As previously mentioned, having high quality products is a must for Decathlon brand. To gain the trust of Portuguese consumers, the brand has also increased the amount of products produced within Portuguese borders. Besides that, the brand has proven several times through partnerships with NGOs that it is not only aiming to improve the durability of the products, but also to save the environment (Decathlon website). Changing the production techniques by incorporating used products to produce new ones was one of their internal strict policies to produce as green as possible. From the respondents’ answers, it is noticeable that consumers perceive Decathlon products as both reliable and durable (each with 4 stars on average out of 5). Regarding serviceability, Decathlon provides repair services in case consumers have problems with their equipment. This helps the brand establishing more trust with consumers and empowering brands’ reliability.
c) Service Effectiveness, Efficiency, and Empathy
Decathlon defines its main values as vitality and responsibility. Their employees are usually recruited based on both of these values and trained to deliver them on each interaction with customers. One of Decathlons’ main mottos clearly described on their website is to guarantee the safety of their customers as well as their teams. Consumers agree that the staffs at Decathlon are friendly with an average of 67% on a scale from 1 to 100 and rated the service with an average of 4 stars out of 5. Regarding waiting lines, it is noticeable from respondents’ answers that they usually do not spend time in lines while shopping at Decathlon.
d) Style and Design
From Decathlons’ website, it is clear that the brand is aiming to deliver functional equipment as well as high quality sportswear. They focus a huge part of their communication on these premises. Consumers gave 3 stars to the brand design and, on Q7, regarding the reasons people buy from Decathlon, only one respondent stated buying due to their trendy clothes. By focusing too much on the functional benefits, the brand is being perceived as a brand that is practical (77 out of 100) which is purchased for utilitarian reasons.
Another important Decathlon statement is their value over money. People are associating Decathlon with a brand that delivers high quality for low prices. This association has been created from a long time of consistent communication efforts, like the “lowest prices” campaigns that usually stick in people's minds. Their message has been well received by consumers since they evaluated Decathlon with an average of 78 out of 100 (Q11) on the dimension “good quality for money”. To further study this aspect, respondents were provided with a randomized question (Q6) on which everyone would see the same sweater to buy for a friend, but 33% had the logo of a brand from Decathlon, 33% had the logo of a brand from Sport Zone and 33% had no logo at all. All had the same design and the same features, the brand logo being the only difference. From the results, it was seen that the respondents, on average, would be willing to pay 19€ for the sweater with no brand, 16€ for Sport Zone’s sweater and around 14€ for Decathlons’ sweater. This was a double-sided result: On one hand, Decathlon’s communication has proven effective since people are associating their products to lower prices and thus are willing to pay less for their sweaters. But on the other hand, Decathlon is losing 5€ on each branded piece of clothing. There is no assurance that this strategy is the best for Decathlon and on how this trade-off might be compensating the brand in the long-run, but further studies are recommended to understand the effects of this on their revenues.
“Brand imagery deals with the extrinsic properties of the product or service, including the ways the brand attempts to meet customers’ more abstract psychological or social needs” (Keller, 2001)
Aiming to get insights on imagery that respondents have regarding actual Decathlon customers, they were asked to describe the characteristics of a Decathlon customer according to their perception.
The findings revealed that Decathlon customers are mostly perceived as people who love the practice of sports activities, who are fit or who are just beginning their sports activities. Regarding demographics, respondents perceive Decathlon customers as young adults who do not have high income levels. Respondents disagree with the fact that Decathlon customers value style and that they belong to the segment of office workers. These findings are consistent with the findings from the in-depth interviews.
Regarding the purchasing behaviour, almost all respondents buy in-store and only 3% of the sample buys online. This was expected since the brand is not making many visible efforts on the online shopping experience, but is rather focusing on in-store purchase. From qualitative research, it was also visible that some clients were quite dissatisfied with the purchase situations, either due to the lack of stores or due to the overall design of them. It would be advised for Decathlon to either extend their points of sale or to start focusing on online selling. Even though people from quantitative research attributed fair evaluation of the purchase situations and store environment, there is space for improvement since the average evaluations of different store situations was never completely agreed on within the group of respondents.
