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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 needs of the athlete. Focusing more on function and less on fashion, Adidas strives to provide athletes with shoes that can make a noticeable difference in their performance. Meeting athlete needs is what makes Adidas the best. Adidas America has continued to build on this history. In February of 1993, Adidas acquired Sports Inc., a US-based sports marketing company founded by former Nike executives Rob Strasser and Peter Moore. Sports Inc. had been working in conjunction with Adidas USA on the design, development, and marketing of the Adidas Equipment line. This line helped rejuvenate and reposition the Adidas brand in the United States by creating an exclusive line focused on fulfilling the functional needs of the athlete and by utilizing the best materials and athlete input in the tradition of Adi Dassler. It offered moisture management, thermal insulation, weather protection, ease of
movement, and safety, helping the athlete to perform more efficiently. After the successful creation and launch of Adidas America 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.
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 area seen which adidas can improve.
This line helped rejuvenate and reposition the Adidas brand in the United States by creating an exclusive line focused on 4 . Adolf “Adi” Dassler brought to life those three little stripes. Adidas strives to provide athletes with shoes that can make a noticeable difference in their performance. Dassler formed Adidas and his brother formed Puma. In1948. development. The history of Adidas is one of consistently meeting the evolving needs of the athlete. and marketing of the Adidas Equipment line.. Sports Inc. the Dassler brothers separated to form their own two separate companies. Dassler manufactured his first sports shoe. both headquarters in Herzogenaurach. Focusing more on function and less on fashion. In February of 1993. had been working in conjunction with Adidas USA on the design. 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. Adidas acquired Sports Inc. a US-based sports marketing company founded by former Nike executives Rob Strasser and Peter Moore.COMPANY PROFILE In the small German village of Herzogenaurach the world began its love affair with Adidas (Ryno’s Company History). after realizing the need for performance athletic shoes. Meeting athlete needs is what makes Adidas the best. In 1920. Rudolph. Adidas America has continued to build on this history. With his brother. made for training.
ease of movement.Salomon is a global leader in the sporting goods industry and offers the broadest portfolio of products. The strategic business unit Golf is based in 5 . apparel and accessories. Adidas-Salomon products are available in virtually every country of the world. delivering state-of-the-art sports footwear. The company's share of the world market for sporting goods is estimated at around 15 percent. Adidas . helping the athlete to perform more efficiently. Today. thermal insulation. and safety. Also located in Herzogenaurach are the strategic business units for Running. with total net sales of 6. Oregon in the USA. Soccer and Tennis as well as the Research and Development Center.1 billion and net income of 208 million. It offered moisture management. and home to the strategic business units Basketball. Germany.fulfilling the functional needs of the athlete and by utilizing the best materials and athlete input in the tradition of Adi Dassler. Additional key corporate units are based in Portland. the domicile of Adidas America Inc. Adventure and Alternative Sports. Our strategy is simple: continuously strengthen our brands and products to improve our competitive position and financial performance. weather protection. Activities of the company and its approximately 100 subsidiaries are directed from Adidas-Salomon AG's headquarters in Herzogenaurach. 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.
The business unit Winter Sports is in Annecy.California. The company also operates design studios and development departments at other locations around the world. Future Plans Turnover is expected to rise to 22 Million US dollar for Adidas India in 2006-07 cash break even is fore cast during calendar year 2005 and an operating break even during 2006. The other Adidas – owned brands. Turnover and Brand Image The turnover of Adidas company has grown to 20Million US dollar in year 2005-06. corresponding to the related business activity. 6 . Almost 53% of the turnover is from sale of apparel and accessories with the rest from footwear.400 employees worldwide. Adidas-Salomon AG has approximately 13. salomon & taylor made are expected to hit Indian Adidas stores during 2005 and 2006. France. The Adidas brand is one of the most popular brands as determined by a within brand survey of sportswear brands in the year 2007.
will react to your products or services. • 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 7 . income occupation etc. you hope to sell to. sex. Market research will answer questions like: • • • Whether your products or services are needed Who might want to buy your products What age. Market research is a method of collecting data which will make you (as a business) more aware of how the people. are the people I want to sell to.MARKETING STRATEGIES: AN OVERVIEW OF ADIDAS Some of the theory I have used in my project are as follows Theory: what is market research and why it is important.
and there are many methods of gathering data this way: Direct Interview. I have asked some question about the company my mail and also by direct contacts. questionnaire and mail survey. The Question I have asked are given in “questionnaire part” below. 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. 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 8 . Mail Survey and Telephone interview.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.
