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STUDY OF ORDER DELIVERY SYSTEM FOR INSTITUTIONAL SALES, SERVICE EFFICIENCY AND CUSTOMER PERCEPTION OF ADIDAS BRAND VIS--VIS COMPETIOTION
A PROJECT CONDUCTED FOR ADIDAS

SUBMITTED IN PARTIAL FULFILMENT OF

P OST GRADUATE DIPLOMA IN MANAGEMENT (PGDM ) 2009 -2011

Rajesh Gupta
PGDM 2009-2011 ROLL NO. 09DM95 April-June 2010

FACULTY MENTOR Prof. Gagan Katiyar

INDUSTRY MENTOR Mr. Nitin Kakkar

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Summer Project Certificate


This is to certify that Mr. RAJESH GUPTA bearing Roll No. 09DM95 a student of PGDM has worked on summer project titled STUDY OF ORDER DELIVERY SYSTEM FOR INSTITUTIONAL SALES, SERVICE EFFICIENCY AND CUSTOMER PERCEPTION OF ADIDAS BRAND VIS-A-VIS COMPETITION, after trimester-III in partial fulfilment of the requirement for the programme. This is his original work to the best of my knowledge.

Prof. Gagan Katiyar Date: BIMTECH, Greater Noida.

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This is to certify that Mr. RAJESH GUPTA a student of Birla Institute Of Management, PGDM, Roll Number- 09DM95 has worked on summer project titled STUDY OF ORDER DELIVERY SYSTEM FOR INSTITUTIONAL SALES, SERVICE EFFICIENCY AND CUSTOMER PERCEPTION OF ADIDAS BRAND VIS-A-VIS COMPETITION under our guidance and supervision. This Summer Project Report has the requisite standard and to the best of our knowledge no part of it has been reproduced from any other summer project, monograph, report or book.

NITIN KAKKAR INSTITUTIONAL SALES MANAGER ADIDAS GURGAON

DATE:

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ACKNOWLEDGEMENT

I express my sincere thanks to ADIDAS INDIA MARKETING PVT. LIMITED for giving me an opportunity to work with them through this project. I take this opportunity to express my profound sense of gratitude to Mr. Nitin Kakkar (Institutional Sales Manager) whose sincere co-operation and guidance enabled the project to assume its systematic shape. I feel immense pleasure in expressing my sincere thanks and deep sense of gratitude to Prof. Gagan katiyar (Faculty guide, Birla Institute of Management Technology), for his time and valuable efforts. He constantly encouraged me right from the selection of the project to final preparation of my project. I also express my thanks to Mr. Nitin Dayal, Mr. Probal Sur and Mr. Vaibhav Jain for extending their support.

RAJESH GUPTA PGDM 2009-11 Roll no. 2009/095

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TABLE OF CONTENTS:-

Executive Summary Topic of the Project Literature Review Company Profile How adidas operates Order Delivery Process Study of Service Efficiency Study of Customer Perception Annexure Bibliography

6 7 8 11 15 18 21 26 31 33

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EXECUTIVE SUMMARY
adidas is primarily into the business of shoemaking that too particularly for the sports. Be it any sport whether Tennis or Football or Cricket adidas has its range of shoes designed specially to support that sport. It also make apparels like T-shirts, track suits and accessories like wrist band, socks, bag pack, water bottles and many other all designed keeping in mind the sports. adidas was founded by Adi Dassler and he followed three guiding principles in his development work, driven by his passion for sports and shoemaking: To produce the best shoe to serve the needs of the sport, to protect the athlete from injury, and to make the product durable. The objective of the report is to study the order delivery process of adidas and service efficiency in B2B segment. It was carried out in three parts. Initially the order delivery system was studied by asking the employees involved in the process and then it was implemented to understand it better. Secondly, the service efficiency in terms of delivery was studied by tracking the order completion status. Order was tracked with the help of IOS( Institutional Order Status) which was developed by the sourcing department. IOS of four months was studied and analysed. Thirdly, a questionnaire was formed to study the customers perception of adidas brand and its competitors and based upon the responses analyses were carried out. On the basis of the analysis, it is found that adidas is second best or leads the studied parameters whether it is quality or style or brand visibility. It was also found out that Reebok has very high brand presence i.e. availability, visibility and association with sporting events in India. So it is recommended that adidas needs to focus on its marketing and promotional strategies to increase brand visibility.

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TOPIC OF THE PROJECT

Project Title: A study of adidas delivery system for Institutional Sales, Service efficiency and customer perception of adidas brand vis-a-vis competition. Objective: First- The whole process of sales i.e. from taking an order to delivering the order to client will be analysed. Second- The study of service efficiency of adidas in terms of delivery vis-a-vis competition. Third- Studying customer perception of adidas brand vis-a-vis competitors.

