EXECUTIVE SUMMARY

My project topic is "Adidas" which is a shoe company and I am

analyzing its Marketing Strategy. I have chosen this particular topic
mainly for two reasons. Firstly, since my childhood days I had great
interest in the shoes and I like to buy new shoes as and when it comes
in the market. The Shoe Company that I most admire is Adidas.
Secondly adidas grows as one of the best leading brand in the shoes
and other accessories which is admired by all types of generation.
Hence I have decided to do my project report on this company.

The Adidas mission has changed little since founder Adi Dassler began
making sports shoes in the 1920s: to be the best sports brand in the
world. The history of Adidas is one of consistently meeting the
evolving needs of the athlete. Focusing more on function and less on
fashion, Adidas strives to provide athletes with shoes that can make a
noticeable difference in their performance. Meeting athlete needs is
what makes Adidas the best. Adidas America has continued to build on
this history.

In February of 1993, Adidas acquired Sports Inc., a US-based sports

marketing company founded by former Nike executives Rob Strasser
and Peter Moore. Sports Inc. had been working in conjunction with
Adidas USA on the design, development, and marketing of the Adidas
Equipment line. This line helped rejuvenate and reposition the Adidas
brand in the United States by creating an exclusive line focused on
fulfilling the functional needs of the athlete and by utilizing the best
materials and athlete input in the tradition of Adi Dassler. It offered
moisture management, thermal insulation, weather protection, ease of

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movement, and safety, helping the athlete to perform more efficiently.
After the successful creation and launch of Adidas America

I have made a research on marketing of Adidas by questionnaire

method. The main aim of my research is to find out that how Adidas
hold to the market and what are the areas in which Adidas can improve
upon, in the questioner itself I have emphasis on the marketing of
Adidas and also about the current position of Adidas in market.
According to the response of my questionnaire, I have found that
Adidas and Nike are main competitors but Nike is more preferred
brand then Adidas. This is mainly for two reasons first Nike has more
variety and good looks then Adidas and second there outlets are more
then Adidas so the company must work upon these two thing to be the
world number one.

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 OBJECTIVES OF THE STUDY

• To study the marketing of Adidas and also about the current position
of Adidas in market

• To find out Adidas and Nike are main competitors but Nike is more
preferred brand then others.

• To find out that how Adidas hold to the market and what are the area
seen which adidas can improve.

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 COMPANY PROFILE

In the small German village of Herzogenaurach the world began its

love affair with Adidas (Ryno’s Company History). In 1920, Adolf
“Adi” Dassler brought to life those three little stripes. With his
brother, Rudolph, Dassler manufactured his first sports shoe, made for
training, after realizing the need for performance athletic shoes.
In1948, the Dassler brothers separated to form their own two separate
companies. Dassler formed Adidas and his brother formed Puma, both
headquarters in Herzogenaurach.

The Adidas mission has changed little since founder Adi Dassler began

making sports shoes in the 1920s: to be the best sports brand in the

world. The history of Adidas is one of consistently meeting the

evolving needs of the athlete. Focusing more on function and less on

fashion, Adidas strives to provide athletes with shoes that can make a

noticeable difference in their performance. Meeting athlete needs is

what makes Adidas the best. Adidas America has continued to build on

this history.

In February of 1993, Adidas acquired Sports Inc., a US-based sports

marketing company founded by former Nike executives Rob Strasser
and Peter Moore. Sports Inc. had been working in conjunction with
Adidas USA on the design, development, and marketing of the Adidas
Equipment line. This line helped rejuvenate and reposition the Adidas
brand in the United States by creating an exclusive line focused on

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fulfilling the functional needs of the athlete and by utilizing the best
materials and athlete input in the tradition of Adi Dassler. It offered
moisture management, thermal insulation, weather protection, ease of
movement, and safety, helping the athlete to perform more efficiently.
After the successful creation and launch of Adidas America

General Information

For over 83 years Adidas has been part of the world of sports on every
level, delivering state-of-the-art sports footwear, apparel and
accessories. Today, with total net sales of 6.1 billion and net income of
208 million, Adidas - Salomon is a global leader in the sporting goods
industry and offers the broadest portfolio of products. Adidas-Salomon
products are available in virtually every country of the world. Our
strategy is simple: continuously strengthen our brands and products to
improve our competitive position and financial performance.

The company's share of the world market for sporting goods is

estimated at around 15 percent.

