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IN-COMPANY TRAINING REPORTON

Marketing Strategies of ADIDAS

COMPLETED IN“Adidas Int. Pvt. Ltd.”

Submitted in partial fulfillment of the requirement ofBachelor of Business Administration (BBA)

Guru Jambheshwar University of Science & Technology, Hisar

TRAINING SUPERVISOR SUBMITTED BY:Mr. Anil Sharma Aman KumarDesignation – Marketing Manager Enrollment No. 09511225005

SESSION: 2009-12

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DECLARATION

I hereby declare that the project report entitled “Marketing Strategies of Adidas”, is submitted

in partial fulfillment of the award for the degree of the Bachelor of Business Administration to

Guru Jambheshwar University Of Science & Technology, Hisar is an original piece of my project

work carried out by me and the same has not been submitted to any other University for the

award of any degree, diploma, fellowship or any similar title.

Name: - Aman Kumar

Enrollment No-09511225005

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ACKNOWLEDGEMENT

Special thanks to Mr. Anil Sharma for making my project at Adidas a memorable

learning experience. For his learned guidance, constant inspiration, keen interest

and immense encouragement throughout the period of market research. His

constant supports as well as the confidence, which he shown in me helped me,

hide over the difficulties.

PREFACE

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I have made a research on marketing of Adidas by questionnaire method. The main

aim of my research is to find out that how Adidas hold to the market and what are

the areas in which Adidas can improve upon, in the questioner itself I have

emphasis on the marketing of Adidas and also about the current position of Adidas

in market. According to the response of my questionnaire, I have found that Adidas

and Nike are main competitors but Nike is more preferred brand then Adidas. This

is mainly for two reasons first Nike has more variety and good looks then Adidas

and second there outlets are more then Adidas so the company must work upon

these two thing to be the world number one.

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Table of Contents

Executive Summaryo Introduction 7-8

Profile of the Company 9-12

o Products 13-19o Financial facts 20

Marketing Strategies 21-28o Marketing mix 29-40o Other important strategies 41-47o Adidas logo 48-49

Market Research o Objectives 50o Conducting marketing research 51o SWOT Analysis 52-53o Research and Methodology 54-55o Limitations 56

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Findings and Analysis 57-66

Conclusion 67-68

Recommendation 69-71

Bibliography 72-73

Annexure 74-75

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Executive Summary

INTRODUCTIONMy project topic is "Adidas" which is a shoe company and I am analyzing its

Marketing Strategy. I have chosen this particular topic mainly for two reasons.

Firstly, since my childhood days I had great interest in the shoes and I like to buy

new shoes as and when it comes in the market. The Shoe Company that I most

admire is Adidas. Secondly adidas grows as one of the best leading brand in the

shoes and other accessories which is admired by all types of generation. Hence I

have decided to do my project report on this company.

The Adidas mission has changed little since founder AdiDassler began making

sports shoes in the 1920s: to be the best sports brand in the world. The history of

Adidas is one of consistently meeting the evolving needs of the athlete. Focusing

more on function and less on fashion, Adidas strives to provide athletes with

shoes that can make a noticeable difference in their performance. Meeting

athlete needs is what makes Adidas the best. Adidas America has continued to

build on this history.

In February of 1993, Adidas acquired Sports Inc., a US-based sports marketing

company founded by former Nike executives Rob Strasser and Peter Moore.

Sports Inc. had been working in conjunction with Adidas USA on the design,

development, and marketing of the Adidas Equipment line. This line helped

rejuvenate and reposition the Adidas brand in the United States by creating an

exclusive line focused on fulfilling the functional needs of the athlete and by

utilizing the best materials and athlete input in the tradition of AdiDassler. It

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offered moisture management, thermal insulation, weather protection, ease of

movement, and safety, helping the athlete to perform more efficiently. After the

successful creation and launch of Adidas America

I have made a research on marketing of Adidas by questionnaire method. The

main aim of my research is to find out that how Adidas hold to the market and

what are the areas in which Adidas can improve upon, in the questioner itself I

have emphasis on the marketing of Adidas and also about the current position of

Adidas in market. According to the response of my questionnaire, I have found

that Adidas and Nike are main competitors but Nike is more preferred brand then

Adidas. This is mainly for two reasons first Nike has more variety and good looks

then Adidas and second there outlets are more then Adidas so the company must

work upon these two thing to be the world number one.

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Profile of the company

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

with Adidas (Ryno’s Company History). In 1920, Adolf “Adi” Dassler brought to

life those three little stripes. With his brother, Rudolph, Dassler manufactured his

first sports shoe, made for training, after realizing the need for performance

athletic shoes. In1948, the Dassler brothers separated to form their own two

separate companies. Dassler formed Adidas and his brother formed Puma, both

headquarters in Herzogenaurach.

The Adidas mission has changed little since founder AdiDassler began making

sports shoes in the 1920s: to be the best sports brand in the world. The history of

Adidas is one of consistently meeting the evolving needs of the athlete. Focusing

more on function and less on fashion, Adidas strives to provide athletes with

shoes that can make a noticeable difference in their performance. Meeting

athlete needs is what makes Adidas the best. Adidas America has continued to

build on this history.

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In February of 1993, Adidas acquired Sports Inc., a US-based sports marketing

company founded by former Nike executives Rob Strasser and Peter Moore.

Sports Inc. had been working in conjunction with Adidas USA on the design,

development, and marketing of the Adidas Equipment line. This line helped

rejuvenate and reposition the Adidas brand in the United States by creating an

exclusive line focused on fulfilling the functional needs of the athlete and by

utilizing the best materials and athlete input in the tradition of AdiDassler. It

offered moisture management, thermal insulation, weather protection, ease of

movement, and safety, helping the athlete to perform more efficiently. After the

successful creation and launch of Adidas America

Current executive board

CEO Adidas-group: Herbert Hainer

Finance Adidas-group: Robin J. Stalker

CEO Adidas brand: Erich Stamminger

Global Operations Adidas-group: Glenn S. Bennett

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General Information

For over 83 years Adidas has been part of the world of sports on every level,

delivering state-of-the-art sports footwear, apparel and accessories. Today, with

total net sales of 6.1 billion and net income of 208 million, Adidas - Salomon is a

global leader in the sporting goods industry and offers the broadest portfolio of

products. Adidas-Salomon products are available in virtually every country of the

world. Our strategy is simple: continuously strengthen our brands and products to

improve our competitive position and financial performance.

