SESSION: APRIL 2023

GROUP REPORT
INTRODUCTION TO INTERNATIONAL MARKETING (PMK2243)

PREPARED FOR:
MADAM FAUZIANA BINTI MAT HUSSAIN

COURSE:
DIPLOMA IN BUSINESS MANAGEMENT (AB101)

PREPARED BY: SECTION 1

NO STUDENT ID NO. STUDENT NAME

1 KBN220210395 AZREEQ IMAAN BIN MUHAMMAD PADIR

2 KBN220210045 MUSHI ABDULLAH BIN MUHAMMAD JEHKA

3 KBN220210307 MUHAMMAD AFNAN HAKIM BIN MUHAMMAD AZWAN

4 KBN220210095 WAN AHMAD FARES BIN WAN ROSLI

TABLE OF CONTENT

1.0 INTRODUCTION -----------------------------------------------------------------------------------1

1.1 COMPANY BACKGROUND---------------------------------------------------------------------3

2.0 ANALYZE AND RESEARCH--------------------------------------------------------------------6

2.1 POLITICAL AND LEGAL ENVIRONMENT--------------------------------------------------6

2.2 CULTURAL ISSUES-------------------------------------------------------------------------------7

2.3 BUYING BEHAVIOR-------------------------------------------------------------------------------9

3.0 CONCLUSION---------------------------------------------------------------------------------------11

4.0 REFERENCE-----------------------------------------------------------------------------------------12

5.0 APPENDICES----------------------------------------------------------------------------------------13
1.0 INTRODUCTION

Adidas is a German multinational corporation that design and manufactures sports shoes,
clothing and accessories headquartered in Herzogenaurach, Bavaria. It is the large
sportswear manufacturer in Europe and the second biggest in the world. It is the holding
company for Adidas Group, which consists of the Reebok sportswear company, TaylorMade-
Adidas golf company (including Ashworth), 9,1% of FC Bayern Munich and Untasted, an
Austrian fitness technology company. Adidas revenue for 2012 was listed at $14.88 billion.
Adidas was registered on 18 August 1949 Adolf Dassler, following a family feud at the
Gebruder Dassler Schuh Fabrik company between him and his older brother Rudolf. Rudolf
had earlier established Puma, which quickly became the business rival of Adidas and is also
headquartered in Herzogenaurach.

The company's clothing and shoe designs typically feature three parallel bars, and the same
motif is incorporated into Adidas's current official logo. The brand name is appropriately
uncapitalized, with a lower case"a”. The brand works out 3 major lines which are Adidas
Performance, Adidas Original and Adidas style.

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 1.1 COMPANY BACKGROUND

Adidas was founded in 1949 and is a member of Adidas AG, a German sportswear
manufacturer. Adolf Adi Dassler is the founder of Adidas, he started to produced footwear in
Herzogenaurach in 1920, (Baidu,2019) Soccer player Adolf (Adi) Dassler was a German
cobbler invented spiked shoes for track and field at the age of 20 in 1920. Four years later,
the German sports shoe company Gebruder Dassler OHG was founded by Adi and his
brother Rudi, later known as Adidas. In 1925, the Dasslers, made leather shoes with
hammered studs and hand-forged spikes for running shoes. Adidas background: 1949 To
Now.

Adidas was founded in 1949 and is a member of Adidas AG, a German

sportswear manufacturer. Adolf Adi Dassler is the founder of Adidas, he started to produce
footwear in Herzogenaurach in 1920. (Baidu,2019) Soccer player Adolf (Adi) Dassler was a
German cobbler invented spiked shoes for track and field at the age of 20 in 1920. Four
years later, the German sports shoe company Gebrüder Dassler OHG was founded by Adi
and his brother Rudi, later known as Adidas.

In 1925, the Dasslers made leather shoes with hammered studs and hand-forged spikes for
running shoes. The mission in Adidas company is Guiding Principles means always
remind us what is significant while success requires concentration and commitment.
Set ourselves Guiding Principles is to ensure we are staying on the right path. Adidas
cantered on the customer and constantly improving the quality, look, feel and identity the
goods in order to meet consumer expectations. Then, the vision of Adidas is leaders in
technology and development who seek to help athletes of all abilities achieve top quality
with every product that bring to the market. (Comparably,2019) The sporting brand puma
was launched after parting ways by Adolf's son Rudolf Dassler. Its classic slogan:
"Impossible is nothing." Adidas changed their slogan to “Adidas is All In” in2013. (SAROSH
WAIZ,2019) In history of Adidas logo, Adidas has been known for its three stripes logo for a
long time, but they were not the first company to use the logo.

