12/20/2010
ADIDAS
BRAND STUDY
Submitted To:
Faculty Strategic Brand Management FORE School of Management Management,, New Delhi
Submitted By:
FMG-18A FORE School of Management, New Delhi
Brand Study Introduction The idea was as simple as it was brilliant. Adi Dassler ’s aim was to provide every athlete with the best possible equipment. It all began in 1920, when Adi Dassler made his first shoes using the few materials available after the First World War. Today, the Adidas product range extends from footwear and apparel to accessories for all kinds of different sports.
The Journey Adidas as earlier mentioned started its operation in 1920 as a small workshop. But its transformation into a large corporation and become one of the top global brands has a story within. In 1949 Adi Dassler first registered Adidas in the commercial register (Handelsregister) (Handelsregister) in Fürth (near Herzogenaurach). The official name of the company back then was “Adolf Dassler Adidas Sportschuhfabrik”.
And
then
the
enterprise
was
transformed
into
a
corporation
(“Aktiengesellschaft”) in 1989.
In 1997, Adidas acquired the Salomon group, and the company’s name changed to Adidas-Salomon AG. The Salomon group also included the TaylorMade golf brand. In October 2005, the Salomon business segment, including the related subsidiaries was sold to the Finnish Amer Sports Corporation. The company changed its legal name to “Adidas AG”. And then On January 31, 2006, Adidas-Salomon Adidas-Salomon AG acquired Reebok International Ltd. By combining two of the most respected and well-known brands in the worldwide sporting goods industry, the new Group benefits from a more competitive worldwide platform, well-defined and complementary brand identities, a wider range of products, and a stronger presence across teams, athletes, events and leagues. And in June 2006, the company’s name is changed to Adidas AG.
Since the very beginning of Adidas, the corporation, the employees and the organization followed the three guiding principle of “To “To produce the best shoe to serve the needs of the Sport; TO Protect the athlete from Injury, and to make the product durable” durable ” These principles were followed by the
founder Adolf Dassler (the Man who gave gave Adidas its name) . From the very beginning, beginning, a passionate athlete himself, from the very beginning Adi Dassler was in close contact with sports participants and was always present in person at important sports events. Parallel to the rapid developments in sport, Adi Dassler strove to specialize and optimize his products. Adi Dassler was the first entrepreneur to use sports promotion in order to make the public aware of his innovations. He started using well-known athletes as advertising for his products. And then Aggressive publicity became one of the cornerstones of his corporate policy.
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Brand Study Brand Portfolio Adidas( name derived from Adi Das The name of its Founder) has three major brands namely Adidas, TaylorMade and Reebok.
Adidas Adidas has two sub brands under it namely Sports performance and Originals.
The guiding principle of the Adidas Sport Performance Division is to equip all athletes to achieve their “impossible”.
Adidas Sport
Performance brings its passion for great products to athletes in all sports and mainly focuses on four key categories globally: football, running, training and basketball. It has various product categories ranging from Sport, to body care to Eye care. The Sport Style Division is the home of Originals, defined as authentic sportswear, the Fashion Group, which is the future of sportswear, and Style Essentials, the fresh sport-inspired label made accessible for styleadopting youth. Together they offer consumers products from street fashion to high fashion, all uniquely inspired and linked to sport. Inspired by its roots in sport and women’s fitness, Reebok is a global brand that is committed to developing innovative products which will allow Reebok to own Women’s Fitness, challenge the Men’s Sport category and revive its Classics heritage. It has brands like
Reebok-CCM Hockey and Rockport under this Brand. TaylorMade is a leader in the industry and the number one metal wood
supplier. It focuses on consumers who seek the most innovative, performance-enhancing golf equipment available, including technologically technologically superior drivers, fairway woods, irons, putters and balls. The brands like Adidas Golf and Ashworth popular brands in Golf are part of this Brand.
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Brand Study CBBE Model Salience Adidas continuously makes efforts to increase awareness about its brand by various modes of communication. To mention, The Covert Advertising (Displaying large Sized Shoes) at Public places, sponsoring Sports events and associating it with sportsmen. Also since Adidas is into Only Sports category, there is also a high chance of recall and clear Brand Need. Being synonym to quality in Sports increases both Depth and breadth of Brand. As mentioned before Adidas is not only into sports foot ware but has also entered sports accessories, personal care products for sports person increasing the Brand breadth.