The company's share of the world market for sporting goods is estimated at

around 15 percent.

Activities of the company and its approximately 100 subsidiaries are directed from

Adidas-Salomon AG's headquarters in Herzogenaurach, Germany. Also located in

Herzogenaurach are the strategic business units for Running, Soccer and Tennis as

well as the Research and DevelopmentCenter. Additional key corporate units are

based in Portland, Oregon in the USA, the domicile of Adidas America Inc. and

home to the strategic business units Basketball, Adventure and Alternative Sports.

The strategic business unit Golf is based in California. The business unit Winter

Sports is in Annecy, France. The company also operates design studios and

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development departments at other locations around the world, corresponding to

the related business activity. Adidas-Salomon AG has approximately 13,400

employees worldwide.

Turnover and Brand Image

The turnover of Adidas companyhas grown to 16 Million US dollar in 2004-05.

Almost 53% of the turnover is from sale of apparel and accessories with the rest

from footwear.

The Adidas brand is one of the most popular brands as determined by a within

brand survey of sportswear brands in the year 2004.

Future Plans

Turnover is expected to rise to 18 Million US dollarfor Adidas India in 2005-06

cash break even is fore cast during calendar year 2005 and an operating break

even during 2006. The other Adidas – owned brands, salomon&taylor made are

expected to hit Indian Adidas stores during 2005 and 2006.

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PRODUCTS

Running

Adidas currently manufactures several running shoes, including the adiStar

Control 5, the adiStar Ride (the replacement for the adiStar Cushion 6), the

Supernova Sequence (the replacement for the Supernova Control 10), and the

Supernova Cushion 7 (which will soon be replaced by the Supernova Glide),

among others. In addition, their performance apparel is widely used by runners.

Adidas also uses kangaroo leather to make their more expensive shoes

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Football (soccer)

One of the main focuses of Adidas is football kit and associated equipment.

Adidas also provides apparel and equipment for all teams in Major League Soccer.

Adidas remain a major company in the supply of team kits for international

football teams.

Adidas also makes referee kits that are used in international competition and by

many countries and leagues in the world. In the United States, referees wear the

Adidas kits in MLS matches even though the primary referee supplier is Official

Sports. The company has been an innovator in the area of footwear for the sport

with notable examples including development of the Copa Mundial moulded boot

used for matches on firm dry pitches for almost forty years. The studded

equivalent was named World Cup follow in celebration of the 1978 tournament

won by Argentina, one of the nations it supplied at the time. Some of the most

famous football teams are currently sponsored by Adidas, such as Al-Shorta.

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Cricket

In the 1990s, Adidas signed the famous Indian batsman Sachin Tendulkar and

made shoes for him.]Tendulkar continues to wear Adidas shoes while playing

matches. Adidas even made action figures after SachinTendulkar.From 2008,

Adidas also sponsor the Bat used by Sachin Tendulkar. It created a new bat

'Adidas Master Blaster' personalized for him.

In 2008, Adidas made their move into English cricket market by sponsoring English

batting star Kevin Pietersen after the cancellation of his lifetime deal

with Woodworm, when they ran into financial difficulties.]The following year they

signed up fellow England player Ian Bell,Pakistan opening batsman Salman

Butt and Indian Player RavindraJadeja. Having made cricket footwear for many

years, the company finally entered the field of bat manufacture in 2008 and their

products are available in the Incurza, Pellara and Libroranges.This bat is worth

over £1000.

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Adidas also manufactures the uniforms worn by both the England cricket

team and the Australian cricket team. Adidas signed partnership withCricket

South Africa in 2011 and the uniforms worn by South African Cricket Team during

and after Cricket World Cup 2011 will be manufactured by Adidas.[23] They also

sponsored the South Korea national cricket team .

In the Indian Premier League (IPL), Adidas are the official apparel sponsor for the

teams Mumbai Indians, Delhi Daredevils and Pune Warriors

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Basketball

Adidas has been a longtime basketball shoe manufacturer and is one of the

leading basketball brands in the world. They are most famous for their iconic

Superstar and Pro Model shoes, affectionately known as "shelltoes" for their

stylized hard rubber toe box. These were made very popular in the 1980s hip hop

streetwear scene alongside Adidas' stripe-sided polyester suits.

Adidas is also the current outfitter of all 30 franchises in the National Basketball

Association (replacing the Reebok brand after the merger) and sponsors

numerous players past and present like Kareem Abdul-Jabbar and Tracy McGrady,

as well as Dwight Howard, Chauncey Billups, Derrick Rose, Eric Gordon, Michael

Beasley, Josh Smith and Tim Duncan. Adidas used to endorse Kobe Bryant with

the Adidas Equipment KB8 as his first signature shoe, and stopped endorsing him

in 2003. The company also endorsed Kevin Garnett, until he opted out of his

contract in 2010; he is currently endorsing Anta. Lebron James also wore Adidas

at high school. Now he endorses Nike to date. Gilbert Arenas was an Adidas

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endorser until the now-infamous gun incident last season; he is currently un-

endorsed.

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Accessories

Adidas also designs and makes sandals, watches, eyewear, bags, baseball caps,

and socks.

As well, Adidas has a branded range of male and

female deodorants, perfumes, aftershave and lotions.

