Download - Marketing Strategies Adidas Final
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IN-COMPANY TRAINING REPORTON
Marketing Strategies of ADIDAS
COMPLETED IN“Adidas Int. Pvt. Ltd.”
Submitted in partial fulfillment of the requirement ofBachelor of Business Administration (BBA)
Guru Jambheshwar University of Science & Technology, Hisar
TRAINING SUPERVISOR SUBMITTED BY:Mr. Anil Sharma Aman KumarDesignation – Marketing Manager Enrollment No. 09511225005
SESSION: 2009-12
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DECLARATION
I hereby declare that the project report entitled “Marketing Strategies of Adidas”, is submitted
in partial fulfillment of the award for the degree of the Bachelor of Business Administration to
Guru Jambheshwar University Of Science & Technology, Hisar is an original piece of my project
work carried out by me and the same has not been submitted to any other University for the
award of any degree, diploma, fellowship or any similar title.
Name: - Aman Kumar
Enrollment No-09511225005
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ACKNOWLEDGEMENT
Special thanks to Mr. Anil Sharma for making my project at Adidas a memorable
learning experience. For his learned guidance, constant inspiration, keen interest
and immense encouragement throughout the period of market research. His
constant supports as well as the confidence, which he shown in me helped me,
hide over the difficulties.
PREFACE
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I have made a research on marketing of Adidas by questionnaire method. The main
aim of my research is to find out that how Adidas hold to the market and what are
the areas in which Adidas can improve upon, in the questioner itself I have
emphasis on the marketing of Adidas and also about the current position of Adidas
in market. According to the response of my questionnaire, I have found that Adidas
and Nike are main competitors but Nike is more preferred brand then Adidas. This
is mainly for two reasons first Nike has more variety and good looks then Adidas
and second there outlets are more then Adidas so the company must work upon
these two thing to be the world number one.
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Table of Contents
Executive Summaryo Introduction 7-8
Profile of the Company 9-12
o Products 13-19o Financial facts 20
Marketing Strategies 21-28o Marketing mix 29-40o Other important strategies 41-47o Adidas logo 48-49
Market Research o Objectives 50o Conducting marketing research 51o SWOT Analysis 52-53o Research and Methodology 54-55o Limitations 56
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Findings and Analysis 57-66
Conclusion 67-68
Recommendation 69-71
Bibliography 72-73
Annexure 74-75
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Executive Summary
INTRODUCTIONMy project topic is "Adidas" which is a shoe company and I am analyzing its
Marketing Strategy. I have chosen this particular topic mainly for two reasons.
Firstly, since my childhood days I had great interest in the shoes and I like to buy
new shoes as and when it comes in the market. The Shoe Company that I most
admire is Adidas. Secondly adidas grows as one of the best leading brand in the
shoes and other accessories which is admired by all types of generation. Hence I
have decided to do my project report on this company.
The Adidas mission has changed little since founder AdiDassler began making
sports shoes in the 1920s: to be the best sports brand in the world. The history of
Adidas is one of consistently meeting the evolving needs of the athlete. Focusing
more on function and less on fashion, Adidas strives to provide athletes with
shoes that can make a noticeable difference in their performance. Meeting
athlete needs is what makes Adidas the best. Adidas America has continued to
build on this history.
In February of 1993, Adidas acquired Sports Inc., a US-based sports marketing
company founded by former Nike executives Rob Strasser and Peter Moore.
Sports Inc. had been working in conjunction with Adidas USA on the design,
development, and marketing of the Adidas Equipment line. This line helped
rejuvenate and reposition the Adidas brand in the United States by creating an
exclusive line focused on fulfilling the functional needs of the athlete and by
utilizing the best materials and athlete input in the tradition of AdiDassler. It
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offered moisture management, thermal insulation, weather protection, ease of
movement, and safety, helping the athlete to perform more efficiently. After the
successful creation and launch of Adidas America
I have made a research on marketing of Adidas by questionnaire method. The
main aim of my research is to find out that how Adidas hold to the market and
what are the areas in which Adidas can improve upon, in the questioner itself I
have emphasis on the marketing of Adidas and also about the current position of
Adidas in market. According to the response of my questionnaire, I have found
that Adidas and Nike are main competitors but Nike is more preferred brand then
Adidas. This is mainly for two reasons first Nike has more variety and good looks
then Adidas and second there outlets are more then Adidas so the company must
work upon these two thing to be the world number one.
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Profile of the company
In the small German village of Herzogenaurach the world began its love affair
with Adidas (Ryno’s Company History). In 1920, Adolf “Adi” Dassler brought to
life those three little stripes. With his brother, Rudolph, Dassler manufactured his
first sports shoe, made for training, after realizing the need for performance
athletic shoes. In1948, the Dassler brothers separated to form their own two
separate companies. Dassler formed Adidas and his brother formed Puma, both
headquarters in Herzogenaurach.
The Adidas mission has changed little since founder AdiDassler began making
sports shoes in the 1920s: to be the best sports brand in the world. The history of
Adidas is one of consistently meeting the evolving needs of the athlete. Focusing
more on function and less on fashion, Adidas strives to provide athletes with
shoes that can make a noticeable difference in their performance. Meeting
athlete needs is what makes Adidas the best. Adidas America has continued to
build on this history.
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In February of 1993, Adidas acquired Sports Inc., a US-based sports marketing
company founded by former Nike executives Rob Strasser and Peter Moore.
Sports Inc. had been working in conjunction with Adidas USA on the design,
development, and marketing of the Adidas Equipment line. This line helped
rejuvenate and reposition the Adidas brand in the United States by creating an
exclusive line focused on fulfilling the functional needs of the athlete and by
utilizing the best materials and athlete input in the tradition of AdiDassler. It
offered moisture management, thermal insulation, weather protection, ease of
movement, and safety, helping the athlete to perform more efficiently. After the
successful creation and launch of Adidas America
Current executive board
CEO Adidas-group: Herbert Hainer
Finance Adidas-group: Robin J. Stalker
CEO Adidas brand: Erich Stamminger
Global Operations Adidas-group: Glenn S. Bennett
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General Information
For over 83 years Adidas has been part of the world of sports on every level,
delivering state-of-the-art sports footwear, apparel and accessories. Today, with
total net sales of 6.1 billion and net income of 208 million, Adidas - Salomon is a
global leader in the sporting goods industry and offers the broadest portfolio of
products. Adidas-Salomon products are available in virtually every country of the
world. Our strategy is simple: continuously strengthen our brands and products to
improve our competitive position and financial performance.