Activities of the company and its approximately 100 subsidiaries are

directed from Adidas-Salomon AG's headquarters in Herzogenaurach,
Germany. Also located in Herzogenaurach are the strategic business
units for Running, Soccer and Tennis as well as the Research and
Development Center. Additional key corporate units are based in
Portland, Oregon in the USA, the domicile of Adidas America Inc. and
home to the strategic business units Basketball, Adventure and
Alternative Sports. The strategic business unit Golf is based in

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California. The business unit Winter Sports is in Annecy, France. The
company also operates design studios and development departments at
other locations around the world, corresponding to the related business
activity. Adidas-Salomon AG has approximately 13,400 employees
worldwide.

Turnover and Brand Image

The turnover of Adidas company has grown to 20Million US dollar in

year 2005-06. Almost 53% of the turnover is from sale of apparel and

accessories with the rest from footwear.

The Adidas brand is one of the most popular brands as determined by a

within brand survey of sportswear brands in the year 2007.

Future Plans

Turnover is expected to rise to 22 Million US dollar for Adidas India

in 2006-07 cash break even is fore cast during calendar year 2005 and

an operating break even during 2006. The other Adidas – owned

brands, salomon & taylor made are expected to hit Indian Adidas

stores during 2005 and 2006.

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 MARKETING STRATEGIES: AN
OVERVIEW OF ADIDAS

Some of the theory I have used in my project are as

follows

Theory: what is market research and why it is

important.
Market research is a method of collecting data which will make you (as
a business) more aware of how the people, you hope to sell to, will
react to your products or services. Market research will answer
questions like:

• Whether your products or services are needed

• Who might want to buy your products

• What age, sex, income occupation etc. are the people I want to
sell to.

• If there are changes taking place and how this might affect
what you sell

• How well your products or services might sell

• How much demand there is for what you hope to sell

• What price would people be prepared to pay

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Conducting market research

There are number of ways in which you can carry out your research
but you need to carefully consider why you made this choice and what
you hope the evidence will suggest to you.

Questionnaires and personal interviews are one of the most common

ways in which you can conduct market research, and there are many
methods of gathering data this way: Direct Interview, Mail Survey and
Telephone interview. Depending on the type of data you hope to
collect will have a impact on what you choose to use. I have made use
of two type of survey methods, questionnaire and mail survey. I
have asked some question about the company my mail and also by
direct contacts. The Question I have asked are given in “questionnaire
part” below.

Theory: marketing mix

The Marketing Mix (The 4 P's of Marketing)

Marketing decisions generally fall into the following four controllable

categories:

• Product

• Price

• Place (distribution)

• Promotion

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The term "marketing mix" became popularized after Neil H. Borden

published his 1964 article, The Concept of the Marketing Mix.

Borden began using the term in his teaching in the late 1940's after
James Culliton had described the marketing manager as a "mixer of
ingredients". The ingredients in Borden's marketing mix included
product planning, pricing, branding, distribution channels, personal
selling, advertising, promotions, packaging, display, servicing,
physical handling, and fact finding and analysis. E. Jerome McCarthy
later grouped these ingredients into the four categories that today are
known as the 4 P's of marketing, depicted below:

The Marketing Mix

These four P's are the parameters that the marketing manager can
control, subject to the internal and external constraints of the marketing
environment. The goal is to make decisions that center the four P's on
the customers in the target market in order to create perceived value
and generate a positive response.

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Product Decisions

The term "product" refers to tangible, physical products as well as

services. Here are some examples of the product decisions to be made:

• Brand name

• Styling

• Quality

Price Decisions

Some examples of pricing decisions to be made include:

• Pricing strategy (skim, penetration, etc.)

• Cash and early payment discounts

• Price flexibility

• Price discrimination

Distribution (Place) Decisions

Distribution is about getting the products to the customer. Some

examples of distribution decisions include:

• Distribution channels

• Market coverage (inclusive, selective, or exclusive distribution)

• Warehousing

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• Distribution centers

• Transportation

Promotion Decisions

In the context of the marketing mix, promotion represents the various

aspects of marketing communication, that is, the communication of
information about the product with the goal of generating a positive
customer response. Marketing communication decisions include:

• Promotional strategy (push, pull, etc.)

• Advertising

• Personal selling & sales force

• Sales promotions

Theory: SWOT analysis

This theory tells about the company strength, weakness, opportunity

and Threats. This theory is very important for the company because
this theory tell the weakness and the strong points of the company and
if company knows it weakness and it strong points then company
becomes easy operative and also the profits as well as the market share
of the company get increased.