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FINANCIAL FACTS

For over 83 years Adidas has been part of the world of sports on every level,

delivering state-of-the-art sports footwear, apparel and accessories. Today, with

total net sales of £182 million, Adidas-Salomon is a global leader in the sporting

goods industry and offers the broadest portfolio of products. Adidas-Salomon

products are available in virtually ever country of the world. Our strategy is

simple: continuously strengthen our brands and products to improve our

competitive position and financial performance. The company’s share of the world

market for sporting goods is estimated at around 19 percent.

FINANCIAL DATA IN MILLION EUROS

Year 2006 2007 2008 2009 2010

Sales 10,084 10,299 10,799 10,381 11,990

EBITDA 1,078 1,165 1,280 780 1,159

Net results 483 551 642 245 567

Net debt 2,231 1,766 2,189 917 221

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MARKETING STRATEGIES

OVER VIEW OF ADIDASSome of the theory I have used in my project are as follows

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

Market research is a method of collecting data which will make you (as a

business) more aware of how the people, you hope to sell to, will react to your

products or services. Market research will answer questions like:

Whether your products or services are needed

Who might want to buy your products

What age, sex, income occupation etc. are the people I want to sell to.

If there are changes taking place and how this might affect what you sell

How well your products or services might sell

How much demand there is for what you hope to sell

What price would people be prepared to pay

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Theory: marketing mix

The Marketing Mix (The 4 P's of Marketing)

Marketing decisions generally fall into the following four controllable categories:

Product

Price

Place (distribution)

Promotion

The term "marketing mix" became popularized after Neil H. Borden published his

1964 article, The Concept of the Marketing Mix. Borden began using the term in

his teaching in the late 1940's after James Culliton had described the marketing

manager as a "mixer of ingredients". The ingredients in Borden's marketing mix

included product planning, pricing, branding, distribution channels, personal

selling, advertising, promotions, packaging, display, servicing, physical handling,

and fact finding and analysis. E. Jerome McCarthy later grouped these ingredients

into the four categories that today are known as the 4 P's of marketing, depicted

below:

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The Marketing Mix

These four P's are the parameters that the marketing manager can control,

subject to the internal and external constraints of the marketing environment.

The goal is to make decisions that center the four P's on the customers in the

target market in order to create perceived value and generate a positive

response.

Product Decisions

The term "product" refers to tangible, physical products as well as services. Here

are some examples of the product decisions to be made:

Brand name

Styling

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Quality

Price Decisions

Some examples of pricing decisions to be made include:

Pricing strategy (skim, penetration, etc.)

Cash and early payment discounts

Price flexibility

Price discrimination

Distribution (Place) Decisions

Distribution is about getting the products to the customer. Some examples of

distribution decisions include:

Distribution channels

Market coverage (inclusive, selective, or exclusive distribution)

Warehousing

Distribution centers

Transportation

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Promotion Decisions

In the context of the marketing mix, promotion represents the various aspects of

marketing communication, that is, the communication of information about the

product with the goal of generating a positive customer response. Marketing

communication decisions include:

Promotional strategy (push, pull, etc.)

Advertising

Personal selling & sales force

Sales promotions

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Theory: SWOT analysis

This theory tells about the company strength, weakness, opportunity and Threats.

This theory is very important for the company because this theory tell the

weakness and the strong points of the company and if company knows it

weakness and it strong points then company becomes easy operative and also the

profits as well as the market share of the company get increased.

The Company

Adidas entered the Indian market in 1996 by setting up a 100% subsidiary of

Adidas AG called Adidas India Ltd. and announced its joint venture with Magnum

International Trading Company Ltd. on October 1, 1996. The new joint venture –

Adidas India Ltd. – was incorporated with an initial investment of US $ 205 million

with Adidas India Ltd. holding 80% of the equity and Magnum holding the balance

20%. This investment was raised to US $ 6.4 million with the equity structure

remaining the same. Currently, the total investment stands at US $ 11.4 Million

with the equity structure changing to 91.4% by Adidas and 8.6% by magnum.

Adidas’ Range of Products in India

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A month after announcing the joint venture, Adidas India Ltd. launched its range

of sports footwear, apparel and accessories in New Delhi on November 1, 1996.

Subsequently, Adidas products were also launched in Mumbai, Bangalore,

Chennai, Hyderabad and Calcutta. Currently, Adidas products are available in 30

cities in India.

The range of Adidas products available in India include sports footwear featuring

some of the most popular innovations and technologies developed by Adidas such

as Feet You Wear, Torsion system and adi wear. The sports footwear available in

India includes a wide range of core categories such as adventure, basketball

cricket, golf, indoor, running, tennis, training, soccer and workout.

Adidas has introduced in India, a wide range of sports wear for both men and

women. These include apparel for athletics, basketball, cricket, golf, running,

soccer, swimming, tennis and training for Men. The women’s range includes

apparel for athletics, golf, running, swimming, tennis, training and workout.

Accessories include bag packs, campus bags, medium and large kit bags, caps,

socks, wrist and headbands.

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Adidas Markets its products in India through a combination of mega exclusive

stores (area of 1000 sq. feet and above), exclusive stores, multi-brand stores and

distributors.

At present, Adidas is available in 80 exclusive outlets out of which 34 are company

– owned with 8 new Company – owned stores planned for 2005 and in 500 multi-

brand outlets in India.

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MARKETING-MIX

THE PRODUCT:

Whatever your athletic preference, you can now purchase an extensive range of

Adidas footwear and apparel online. From running shoes to baseball cleats, eye

wear to lanyards, collegiate licensed jackets to good old fashioned cotton T-shirts,

all things sport are available at the Adidas store.

HOW DO ADIDAS CREATE ITS PRODUCTS

Adidas goal is to create a product that is honest – it must perform. The

rule is simple: form follows function.

Technology and functional design. A development team makes the actual

prototypes. These prototypes are then presented to the retail market by

the marketing department.

An Adidas product is the result of the intense thought and creative energy

of many different people. The following is a general outline of how we

create our performance-based products.

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1. The marketing department evaluates athletes’ needs and develops

a basic concept of how those needs should be met. This concept is

then presented to the design department.

