PRODUCT MARKET ANALYSIS

Binal Shah [Roll No. 23]

Milroy Almeida [Roll No. 55]

Prathamesh Prabhu [Roll No. 34]

Renu Batra [Roll No. 49]

Rohit Tilgulkar [Roll No. 15]

Sachin Dore [Roll No. 13]

[RPIMS F.Y.M.M.S 2009-10]

CONTENTS…

OVERVIEW …………………………………………………………….... 3

INTRODUCTION TO PRODUCT CATEGORY ……………………... 4

COMPANIES INVOLVED IN THE CATEGORY …………………..... 6

THE PRODUCT …………………………………………………………... 8

4 P’S OF MARKETING …………………………………………………. 10

SEGMENTATION ……………………………………………………..... 13

POSITIONING …………………………………………………………… 16

MARKET RESEARCH AND CONSUMER SURVEY ………………... 17

2

Overview…

is a German sports apparel manufacturer, part of the adidas Group. The

company was named after its founder, Adolf (Adi) Dassler, who started producing shoes in the

1920s in Herzogenaurach, near Nuremberg, with the help of his brother Rudolf Dassler who

later formed rival shoe company PUMA AG. The company's clothing and shoe designs include

three parallel stripes of the same color, and the same is incorporated into adidas' official

logos. The strength of Adidas was its product innovation. Adidas began selling its shoes in

the United States after 1968 and in few years the company dominated the American market.

The most important marketing breakthrough was the active promotion of global sporting

events, especially the Olympics. Adidas has 107 subsidiaries in 20 countries, and exports to

160 countries. Exploitation of the registered trademark

It registered itself as adidas AG on 18 August 1949…

Adidas plans to attain and maintain leadership position in the organised sports footwear

and sportswear market…

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Introduction To Product Category…

port Shoes- An athletic shoe or Sport shoe is a generic name for footwear

designed for sporting and physical activities. It is different in style and build than a

formal shoe. Athletic/Sport shoes often have less difference between the sexes than in dress

shoes. In many cases these shoes can be worn by either sex. Sport Shoe emphasizes more on

function than on style. Sports Shoes can hence be further diversified into various

categories….

Sneakers/trainers: These are general purpose athletic shoes made out of rubber, cloth,

and/or plastic to be lightweight, flexible, and have good traction.

Cleat (shoe): a type of shoe featuring molded or removable studs. Usually worn while

playing sports such as rugby, football, American football, or baseball.

Golf shoes: These are with "spikes" for better grip in grass and wet ground. Originally

the spikes or "cleats" were made of metal but replaceable "soft spikes" made of synthetic

plastic-like materials with prongs distributed radially around the edge of each spike are

much more common today (and are required on many golf courses since they cause less

damage to the greens).

Bowling shoes: An intermediate style between ordinary dress shoes and athletic shoes.

They have harder rubber soles/heels so as not to damage bowling alley floors. They are

often rented or loaned at bowling alleys.

Hiking shoes or boots: These usually have a high somewhat stiff upper with many lace

eyelets, to provide ankle support on uneven terrain, with extra large traction on the sole.

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S

Skate Shoes: Specifically designed for use in Skateboarding, the shoes are manufactured

with flat soles as to allow a skateboarder to have better grip when riding a skateboard.

They are very wide and have extra layers of padding to protect the skateboarders feet.

Cycling shoes: These are equipped with a metal or plastic cleat to interface with  clip less

pedals, as well as a stiff sole to maximize power transfer and support the foot.

Snowshoes: Snowshoes are special shoes for walking in thick snow. In temperate

climates, snowshoes are used for mostly recreational purposes in winter.

Wrestling shoes: These are light, flexible shoes that mimic bare feet while providing

additional traction and protection.

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Companies Involved In The Category…

One of the Sport apparel giant, ADIDAS is a German-based

manufacturer and a part of the Adidas Group, which consists

of Reebok sportswear company, Taylor Made-adidas golf company, and Rockport.

CONVERSE is an American shoe manufacturing company which has

been making shoes since 1908. In 2003, rival firm NIKE purchased CONVERSE for $305

million.

FILA is South Korea's largest sportswear manufacturing company, founded

in 1911 in Italy. Created by Fila brothers in 1911, it originally started by

making clothing for the people of the Italian Alps, and now manufactures sportswear for

men, women, children and athletes.

