ADIDAS and Its Marketing Strateg

8/2/2019 ADIDAS and Its Marketing Strateg

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ACKNOWLEDGEMENT

A special thanks to Mr. Rakesh Manocha (Manager Marketing) 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.

No work is complete without credits being given to the person who

helped in achieving the desired task.I feel privileged to thank my teacher

MISS SARGAM MAKKAR and all those who have directly or

indirectly contributed to the completion of the project.

RATNADEEP SINGH


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CERTIFICATION

This is to certify that I , RATNADEEP SINGH , pursuing BBA fromJIMS ,Vasant Kunj,New Delhi(Affiliated to Guru Gobind SinghIndraprastha University) have prepared this project by myself with thehelp of various people.

Most importantly, I would like to thank my teacher guide MS. SARGAMMAKKAR. I am grateful to her for her help and guidance throughout.

SIGNATURE


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PREFACE

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

1. INTRODUCTION

2. COMPANY PROFILE

3. SWOT ANAYSIS

4. OBJECTIVES

5. RESERCH METHODOLOGY

6. FINDINGS&ANALYSIS

7. LIMITATION

8. CONCLUSIONS

9. RECOMMENDATION

10.QUESTIONNAIRE

11.BIBLIOGRAPHY


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INTRODUCTION

My 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 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 needsof 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


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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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COMPANY PROFILE

In the small German village of Herzogenaurach the world began its love

affair with Adidas (Rynos 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


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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-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%. Activities of the company and its

approximately 100 subsidiaries are directed from Adidas-Salomon AG's


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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 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

Football's World Cup and the takeover of US rival Reebok contributed to

a surge inprofitsand turnover for adidas in 2006, Europe's biggest

sporting goods manufacturer said Wednesday.
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Operating profit rose 26 per cent to 483 million euros (632

milliondollars) while group revenues climbed 52 per cent to 10.08 billion

euros, the German based company said.

IN 2008, adidas faced a slowdown in growth because of an absence of

major sporting events.

Adidas AG chairman and chief executive office Herbert Hainer called

2007 'a truly exciting year' for the adidas Group.

'We strengthened our brand portfolio by acquiring Reebok and exceeded

the 10 billion euro sales mark for the first time in the group's history,' he

said.
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Hainer said adidas' performance at the 2006 World Cup held on home

soil 'was a stand-out in leveraging our brand strength.'

The brand with the three stripes said it also profited from a strong

performance by the TaylorMade-adidas Golf segment.

Interest payments result from the 3.1 billion takeover of Reebok last year

as well as negative effects from lower US operating margins pushed the

group's operating margin down 1.9 per cent to 8.7 per cent of sales, the

company said.

Adidas reported a final quarter surplus of 13 million euros, following a 4

million euros loss for the same period of 2007. Turnover for the quarter

rose 2.25 billion euros from 1.52 billion in 2007.

ADIDAS Managing Director


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MARKETING STRATEGIES : AN OVERVIEWMARKETING STRATEGIES : AN OVERVIEW

OF ADIDASOF ADIDAS

Some of the theory I have used in my project are as followsSome of the theory I have used in my project are as follows

Theory: what is market research and why it is important.Theory: what is market research and why it is important.

Market research is a method of collecting data which will make you (as abusiness) 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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Conducting market research

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 my mail and also by direct contacts.

The Question I have asked are given in questionnaire part below.

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)


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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

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


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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

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

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


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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 womens


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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 2009

and in 900 multi-brand outlets in India.


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MARKETING-MIX ( FOUR PS): ADIDASMARKETING-MIX ( FOUR PS): 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 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 wont

really be a hot seller, but it will contribute a lot to Adidas brand

image. Thats 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 clothes that people wear today. The three stripes,


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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 involvesdeveloping of the right

product which can then be put to right place & sold with the right

promotion & price.

VALUE OF ITS 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


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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

dont care how they were made. Further they want that when they

order something, the dont 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 customers

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


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which almost every company spends a handsome amount of

money.