2. Based upon this concept from the marketing department, the design

teams sketch possible prototypes.

3. The people from design and marketing consider the prototype

sketches together, narrowing the selection to those they anticipate

will most successfully meet athletes’ needs.

4. The development department then works with the design

department to create an actual prototype from the selected

sketches.

5. Three separate groups – marketing, design and development – meet

and discuss how to improve the prototype.

6. Samples are wear-tested to ensure the product meets Adidas

standards for performance and durability and stands up to the

demands of the sport for which it was designed.

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7. Preview samples are presented to key accounts and consumer focus

groups for feedback. Based upon this information, final changes are

made.

8. Samples are distributed to Adidas sales representatives for

presentation to retailers.

9. The finished product is delivered to retailers.

A. As A BRAND

At Adidas –you have got to be sporty. At Adidas the brand awarding is

been taken rather seriously at its headquarters. Adidas wants to bring

inline skates into India.

What that kind of stuff got to do with Indian market? Yes, it won’t really

be a hot seller, but it will contribute a lot to Adidas brand image. That’s

the Adidas way of doing it – image is a critical part of branding strategy

the world over.

The idea of the company is to introduce performance specific sports shoes

in the Indian market by building images around the world & at the same

time create the need for these shoes at the ground level.

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Adidas already has heavy weight sportsmen such as Sachin Tendulkar,

Leander Paes & Mahesh Bhupathi endorsing the brand in India. They had

the image, apart from endorsing the performance element in the brand.

Adidas steps out of crease with a clear sports positioning. Adidas will take

on arch Nike with almost the same positioning. Its working with promising

athletes to give them a taste of its products. Adidas nowadays is capturing

an attitude that is sports related.

Adidas in fact did go through a limited fashion phase. Adidas says – that

you are tempted to make quick buck but we would like to stick to the

sports brand image because that make us fashionable.

B. Words of G. Kannan (Director – Marketing)“Our Secret is our commitment to the sports process. We develop shoes

that take into account the needs of a particular sports & the role of this

brand is driven by this factor”.

Good news for Adidas is that even in the casual market, the trend is

towards being sporty. Going to Gym is fast graduating from a mere fad to

serious body building, strengthening & toning. This is reflected in the

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clothes that people wear today. The three stripes, for instance is unique

property which can be reinvented in various forms as trends changes.

C. For Adidas the product plays an eminent role in the enhancement of their corporate as well as sports image:ADIDAS SAYS –

“Nothing compromised. The most innovative Adidas products created specifically

to help make you a better athlete. For Adidas, product is not just a assortment of

few items. But it involves—developing of the rightproduct – which can then be

put to right place & sold with the right promotion & price.

VALUE OF IT’S PRODUCTS FOR ADIDAS

Our goal is to create a product that is honest – it must perform. The rule is

simple: form follows function.

As studied earlier an Adidas product is the result of the intense thought

and creative energy of many different people. If a company sell an

automobile, is it selling a certain no. of nuts and bolts, some metal sheet,

an engine and four wheels?

If a company sell a delivery service, is it selling so much wear and tear on

a delivery truck and so much operator fatigue? As per Adidas the answer

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to these question is instead what we are really selling is the satisfaction,

use or profit the customer wants.

Adidas says that all the customer wants is, that whatever product they

purchase should fulfill all their needs and preferences. They don’t care

how they were made. Further they want that when they order something,

the don’t really care how much out of the way the driver had to go or

where he/she has been. They just want their package. That means for

them only the final service matters.

As per Adidas the idea of product potential customer’s satisfactions or

benefits is very important. Adidas says that the total product is not just a

physical product with its related features, but it includes accessories,

installation, instruction on use, the package, perhaps the brand name

which fulfills some psychological needs a warranty and confidence that

service will be available after the purchase .

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PLACE AND PHYSICAL DISTRIBUTION:

A: Place

Adidas is very much concerned about its second “p”. as per Adidas place

and physical distribution of the product is something on which almost

every company spends a handsome amount of money.

Hence Adidas takes a good care of its place and physical distribution

process. Adidas has appointed marketing specialists who are taking care

of the supply of the product and their distribution channels and process.

Process used – assorting progress

Entire range, which is available is put together to give a target market what it

wants. Marketing specialists put together an assortment to satisfy some target

market. His is usually done by those who are close to the retailers only.

B: Physical distribution

As per Adidas nearly half of the costs of marketing is spend upon the physical

distribution.

To take care of this problem Adidas has appointed marketing managers who

decides how the transporting and storing functions should be divided within a

channel.

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Note: Physical distribution can be varied endlessly in a marketing mix and in a

channel system.

TRUCKS

In Adidas, except the export products, trucks are considered to be the best

medium for transport. The flexibility of trucks makes them really good for moving

small loads for short distances. They can travel on almost any road. According to

Adidas they can give extremely fast service. Also trucks causes less breakage in

handling.

PROMOTION:

Adidas is one of the India’s biggest company of sports that spends nearly $10

million on its sales promotion and advertising in Indian Market.

Adidas believe that it just cannot be taken lightly. It is a very important aspect of

products life cycle. It is the process which is responsible for the growth or decline

in the sale of the product.

Adidas thinks that promotion is communicating information about the product

between the seller and the buyer to change attitudes and behavior.

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To handle the company’s promotional activities Adidas has employed marketing

managers, wherever the Adidas is located. These marketing managers look after

process of the promotion of the products of their company.

As per Adidas the marketing managers promotion job is to tell the target

customers that the right product is available at the right place and at the right

time and especially at the right price.

Adidas thinks that only taking the product to the customers is not a task

of the company. But company takes a very important look about how the

product works and this message is communicated to their consumers.

Because a wrong message can lead to the end of their products life.

Sales Promotion

Adidas is the most popular amongst its rival for its excellent sales

promotional activities.

As per Adidas they say that they themselves are responsible for the

encouragement of the customer to by their products. Adidas believes

sales promotion tries to compliment the company’s selling efforts.