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LITERATURE REVIEW

SALES PROMOTION STRATEGY Sales are the lifeblood of a business-Without sales there would be no business in the first place; therefore it is very important that if a business wants to succeed, it should have a sales promotion strategy in mind. The primary objective of a sales promotion is to improve a companys sales by predicting and modifying the target customers purchasing behaviour and patterns. Sales promotion is very important as it not only helps to boost sales but it also helps a business to draw in new customers while at the same time retaining older ones. There are a variety of sales promotional strategies that a business can use to increase their sales. However, it is important that we first understand what a sales promotion strategy actually is and why it is important. Sales promotion strategy is an activity that is designed to help boost the sales of a product or service. This can be done through an advertising campaign, public relation activities, a free sampling campaign, a free gift campaign, through demonstrations and exhibitions, through sponsoring events, through temporary price cuts, personal sales letters, and emails. When developing a sales promotion strategy for your business, it is important that the following points are kept in mind. Consumer attitude and buying patterns The brand strategy The competitive strategy The advertising strategy And other external factors that can influence-the products availability and pricing.

Sales Promotion Strategies There are three types of sales promotion strategies: Push strategy Pull strategy A combination of the two

A push sales strategy involves pushing vendors and agents to sell the companys products to the consumer by offering various kinds of promotions and personal selling efforts. The basic objective of this strategy is to persuade vendors and agents to carry the companys brand, give it shelf space, promote it be advertising, and ultimately push it forward to the consumer. Typical push sales promotion strategies include; buy-back guarantees, free trials, contests, and discounts. A pull sales promotion strategy focuses more on the consumer instead of the vendor or agent. This strategy involves getting the consumer to pull or purchase the product directly from the company itself. This strategy targets its marketing efforts directly on the consumers with the hope that it will stimulate interest

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and demand for the product. Typical pull sales promotion strategies include; samples, coupons, cash refunds or rebates, loyalty programs and rewards, and games. A combination sales promotion strategy is just that; it is a combination of both push and pull strategy. It focuses both on the vendor as well as the consumers, targeting both the parties directly. It offers consumer incentives side by side with discounts. Methods of Sales Promotion Some of the most common methods used in sales promotion strategies include: Coupons Price discounting Gift with purchase offers Sampling Refund and premium offers Group promotions Frequent user/loyalty offers

STOCK MANAGEMENT Stock needs to be available for sale when your customer is ready to buy. But since it sucks up cash to have it waiting to be sold, it is good stock management and forecasting which is needed to keep stock for the shortest possible time. Know the stock The trick to shortening stock days is to carefully manage when the stock is coming in, as well as when it is going out. There is a need to know: What is selling What isnt selling Which items are slow moving Which items are obsolete What the trends/seasons are Whats the margins on items are What it is costing to store stock.

Watch top performers Finally, keep an eye on industry benchmarks. Good benchmarks should include stock days for the low, average and top performing products. The stock days of top performing products are fewer than those of the others.

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In a nutshell, shortening the length of time stock sits in the store room will free up working capital to spend on other things like advertising, salaries and expansion.

Setting Targets The essence of control is the comparison of performance against plan or target. The monitoring of progress and the comparisons with target reveal variations from the original plan(control activity) which can either be used to guide activities back towards the original plan or for the monitoring of actual results and if unforeseen conditions have arisen, can be used to revise the original plan. Control activity is of great strategic importance and is part of general plan reviews which are vital in uncertain conditions. Planning and control are distinct activities, but they go hand in hand. To maximize the benefits from planning (budgeting), the manager should use the plan as a benchmark for controlling(assessing the effectiveness and efficiency of implementation). Conversely, it is difficult to control activities without a benchmark plan.

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COMPANY PROFILE
adidas Group, the parent company of adidas, Reebok and TaylorMade Golf, is the worlds second largest maker of athletic footwear, apparel and equipment by sales. The company makes most of its money by selling at wholesale rates to large retailers like Dicks Sporting Goods(DKS), Foot Locker(FL), and Sports Authority. But at the same time we cannot underestimate the potential of corporate sales. Nearly one-fourth of the companys revenue in India comes from Institutional Sales. Background adidas was founded by Adolf Dassler in 1948. It remained a family firm till 1989, when it was transformed into a corporation. The adidas Group is the worlds second largest sporting goods company. adidas product range includes shoes, apparel and accessories for basketball, golf, soccer, cricket, fitness and training. The company has over 14000 employees, 110 subsidiaries and sources from 840 factories across the world. 60 % of the companys suppliers are based in Asia. In 1997, adidas acquired the Solomon Group and the name got changed to adidas-Solomon AG. The name further changed to adidas AG in 2006 following the acquisition of Reebok. adidas started in India in 1996 as a joint venture with Magnum Trading, with adidas holding 80% stake. In India, it sources from 16 factories which employ 3800 people. It also sells accessories such as footballs, wrist bands, cricket bats and water bottles in addition to footwear and apparels. adidas has 30-35 % share of the premium footwear market in the country. The market is estimated to be growing at 15-20% annually. The six metros account for nearly 40% of adidas sales, but the smaller towns are also playing an important role and showing very healthy growth.