The term "marketing mix" became popularized after Neil H. The ingredients in Borden's marketing mix included product planning. advertising. 9 . packaging. The Concept of the Marketing Mix. Jerome McCarthy later grouped these ingredients into the four categories that today are known as the 4 P's of marketing. Borden published his 1964 article. branding. display. E. pricing. and fact finding and analysis. promotions. 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. subject to the internal and external constraints of the marketing environment. 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". personal selling. distribution channels. servicing. physical handling. depicted below: The Marketing Mix These four P's are the parameters that the marketing manager can control.
penetration. physical products as well as services. Some examples of distribution decisions include: • • • Distribution channels Market coverage (inclusive. or exclusive distribution) Warehousing 10 . etc.) Cash and early payment discounts Price flexibility Price discrimination Distribution (Place) Decisions Distribution is about getting the products to the customer. selective.Product Decisions The term "product" refers to tangible. 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.
pull.• • Distribution centers Transportation Promotion Decisions In the context of the marketing mix. that is. promotion represents the various aspects of marketing communication. The Company 11 . the communication of information about the product with the goal of generating a positive customer response. weakness. opportunity and Threats. Marketing communication decisions include: • • • • Promotional strategy (push. 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. etc.) Advertising Personal selling & sales force Sales promotions Theory: SWOT analysis This theory tells about the company strength.
Adidas products were also launched in Mumbai. basketball. Currently. Adidas has introduced in India. on October 1. Torsion system and adi wear. Currently. apparel and accessories in New Delhi on November 1. Adidas’ Range of Products in India A month after announcing the joint venture. Subsequently. soccer and workout. 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. Adidas India Ltd.4 Million with the equity structure changing to 91.4 million with the equity structure remaining the same. Chennai. 1996. The sports footwear available in India includes a wide range of core categories such as adventure.4% by Adidas and 8. holding 80% of the equity and Magnum holding the balance 20%. and announced its joint venture with Magnum International Trading Company Ltd. a wide range of sports wear for both men and women. launched its range of sports footwear. This investment was raised to US $ 6. – was incorporated with an initial investment of US $ 205 million with Adidas India Ltd. Adidas products are available in 30 cities in India. Bangalore. indoor. Hyderabad and Calcutta. 1996. 12 . These include apparel for athletics. tennis. training. The new joint venture – Adidas India Ltd.6% by magnum. golf.Adidas entered the Indian market in 1996 by setting up a 100% subsidiary of Adidas AG called Adidas India Ltd. basketball cricket. running. the total investment stands at US $ 11.
At present. Accessories include bag packs. socks. feet and above). tennis. caps. training and workout. 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. wrist and headbands. swimming. soccer. running. exclusive stores. multi-brand stores and distributors.cricket. golf. Adidas Markets its products in India through a combination of mega exclusive stores (area of 1000 sq. golf. The women’s range includes apparel for athletics. tennis and training for Men. running. campus bags. medium and large kit bags. swimming. 13 .
MARKETING-MIX (FOUR P’S): ADIDAS The Product Whatever your athletic preference. The rule is simple: form follows function. From running shoes to baseball cleats. A development team makes the actual prototypes. An Adidas product is the result of the intense thought and creative energy of many different people. you can now purchase an extensive range of Adidas footwear and apparel online. Technology and functional design. How do adidas create its Products Adidas goal is to create a product that is honest – it must perform. 1. The following is a general outline of how we create our performance-based products. The marketing department evaluates athletes’ needs and develops a basic concept of how those needs should be 14 . eye wear to lanyards. collegiate licensed jackets to good old fashioned cotton T-shirts. These prototypes are then presented to the retail market by the marketing department. all things sport are available at the Adidas store.
the design teams sketch possible prototypes. design and development – meet and discuss how to improve the prototype. The people from design and marketing consider the prototype sketches together. This concept is then presented to the design department. narrowing the selection to those they anticipate will most successfully meet athletes’ needs. 2. 15 . 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. Based upon this concept from the marketing department. 4. 3. 6. Three separate groups – marketing.met. The development department then works with the design department to create an actual prototype from the selected sketches. 5.
