ASSIGNMENT OF MARKETING MANAGEMENT
SUBMITTED TO:-
Ms. Mamta Mohan
SUBMITTED BY:-
Gamanpreet Singh Ahuja B-31 MBA ( M & S )
MARKETING PLAN OF ADIDAS
COMPANY PROFILE
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 Adi Dassler 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 Adi Dassler. 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.
General Information
For over 83 years Adidas has been part of the world of sports on every level, delivering state-ofthe-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 Development Center. 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 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 company has grown to 20Million US dollar in year 2005-06. 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 2007.
Future Plans
Turnover is expected to rise to 22 Million US dollar for Adidas India in 2006-07 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.
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
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, so ccer, 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. 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.
. MARKETING-MIX (FOUR P’S): ADIDAS 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 makesthe 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. 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. 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.
I. 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 wa y 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. 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.
II. 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 b y 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 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 right product – 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 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 r eally 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.
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 physicaldistribution 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. 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 compan y 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. To handle the company‘s pr omotional 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. encouragement of the customer to by their products. Adidas believes sales promotion tries to compliment the company‘s selling efforts.
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. 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 contex t. 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 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 apparel, while the industry growth as a best case estimate has been 20-25%.
MARKETING STRATEGY – ADIDAS 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 highvoltage 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 advertisements: 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 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.
MARKETING: ADIDAS
In 1997, Adidas became Adidas-Salomon with its US $1.4 billionpurchase of Salomon, a French manufacturer of skis and other sporting goods. The deal put Adidas one step closer to competitor and world market leader Nike, and one step ahead of Reebok. Salomon, aside from its winter sport equipment, also owns golf club brand Taylor Made and cycle brand Mavic. The merger makes Adidas/Salomon the second largest sport marketer in the world, and number one in Europe. Salomon is currently very strong in North America and Japan, and Adidas has the largest market share in Europe. Adidas is, like Nike, very active insuring sponsorships advertising deals with celebrities. Some of the most famous are Martina Hingis (tennis), Kobe Bryant (basketball), Peyton Manning, Paul Palmer (swimmer), jan Ullrich (racing cyclist) and the New York yankees. David Beckham, Patrick Kluivert and Zidane all wear Adidas boots, the Predator Accelerator.
LEVERAGING ON SACHIN: ONE MAJOR PART OF MARKETING STRATEGY IN INDIA
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
dimensions :
The first ad connects Sachin‘s choice of a heavy bat with Adidas‘ Falcon Dorf light weight 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 LouisDreyfus‘ 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.‘ 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 b rand, 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.
THE ADIDAS LOGO
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, A15 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 dedication to producing high-quality athletic products to help athletes perform better.
FINANCIAL FACTS
For over 83 years Adidas has been part of the world of sports on every level, delivering state-ofthe-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 compa ny‘s share of the world market for
sporting goods is estimated at around 19 percent.
CORE COMPETENCY
A company‘s core competencies are those things that a company can do so as to be better than
their competitors in the central areas of the company where the most value is added to your products. Core Competencies of Adidas
Technology
Customer focus
Brand recognition
Supply chain
Collaboratively competitive
The company launches every six months between 600 and 800 new designs in footwear.
Strategic Outsourcing – An advantage for Adidas over competitors
Adidas core competency is strategic outsourcing. The core skills that set adidas apart from the competition, are their marketing, distribution, and technological expertise. The following questions are always asked by the expertise to the company:
Is internalization a source of competitive advantage?
Is manufacturing a skill our firm does better than anybody else?
Will firms be able to leverage their manufacturing ex pertise in the future?
Are we releasing any of the firm‘s proprietary skills/information by outsourcing?