The Company

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Adidas entered the Indian market in 1996 by setting up a 100%
subsidiary of Adidas AG called Adidas India Ltd. and announced its
joint venture with Magnum International Trading Company Ltd. on
October 1, 1996. The new joint venture – Adidas India Ltd. – was
incorporated with an initial investment of US $ 205 million with
Adidas India Ltd. holding 80% of the equity and Magnum holding the
balance 20%. This investment was raised to US $ 6.4 million with the
equity structure remaining the same. Currently, the total investment
stands at US $ 11.4 Million with the equity structure changing to
91.4% by Adidas and 8.6% by magnum.

Adidas’ Range of Products in India

A month after announcing the joint venture, Adidas India Ltd.

launched its range of sports footwear, apparel and accessories in New
Delhi on November 1, 1996. Subsequently, Adidas products were also
launched in Mumbai, Bangalore, Chennai, Hyderabad and Calcutta.
Currently, Adidas products are available in 30 cities in India.

The range of Adidas products available in India include sports

footwear featuring some of the most popular innovations and
technologies developed by Adidas such as Feet You Wear, Torsion
system and adi wear. The sports footwear available in India includes a
wide range of core categories such as adventure, basketball cricket,
golf, indoor, running, tennis, training, soccer and workout.

Adidas has introduced in India, a wide range of sports wear for both
men and women. These include apparel for athletics, basketball,

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cricket, golf, running, soccer, swimming, tennis and training for Men.
The women’s range includes apparel for athletics, golf, running,
swimming, tennis, training and workout. Accessories include bag
packs, campus bags, medium and large kit bags, caps, socks, wrist and
headbands.

Adidas Markets its products in India through a combination of mega

exclusive stores (area of 1000 sq. feet and above), exclusive stores,
multi-brand stores and distributors.

At present, Adidas is available in 80 exclusive outlets out of which 34

are company – owned with 8 new Company – owned stores planned
for 2005 and in 500 multi-brand outlets in India.

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MARKETING-MIX (FOUR P’S): ADIDAS

The Product

Whatever your athletic preference, you can now purchase an extensive

range of Adidas footwear and apparel online. From running shoes to
baseball cleats, eye wear to lanyards, collegiate licensed jackets to
good old fashioned cotton T-shirts, all things sport are available at the
Adidas store.

How do adidas create its Products

Adidas goal is to create a product that is honest – it must

perform. The rule is simple: form follows function.

Technology and functional design. A development team makes

the actual prototypes. These prototypes are then presented to

the retail market by the marketing department.

An Adidas product is the result of the intense thought and

creative energy of many different people. The following is a

general outline of how we create our performance-based

products.

1. The marketing department evaluates athletes’ needs and

develops a basic concept of how those needs should be

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 met. This concept is then presented to the design

department.

2. Based upon this concept from the marketing department,

the design teams sketch possible prototypes.

3. The people from design and marketing consider the

prototype sketches together, narrowing the selection to

those they anticipate will most successfully meet athletes’

needs.

4. The development department then works with the design

department to create an actual prototype from the selected

sketches.

5. Three separate groups – marketing, design and

development – meet and discuss how to improve the

prototype.

6. Samples are wear-tested to ensure the product meets

Adidas standards for performance and durability and

stands up to the demands of the sport for which it was

designed.

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7. Preview samples are presented to key accounts and

consumer focus groups for feedback. Based upon this

information, final changes are made.

8. Samples are distributed to Adidas sales representatives for

presentation to retailers.

9. The finished product is delivered to retailers.

I. As A BRAND

At Adidas –you have got to be sporty. At Adidas the brand

awarding is been taken rather seriously at its headquarters.

Adidas wants to bring inline skates into India.

What that kind of stuff got to do with Indian market? Yes, it

won’t really be a hot seller, but it will contribute a lot to

Adidas brand image. That’s the Adidas way of doing it – image

is a critical part of branding strategy the world over.

The idea of the company is to introduce performance specific

sports shoes in the Indian market by building images around

the world & at the same time create the need for these shoes at

the ground level.

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Adidas already has heavy weight sportsmen such as Sachin

Tendulkar, Leander Paes & Mahesh Bhupathi endorsing the

brand in India. They had the image, apart from endorsing the

performance element in the brand. Adidas steps out of crease

with a clear sports positioning. Adidas will take on arch Nike

with almost the same positioning. Its working with promising

athletes to give them a taste of its products. Adidas nowadays

is capturing an attitude that is sports related.

