Adidas

Marketing strategy of Adidas

December 15, 2017 By Hitesh Bhasin Tagged With: Marketing strategy articles

Adidas employs more than 53,731 people in over 160 countries produce more than 660 million product
units every year and generate sales of € 14.5 billion (all figures relate to 2014). These numbers alone can
easily suggest that Adidas Group is quite a complex organisation. True. But they keep things simple, lean
and fast.

Segmentation, targeting, positioning in the Marketing strategy

of Adidas
Biggest sportswear manufacturer of Europe & one of the biggest in the world, Adidas is segmented
based on demographic, psychographic & behavioural factors. The Adidas group has four brands in its
strong portfolio – Reebok, Adidas, Rockport & taylor made meant for different segment customer
groups.

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Adidas uses differentiated targeting strategy to target young adults, adults as well as children who have
passion for fitness & sports. Although it targets customers in the age group of 13-40 years but majority
of its customers are of 15-30 years of age who hail from upper middle class or the luxury class of
customers.

User & benefit based positioning are the strategies Adidas uses to create distinctive image in the mind of
the prospective consumer. By emphasizing the value of quality products from a trusted brand Adidas is
able to maintain its brand essence. The portfolio is divided as follows.

They have Adidas-performance in Competitive sports,

Reebok & Reebok classics in Active sports & casual sports, &

Adidas originals, Adidas Fun, Rockport in Sports fashion.

Marketing mix – Click here to know about the Marketing mix of Adidas

SWOT analysis – Click here to know about the SWOT analysis of Adidas

Mission in the Marketing strategy of Adidas

“The Adidas Group strives to be the global leader in the sporting goods industry with brands built on a
passion for sports and a sporting lifestyle. We are committed to continuously strengthening our brands
and products to improve our competitive position”.

Tagline – “Impossible is Nothing”. This is one of the most famous tagline by the
company. This tagline, which showcases the importance of fitness and importance of striving hard for
anything you desire, is one of the biggest asset the company has, and possibly summarises the marketing
strategy of Adidas.

Competitive advantage in the Marketing strategy of Adidas

One of the few competitive advantages that Adidas has is its distribution network, its product quality
and its brand equity. Globally it has 2400 stores accounting $4.3 billion business (2014 data). In order to
associate itself with the community it has sponsored many world sport events such as FIFA, UEFA, NBA,
Cricket & Olympics. At the same time, over the years Adidas has been known to give the best products in
the market which are always comfortable, beyond normal and long lasting.

Strong relationship with the organizations such as International Labour organization, International
Finance Corporation has given the company edge over competitors for a sustainable business.

BCG Matrix in the Marketing strategy of Adidas

BCG matrix helps in identifying the strategic position & future course of actions of the SBU’s (strategic
business unit).

Adidas has four brands under the Adidas group out of which:
Adidas & Reebok are stars; Both of these individual brands have a strong market share but at the same
time the competition in this sports and fitness segment is very high. Other brands like Pume, Nike also
fight for a large share of the market.

Rockport & Taylor made is question mark – This is because their market share is low but at the same
time there is a good potential for these brands. But when this potential will actually benefit the company
in a large way is yet to be seen.

Distribution strategy in the Marketing strategy of Adidas

As the consumer environment becomes even more dynamic with trends quickly changing, Adidas is also
increasing its focus on anticipating these changes and responding with speed. They had aligned their
sales with distribution strategy to enable and propel a heightened consumer-centric Omni-channel mind-
set.

After analysing the purchase process of their customers, they came to conclusion that the interactive
experience and the availability, convenience and the size of the product offerings plays a major role in a
successful distribution strategy. In order to expand their distribution system they made the products
available through Exclusive stores (franchise model), Co-branded stores who source it from C & N and
distributors.

Brand equity in the Marketing strategy of Adidas

Sports centric activities predominantly revolving around social media & community connect programs
has helped Adidas to be one of the biggest players in the sportswear. Each brand and sub-brand is
responsible for bringing its own distinct identity and positioning to life, through the creation of products,
services and experiences that provide platforms and frameworks for long-term market share and
profitability improvements.