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STEPS THAT ADIDAS TAKE TO PROMOTE

SALES

In the last years the Adidas has almost given sale to its products 6 to 7

times i.e. almost twice in a year Adidas goes for discount on sales. They

arrange contest.

In order to motivate the employees of the company Adidas also prepares

training material for the company’s own sales force. They even design the

sales materials for the company’s own sales force to use during the sales

calls. As per Adidas, people see same message in different ways. They may

interpret the same words differently. So Adidas always tries to deliver the

message which everyone can easily understand.

ADVERTISING

As per Adidas advertising can get results in a promotion blend. Good results are

obtained at a cost of course. The amount spent in the Unites States for

advertising is growing. Continuously, from World War II to 1980 it went from $1

billion to $50 billion.

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Adidas also spends nearly $2.9 million on its advertising throughout the world.

Adidas in India is spending almost $17 million on advertising.

The heavy weight players like Sachin Tendulkar, Leander Paes and Mahesh

Bhupathi are already attached with their ad-campaigns.

PRICING:

Adidas is clear, it wants to become the no. one sports brand in India, a

choice brand for all brands. So far so good, but how will it tackle a price

conscious market like India?

Adidas feels that being a high energy business Adidas introduces 600-700

articles every six months – enables the brand to remain fresh and bring on

an international and Indians the brand from the price stand point.

Price, that’s the most critical factor in the Indian context. Adidas believes

it has to deliver a functional at an affordable price. It’s a tough job – to

maintain the integrity of the performance and still come out with a

product a right price point. Globally shoes start at $50. But in India as the

perceived need is lower, you have to make the product more affordable.

To tackle this, Adidas came out with speed 2000, a product priced at

Rs.995 with the help of local and Hong Kong source people. Adidas

however feels that its just the matter of time before India coverage’s the

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world on this front. It is very difficult to operate on a lower price point

and maintain integrity of product, but its been barely 3 years since the

sports market has taken off. The original sector is just 20% of the total

market and 80% of the volumes comes from sporty shoes. But our market

is producing products at a price that is relevant to the consumers.

Adidas feels that as the volume go up, Adidas will try and work out price

points as people graduate with better understanding of quality and price

perception. Volumes are bound to go up. Adidas started at the time when

India had no strength out in the sports products market in 1989 – 90. Its

then licensing partner Bata, and it had limitations of what it could have

put behind the brand. So company took the next best step when the

licensing agreement ended to take a bigger share in business.

To conclude we can say that Adidas is putting all efforts to bring down the

price consciousness in the Indian market. Company is trying to make

products, which are easy to afford and still maintain the integrity of their

performance. Growth has been phenomenal for Adidas even given the

base is small. In 2002 Adidas grew by 25%, 2003 by over 50% and this year

Adidas is expecting more than 50% in terms of value in both shoes and

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apparel, while the industry growth as a best case estimate has been 20-

25%.

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OTHER STRATEGY

Adidas, the brand with three stripes, seems to use the elements of high-

tension in its ads. Remember the Sachin Tendulkar commercial? How

everything is near-frozen, and the shattering glass signifies release.

Release of tension. Adidas gives you a chance to but the boundaries – in

every sphere.

Only now, the setting is not the playground or the track or the court, it is

the urban landscape – with its omnipresent traffic jams, crowded streets

and so forth. This way, Adidas becomes a part of life. Anyone’s life. You

don’t have to be the high-voltage performer to be a part of the Adidas

family. And it goes beyond that – Adidas becomes something that makes

you better. Not just as an athlete, but as a sports person, a better human

being.

One of the advertisement: The spot featuring Boldon, shows him chasing

a thief (who’d stolen a TV set when its owner was in the bath) through the

dark streets. To help a man (the owner, in a towel) in distress. And he

uses all the power that he can, to do what he has to do and what he needs

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to do. And Adidas helps him perform better, than he would otherwise

have been able to. This is perhaps shown in an oblique way when the spot

ends at the feet of Boldon and the bather.

One is wearing a pair of Adidas shoes while the other is barefoot. Adidas

makes you better, goes the base. In short, the other man could have done

as well as Boldon. The bather reads any man. Any man who wears Adidas.

And Adidas goes beyond athletic performance – it becomes everyday life.

In stark reality.Though humorously and light, it has a deep meaning.

LEVERAGING ON SACHINONE MAJOR PART OF MARKETING STRATEGY IN INDIA

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Continuing its association with trump card Sachin, the local four-ad print

campaign tries to connect Adidas’ product attributes with Sachin’s magic.

“Instead of presenting just one dimension:

The first ad connects Sachin’s choice of a heavy bat with Adidas’ Falcon

Dorflightweight shoes. Says the headline: ‘Sachin likes his bat heavy, not his shoe.’

The second new shoe range to be introduced for the first time in India. Sub-

branded ‘Aksu’ and priced at Rs 2,299, these are athletic sandals primarily meant

for water-based adventure sports. Finally, The next ad will convey that Adidas

covers various price points by promoting its existing Portland range priced at Rs

1,499 and 1,799 (the leather version).

The importance of celebrity sponsorship and events to Adidas is illustrated by

Robert Louis-Dreyfus’ letter in the company’s 1998 annual report :

“When it comes to showcasing our brands, 1998 was truly exceptional. Early in

the year, the Winter Olympics focused the attention of sports enthusiasts on

Nagano. In summer, the Soccer World Cup in France attracted more spectators

than any single sports event before. When the French team, promoting the three

stripes, won the World Cup, we could not have wished for more. These were

great times for our brand.’

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Adidas has reached an agreement with ISL Marketing G of Switzerland to become

an official sponsor of the 2000 UEFA European Championships. Adidas will have

access to the official emblems, mascot and trophy for the design of its own

products..

In 1998, the overall Adidas budget for promotion and sponsoring accounted for

nearly 15% of turnover.