Samples are distributed to Adidas sales representatives for presentation to retailers. That’s the Adidas way of doing it – image is a critical part of branding strategy the world over.7. final changes are made. Based upon this information. The finished product is delivered to retailers. As A BRAND At Adidas –you have got to be sporty. I. 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. 16 . Adidas wants to bring inline skates into India. At Adidas the brand awarding is been taken rather seriously at its headquarters. but it will contribute a lot to Adidas brand image. it won’t really be a hot seller. Preview samples are presented to key accounts and consumer focus groups for feedback. 8. What that kind of stuff got to do with Indian market? Yes. 9.
They had the image. Words of G. Its working with promising athletes to give them a taste of its products. II. strengthening & toning. Adidas steps out of crease with a clear sports positioning. 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. This is reflected in the clothes that people wear today. Kannan (Director – Marketing) “Our Secret is our commitment to the sports process. Adidas nowadays is capturing an attitude that is sports related. Going to Gym is fast graduating from a mere fad to serious body building. Leander Paes & Mahesh Bhupathi endorsing the brand in India. apart from endorsing the performance element in the brand. Adidas in fact did go through a limited fashion phase. the trend is towards being sporty. We develop shoes that take into account the needs of a particular sports & the role of this brand is driven by this factor”. Adidas will take on arch Nike with almost the same positioning. 17 . Good news for Adidas is that even in the casual market.Adidas already has heavy weight sportsmen such as Sachin Tendulkar.
for instance is unique property which can be reinvented in various forms as trends changes. For Adidas the product plays an eminent role in the enhancement of their corporate as well as sports image: ADIDAS SAYS – “Nothing compromised. If a company sell an automobile.The three stripes. C. The most innovative Adidas products created specifically to help make you a better athlete. product is not just a assortment of few items. But it involves—developing of the right product – which can then be put to right place & sold with the right promotion & price. an engine and four wheels? If a company sell a delivery service. of nuts and bolts. The rule is simple: form follows function. is it selling so much wear and tear on a delivery truck and so much operator fatigue? As 18 . is it selling a certain no. VALUE OF IT’S PRODUCTS FOR ADIDAS Our goal is to create a product that is honest – it must perform. As studied earlier an Adidas product is the result of the intense thought and creative energy of many different people. For Adidas. some metal sheet.
That means for them only the final service matters. installation. use or profit the customer wants. the package. Adidas says that all the customer wants is. As per Adidas the idea of product potential customer’s satisfactions or benefits is very important. as per Adidas place and physical distribution of the product is something on which almost every company spends a handsome amount of money. Adidas says that the total product is not just a physical product with its related features. but it includes accessories. perhaps the brand name which fulfills some psychological needs a warranty and confidence that service will be available after the purchase. that whatever product they purchase should fulfill all their needs and preferences. instruction on use.PLACE AND PHYSICAL DISTRIBUTION: A: Place Adidas is very much concerned about its second “p”. They don’t care how they were made. the don’t really care how much out of the way the driver had to go or where he/she has been. 19 . Further they want that when they order something.per Adidas the answer to these question is instead what we are really selling is the satisfaction. They just want their package.
B: Physical distribution As per Adidas nearly half of the costs of marketing is spend upon the physical distribution. The flexibility of trucks makes them really 20 . TRUCKS In Adidas. Marketing specialists put together an assortment to satisfy some target market. 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. 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. trucks are considered to be the best medium for transport. His is usually done by those who are close to the retailers only. Note: Physical distribution can be varied endlessly in a marketing mix and in a channel system.Hence Adidas takes a good care of its place and physical distribution process. except the export products. which is available is put together to give a target market what it wants.
21 . Adidas believe that it just cannot be taken lightly. It is a very important aspect of products life cycle. To handle the company’s promotional activities Adidas has employed marketing managers. 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 thinks that promotion is communicating information about the product between the seller and the buyer to change attitudes and behavior. wherever the Adidas is located. Also trucks causes less breakage in handling.good for moving small loads for short distances. They can travel on almost any road. According to Adidas they can give extremely fast service. 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. These marketing managers look after process of the promotion of the products of their company. It is the process which is responsible for the growth or decline in the sale of the product.