While Adidas and Reebok each have unique identities, heritages, technologies, designs and reputations,
the strategic principles and methods for driving future sales growth and profitability improvements are
common to both.
Competitive analysis in the Marketing strategy of Adidas
Adidas Group’s multi-brand portfolio gives them an important competitive advantage. Through their
brand portfolio, they seamlessly cover the sports and consumer segments defined as strategically
important to support their Group’s ambition to inspire and engage people to harness the power of sport
in their lives.

Adidas is doing well because of its differentiated positioning but Reebok, the brand Adidas has spent
years trying to firm up, but its situation is faltering.

Large firms such as Nike & Adidas have grown immensely over the last two decades. Their global reach
has expanded through all continents, which is attributed to the changing lifestyle of developing
economies & emergence of Internet, E-commerce firms.

Market analysis in the Marketing strategy of Adidas

Due to the presence of counterfeit products & high bargaining power of customers it is very difficult for
these players to sustain in the market. Although the offerings are meant for sports persons but major
chunk of its buyers are normal people professionals, young children who don’t mind switching to other
brands due to the changing competitive positioning worked upon by the players.

Industry is growing due to changing lifestyle, economics of the population & migration from Rural to
urban areas but at the same time demand supply mismatch & idle inventory is resulting into shrinking
margins of the players in this industry.

Customer analysis in the Marketing strategy of Adidas

Adidas customers consist of upper & Upper-middle class social groups. To be successful across consumer
segments, Adidas acknowledged that a strategy of mass production or mass marketing is no longer
sufficient.

Only by identifying and understanding consumer’s individual motivations and goals for doing sport, their
lifestyle, their fitness level, where they are doing sport and their buying habits will help them in creating
meaningful products, services and experiences that build a lasting impression and brand loyalty.

Nike
Marketing Strategy of Nike – Nike Marketing Strategy
March 6, 2018 By Hitesh Bhasin Tagged With: Strategic Marketing Articles

Founded in 1967 Nike has emerged as the most preferred footwear company for the athletes. However,
over the period of time, it extended its product line to apparels and accessories like clothing, socks,
digital devices, eyewear, and equipment for sports. Nike has achieved compounded annual growth rate
(CAGR) of 11% for the period of 5 years i.e. 2011-15 and revenue of $ 30,601 million.

Segmentation, targeting, positioning in the Marketing

strategy of Nike –
Nike uses psychographic segmentation variables to make its offerings more attractive to the target
customers. It uses separate campaign or strategy to cap the market potential of the different segments.

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Targeting is the important aspect of the marketing strategy, especially when a company is in different
businesses. Being present in footwear, sports equipment, clothing and many others Nike uses
differentiated targeting strategy.

Product and usage-based positioning are used by Nike to create the image in mind of the consumers.

Marketing mix – Here is the Marketing mix of Nike.

SWOT analysis – Here is the SWOT analysis of Nike.

Mission- “To bring inspiration and innovation to every athlete in
the world”

Vision- “Not Available”

Tagline-“Just do it”

Marketing Strategy of Nike - 1

Competitive advantage in the Marketing strategy of Nike

–
Outsourced Manufacturing Units: Nike receives footwear from more than 140 factories located
in 13 countries across the globe. Outsourcing of the manufacturing helps the company in keeping its
operational cost low and at the same time focus its competencies on sales and marketing activities to
drive the sales.

Strong product portfolio: Nike have strong product portfolio as being present in various
interrelated business segments is helping the company in retaining its customers and provide a bundled
products to them. Nike has subsidiaries such as Converse, Hurley and Jordan for driving growth with the
help of the different brands.

BCG Matrix in the Marketing strategy of Nike –

The Nike brand and its offering are Stars in the BCG matrix while Converse, Hurley and Jordan are the
question mark in the BCG matrix due to their presence in the limited countries.

Distribution strategy in the Marketing strategy of Nike –

Nike distributes its products worldwide through different channels such as resellers, supermarkets, e-
commerce sites, retailers, licensees and company-owned outlets. There are 697 Nike brand factory
stores, 106 inline stores and 99 converse stores and 29 Hurley stores globally.