Karhu Sportswash the original creator of the logo. Nevertheless, World War II struck Karhu
Sports hard, and he agreed to sell Adidas ' rights to their logo for 1,600 Euros and two
bottles of whiskey because of short on capital. In 1971, the company launched a three-
striped logo in the form of leaf, which they called "trefoil”. This version was later replaced by
the current logo shaped like a triangle, although some Adidas products still have the trefoil
logo. (LogoMyWay,2017) The sporting brand Puma was launched after parting ways by
Adolf ‘son
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Rudolf Dassler. Its classic slogan. “Impossible is nothing” Adidas changed their slogan to
“Adidas is All In” in 2013. (Sarosh Waiz,2019) In history of Adidas logo, Adidas has been
known for its three stripes logo for a long time, but they were not the first company to use the
logo. Karhu Sports was the original creator of the logo. Nevertheless, World War 2 struck
Karhu Sports hard, and he agreed to sell Adidas ‘right to their logo for 1600 Euros and two
bottles of whiskey because of short on capital. In 1971, the company launched a three-
striped logo in the form of a leaf, which the called ‘trefoil’. This version was later replaced by
the current logo shaped like a triangle, although some Adidas products still have the trefoil
logo.
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2.0 ANALYZE AND RESEARCH

2.1 POLITICAL AND LEGAL ENVIRONMENT

i) Political Factors: Many systems

Adidas supplies, ships, and distributes their products worldwide. This requires them to
extend international supply chains and follow political procedures when selling products
online. The company also uses political forces as a method of intervention of counterfeit
products.

Each country abides by their own taxation system. Adidas is required to abide by these rules
for each sale and each product distributed overseas. The company tends to outsource the
development of their product to third world countries. Most likely because it reduces
manufacturing costs. But communities don’t condone this type of business.

ii) Economic Factors: Counterfeit issues

The sports good industry is concentrated. The 50 largest companies contribute to roughly
70% of the industry’s revenue. Adidas is one of these organizations.

The products Adidas creates are deemed “leisure items”. They’re not a necessity. Sales are
driven by sports buyer trends and preferences.

Leisure products of different categories must compete against each other. Sports products
are competing against the gaming industry and music industry. The global economy
fluctuates. Manufacturers shift to accommodate this. Adidas must research where to sell and
distribute products. This ensures company growth and opportunities.

Adidas manufactures products in China because they’re labour intensive with low cost for
creation. Especially compared to North American countries. Adidas must play smart with the
price of materials. But they face continuous challenges when importing/exporting goods. And
the rise of counterfeit products dampers Adidas’ sales.
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iii) Social Factors: Health-conscious shoppers

Adidas changes designs of their products. Designs match the interest of consumers.
Products are often available for any age, gender or lifestyle. But their core focus group are
health-conscious buyers with a love for sports. They must keep up with health trends and
preferences to cater to their audience.

They also offer corporate volunteer programs. They support communities and foster the
health of individuals. Adidas also supports the Olympics, which allows them to leverage
marketing opportunities and catch the eye of new audiences around the world.

iv) Technological factors: Smart sportswear opportunities

Adidas tests their products under varying conditions. It’s because they cater to athletes.
They are trying to optimize performance for coaches and professionals in the sports industry.
For durable solutions to athletic problems, they use natural material replacements.

They support online sales through their website and with social media. Now, they’re studying
the smart sportswear industry. Technology, like the Fitbit, is quite popular in the health
communities. Adidas can use these technological advancements to dive into new industries
and develop an edge over the competition.

v) Legal factors: Patents and more patents

Adidas has ownership of intellectual properties and IP systems. They also have design
patents, defending their right against copiers and infringement. The patents also serve as
legal protection to end counterfeit businesses. As a big company, they naturally have
trademark production.
Because if their connection to the sports world, Adidas endorses celebrity sponsorships as a
form of marketing. And follow full compliance with national and local laws.

vi) Environmental factors

Adidas decreases environmental impact. It’s their duty to monitor hazardous substances and
eliminate them. This may be why they offer natural materials in their products.

