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Term Paper on Marketing Management of Adidas

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Research on the Digital Marketing Strategy of Adidas

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This analysis focuses on Adidas’ digital marketing strategy, aiming to identify challenges and provide corresponding suggestions for improvement. The current status analysis highlights Adidas’ overall approach to digital marketing, while the problem analysis identifies specific challenges within the strategy. The causes of these problems are also examined to gain a deeper understanding of their origins. The suggested improvements include enhancing personalization, optimizing the mobile experience, embracing influencer marketing, leveraging social media platforms, implementing data-driven marketing strategies, investing in augmented reality and virtual reality, enhancing social listening and reputation management, collaborating with technology partners, prioritizing continuous testing and optimization, and fostering customer engagement and advocacy. These suggestions aim to help Adidas strengthen its digital marketing efforts, engage customers effectively, and drive business growth in the digital landscape.

Adidas, digital marketing, suggestion

1. Liu, Z. (2023). Transforming from a fresh food e-commerce provider to a digital marketing solution provider. Can the new business solve the urgent need of Daily Fresh?. Securities Daily, 2023-08-05(A03).

2. Zhang, B. (2023). Four major digital marketing strategies of inclusive finance in large state-owned commercial banks. China Business, 2023, (07): 20-23.

3. Wang, Y. G., Zhang, E. W., Zhang, S. Q. (2017). The Integration Framework and Future Prospects of Digital Marketing Research——Research Based on TCCM Framework and ADO Framework. Business Economics and Management: 1-23.

4. Wang, W. (2023). Research on the Development and Trend of Digital Marketing. National Circulation Economy, (13): 28-31.

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6. Ramko, K., & Jarosch, M. (2005). Digital marketing redux: Pharmaceuticals take a second look at e-detailing. Journal of medical marketing, 5(2), 134-136.

7. Morris, N. (2009). Understanding digital marketing: marketing strategies for engaging the digital generation. Journal of Direct, Data and Digital Marketing Practice, 10(4), 384-387.

8. Ryan, D. (2016). Understanding digital marketing: marketing strategies for engaging the digital generation. Kogan Page Publishers.

9. Wolny, J. (2014). The e-Marketing SIG (beta) manifesto—Aligning research with practice in digital marketing. Journal of Direct, Data and Digital Marketing Practice, 15, 288-289.

10. Saura, J. R., Palos-Sánchez, P., & Cerdá Suárez, L. M. (2017). Understanding the digital marketing environment with KPIs and web analytics. Future Internet, 9(4), 76.

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Campaign Management

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• V. Kumar 3 &
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This chapter defines campaign management as a series of interconnected promotional efforts, usually undertaken within a defined timeframe, designed to capture customer’s interest, and thereby achieve precise marketing goals. Marketing campaigns can be used by firms to identify prospective customers, acquire customers, and retain and reward existing customers. The four phases that are required for a successful campaign management process are: (1) campaign planning and development, (2) campaign execution, (3) analysis and control, and (4) campaign feedback. The chapter describes the various objectives that should be set forth within each phase and the methods by which a firm should strive to accomplish these goals. Further, the chapter provides the various channels through which firms can maximize customer interaction, including phone, direct mail, the Web, wireless devices, email, direct sales, and partner network. Through various examples and case studies, the chapter also highlights how creating successful relationships with customers is contingent upon the firm’s ability to use the right method of contact with the right customer at the right time.

• Campaign Execution
• Direct Mail
• Campaign Management Process
• Allowable Marketing
• Campaign Budget

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However, the federal do-not-call implementation has made it mandatory for telemarketers to scrub their contact lists against the national do-not-call registry 31 days.

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Aaker, D. A., Kumar, V., & Day, G. (2004). Marketing research (8th ed.). Hoboken, NJ: Wiley.

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Kumar, V., Reinartz, W. (2018). Campaign Management. In: Customer Relationship Management. Springer Texts in Business and Economics. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-55381-7_11

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Adidas Marketing Strategy: How Adidas lives by what they believe in "Impossible is Nothing"!

Learn about adidas's conic marketing strategy and advertising campaigns. read how adidas aces the 4ps of marketing mix - product, price, promotion & placement..

• overview#goto" data-overview-topic-param="adidas">About Adidas
• overview#goto" data-overview-topic-param="strategy">Adidas' Marketing Strategy
• overview#goto" data-overview-topic-param="vs">Adidas vs Nike
• overview#goto" data-overview-topic-param="unique">Unique Marketing Strategy
• overview#goto" data-overview-topic-param="campaigns">Memorable Marketing Campaigns
• overview#goto" data-overview-topic-param="key">Key Takeaways

Adidas is a recognizable name to not just sports fanatics but everyone, right from children to adults. Started as a shoe company in Germany, today Adidas owns a market cap of more than 21 billion euros!

Venturing into sports equipment and sporting apparel brand has made it the fastest-growing footwear lines. As of 30th June 2022, the company's sales were $24.559 billion .

Founded and headquartered in Herzogenaurach, Bavaria to sell soccer products to athletes, today Adidas is one of the best sporting goods company that is competing for neck-to-neck with Nike footwear in this monopolistic sportswear market .