Adidas believes sales promotion tries to compliment the company’s selling efforts. But company takes a very important look about how the product works and this message is communicated to their consumers. Sales Promotion Adidas is the most popular amongst its rival for its excellent sales promotional activities.Adidas thinks that only taking the product to the customers is not a task of the company. Because a wrong message can lead to the end of their products life. 22 . As per Adidas they say that they themselves are responsible for the encouragement of the customer to by their products.
almost twice in a year Adidas goes for discount on sales. They even design the sales materials for the company’s own sales force to use during the sales calls. 23 . The amount spent in the Unites States for advertising is growing. As per Adidas.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. from World War II to 1980 it went from $1 billion to $50 billion. They arrange contest. They may interpret the same words differently. Continuously. In order to motivate the employees of the company Adidas also prepares training material for the company’s own sales force. Good results are obtained at a cost of course. ADVERTISING As per Adidas advertising can get results in a promotion blend. people see same message in different ways. So Adidas always tries to deliver the message which everyone can easily understand.e.
Leander Paes and Mahesh Bhupathi are already attached with their ad-campaigns. It’s a tough job – to maintain the integrity of the performance and still come out with a product a right price point. 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. Adidas in India is spending almost $17 million on advertising. But in India as the perceived need is lower.995 with the help of local and Hong Kong source people. that’s the most critical factor in the Indian context. you have to make the product more affordable. one sports brand in India. So far so good. Globally shoes start at $50. a choice brand for all brands. PRICING: Adidas is clear.The heavy weight players like Sachin Tendulkar. it wants to become the no.9 million on its advertising throughout the world. a product priced at Rs. Adidas however feels that its just the matter of time 24 . To tackle this. Adidas believes it has to deliver a functional at an affordable price. Adidas came out with speed 2000.Adidas also spends nearly $2.
Adidas started at the time when India had no strength out in the sports products market in 1989 – 90. So company took the next best step when the licensing agreement ended to take a bigger share in business. The original sector is just 20% of the total market and 80% of the volumes comes from sporty shoes. which are easy to afford and still maintain the integrity of their performance. But our market is producing products at a price that is relevant to the consumers. Growth has been phenomenal for Adidas even given the base is small. Volumes are bound to go up. Adidas feels that as the volume go up. but its been barely 3 years since the sports market has taken off. Adidas will try and work out price points as people graduate with better understanding of quality and price perception. Its then licensing partner Bata. and it had limitations of what it could have put behind the brand. It is very difficult to operate on a lower price point and maintain integrity of product. 2003 by over 50% and 25 . Company is trying to make products. In 2002 Adidas grew by 25%.before India coverage’s the world on this front. To conclude we can say that Adidas is putting all efforts to bring down the price consciousness in the Indian market.
26 . while the industry growth as a best case estimate has been 20-25%.this year Adidas is expecting more than 50% in terms of value in both shoes and apparel.
One of the advertisements : The spot featuring Boldon. but as a sports person. Adidas gives you a chance to but the boundaries – in every sphere. And it goes beyond that – Adidas becomes something that makes you better. 27 . This way. You don’t have to be the highvoltage performer to be a part of the Adidas family. in a towel) in distress. Release of tension. the brand with three stripes. crowded streets and so forth. the setting is not the playground or the track or the court. to do what he has to do and what he needs to do. shows him chasing a thief (who’d stolen a TV set when its owner was in the bath) through the dark streets. Remember the Sachin Tendulkar commercial? How everything is near-frozen. Adidas becomes a part of life.MARKETING STRATEGY – ADIDAS OTHER STRATEGY Adidas. Only now. And he uses all the power that he can. a better human being. Not just as an athlete. and the shattering glass signifies release. it is the urban landscape – with its omnipresent traffic jams. Anyone’s life. seems to use the elements of high-tension in its ads. To help a man (the owner.
Any man who wears Adidas. a French manufacturer of skis and other sporting goods. Salomon is currently very strong in North America and Japan. it has a deep meaning. the other man could have done as well as Boldon. goes the base. Salomon. MARKETING: ADIDAS In 1997. The merger makes Adidas/Salomon the second largest sport marketer in the world.4 billion purchase of Salomon. In stark reality. Adidas makes you better. The bather reads any man. and Adidas has the largest market share in Europe. The deal put Adidas one step closer to competitor and world market leader Nike. In short. 28 . This is perhaps shown in an oblique way when the spot ends at the feet of Boldon and the bather. and one step ahead of Reebok. And Adidas goes beyond athletic performance – it becomes everyday life. than he would otherwise have been able to. Adidas became Adidas-Salomon with its US $1. aside from its winter sport equipment. One is wearing a pair of Adidas shoes while the other is barefoot. also owns golf club brand Taylor Made and cycle brand Mavic. Though humorously and light. and number one in Europe.And Adidas helps him perform better.