The company's share of the world market for sporting goods is estimated at
around 15 percent.
Activities of the company and its approximately 100 subsidiaries are directed from
Adidas-Salomon AG's headquarters in Herzogenaurach, Germany. Also located in
Herzogenaurach are the strategic business units for Running, Soccer and Tennis as
well as the Research and DevelopmentCenter. Additional key corporate units are
based in Portland, Oregon in the USA, the domicile of Adidas America Inc. and
home to the strategic business units Basketball, Adventure and Alternative Sports.
The strategic business unit Golf is based in California. The business unit Winter
Sports is in Annecy, France. The company also operates design studios and
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development departments at other locations around the world, corresponding to
the related business activity. Adidas-Salomon AG has approximately 13,400
employees worldwide.
Turnover and Brand Image
The turnover of Adidas companyhas grown to 16 Million US dollar in 2004-05.
Almost 53% of the turnover is from sale of apparel and accessories with the rest
from footwear.
The Adidas brand is one of the most popular brands as determined by a within
brand survey of sportswear brands in the year 2004.
Future Plans
Turnover is expected to rise to 18 Million US dollarfor Adidas India in 2005-06
cash break even is fore cast during calendar year 2005 and an operating break
even during 2006. The other Adidas – owned brands, salomon&taylor made are
expected to hit Indian Adidas stores during 2005 and 2006.
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PRODUCTS
Running
Adidas currently manufactures several running shoes, including the adiStar
Control 5, the adiStar Ride (the replacement for the adiStar Cushion 6), the
Supernova Sequence (the replacement for the Supernova Control 10), and the
Supernova Cushion 7 (which will soon be replaced by the Supernova Glide),
among others. In addition, their performance apparel is widely used by runners.
Adidas also uses kangaroo leather to make their more expensive shoes
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Football (soccer)
One of the main focuses of Adidas is football kit and associated equipment.
Adidas also provides apparel and equipment for all teams in Major League Soccer.
Adidas remain a major company in the supply of team kits for international
football teams.
Adidas also makes referee kits that are used in international competition and by
many countries and leagues in the world. In the United States, referees wear the
Adidas kits in MLS matches even though the primary referee supplier is Official
Sports. The company has been an innovator in the area of footwear for the sport
with notable examples including development of the Copa Mundial moulded boot
used for matches on firm dry pitches for almost forty years. The studded
equivalent was named World Cup follow in celebration of the 1978 tournament
won by Argentina, one of the nations it supplied at the time. Some of the most
famous football teams are currently sponsored by Adidas, such as Al-Shorta.
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Cricket
In the 1990s, Adidas signed the famous Indian batsman Sachin Tendulkar and
made shoes for him.]Tendulkar continues to wear Adidas shoes while playing
matches. Adidas even made action figures after SachinTendulkar.From 2008,
Adidas also sponsor the Bat used by Sachin Tendulkar. It created a new bat
'Adidas Master Blaster' personalized for him.
In 2008, Adidas made their move into English cricket market by sponsoring English
batting star Kevin Pietersen after the cancellation of his lifetime deal
with Woodworm, when they ran into financial difficulties.]The following year they
signed up fellow England player Ian Bell,Pakistan opening batsman Salman
Butt and Indian Player RavindraJadeja. Having made cricket footwear for many
years, the company finally entered the field of bat manufacture in 2008 and their
products are available in the Incurza, Pellara and Libroranges.This bat is worth
over £1000.
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Adidas also manufactures the uniforms worn by both the England cricket
team and the Australian cricket team. Adidas signed partnership withCricket
South Africa in 2011 and the uniforms worn by South African Cricket Team during
and after Cricket World Cup 2011 will be manufactured by Adidas.[23] They also
sponsored the South Korea national cricket team .
In the Indian Premier League (IPL), Adidas are the official apparel sponsor for the
teams Mumbai Indians, Delhi Daredevils and Pune Warriors
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Basketball
Adidas has been a longtime basketball shoe manufacturer and is one of the
leading basketball brands in the world. They are most famous for their iconic
Superstar and Pro Model shoes, affectionately known as "shelltoes" for their
stylized hard rubber toe box. These were made very popular in the 1980s hip hop
streetwear scene alongside Adidas' stripe-sided polyester suits.
Adidas is also the current outfitter of all 30 franchises in the National Basketball
Association (replacing the Reebok brand after the merger) and sponsors
numerous players past and present like Kareem Abdul-Jabbar and Tracy McGrady,
as well as Dwight Howard, Chauncey Billups, Derrick Rose, Eric Gordon, Michael
Beasley, Josh Smith and Tim Duncan. Adidas used to endorse Kobe Bryant with
the Adidas Equipment KB8 as his first signature shoe, and stopped endorsing him
in 2003. The company also endorsed Kevin Garnett, until he opted out of his
contract in 2010; he is currently endorsing Anta. Lebron James also wore Adidas
at high school. Now he endorses Nike to date. Gilbert Arenas was an Adidas
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endorser until the now-infamous gun incident last season; he is currently un-
endorsed.
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Accessories
Adidas also designs and makes sandals, watches, eyewear, bags, baseball caps,
and socks.
As well, Adidas has a branded range of male and
female deodorants, perfumes, aftershave and lotions.
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FINANCIAL FACTS
For over 83 years Adidas has been part of the world of sports on every level,
delivering state-of-the-art sports footwear, apparel and accessories. Today, with
total net sales of £182 million, Adidas-Salomon is a global leader in the sporting
goods industry and offers the broadest portfolio of products. Adidas-Salomon
products are available in virtually ever country of the world. Our strategy is
simple: continuously strengthen our brands and products to improve our
competitive position and financial performance. The company’s share of the world
market for sporting goods is estimated at around 19 percent.