Development of the logos


Right from the start, Adi Dassler wanted to mark his products clearly. In the days of the Gebrder Dassler Schuhfabrik (Dassler brothers shoe factory) he experimentalised with a capital D and the written name DASSLER. Later on, many shoes bore the logo on the left, which shows a bird carrying a shoe in its beak. It appears on a background reminiscent of a coat of arms drawing with the written name DASSLER shaped like a crown on top.

After the Dassler brothers had gone their separate ways and had both founded their own factories, Adi Dassler started using the written name adidas as a logo. He used a logo pictured here on the left, elongating each d in the name adidas to make them look like the lateral posts of a high-jump facility and placed a highjump shoe with the 3-Stripes in-between.

Besides the logos, the 3-Stripes mark is without doubt the quintessential adidas symbol. Adi Dassler first used them on footwear as an identification mark in 1949. Adi Dassler created a symbol that could be immediately recognised when his footwear was used in athletic competition and associated with adidas. He emphasised the association with the slogan The Brand with the 3-Stripes. The 3-Stripes now enjoy worldwide recognition as an adidas symbol.
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Towards the end of the 1960s, Adi Dassler sought a new, additional identification mark for the adidas brand. Inspired by the 3-Stripes, the Trefoil is a geometric execution with a triple intersection, symbolising the diversity of the adidas brand. This symbol was first used on adidas products in 1972, and later became the companys corporate symbol. Today it plays the important role of representing the adidas Sport Heritage division. In 1997, adidas decided to introduce an integrated corporate design, choosing as the core element a new and yet familiar old logo: the 3 bars. It was designed in 1990 by the then Creative Director Peter Moore, and was initially used on the Equipment range of performance products. It is inspired by the 3-Stripes as they appear on footwear. The shape formed by the bars also represents a mountain, indicating the challenge to be faced and the goals to be achieved.

In August 1998, following the merger of adidas and Salomon, adidas-Salomon AG introduced a new corporate logo. The logo unites the values of the brands of the new group, incorporating the typical colours of the two previous groups: blue for adidas, red for Salomon. The logo shows three shapes coming together to form a larger shape, namely a diamond. The space between the shapes forms another shape, that of a person with arms raised in victory and celebration. This logo, which was also designed by Peter Moore, appears on all corporate documents of adidas-Salomon AG, but not on products. All the brands belonging to the adidas-Salomon Group, i.e. adidas, Salomon, TaylorMade, Mavic, Bonfire, ArcTeryx, Clich and Maxfli retain their full logo identity on products, in marketing and in communication.

In July 2002, adidas-Salomon AG presented a revolutionary new business strategy for the adidas brand, aimed at expanding its customer base and driving top-line growth. The new structure is a fundamental shift from the traditional Footwear and Apparel structure, introducing a new three-divisional approach with the Sport Performance, Sport Heritage and Sport Style divisions. The former 3-bar logo in conjunction with the brand name adidas is used for the Sport Performance division and the Trefoil logo in conjunction with the brand name adidas for the Sport Heritage division. The adidas Sport Style logo was newly created in 2001. The inspiration for the symbol was the fast-moving and ever-changing world we live in today. This was also the inspiration for the whole concept behind the Sport Style division. The world is represented with the globe whose speed is captured by the oval shape. adidas is indicated by the three stripes across the face of the globe, keeping pace with the speed and change of our world.

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Entered India as part of Global Strategy adidas decided to enter India as part of the companys global strategy to take direct control of the markets in Asia. The domestic demand was not high when the company started its operations. In the first 9 years, India was the smallest sub-division in Asia, in terms of revenue. The company believed that India had the potential to become a huge market, considering Indias large youth population and the changing demographics. The merger with Reebok has strengthened adidas in India. In most countries, adidas is significantly bigger than Reebok but in India, Reebok has larger share of the market. Mission of the Company The adidas Group strives to be the global leader in the sporting goods industry with sports brands built on a passion for sports and a sporting lifestyle. Consumer Focussed: continuously improve the quality, look, feel and image of its products and organizational structures to match and exceed consumer expectations and to provide them with the highest value. Innovation and Design leaders: who seek to help athletes of all skill levels and achieve peak performance with every product they bring to market. Global Organisation: that is socially and environmentally responsible, creative and financially rewarding for employees and shareholders. Committed: to continuously strength their brand and products to improve competitive position. Dedicated: to consistently deliver outstanding financial results.