299. not his shoe. Finally.’ The second new shoe range to be introduced for the first time in India. these are athletic sandals primarily meant for water-based adventure sports. “Instead of presenting just one dimensions : The first ad connects Sachin’s choice of a heavy bat with Adidas’ Falcon Dorf light weight shoes. Kobe Bryant (basketball). Some of the most famous are Martina Hingis (tennis).Adidas is. Says the headline: ‘Sachin likes his bat heavy. jan Ullrich (racing cyclist) and the New York yankees. Sub-branded ‘Aksu’ and priced at Rs 2. the Predator Accelerator. like Nike. very active insuring sponsorships advertising deals with celebrities. Peyton Manning. Paul Palmer (swimmer). David Beckham. the local four-ad print campaign tries to connect Adidas’ product attributes with Sachin’s magic. LEVERAGING ON SACHIN: ONE MAJOR PART OF MARKETING STRATEGY IN INDIA Continuing its association with trump card Sachin. Patrick Kluivert and Zidane all wear Adidas boots. The next ad will convey that Adidas covers various price points by promoting its 29 .
existing Portland range priced at Rs 1. 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. general manager. only in May-as well as through a four-ad print campaign developed locally by RK Swamy/BBDO. 1998 was truly exceptional. the overall Adidas budget for promotion and sponsoring accounted for nearly 15% of turnover. Says G Kanan.799 (the leather version). When the French team. we could not have wished for more.. Adidas will have access to the official emblems. Early in the year.’ Adidas has reached an agreement with ISL Marketing G of Switzerland to become an official sponsor of the 2000 UEFA European Championships. These were great times for our brand. Adidas: 30 . In summer. The positioning is being communicated through its global campaignreleased worldwide in February 1999 but in India. the Winter Olympics focused the attention of sports enthusiasts on Nagano. mascot and trophy for the design of its own products. promoting the three stripes. In 1998. the Soccer World Cup in France attracted more spectators than any single sports event before.499 and 1. marketing. won the World Cup.
the new brand line has been introduced almost after a decade. But after a certain duration. The company dropped it during the late 80s after it found that it wasn’t connecting too well with its consumers. we have to present a global perspective too and hence the Forever Sport campaign. The campaign also introduces a new brand line for Adidas: ‘Forever Sport’.” 31 . Says Kanan: “Sachin has and will play a major role in pushing the brand. when it was using ‘Earn your stripes’ as its tag-line. 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. As a brand. Interestingly. 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.“We are the only brand with heritage in sports. We’re an attitude that is relevant all the time. as there are certain values a consumer needs to know about Adidas. we’re not an attitude that’s fashionable. He is important.
Says Kanan. the real breakthrough. "“e 32 . we can catch the elite customer”. expanding its reach (it opened 45 stores last year).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. Adidas does not intend to bring down the prices of its products. We are willing to wait for the market to evolve. and support to the brand. Kanan says. has come through a combination of strategies: signing on Sachin. As a company that takes pride in not joining the price brawl. It’s too large an event to make significance for us”. However. the campaign has been broken now to coincide with the peak season (April-June). “We don’t look at driving down the market by lowering the price. according to Kanan. and ESPN are the Sachin ads promoting Adidas. a revamped range which covers a band of price points. says Kanan. Discovery. he claims that Adidas has grown by over 250 per cent from last year. Leander and Bhupathi. “The World Cup is incidental. the company is maintain a steady and dominant presence in the media during the Cup: strewn over select channels like Star. says Kanan. Instead.” For Adidas. Although Kanan admits that the sports shoe and apparel market is at a nascent stage. “Star News is delivering good value while through Discovery.
Villota says that every style of footwear has a story. Further. for women. either through direct purchase or a retailer finder. Never achieved profitability and collapsed under the weight of its own unrealized ambitions. “We’re looking at driving the market through exclusive stores”. and it’s these stories that sell the shoes to buyers. We have realized that to have just one good guy endorsing your brand is more important than having several unknown faces”. particularly those endorsed by star athletes. Most consumers start experimenting with the brand through apparel”. admits Kanan. Adidas’s objective with the new line of footwear is to generate sales leads through its Web site. Essentially perceived as a male brand. Says Kanan. and supported them through sports icons who are looked up to. Adidas is planning to add 30 new stores this year.built-in value pricing in our products. says Kanan The company is enlarging the scope of its business by concentrating on apparel. The logic is clear: use Forever Sport to ensure sales forever. 33 . “Apparel is driving the business. Adidas however defends its range by pointing out that currently it has 50 items out of a total of 250.