In this article, we will understand how Adidas' manufacturing process and branding enable the Adidas marketing strategy to build a company that has lasted for 73 years.

About Adidas company

Source - GamePlan

Adolf Dassler founded the firm at his mother's house for selling soccer products, where he was joined by his elder brother Rudolf in 1924. Both the brothers split, post which Rudolf created the famous Puma brand, while Adolf continued with Adidas.

The company acquired Reebok in 2005 and repositioned Reebok to align with Adidas' brand values. A series of such acquisitions allowed Adidas to gain market share and dominance in the sporting goods industry.

Adidas' marketing strategy

Adidas has worked for more than 70 years to build the brand that it is today. The Adidas strategy for marketing emphasizes quality, innovation, diversification, and heavy-budget advertisements to stay as one of the best brand in a competitive market.

Let's analyze the same using 4P marketing analysis:

Adidas Brand Target Market

For its marketing strategy, Adidas' target audience includes athletes and youth between the age group of 20 to 30. Another target audience of the Adidas brand is 13 to 18-year-old athletes as they believe the youth are the future generation of prominent athletes.

Source - Adidas

But overall, Adidas has taken an approach of broad customer development as a result of which their target market includes people of any age or demographic passionate about sports culture and being fit.

Source - keishelleeadidas

Adidas' product lines include a range of t-shirts, hoodies, shorts, sporting equipment, etc apart from shoes. Their apparel includes sweaters, shorts, tracksuits, jackets, swimsuits, sports bras, hoodies, and other items.

To produce such products with good quality in a scalable manner, Adidas collaborates with many researchers, creators, designers, and open source innovations to shape its sporting goods. For example, Adidas partnered with Parley for the Ocean to use the plastic waste from oceans and beaches for manufacturing shoes.

You can learn more about the innovation and watch documentaries - Adidas X Parley shoes

Overall, the brand's product portfolio is well-rounded, offering outstanding options in many vital areas.

To compete with Nike which had started to sell sporting equipment, Adidas too released its collection of backpacks, sunglasses, goggles, and watches to capture the market. This includes training equipment and yoga accessories too.

Source - Adidas Hardware

As mentioned, the Adidas marketing strategy also targets young audiences as a part of diversifying its product portfolio. It has a dedicated collection called Adidas Neo that sells casual footwear for young adults and children.

Adidas, even though has premium pricing, indeed keeps in mind its major competition across Puma, Nike, and other upcoming startups to price its products. It also follows the skimming pricing strategy, where newly launched products are kept at premium prices, and their value drops as they get out of fashion.

The Adidas brand spends a ton of money on traditional advertising methods. This includes billboards, TV, newspapers, magazines, etc. To compete with Nike, one of its strategic growth areas is to leverage digital marketing with social media, influencer marketing, and paid ad spending.

Adidas is also very actively involved in sponsoring sports teams, which includes big names like Real Madrid, England, South Africa cricket teams, United Kingdom Football, etc. Many professional athletes also form a part of its influencer campaigns.

Distribution Strategy

Source - Infinity Mall

Adidas, with its high speed manufacturing prowess and production process, has more than 500 independent factories across 55 countries. All its products are available in its own retail stores in malls, independent showrooms, other mega marts like Walmart, online stores like Amazon/Myntra, and its own eCommerce store for direct purchases.

The two sportswear giants' competition - Adidas vs Nike

Adidas and its main competitor Nike have nurtured their own sports fans in a fierce competition ruled by marketing spending. Consumers are loyal and both products are in high demand, but looking at their marketing strategy, one can find many differences stemming from their business ideology and country of origin.

Adidas has focused on tennis and soccer players, while Nike has focused on basketball and runners as its target audience. Within their segments, both have diversified to make sporting goods and equipment to cater to all their needs.

Their country of origin also plays an important role in how these brands market themselves. Being a U.S-based Brand, Nike focuses on its domestic market and many of its products are suited to American taste.

While Adidas, which is a German brand, has designed its products more suited to European feet and weather conditions. Its speedy manufacturing processes and production processes are enabled by German technology. Their German branding which is known for product excellence is indeed a unique selling point that gains potential consumers' trust across the world.

What makes Adidas' marketing strategy unique?

Building a company that lasts more than 70 years requires consistent branding efforts and adaptive business operations. Some key aspects of the Adidas marketing strategy that helps it stand out include:

Adidas digital marketing strategy

Source - SocialInsider

Adidas has its own eCommerce store is today one of its fastest growing revenue channel. For targeting the younger crowd which is more online, it's even more important today to maintain a strong digital marketing strategy. Its social media posts promote sustainability, action, inspiration, and a modern outlook.

To achieve this, Adidas itself went into digital transformation to become a digital company. Today, the company spends most of its marketing budget on digital campaigns and social media - as per MarketingWeek digital analysis of the brand.

Strategic Cities

Adidas makes its presence strong in certain cities of strategic importance and that are culturally influential. This includes prominent names like Paris, Tokyo, London, Shanghai, Los Angeles, and New York.