Target Markets The target market of adidas is the urban youth with the brand proposition competition to lifestyle. The principle consumption centres namely the metros are also a potential target market. Products and Applications PRODUCTS Shoes, spikes, socks Studded boots, warm up suites Shoes, jerseys, shorts, team kits Hats, gloves, bags, golf sticks, golf balls Shoes, gloves, team kits Shoes, accessories, apparels Footwear, Apparels and accessories Competitive Scope adidas is in the sportswear, apparel and sports accessories business. The main competitors of adidas in India are NIKE, PUMA and Reebok (though they have acquired the last named brand, both brands are competing for market share in India). APPLICATIONS Running Football Basketball Golf-TaylorMade Cricket Tennis Casual

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NIKE Nike is currently the world leader in the Sports good industry. The company concentrates on style and technology with a high price range of the products. PUMA A German based company best known for its football shoes and athletic shoes. The competition from Puma has become stronger after the 2008 Olympics in which the Jamaican sprinter Usain Bolt broke the world records and won 6 gold medals. Bolt was wearing Puma shoes. Future Plans adidas has plans to make India the hub for its South Asian operations. Most companies which start operations in a new country, initially set up their sourcing office and start selling when the local demand reaches a threshold. adidas strategy has just been the reverse. Now, after establishing itself in India as a sales and marketing organisation, it is planning to set up a global procurement base for International markets. After China, which is the current growth driver in Asia, adidas expects India to be the next powerhouse, which will drive regional growth over the next 3 to 8 years. India is a significant market for adidas and it plans to have 200 to 300 more franchisee showrooms by 2011. In institutional sales also, it is eying an increase of 20% in sales by 2011.It is exploring the option of transferring technology and know-how to manufacture high-end footwear in India.

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How adidas operates

adidas

Retail

Institution

Exclusive outlets

Distributors

Retailers

Factory outlets

Mixed outlets

Corporate

Personal kitting Service

CSD

Schools

Frontend

Backend

adidas has approx 600 stores in India. For the manufacturing of apparels it relies on 13 factories in India and Imports whereas for shoes it has tie up with Lakhani India and shoes worth more than Rs 3000 are imported. The lead time for apparels is 3 months and for shoes is 6 months. adidas is a fashion industry and it operates in two segments i.e. Spring Summer and Fall Winter
Jan Feb Mar Apr May Jun

Spring Summer Fall Winter

July Aug Sept Oct Nov Dec

In spring summer adidas offers a completely different range from what it offers in Fall Winter period. The summer spring collection is manufactured in post June period and Fall Winter in post December period This method is followed because of the lead time. Now onwards my concern will be with the Institutional sales limited to Corporates. Some of the corporate clients of adidas are LG, Samsung, Intel, HP, Sony, etc. Corporate sales are like free sales i.e. the products corporate buy are to be distributed free to their customers or distributors so they demand quality and brand at cheaper rates. The key areas taken care of are: Clients: Which kind of client will buy adidas products? What kind of promotions they indulge themselves in and when?
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For example:- A tyre industry like Goodyear, which sells its products to customers who have buying power because only the car owner will buy products from them and since the person has got car, it means he is earning well enough to afford i. Now that person may be involved in business or Job but in both cases he needs a laptop. So, Goodyear can offer adidas bag to its customers and this promotion can also help to draw in new customers.

adidass Corporate Running process- Frontend & Backend Frontend is responsible for building relations with clients and get the orders i.e. frontend people represent Adidas and negotiate with clients to get the sales. They should know the type of client who will buy Adidas products and in which month they run what kind of promotions. Promotion can be customer centric or Dealer centric. In Customer centric type they offer gifts or scratch cards with assured prizes with their products whereas in Dealer centric they offer extra incentive or free products to dealers in order to push the sales(for ex. Offering Adidas shoes worth Rs 4000 to Dealer on buying two ACs). Moreover, companies generally go for customer centric approach in the peak sales period or they can follow both strategies simultaneously. Now, the frontend people should have thorough knowledge of these activities of clients. Backend people take care of the profitability, products, delivery, etc aspects of sales. In other words they execute the sales. Corporate clients dont buy the expensive merchandise as they have to give them as a gift to customers or dealers. So, the backend people should know the type of product corporates need. After deciding upon the product, volume which needs to be manufactured is forecasted keeping in view the upcoming events and past trends. Also, frontend should maintain 25% profit on total sales. The more the volume the less will be the landed cost, so the price is settled keeping in view the volume. Backend people give the slots to the frontend i.e. the minimum price needs to be charged for 25% profit for the fixed volume. Now, the delivery of goods is crucial for maintaining the future relations with the clients. Due to lead time the products are manufactured based on the projections, so the backend manufactures the product which it thinks the corporate will demand in specific volume based on forecasts and then convey everything i.e. product available, volume available, price and the time they require to make the product(with personalization) ready to deliver to the frontend. Thus frontend is supported with data from backend.