Brand equity in the Marketing strategy of Nike –

Nike is the well-known brand globally and its association with the various sports events such as Cricket
world cup, FIFA cup, Olympics and many others has helped the company in creating high TOMA (top of
mind awareness) and brand pull.

Marketing Strategy of Nike - 2

Competitive analysis in the Marketing strategy of Nike –

The apparel, athletic footwear and sports equipment industry are highly competitive due to the
presence of a large number of local and international players. Nike competes with the company like
Lululemon, Puma, Adidas, V.F Corp., athletic UNIQLO and many others. The demand graph is shaped by
variables such as the change in the fashion, technology, taste and preferences of the customers. Factors
such as quality, performance, reliability, competitive pricing, connect with the consumer plays the critical
role for the companies operating in this business. Here are the Top Nike Competitors.

Market analysis in the Marketing strategy of Nike –

Business segments in which Nike operates has a large number of local & national players. The major
threat to Nike is the imitation that goes hand in hand in various markets which are affecting its revenues
and businesses. Also, Nike is in the industry which is by and large affected by the product life cycle which
means that sometimes it’s very difficult for the company to respond to the fad timely.

Customer analysis in the Marketing strategy of Nike –

Customers of Nike ranges from individual customers to companies. Nike targets customers from different
age groups and middle / upper-middle or upper-income social groups.

A Comparative Analysis of Strategies and

Business Models of Nike, Inc. and Adidas Group with
special reference to Competitive Advantage in the
context of a Dynamic and Competitive Environment
By Madeeha Kanwal

Strategy is about the most crucial and key issues for the future of organizations. Strategy is also
important to explore several strategic options, investigating each one carefully before making strategic
choices. The study incorporates a rigorous and systematic effort to uncover the strategies and its impact
on the company's performance by analysing case studies, articles and the annual report of Nike Inc. and
Adidas Inc. The study attempts to find out the relevance of the strategies adopted by these companies,
which are globally successful athletic apparel companies in the context of Bahrain. The findings of the
study highlight Nike's strategies which focus on innovation and emphasis on its research and
development department, provision of premium pricing for its customers, broad differentiation strategy,
market Segmentation Strategy and Closed-Loop strategy. The Adidas strategies focus on the broad
differentiation, innovation, trying to produce new products, services and processes in order to cope up
with the competition. It embraces a multi-brand strategy, emphasis on expanding activities in the
emerging markets, continuously improving infrastructure, processes and systems, foster a culture of
challenging convention and embracing change, foster a corporate culture of performance, passion,
integrity and diversity. These strategies coupled with its resources and unique capabilities form the basis
of sustainable competitive advantage for both the companies. INTRODUCTION: The strategy is a path
towards achieving the optimum goals of individuals, groups and organizations. In addition, it leads to a
best use of companies' available resources and it also guides the company to stay in a business
successfully and continuous improvements for its processes. The definition of strategy could be differ
from one author to another, but the most common definition is that the strategy is long term plans and
approaches towards the intended visions and objectives. It is a general framework that specified the
organizations' plans, policies and approaches to meets its objectives, goals and end results. The way an
organization used to shape its strategies could be differentiate from other organizations in order to make
its products unique and remarkable. Globally, companies formulate their strategies based on their
visions and reaching the satisfaction of customer's needs, requirements and expectations. Subsequently,
they use those strategies as a baseline to compare their actual performance with planned ones, to
evaluate the end results and ensuring the continuing organizational excellence. There are many kinds of
strategies that are pursued by the companies; Such as cost leadership, differentiation and the focus
strategies (Porter, 1985), services strategies, growth strategies. Based on the goals, the companies form
those strategies and they rank them upon the priorities. It is more than important for any organization to
put strategies and not any strategies; the correct strategies which are formulated after a long time of
studying and after numerous number of brainstorming among the top management members.
Therefore, those strategies then to be implemented by converting the organization's plans and policies
into real actions through the best use of available resources such as: human resources, budgets and
technological advance; in order to enhance the organization's performance, productivity and
sustainability.