FINANCIAL DATA IN MILLION EUROS
Year 2006 2007 2008 2009 2010
Sales 10,084 10,299 10,799 10,381 11,990
EBITDA 1,078 1,165 1,280 780 1,159
Net results 483 551 642 245 567
Net debt 2,231 1,766 2,189 917 221
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MARKETING STRATEGIES
OVER VIEW OF ADIDASSome of the theory I have used in my project are as follows
Theory: what is market research and why it is important.
Market research is a method of collecting data which will make you (as a
business) more aware of how the people, you hope to sell to, will react to your
products or services. Market research will answer questions like:
Whether your products or services are needed
Who might want to buy your products
What age, sex, income occupation etc. are the people I want to sell to.
If there are changes taking place and how this might affect what you sell
How well your products or services might sell
How much demand there is for what you hope to sell
What price would people be prepared to pay
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Theory: marketing mix
The Marketing Mix (The 4 P's of Marketing)
Marketing decisions generally fall into the following four controllable categories:
Product
Price
Place (distribution)
Promotion
The term "marketing mix" became popularized after Neil H. Borden published his
1964 article, The Concept of the Marketing Mix. Borden began using the term in
his teaching in the late 1940's after James Culliton had described the marketing
manager as a "mixer of ingredients". The ingredients in Borden's marketing mix
included product planning, pricing, branding, distribution channels, personal
selling, advertising, promotions, packaging, display, servicing, physical handling,
and fact finding and analysis. E. Jerome McCarthy later grouped these ingredients
into the four categories that today are known as the 4 P's of marketing, depicted
below:
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The Marketing Mix
These four P's are the parameters that the marketing manager can control,
subject to the internal and external constraints of the marketing environment.
The goal is to make decisions that center the four P's on the customers in the
target market in order to create perceived value and generate a positive
response.
Product Decisions
The term "product" refers to tangible, physical products as well as services. Here
are some examples of the product decisions to be made:
Brand name
Styling
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Quality
Price Decisions
Some examples of pricing decisions to be made include:
Pricing strategy (skim, penetration, etc.)
Cash and early payment discounts
Price flexibility
Price discrimination
Distribution (Place) Decisions
Distribution is about getting the products to the customer. Some examples of
distribution decisions include:
Distribution channels
Market coverage (inclusive, selective, or exclusive distribution)
Warehousing
Distribution centers
Transportation
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Promotion Decisions
In the context of the marketing mix, promotion represents the various aspects of
marketing communication, that is, the communication of information about the
product with the goal of generating a positive customer response. Marketing
communication decisions include:
Promotional strategy (push, pull, etc.)
Advertising
Personal selling & sales force
Sales promotions
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Theory: SWOT analysis
This theory tells about the company strength, weakness, opportunity and Threats.
This theory is very important for the company because this theory tell the
weakness and the strong points of the company and if company knows it
weakness and it strong points then company becomes easy operative and also the
profits as well as the market share of the company get increased.
The Company
Adidas entered the Indian market in 1996 by setting up a 100% subsidiary of
Adidas AG called Adidas India Ltd. and announced its joint venture with Magnum
International Trading Company Ltd. on October 1, 1996. The new joint venture –
Adidas India Ltd. – was incorporated with an initial investment of US $ 205 million
with Adidas India Ltd. holding 80% of the equity and Magnum holding the balance
20%. This investment was raised to US $ 6.4 million with the equity structure
remaining the same. Currently, the total investment stands at US $ 11.4 Million
with the equity structure changing to 91.4% by Adidas and 8.6% by magnum.
Adidas’ Range of Products in India
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A month after announcing the joint venture, Adidas India Ltd. launched its range
of sports footwear, apparel and accessories in New Delhi on November 1, 1996.
Subsequently, Adidas products were also launched in Mumbai, Bangalore,
Chennai, Hyderabad and Calcutta. Currently, Adidas products are available in 30
cities in India.
The range of Adidas products available in India include sports footwear featuring
some of the most popular innovations and technologies developed by Adidas such
as Feet You Wear, Torsion system and adi wear. The sports footwear available in
India includes a wide range of core categories such as adventure, basketball
cricket, golf, indoor, running, tennis, training, soccer and workout.
Adidas has introduced in India, a wide range of sports wear for both men and
women. These include apparel for athletics, basketball, cricket, golf, running,
soccer, swimming, tennis and training for Men. The women’s range includes
apparel for athletics, golf, running, swimming, tennis, training and workout.
Accessories include bag packs, campus bags, medium and large kit bags, caps,
socks, wrist and headbands.
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Adidas Markets its products in India through a combination of mega exclusive
stores (area of 1000 sq. feet and above), exclusive stores, multi-brand stores and
distributors.
At present, Adidas is available in 80 exclusive outlets out of which 34 are company
– owned with 8 new Company – owned stores planned for 2005 and in 500 multi-
brand outlets in India.
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MARKETING-MIX
THE PRODUCT:
Whatever your athletic preference, you can now purchase an extensive range of
Adidas footwear and apparel online. From running shoes to baseball cleats, eye
wear to lanyards, collegiate licensed jackets to good old fashioned cotton T-shirts,
all things sport are available at the Adidas store.
HOW DO ADIDAS CREATE ITS PRODUCTS
Adidas goal is to create a product that is honest – it must perform. The
rule is simple: form follows function.
Technology and functional design. A development team makes the actual
prototypes. These prototypes are then presented to the retail market by
the marketing department.
An Adidas product is the result of the intense thought and creative energy
of many different people. The following is a general outline of how we
create our performance-based products.
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1. The marketing department evaluates athletes’ needs and develops
a basic concept of how those needs should be met. This concept is
then presented to the design department.
2. Based upon this concept from the marketing department, the design
teams sketch possible prototypes.