It is known that these cities influence fashion trends across the world. Many other strong competitor of Adidas also focus on these cities to ensure success there, post which they distribute the product worldwide. This forms a concentrated marketing strategy that helps reduce overall marketing efforts and budget if done right.

Memorable marketing campaigns by Adidas

Adidas' ads successfully create excitement and espouse inspiration to its viewers. They have worked with several professional athletes, musicians, actors, and influencers who align with its brand values. Some notable ad campaigns include:

Your future is not mine

This ad targets the younger generation, a customer segment that is of growing importance for the Adidas company. With futuristic visuals, the ad inspires one to take the future into your hands.

Muhammad Ali VS Laila Ali

The Impossible is Nothing campaign is a unique one, where they use technology to rework Muhammad Ali's images from his real-life matches to compete against his daughter, Laila Ali. This Adidas-created ad is a great use case of using AI for taking creative execution for ads to another world.

Partnership with Kanye West

Adidas partnered with Kanye West to release branded footwear - Adidas Yeezy and accessories that would appeal to his fans. Recently, due to Kanye's unfavorable behavior, the company cut ties on this deal, though it will continue to sell its shoes.

Key takeaways from Adidas marketing strategies

If you're working on building a retail business, there is a lot to learn from the Adidas marketing strategy and the founding story as well.

Here are some major takeaways:

Focus on building a quality supply chain

The Adidas company is successful today due to its strong focus on ensuring its product quality is at par with what its upper middle class and above target market find appealing. If you have good quality products, you can always sell, upsell and cross-sell across the world. Adidas ensures its products are also consistently available worldwide.

Don't neglect digital marketing

Adidas started to lose its market share with Nike due to its lackluster digital presence. Recently, it has vowed to regain its share by making digital as a key part of its overall marketing strategy. In today's age, one cannot neglect to be a digital company, especially post-pandemic.

Target the root cause of trend formation

Adidas smartly focuses on key cities that are responsible for fashion trends than doing any spray-and-pray approach to sell across the world. Adidas works to ensure the people of these cities use its products, while the rest gets taken care of via word of mouth.

Adidas is today's world's number 2 brand, just behind Nike. With its recent digital transformation, the Adidas digital marketing strategy would again create fierce competition in the sports retail market. If you enjoyed this case study, you can also get more retail-marketing insights from Nike's marketing strategy or beverage brands like Pepsi , Gatorade , and Monster Energy .

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With sport playing an increasingly important role in more and more people’s lives, both on and off the field of play, we operate in a highly attractive industry. Based on our deep understanding of our consumer and the authenticity of the adidas brand, we push the boundaries of products, experiences and services. We do so according to our strategy ‘Own the Game,’ which allows us to fully capitalize on the acceleration of favorable long-term structural trends

OUR PURPOSE: THROUGH SPORT, WE HAVE THE POWER TO CHANGE LIVES

We will always strive to expand the limits of human possibilities, to include and unite people in sport, and to create a more sustainable world.

OUR MISSION: TO BE THE BEST SPORTS BRAND IN THE WORLD

We are the best when we are the credible, inclusive, sustainable leader with a first or second position regarding market share in each strategic category in the long term.

OUR ATTITUDE: IMPOSSIBLE IS NOTHING

We are rebellious optimists driven by action to shape a future together and we see the world with possibilities where others only see the impossible.

NEW STRATEGY ‘OWN THE GAME’ FOR THE PERIOD UNTIL 2025

‘Own the Game’ is our strategy that guides us through to 2025 – a plan rooted in sport. Sport is adidas’ past, present and future. ‘Own the Game’ puts the consumer at the heart of everything we do and is brought to life by our people. Our strategic focus is on increasing brand credibility, elevating the experience for our consumers and pushing the boundaries in sustainability. The execution of our strategy is enabled by a mindset of innovation across all dimensions of our business as well as our digital transformation. We own the game and drive significant growth.

Our new strategy ‘Own the Game’

Our consumers are at the heart of ‘Own the Game.’ Consumers drive structural trends in our industry through their preferences and behaviors. They strive to live active and healthy lives, they wish to blend sport and lifestyle, and they are digital by default as well as sustainable by conviction. ‘Own the Game’ captures those consumer-driven opportunities and carves out new ones for their benefit. In 2025, ‘Own the Game’ will not only have delivered overproportionate growth for adidas, but also deepened relationships with our consumers, as we continue to actively live our purpose ‘Through sport, we have the power to change lives.’

Credibility

We are a leading brand thanks to our credibility in both sport and culture. To continue to excite our consumers with innovative concepts that support our mission, we sharpen our brand, refine our product offering and leverage partnerships to further enhance our credibility with consumers.

To grow long-term relationships with our consumer, we excite and empower them by creating personalized experiences in both digital and physical spaces. With this in mind, we accelerate our transformation into a direct-to-consumer-led (‘DTC-led’) business built around membership.

Our commitment to sustainability is truly holistic and deeply embedded into how we have done business for over two decades. It’s rooted in our purpose ‘Through sport, we have the power to change lives.’ As we continue to be pioneers in sustainability, we move from strong stand-alone initiatives to a comprehensive consumer-facing program with a sustainability offering at scale.

