Case study MKT420 of Adidas PDF

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FACULTY OF BUSINESS MANAGEMENT BACHELOR OF BUSINESS ADMINISTRATION IN HUMAN RESOURCE MANAGEMENT BA243 1B

PRINCIPLES AND PRACTICE OF MARKETING MKT420 CASE STUDY OF ADIDAS

PREPARED BY: NOR DINI BINTI ISKANDAR

STUDENT ID: 2020985883

PREPARED FOR: DR AZYYATI ANUAR

Table of Contents 1.0 INTRODUCTION 1 2.0 MARKET SEGMENTATION

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2.1 GEOGRAPHIC SEGMENTATION

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2.2 DEMOGRAPHIC SEGMENTATION

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2.3 PSYCHOGRAPHIC SEGMENTATION

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2.4 BEHAVIOUR SEGMENTATION 2 3.0 MARKET TARGETTING

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3.1 DIFFERENTIATED

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4.0 MARKET POSITIONING

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4.1 PRODUCT

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4.2 PRICE 5 4.3 PLACE 6 4.4 PROMOTION 6 5.0 RECOMMENDATION AND CONCLUSION 7 6.0 REFERENCES

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INTRODUCTION Marketing choices are crucial components of a strategic marketing process. At this stage of planning, decisions are made in order to indicate the direction of the marketing mix not to mention the way products are going to be perceived in the market place. These marketing chooses group consumers together based on common needs with the ultimate goal to affect the buying decisions of the target customers for these products, which stands for segmenting, targeting and positioning strategy. In other words, STP is a marketing signification that associates the way to evaluate and choose a target market for specific product or service. Considering the factors related to this topic, the question of what specific consequences arise when addressing this topic must be elaborated. This research is particularly outstanding for the reader because it will analyse the STP strategy of a well-known company that produces sports equipment, which is Adidas.

SEGMENTATION: Market segmentation is the process of dividing up mass markets into different groups of similar needs and wants. The motive behind segmentation is Get to know the customer in a detailed manner, gain a competitive advantage and then be able to serve the customers’ needs and wants in a better Adidas uses different types of segmentation to break a bigger market into small customer groups. Geographic Geographic is simple, yet powerful segmentation basis. Adidas segments market based on world and country region, city and popularity density in different way. In particular, Adidas promotes different campaigns in the United States of America, in Europe, in Asia, in Australia as well as in Africa because sports differentiate by region, even cities. For instance, all the commercials in the United States are around football and baseball, while in Europe, advertisements refer to soccer. Concerning cities segmentation and their fans in New Delhi, the capital of India, Adidas promotes equipment for cricket while in 1

England and Sidney for rugby. Based on Adidas’s statistics, largest market places are North America as well as Western Europe and China where the company segments more the market focusing on urban areas with purchase densities.

1. Demographic Segmentation: Segmentation according to demography is based on consumer- demographic variables such as age, income, family size, socio-economic status, etc Mainly Adidas targets young consumers between 14 – 40 years of age group. Adidas’ brand equity is not just confined to this customer segment, the brand is quite popular and is liked by consumers with age group between 40 -65 as well. Adidas offers different sub-brands like Adidas Originals, Adidas Neo etc which targets different customer segments. Adidas targets both male and female customers and offers premium quality sports products.

2. Psychographic Segmentation: Adidas uses psychographic as one of their main segmentation. In order to create a premium positioning among consumers, Adidas targets upper-middle-class consumers to affluent consumers. Psychographic segmentation is used to divide the market into groups based on social class, life style or personality characteristics. Adidas focuses on social class because people within a given social class tend to have similar buying traits. Companies also use income, gender, ethnic, and family life cycle segmentations to distinguish their market but Adidas keeps it a little less complicated and wider ranged so the brand is marketing to many different people all over the world. Behavioural On the one hand, Adidas focuses on the way its products make consumers feel. Adidas builds customers’ engagement by

providing

them unique quality as well as

various

and

innovative products to choose in order them to purchase more frequently company’s products. Furthermore, Adidas gives its consumers the opportunity to share their experiences with their friends and family including the review products on the internet, which spread to social networks having a huge effect to purchasing behaviour of the customers. 2