The positioning is being communicated through its global campaign-released

worldwide in February 1999 but in India, only in May-as well as through a four-ad

print campaign developed locally by RK Swamy/BBDO. Says G Kanan, general

manager, marketing, Adidas: “We are the only brand with heritage in sports. As a

brand, we’re not an attitude that’s fashionable. We’re an attitude that is relevant

all the time.

The campaign also introduces a new brand line for Adidas: ‘Forever Sport’. The

line sums up the “deeply-felt” and “long-term love affair” (it has been involved

with sports since 1928) that Adidas has with sport in all of its forms. Interestingly,

the new brand line has been introduced almost after a decade, when it was using

‘Earn your stripes’ as its tag-line. The company dropped it during the late 80s after

it found that it wasn’t connecting too well with its consumers.

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But the golden question is that will the campaign make Adidas run?

The company expects the campaign to strengthen the image of the brand since

research had indicated that neither of the three multinational sports shoe brands

present in India had a clear image: most were perceived as diffused brands and

personality-led. Says Kanan: “Sachin has and will play a major role in pushing the

brand. He is important, as there are certain values a consumer needs to know

about Adidas. But after a certain duration, we have to present a global

perspective too and hence the Forever Sport campaign.”

Interestingly, Adidas claims that it did not want to be caught up in the clutter of

the World Cup promotions-and deliberately chose not to associated with the

World Cup. Instead, according to Kanan, the campaign has been broken now to

coincide with the peak season (April-June). “The World Cup is incidental. It’s too

large an event to make significance for us”, says Kanan.

However, the company is maintain a steady and dominant presence in the media

during the Cup: strewn over select channels like Star, Discovery, and ESPN are the

Sachin ads promoting Adidas. “Star News is delivering good value while through

Discovery, we can catch the elite customer”, Kanan says.

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Although Kanan admits that the sports shoe and apparel market is at a nascent

stage, he claims that Adidas has grown by over 250 per cent from last year. As a

company that takes pride in not joining the price brawl, Adidas does not intend to

bring down the prices of its products. Says Kanan, “We don’t look at driving down

the market by lowering the price. We are willing to wait for the market to

evolve.”

For Adidas, the real breakthrough, says Kanan, has come through a combination

of strategies: signing on Sachin, Leander and Bhupathi; expanding its reach (it

opened 45 stores last year); a revamped range which covers a band of price

points; and support to the brand. "“e built-in value pricing in our products, and

supported them through sports icons who are looked up to. We have realized that

to have just one good guy endorsing your brand is more important than having

several unknown faces”, says Kanan

The company is enlarging the scope of its business by concentrating on apparel.

“Apparel is driving the business. Most consumers start experimenting with the

brand through apparel”, admits Kanan. Essentially perceived as a male brand,

Adidas however defends its range by pointing out that currently it has 50 items

out of a total of 250, for women.

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Further, Adidas is planning to add 30 new stores this year. “We’re looking at

driving the market through exclusive stores”. Says Kanan. The logic is clear: use

Forever Sport to ensure sales forever.

THE ADIDAS LOGO

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The “Trefoil” was adopted as the corporate logo in 1972. It

represents the heritage and history of the brand. In 1996, it was decided that the

Trefoil would only be used on heritage products. Examples of product featuring

the Trefoil logo include the Stan Smith, Road Laver, A-15 warm-up, and Classic T-

shirt.

Equipment

The Adidas Equipment line was launched in 1991. This line of footwear and

apparel represents the most unique and functional of Adidas products.

Equipment is the ultimate expression of what is uniquely possible by design when

form follows function.

In January 1996, the Three-Stripes brand mark became the worldwide Adidas

corporate logo. This logo represents performance and the future of the Adidas

brand. This logo is used in all advertising, printed collateral and corporate signage.

Since 1949, the Three-Stripes have been an integral part of our brand and

product designs. This trademark has become synonymous with Adidas and its

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dedication to producing high-quality athletic products to help athletes perform

better.

MARKETING RESEARCH

OBJECTIVES OF THE STUDY

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To study the marketing of Adidas and also about the current position of Adidas

in market

To find out Adidas and Nike are main competitors but Nike is more preferred

brand then others.

To find out that how Adidas hold to the market and what are the areas in which

Adidas can improve.

Conducting market research

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There are number of ways in which you can carry out your research but you need

to carefully consider why you made this choice and what you hope the evidence

will suggest to you.

Questionnaires and personal interviews are one of the most common ways in

which you can conduct market research, and there are many methods of

gathering data this way: Direct Interview, Mail Survey and Telephone interview.

Depending on the type of data you hope to collect will have a impact on what you

choose to use.I have made use of two type of survey methods, questionnaire

and mail survey. I have asked some question about the company by mail and also

by direct contacts. The Question I have asked are given in “questionnaire part”

below.

SWOT ANAYSIS

Strengths:

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The main strength of Adidas is his Product Quality. The quality and the material

uses in Adidas is very good. The company has a good brand image in the market,

the publicity and the advertisement is also very good and lastly company hold a

heathly market share in the market.

Weakness:

The major weakness in the Adidas is that the manufacturing of the products of

Adidas is not done in India itself it is being import hence the cost become high

and the margin of profit becomes low that’s why company must give a deep

thought on manufacturing their products in India.

Another major weakness in the company is that it is not catering to all the

segments which I have already discuss above, If these two weakness in the

company can be eradicated then the company may earn high profit and better

market status.

Opportunities:

Adidas does have many products for the urban segment or poor people, but there

are hardly any product or we can say that there are no products for this segment.

India is more a rural country, in the total population of India major part of

population lives in rural area and these people can not afford the costly products

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of the company like Adidas hence company must target this particular segment

they must introduce the shoes and other product according to their demands.

and also price is one of the major factor which may influence this type of segment

hence company should make their policy accordingly.

Company must also consider the rage of products as compare to Nike and

Reebok. In my opinion the company must introduce more rage or more variety in

the market to compete with their competitors and also the customer have more

choices to choice the product from.