Founded on January 25, 1964 as Blue Ribbon Sports it officially

became NIKE, INC. in 1978. It is the world's leading supplier of

athletic shoes and apparel and a major manufacturer of sports equipment with revenue in

excess of $18.6 billion USD in its fiscal year 2008 .

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PUMA AG Rudolf Dassler Sport (PUMA) is a large German multinational company that

produces high-end athletic shoes, lifestyle footwear and other sportswear. The company also

offers lines shoes and sports clothing.

Reebok International Limited, is a producer of athletic footwear,

apparel, and accessories. In August 2005, one of the company's

largest rivals, Adidas, announced that it would acquire Reebok for $3.8 billion. The deal was

completed in January 2006.

Founded in 1910, Umbro is a United Kingdom sportswear and equipment

supplier based in Cheadle, Greater Manchester, England. Now part of of

Nike, Umbro designs, sources, and markets sport-related apparel, footwear, and equipment. Its

products are sold in over 90 countries worldwide.

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The Product…

A modest shoemaker from a small rural town in Germany developed

a range of sports products so original and so perfect that they were

sought by athletes from all over the world. As he indulged his passion for sport and for

innovation, he created a brand as great as any in the world. An unlikely story, but not

impossible.

“Impossible is Nothing”

For Adidas, it all began with shoes. Shoes to play in. Shoes to play better in.

Shoes to win games in. Shoes that, one day, would run at OLD TRAFFORD, LORDS or

WIMBLEDON. Shoes that, one day would win Grand Slams, World Cups and the Premiere

League. Athletes would wear them, break records, and would win championship. Today,

Adidas is one of the world’s leading brands, one of the most recognized and respected…

Adidas first entered India in 1989 through a license agreement with Bata. The result

wasn’t so-very convincing. After Liberalization, Privatization and Globalization in 1991, a

foundation for international firms was built. Foreign-Companies started investing in the

Indian Market. Adidas later re-entered India in 1996 through a joint venture with Magnum

International Trading Company Ltd to form Adidas (India) Trading Pvt. Ltd.

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The company is the largest sportswear manufacturer in Europe and the second biggest

sportswear manufacturer in the world , after its U.S. rival Nike.

The company's clothing and shoe designs typically feature three

parallel bars, and the same motif is incorporated into Adidas's current

official logo. One of the main focuses of Adidas is FOOTBALL KIT and associated

equipment. It provides apparel and equipment for all teams in  Major League Soccer(U.S.A).

It also provides sporting kits to major international football teams like RUSSIA,

ARGENTINA, SPAIN and many more. Major English clubs like LIVERPOOL and

CHELSEA use Adidas kits.

Football boots are an item of footwear worn when playing football. Those designed

for grass pitches have studs on the bottom to aid grip. Modern "boots" are not truly boots in

that they do not cover the ankle. Originally, association football boots (soccer shoes in U.S.

English) were available only in black, but in more recent years have become available in

various colors such as red, white, yellow, silver, gold and even pink. Adidas are responsible

for the PREDATOR RANGE worn by David Beckham, Gary Neville, and Steven Gerrard.

The entire German national side wore Adidas boots during the 2006 FIFA World Cup.

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4 P’s Of Marketing…

PRODUCT

Comfort Quality Appearance Packaging Brand Service Warranty/ Guarantee

PRICE

Fair  price Discounts & Offers Concessions on volume purchase Consumer Discounts Budget

PLACE

Locations Channels Market Coverage Service Levels Competitors

PROMOTIONS

Advertising Public  Relations Messages Direct Marketing Sales Media

4 P’s Of

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Marketing  strategy means   changing   the marketing mix to respond to changing

customer expectations…

PRODUCT

Attracting Competitor’s Customers. Sharper Product Diversification. Analyzing Competitor’s Strength’s. Increasing Promotional Efforts. Re –Positioning In Some Cases. Increasing Present Customers’ Rate Of Usage.

PRICE

Increasing The Unit Sales By Offering Discount. Price Discount For Bulk Orders. Considering The Budget Of The Public.