3. The people from design and marketing consider the prototype
sketches together, narrowing the selection to those they anticipate
will most successfully meet athletes’ needs.
4. The development department then works with the design
department to create an actual prototype from the selected
sketches.
5. Three separate groups – marketing, design and development – meet
and discuss how to improve the prototype.
6. Samples are wear-tested to ensure the product meets Adidas
standards for performance and durability and stands up to the
demands of the sport for which it was designed.
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7. Preview samples are presented to key accounts and consumer focus
groups for feedback. Based upon this information, final changes are
made.
8. Samples are distributed to Adidas sales representatives for
presentation to retailers.
9. The finished product is delivered to retailers.
A. As A BRAND
At Adidas –you have got to be sporty. At Adidas the brand awarding is
been taken rather seriously at its headquarters. Adidas wants to bring
inline skates into India.
What that kind of stuff got to do with Indian market? Yes, it won’t really
be a hot seller, but it will contribute a lot to Adidas brand image. That’s
the Adidas way of doing it – image is a critical part of branding strategy
the world over.
The idea of the company is to introduce performance specific sports shoes
in the Indian market by building images around the world & at the same
time create the need for these shoes at the ground level.
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Adidas already has heavy weight sportsmen such as Sachin Tendulkar,
Leander Paes & Mahesh Bhupathi endorsing the brand in India. They had
the image, apart from endorsing the performance element in the brand.
Adidas steps out of crease with a clear sports positioning. Adidas will take
on arch Nike with almost the same positioning. Its working with promising
athletes to give them a taste of its products. Adidas nowadays is capturing
an attitude that is sports related.
Adidas in fact did go through a limited fashion phase. Adidas says – that
you are tempted to make quick buck but we would like to stick to the
sports brand image because that make us fashionable.
B. Words of G. Kannan (Director – Marketing)“Our Secret is our commitment to the sports process. We develop shoes
that take into account the needs of a particular sports & the role of this
brand is driven by this factor”.
Good news for Adidas is that even in the casual market, the trend is
towards being sporty. Going to Gym is fast graduating from a mere fad to
serious body building, strengthening & toning. This is reflected in the
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clothes that people wear today. The three stripes, for instance is unique
property which can be reinvented in various forms as trends changes.
C. For Adidas the product plays an eminent role in the enhancement of their corporate as well as sports image:ADIDAS SAYS –
“Nothing compromised. The most innovative Adidas products created specifically
to help make you a better athlete. For Adidas, product is not just a assortment of
few items. But it involves—developing of the rightproduct – which can then be
put to right place & sold with the right promotion & price.
VALUE OF IT’S PRODUCTS FOR ADIDAS
Our goal is to create a product that is honest – it must perform. The rule is
simple: form follows function.
As studied earlier an Adidas product is the result of the intense thought
and creative energy of many different people. If a company sell an
automobile, is it selling a certain no. of nuts and bolts, some metal sheet,
an engine and four wheels?
If a company sell a delivery service, is it selling so much wear and tear on
a delivery truck and so much operator fatigue? As per Adidas the answer
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to these question is instead what we are really selling is the satisfaction,
use or profit the customer wants.
Adidas says that all the customer wants is, that whatever product they
purchase should fulfill all their needs and preferences. They don’t care
how they were made. Further they want that when they order something,
the don’t really care how much out of the way the driver had to go or
where he/she has been. They just want their package. That means for
them only the final service matters.
As per Adidas the idea of product potential customer’s satisfactions or
benefits is very important. Adidas says that the total product is not just a
physical product with its related features, but it includes accessories,
installation, instruction on use, the package, perhaps the brand name
which fulfills some psychological needs a warranty and confidence that
service will be available after the purchase .
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PLACE AND PHYSICAL DISTRIBUTION:
A: Place
Adidas is very much concerned about its second “p”. as per Adidas place
and physical distribution of the product is something on which almost
every company spends a handsome amount of money.
Hence Adidas takes a good care of its place and physical distribution
process. Adidas has appointed marketing specialists who are taking care
of the supply of the product and their distribution channels and process.
Process used – assorting progress
Entire range, which is available is put together to give a target market what it
wants. Marketing specialists put together an assortment to satisfy some target
market. His is usually done by those who are close to the retailers only.
B: Physical distribution
As per Adidas nearly half of the costs of marketing is spend upon the physical
distribution.
To take care of this problem Adidas has appointed marketing managers who
decides how the transporting and storing functions should be divided within a
channel.
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Note: Physical distribution can be varied endlessly in a marketing mix and in a
channel system.
TRUCKS
In Adidas, except the export products, trucks are considered to be the best
medium for transport. The flexibility of trucks makes them really good for moving
small loads for short distances. They can travel on almost any road. According to
Adidas they can give extremely fast service. Also trucks causes less breakage in
handling.
PROMOTION:
Adidas is one of the India’s biggest company of sports that spends nearly $10
million on its sales promotion and advertising in Indian Market.
Adidas believe that it just cannot be taken lightly. It is a very important aspect of
products life cycle. It is the process which is responsible for the growth or decline
in the sale of the product.
Adidas thinks that promotion is communicating information about the product
between the seller and the buyer to change attitudes and behavior.
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To handle the company’s promotional activities Adidas has employed marketing
managers, wherever the Adidas is located. These marketing managers look after
process of the promotion of the products of their company.
As per Adidas the marketing managers promotion job is to tell the target
customers that the right product is available at the right place and at the right
time and especially at the right price.
Adidas thinks that only taking the product to the customers is not a task
of the company. But company takes a very important look about how the
product works and this message is communicated to their consumers.
Because a wrong message can lead to the end of their products life.
Sales Promotion
Adidas is the most popular amongst its rival for its excellent sales
promotional activities.
As per Adidas they say that they themselves are responsible for the
encouragement of the customer to by their products. Adidas believes
sales promotion tries to compliment the company’s selling efforts.
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STEPS THAT ADIDAS TAKE TO PROMOTE
SALES
In the last years the Adidas has almost given sale to its products 6 to 7
times i.e. almost twice in a year Adidas goes for discount on sales. They
arrange contest.
