Adidas CASE Study - Grade: a PDF

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Adidas CASE Study - Grade: a...

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MASTER OF BUSINESS ADMINISTRATION IN PROJECT MANAGEMENT (MBS1123) Marketing management Name Title

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Individual assignment

Due Date

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22-12-2018

Lecturer

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Prof. vally

muthana dafalla mohamed Student ID#

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110040125

Semester

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1

Academic Honesty Policy Statement I, hereby attest that contents of this attachment are my own work. Referenced works, articles, art, programs, papers or parts thereof are acknowledged at the end of this paper. This includes data excerpted from CD-ROMs, the Internet, other private networks, and other people’s disk of the computer system. Student’s Signature : _____________________________

for office use only

LECTURER’S COMMMENTS/GRADE

DATE : ______________ TIME : ________________ RECEIVER’S NAME : _______

Table of Contents

Introduction..............................................................................................3 Marketing Mix of Adidas...........................................................................3 Explain the term sponsorship. Name a sponsorship deal that you think was effective.............................................................................................5 Analyze the importance of using both above-the-line and below-the-line promotion for an effective marketing campaign......................................6 Evaluate the effectiveness of adidas’ use of social media in its ‘Take the Stage’ campaign........................................................................................8 CONCLUSION.............................................................................................8

Introduction

Adidas is a multinational firm which was founded in 1948. The firs specialized in designing and manufacturing of sports clothing and accessories. The company is base in Herzogenaurach, Bavaria, Germany.Adidas AG group consist of the Reebok sportswear company, TaylorMadeAdidas golf company (including Ashworth), Rockport, and 9.1% of FC Bayern Munich. The company also produces bags, shirts, watches, eyewear, and other sports- and clothing-related goods. It is considered Number one manufacturer of sportswear in both Germany and Europe. The company was founded by Adolf Dessler who used the his nickname Adi and the first initials of his last name . Adidas’ revenue for the year of 2012 is €14.48 billion.The purpose of this project is to evaluate the company’s marketing strategy through conducted sever analysis ( PEST , SWOT, Porter’s five forces , marketing mix analysis, value chain analysis and competitor analysis ) and based on the findings provide recommendation for the company.

1.0 Marketing Mix of Adidas. Adidas has made a real come back in the past few years. Despite Nike’s challenge, it has emerged a strong player and is again in a mood to make its presence felt with full might. The brand has a unique appeal and its market share and popularity have grown in the recent years. Apart from product innovation, the credit can be given to the excellent marketing efforts of the brand. It makes shoes and apparel for men, women and kids. The brand has revamped its marketing strategy in these years and that has boosted its growth rate and revenue. This is a discussion of the marketing mix of Adidas focusing on the four P’s- Product, place, Price and promotion. All these aspects of its marketing mix are important and have played a major role in the growth and success of the famous sports shoe and apparel brand.

Product Mix:

Adidas is a well-known maker of sports shoe, apparel and accessories. It makes shoes and apparel for men, women and kids. The brand also produces shoes and sports gear for different sports. Apart from quality, it also focuses on attractive designs and a large product range. Its product mix has grown larger after its acquisition of Reebok. Below is a brief description of its product mix.

Products: Sports shoes and apparel for basketball, football, golf, outdoor, running, tennis and training Men’s shoes and clothing, Kid’s shoes and clothing Women’s shoes and clothing Handbags and other accessories for men and women Thus, I can see that Adidas has a large array of stylish products for men, women and kids. Apart from its shoes and accessories for specific sports, it has also brought innovative designs and styles in sports shoes and apparel.

Place. Adidas has outsourced most of its production. Its products are manufactured in 55 countries and it works with more than 800 independent factories globally. Its Tier 1 suppliers are the factories with which it is in direct contractual relationship for the supply of its products. In Tier 2 are its subcontractors that are subcontracted by its primary suppliers. The brand has 785 tier 1 and 249 tier 2 suppliers. Its number of retail stores in 2016 was more than 2800. Out of them, 1757 are concept stores, 902 factory outlets and 152 are concession corners and others.

Price The pricing strategy that Adidas uses is an example of the high low pricing strategy. The high low pricing scheme is a scheme where the prices of the products are generally kept higher than the competitors but the company uses promotional discounts to offer lower prices and attract consumers. In this way, the brands following this strategy attract consumers to the retail stores by providing low introductory prices on new products while also introducing them to the higher priced products. This strategy is extensively followed in the shoe and fashion industry.

2.0 Explain the term sponsorship. Name a sponsorship deal that you think was effective. Sponsorship For adidas, London is a key focus for the sportswear market, for both performance sportswear and sports fashion. This market sets more trends than anywhere else in the country. London 2012 gave adidas a platform to target this audience but with a global reach. The sponsorship deal obtained by adidas was the broadest set of sportswear rights in Olympic history. It became the Official Sportswear Partner of the London Games and the exclusive licensee of all branded (adidas + London 2012) and event branded (London 2012 only) clothing. From these rights adidas set four key marketing objectives.

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To ensure a clear association as Sportswear Partner of London 2012, Team GB and Paralympics GB.

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To engage and excite the 14-19 year old audience in order to drive brand preference in the UK.

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To deliver a Licensed Product Return on Investment (ROI) (branded and event branded licensee rights).