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Now, to track down the orders there is IOS (Institutional Order Status) which is maintained and updated daily so that the orders which are pending and which are delivered can be tracked. This contains all details about the deal i.e. sourcing month (month in which the deal initiated), client name, quantity ordered, landed cost, MRP, MDP (Marketing Delivery Plan the date of delivery which was agreed b/w client and agent), SDP (sourcing Delivery Plan), Date of Delivery (the date on which consignment was actually delivered to client), volume Delivered (the volume delivered to client). Thus IOS gives the thorough details of the deal. This also helps adidas to keep track of the inventory so that they do not go out of stock or delay the delivery due to shortage of stock. IOS is followed by frontend and maintained by backend.

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Order Delivery Process

Query

Show Sample

Negotiations

Quote

Purchase Order

Order to adidas

Delivery to Customer
Before explaining the order delivery process, let me first explain that in Institutional Sales adidas has one authorised vendor named Eight Grams Of Brain Marketing Pvt. Ltd. It started four years ago as an official vendor of adidas. For adidas, it looks after only corporate part of Institutional sales. EGOB also deals with other brands like Raymond, Peter England and unbranded stuff but none of them are adidas rival brands. EGOB has almost all big companies as their clients. Now, whenever the adidas agents or employees get a lead or query, there are three primary things which they try to know from the client which are Budget Time Requirement

Budget- This is the amount client is willing to spend to purchase the merchandise for its promotional or any other motive. Knowing the budget is very important because then the agent can tell them which products a client can go for since adidas has products ranging from Rs599 to Rs2999. Requirement- This is the quantity required by the client. This is important for the agent to know because if the quantity is less than 500 they will try to give it from the stock because minimum quantity required for production is 500.

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Time- This is the period within which the client requires the delivery. It is also a very crucial factor in corporate sales because the company requires minimum 7-10 days to execute the order from the purchase order date if the quantity is less than 500. Otherwise the order will be executed from production which requires minimum 40-45 days for apparels and 20-25 days for bags from the PO date and the mentioned time is without customization. After knowing these three basic things, the agent tries to figure out which product they can give the client or if the client already knows the product he requires. Then the agent figures out the possibility of whether he can execute the order by meeting the above mentioned parameters. Now, if the product is selected keeping in view those three parameters, the agent asks if any customization is required by the client. If no customization is needed he can move to the next step i.e. showing the sample to the customer. If customization is needed then the customer has two options i.e. whether to go for Printing Or Embroidery

Printing is cheaper than Embroidery and takes less time. Embroidery is not recommended if the order is going to be executed from stock because it is very difficult to do embroidery on the finished product. Printing can be done in 4-5 days. In case of customization, the agent asks the customer three things: Size of Logo Placement Colour

After knowing the specifications a swatch (sample) is prepared and is send to the client for its approval. If the client approves the sample then the deal is carried forward to next step; otherwise a new sample is prepared with modifications. After the sample has been approved, there are negotiations on the discount offered by the agent to the customer or negotiations can also be on the payment terms i.e. whether the payment will be 100 percent advance or 50 percent advance. Also, if there is multi point delivery then it is charged. After the negotiation phase, a Quote is prepared by the agent which includes the price offered to customer, delivery schedule, taxes and the payment terms. In this the customization charges are mentioned separately. After the Quote, a Purchase Order is prepared by the client in favour of the Eight Grams of Brain if they are dealing through them or in favour of adidas if the client has approached directly to adidas. Now, the question arises Why will the corporate buy through Eight grams of Brain instead of approaching adidas directly?

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This is because, it is not necessary that all corporates need quantities in hundreds or thousands. Sometimes they may require the quantity as low as 50. In that case adidas cant provide that. Here EGOB comes into the picture as they stock hot selling products and can execute the order from their stock. In the order delivery process, after receiving the PO if the order is needed to be executed from the production- Then it is booked by the adidas employee using its adirace software with the sourcing department which is responsible for the production and quality check. Otherwise it is executed from the stock by the vendor.