They follow ethical business practices by committing to ensure supplies are following
regulations in every country their products are manufactured in.
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2.2 CULTURAL ISSUES

Adidas has faced its fair share of cultural issues over the years. It's important to note that
this information is based on knowledge up until September 2021, and there may have been
more recent developments that I'm unaware of. Here are some cultural issues that have
been associated with Adidas:

I. Racism and discrimination

Adidas has faced allegations of racism and discrimination within its organization. In 2020,
employees at Adidas' North American headquarters staged a protest, claiming that the
company had failed to address racial discrimination and create an inclusive work
environment. Several employees reported instances of racial bias, pay disparities, and lack
of representation within the company's leadership.

II. Workplace culture

There have been reports of a toxic work environment at Adidas, including allegations of
bullying, favouritism, and a lack of transparency. These issues can affect ` employee morale,
productivity, and overall company culture.

III. Supply chain controversies

Like many apparel and footwear brands, Adidas has faced criticisms regarding its supply
chain practices. Concerns have been raised about worker exploitation, low wages, and poor
working conditions in some of the factories that produce Adidas products. The company has
made efforts to address these issues, but challenges remain in ensuring fair and ethical
practices throughout its supply chain.

IV. Sustainability challenges

Adidas has faced scrutiny regarding its environmental impact. As a major producer of athletic
footwear and apparel, the company's manufacturing processes and materials can have
significant environmental consequences. Adidas has taken steps to improve its sustainability
practices, such as setting targets for reducing greenhouse gas emissions and using more
sustainable materials, but there is ongoing debate about the effectiveness of these efforts.

2.3 Buying Behaviour

Consumer buying behaviour of Adidas;

1) Adidas and their consumer

Adidas customer are mainly comprised of upper class and upper-middle class social group.
More specifically, they target young adult and children Who can interest and passion for
fitness and sport. However, Adidas acknowledges the fact that in order to be successful
across various customer segments, they need to be above and beyond the act of mass
production and mass marketing. To do this, they aim to identify and understand in individual
consumer motivation and goal related to sport, consumer lifestyle and a consumer’s
involvement in Adidas as a brand which can help them create meaningful products and
experiences for their consumer that can build lasting impression not in return brand loyalty

2) Impossible is Nothing

Adidas’ famous slogan “Impossible is Nothing” was not always the brand’s catchphrase. The
slogan was coined in 1974 and was actually taken from a quate by Muhammad Ali, a
legendary boxer who ruled the ring. “Impossible is Nothing” is the concept behind Adidas’
brand positioning “forever sport” that clearly and emotionally communicates our passion for
sport.

3) The Customer Is Always Right

Adidas has to ensure that their customer is satisfied and are willing to continue buying their
products. To do this, they establish reinforcement schedules which can primarily take three
forms: total, systematic, and random. Amongst the three mentioned reinforcement
schedules, Adidas offers a random reinforcement schedule and a systematic reinforcement
schedule. Adidas does this by offering a customer loyalty card known as “3Stripes” card.
According to be 3Stripes website, this card can be received after a simple purchase at any
Adidas store. After the 3Stripes card is registered, the member automatically gets assured to
be the first to know about any exclusive event, product, or special offers (3Stripes, n d.).
Furthermore, a 3Stripes card holder gets a special discount on Adidas product throughout
the year. Additionally, they also get 30% discount voucher for the mouth when it is their
birthday. Adidas is not different than another brand when it comes to shaping.
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Coupons such as “get 15% on next purchase” are available on website such as “Groupon”
and “RetailMeNot”.

4) A.D.I.D.A.S – All Day Dream About Sports

Included in Adidas’ target audience is primarily sports participant, including athletes at the
highest level of their sport career as well as non-athletes that are motivated or inspired by
sports. Studies show that Adidas, association to its German heritage has contributed to its
brand image, and quality to be perceived positively due to its European link. Adidas is
associated with so many other words, thought, and activities and whether it was intentional
or not, Adidas benefits in one way or another. However, the sports company has primarily
taken advantage of its heritage and adopted it as an asset for its brand image, linking its
European heritage to portray a high-end image of the brand so the product would be
perceived as high quality in term of performance. However, high end products are usually
associated with a premium, therefore the higher the quality, the higher the price. Using the
perceived quality and price-quality relationship, Adidas’ high-end image and high-quality
product are reflected on its price as well. Consumer’ perceived price fairness can be
evaluated by comparing Adidas’ price to the prices of their biggest competitor-Nike may Nike
have comparatively lower prices, but it is consistent with their “cool” instead of high-end
image. Consumer s can compare price internally as well by comparing the prices between
Adidas’ different major product line: Adidas Sports performance, Adidas Original, and Adidas
Style. Each product line is prices differently according to their characteristic and performance
level targeting different type of consumers;