While Villota wouldn’t disclose how much of Bryant’s Adidas footwear is sold online. despite the EPS decline in 2004. underlines Management’s confidence in its ability to achieve its 2005 targets. While Adidas won’t comment on the new site’s features. 34 . This decision to maintain a stable dividend level. The Adidas .92 per share to the Annual General Meeting of Shareholders on May 10. citing competitive pressure. coinciding with the start of the 2003-2004 NBA season. 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 same amount as in the previous year. 1. Management views 2004 as a year of consolidation and restructuring and has increased the pay out percentage to reward longterm shareholders. Villota says it is Adidas America’s most ambitious integration of Web content and electronic marketing. The newest version of Bryant’s footwear hits the street Nov.Salomon Executive Board will propose paying a dividend of CC 0.
It represents the heritage and history of the brand. 35 . In 1996. Equipment is the ultimate expression of what is uniquely possible by design when form follows function. A-15 warm-up. and Classic T-shirt.THE ADIDAS LOGO The “Trefoil” was adopted as the corporate logo in 1972. This line of footwear and apparel represents the most unique and functional of Adidas products. Road Laver. Examples of product featuring the Trefoil logo include the Stan Smith. Equipment The Adidas Equipment line was launched in 1991. it was decided that the Trefoil would only be used on heritage products.
This trademark has become synonymous with Adidas and its dedication to producing high-quality athletic products to help athletes perform better. Since 1949. This logo represents performance and the future of the Adidas brand. This logo is used in all advertising. printed collateral and corporate signage. 36 . the Three-Stripes brand mark became the worldwide Adidas corporate logo. the Three-Stripes have been an integral part of our brand and product designs.In January 1996.
apparel and accessories. delivering state-of-the-art sports footwear. 37 . with total net sales of £182 million. Adidas-Salomon products are available in virtually ever country of the world.ADIDAS: COMPANY’S FINANCIAL FACTS For over 83 years Adidas has been part of the world of sports on every level. 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. AdidasSalomon is a global leader in the sporting goods industry and offers the broadest portfolio of products. Today.
• The company has a good brand image in the market. the publicity and the advertisement is also very good and lastly company hold a healthy market share in the market. which works as a team. 38 .SWOT ANAYSIS Strengths: • The main strength of Adidas is his Product Quality. • Another strength of the company is its well efficient and effective management. The quality and the material uses in Adidas is very good. 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.
• Adidas does have many products for the urban segment or poor people, but there is hardly any product or we can say that there are no products for this segment. India is more a rural country, in the total population of India major part of population lives in rural area and these people can not afford the costly products of the company like Adidas hence company must target this particular segment they must introduce the shoes and other product according to their demands. • Also price is one of the major factor which may influence this type of segment hence company should make their policy accordingly. • Company must also consider the range and the variety of the products as compare to Nike and Reebok. In my opinion the company must introduce more rage or more variety in the market to compete with their competitors and also the customer have more choices to choice the product from.
• Adidas does not have strong distribution network as compare to Nike and Reebok in India. Nike has more number of retail outlet then Adidas and Reebok has a unique distribution network, the company Reebok not only uses its outlet for the sale of their product but also use some other shoes company outlet like “Bata”. In a Bata showroom u can find Reebok shoes and other products. But this is not a case with Adidas hence Reebok has an extra advantage over Adidas. • Adidas do not have any competitive advantage as compared to Nike and Reebok.
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 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)
in that particular questionnaire I have asked some question give in finding and analysis section: (the questioner is filled by 80 people). Primary data: I have prepared a questionnaire for the general public asking about the marketing strategy of Adidas. And Other Related Sources. 42 .