Our consumers are at the heart of ‘Own the Game.’ Consumers drive structural trends in our industry through their preferences and behaviors. They strive to live active and healthy lives, they wish to blend sport and lifestyle , and they are digital by default as well as sustainable by conviction. ‘Own the Game’ captures those consumer-driven opportunities and carves out new ones for their benefit. In 2025, ‘Own the Game’ will not only have delivered overproportionate growth for adidas, but also deepened relationships with our consumers, as we continue to actively live our purpose ‘Through sport, we have the power to change lives.’

To successfully deliver on our five-year strategy, we empower our people to truly own the game. Our people strategy comprises three key pillars: Leadership, Betterment, and Performance , underpinned by Diversity, Equity, and Inclusion.

• Leadership: We grow our people to demonstrate leadership at all levels of the organization, to empower and inspire others, so that everyone can realize their potential in our company. By taking ownership, showing courage and driving innovation our people can own the game.
• Betterment: We are committed to building the strategic capabilities required to execute our strategy. We do so by creating an employee experience that attracts talent and provides relevant learning and career-building opportunities to upskill and reskill for the future.
• Performance: We evolve our performance management philosophy to clearly articulate our ambition to win, to play by our values, to embed a strong feedback culture, and to recognize both outstanding individual and team results.
• Diversity, Equity, and Inclusion: We are committed to providing an equal starting line for all our people, ensuring that everyone has the same career opportunities. One of our commitments is to increase the share of women in management positions (Director level and above) globally to more than 40% by 2025.

CREDIBILITY

• Sport: We focus on the most important sport categories: Football, Training, Running, and Outdoor. Football is the biggest sport in terms of viewership, while Running, Training, and Outdoor are the biggest participation sports. Our products in these categories are built for sport and worn for sport.
• Lifestyle: To tap into the biggest commercial opportunity for our brand, we sharpen our brand architecture by introducing a new consumer proposition called ‘Sportswear’. These products are born from sport and worn for style. At the same time, we extend Originals, which is inspired by sport and worn on the street, into the premium segment through top-quality materials and craftsmanship.
• Women: We execute a cross-category plan to achieve product excellence and elevate the women’s experience through our membership program to become her indispensable sports brand. Our goal is to grow currency-neutral net sales for our Women’s business at a mid-teens rate per annum on average between 2021 and 2025, thereby significantly increasing the Women’s share of our overall business.
• Partnerships: We amplify our credibility through our partnerships by leveraging their power, authenticity, and reach. We expand our portfolio of partners, which already includes Beyoncé, Jerry Lorenzo, Kanye West, Pharrell Williams, Stella McCartney, and Yohji Yamamoto, all of whom continue to play a significant role in wowing our consumers on the lifestyle side. Likewise, we continue to leverage our partnerships with the biggest symbols in sport, be it with teams like Bayern Munich or Real Madrid, athletes like Lionel Messi or Mikaela Shiffrin, or events like the Boston and Berlin Marathons.
• Membership: With the launch of our membership program in 2018, we laid the foundation for offering personalized experiences to our most valuable consumers. Through membership, we reward engagement and purchasing activity by offering exclusive hype products, access to launches and special events, and more. We are now ready to take this to the next level with the goal of increasing our member base to around 500 million by 2025. In 2021, we reached 240 million members and are well on track to achieve our 2025 ambition.
• DTC-led: E-commerce continues to be our most important store. Both adidas.com and the adidas app are seeing enhancements across the entire consumer journey. By 2025, our e-commerce business is expected to account for between € 8 billion and € 9 billion of our company’s net sales. In 2021, we reached a level of € 3.942 billion . While e-commerce is the pinnacle of our DTC strategy, our physical stores continue to play a crucial role in creating a physical and emotional connection with our brand. Retail formats will be digitized with fully fledged omni-channel capabilities. The DTC business, comprising our e-commerce as well as our physical stores, is projected to account for around half of the company’s net sales by 2025. In 2021, our DTC business accounted for 38% of the company’s net sales. We also continue to leverage our strong relationships with strictly selected wholesale partners and ‘win-with-the-winners’ to ensure a holistic experience for the consumer no matter the point of sale.
• Key Cities: We are building on our ‘Key Cities’ portfolio of Tokyo, Shanghai, Paris, London, New York and Los Angeles by adding Mexico City, Berlin, Moscow, Dubai, Beijing, and Seoul. These cities represent the beating heart of our global consumer experience and exert influence on the rest of the world, while at the same time offering commercial opportunities as urbanization continues.
• Strategic markets: We focus on Greater China, North America and EMEA to bring exciting consumer experiences to life, pursuing a tailored approach that appeals to local trends. Our ambition is to gain market share in all three strategic markets, which are expected to jointly account for around 90% of net sales growth until 2025.