1. High Physical activity enthusiasts

2. High risk perceivers
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3.0 Conclusion

The idea that Adidas is tailored for the active, trendy and comfortable lifestyle of both
teenagers and adults are conclusive. Just like their competitor, Nike, Adidas provides
excellent satisfactions to consumers up to a certain extent because there are still some who
would choose Nike over Adidas. Adidas now with the purchase of Reebok, has a larger
consumer base and this in turn, will definitely increase profits for the company. In terms of
price, Adidas shoes are not too much of a luxury product as some purchased it before would
repeat the decision to purchase again. Even with small discounts offered. Competition is stiff
in the sport shoe industry as many major companies are actively producing new shoes that
are meeting consumer satisfactions. Adidas is also very vigilant and is actively improving
itself to improve its products and satisfy the consumers.

Brand allows consumers to filter out the countless generic items and gives them a reason to
buy the product. Brand is essentially the sum of all experiences related to the product,
service, and companies that make and deliver the product. Branding is a very powerful
component in business as it can make or break business interests, it can destroy corporate
image or it can build public trust and credibility. It all depends on how it creates an impact on
the consumer’s perception. Brand perceptions are shaped by functional experiences as well
as emotional experiences,

make my life-job more gratifying or easier the customer associates with the product and
company. Once a customer likes your brand will definitely come back for repeated services
or products. The qualities of the product or services are ensured through the customers
minds from the brand image. Brand recognition is acquired when a brand is widely known in
the market place. The ability of creating and retaining a brand is called brand management.
With the demand in the market for sports goods, various prominent brands are trying their
best to satisfy the customers with the help of innovative techniques which causes impact on
the perception of the consumers‟ to change their brands. This changes the buying behaviour
of the consumers which is a process they use to make purchase decisions as well as the
use and disposal of the purchased goods and service.

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Adidas has become a world leading producer of sportswear by positioning themselves as
high quality, popular and faster. It knows that each customer has different wants, needs and
tastes. Customers often want to be the fashion leads. To achieve this, they focus on
purchasing certain and specific styles and are willing to pay a premium for it. Most are also
shoppers who desire value for money and bargain for best value. The Adidas as an
organization faces a dilemma to target the both markets simultaneously with a single
product. There are cases where a high-priced product may not be so valued by a bargaining
customer. The decision-making process is influenced by many factors in a consumer’s life
being both internal and external influences and factors. Adidas has established itself as a
global brand in such a way that it is prominent in the mind of many consumers when they are
at, they are seeking to buy sportswear.
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IV.0 Reference

1. Jyoti Sharma- Adidas Introduction- Academic.edu

(https://www.academia.edu/28430497/Adidas_Introduction)
2. PESTLE Analysis of adidas (https://pestleanalysis.com/pestle-analysis-adidas/)
3. Adidas Cultural Factors-eHow UK (https://www.ehow.co.uk/info_8374163_adidas-
cultural-factors.html)
4. Adidas-Consumer behaviour by Rand Amin-
Issues(https://issuu.com/randamin/docs/consumer_behaviour_.docx#:~:text=Adidas
%20always%20makes%20sure%20that,positive%20image%20towards%20the
%20brand)
5. International Journal of Business and Management Invention (IJBMI) ISSN (Online):
2319 – 8028, ISSN (Print): 2319 – 801X www.ijbmi.org || Volume 7 Issue 4 Ver ii ||
April. 2018 || PP ----67-69
6. Lakshminarayana. K & Sreenivas D L, “A Study on consumer buying behaviour
towards branded Apparels in selected cities of Karnataka”. International Journal of
Advanced in Management, Technology and Engineering Sciences, Volume 8, Issue
III, ISSN 2249-7455, March 2018.
7. Muhammad Ashraf, Madiha Naeem, Mehwish Shahzadi, “Impact of branding on
consumer buying behaviour”. International journal of Academic Research in Business
and Social Sciences, Volume 7, No.7, ISSN 2222-6990, March 2017.
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5.0 Appendix

Appendix 1: 2010 adidas FACT Division 1 certificate

Appendix 2: Product of Adidas Czech Republic

Appendix 3: Running Shoes

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