MARKET TARGETING Differentiated strategy Adidas uses differentiated targeting strategy to target young adult. Adidas target market falls within the 20- to a 29-year-old age group who are athletes or are passionate about sports and this segment is considered as the strongest consumer market. The company is focused on targeting and strengthening its brand with the next generation of athletes in the 14- to 19year-old age group. Adidas believes this target group is the most influential consumer group in the world. How adidas market their product? To achieve this business strategy Adidas followed a plan that is based on three strategic choices: 

Speed – Keeping customers at heart of everything the company does, Adidas ensures that its customers find their desired products where and when they want them.



Cities – Owning to the target market of Adidas, the company zeroed down the six key cities in which they want to over-proportionally grow share of mind, the share of market and share of the trend: London, Los Angeles, New York, Paris, Shanghai, and Tokyo.



Open Source – Collaboration and Innovation – This is a major leg which led to the success of Adidas. For example, Adidas Yezzy, Adidas Stan Smith and many more.

WHAT IS THE MARKETING STRATEGY OF ADIDAS? After discussing the business strategy of Adidas, Adidas target market and Adidas competitive advantage comes the Marketing Strategy of Adidas.

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Collaboration:

Everyone must have surely heard of “Yeezy’s” and Adidas Pharell William sneakers, these were the major reasons for Adidas resurgence. Adidas backed powerful endorsement contracts with some powerful non-athlete superstars like Kanye West and Pharrell Williams and managed to very well capitalize of these names by promoting them left right and centre. This Marketing strategy of Adidas worked so well for the brand that its competitors like Puma followed the same suite and signed-in famous personalities include popstar Rihanna for their line of sportswear. Innovation: The strategy to move to use recycled plastics for their shoes and clothing is because of the company’s vision to get rid of virgin polyester overall by 2024. This strategy is not just going to have an impact on Adidas but also have profound implications in the overall fashion industry.

A New Strategy: Limiting Supply Popular Adidas shoe models such as the “Stan Smith” and “Superstar” have been major contributors to Adidas’ massive revival over the past few years, which have been supported by the aforementioned endorsements and innovative marketing campaigns.

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Social media: Social media has been the focus of attention for the brand when it comes to interact and connect with the customers. Adidas remains active through the traditional channels, its own website as well as the social media. Adidas has active Facebook, YouTube and twitter where it uses to stay connected with its fans and followers. The core focus of all its marketing efforts is to bring energy to sports and help athletes achieve. uploads thousands of promotional videos for its products. MARKET POSITIONING 4Ps 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.

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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 ecommerce websites like Zalora.com, Lazada.com, JDsport.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.

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4.0 RECOMMENDATION/CONCLUSION Based on the all the data I collected, I can conclude that in overall customers are quite satisfy with Adidas product and services. Customer’s has no doubt in the durability of material that used in produced Adidas product, however in term of price and design, Adidas might need to put in more effort and come out with a newest design that can attract more customers. Adidas can also launch a promotion or give a special offer of price in a certain period of times to increase the sales volume and attract more customers Moreover, Adidas might also need to come out with a better idea on advertisement to promote and differentiate its product from its competitive. Because in overall, Adidas advertisement has less influence in consumer’s mind and therefore become one of its marketing weaknesses. I suggest that Adidas can invite famous more athletes or artists as a brand spokesperson to make it a more memorable brand name in consumer mindset. In term of services, customers also were quite satisfied with Adidas services they provided and I believe Adidas still able to improve their service to serve their customer even more sufficient to truly maximize their sales and make their customer satisfy and happy each time they enter and leave Adidas store.

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REFERENCES

[CITATION htt2 \l 1033 ] retrieved from https://en.wikipedia.org/wiki/Adidas

[CITATION Adi \l 1033 ] retrieved from https://www.adidas-group.com/en/

[CITATION YOU20 \l 1033 ] retrieved from

-https://www.youtube.com/watch?v=7SAPUypFmTA

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