SUSTAINABILITY

• What we offer: We keep pushing the boundaries of our sustainable offering, so that our consumers are able to choose from a uniquely comprehensive range. By 2025, nine out of ten of our articles will be sustainable. How we do this revolves around how we expand and innovate our 3-loops: made from recycled materials, made to be remade, or made with natural and renewable materials. We define articles as sustainable when they show environmental benefits versus conventional articles due to the materials used, meaning they are – to a significant degree – made with environmentally preferred materials.
• What we do: We are committed to reducing the CO 2 e footprint of our product offerings as we work to reach climate neutrality by 2050. We achieve this through initiatives such as driving zero-carbon within our own operations and promoting environmental programs along our entire value chain in close cooperation with our suppliers.
• What we say: We are vocal about our efforts that focus on creating low-impact products that are made to be remade. To guide our consumer to make more sustainable choices, we communicate clearly and consistently, with simple measures that make it easy to understand our ambitions and our progress.

INNOVATION AND DIGITAL

Two strategic enablers set us up for success. The first is applying a mindset of deep and broad innovation across all dimensions of our business. The second is using the speed and agility of Digital throughout our entire value chain. These strategic enablers are particularly powerful when it comes to executing on the three strategic focus areas – Credibility, Experience, and Sustainability – that support us in intensifying our focus on the consumer and driving growth.

FINANCIAL AMBITION FOR 2025

‘Own the Game’ is designed to yield growth in terms of revenue, profitability, and cash generation, which in turn creates long-term value for our shareholders. Therefore, we are focused on rigorously driving execution and managing all of the factors under our control, which enables us to:

• Achieve top-line growth above industry average: We aim to increase currency-neutral revenue at a rate of between 8% and 10% per annum on average in the period between 2021 and 2025, where 2021 is the base year.
• Further expand both gross and operating margin: We expect to expand our gross margin to a level of between 53% and 55% and our operating margin to a level of between 12% and 14% by 2025.
• Grow our bottom line sustainably: We plan to grow our net income from continuing operations by an average of between 16% and 18% per annum in the period between 2021 and 2025, where 2021 is the the base year.
• Invest in future organic growth: We are committed to reinvesting between 3% and 4% of net sales into our business by means of annual capital expenditure.
• Deliver attractive cash return to shareholders: Based on the material growth in terms of revenue and profitability, we will generate substantial cumulative free cash flow until 2025. The majority of it – between € 8 billion and € 9 billion – will be made available and distributed to shareholders through a consistent dividend pay-out in a range between 30% and 50% of net income from continuing operations, complemented by share buybacks. In 2021, we bought back shares in an amount of € 1 billion . Including the dividend payment of € 585 million in May, we already returned nearly € 1.6 billion to our shareholders during the first year of ‘Own the Game.’

As a global leader in our industry with a strong strategy in place, we are very well positioned for the years ahead.

Under the ‘Lifestyle’ category, we subsume all footwear, apparel, and ‘accessories and gear’ products that are born from sport and worn for style. ‘adidas Originals,’ which is inspired by sport and worn on the street, is at the heart of the ‘Lifestyle’ category.

Leadership, betterment, and performance

Leadership, Betterment, and performance are the three pillars of our people strategy:

• Leadership: We will develop leaders to own the game and act as role models empowering all people to realize their possibilities.
• Betterment: We believe in a mindset of continuous learning and improvement and are committed to providing relevant learning opportunities to upskill and reskill for the future.
• Performance: We build the best teams that play to win, recognizing and rewarding both individual and team performances.

Climate neutrality

Climate neutrality refers to a concept of a state in which human activities result in no net effect on the climate system. Achieving such a state requires balancing residual emissions with emission removals as well as accounting for regional or local bio-geophysical effects of human activities that, for example, affect surface albedo (i.e., solar radiation reflected by a surface) or local climate (definition according to ‘Intergovernmental Panel on Climate Change (IPCC) Glossary‘).

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Marketing strategy of Adidas

Posted by Zander Henry on Aug-22-2018

1. The vision of Adidas

The vision of Adidas is to be the leading quality service and product provider for customers. Being the best and the leading player means that Adidas marketing strategy and operations focus on:

• Providing high quality of products and services
• Providing value to customers
• Concentrate on building customer experience

2. The mission of Adidas

Adidas marketing strategy is grounded in its mission. The mission for Adidas is to be the favorite brand of the customers. This mission is essential for the marketing strategy of Adidas as it focuses on all operations and marketing activities in the direction of:

• Consumer centrism
• Using research to understand and influence consumers

3. Brand Equity of Adidas

Understanding and knowing the brand equity is vital for directing and giving meaning to the marketing strategy of Adidas. The knowledge of brand equity will help in shaping Adidas marketing strategy effectively – thereby facilitating the growth of business for Adidas.