PLACE

New Market Opportunities And Expanding The Existing Markets. Concentrating Resources On Most Profitable Customer Segments. Concentrating On Distribution Channels Reaching Most Profitable Segments. Offering Total Customer Service At Higher Price.

PROMOTION

Attracting Other Market Segments. Seeking Other Distributional Channels & Other Marketing Strategies. Advertising In Other Medias. Improving Communication With Present Customers. Build New Strategy To Cope Up With Competitors.

SWOT ANALYSIS

Strengths:

Popular in Europe among Soccer & athletic fans Highest brand image in INDIA.

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Marketing Mix

Promotion

Place Price

Product

Largest international portfolio of sports ambassadors Focus on Performance development & Technology Development Have Global Presence

Weakness:

Direct sale to consumers conflicts with its own reseller Rigid pricing structure Has not do well in Indian subcontinent market

Opportunities:

Increasing demand in the industry for the product available online Increase female participation in athletics New Technology & Innovation to stay on top of market need Collaborate with other online retailers to offer Adidas products

Threats:

Economic downturn in North America & Asian countries Strong competitions from some of its major challengers in all branches of business Increase in Price of Raw Material

Segmentation…

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Market segmentation: Basically not all types’ segmentation is useful. It is important to recognize that a marketer needs to use relevant variables to segment a market. For example: segmenting a market based on a person’s age is not relevant for a product like salt.

Geographic Segmentation:

Geographic segmentation calls for dividing the market into different geographical units such as states, regions, cities, towns, etc. Adidas has been marketed in various Tier I and Tier II cities along with the metropolitan cities.

In case of Adidas, the geographic segmentation consists of:

Basis:                               Segmentation:

 Region:                            East, West, South, and North

 City or Metro-size:            Metropolitans, Tier I, Tier II Cities.

 Density:                           Urban, Semi Urban.

Demographic Segmentation:

 In demographic segmentation the market is divided into groups on the basis of variables such as age, gender, income, occupation, generation, and social class.

In case Adidas, the demographic segmentation consists of:

Basis:                            Segmentation:

Age:                              All age 

Gender:                          Male, Female

Income:                         Individuals with higher income brackets

Occupation:                    Sports persons, Students, Working individuals with a want for quality

Generation:                    Generation X’ers

Social Class:         Premium class, Middle class, Upper-Middle class.

 Psycho Graphic Segmentation:

In Psycho graphic Segmentation, buyers are divided in two different groups on the basis of lifestyle, or values. People within the same demographic group can exhibit very different

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Psycho Graphic profiles. People exhibit more lifestyles as it differs in attitudes, interest, and activities and this affects the goods and the services they consume. Consumers are time-constrained or money-constrained as the life has become very hectic and this affects the lifestyle.

In case of Adidas, the Psycho graphic segmentation consists of:

 Basis:                          Segmentation:

 Lifestyle:                         Sports-oriented, outdoor- oriented,

 Values:                            Attitudes, choice, desire, Value for money.

Users: Enthusiastic, impulsive people who seek variety and excitement.

Strivers: Trendy and fun-loving people who are resource-constrained but favor stylish products that emulate the purchase of those with greater material wealth.

Image Drivers: The wealthy few who set the trends in their social circle. This is the segment responsible for the selling out of the Rs.12499 adidas One - adidas’ most expensive shoe in India.

Behavioral Segmentation:

 In Behavioral Segmentation, buyers are divided into groups on the basis of their knowledge of, attitude towards, or use of, or response to a product. Marketers believe that behavioral

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variables- occasions, benefits, user-status, usage rate, royalty-status, buyers- readiness stage and attitude are the best starting points for constructing market segments.

The company targets behavioral segments also: The sports and fitness conscious population is further subdivided into gym regulars, professional and amateur athletes and even drawing-room sports enthusiasts.

  In case of Adidas, the Behavioral segmentation consists of:  

Basis:                               Segmentation:

Occasions:                       Regular use as there can be any occasion for using it.

Benefits:                          Quality, Service, Brand name, Design, Comfort.

Usage rate:                       Light user, Medium user and heavy user.

Loyalty status:                 Low, Medium, Strong, and Absolute

Readiness Stage:              Aware, Inform, Interested, Desirous, Intending to use

Attitude towards service: Positive, Indifferent, Enthusiastic.