Material/fabrics adidas sell are: 100% Cotton CVC (Chief Value Cotton)- This is 60% Cotton + 40% Polyester 100% Polyester- The three types of polyester used by adidas are Pique (best quality) Interlock Ilet

CLIMACOOL- This is the adidas technology which is made for athletes and can be wore in summers despite being polyester because it absorbs sweat and spreads it across the whole T-shirt thus making the evaporation process faster. Designs used by adidas are: With stripes Without stripes Separate- These are the ones with graphics

Combos adidas sell are: 100% Cotton with Stripes 100% Cotton without Stripes 100% CVC with Stripes 100% CVC without Stripes Polyester with Stripes Polyester without Stripes

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Study of service efficiency of adidas in terms of delivery vis-a-vis competition


Scope Looking beyond price and quality as a differentiator, adidas need to focus on their value chain to examine what factors they can rely upon as differentiator. Companies can use their excellence in operations and product leadership as differentiators. However, both of these criteria are related to one gating factor and that is service. For some sales executives, service is the only viable differentiator they can rely upon to market to customers, current and potential. To use service as a differentiator, adidas must provide excellent service to all of its key clients, agents, vendors and members of its distribution channels. Institutional sales in adidas is responsible for 25% of the total revenue and every year it is increasing by approx 20% i.e. in year 2009-10 they achieved the target of Rs85 crore out of which Rs25 crore was corporate sales and for this year 2010-11 they have the target of Rs30 crore in corporate sector. Institutional sales since their inception have been doing well with a good conversion rate. The study aims to find out the service efficiency of adidas and whether it can be further used to enhance the sales and can the service of adidas cope up with the increase in the business. Service efficiency In adidas, after the order is being taken it is referred to the sourcing department for its execution which is then responsible for the production, quality and timely delivery of the order. Sourcing department which sits at the main office of adidas in Gurgaon is in direct touch with the 13 manufacturing plants like in Noida, Ludhiana, etc. The sales executives after taking the order, give full specifications i.e. size ratio, customization details, period of delivery, etc to sourcing people who then communicates with the outsourced plants, ask them for the sample before producing a whole lot and then the sample undergoes SGS and MCS testing which are nothing but related to fabric, technical specifications and quality standards. After the sample is being approved by the sourcing, production proceeds and then the order is delivered. To keep a track of the orders an IOS (Institutional Order Status) format was developed by the Sourcing department which will help both the frontend i.e. sales executives to know the status of their order so that they can keep the client updated if there is any postponement or preponement in delivering the order and backend i.e. sourcing which can know their status whether they are on time or not. Institutional Order Status is maintained and updated every Monday so that the orders which are pending and which are delivered can be tracked. This contains all details about the deal i.e. Sourcing month (month in which the deal initiated), Client name, Vendor name, OC (Order confirmation date) Quantity ordered, Landed cost, MRP, MDP (Marketing Delivery Plan the date of delivery which was agreed b/w client and agent),

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MDP-agreed (Marketing Delivery Plan the date of delivery which was agreed b/w sourcing and agent), SDP-if delayed (sourcing Delivery Plan- here the status is written by sourcing people i.e. if there is any delay or not), SDP-internal (this is the date agreed b/w agent and ware house to deliver), Date of Delivery (the date on which consignment was actually delivered to client), Volume Delivered (the volume delivered to client)

Thus IOS gives the thorough details of the deal. This also helps adidas to keep track of the products which are hot selling and thus helps the next year to make forecast for the inventory so that they do not go out of stock or delay the delivery due to shortage of stock. IOS is followed by frontend and maintained by backend. Below are the analyses of IOS:
JANUARY STATUS Order Qty 27 0 3 16 8

Order Jan Delivery On time 00-05 Days Delay 06-10 Days Delay 11-15 Days Delay 16-20 Days Delay 21-25 Days Delay 26-30 Days Delay Above 30 Days Delay TBC(To be confirmed) Total

10 64

% 42% 0% 5% 25% 13% 0% 0% 16% 0% 100%

FEBRUARY STATUS Order Qty 39 1 2 3 8 16 1 1 71

Order Feb Delivery On time 00-05 Days Delay 06-10 Days Delay 11-15 Days Delay 16-20 Days Delay 21-25 Days Delay 26-30 Days Delay Above 30 Days Delay TBC(To be confirmed) Total

% 55% 1% 3% 4% 11% 23% 1% 1% 0% 100%

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Order March Delivery On time 00-05 Days Delay 06-10 Days Delay 11-15 Days Delay 16-20 Days Delay 21-25 Days Delay 26-30 Days Delay Above 30 Days Delay TBC(To be confirmed) Total