3.1. Brand awareness

• Adidas has high brand awareness because of international operations
• The company focuses on higher budget allocation in the country of origin
• Each market for Adidas has modified marketing and strategic directives and plans

3.2. Brand association

• Adidas is directly associated with the brand name and product category
• Adidas has a broad product portfolio
• Adidas is associated with promising and delivering quality and innovative products
• Adidas is also associated with excellent customer service

3.3. Brand loyalty

• Adidas has been successful at gaining high consumer loyalty because of unique and influential marketing strategy
• Adidas has a global customer base
• Adidas keeps adding value addition to the products and product portfolio to keep consumers engaged

3.4. Brand asset

• Adidas has a substantial brand value
• Adidas also enjoys the high financial worth
• Adidas focuses on building a reliable and robust employee base

3.5. Brand element

• Adidas uses the brand element as a means of competitive advantage
• Uses adaptability in product, services, and marketing to meet different cultural demands

4. Situational Analysis of Adidas

The situational analysis will help in developing the marketing strategy of Adidas by conducting a thorough market analysis. This market analysis will aid in understanding the compatibility between external opportunities and other factors, and internal strengths – to be used to maximize the marketing influence of Adidas.

4.1.1. Strengths

Adidas marketing strategy can benefit from the following internal advantages:

• Strong brand image
• Global distribution network
• Investment in market research

4.1.2. Weakness

Adidas faces challenges in marketing strategy because of the following weakness:

• Slow organizational processes
• High product prices

4.1.3. Opportunity

Adidas has the following possibilities of business growth:

• Green lifestyles
• Regional expansion
• Diversification

4.1.4. Threats

Adidas faces business threats because of the following factors:

• Increased competition
• Increased imitation

4.2. PESTEL

4.2.1. political.

• Adidas operates I markets with political stability
• Adidas has funding support from the government for small businesses

4.2.2. Economic

• Adidas enjoys high sales because of higher GDP
• Lower interest rates make business expansion and loaning easier for Adidas
• Low inflation strengthens the financial position of Adidas

4.2.3. Social

• Higher education and awareness increases sales of Adidas predict
• Adidas focuses on understanding consumers and fulfilling their demands through its offerings

4.2.4. Environmental

• Adidas has an active CSR program
• Adidas ensures environmental safety in all its operations

4.2.5. Legal

• Adidas is aware of local and global laws of business and human resource management
• Adidas abides by all statutes – especially labour law, discrimination law, and employee safety laws

4.3. Porter’s Five Forces

4.3.1. threat of substitutes.

• High risk of replacements
• Substitutes offer similar products at low prices

4.3.2. The threat of new entrants

• New entrants need high financial investment
• New entrants need updated technology for keeping par with industry progress

4.3.3. Bargaining power of buyers

• Sales made to end consumer directly
• Stocking of products at retailers, as well as own-controlled retail outlets

4.3.4. Bargaining power of suppliers

• Multiple suppliers of raw materials
• Suppliers are chosen after careful inspection, and through contracts

4.3.5. Industry rivalry

• High industry rivalry
• Players offer similar products
• Players compete through marketing to influence consumers

5. Marketing Objectives for Adidas: The Marketing Strategy of Adidas

Adidas marketing strategy has the following objectives for the current financial year:

5.1. Increased market penetration

• Increase top of mind recall for Adidas brand and products by 30%
• Increase sales for Adidas by 40% by the third quarter of the financial year
• Achieve a trial rate for new products of 10% during the first quarter of the launch
• Increase consumption rate of existing products by 45% during the current financial year

5.2. Enhanced brand recognition

• Increase top of mind recall by 65% during the current fiscal year
• Increase brand recognition by 80% during the first two quarters of the current financial year

5.3. Increased use of digital marketing

• Acquire 25,000 new online customers during the financial year
• Increase website traffic through using blogging and email tactics effectively by 505 during the first two quarters of the year
• Acquire 65,000 likes on the official Facebook page of Adidas during the first quarter of the financial year

5.4. Retail Growth

• Contract with five more leading supermarkets in the first quarter of the year to stock product at eye level shelving
• Contract with two leading online retail sites – eBay and Amazon – to stock our products, and increase accessibility for consumers globally by the second quarter of the financial year

6. Segmentation of Adidas

Adidas marketing strategy uses different means of segmentation to reach an increase in market penetration.

6.1. Demographic segmentation

Adidas has consumers of age groups

• 20-45 years
• 45-60 years

6.1.2. Gender

• Adidas has a broad product portfolio for both males and females

6.1.3. Life-cycle stage

Consumers for Adidas, according to the marketing strategy, are in the following various life cycle stages:

• Single students
• Single graduates
• Single people living at home/not living at home
• Young couples without children
• Married couples with one to four children – all at home
• Married couples with one or two children in college
• Old married couples with an empty nest

6.1.4. Occupation

The marketing strategy devises the following occupations for Adidas consumers:

• Professionals
• House makers

6.2. Psychographic segmentation

6.2.1. social class.

• Adidas focuses on segments of middle-upper and upper social classes

6.2.2. Lifestyle

Adidas consumer segments have the following lifestyle characteristics:

• They aspire towards a better and higher living standard
• They want to be successful – professionally and socially
• They are not hesitant to try new things, products and services in life
• They are confident in their behaviour and attitude
• They are mainstreamers in their fields

6.3. Geographic segmentation

6.3.1. region.

• Adidas has operations spread across the western developed countries such as America, the united kingdom, and the Netherlands
• It also has operations in emerging markets such as Brazil, India, and China

6.3.2. Density

• The focus of Adidas remains on the urban part of the population

6.4. Behavioural segmentation

6.4.1. personality.