In order to motivate the employees of the company Adidas also prepares
training material for the company’s own sales force. They even design the
sales materials for the company’s own sales force to use during the sales
calls. As per Adidas, people see same message in different ways. They may
interpret the same words differently. So Adidas always tries to deliver the
message which everyone can easily understand.
ADVERTISING
As per Adidas advertising can get results in a promotion blend. Good results are
obtained at a cost of course. The amount spent in the Unites States for
advertising is growing. Continuously, from World War II to 1980 it went from $1
billion to $50 billion.
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Adidas also spends nearly $2.9 million on its advertising throughout the world.
Adidas in India is spending almost $17 million on advertising.
The heavy weight players like Sachin Tendulkar, Leander Paes and Mahesh
Bhupathi are already attached with their ad-campaigns.
PRICING:
Adidas is clear, it wants to become the no. one sports brand in India, a
choice brand for all brands. So far so good, but how will it tackle a price
conscious market like India?
Adidas feels that being a high energy business Adidas introduces 600-700
articles every six months – enables the brand to remain fresh and bring on
an international and Indians the brand from the price stand point.
Price, that’s the most critical factor in the Indian context. Adidas believes
it has to deliver a functional at an affordable price. It’s a tough job – to
maintain the integrity of the performance and still come out with a
product a right price point. Globally shoes start at $50. But in India as the
perceived need is lower, you have to make the product more affordable.
To tackle this, Adidas came out with speed 2000, a product priced at
Rs.995 with the help of local and Hong Kong source people. Adidas
however feels that its just the matter of time before India coverage’s the
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world on this front. It is very difficult to operate on a lower price point
and maintain integrity of product, but its been barely 3 years since the
sports market has taken off. The original sector is just 20% of the total
market and 80% of the volumes comes from sporty shoes. But our market
is producing products at a price that is relevant to the consumers.
Adidas feels that as the volume go up, Adidas will try and work out price
points as people graduate with better understanding of quality and price
perception. Volumes are bound to go up. Adidas started at the time when
India had no strength out in the sports products market in 1989 – 90. Its
then licensing partner Bata, and it had limitations of what it could have
put behind the brand. So company took the next best step when the
licensing agreement ended to take a bigger share in business.
To conclude we can say that Adidas is putting all efforts to bring down the
price consciousness in the Indian market. Company is trying to make
products, which are easy to afford and still maintain the integrity of their
performance. Growth has been phenomenal for Adidas even given the
base is small. In 2002 Adidas grew by 25%, 2003 by over 50% and this year
Adidas is expecting more than 50% in terms of value in both shoes and
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apparel, while the industry growth as a best case estimate has been 20-
25%.
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OTHER STRATEGY
Adidas, the brand with three stripes, seems to use the elements of high-
tension in its ads. Remember the Sachin Tendulkar commercial? How
everything is near-frozen, and the shattering glass signifies release.
Release of tension. Adidas gives you a chance to but the boundaries – in
every sphere.
Only now, the setting is not the playground or the track or the court, it is
the urban landscape – with its omnipresent traffic jams, crowded streets
and so forth. This way, Adidas becomes a part of life. Anyone’s life. You
don’t have to be the high-voltage performer to be a part of the Adidas
family. And it goes beyond that – Adidas becomes something that makes
you better. Not just as an athlete, but as a sports person, a better human
being.
One of the advertisement: The spot featuring Boldon, shows him chasing
a thief (who’d stolen a TV set when its owner was in the bath) through the
dark streets. To help a man (the owner, in a towel) in distress. And he
uses all the power that he can, to do what he has to do and what he needs
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to do. And Adidas helps him perform better, than he would otherwise
have been able to. This is perhaps shown in an oblique way when the spot
ends at the feet of Boldon and the bather.
One is wearing a pair of Adidas shoes while the other is barefoot. Adidas
makes you better, goes the base. In short, the other man could have done
as well as Boldon. The bather reads any man. Any man who wears Adidas.
And Adidas goes beyond athletic performance – it becomes everyday life.
In stark reality.Though humorously and light, it has a deep meaning.
LEVERAGING ON SACHINONE MAJOR PART OF MARKETING STRATEGY IN INDIA
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Continuing its association with trump card Sachin, the local four-ad print
campaign tries to connect Adidas’ product attributes with Sachin’s magic.
“Instead of presenting just one dimension:
The first ad connects Sachin’s choice of a heavy bat with Adidas’ Falcon
Dorflightweight shoes. Says the headline: ‘Sachin likes his bat heavy, not his shoe.’
The second new shoe range to be introduced for the first time in India. Sub-
branded ‘Aksu’ and priced at Rs 2,299, these are athletic sandals primarily meant
for water-based adventure sports. Finally, The next ad will convey that Adidas
covers various price points by promoting its existing Portland range priced at Rs
1,499 and 1,799 (the leather version).
The importance of celebrity sponsorship and events to Adidas is illustrated by
Robert Louis-Dreyfus’ letter in the company’s 1998 annual report :
“When it comes to showcasing our brands, 1998 was truly exceptional. Early in
the year, the Winter Olympics focused the attention of sports enthusiasts on
Nagano. In summer, the Soccer World Cup in France attracted more spectators
than any single sports event before. When the French team, promoting the three
stripes, won the World Cup, we could not have wished for more. These were
great times for our brand.’
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Adidas has reached an agreement with ISL Marketing G of Switzerland to become
an official sponsor of the 2000 UEFA European Championships. Adidas will have
access to the official emblems, mascot and trophy for the design of its own
products..
In 1998, the overall Adidas budget for promotion and sponsoring accounted for
nearly 15% of turnover.
The positioning is being communicated through its global campaign-released
worldwide in February 1999 but in India, only in May-as well as through a four-ad
print campaign developed locally by RK Swamy/BBDO. Says G Kanan, general
manager, marketing, Adidas: “We are the only brand with heritage in sports. As a
brand, we’re not an attitude that’s fashionable. We’re an attitude that is relevant
all the time.
