Question

You are a consulting group with Adidas Corporation. Nike, Reebok, Under Armour, Converse, Fila and many others compete with you in the athletic apparel industry. Nike began a campaign last quarter using Steph Curry as their spokesperson. His ads have been plastered on everything from billboards, to buses, to the backs of boxers! The ads imply that if Nike helped LeBron become a great athlete they can help you too. Since the inception of the program Adidas sales have dropped. What kind of market structure is in place and what would you tell Adidas to do to boost sales?

Answer 1

Monopolistic market structure is in place as

1) There are large number of sellers in the market

2) Products are same or similar but they are not substitute on another based on their quality , design and price.

3) Here any new firm can enter the market as there is no barrier of entry.

Here each firm is using different marketing strategies to capture the market as there are large firms.

I will advise Adidas to keep an offer for few days as seasonal offer and ask them to reduce the price of their products so that they can increase demand for products as a part of offer. I will tell them to promote the offer on all networking sites like news paper , social media etc to boost their sales.