Performance Adidas is known for its quality in goods. One of its underlying principles is to provide best quality goods to sportsman. Thus there is high performance satisfying Customer’s functional needs. The
aspects like quality, reliability, durability which is major parameters in buying shoes, Adidas by providing specialised goods has minimised the risk on non-performance. Also the style and design and price are favourable.
Imagery Brand Adidas from its very beginning has associated itself with Sports person and major sports event. Thus it is perceived as aspirational product. The user profile includes popular and successful
sports players who are also aspirations. Also the History attached with Adidas, the name itself is derived from the Founder (Adolf Dassler) who was also very passionate sportsperson. And History of Adidas is also associated with success in many World cups.
Judgements Consumers perceive Adidas products as finest quality. Due to its High Performance and Good Imagery, the Overall Quality of Brand is very good. The superlative quality and better performance leads to Brand credibility and Brand superiority over other brands.
Feelings It becomes highly difficult to comment upon Brand feelings without doing a survey of customers. But analysing the comments of users and their testimonials and also analysing the communication of co. Feelings associated with brand Adidas is Fun and Excitement . The Passion to Compete along with a sense of self respect is associated with it.
Resonance Resonance is Indicator of Brand Loyalty. Since the target segment is much focused and Adidas is able to fulfil their needs by providing specialised and customised products with promise of superior quality. Also the Loyalty can be revalidated from the fact that the sales of Adidas have been growing at CAGR of 11.8% for the period of 5 years1
1
Financial Reports of Adidas for 2005 to 2009
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Brand Study
Picture 1 CBBE Model- Adidas
Target Market From the website and various campaigns led by Adidas for its various brands as above mentioned, the primary target market has been sports person. Over the years the target customer for Adidas was Sportsperson both men and women. It has aimed and is successful in providing not only shoes but every equipment, accessory and also cares items. It has entered into a foray of Electronic Communications by launching mCoach a Mobile with Training and guide. But all the products the Adidas deals into target the sportsperson and all its products have a sporty look.
Brand Identity Name Adidas is derived from the Initials of its Founder Adolf ( Adi ) Dassler. But now the name has become synonym to sports need for Sportsmen. Also the name is easy to pronounce, easy recall ability and not confused with any other brand.
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Brand Study
Logo The Logo is bright, Sporty and easy to recognise. It has few distinct features making it easily distinguishable with other brands like three line breaks. Also Name is written in small caps.
Slogan The Slogan of Adidas “Impossible Nothing” though it has just two words, but it says a lot; It
stimulates the sportiness and enthusiasm in minds of consumer. The slogan is very apt with the product it is into and the message and perception it wants to make.
Brand Positioning Adidas tries to position itself as Sporty brand by associating itself with Major Sports events, Aspirational and successful sportspersons, and also by creating commercials full of energy. The slogan as mentioned above is also very sporty. The primary positioning which Adidas wants to make is of Super quality sports good for Sporty persons.
Kapferer Model Brand Identity Prism Analysing Brand Adidas with reference to Brand Identity Model
Picture 3 Kapferer Model Brand Identity Prism -Adidas
From the above model it is very clear that the personality of Adidas is very conservative and collective and is perceived to be of European Culture. Also there is strong relationship between each of the parameter and each other are in sync with others. All the parameters are related to Sports, Enthusiasm, reliability and quality.
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Brand Study Position Re-Shuffle Adidas over the years has constantly positioned itself as brand for Hard core Sports person. All of its communication communication campaigns feature Healthy sporty men and women and majorly sportspersons. And this has been a success mantra for adidas. Since its founder Mr.Dassler has the principle of providing the best quality goods to sportsmen and also the same is the company’s objectives, thus targeting sportsperson or aspiring sportsperson is very much relevant. Adidas has gained core competency in sports Goods by means of remaining in constant touch with sportspersons and identifying their needs. This competency has given a competitive advantage to Adidas over its competitor. The expertise of sports knowledge has helped Adidas in acquiring related brands like TaylorMade and Reebok. Also it has entered into other sports equipments and Sports merchandise. But One Critical observation is, after acquiring Reebok and Taylor made, they are retained as separate brands targeting different customers like Reebok for Women; this creates confusion in minds of customer and also by this way Adidas is not leveraging its Brand value. Thus it would be better if Reebok and Taylor made though will remain as brand but will become part of Adidas like Adidas Sports and Adidas Originals.