Threats:

Adidas does not have strong distribution network as compare to Nike and Reebok

in India. Nike has more number of retail outlet then Adidas and Reebok has a

unique distribution network, the company Reebok not only use its outlet for the

sale of their product but also use some other shoes company outlet like “Bata”. In

a Bata showroom u can find Reebok shoes and other products. But this is not a

case with Adidas hence Reebok has a extra advantage over Adidas.

RESEARCH METHODOLOGY

STAGE ONE

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

secondary data are as follows:

Data Sources

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News Papers

Magazines

Internet

Press articles on Adidas.

Stage Two

I visited the Adidas India Ltd., which is located In Mehrauli (new Delhi). I Also Met

Some Of The Marketing Executives Who Helped Me Getting The Required

Information.

I Also Got Some Of The Information From The Other Resources Of The Corporate

Office Like

Company Journals

Company Catalogs

Questionnaire (Structured & Non Disguised)

And Other Related Sources.

Primary data:

I have prepared a questionnaire for the general public asking about the

marketing strategy of Adidas, in that particular questionnaire I have asked

some question give in finding and analysis section: (the questioner is filled by

80 people).

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LIMITATIONS

The research project has been completed with ease and

comfortably. No particular limitation or shortcoming was

realized during the analysis.

Also, due to time constraints, enough justice could not be done

to the project.

FINDINGS AND ANALYSIS

Company research report

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(A) Company Description

Adidas-Salomon AG(ADIDAS). Production and marketing of sports equipment,

footwear and apparel under the brand names of Adidas, Salomon, Taylor Made

and Mavic. Sales of Footwear accounted for 45% of 2004 revenues; Sales of

Apparel, 35% and Sales of Hardware, 20%.

(B) Competitor Analysis

Adidas-Salomon AG operates in the Men’s & boys’ clothing sector. This analysis

compares Adidas with three other sport shoe and apparel manufacturers: Nike

Inc. of the United States (2004 sales of $9 billion of which 59% was Footwear),

Reebok International Ltd. of the United States (2003 sales: $2.87 billion of which

73% was Footwear), and Amer Group PLC which is based in Finland (2003 sales of

6.46 billion Finnish Markka [US$996.88 million] of which 24% was Racquet

Sports). Note: not all of these companies have the same fiscal year: the most

recent data for each company are being used.

(C) Sales Analysis

In 2008, sales growth in the adidas segment exceeded Management’s initial

expectations. Profitability developed in line with expectations. Currency-

neutral sales in the adidas segment increased 14%. In euro terms, segment sales

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grew 10% to € 7.821 billion in 2008 from € 7.113 billion in 2007. Gross

margin increased 1.2 percentage points to a record annual level of 48.6% (2007:

47.4%). This was mainly driven by an improving regional mix, further own-retail

expansion and a more favourable product mix. Gross profit grew 13% to € 3.802

billion in 2008 from € 3.370 billion in 2007. As a result of the positive gross margin

development and stable net other operating expenses and income as a

percentage of sales, operating margin increased 1.1 percentage points to 14.0%

(2007: 12.9%). Operating profit increased 19% to € 1.098 billion in 2008

versus € 920 million in 2007.

adidas at a glance€ in millions

  2008 2007 Change

       

Net sales 7,821 7,113 10%

Gross profit 3,802 3,370 13%

Gross margin 48.6% 47.4% 1.2 pp

Operating profit 1,098 920 19%

Operating margin 14.0% 12.9% 1.1 pp

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ADIDAS NET SALES BY QUATER

GROWTH

Adidas is a constantly growing company. It is global in scope with the majority of

its sales coming from Europe, followed by the United states, with the smallest

percent of Adidas’ sales coming from Asia. Adidas sales have grown significantly

each year from 1994 to the present. Adidas is the leading producer of sporting

goods in Europe and it is second in the overall world market, just behind Nike.

Nearly 55% of Adidas revenues come from Europe, while 37% come from the

Americas, and only 9% of revenues come from a growing Asian market.

For anyone not familiar with the structure of this company (since it is not based

out of the USA), it is much like US based competitor Nike. Adidas has stock

traded on exchanges in Frankfurtand Pairs, and its ticker symbol is ADDDY. The

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pie chart below shows exactly how the ownership of the company is spread out

across the world. Most of the ownership comes from Europe, while a substantial

30% comes from the United States, and the rest from Asia.

Adidas is a growing company as stated above, but how much and how fast? As

you can see from the graph of net sales over the past five years, sales have grown

rather exponentially, although growth slowed in 1999. This growth in sales comes

from not only an improving world economy, but from Adidas’ marketing efforts

to make it one of the most popular sporting goods brands.

This shows that Adidas does not have a large market share in Asia as compare us

and Europe and my questionnaire (given below) also suggest that company can

improve a lot the certain areas are marketing distribution and competing with the

Asia5%

US30%

UK25%

Europe40%

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competitors. The company has to become innovator not follower they must do

something differently to come with the flying colors.

DATA ANALYSIS

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

competitors company like Nike, Reebok etc.?

Out of 80 people 36 had said Adidas have a good marketing strategy and

should continue like this only, 24 had said Nike is more better then Adidas, 16

said Reebok is good and 4 said others.

adidas45%

nike30%

reebok20%

others5%

Chart Title

adidas

nike

reebok

others

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2. Do u think that the company Adidas is giving its customer what they want in

terms of quality and prices or value for money? Out of 80 people 68 person

are satisfy with the quality and the price of the product and other says that

they are not satisfy.

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

company is good enough?

Out of 80 people 66 person said yes they like the advertisement

very much and rest said no they don’t like them.

83%

18%

Chart Title

happy

not happy

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4. What things u keep in mind while purchasing shoes will it be quality,

advertisement, price or design?

Out of 80 people 69 person had said that the product must have good

quality and good design and other said they purchase these shoe for status

symbol only.

86%

14%

Chart Title

quality

other factor

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5. If u have to purchase shoe except Adidas which shoe it will be and why?