The campaign also introduces a new brand line for Adidas: ‘Forever Sport’. The
line sums up the “deeply-felt” and “long-term love affair” (it has been involved
with sports since 1928) that Adidas has with sport in all of its forms. Interestingly,
the new brand line has been introduced almost after a decade, when it was using
‘Earn your stripes’ as its tag-line. The company dropped it during the late 80s after
it found that it wasn’t connecting too well with its consumers.
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But the golden question is that will the campaign make Adidas run?
The company expects the campaign to strengthen the image of the brand since
research had indicated that neither of the three multinational sports shoe brands
present in India had a clear image: most were perceived as diffused brands and
personality-led. Says Kanan: “Sachin has and will play a major role in pushing the
brand. He is important, as there are certain values a consumer needs to know
about Adidas. But after a certain duration, we have to present a global
perspective too and hence the Forever Sport campaign.”
Interestingly, Adidas claims that it did not want to be caught up in the clutter of
the World Cup promotions-and deliberately chose not to associated with the
World Cup. Instead, according to Kanan, the campaign has been broken now to
coincide with the peak season (April-June). “The World Cup is incidental. It’s too
large an event to make significance for us”, says Kanan.
However, the company is maintain a steady and dominant presence in the media
during the Cup: strewn over select channels like Star, Discovery, and ESPN are the
Sachin ads promoting Adidas. “Star News is delivering good value while through
Discovery, we can catch the elite customer”, Kanan says.
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Although Kanan admits that the sports shoe and apparel market is at a nascent
stage, he claims that Adidas has grown by over 250 per cent from last year. As a
company that takes pride in not joining the price brawl, Adidas does not intend to
bring down the prices of its products. Says Kanan, “We don’t look at driving down
the market by lowering the price. We are willing to wait for the market to
evolve.”
For Adidas, the real breakthrough, says Kanan, has come through a combination
of strategies: signing on Sachin, Leander and Bhupathi; expanding its reach (it
opened 45 stores last year); a revamped range which covers a band of price
points; and support to the brand. "“e built-in value pricing in our products, and
supported them through sports icons who are looked up to. We have realized that
to have just one good guy endorsing your brand is more important than having
several unknown faces”, says Kanan
The company is enlarging the scope of its business by concentrating on apparel.
“Apparel is driving the business. Most consumers start experimenting with the
brand through apparel”, admits Kanan. Essentially perceived as a male brand,
Adidas however defends its range by pointing out that currently it has 50 items
out of a total of 250, for women.
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Further, Adidas is planning to add 30 new stores this year. “We’re looking at
driving the market through exclusive stores”. Says Kanan. The logic is clear: use
Forever Sport to ensure sales forever.
THE ADIDAS LOGO
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The “Trefoil” was adopted as the corporate logo in 1972. It
represents the heritage and history of the brand. In 1996, it was decided that the
Trefoil would only be used on heritage products. Examples of product featuring
the Trefoil logo include the Stan Smith, Road Laver, A-15 warm-up, and Classic T-
shirt.
Equipment
The Adidas Equipment line was launched in 1991. This line of footwear and
apparel represents the most unique and functional of Adidas products.
Equipment is the ultimate expression of what is uniquely possible by design when
form follows function.
In January 1996, the Three-Stripes brand mark became the worldwide Adidas
corporate logo. This logo represents performance and the future of the Adidas
brand. This logo is used in all advertising, printed collateral and corporate signage.
Since 1949, the Three-Stripes have been an integral part of our brand and
product designs. This trademark has become synonymous with Adidas and its
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dedication to producing high-quality athletic products to help athletes perform
better.
MARKETING RESEARCH
OBJECTIVES OF THE STUDY
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To study the marketing of Adidas and also about the current position of Adidas
in market
To find out Adidas and Nike are main competitors but Nike is more preferred
brand then others.
To find out that how Adidas hold to the market and what are the areas in which
Adidas can improve.
Conducting market research
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There are number of ways in which you can carry out your research but you need
to carefully consider why you made this choice and what you hope the evidence
will suggest to you.
Questionnaires and personal interviews are one of the most common ways in
which you can conduct market research, and there are many methods of
gathering data this way: Direct Interview, Mail Survey and Telephone interview.
Depending on the type of data you hope to collect will have a impact on what you
choose to use.I have made use of two type of survey methods, questionnaire
and mail survey. I have asked some question about the company by mail and also
by direct contacts. The Question I have asked are given in “questionnaire part”
below.
SWOT ANAYSIS
Strengths:
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The main strength of Adidas is his Product Quality. The quality and the material
uses in Adidas is very good. The company has a good brand image in the market,
the publicity and the advertisement is also very good and lastly company hold a
heathly market share in the market.
Weakness:
The major weakness in the Adidas is that the manufacturing of the products of
Adidas is not done in India itself it is being import hence the cost become high
and the margin of profit becomes low that’s why company must give a deep
thought on manufacturing their products in India.
Another major weakness in the company is that it is not catering to all the
segments which I have already discuss above, If these two weakness in the
company can be eradicated then the company may earn high profit and better
market status.
Opportunities:
Adidas does have many products for the urban segment or poor people, but there
are hardly any product or we can say that there are no products for this segment.
India is more a rural country, in the total population of India major part of
population lives in rural area and these people can not afford the costly products
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of the company like Adidas hence company must target this particular segment
they must introduce the shoes and other product according to their demands.
and also price is one of the major factor which may influence this type of segment
hence company should make their policy accordingly.
Company must also consider the rage of products as compare to Nike and
Reebok. In my opinion the company must introduce more rage or more variety in
the market to compete with their competitors and also the customer have more
choices to choice the product from.
Threats:
Adidas does not have strong distribution network as compare to Nike and Reebok
in India. Nike has more number of retail outlet then Adidas and Reebok has a
unique distribution network, the company Reebok not only use its outlet for the
sale of their product but also use some other shoes company outlet like “Bata”. In
a Bata showroom u can find Reebok shoes and other products. But this is not a
case with Adidas hence Reebok has a extra advantage over Adidas.
