BACHELOR IN BUSINESS ADMINISTRATION

SEMESTER 3

PRINCIPLES OF MARKETING – ASSIGNMENT 2

Prepared for:
Lecturer’s name:

Prepared by:
Student’s Name: – ID No:
 1) Customer-driven marketing strategy

Explain in details what market segmentation and market targeting is

Customer-driven marketing strategy

A customer-driven marketing strategy means shifting focus from a product to its user and basing
your marketing strategy, plans and tactics on customers’ needs and objectives in the first place.

Market targeting

Market targeting involves information of each market segment and then selecting one or more
segments to enter. The company must target segments in which it can best fulfill the needs of
consumers. Wise companies enter into a segment from which they can achieve success in gaining
customer loyalty and sustain it over time. A company might use the strategy “niche marketing” and
target only a few segments from which the major competitor over looked.

Market is segmented using certain bases, like income, place, education, age, and life cycle, and so
on. Out of them, a few segments are selected to serve them. Thus, evaluating and selecting some
market segments can be said as market targeting. The quoted definitions are not available.

However, we can define the term as:

1. We can define the term as: Market targeting is a process of selecting the target market from the
entire market. Target market consists of group/groups of buyers to whom the company wants to
satisfy or for whom product is manufactured, price is set, promotion efforts are made, and
distribution network is prepared.

2. It involves basically two actions – evaluation of segments and selection of the appropriate
market segments. In this relation, market targeting can be defined as: Market targeting is an act of
evaluating and selecting market segments.

3. Finally, we define market targeting as: Market targeting consists of dividing the total market into
segments, evaluating these segments, and selecting the appropriate segments as the target market.

Market segmentation

When trying to reach customers with a marketing message or ad campaign, targeting the right
market with the right message is essential — If you aim too broadly, your message might reach a
few people who end up becoming customers, but you’ll also reach a lot of people who aren’t
interested in your products or services. When your messaging isn’t optimized for your audience,
you’ll end up with a lot of wasted advertising dollars.
Market segmentation can help you to target just the people most likely to become satisfied
customers of your company or enthusiastic consumers of your content. To segment a market, you
split it up into groups that have similar characteristics. You can base a segment on one or more
qualities. Splitting up an audience in this way allows for more precisely targeted marketing and
personalized content.

Types of Market Segmentation

Demographic Segmentation

Demographic segmentation is one of the most common forms. It refers to splitting up audiences
based on observable, people-based differences. These qualities include things like age, sex,
marital status, family size, occupation, education level, income, race, nationality and religion.

Segmenting a market according to demographics is the most basic form of segmentation.

Combining demographic segmentation with other types can help you to narrow down your
market even more. One benefit of this kind of segmentation is that the information is relatively
easily accessible and low-cost to obtain.

Some products are targeted explicitly towards a specific demographic. One personal care
company, for example, might make two deodorant products — one labeled as men’s deodorant
and one labeled as women’s deodorant.

Behavioral Segmentation

You can also segment your market based on consumers’ behaviors, especially regarding your
product. Dividing your audience based on behaviors they display allows you to create messaging
that caters to those behaviors. Many of the actions you might look at relate to how someone
interacts with your product, website, app or brand.

Some types of behaviors to look at include:

 Online shopping habits: You might consider a users’ online shopping habits across all
sites, as this may correlate with the likelihood they will make an online purchase on your
website.

 Actions taken on a website: You can track actions users take on your online properties
to better understand how they interact with them. You might look at how long someone
stays on your site, whether they read articles all the way to the end, the types of content
they click on and more.
  Benefits sought: This refers to the need a customer is trying to meet by purchasing a
product.

 Usage rate: You can categorize users based on usage rate. Your messaging will be
different depending on whether someone is a heavy user, medium user, light user or non-
user of your product.

 Loyalty: After using a product for some time, customers often develop brand loyalty.
You can categorize customers based on how loyal they are to your brand and tailor your
messaging accordingly.

Behavioral data is useful because it relates directly to how someone interacts with your brand or
products. Because of this, it can help you market more effectively to them.

3. Geographic Segmentation

Geographic segmentation, splitting up your market based on their location, is a basic but highly
useful segmentation strategy. A customer’s location can help you better understand their needs
and enable you to send out location-specific ads.

There are several kinds of geographic segmentation. The most basic is identifying users based on
their locations such as their country, state, county and zip code. You can also identify consumers
based on the characteristics of the area they live in, such as its climate, the population density
and whether it’s urban, suburban or rural. Identifying characteristics can require you to get more
specific since one county could have rural, suburban and urban areas.

You may need to change the language your messaging depending on the region you’re targeting.
People who live in different countries may also have different interests. Baseball is very popular
in the United States, for example, while cricket is more popular in India. If you’re marketing
sports equipment or publishing sports articles, you will want to take these different preferences
into account.

Companies can also consider different needs in different regions. A clothing company, for
instance, will show ads featuring warmer clothing to people living in cooler climates and show
the opposite to people living in warmer climates.