Order Qty 50 11 18 4 2 0 0 1 86

% 58% 13% 21% 5% 2% 0% 0% 1% 0% 100%

APRIL STATUS Order Qty 76 6 3 1 0 0 0 6 92

Order April Delivery On time 00-05 Days Delay 06-10 Days Delay 11-15 Days Delay 16-20 Days Delay 21-25 Days Delay 26-30 Days Delay Above 30 Days Delay TBC(To be confirmed) Total

% 83% 7% 3% 1% 0% 0% 0% 7% 0% 100%

Findings On analyzing it was found that the on time delivery has increased from 42% in January to 83% in April. The increase in on time delivery efficiency was observed with each progressive month i.e. in Jan it was 42% then

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in Feb it increased to 55%, then to 58% in Mar and finally to 83% in Apr.
90% 80% 70% 60% 50% 40% 30% 20% 10% 0% On time Delivery 00-05 days Delay 06-10 Days Delay 11-15 Days Delay 16-20 Days Delay 21-25 days Delay

26-30 Days Delay


Above 30 Days Delay

January

February

March

April

From the above graph, it can be easily interpreted that there is no pattern in delay and with each passing month they are improving the on time delivery. Reasons for the Delay Sometimes sales executives get the orders which are difficult to execute like if there is an order for 200 T-shirts with client logo at chest that too embroidery, then it is difficult to execute such order because the quantity is too small to be processed through production and it can be served from stock only and doing embroidery on finished product is very difficult. Sometimes time given to sourcing is too little as it is expected to complete the order of 500 quantity and 3000 quantity in same time. Sourcing is already operating at half time period i.e. lead time taken by sourcing to supply in retail is 90 days whereas for corporates it is 40-45 days. A lot of time is wasted in testing i.e. quality check and technical specifications because a sample from the plant goes to the testing centre, and if rejected, will directly lead to at least a 10 days delay. Common warehouse for retail and Institutional sales.

Recommendations For bigger orders, sales and sourcing people should go together so that the technicalities can be dealt and answered then and there only. It means the sourcing person will tell exactly how much time he needs to execute and whether the requirements can be met or not in terms of customization and also the costing. Sales executives should be given training in the field of sourcing so that they do not commit for the order which cannot be executed. Separation of stock between retail and Institutional sales to avoid mix-up i.e. they should be allocated stock according to their demand through adirace( software used in adidas to keep the track of the inventory and intra communication).

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Competition adidas and Reebok both hold 76% market share in B2B business. So, Reebok is the only potential competitor of adidas. Since data regarding service efficiency in terms of delivery cannot be obtained from internet and one has to solely depend on primary data for this purpose and which no company will provide to anyone unless and until one is a part of company. Reebok do approx. 35 crore corporate sale per annum and their delivery time varies from 10 days to 60 days depending upon the quantity of the order. Generally, they manage to serve the clients with 70-80% efficiency on time whereas in adidas, sale is approx 20 crore per annum and time given to sourcing to process the order is 40-45 days and their service efficiency is increasing with each passing month.

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Study of customer perception of adidas brand vis-a-vis competitors


Sample Size-31 Composition of the sample:

Gender
Male Female

35%

65%

Age Group
20-25 25-30 0% 13% 30-35 35-40

32%

55%

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Findings:

Brand Perception
70% 60% 50% 40% 30% 20% 10% 0% %age %age believe very believe high high %age believe average %age %age believe low believe least Nike adidas Puma Reebok

It is found that approx. 60% consumers perceive Nikes brand value as very high whereas adidas and Puma comes under high category with 65% and 50% response respectively. Reeboks brand perception is average as compared to its competitors.

Price Perception
80% 70% 60% 50% 40% 30% 20% 10% 0% %age %age believe very believe high high %age believe average %age %age believe low believe least Nike adidas Puma Reebok

It is found that nearly 60% consumers believe that Nikes products are over-priced and nearly 70% believe adidas price as little high whereas majority believe Reeboks price as value for money.

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Brand association with sporting events


60% 50% 40% 30% 20% 10% 0% %age %age believe very believe high high %age believe average %age %age believe low believe least Nike adidas Puma Reebok

It is found that Puma has low visibility in sporting events held in India whereas Nikes association is average which is also less than what is required for the visibility. Reebok has high association with Indian sports as compared to all its competitors whereas adidas has followed middle road as its association is less than Reebok but greater than other brands.