Hence Adidas takes a good care of i ts 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 mixand 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 Indias 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.

To handle the companys promotional activities Adidas has employed

marketing managers, wherever the Adidas is located. These marketing


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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 companys

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 companys own sales force. They

even design the sales materials for the companys 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.


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The heavy weight players like Sachin Tendulkar, Leander Paes

,Sania Mirza 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, thats the most critical factor in the Indian context. Adidas

believes it has to deliver a functional at an affordable price. Its a

tough job to maintain the integrity of the performance and still


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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

coverages 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.


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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 2005 Adidas grew by 25%, 2006 by over 50% and in

2007 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%.


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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. Anyones life. You dont 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 (whod 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


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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 billion

purchase 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.


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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.

Adidas: Marketing a $250 Running Shoe

No one knows if even serious runners are ready to pay $250 for a shoe

more than 50% above the next most expensive sneaker on the market.

Nike Air Jordans, at $150 to $175 a pair, only staged a comeback last

year, after two years of sinking sales. Adidas won't divulge its capital

investment in Adidas 1. But analysts say production is complicated and

that the new sneakers will cost four or five times as much to make as a

normal shoe. Because of that, production will be less than 10,000 this

year to drive exclusivity and hedge Stamminger's bet.

I run a lot, and I spend a lot of money on running shoes. I bet the Adidas

shoe works really well. But let me tell you - for $100 I can get a very

good running shoe. Is this computerized Adidas more than twice as good?

I doubt it. My guess is, rather than sell a lot of these shoes, they hope to
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instill Adidas as the "king of running shoes" in the mind of the public and

hope that the existence of the computerized shoe drives sales of other

models.

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
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Sachins magic. Instead of presenting just one dimensions :

The first ad connects Sachins choice of a heavy bat with Adidas Falcon

Dorf light weight shoes. Says the headline: Sachin likes his bat heavy,

not his shoe.


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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 companys 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..


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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, were not an

attitude thats fashionable. Were 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

wasnt connecting too well with its consumers.

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


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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. Its 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,


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ADDIDAS IS ALSO SPONSERING THE INDIAN PREMIER

LEAGUE,which draw thousands and millions of fans towards it.So it

promotes the brand image and make it popular.It was one of the major

sponsers of IPL season 1 & 2.Many limited edition merchandises were

launched during the IPL season to promote the brand.

Kanan says.

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


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Kanan, We dont 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 . Were

looking at driving the market through exclusive stores. Says Kanan. The

logic is clear: use Forever Sport to ensure sales forever

Never achieved profitability and collapsed under the weight of its

own unrealized ambitions.

Adidass objective with the new line of footwear is to generate sales leads

through its Web site, either through direct purchase or a retailer finder.

Villota says that every style of footwear has a story, particularly those

endorsed by star athletes, and its these stories that sell the shoes to

buyers.

While Villota wouldnt disclose how much of Bryants Adidas footwear

is sold online, he did say one of three visitors to the Bryant portion of the

Adidas site demonstrated purchase intent by clicking through to the store

or to the retail finder.

The newest version of Bryants footwear hits the street Nov. 1, coinciding

with the start of the 2003-2004 NBA season. While Adidas wont

comment on the new sites features, citing competitive pressure, Villota

says it is Adidas Americas most ambitious integration of Web content

and electronic marketing.


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The Adidas - Salomon Executive Board will propose paying a dividend

of CC 0.92 per share to the Annual General Meeting of Shareholders on

May 10, the same amount as in the previous year. This decision to

maintain a stable dividend level, despite the EPS decline in 2004,

underlines Managements confidence in its ability to achieve its 2005

targets. Management views 2004 as a year of consolidation and

restructuring and has increased the pay out percentage to reward long-

term shareholders.

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, A-15 warm-up, and

Classic T-shirt.


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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.


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ADIDAS: OVERVIEW/COMPANYS

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 companys share of the world market for sporting

goods is estimated at around 19 percent.


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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 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 thats 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.


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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 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.