4. Psychographic Segmentation

Psychographic segmentation is similar to demographic segmentation, but it deals with

characteristics that are more mental and emotional. These attributes may not be as easy to
observe as demographics, but they can give you valuable insight into your audience’s motives,
preferences and needs. Understanding these aspects of your audience can help you to create
content that appeals to them more effectively. Some examples of psychographic characteristics
include personality traits, interests, beliefs, values, attitudes and lifestyles.

If you find that members of a demographic segment are responding differently to your content,
you might want to add in some psychographic information. While demographics provide the
basic facts about who your audience is, psychographics give your insight into why people decide
to purchase or not purchase your product, click on or ignore your ad and otherwise interact with
you.

2) Market segmentation

Propose one new product and you are required to do market segmenting based on the categories
that you need. And choose which market segment will become your target market

Market segmentation

Market segmentation is the process of dividing a market of potential customers into groups, or
segments, based on different characteristics. The segments created are composed of consumers who
will respond similarly to marketing strategies and who share traits such as similar interests, needs, or
locations. In a modern market there are many types of customers, products and needs. The company
will determine which demand it can fulfill best and gain maximum benefits. Consumers are grouped
in various ways geographic, demographic, psychographic, and products are made to fulfill their needs
and wants. Market segmentation consists of consumers who adopt in a similar way to different
marketing efforts. In a sports market for example only those who live a particular kind of lifestyle and
engage in sporting make up only one segment of the market. Then other consumers who does not
engage in sporting activities, but are interested in the style of the sportswear make up another market
segment.

Proposed product: Adidas

I proposed Adidas products which is a good example of customer psychographic segmentation. This
product manufacturer sells stylish and quality sports wear and accessories. The company’s main targets
are people who love luxury and those who engage in various sporting activities.

Adidas has a branded range of male and female clothing, shoes or body-care and eyewear, which all
three brands of Adidas; Performance, Originals and Style also provide products for this segment.
Psychographic segmentation was to dividing the market into groups based on social class, life style or
personality characteristics. Adidas focus on social class because people within a given social class tend
to have similar buying behavior. People interest in many goods is affected by their life style and many
goods they buy are expressions of their lifestyle, people who loves outdoor activities and sporty style
will tends to buy Adidas products.

3) Swot analysis

Explain in details what is swot analysis.

Do swot (strength, weaknesses, opportunities, threats) analysis for the product that you are going
to sell (refer to question no. 2)

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats, and so a SWOT
Analysis is a technique for assessing these four aspects of your business.

Strengths

Strengths are things that your organization does particularly well, or in a way that distinguishes
you from your competitors. Think about the advantages your organization has over other
organizations. These might be the motivation of your staff, access to certain materials, or a
strong set of manufacturing processes.

Weaknesses

Now it's time to consider your organization's weaknesses. Be honest! A SWOT Analysis will
only be valuable if you gather all the information you need. So, it's best to be realistic now, and
face any unpleasant truths as soon as possible.

Weaknesses, like strengths, are inherent features of your organization, so focus on your people,
resources, systems, and procedures. Think about what you could improve, and the sorts of
practices to avoid.

Opportunities

Opportunities are openings or chances for something positive to happen, but you'll need to claim
them for yourself!

They usually arise from situations outside your organization, and require an eye to what might
happen in the future. They might arise as developments in the market you serve, or in the
technology you use. Being able to spot and exploit opportunities can make a huge difference to
your organization's ability to compete and take the lead in your market.
 Think about good opportunities you can spot immediately. These don't need to be game-
changers: even small advantages can increase your organization's competitiveness. What
interesting market trends are you aware of, large or small, which could have an impact?

You should also watch out for changes in government policy related to your field. And changes
in social patterns, population profiles, and lifestyles can all throw up interesting opportunities.

Threats

Threats include anything that can negatively affect your business from the outside, such as
supply chain problems, shifts in market requirements, or a shortage of recruits. It's vital to
anticipate threats and to take action against them before you become a victim of them and your
growth stalls.

SWOT analysis on Adidas

Adidas Strengths

 Brand Value: Adidas is one of the most valuable brands in sports. According to Forbes,
it is ranked at #3 position (Nike at # 1 and ESPN at # 2) with a brand value of $6.8 Billion.

 An Iconic Brand with a Prestigious Legacy: Adidas has nurtured a strong and
prestigious legacy and heritage over its long, illustrious history by influencing and shaping
numerous aspects of society across the world.

For example, the company influenced sports in the 70s and shaped the hip-hop culture in the 80s.
Its iconic three-striped tracksuit and three-leafed motif logo transformed the brand into a cult,
particularly among urban youth.

 New Products Innovation: Since its founding, Adidas has prioritized the quality of its
products over everything else. In 2018, EUR 153 million was invested in R&D (0.7% of its
annual net sales). High-quality, innovative products are one of the driving forces behind its
ever-growing customer base.