Note: not all of these companies have the same fiscal year: the most recent data for each company are being used. This is an increase of 2.FINDINGS Company research report (A) Company Description Adidas-Salomon AG(ADIDAS). Sales of Apparel.56 billion euro. Reebok International Ltd. of the United States (2004 sales of $9 billion of which 59% was Footwear). Taylor Made and Mavic.7% from the 1. (C) Sales Analysis During the first quarter of 2004. Production and marketing of sports equipment.46 billion Finnish Markka [US$996. (B) Competitor Analysis Adidas-Salomon AG operates in the Men’s & boys’ clothing sector. of the United States (2003 sales: $2. Salomon. Sales of Footwear accounted for 45% of 2004 revenues. 20%. and Amer Group PLC which is based in Finland (2003 sales of 6. 35% and Sales of Hardware.87 billion of which 73% was Footwear). sales at Adidas totalled 1. footwear and apparel under the brand names of Adidas.52 billion Euro in sales at 43 .88 million] of which 24% was Racquet Sports). This analysis compares Adidas with three other sport shoe and apparel manufacturers: Nike Inc.
sales in Latin America were up at a rate that was much higher than the company as a whole: in this region.35 billion Euro. Adidas reported sales of 5.47 2002 2003 2004 In 2002.the company during the first quarter of 2003. This represents an increase of 9.00 million Euro). 44 .00 million euro.62 5.0% of the annual sales. Adidas also experienced significant increases in sales in Asia-Pacific (up 3.0% versus 2000. During the previous 17 quarters. sales have increased a total of 226%).06 6.0% and 32. Sales at Adidas appear to have some seasonally: during each of the previous 5 years. Recent Sales at Adidas (Figures in Billions of Euro) 6. which has accounted for between 28.9% to 875. D.53 8 6 4 2 0 1999 2000 2001 1.0% to 171. when the company’s sales were 5.61 3.38 billion Euro (US$5.79 2. sales have been highest during the third quarter. sales at Adidas have increased compared with the same quarter in the previous year. sales increased 36. Sales at Adidas have increased during each of the previous five years (and since 1999.35 billion) for the year ending December of 2004.
It is global in scope with the majority of its sales coming from Europe. Most of the ownership comes from Europe. Adidas has stock traded on exchanges in Frankfurt and Pairs. while a substantial 30% comes from the United States. Nearly 55% of Adidas revenues come from Europe. followed by the United states. while 37% come from the Americas. and the rest from Asia. The pie chart below shows exactly how the ownership of the company is spread out across the world. just behind Nike. and only 9% of revenues come from a growing Asian market. with the smallest percent of Adidas’ sales coming from Asia. 45 . Adidas sales have grown significantly each year from 1994 to the present. it is much like US based competitor Nike. For anyone not familiar with the structure of this company (since it is not based out of the USA).GROWTH Adidas is a constantly growing company. and its ticker symbol is ADDDY. Adidas is the leading producer of sporting goods in Europe and it is second in the overall world market.
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. but from Adidas’ marketing efforts to make it one of the most popular sporting goods brands.Asia 5% Europe 40% US 30% UK 25% 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. The company has to become innovator not follower they must do something differently to come with the flying colors. although growth slowed in 1999. This growth in sales comes from not only an improving world economy. 46 .
16 said Reebok is good and 4 said others. 24 had said Nike is more better then Adidas. Reebok etc. How does u rate the company marketing strategy as compare to the other competitors company like Nike. others 5% reebok 20% adidas 45% adidas nike reebok others nike 30% 47 .? Out of 80 people 36 had said Adidas have a good marketing strategy and should continue like this only.DATA ANALYSIS 1.
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. happy not happy not happy 15% happy not happy happy 85% 48 .
18% 0% happy not happy 82% 49 .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.
advertisement. What things u keep in mind while purchasing shoes will it be quality.4. 14% 0% quality other factor 86% 50 . 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.
5. 23 said Reebok and 15 others. If u have to purchase shoe except Adidas which shoe it will be and why? Out of 80 people 42 have said Nike. 19% nike 52% 29% reebok others 51 . which shows that the main competitor of Adidas is Nike. so different people have different opinion. 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.
52 . 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.6.
due to time constraints.LIMITATIONS The research project has been completed with ease and comfortably. enough justice could not be done to the project. 53 . Also. No particular limitation or shortcoming was realized during the analysis.
As Adidas has grown worldwide. In the case of Adidas. including Adidas are no longer homogenous in the sense that their companies have grown worldwide. Adidas has come to depend on intangibles. it has had to deal with problems of heterogeneity vs. diversity in the workplace has appeared to emerge as an issue. Having to spread its workforce. 54 . in an increasingly heterogeneous and global world. it has faced such problems already and how they have dealt with them is with flexibility and calmness. many problems will arise that cannot be solved. One of the primary challenges associated with globalization is balancing conflicting and competing objectives. Adidas has had to make worldwide headquarters and produce information and products in several different languages. Companies.CONCLUSIONS ADIDAS in INDIA has always been driven by its Value-for-money strategy. And as a result. homogeneity. The company needs to identify critical success factory and work assiduously towards achieving it. 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. In other words. As the world grows to become one. Despite what could be higher costs.