The answer for adidas is NO. Therefore, in today‘s global environme nt, the most strategically viable manufacturing strategy is the outsourcing of their products. The efficiencies that are
gained, in the form of shifting of risk, reduced capital requirements, lower wages, and ability to focus on their core competencies, strongly outweigh all other manufacturing options. Both companies are huge conglomerates with an enviable turnover worldwide. They have large media budgets and a large amount of money to throw around, which they do, with incredible fervour and gusto. They are both pioneers in this field and hire the best talent from the best universities across the world. Hence they have the best people in their organisations and that, coupled with their access to almost unlimited capital, makes them potent forces. ADIDAS
Revenue
$15.6 billion (2008)
Operating income
$1.5 billion (2008)
Profit
$933 million) (2008)
TECHNOLOGY Adidas was originally intended to be a product line for soccer sportswear. Currently, however,
adidas has spread its target to all sportswear. Name
Description
A neoprene-like material that feels somewhat like "nerf," it is most adiPRENE
often used in the heel of a shoe. adiPRENE is quite durable, and is meant to respond to the cushioning needs of a active feet. adiPRENE+ is similar to adiPRENE in that it is a neoprene-like
adiPRENE+
material, however it is primarily found in the forefoot of a shoe. It is located in this region because it is designed to provide greater forefoot momentum at toe-off. Torsion is a stability technology located in the midsole of the shoe; it
Torsion
is meant to provide natural rotation between the forefoot and the heel, ultimately allowing for better support in the midfoot.
SOCIO CULTURAL ADIDAS
Since 70-s, customers are brand focused.
Sport consumers prefer fashion and style which is a value proposition of both nike and adidas.
Young generation believes more on advertisements and internet.
Since 90-s even women consumers dominate the athletic field and changed the market.
Children are becoming more brand conscious and opt for branded products.
The tradition values and attitude is changing of the people using branded products is a status symbol. As the income has changed people shift from normal to branded ones.
ECONOMIC
The economy depends on the current income, price, savings, debt and credit savings.
USA economic growth is in slow growth because of WTC.
Contract manufacturing is chosen by many athletic shoes company.
Slow down in the economy
Reduction in consumer confidence
Barriers of entry to the EU
Contract manufacturing
COMPETITIVE FORCES
Competition is more tight with the coming of Reebok and Adidas for Nike and Nike, Puma for Adidas
Competition is happened around the world, globally, not locally
Athletic shoe trend is going to be fashion-oriente
SEGMENTATION, TARGETING, POSITIONING Market Segmentation
Both Adidas and Nike fall under niche marketing. They have a narrowly defined customer group seeking a distinctive mix of benefits. Their products are mainly aimed at both men and women looking for sports apparel. Adidas and Nike promise their customers comfort, reliability, style and performance. Both the companies have lived up to their reputation in the world of sports shoes. ―Niche marketers aim to understand their customers‘ needs so well that the customers are willing to pay a premium‖. This is very true in the case of these two companies. Adidas and Nike sports
shoes are priced high. But customers are willing to spend the extra money for the quality and service they receive. ADIDAS
Adidas are the main sponsors and kit sponsors of the successful Australian Cricket Team and the England Cricket Team. They are also the main sponsors of the Indian cricketers Sachin Tendulkar and Virender Sehwag and English cricketers Kevin Pietersen and Ian Bell. Adidas are the main sponsors of Australian Domestic Cricket Competitions - Pura Cup, KFC Twenty20 Big Bash, Ford Ranger One Day Cup and the Indian Premier League teams Delhi Daredevils and Mumbai Indians. For the 2008 Summer Olympics in Beijing, China, Adidas spent €70 million sponsoring the event, amid criticisms. Adidas also sponsors events such as the London Marathon. SEGMENTS TARGETED
Both Nike and Adidas target aspiring athletes in the age group of 15-35. In the lifestyle and apparel market targets consumers who identify with sport as a way of life and are brand conscious.