RESEARCH METHODOLOGY
STAGE ONE
The project study started with collection of Secondary Data. The sources for the
secondary data are as follows:
Data Sources
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News Papers
Magazines
Internet
Press articles on Adidas.
Stage Two
I visited the Adidas India Ltd., which is located In Mehrauli (new Delhi). I Also Met
Some Of The Marketing Executives Who Helped Me Getting The Required
Information.
I Also Got Some Of The Information From The Other Resources Of The Corporate
Office Like
Company Journals
Company Catalogs
Questionnaire (Structured & Non Disguised)
And Other Related Sources.
Primary data:
I have prepared a questionnaire for the general public asking about the
marketing strategy of Adidas, in that particular questionnaire I have asked
some question give in finding and analysis section: (the questioner is filled by
80 people).
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LIMITATIONS
The research project has been completed with ease and
comfortably. No particular limitation or shortcoming was
realized during the analysis.
Also, due to time constraints, enough justice could not be done
to the project.
FINDINGS AND ANALYSIS
Company research report
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(A) Company Description
Adidas-Salomon AG(ADIDAS). Production and marketing of sports equipment,
footwear and apparel under the brand names of Adidas, Salomon, Taylor Made
and Mavic. Sales of Footwear accounted for 45% of 2004 revenues; Sales of
Apparel, 35% and Sales of Hardware, 20%.
(B) Competitor Analysis
Adidas-Salomon AG operates in the Men’s & boys’ clothing sector. This analysis
compares Adidas with three other sport shoe and apparel manufacturers: Nike
Inc. of the United States (2004 sales of $9 billion of which 59% was Footwear),
Reebok International Ltd. of the United States (2003 sales: $2.87 billion of which
73% was Footwear), and Amer Group PLC which is based in Finland (2003 sales of
6.46 billion Finnish Markka [US$996.88 million] of which 24% was Racquet
Sports). Note: not all of these companies have the same fiscal year: the most
recent data for each company are being used.
(C) Sales Analysis
In 2008, sales growth in the adidas segment exceeded Management’s initial
expectations. Profitability developed in line with expectations. Currency-
neutral sales in the adidas segment increased 14%. In euro terms, segment sales
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grew 10% to € 7.821 billion in 2008 from € 7.113 billion in 2007. Gross
margin increased 1.2 percentage points to a record annual level of 48.6% (2007:
47.4%). This was mainly driven by an improving regional mix, further own-retail
expansion and a more favourable product mix. Gross profit grew 13% to € 3.802
billion in 2008 from € 3.370 billion in 2007. As a result of the positive gross margin
development and stable net other operating expenses and income as a
percentage of sales, operating margin increased 1.1 percentage points to 14.0%
(2007: 12.9%). Operating profit increased 19% to € 1.098 billion in 2008
versus € 920 million in 2007.
adidas at a glance€ in millions
2008 2007 Change
Net sales 7,821 7,113 10%
Gross profit 3,802 3,370 13%
Gross margin 48.6% 47.4% 1.2 pp
Operating profit 1,098 920 19%
Operating margin 14.0% 12.9% 1.1 pp
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ADIDAS NET SALES BY QUATER
GROWTH
Adidas is a constantly growing company. It is global in scope with the majority of
its sales coming from Europe, followed by the United states, with the smallest
percent of Adidas’ sales coming from Asia. Adidas sales have grown significantly
each year from 1994 to the present. Adidas is the leading producer of sporting
goods in Europe and it is second in the overall world market, just behind Nike.
Nearly 55% of Adidas revenues come from Europe, while 37% come from the
Americas, and only 9% of revenues come from a growing Asian market.
For anyone not familiar with the structure of this company (since it is not based
out of the USA), it is much like US based competitor Nike. Adidas has stock
traded on exchanges in Frankfurtand Pairs, and its ticker symbol is ADDDY. The
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pie chart below shows exactly how the ownership of the company is spread out
across the world. Most of the ownership comes from Europe, while a substantial
30% comes from the United States, and the rest from Asia.
Adidas is a growing company as stated above, but how much and how fast? As
you can see from the graph of net sales over the past five years, sales have grown
rather exponentially, although growth slowed in 1999. This growth in sales comes
from not only an improving world economy, but from Adidas’ marketing efforts
to make it one of the most popular sporting goods brands.
This shows that Adidas does not have a large market share in Asia as compare us
and Europe and my questionnaire (given below) also suggest that company can
improve a lot the certain areas are marketing distribution and competing with the
Asia5%
US30%
UK25%
Europe40%
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competitors. The company has to become innovator not follower they must do
something differently to come with the flying colors.
DATA ANALYSIS
1. How do u rate the company marketing strategy as compare to the other
competitors company like Nike, Reebok etc.?
Out of 80 people 36 had said Adidas have a good marketing strategy and
should continue like this only, 24 had said Nike is more better then Adidas, 16
said Reebok is good and 4 said others.
adidas45%
nike30%
reebok20%
others5%
Chart Title
adidas
nike
reebok
others
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2. Do u think that the company Adidas is giving its customer what they want in
terms of quality and prices or value for money? Out of 80 people 68 person
are satisfy with the quality and the price of the product and other says that
they are not satisfy.
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3. Do u think that the advertisements and the brand ambassador of the
company is good enough?
Out of 80 people 66 person said yes they like the advertisement
very much and rest said no they don’t like them.
83%
18%
Chart Title
happy
not happy
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4. What things u keep in mind while purchasing shoes will it be quality,
advertisement, price or design?
Out of 80 people 69 person had said that the product must have good
quality and good design and other said they purchase these shoe for status
symbol only.
86%
14%
Chart Title
quality
other factor
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5. If u have to purchase shoe except Adidas which shoe it will be and why?
Out of 80 people 42 have said Nike, 23 said Reebok and 15 others, which
shows that the main competitor of Adidas is Nike. They have given different
reason for that some said Nike and Adidas are have same range of products
and th ere quality and prices is also same, so different people have
different opinion.