Adidas in fact did go through a limited fashion phase. Adidas

says – that you are tempted to make quick buck but we would

like to stick to the sports brand image because that make us

fashionable.

II. Words of G. Kannan (Director – Marketing)

“Our Secret is our commitment to the sports process. We

develop shoes that take into account the needs of a particular

sports & the role of this brand is driven by this factor”.

Good news for Adidas is that even in the casual market, the

trend is towards being sporty. Going to Gym is fast graduating

from a mere fad to serious body building, strengthening &

toning. This is reflected in the clothes that people wear today.

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The three stripes, for instance is unique property which can be

reinvented in various forms as trends changes.

C. For Adidas the product plays an eminent role in the

enhancement of their corporate as well as sports image:

ADIDAS SAYS –

“Nothing compromised. The most innovative Adidas products created

specifically to help make you a better athlete. For Adidas, product is
not just a assortment of few items. But it involves—developing of the
right product – which can then be put to right place & sold with the
right promotion & price.

VALUE OF IT’S PRODUCTS FOR ADIDAS

Our goal is to create a product that is honest – it must perform. The

rule is simple: form follows function.

As studied earlier an Adidas product is the result of the intense

thought and creative energy of many different people. If a

company sell an automobile, is it selling a certain no. of nuts

and bolts, some metal sheet, an engine and four wheels?

If a company sell a delivery service, is it selling so much wear

and tear on a delivery truck and so much operator fatigue? As

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per Adidas the answer to these question is instead what we are

really selling is the satisfaction, use or profit the customer

wants.

Adidas says that all the customer wants is, that whatever

product they purchase should fulfill all their needs and

preferences. They don’t care how they were made. Further they

want that when they order something, the don’t really care how

much out of the way the driver had to go or where he/she has

been. They just want their package. That means for them only

the final service matters.

As per Adidas the idea of product potential customer’s satisfactions or benefits is

very important. Adidas says that the total product is not just a physical product with

its related features, but it includes accessories, installation, instruction on use, the

package, perhaps the brand name which fulfills some psychological needs a warranty

and confidence that service will be available after the purchase.PLACE AND

PHYSICAL DISTRIBUTION:

A: Place

Adidas is very much concerned about its second “p”. as per

Adidas place and physical distribution of the product is

something on which almost every company spends a handsome

amount of money.

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Hence Adidas takes a good care of its place and physical

distribution process. Adidas has appointed marketing

specialists who are taking care of the supply of the product and

their distribution channels and process.

Process used – assorting progress

Entire range, which is available is put together to give a target market

what it wants. Marketing specialists put together an assortment to

satisfy some target market. His is usually done by those who are close

to the retailers only.

B: Physical distribution

As per Adidas nearly half of the costs of marketing is spend upon the

physical distribution.

To take care of this problem Adidas has appointed marketing managers

who decides how the transporting and storing functions should be

divided within a channel.

Note: Physical distribution can be varied endlessly in a marketing mix

and in a channel system.

TRUCKS

In Adidas, except the export products, trucks are considered to be the

best medium for transport. The flexibility of trucks makes them really

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good for moving small loads for short distances. They can travel on

almost any road. According to Adidas they can give extremely fast

service. Also trucks causes less breakage in handling.

PROMOTION:

Adidas is one of the India’s biggest company of sports that spends

nearly $10 million on its sales promotion and advertising in Indian

Market.

Adidas believe that it just cannot be taken lightly. It is a very important

aspect of products life cycle. It is the process which is responsible for

the growth or decline in the sale of the product.

Adidas thinks that promotion is communicating information about the

product between the seller and the buyer to change attitudes and

behavior.

To handle the company’s promotional activities Adidas has employed

marketing managers, wherever the Adidas is located. These marketing

managers look after process of the promotion of the products of their

company.

As per Adidas the marketing managers promotion job is to tell the

target customers that the right product is available at the right place

and at the right time and especially at the right price.

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 Adidas thinks that only taking the product to the customers is

not a task of the company. But company takes a very important

look about how the product works and this message is

communicated to their consumers. Because a wrong message

can lead to the end of their products life.

Sales Promotion

Adidas is the most popular amongst its rival for its excellent sales

promotional activities.