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OBJECTIVES OF THE STUDY

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.


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RESEARCH METHODOLOGYRESEARCH METHODOLOGY

STAGE ONE

The project study started with collection of Secondary Data. The sources

for the secondary data are as follows:

Data Sources

News Papers

Magazines

Internet

Press articles on Adidas.

Stage Two

I visited the Adidas India Ltd., which is located In GK-1 (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


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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 20 people).


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FINDINGS

Company research report

(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 Mens & boys clothing sector. This

analysis compares Adidas with three other sport shoe and apparel

manufacturers: Nike Inc. of the United States (2008 sales of $14 billion

of which 69% was Footwear), Reebok International Ltd. of the United

States (2007 sales: $5.87 billion of which 73% was Footwear), and Amer

Group PLC which is based in Finland (2007 sales of 9.46 billion Finnish

Markka [US$ 1.57billon] of which 24% was Racquet Sports). Note: notall of these companies have the same fiscal year: the most recent data for

each company are being used.


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(C) Sales Analysis

During the first quarter of 2006, sales at Adidas totalled 2.56 billion euro.

This is an increase of 2.7% from the 2.49 billion Euro in sales at the

company during the first quarter of 2005. 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 7.86 billion Euro for the year ending December

of 2007. This represents an increase as of in 2006, when the companys

sales were 7.23 billion Euro. Sales at Adidas have increased during each

of the previous five years , since 2003.

D. Recent Sales at Adidas

(Figures in Billions of Euro)

6.066.53

6.94

7.23 7.86 8.23

0

2

4

6

8

10

2003 2004 2005 2006 2007 2008


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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

571.00 million euro. Adidas also experienced significant increases in

sales in Asia-Pacific.

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.


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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 competitors. The company has to

become innovator not follower they must do something differently to

come with the flying colors.

Asia

5%

US

30%

UK

25%

Europe

40%


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DATA ANALYSIS

1. How do u rate the company marketing strategy as compare to the

other competitors company like Nike, Reebok etc.?

* Out of 20 people 9 had said Adidas have a good marketing strategy

and should continue like this only, 6 had said Nike is more better then

Adidas, 4 said Reebok is good and 1 said others.

adidas45%

nike

30%

reebok

20%

others

5%

adidas

nikereebok

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 20 people 17 person are satisfy with the quality and the price

of the product and other says that they are not satisfy.

happy

85%

not happy15%

happy

not happy


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3. Do u think that the advertisements and the brand ambassador of the

company is good enough?

* Out of 20 people 16 person said yes they like the advertisement

very much and rest said no they dont like them.

80%

20% 0%

happy

not happy


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4. What things you keep in mind while purchasing shoes will it be

quality, advertisement, price or design?

* Out of 20 people 17 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%0%

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 20 people 10 have said Nike, 6 said Reebok and 4 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 there quality and prices is also

same, so different people have different opinion.

50%

30%

20%

nike

reebok

others


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6.What do u think that the company Adidas must do to improve its

marketing statergy.

* 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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LIMITATIONSLIMITATIONS

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.


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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.


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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 2009 the Adidas brands 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 2010. 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, have 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


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However, other smaller 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.


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Only those Indian manufactures which have a strong focus on

manufacturing and technological upgradation will survive in the long run,

although with a much 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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QUESTIONNAIRE

1. How do you rate the company marketing strategy as compare to the

other competitors company like Nike, Reebok etc.?

Adidas Nike

Reebok Others

2. Do you 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 you 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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BIBLIOGRAPHY

Books:

PHILIP KOTLER, MARKETING MANAGEMENT, EDITION 2005.

V.S RAMASWAMY AND S. NAMAKUMARI MARKETINGMANAGEMENT, SECOND EDITION.

WILLIAM STANTON.J, MICHALL J.ETJEC, BRUCE J.WALKERFUNDAMENTAL 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

Business India

India Today

Business Today

NewspapersThe Times of India

The Hindustan Times

The Economic Times
http://www.webcrawler.com/http://www.webcrawler.com/

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