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To become the most talked about sports brand in 2012. A major aspect of this sponsorship deal was the athletes’ kit. The kit provided the opportunity to be innovative and excite the target audience whilst creating products to meet commercial sales targets. Market research undertaken by adidas showed the youth audience wanted something ‘untraditionally British’. Designer Stella McCartney fulfilled this brief with her deconstructed union flag design. Preparations to equip the team started 2 ½ years before the Games were due to start. Over 550 athletes were fitted for over 680 items of kit. This meant the marketing activity for the campaign also started long before the Games in 2012. A photo booth shoot captured every athlete in their kit. These images were used to create excitement around the Team GB kit product launch.

Promotion All elements of the marketing mix are important. However, in increasingly competitive markets innovative methods of promotion can create a competitive advantage. Promotional activity is used to communicate with consumers about the brand and its products. As there were more than 50 London 2012 sponsors, adidas needed to ensure it communicated the right messages, at the right time, through the appropriate channels for its target audience. It aimed to create national support for Team GB through its ‘Take the Stage’ campaign. The acronym AIDA is useful when planning promotional activity, promotion should aim to: Initiate awareness amongst consumers. Generate interest for and desire to have the product. Ensure action to purchase.

3.0 Analyze the importance of using both above-the-line and below-theline promotion for an effective marketing campaign. Above-the-line promotion There are many different methods of promotion. Above-the-line promotion refers to traditional methods of advertising, such as, print adverts in magazines and newspapers, billboards or online and TV advertisements. This form of promotion is expensive. As mass audiences become harder to reach through advertising, for example, an increasing number of people record TV and fast-forward the adverts, innovative methods of below-the-line activity is becoming increasingly important to engage the audience. Above-the-line activity for adidas’ campaign included TV adverts that showcased the best UK talent across sport, street and style. The adverts contained carefully planned product placement. Amongst those featured were David Beckham, Wretch 32 and Derrick Rose. In addition to a significant outdoor media spend, adidas featured artist impressions of athletes on 17 London Metro front pages.TV adverts featuring athletes such as Jessica Ennis and Tom Daley were used to rally support for Team GB. In these adverts athletes shared their intimate goals, fears and thoughts, something which was dramatically different to other sponsors of London 2012.

Below-the-line promotion In contrast, below-the-line promotion aims to reach more targeted groups of consumers. For example, through sponsorship deals, direct marketing, public relations and social media. Belowthe-line promotion targeted at the youth audience was a key method for adidas to achieve its marketing objectives. It used a wide range of promotional activities to create deeper engagement with its audience, mixing traditional media with an innovative use of social and digital channels. The scale of the activation of this campaign was an industry first. Its TV adverts aimed to drive consumers to a website where they could demonstrate their talents for a chance to meet their idols. Through ‘Project 32’, adidas had already rewarded 32 talented youngsters in London with the chance to meet leaders in their chosen fields, such as the sporting and musical industry, giving undiscovered talent the chance to ‘Take the Stage. Social media played an integral part in adidas’ campaign. For example, on Twitter #takethestage became the summer trend for supporting Team GB. Videos on YouTube created hundreds of millions of views, including a video of Team GB athletes singing along to Queen’s ‘Don’t stop me now’. In addition, a large photo booth was set up at Westfield shopping centre in Stratford. Members of the public then entered the booth to show support for Team GB. Videos of peoples’ reactions to David Beckham making a surprise appearance received 3.2 million views, as well as international TV coverage.

4.0 Evaluate the effectiveness of adidas’ use of social media in its ‘Take the Stage’ campaign. Creating hype Social media is a natural extension of Adidas’s wider approach to marketing, especially when it comes to creating hype around its high-profile collaborations.Since the brand famously snatched Kanye West from Nike in 2014, it has carefully crafted a series of product launches, cleverly building on the rapper's wider (and fanatical) fan base.Tweeting and posting on Instagram in the run-up to shoe releases, the brand creates massive excitement and interest from followers. View image on Twitter Meanwhile, from Pharrell Williams to Stella McCartney, Adidas Originals is also shrewd in terms of how it collaborates with high profile personalities. Unlike other brands, who might merely use celebrities to front campaigns, Adidas put a huge focus on the personal and direct involvement of influencers in the actual designing processing doing so, it ensures its collaborations feel entirely authentic rather than purely sales-driven. Again, this is reflected in how it posts on social, continuously reinforcing the core topic of originality and creative and artistic expression.

Organic content Lastly, we can see how social media is not simply a one-way marketing tool for Adidas Originals, but also a way for fans and consumers to show their appreciation. Likewise, the Adidas Originals Instagram feed (also with more followers than the main account) typically makes use of imagery from musicians, fashion designers and models to reinforce its tagline of ‘We Are Originals including the consumer in the collective we Using influence and artistic expression, Adidas Originals has managed to make its brand relevant again. By delivering its message on social media in a natural and authentic way, it has truly connected with a new and highly engaged young audience.

CONCLUSION It seems that conducting a survey is a very good choice to allow consumers to evaluate what they wanted and what they are unsatisfied with. However, the drawbacks such as few willing respondents and not able to fully voice out their opinions.This is not much of a problem as survey questions are not very specific. But, conducting a survey is able to give us some idea of what consumers are really thinking about Adidas products. In the future, survey questions will be made to allow the consumers to give more accurate and specific answers to the Adidas brand. This method, when done continuously, will create an idea that Adidas can use to fully meet customer`s satisfaction and increase sales, thus profits increase. 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....