Functionality
70% 60% 50% 40% 30% 20% 10% Nike adidas Puma Reebok %age %age believe very believe high high %age believe average %age %age believe low believe least

0%

It is found that in terms of functionality i.e. heat regulation, breathability, durability, easy care, dimensional stability and pleasant touch Nike surpass all its competitors and adidas is placed second by majority. Reebok on the other hand is perceived as average in terms of functionality. In case of Puma there is mixed response as nearly 40% consider it as average whereas 35% consider high in functionality.

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Availability and Visibility


70% 60% 50% 40% 30% 20% Nike adidas Puma Reebok %age %age believe very believe high high %age believe average %age %age believe low believe least

10%
0%

It is found that Reebok has very high brand presence in comparison to its competitors with 40% vote and other 50% consider it highly accessible. Adidas has comparatively less availability and visibility as compared to Reebok but greater than Nike and Puma. Puma is considered as below average in terms of visibility.

Style and Variety


70% 60% 50% 40% 30% 20% 10% Nike adidas Puma Reebok %age %age believe very believe high high %age believe average %age %age believe low believe least

0%

It is found that all four brands are offering more or less same variety and style with Nike leading the group and then adidas is considered as most stylish brand with lot of variety to offer.

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Brand fabrics
70% 60% 50% 40% 30% 20% Nike adidas Puma Reebok %age %age believe very believe high high %age believe average %age %age believe low believe least

10%
0%

It is found that the quality of the fabrics of Nike is perceived as very high whereas Reeboks as average. Adidas fabrics quality is voted as second best with more than 60% perceiving it as high.

Conclusion There is no doubt that Nike is perceived as a premium brand in terms of quality and brand value in comparison to adidas but it does not have the brand presence i.e. availability and visibility in India as compared to adidas or Reebok. Price of Nike is also perceived as very high as compared to adidas. If we observe the above analysis carefully it is found that adidas is second best or leads the studied parameters whether it is quality or style or brand visibility. As long as Nike and Puma both does not have the brand visibility and association with sporting events in India which adidas and Reebok has, they do not pose any threat to the latters market share in B2B segment in India. The healthy competition lies between adidas and Reebok. Though adidas has high quality, functional attributes, variety, brand value and style but when it comes to price and brand visibility Reebok has an edge. Recommendations In India, Reebok has very high brand presence i.e. availability, visibility and association with sporting events. So, adidas needs to focus on its marketing and promotional strategies to increase brand visibility. Since India is a price sensitive market, one cannot survive in it by offering its products at high premium no matter how high its brand value is. So, adidas should try to reduce its prices without compromising on quality because reducing the quality will dilute its brand image.

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ANNEXURE

Questionnaire to study consumer perception of adidas brand vis--vis competition

1. What is your perception about the Quality of the following brands? Tick appropriate cells Least Low Average High Very high Nike adidas Puma Reebok

2. What is your perception about the Price of the following brands? Tick appropriate cells Least Low Average High Very high Nike adidas Puma Reebok

3. What do you perceive about the Brand Association of the following, in terms of their association with sporting events like IPL, International sporting events like soccer, tennis etc and brand visibility in terms of advertisements and promotion from Indian perspective? Tick appropriate cells Least Low Average High Very high Nike adidas Puma Reebok

4. Are you involved in activities like jogging, yoga, aerobics etc and actively take part in sports like tennis, cricket etc? Do the following brands have sportswear that supports these strenuous activities to take care of excessive sweating, keeping your body cool, keeping your skin dry etc? Rate the following on Functional attribute. Tick appropriate cells Least Low Average High Very high Nike adidas Puma Reebok

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5. Rate the Availability and visibility of the following brands? Is the brand easily available near your locality or available in the major market locations which you visit frequently? Tick appropriate cells Least Low Average High Very high Nike adidas Puma Reebok

6. Rate the Styles and Variety of sportswear apparel available in the following brands: Tick appropriate cells Least Low Average High Very high Nike adidas Puma Reebok

7. What is your perception about the suitability of the following brand fabrics in sportswear? Tick in the appropriate cells Least Low Average High Very high Nike adidas Puma Reebok

8. Which age group do you belong to? Tick in the appropriate cell 15-20 20-25 25-30 30-35 35+ 9. Gender: Tick in the appropriate cell Male Female

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BIBILIOGRAPHY
Books: Malhotra, Naresh k. And Dash, Satyabhushan, P 2009. Marketing Research. Pearson Publications, New Delhi, 5th Edition. Schiffmean, Leon G. and Kanuk, Leslie Lazar, P 2009. Consumer Behavior. Pearson Publications, New Delhi, 9th Edition.

Websites: www.adidas.com www.google.com www.wikipedia.com

Rajesh Gupta 09DM95