The marketing strategy defines personality characteristics for the consumers of the brand of Adidas, such as:

• Hardworking

6.4.2. Usage frequency

• The consumer segments for Adidas are regular and frequent users of the product

6.4.3. Benefits sought

• Consumers seek functional benefits
• The focus, however, is more on the emotional benefits reaped from the consumption of the brand

6.4.4. Degree of loyalty

• Consumers are very loyal
• Have an emotional attachment with the brand

7. Targeting of Adidas Positioning of Adidas

The marketing strategy of Adidas targets consumer groups based on segmentation as follows:

7.1. Target market

• The target market for Adidas is from middle to upper class
• The target market is ambitious and desires to purchase high-end consumer products
• This target market also seeks affordability
• To meet target market expectations, the Adidas focuses on quality control

7.2. Mass marketing

• The marketing strategy of Adidas focuses on mass marketing
• This also requires unique marketing designs and product promotion programs
• Adidas makes use of one strategy to influence all segments

7.3. Undifferentiated marketing strategy

• Adidas does not differentiate between market segments
• It uses a single marketing strategy to target all segments and consumer groups
• Based on this, Adidas also created the marketing mix under the marketing strategy as a singular one for the whole market – regardless of the segmentation divides.

7.4. Focus on quality

• Adidas has created, developed, and maintained a brand that satisfies all consumers under the undifferentiated marketing strategy and mass marketing
• No compromise on quality has been made in the broad product portfolio
• To ensure the influence of a single marketing strategy, the Adidas has also adopted a consumer-centric approach in its overall marketing strategy and operations as well
• This was used for targeting strategy as well as for maintaining growth

8. Company Competitive Advantage in the marketing strategy of Adidas

The marketing strategy of Adidas stands out from the clutter and competition. Adidas has also achieved a sustainable competitive advantage in its marketing strategy. This is because of the following factors that Adidas has utilized:

8.1. Cost-effectiveness

• Adidas focuses on reaching consumers effectively rather than grandeur
• Adidas focuses on developing an integrated marketing approach
• The use of digital marketing efficiently and expertly has helped the company reach a wider audience at a lower cost
• Adidas has in-house copywriters for marketing campaigns which also helps in controlling costs
• Adidas also focuses efforts on ground activities – which are less expensive than commercial marketing tactics

8.2. Innovation

• Adidas has stayed updated with latest developments in marketing research and marketing knowledge
• Adidas makes use of new and innovative tactics to reach its target consumers
• Adidas also employs top of the field marketers to facilitate its marketing strategy and promotional campaigns
• Each marketing campaign launched by Adidas is effective catchier and more influential than the previous one

8.3. Strong market research and consumer understanding grounded

• Adidas marketing strategy is strongly grounded in consumer and market research
• Adidas makes informed marketing campaigns and goals based on consumers’ behavioural feedback
• Adidas also incorporates consumer feedback in its marketing strategy
• Adidas marketing strategy is based on market trends, and consumer needs and wants

8.4. Making effective use of emotional appeals

• Consumers’ emotional needs strongly influence all marketing objectives and marketing goals set by Adidas
• In addition to fulfilling functional needs, Adidas also tries to fulfil the emotional and psychological needs of the consumer
• Adidas tries to build a strong emotional bond with the consumer, which also results in high consumer loyalty

9. Distribution Strategy of Adidas

Adidas marketing strategy highlights the use of the following distribution strategy to maximize reach and accessibility for consumers.

9.1. Intensive distribution strategy

• Adidas makes use of intensive distribution strategy because it is mass marketing
• Adidas’s marketing strategy is based on undifferentiated segments, and thus an intensive distribution strategy allows high penetration and reaches in the overall market
• With the use of the intensive distribution, Adidas tries to maximise its coverage of the markets where it's present
• For achieving the intensive strategy, the company uses hardcore 360-degree integrated marketing strategy and campaign to reach all consumers, across all segments in the market.

9.2. Direct distribution strategy

• Adidas uses direct distribution country of origin as well as in locations where it has subsidiary operations
• The Adidas also makes use of modern retailing channels
• Also, Adidas makes use of e-commerce and makes a sale through online retailers, as well as through the company website
• Direct distributions have allowed Adidas to increase market penetration and accessibility for consumers

9.3. Indirect distribution strategy

• This strategy is largely used for offshore operations where the Adidas does not have a subsidiary
• In these offshore locations, Adidas largely works through the export model
• This makes use of several intermediaries in between, before the product by Adidas reaches the target consumers
• Intermediaries for Adidas include not only the end retail outlets, but also sales agents, retail agents, and distribution agents in offshore locations

9.4. Selective distribution strategy

• For some products of its portfolio which are premium in nature, Adidas makes use of selective distribution channel
• Adidas has maintained a few outlets in the country of origin, and in selected offshore markets for these products
• These placements and locations are chosen based on the niche market that Adidas has for its premium products
• These locations, placements, and marketing strategy helps make the company’s product selectively, but readily accessible for its niche target audience

10. Competition Analysis in the marketing strategy of Adidas

The industry in which Adidas operates is very responsive to market and consumer trends. Adidas, therefore, needs to be vigilant in its market strategy towards competition – to make sure that it maintains its competitive advantage.