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Positioning…

It is an act of designing Company’s Offering & Image to occupy a

distinctive place in the minds of the target market.

Adidas is a worldwide producer of sporting goods and holds a leading position in the

industry. The company wants to use the FIFA world cup as a powerful weapon in order to

boost their sales. Adidas is ahead of competitors in terms of marketing strategy. Adidas

exploited its home advantage at the 2006 Football World Cup. Adidas strategy is to heavily

invest on the events rather than sponsoring teams and players. It has already signed a $350

million deal last year to extend its World Cup partnership with FIFA up to 2014.By

sponsoring the event Adidas controls the competitors guerrilla-marketing tactics in the world

cup. Adidas has locked up exclusive rights to advertisements during broadcasts of games in the

U.S effectively blocking Nike ads from view. It also gets exclusive marketing rights in

billboard space outside stadiums…

Adidas gives special attention to successful creation of customer focused value

proposition by emphasizing on high quality.

RETAILER’S INCEPTS :-“Adidas wants the product to be known for its high

quality and comfort orientation. Due to these factors public perceives the product as a

value based product, worth its price.”

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Market Research & Consumer Survey...

Market Research (As Interpreted By The Store Manager,

Adidas)

Q. Do you(Adidas) provide training to new incumbents ?

A. Yes, the training period is 4 days for the new employees. For Mumbai division, the

employees of adidas (India) Trading Pvt. Ltd. are trained at Bandra. Every six months,

training is being provided for sales division.

Q. How long have you(The Store Manager) been in the business ?

A. I have been at adidas for about 2 years. Before joining adidas, I have worked in the

marketing sector for about 10 years.

Q. Who according to you(The Store Manager) has been the toughest competitor for Adidas ?

A. Nike & Puma to certain extent. Since these two are big names in the industry, and they

too produce high quality footwear, these are Adidas’s toughest competitor.

Q. Are you aware of the Adidas-Reebok ?

A. Yes. The deal happened in 2005-06 and now Reebok has been taken over by Adidas.

Q. Are marketing strategies communicated from the Adidas headquarters ?

A. Yes, there are different departments such as visual merchandising, sales, marketing .

Q. What is the USP of Adidas ?

A. In India, Adidas is majorly promoted by Sportsmen like Sachin Tendulkar. Internationally,

the brand has many big names such as Beckham, Messi and many more. Also, the brand

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name, the quality, the variety in offers it provides to the customer is its USP.

Q. Does Adidas accept feedback(From The Retailers) ?

A. Yes, Feedback is mostly given by the store managers. Adidas asks for feedbacks every 6

Months.

Q. Is Adidas receptive, and does it act upon the suggestion/feedback instantly ?

A. Yes, the feedbacks are received positively.

Consumer Survey [Sample Size=50]

(The consumer survey was conducted to determine the awareness of the brand amongst the consumers.)

Q. Which Sports apparel brand do you trust more ?

Adidas 30

Nike 16

Puma 04

Umbro 00

Q. Preference of buying sports shoes

Price

[1] 8

[2] 12

[3] 11

[4] 19

Comfort

[1] 23

[2] 17

[3] 10

18

[4] 00

Brand Name

[1] 09

[2] 12

[3] 15

[4] 14

Style

[1] 10

[2] 08

[3] 14

[4] 18

Q. Which of these football teams use adidas apparels ?

Manchester United 13

Arsenal 07

Liverpool 25

Manchester City 05

CORRECT ANSWER:-Liverpool

Q. Which of these IPL teams does adidas sponsor ?

Chennai Super Kings 03

Deccan Chargers 07

Kings XI Punjab 05

Mumbai Indians 35

CORRECT ANSWER:-Mumbai Indians

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Q.Which of these brands was acquired by adidas for $3.8 billion ?

Nike 07

Reebok 32

Puma 05

Umbro 08

CORRECT ANSWER:-Reebok

Q.Which of these accessories does adidas manufacture ?

Aftershave 43

Laptops 03

T.V 01

Guitar 04

CORRECT ANSWER:-Aftershave

Q. Slogan Of Adidas…

Just Do It… 06

Can We Do It..? 01

Impossible Is Nothing… 37

Nothing Is Impossible… 07

CORRECT ANSWER:-Impossible Is Nothing

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