As per Adidas they say that they themselves are responsible for the

encouragement of the customer to by their products. Adidas believes

sales promotion tries to compliment the company’s selling efforts.

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STEPS THAT ADIDAS TAKE TO PROMOTE

SALES

In the last years the Adidas has almost given sale to its

products 6 to 7 times i.e. almost twice in a year Adidas goes

for discount on sales. They arrange contest.

In order to motivate the employees of the company Adidas also

prepares training material for the company’s own sales force.

They even design the sales materials for the company’s own

sales force to use during the sales calls.

As per Adidas, people see same message in different ways.

They may interpret the same words differently. So Adidas

always tries to deliver the message which everyone can easily

understand.

ADVERTISING

As per Adidas advertising can get results in a promotion blend. Good

results are obtained at a cost of course. The amount spent in the Unites

States for advertising is growing. Continuously, from World War II to

1980 it went from $1 billion to $50 billion.

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Adidas also spends nearly $2.9 million on its advertising throughout

the world. Adidas in India is spending almost $17 million on

advertising.The heavy weight players like Sachin Tendulkar,

Leander Paes and Mahesh Bhupathi are already attached with

their ad-campaigns.

PRICING:

Adidas is clear, it wants to become the no. one sports brand in

India, a choice brand for all brands. So far so good, but how

will it tackle a price conscious market like India?

Adidas feels that being a high energy business Adidas

introduces 600-700 articles every six months – enables the

brand to remain fresh and bring on an international and Indians

the brand from the price stand point.

Price, that’s the most critical factor in the Indian context.

Adidas believes it has to deliver a functional at an affordable

price. It’s a tough job – to maintain the integrity of the

performance and still come out with a product a right price

point. Globally shoes start at $50. But in India as the perceived

need is lower, you have to make the product more affordable.

To tackle this, Adidas came out with speed 2000, a product

priced at Rs.995 with the help of local and Hong Kong source

people. Adidas however feels that its just the matter of time

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before India coverage’s the world on this front. It is very

difficult to operate on a lower price point and maintain

integrity of product, but its been barely 3 years since the sports

market has taken off.

The original sector is just 20% of the total market and 80% of

the volumes comes from sporty shoes. But our market is

producing products at a price that is relevant to the consumers.

Adidas feels that as the volume go up, Adidas will try and

work out price points as people graduate with better

understanding of quality and price perception. Volumes are

bound to go up. Adidas started at the time when India had no

strength out in the sports products market in 1989 – 90. Its then

licensing partner Bata, and it had limitations of what it could

have put behind the brand. So company took the next best step

when the licensing agreement ended to take a bigger share in

business.

To conclude we can say that Adidas is putting all efforts to

bring down the price consciousness in the Indian market.

Company is trying to make products, which are easy to afford

and still maintain the integrity of their performance.

Growth has been phenomenal for Adidas even given the base is

small. In 2002 Adidas grew by 25%, 2003 by over 50% and

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this year Adidas is expecting more than 50% in terms of value

in both shoes and apparel, while the industry growth as a best

case estimate has been 20-25%.

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 MARKETING STRATEGY – ADIDAS
OTHER STRATEGY

Adidas, the brand with three stripes, seems to use the elements

of high-tension in its ads. Remember the Sachin Tendulkar

commercial? How everything is near-frozen, and the shattering

glass signifies release. Release of tension. Adidas gives you a

chance to but the boundaries – in every sphere.

Only now, the setting is not the playground or the track or the

court, it is the urban landscape – with its omnipresent traffic

jams, crowded streets and so forth. This way, Adidas becomes

a part of life. Anyone’s life. You don’t have to be the high-

voltage performer to be a part of the Adidas family. And it

goes beyond that – Adidas becomes something that makes you

better. Not just as an athlete, but as a sports person, a better

human being.

One of the advertisements : The spot featuring Boldon,

shows him chasing a thief (who’d stolen a TV set when its

owner was in the bath) through the dark streets. To help a man

(the owner, in a towel) in distress. And he uses all the power

that he can, to do what he has to do and what he needs to do.

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And Adidas helps him perform better, than he would otherwise

have been able to. This is perhaps shown in an oblique way

when the spot ends at the feet of Boldon and the bather.

One is wearing a pair of Adidas shoes while the other is

barefoot. Adidas makes you better, goes the base. In short, the

other man could have done as well as Boldon. The bather reads

any man. Any man who wears Adidas. And Adidas goes

beyond athletic performance – it becomes everyday life. In

stark reality. Though humorously and light, it has a deep

meaning.