Brand Extension Strategies Given the origins of Adidas, it is understandable why the brand was focused purely on sports performance and technology for most of its existence. However, the Adidas Style brand extension, which targets a broader audience with casual street wear, is responsible for 20% of total brand sales. The untouched target group propelled Adidas through the roof in the 1980s was that of Hip-Hop musicians and break dancers! That's 20% of total sales that may not have existed if Adidas didn't think to market to a new audience and decided to stick with w ith sports.
Reorganization of Group Provides Solid Platform For Growth In 2009, the adidas Group took the strategic decision to move from a vertically integrated brand structure into a functional multi-brand structure for the adidas and Reebok brands. This led to the creation of a Global Sales function responsible for the commercial activities and a Global Brands function responsible for the marketing activities of both brands. In addition, the Global Sales organization was split into Wholesale and Retail, to cater more appropriately to the different needs of these two distinctive business models. This new structure follows two important principles: to foster further alignment and strengthen brand management to drive long-term sustainable growth, while at the same time ensuring coordinated and best practice execution in the marketplace.
Diverse Brand Portfolio Consumers want choice. To maximize our consumer reach, it has embraced a multi-brand strategy. This approach allows it to tackle opportunities from several perspectives, as both a mass and a niche Strategic Brand Management
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Brand Study player, providing distinct and relevant products to a wide spectrum of consumers. In this way, each brand is able to keep a unique identity and focus on its core competencies, while simultaneously providing the Group with a broad product offering, increasing its leverage in the marketplace. It also allows adidas to address multiple consumer needs, tackle market opportunities from various angles as well as be less affected by one-dimensional market risks. Currently, the brand focuses on 5 global priorities: Football: expanding market leadership Running: building credibility with high-performance athletes Training: creating new consumer experiences Basketball: increasing global footprint Outdoor: the athletic brand in the outdoors
Investments Focused on Highest Potential Markets and Channels As a Group, it targets leading market positions in all markets where it competes. However, with almost 180 subsidiaries worldwide, it has prioritized our investments based on those markets which offer the best medium- to long-term growth and profitability opportunities. Therefore, to fully exploit market opportunities, it tailors the distribution strategy to present brands to the consumer in the most impactful way.
Brand’s Broad and Unique Product Portfolio It spans from apparel and footwear for professional athletes to premium fashion. It allows adidas to address multiple consumer needs, exploit market opportunities from various angles as well as be less affected by one-dimensional market risks. Adidas’ commitment to product innovation and its rich heritage differentiates the brand from competitors and provides a solid platform for future growth. That means adidas intends to inspire, support and equip all athletes in the best possible way to help them achieve their optimal performance. performance.
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Brand Study Recommendations Brand Consolidation As already mentioned, adidas has four sub brands ( as mentioned above) of these two are sub brands of Adidas and two are positioned as separate separate brands. Instead of this it will be beneficial if all brands are made as sub brands of adidas. By this none of the brand will lose their positioning and a clear corporate brand structure will be made.
Reshuffle Portfolio At present adidas has a very wide range of products lengthening and widening its product mix. Different Shoes of different variety and different features for each sport namely Cricket, Hockey, and Football etc... Also Different apparels, apparels, merchandise merchandise and Sports equipments. equipments. Thus it is per se necessary to re shuffle the product basket. A Concentrated approach will be advisable.
Focus on Emerging markets like India According to Venn research Inc., The Indian sports equipment market had total revenue of $2,069.1 million in 2009, representing a com-pound annual growth rate (CAGR) of 7.1% for the period spanning 2005-2009. Thus there is huge scope and opportunity for Brand like Adidas to increase its presence in emerging countries.
Creating a Flexible Supply Chain Speed and agility is the key to outpacing the competition. It is committed to meeting the full range of customer and consumer needs by ensuring product availability in the correct size and colour, providing game-changing technical innovations and also the latest high-end fashion product to the highest quality standards.
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