ADIDAS
The unique Adidas Shoes compared with other sport shoes covers the largest market. Some makes of athletic shoes have raced ahead of the pack in appreciation, among them Adidas running shoes. These brands and a couple of others have gained the respect of thousands of beginner and professional sportsmen around the world, because of great design, quality construction and durability that rivals any other shoe. The company officially became the No. 1 driver in golf in 2005 and in 2008 Adidas made their first major move in cricket market. At present, Adidas has slowly crawled its way back up into the ranking of the top footwear manufacturers in the world. Adidas wants to reach the pinnacle of success. Customer satisfaction is the main motive of the company. Adidas mainly focuses on men and women who are brand conscious or are looking for comfort and performance in the area of footwear. It has more than 200 varieties of men‘s footwear and
more than 150 women footwear. Adidas also makes sports specific shoes. It has got an entire line of shoes devoted to sports like basket ball, football, tennis, golf and running. A major chunk of their customers include athletes who are looking for sports shoes which are customized according to their needs. Adidas constantly comes up with new technologies to help sportsmen improve their performance by providing comfortable shoes. They are consumer focused and therefore continuously improve the quality, look, feel and image of the products and
organizational structures to match and exceed consumer expectations and to provide them with the highest value. They seek to help athletes of all skill levels achieve peak performance with every product they bring to market. 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. Cricket
In the 1990s, Adidas signed the world No. 1 batsman Sachin Tendulkar and made shoes for him. He is still wearing Adidas shoes when he plays matches. Adidas even made action figures after Sachin Tendulkar. Basketball
Adidas has been a long time 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. Skateboarding
Adidas SB (Skateboarding) is shoes made specifically for skateboarding. Many of the shoes Adidas previously made were redesigned for skateboarding VALUE PROPOSITION
Value proposition consists of the whole cluster of benefits the company promises to deliver to its customers. Adidas promise their customers sports shoes which will provide them with comfort and durability. They have a brand value and have established themselves as style statements. Nike and Adidas have a wide range of athletic footwear specialized for various sports like football, cricket, running, gym etc. However, Nike offers customers more comfortable and durable athletic shoes at a higher price, while Adidas has a lower price range offering almost the same benefits. Nike communicates a provocative, aggressive winner attitude which can be related to the American sports attitude ―You don‘t win silver, you lose gold‖. Adidas stand for a competing
and winning over your self-attitude, and Nike stands for a winning over everyone attitude.
POSITIONING
The core of Nike‘s brand positioning is the ―Just Do It‖ slogan. It means being what you are and
concentrating on what is important to you. Adidas represents passion, elegance and durability.
SWOT ANAYSIS: Strengths:
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 healthy market share in the market.
Another strength of the company is its well efficient and effective management, which works as a team.
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 is 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 of the company like Adidas hence company must target this particular segment they must introduce the shoes and other product according to their demands.
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 range and the variety of the 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 uses 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 an extra advantage over Adidas.
Adidas do not have any competitive advantage as compared to Nike and Reebok.
FINDINGS:
(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 & bo ys‘ 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
During the first quarter of 2004, sales at Adidas totalled 1.56 billion euro. This is an increase of 2.7% from the 1.52 billion Euro in sales at the company during the first quarter of 2003. During the previous 17 quarters, sales at Adidas have increased compared with the same quarter in the previous year. Sales at Adidas appear to have some seasonally: during each of the previous 5 years, sales have been highest during the third quarter, which has accounted for between 28.0% and 32.0% of the annual sales. Adidas reported sales of 5.38 billion Euro (US$5.35 billion) for the year ending December of 2004. This represents an increase of 9.0% versus 2000, when the company‘s sales were 5.35 billion Euro. Sales at Adidas have increased during each of the
previous five years (and since 1999, sales have increased a total of 226%).
D. Recent Sales at Adidas (Figures in Billions of Euro)
In 2008, sales in Latin America were up at a rate that was much higher than the company as a whole: in this region, sales increased 36.0% to 171.00 million euro. Adidas also experienced significant increases in sales in Asia-Pacific (up 3.9% to 875.00 million Euro).
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 Frankfurt and Pairs, and its ticker symbol is ADDDY. The 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. The company has tobecome innovator not follower they must do something differently to come with the flying colors.
CONCLUSIONS
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.