Out of 80 people 42 have said Nike, 23 said Reebok and 15 others, which

shows that the main competitor of Adidas is Nike. They have given different

reason for that some said Nike and Adidas are have same range of products

and th ere quality and prices is also same, so different people have

different opinion.

53%29%

19%

Chart Title

nike

reebok

others

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

strategy?

Most of people said Adidas has a good marketing strategy but the company

should launch more products or u can say more variety to their products.

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CONCLUSION

ADIDAS in INDIA has always been driven by its Value-for-money strategy. The

company needs to identify critical success factory and work assiduously towards

achieving it.

As the world grows to become one, many problems will arise that cannot be

solved. One of the primary challenges associated with globalization is balancing

conflicting and competing objectives. In the case of Adidas, it has faced such

problems already and how they have dealt with them is with flexibility and

calmness. Despite what could be higher costs, Adidas has chosen to stick with

their human right codes and Standards of Engagement rather than continue to be

associated with subcontractors who treat works in inhumane ways. As Adidas has

grown worldwide, it has had to deal with problems of heterogeneity vs.

homogeneity. In other words, in an increasingly heterogeneous and global world,

diversity in the workplace has appeared to emerge as an issue. Companies,

including Adidas are no longer homogenous in the sense that their companies

have grown worldwide. And as a result, Adidas has had to make worldwide

headquarters and produce information and products in several different

languages. Having to spread its workforce, Adidas has come to depend on

intangibles.

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The knowledge, worldwide experience and diversity that an Adidas employee can

bring to the table are valuable. Recently, how successful companies are in the

global world is increasingly derived from intangibles, such as these, that

organizations cannot own. Adidas is greatly affected by these external influences

since indeed it is a global company. For some it is not common knowledge that

Adidas is a German company. This is a result of good global business. Adidas has

created a product that is global and with that diversity and knowledge greatly

affect the company. Adidas must be able to easily adapt to different cultures and

must be culturally aware when conducting business. The long list of Adidas

subsidiaries where it conducts business proves that Adidas is constantly adapting

to cultural changes and must be extremely diverse. Because of this necessity,

knowledge is greatly valued. Great changes occur in this industry and as a result,

new ideas, intuition and inspiration are an asset that is a necessity in this industry

and to remain a global company. Who leads this knowledge and maintains

diversity are the managers, yet they too are facing new changes.

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RECOMMENDATION

For 2004, the Adidas brand’s new divisional structure will be in place to start

delivering positive results for the Group. Adidas America will remain a challenge

but nevertheless will deliver qualitative sales improvements in the second half of

2005. Top-line growth is expected in all other regions. Double-digit growth from

Salomon is projected as a result of the continued innovative strength and the

increasing profile of their products. The integration of Mavic with Salomon, which

began in 2002, will continue in 2005, with further synergies between the two

brands. At Taylor Made-Adidas Golf, increased marketing and sales support will

target ambitious golfers, and solid growth in all the major golf markets is

expected to continue.

In addition to these positive top-line developments, gross margins are expected

to remain within a range of 41% to 43%, operating expenses will decline as a

percentage of sales, and as a result net income is projected to increase by 15%.

Adidas is currently ranked third in almost every category in the global athletic

shoe industry. However, they rank second only to Nike in terms of sales. The

main competitors of Adidas include Nike and Reebok However, other smaller

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competitors include Fila, Puma and Easy Spirit. Adidas commands only 5% of the

athletic shoe business in the U.S., compared with the 40% for the fearsome Nike,

but the rejuvenated Adidas has climbed to within easy reach of Reebok, which has

been struggling in the past couple of years. Adidas is also steadily regaining

market share lost to other brands such as L.A. Gear and Fila (Fortune, 2000)

Since acquiring their current president, Louis-Dreyfus, Adidas, a wholly owned

subsidiary, has competed with a whole new strategy. Aside from cutting the

whole line of German senior management, Louis-Dreyfus also fired management

in Asia, who failed to match competitors’ low costs in subcontracting shoemaking

to local companies. While Louis-Dreyfus fought bring down costs, he also took a

gamble on the side. Adidas began to focus on global marketing.

But the battle has only started, and the foreign sports companies are here for the

long term. They can sustain losses for years to come in order to gain market

share. What they are doing at present, is building up distribution networks to

cover every nook and corner of the country and, setting up manufacturing

facilities.

Only those Indian manufactures which have a strong focus on manufacturing and

technological upgradation will survive in the long run, although with a much

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smaller market share than they have at present. Small companies will be sidelined

totally and will exit from the sports market altogether. ADIDAS in INDIA has

always been driven by its Value – for-money strategy. The company needs to

identify critical success factory and work assiduously towards achieving it.

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BIBLIOGRAPHY

Books:

PHILIP KOTLER, MARKETING MANAGEMENT, EDITION 2005.

V.S RAMASWAMY AND S. NAMAKUMARI MARKETING MANAGEMENT,

SECOND EDITION.

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

FUNDAMENTAL OF MANAGEMENT.

RAVICHANDRAH.N COMPETITION IN INDIAN INDUSTRY.

Web Sites

www.adidas.com

www.indiainfoline.com

www.webcrawler.com

www.google.com

www.indiatimes.com

Magazines

A&M

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Business India

India Today

Business Today

Newspapers

The Times of India

The Hindustan Times

The Economic Times

From Company

Company Journals

Company Catalogs

ANNEXURE

QUESTIONNAIRE

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

competitors company like Nike, Reebok etc.?

Adidas Nike

Reebok Others

2. Do u think that the company Adidas is giving its customer what they want in

terms of quality and prices or value for money?

Happy Not Happy

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

is good enough?

Happy Not Happy

4. What things u keep in mind while purchasing shoes will it be quality,

advertisement, price or design?

Quality Other factor

5. If u have to purchase shoe except Adidas which shoe it will be and why?

Nike Reebok

Others

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

strategy?

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