10.1. Strategic Group Analysis

• Adidas competes with direct and close competition based on quality and price
• Consumers choose between different companies from the industry based on their functional offering
• Consumers have progressively evolved to strengthen loyalty and form an emotional bond with products that they consume
• Adidas also competes, thereby, with close competition for building stronger brand image, increasing consume loyalty, and for forming strong emotional ties with the consumer

10.2. Industry rivalry

• Adidas experiences high industry rivalry
• The barriers to entry for the industry are low, and new entrants gain easy access in the industry
• The number of local as well as global players is increasing

11. Marketing mix of Adidas

The marketing mix for Adidas as per the marketing strategy is the following:

11.1. Product

• Adidas provides mass marketed products for all segments across the market undifferentiated
• Adidas also provides some selected, premium products to niche customer groups
• All products in the portfolio consistently maintain high quality
• All products are tailored to meet consumer specifications, demands and needs across different regional markets
• The Adidas maintains a high focus on innovation in products and introduces new products frequently to keep the consumers engaged

11.2. Place

• Adidas wants to have a close, emotional and personal relationship with its consumers
• The company maintains high control in its distribution strategies – especially through direct distribution strategy
• The company has a presence in leading supermarkets
• The Adidas also has company-operated stores in malls, and otherwise to make products accessible to consumers easily
• Adidas also makes use of e-commerce to increase penetration and sales

11.3. Price

• The Adidas prices its products so that its target consumers can afford it easily
• Adidas uses relative pricing strategy for its products
• The price of Adidas’s products include not only the high quality raw materials and value additions but also the enhanced customer experience they deliver
• The company’s pricing strategy allows it to enjoy stable revenue and profit growth

11.4. Promotion

• The Adidas has a high budget allocated towards marketing activities
• The Adidas invests substantially in digital marketing activities to reap high and effective results
• Use of digital marketing has also allowed Adidas marketing strategy to cap costs and expenses
• Adidas also takes part in direct consumer engagement through on-ground activities where the company initiates trials
• Adidas also invests in traditional media channels to reach maximum consumers in the market

11.5. People

• Adidas has a large workforce across different companies
• This workforce is continually trained to become experts in their respective fields of operations
• Adidas hires without discrimination
• Adidas ensures that its employees remain motivated through building an inspirational and creative organizational culture
• Adidas focuses on also building and maintaining organizational commitment and loyalty in its employees

11.6. Process

• All activities at Adidas - from raw material procurement to the final sale to the end consumer - undergo systematic processes
• The processes at Adidas are well defined, and well communicated to all employees
• All employees are trained to follow the processes internally to ensure consistently high quality as well as timely production and deliveries
• The systematic processes also ensure a smooth running of operations at the Adidas

11.7. Physical evidence

• The physical evidence for Adidas includes the company logo, company store designs, and the product packaging
• Satisfied and excited customers in the retail spaces of Adidas, as well as during product consumption create a bubbling and an inviting atmosphere
• The e-commerce website for retail by Adidas is also designed with a friendly customer interface to allow maximum interaction with the brand
• The store designs created by Adidas for its retail space allow consumers maximum interaction with the products directly.

12. Promotional tactics for the marketing strategy of Adidas

12.1. digital marketing.

• The company uses social media for reaching consumers effectively
• The Adidas interacts with the consumers directly, and engages with them, answers their queries and takes their feedback
• The company also shares information and build relationships with consumers through digital marketing
• Adidas also makes use of blogging, emails, and content creations as a means of digital marketing

12.2. Conventional marketing

• The company uses a 360-degree approach in its marketing strategy
• This means that the company makes use of traditional marketing channels as well – such as TV, magazine adverts, and out of house placements

12.3. Influencers

• For direct, on-ground engagement, the company uses influencers
• Influencers interact with consumers directly, or through their channels of communication as a means of content creation and endorsing the Adidas brand

13. Monitoring and evaluation of the marketing strategy of Adidas

13.1. changes in sales.

• Adidas regularly tracks its sales to identify the effectiveness of its marketing strategy
• Increase in sales reflect the success of marketing strategy of Adidas
• Sometimes, Adidas experiences increase ins ae after some time of the launch of the marketing promotions

13.2. Surveys and focus groups

• Adidas frequently conducts focus groups and surveys to identify its brand worth
• These methods also help the company identify brand value, brand recall, and brand recognition
• Focus groups allow Adidas to gather feedback on its marketing strategy and helps it understand consumers better
• Effectiveness of marketing strategy of Adidas can also be seen through the revenue and profit growth
• Return on investment allows Adidas to effective gauge the effect and influence of the marketing strategy, and measure its success

13.4. Attainment of marketing objectives

• All marketing objectives set by Adidas are SMART
• The quantitative set against each of the marketing objective can facilitate attainment evaluation for the overall marketing strategy
• Successful and timely attainment of these marketing objectives highlight the success of the marketing strategy of Adidas

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