Module Name: Marketing Principles and Practice

Module Code: KH4002MKT

Full Name: Farah Al Najjar

ID Number: 202101119

Group: 1

Brand Name: Adidas

Name of Module Leader: Dr. Mostafa Saad El din

Name of Assistant Lecturer of your group: Dara Ashraf

Word Count (excluding the references and tables): __1080__

Submission Date: Thursday, 24 November

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 Table of contents

1. Company background ……………………. 3

2. Marketing environment analysis ……………………. 3

2.1 Macro environment …………………….3

2.2 Microenvironment ……………………. 4

3. Product Proposal ……………………. 4

4. Targeting strategy ……………………. 6

5. Positioning strategy ……………………. 6

6. References……………………. 8

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 Company background

Adidas group, a German multinational business established in 1959 by Adolf Dassler and

aboded in Herzogenaurach, Germany, is one of the earliest footwear brands that are even now

respected as a major style statement by young teenagers worldwide. “The main objective of

Adidas is to provide every athlete best equipment and sportswear” (Adidas, 2022). The company

strives to improve the portrayal, look, and quality conditions of the goods.

Afterward its formation, Adidas opened its growing brand divisions including Adidas,

TaylorMade, Rebook, and Runtastic. The company has various product lines including shoes,

clothing, accessories, bags, sunglasses, as well as fitness equipment.

Marketing environment analysis

Macroenvironment

Political: Adidas supplies, ships, and distributes its products worldwide. Since February,

there have been restrictions on imports in Egypt due to banks waiting on financial requests.

“Some international chains are running low on stock and have used up what they have” (Mounir,

2022). “The Deputy head of Commerce in Egypt said that most shops are now selling imported

products from last year since they cannot import new clothes. (Mounir, 2022). Adidas is not able

to fulfill the customer's demand due to the shortage of imports, therefore causing a loss of sales

and growth.

Environmental: Adidas affirms that the company's manufactured sections don’t produce

harmful and non-sustainable products. Adidas launched several low-waste programs including

Parley for the Oceans, Future Craft Loop, Dyeing Processes, Bio steel Fiber, Adidas Formation

Technology, and Sports Infinity. The intention of all of these initiatives is to use oil-based

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plastic, minimize waste, and reduce consumption through reusable products. (Robertson, 2022)

Through sustainability programs, they have launched an initiative named “made to me remade”

which is not available in Egypt.

Microenvironment:

Customers: Adidas has implemented a customer loyalty program to create rewards for

loyal customers. By joining the Adi Club, members can gain points where they can reach a

higher level and “unlock exclusive awards” (Adidas, 2022) such as members-only products,

vouchers, golden tickets, and specially signed products by famous athletes. In a study by

Nielson, 69% of Egyptians stated that they lean toward retailers who offer customer loyalty

initiatives (Marketing, 2013). As COP27 was recently held in Egypt, it raised awareness to a lot

of consumers about becoming more sustainable.

Competitors: “Adidas uses scanning pricing and competitive pricing in its marketing mix.

Competitive ones are useful for its products to compete with companies such as Nike and Puma

and scanning costs are used for the newly entering goods to the market.” (Shastri, 2021). Other

than that, their competitive advantage is implementing a high-low pricing strategy. They tend to

“keep their prices greater than that of their competitors, however, they occasionally use

promotional discounts to allure costumers.” (Srivastava, 2021)

Product Proposal

Since Adidas is moving more towards being sustainable, its ambition is to make “90% of

our articles sustainable by 2025” (Adidas, 2022). Thus, the new product innovation is renewable,

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reusable running shoes. To be specific, the shoes are made out of renewable, raw materials, using

mushroom fungi leather for the three stripes since its sustainably grown as an eco-friendly

material. Using circulative materials allows the product to be easily formed into any new good

once they are worn down by the customers, thus reducing consumption. The customers simply

return them to the store, and so the cycle continues when a new product is made.

The newly proposed product innovation type is incremental innovation. This is because

the same product of shoes is still being used, however, it's improving itself by becoming

sustainable. The type of new product is an addition to existing lines, meaning that it has taken the

form of a new product that’s adding to an already existing line.

This product is relevant to the Egyptian consumer market and should be introduced

because Egyptians are now moving towards sustainability. “Consumers in Egypt are more

encouraging of local retailers while making purchasing choices, becoming more environmentally

aware and conscious”. “76% of consumers in Egypt, will finance a greater cost for products that

are made from recycled, sustainable or eco-friendly materials.” (PWC, 2022). Additionally,

adding this innovative product to the company will help expand the brand's growth providing

them with a competitive advantage, where they have a different, sustainable product that its

competitors don’t, making them unable to compete. Other than that, by creating this product they

are driving the company in a different marketing direction related to helping the environment,

which is useful in reducing climate change, a threat to the Egyptian economy. “The world's

current circumstances would be aggravated by another large-scale volcanic eruption, which we're

long overdue for.” (McCarthy, 2017). Furthermore, a larger target audience will be appealed to

by gaining knowledge about the original, innovative idea of sustainable shoes that can be made

into a new product.