Adidas must be able to easily adapt to different cultures and must be culturally aware when conducting business. new ideas. such as these. Great changes occur in this industry and as a result. 55 . worldwide experience and diversity that an Adidas employee can bring to the table are valuable. This is a result of good global business. yet they too are facing new changes. Because of this necessity. how successful companies are in the global world is increasingly derived from intangibles. that organizations cannot own.The knowledge. For some it is not common knowledge that Adidas is a German company. Who leads this knowledge and maintains diversity are the managers. The long list of Adidas subsidiaries where it conducts business proves that Adidas is constantly adapting to cultural changes and must be extremely diverse. intuition and inspiration are an asset that is a necessity in this industry and to remain a global company. Recently. Adidas has created a product that is global and with that diversity and knowledge greatly affect the company. Adidas is greatly affected by these external influences since indeed it is a global company. knowledge is greatly valued.
In addition to these positive top-line developments. The main competitors of Adidas include Nike and Reebok However. will continue in 2005. increased marketing and sales support will target ambitious golfers. the Adidas brand’s new divisional structure will be in place to start delivering positive results for the Group. other smaller competitors 56 . which began in 2002. with further synergies between the two brands. gross margins are expected to remain within a range of 41% to 43%. Double-digit growth from Salomon is projected as a result of the continued innovative strength and the increasing profile of their products. and as a result net income is projected to increase by 15%. At Taylor Made-Adidas Golf. However. Adidas is currently ranked third in almost every category in the global athletic shoe industry. and solid growth in all the major golf markets is expected to continue.RECOMMENDATION For 2004. Topline growth is expected in all other regions. operating expenses will decline as a percentage of sales. they rank second only to Nike in terms of sales. The integration of Mavic with Salomon. Adidas America will remain a challenge but nevertheless will deliver qualitative sales improvements in the second half of 2005.
But the battle has only started. While Louis-Dreyfus fought bring down costs. They can sustain losses for years to come in order to gain market share.S.. has competed with a whole new strategy. is building up distribution networks to cover every nook and corner of the country and. which has been struggling in the past couple of years. Louis-Dreyfus also fired management in Asia. Adidas began to focus on global marketing. and the foreign sports companies are here for the long term. Puma and Easy Spirit. Gear and Fila (Fortune. who failed to match competitors’ low costs in subcontracting shoemaking to local companies. Adidas commands only 5% of the athletic shoe business in the U. 2000) Since acquiring their current president. 57 . but the rejuvenated Adidas has climbed to within easy reach of Reebok. Aside from cutting the whole line of German senior management. Louis-Dreyfus.include Fila. compared with the 40% for the fearsome Nike. Adidas. setting up manufacturing facilities. he also took a gamble on the side. What they are doing at present. a wholly owned subsidiary.A. Adidas is also steadily regaining market share lost to other brands such as L.
The company needs to identify critical success factory and work assiduously towards achieving it. although with a much smaller market share than they have at present.Only those Indian manufactures which have a strong focus on manufacturing and technological upgradation will survive in the long run. 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. 58 .
Reebok etc. 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.ANNEXURE QUESTIONNAIRE 1. 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. How do u rate the company marketing strategy as compare to the other competitors company like Nike. price or design? Quality Otaher factor 59 . advertisement.? Adidas Reebok Nike Others 2.
If u have to purchase shoe except Adidas which shoe it will be and why? Nike Others Reebok 6.5. What do u think that the company Adidas must do to improve its marketing strategy? ______________________________________________________ ____________________________________________________ 60 .
S RAMASWAMY AND S.ETJEC.J. MICHALL J. Web Sites • • • www.com • Class Notes is referred Magazines • • • • A&M Business India India Today Business Today Newspapers • • • The Times of India The Hindustan Times The Economic Times 61 . BRUCE J.indiainfoline.webcrawler.com www. NAMAKUMARI MARKETING MANAGEMENT.com www. MARKETING MANAGEMENT.N COMPETITION IN INDIAN INDUSTRY.BIBLIOGRAPHY Books: PHILIP KOTLER.adidas. RAVICHANDRAH.com www. V. SECOND EDITION. EDITION 2005.indiatimes.WALKER FUNDAMENTAL OF MANAGEMENT. WILLIAM STANTON.
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