MARKETING: ADIDAS

In 1997, Adidas became Adidas-Salomon with its US $1.4 billion

purchase of Salomon, a French manufacturer of skis and other sporting

goods. The deal put Adidas one step closer to competitor and world

market leader Nike, and one step ahead of Reebok.

Salomon, aside from its winter sport equipment, also owns golf club

brand Taylor Made and cycle brand Mavic. The merger makes

Adidas/Salomon the second largest sport marketer in the world, and

number one in Europe. Salomon is currently very strong in North

America and Japan, and Adidas has the largest market share in Europe.

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Adidas is, like Nike, very active insuring sponsorships advertising

deals with celebrities. Some of the most famous are Martina Hingis

(tennis), Kobe Bryant (basketball), Peyton Manning, Paul Palmer

(swimmer), jan Ullrich (racing cyclist) and the New York yankees.

David Beckham, Patrick Kluivert and Zidane all wear Adidas boots,

the Predator Accelerator.

LEVERAGING ON SACHIN: ONE MAJOR PART OF

MARKETING STRATEGY IN INDIA

Continuing its association with trump card Sachin, the local four-ad

print campaign tries to connect Adidas’ product attributes with

Sachin’s magic. “Instead of presenting just one dimensions :

The first ad connects Sachin’s choice of a heavy bat with Adidas’

Falcon Dorf light weight shoes. Says the headline: ‘Sachin likes his bat

heavy, not his shoe.’

The second new shoe range to be introduced for the first time in India.

Sub-branded ‘Aksu’ and priced at Rs 2,299, these are athletic sandals

primarily meant for water-based adventure sports. Finally, The next ad

will convey that Adidas covers various price points by promoting its

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existing Portland range priced at Rs 1,499 and 1,799 (the leather

version).

The importance of celebrity sponsorship and events to Adidas is

illustrated by Robert Louis-Dreyfus’ letter in the company’s 1998

annual report :

“When it comes to showcasing our brands, 1998 was truly exceptional.

Early in the year, the Winter Olympics focused the attention of sports

enthusiasts on Nagano. In summer, the Soccer World Cup in France

attracted more spectators than any single sports event before. When the

French team, promoting the three stripes, won the World Cup, we

could not have wished for more. These were great times for our brand.’

Adidas has reached an agreement with ISL Marketing G of

Switzerland to become an official sponsor of the 2000 UEFA

European Championships. Adidas will have access to the official

emblems, mascot and trophy for the design of its own products..

In 1998, the overall Adidas budget for promotion and sponsoring

accounted for nearly 15% of turnover.

The positioning is being communicated through its global campaign-

released worldwide in February 1999 but in India, only in May-as well

as through a four-ad print campaign developed locally by RK

Swamy/BBDO. Says G Kanan, general manager, marketing, Adidas:

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“We are the only brand with heritage in sports. As a brand, we’re not

an attitude that’s fashionable. We’re an attitude that is relevant all the

time.

The campaign also introduces a new brand line for Adidas: ‘Forever

Sport’. The line sums up the “deeply-felt” and “long-term love affair”

(it has been involved with sports since 1928) that Adidas has with

sport in all of its forms. Interestingly, the new brand line has been

introduced almost after a decade, when it was using ‘Earn your stripes’

as its tag-line. The company dropped it during the late 80s after it

found that it wasn’t connecting too well with its consumers.

But the golden question is that will the campaign make Adidas

run?

The company expects the campaign to strengthen the image of the

brand since research had indicated that neither of the three

multinational sports shoe brands present in India had a clear image:

most were perceived as diffused brands and personality-led. Says

Kanan: “Sachin has and will play a major role in pushing the brand. He

is important, as there are certain values a consumer needs to know

about Adidas. But after a certain duration, we have to present a global

perspective too and hence the Forever Sport campaign.”

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Interestingly, Adidas claims that it did not want to be caught up in

the clutter of the World Cup promotions-and deliberately chose not

to associated with the World Cup. Instead, according to Kanan, the

campaign has been broken now to coincide with the peak season

(April-June). “The World Cup is incidental. It’s too large an event to

make significance for us”, says Kanan.

However, the company is maintain a steady and dominant presence in

the media during the Cup: strewn over select channels like Star,

Discovery, and ESPN are the Sachin ads promoting Adidas. “Star

News is delivering good value while through Discovery, we can catch

the elite customer”, Kanan says.