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 Targeting strategy

The key target market for this product includes both, men and women, consumers aged

between 20-30, and youthful athletic people who are interested in the idea of sustainability.”

(edrawsoft, 2022). The target audience of Adidas includes those of the middle class and high-end

consumers.” (Shastri, 2021). The target marketing strategy used for this type of product is

concentrated marketing because the company is focusing on a specific segment, which is those

who are intrigued by the idea of owning reusable, recyclable running shoes. Adidas reaches its

audience through its main promotion strategy, which includes “television marketing of ads that

are Adrenaline pumping” (Shastri, 2021) Other than that, they use the product placement

strategy. This is where brands are featured in other works such as movies. Adidas mainly “gains

its popularity from collaborating with iconic sportsmen such as Ronaldinho and Messi” (Shastri,

2021), which almost all fans are aware of and value. By doing this, customers will be more

unsub consciously encouraged to purchase their products.

Positioning strategy

positioning based on characteristics is the best fit for this product. This is because with

this strategy, the brand is allied with specific features which are advantageous to its consumers.

Creating sustainable, shoes that can be reproduced positions this product as an eco-friendly good

in the consumer's mind. Thus, making this a unique selling point, where the product is

differentiated from competitors. To further improve its brand reputation, Adidas “collaborates

with famous sports celebrities. Other than that, they also sponsor popular sports teams such as

Real Madrid which helps the company to improve its brand reputation.” (Shastri, 2021)

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 Overall, positioning is not what you do to a product. Positioning is what you do to the

mind of the prospect. You position the product in the mind of the prospect.” (Ries & Trout,

2001).

References

Adidas. (2022). Profile. adidas profile. Retrieved November 24, 2022, from https://www.adidas-
group.com/en/about/profile/

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Adidas segmentation, targeting, and positioning. Edrawsoft. (n.d.). Retrieved November 23,
2022, from https://www.edrawmind.com/article/adidas-segmentation-targeting-and-
positioning.html#:~:text=Targeting%20of%20Adidas&text=They%20are%20aimed
%20towards%20athletes,the%20most%20important%20customer%20segment.

Marketing. (2013, December 31). 92% of Egyptian respondents more likely to visit retailers that
offer a loyalty program. Think Marketing. Retrieved November 24, 2022, from
https://thinkmarketingmagazine.com/92-of-egyptian-respondents-more-likely-to-visit-
retailers-that-offer-a-loyalty-program/

McCarthy, J. (2017). Climate change affected ancient Egypt, too and led to its demise. Global
Citizen. Retrieved November 24, 2022, from
https://www.globalcitizen.org/en/content/climate-change-ancient-egypt-conflict-demise/

Mounir, S. (2022, June 15). Tightening up on imports - economy - al-Ahram weekly. Tightening
up on imports. Retrieved November 23, 2022, from
https://english.ahram.org.eg/NewsContent/50/1202/467965/AlAhram-Weekly/Economy/
Tightening-up-on-imports.aspx

PWC. (n.d.). Retrieved November 23, 2022, from

https://www.pwc.com/m1/en/media-centre/2022/consumers-egypt-supporting-local-
products-becoming-esg-conscious-concerned-data-protection.html

Rahul, R., & Willy, K. (2022, July 8). Adidas Swot Analysis (2022). Business Strategy Hub.
Retrieved November 22, 2022, from https://bstrategyhub.com/adidas-swot-analysis/

Robertson, L. (2022, October 11). How ethical is Adidas? Good On You. Retrieved November
24, 2022, from https://goodonyou.eco/adidas-ethical/

Ries & Trout. (2001, August 3). Positioning: 5 strategies to stand out from your competitors:
Byb Marketing Blog. Marketing specialists based in Hamilton, New Zealand. Retrieved
November 24, 2022, from https://brandyourselfbetter.com/blog/post/98450/positioning-5-
strategies-to-stand-out-from-your-competitors/

Srivastava, P. (2021, November 1). How is Adidas different from its competitors: Adidas
Marketing Strategy. StartupTalky. Retrieved November 24, 2021, from
https://startuptalky.com/adidas-marketing-strategy/

Mostafa Saad El Din, Topic 4 : Value Through Innovation

https://moodle.tkh.edu.eg/pluginfile.php/67347/mod_resource/content/0/Marketing
%20Principles%20and%20Practices%20Lecture%20-%20Week%205.pdf