 Diversified Portfolio: Even though the Adidas brand is restricted within the sportswear
industry, the company’s products are diversified. It offers multiple products that are designed
to cater to a wide range of sports, including footwear, apparel, and hardware accessories.

 Young Customers prefer Adidas: The consistent focus on product quality and customer
experience has enabled Adidas to nurture a global and customer loyal base, particularly teens
and young adults between 16 and 24 years in urban areas.
 Adidas Weaknesses

 Supply Chain Shortage: Adidas outsources the production of most of its products to

rd
3  party or independent manufacturing suppliers, mainly in China, Cambodia, and Vietnam. It
has exposed Adidas to the risk of overdependence on foreign suppliers.

According to Reuters, these suppliers are unable to keep up with the growing demand for mid-
priced apparel in the North American market, resulting in a reduction in sales growth by 1-2% in
2019.

 Expensive Products: Adidas charges a premium or high prices for its products, which

has alienated low-income consumers. Only upper- and middle-income group customers can
afford over a $100 shoe.

 Limited Product Line: Adidas Group has only Adidas brand and Reebok brand under its
portfolio, which has restricted the company within sports footwear, sports apparel, and
accessories. Therefore, a decline in demand for sports-related products can be disastrous to
Adidas.

Adidas Opportunities

 E-commerce: In recent years, the number of consumers who shop online or use e-
commerce sites has increased significantly. Adidas incorporated Instagram’s checkout
feature into its distribution network, leading to a 40% increase in online sales in the 1st
Quarter of 2019, which implies that it can replicate this success in other social media
platforms such as Facebook and Snapchat. 

 Growing Sportswear Industry: Sports and fitness have grown in popularity with no

sign of slowing down soon, which means there will be a consistent increase in demand for
sportswear products and assortments.

 Investing in Smart Materials: Technological advancements have enabled the

development of new synthetic materials that are better and more beneficial than traditional
materials.

Adidas Threats

 Competition: The main threat facing Adidas is increased competition due to

globalization and technological advancements, which has enabled entry and penetration of
small and medium companies. This implies that Adidas has to compete against main
rivals such as Nike, Under Armor, Puma while fending-off new entrants and penetrators.
 Rapid Expansion and Adoption of Ecommerce: Companies are adopting the rapidly
expanding e-commerce at an alarming rate, which can pose a threat to Adidas if its main
competitors such as Nike and Puma adopt e-commerce before them.

 Supplier Dominancy: The fact that Adidas outsources most of the manufacturing of

its products implies that the suppliers have more bargaining power than the company. The
skewed balance of power exposes Adidas to the possibility of being held hostage by its
biggest suppliers.

4) Marketing Mix

Propose 4Ps marketing mix strategy to sell the product. The strategy must be based on the
condition in question no. 2 and no. 3

MARKETING MIX FOR ADIDAS

PRODUCT:

Known for its sportswear products, Adidas mainly offers sports shoes, apparels and accessories
to its customers. Adidas invests heavily in research and development so as to come up with new
innovations in their sports footwear category.

Adidas has also partnered/collaborated with different celebrities and have launched an exclusive
and limited range of sportswear. Eg Adidas Yeezy Boost, an exclusive line of sneakers gained
huge popularity among customers, was made in collaboration with popular singer Kanye West
and Adidas.

Adidas focuses on design and technology for their products and produces products which are
futuristic and satisfies customers wants and desires.

PRICE:

The brand known for its quality and stylish products focuses on the Upper Middle class as well
as High-end customers has always used the Competitive and Skimming pricing strategy. 

For normal product launches, Adidas uses the competitive pricing strategy keeping in mind the
competitors like Nike, Puma, and Reebok.

For new products, which are uniquely designed and technologically advanced as compared to
other competitive brands, Adidas uses Skimming Pricing strategy.

High-Quality products do not come at a low price – This is the psychological factor that Adidas
plays at with its customers.
PLACE:

Place plays an important role in the Marketing Mix of Adidas.

Adidas uses both Offline and Online channels for the promotion of its products.

For Offline channels, Adidas uses its own dedicated Adidas outlets and Multi-brand outlets for
distributing their products.

The company has set up different outlets and partnered with different multi-brand outlets in
different cities of the country to reach out to the mass audience.

For Online channels, Adidas uses e-commerce websites like Myntra.com, Flipkart.com,
Amazon.com etc. to promote their products. Adidas is using these channels to sell their new
launches in footwear, sportswear etc.

PROMOTION:

Impossible is Nothing

That’s the message that Adidas promotes through the promotions that the brand does. The
advertisements are high energy adverts that are aimed to bring in adrenaline rush in you and
promote the message to “Go for the Kill” and there is nothing that can stop you from achieving
what you want in life.

Adidas uses a proper mix of Online and Offline channels for its promotion.

Online Channels: Adidas has a massive Facebook, Instagram and YouTube followership and it
makes the best use of it for promoting its latest launches and giving product updates

Offline Channels: Adidas uses Television ads, Events sponsorships, OOH promotion to its best
to reach out to customers. The brand also has tie-ups with leading sports personalities to promote
their products.