53%29%
19%
Chart Title
nike
reebok
others
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5. What do u think that the company Adidas must do to improve its marketing
strategy?
Most of people said Adidas has a good marketing strategy but the company
should launch more products or u can say more variety to their products.
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CONCLUSION
ADIDAS in INDIA has always been driven by its Value-for-money strategy. The
company needs to identify critical success factory and work assiduously towards
achieving it.
As the world grows to become one, many problems will arise that cannot be
solved. One of the primary challenges associated with globalization is balancing
conflicting and competing objectives. In the case of Adidas, it has faced such
problems already and how they have dealt with them is with flexibility and
calmness. Despite what could be higher costs, Adidas has chosen to stick with
their human right codes and Standards of Engagement rather than continue to be
associated with subcontractors who treat works in inhumane ways. As Adidas has
grown worldwide, it has had to deal with problems of heterogeneity vs.
homogeneity. In other words, in an increasingly heterogeneous and global world,
diversity in the workplace has appeared to emerge as an issue. Companies,
including Adidas are no longer homogenous in the sense that their companies
have grown worldwide. And as a result, Adidas has had to make worldwide
headquarters and produce information and products in several different
languages. Having to spread its workforce, Adidas has come to depend on
intangibles.
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The knowledge, worldwide experience and diversity that an Adidas employee can
bring to the table are valuable. Recently, how successful companies are in the
global world is increasingly derived from intangibles, such as these, that
organizations cannot own. Adidas is greatly affected by these external influences
since indeed it is a global company. For some it is not common knowledge that
Adidas is a German company. This is a result of good global business. Adidas has
created a product that is global and with that diversity and knowledge greatly
affect the company. Adidas must be able to easily adapt to different cultures and
must be culturally aware when conducting business. The long list of Adidas
subsidiaries where it conducts business proves that Adidas is constantly adapting
to cultural changes and must be extremely diverse. Because of this necessity,
knowledge is greatly valued. Great changes occur in this industry and as a result,
new ideas, intuition and inspiration are an asset that is a necessity in this industry
and to remain a global company. Who leads this knowledge and maintains
diversity are the managers, yet they too are facing new changes.
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RECOMMENDATION
For 2004, the Adidas brand’s new divisional structure will be in place to start
delivering positive results for the Group. Adidas America will remain a challenge
but nevertheless will deliver qualitative sales improvements in the second half of
2005. Top-line growth is expected in all other regions. Double-digit growth from
Salomon is projected as a result of the continued innovative strength and the
increasing profile of their products. The integration of Mavic with Salomon, which
began in 2002, will continue in 2005, with further synergies between the two
brands. At Taylor Made-Adidas Golf, increased marketing and sales support will
target ambitious golfers, and solid growth in all the major golf markets is
expected to continue.
In addition to these positive top-line developments, gross margins are expected
to remain within a range of 41% to 43%, operating expenses will decline as a
percentage of sales, and as a result net income is projected to increase by 15%.
Adidas is currently ranked third in almost every category in the global athletic
shoe industry. However, they rank second only to Nike in terms of sales. The
main competitors of Adidas include Nike and Reebok However, other smaller
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competitors include Fila, Puma and Easy Spirit. Adidas commands only 5% of the
athletic shoe business in the U.S., compared with the 40% for the fearsome Nike,
but the rejuvenated Adidas has climbed to within easy reach of Reebok, which has
been struggling in the past couple of years. Adidas is also steadily regaining
market share lost to other brands such as L.A. Gear and Fila (Fortune, 2000)
Since acquiring their current president, Louis-Dreyfus, Adidas, a wholly owned
subsidiary, has competed with a whole new strategy. Aside from cutting the
whole line of German senior management, Louis-Dreyfus also fired management
in Asia, who failed to match competitors’ low costs in subcontracting shoemaking
to local companies. While Louis-Dreyfus fought bring down costs, he also took a
gamble on the side. Adidas began to focus on global marketing.
But the battle has only started, and the foreign sports companies are here for the
long term. They can sustain losses for years to come in order to gain market
share. What they are doing at present, is building up distribution networks to
cover every nook and corner of the country and, setting up manufacturing
facilities.
Only those Indian manufactures which have a strong focus on manufacturing and
technological upgradation will survive in the long run, although with a much
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smaller market share than they have at present. Small companies will be sidelined
totally and will exit from the sports market altogether. ADIDAS in INDIA has
always been driven by its Value – for-money strategy. The company needs to
identify critical success factory and work assiduously towards achieving it.
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BIBLIOGRAPHY
Books:
PHILIP KOTLER, MARKETING MANAGEMENT, EDITION 2005.
V.S RAMASWAMY AND S. NAMAKUMARI MARKETING MANAGEMENT,
SECOND EDITION.
WILLIAM STANTON.J, MICHALL J.ETJEC, BRUCE J.WALKER
FUNDAMENTAL OF MANAGEMENT.
RAVICHANDRAH.N COMPETITION IN INDIAN INDUSTRY.
Web Sites
www.adidas.com
www.indiainfoline.com
www.webcrawler.com
www.google.com
www.indiatimes.com
Magazines
A&M
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Business India
India Today
Business Today
Newspapers
The Times of India
The Hindustan Times
The Economic Times
From Company
Company Journals
Company Catalogs
ANNEXURE
QUESTIONNAIRE
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1. How do u rate the company marketing strategy as compare to the other
competitors company like Nike, Reebok etc.?
Adidas Nike
Reebok Others
2. Do u think that the company Adidas is giving its customer what they want in
terms of quality and prices or value for money?
Happy Not Happy
3. Do u think that the advertisements and the brand ambassador of the company
is good enough?
Happy Not Happy
4. What things u keep in mind while purchasing shoes will it be quality,
advertisement, price or design?
Quality Other factor
5. If u have to purchase shoe except Adidas which shoe it will be and why?
Nike Reebok
Others
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6. What do u think that the company Adidas must do to improve its marketing
strategy?
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