“Brands may also take on personality traits and values similar to those of people” (Keller, 2001). Regarding Decathlon personality, taking outputs from different questions on the survey it is possible to associate Decathlon with certain personality traits. The group opinion is that if Decathlon were a person, it would be a friendly individual who enjoys sports and that is usually more into functional products than hedonic ones. It is seen as a young adult brand who is for everyone, but that lacks trendiness even though it has high quality products.
”Brand responses refer to how customers respond to the brand, its marketing activity, and other sources of information, that is, what customers think or feel about the brand.” (Keller, 2001) Brand responses are composed of brand judgements, the thinking part, and brand feelings.
Moreover, Decathlon as a brand was compared to its main competitors Nike, Adidas and Sport Zone, which had better scores in terms of uniqueness and trendiness, but at the same time Decathlon without a doubt won in terms of image of being The brand for everyone and practicality. This implies an interesting conclusion in regards of established brand identity and image and how can it be manipulated, more of which will be discussed in the recommendations part of the report.
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Figure 2. Brand judgements and feelings data
“Brand feelings are customers' emotional responses and reactions with respect to the brand” (Keller, 2001). In terms of exploration and evaluation of customers' feelings about Decathlon, participants of the survey were asked to evaluate several statements about the brand and shopping experience.
Overall, it can be concluded that Decathlon has quite some space to improve its customer experience, since only 25% of customers expressed the feeling of happiness in interaction with the brand, with the mean value of 53.76 on the scale of 100 for the statement “The brand makes me happy.” Some of the possible reasons for the aforementioned based on the survey are that shopping experience is time consuming and sometimes complicated and confusing. On the other hand, 70% of the customers expressed the increase in their motivation and willingness to practice sports when interacting with the brand, as well as 70% participants expressed satisfaction with the friendliness of the staff and 68% of them who consider the amount of available information about Decathlon's offer to be satisfying. This inconsistency in customers' opinions could be also seen in in-depth interviews conducted beforehand, which leads to the conclusion that Decathlon should reconsider its brand image and improve it to comply with customers' expectations and needs.
Brand relationship: Resonance
Brand resonance is the fourth and last stage of brand development. It can be found at the top of Keller’s customer-based brand equity pyramid, and it basically refers to “the nature of the relationship customers have with the brand and whether they feel in synch with the brand” (Keller, 2001). The branding objective at this point is that customers qualify their relationship with a given brand as intense and their loyalty towards it as active (Lakishyk, 2016b). Brand resonance can be better measured through the following four subcategories: (i) behavioural loyalty, (ii) attitudinal attachment, (iii) sense of community and (iv) active engagement. The present section will cover these four categories in regards of the answers to the survey.
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Figure 3. Decathlon consumers' loyalty
Behavioural loyalty. According to Keller, loyalty mainly translates into high frequency and amounts of purchases. It can be added that loyalty also implies being deeply committed to a brand, despite the rivals’ marketing efforts (Biscaia Dos Santos Silva, 2013). In this regard, the survey’s respondents were asked to which extent they considered themselves loyal to Decathlon through a 5-points smiley face rating, with 1 meaning “Not loyal at all” and 5 meaning “Extremely loyal”. The results show that 10,5% of the customers claimed to be disloyal, 8,4% somewhat disloyal, 21,7% neutral, 32,9% somewhat loyal and 26,6% loyal (Q18). These results are consistent with the ones that have been obtained through the individual interviews conducted prior to the survey, during which 4 out of the 7 interviewees considered themselves as loyal to the brand, citing prices and diversity as the main drivers explaining their preference. A clear majority of the respondents thus see themselves as loyal to Decathlon.
 Source: Own graphic created from results of questionnaire
 Source: Own graphic created from results of questionnaire
 Source: Own graphic created from results of questionnaire