Although Kanan admits that the sports shoe and apparel market is at a

nascent stage, he claims that Adidas has grown by over 250 per cent

from last year. As a company that takes pride in not joining the price

brawl, Adidas does not intend to bring down the prices of its products.

Says Kanan, “We don’t look at driving down the market by lowering

the price. We are willing to wait for the market to evolve.”

For Adidas, the real breakthrough, says Kanan, has come through a

combination of strategies: signing on Sachin, Leander and Bhupathi;

expanding its reach (it opened 45 stores last year); a revamped range

which covers a band of price points; and support to the brand. "“e

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built-in value pricing in our products, and supported them through

sports icons who are looked up to. We have realized that to have just

one good guy endorsing your brand is more important than having

several unknown faces”, says Kanan

The company is enlarging the scope of its business by concentrating on

apparel. “Apparel is driving the business. Most consumers start

experimenting with the brand through apparel”, admits Kanan.

Essentially perceived as a male brand, Adidas however defends its

range by pointing out that currently it has 50 items out of a total of

250, for women.

Further, Adidas is planning to add 30 new stores this year. “We’re

looking at driving the market through exclusive stores”. Says Kanan.

The logic is clear: use Forever Sport to ensure sales forever.

Never achieved profitability and collapsed under the weight of its

own unrealized ambitions.

Adidas’s objective with the new line of footwear is to generate sales

leads through its Web site, either through direct purchase or a retailer

finder. Villota says that every style of footwear has a story, particularly

those endorsed by star athletes, and it’s these stories that sell the shoes

to buyers.

33
While Villota wouldn’t disclose how much of Bryant’s Adidas

footwear is sold online, he did say one of three visitors to the Bryant

portion of the Adidas site demonstrated purchase intent by clicking

through to the store or to the retail finder.

The newest version of Bryant’s footwear hits the street Nov. 1,

coinciding with the start of the 2003-2004 NBA season. While Adidas

won’t comment on the new site’s features, citing competitive pressure,

Villota says it is Adidas America’s most ambitious integration of Web

content and electronic marketing.

The Adidas - Salomon Executive Board will propose paying a

dividend of CC 0.92 per share to the Annual General Meeting of

Shareholders on May 10, the same amount as in the previous year. This

decision to maintain a stable dividend level, despite the EPS decline in

2004, underlines Management’s confidence in its ability to achieve its

2005 targets. Management views 2004 as a year of consolidation and

restructuring and has increased the pay out percentage to reward long-

term shareholders.

34
THE ADIDAS LOGO

The “Trefoil” was adopted as the corporate logo in 1972. It

represents the heritage and history of the brand. In 1996, it was

decided that the Trefoil would only be used on heritage

products. Examples of product featuring the Trefoil logo

include the Stan Smith, Road Laver, A-15 warm-up, and

Classic T-shirt.

Equipment

The Adidas Equipment line was launched in 1991. This line of

footwear and apparel represents the most unique and functional of

Adidas products. Equipment is the ultimate expression of what is

uniquely possible by design when form follows function.

35
In January 1996, the Three-Stripes brand mark became the worldwide

Adidas corporate logo. This logo represents performance and the

future of the Adidas brand. This logo is used in all advertising, printed

collateral and corporate signage.

Since 1949, the Three-Stripes have been an integral part of our brand

and product designs. This trademark has become synonymous with

Adidas and its dedication to producing high-quality athletic products to

help athletes perform better.

36
 ADIDAS: COMPANY’S

FINANCIAL FACTS

For over 83 years Adidas has been part of the world of sports on every
level, delivering state-of-the-art sports footwear, apparel and
accessories. Today, with total net sales of £182 million, Adidas-
Salomon is a global leader in the sporting goods industry and offers the
broadest portfolio of products. Adidas-Salomon products are available
in virtually ever country of the world. Our strategy is simple:
continuously strengthen our brands and products to improve our
competitive position and financial performance. The company’s share
of the world market for sporting goods is estimated at around 19
percent.

37
 SWOT ANAYSIS

Strengths:

• The main strength of Adidas is his Product Quality. The quality

and the material uses in Adidas is very good.

• The company has a good brand image in the market, the

publicity and the advertisement is also very good and lastly

company hold a healthy market share in the market.

• Another strength of the company is its well efficient and

effective management, which works as a team.

Weakness:

• The major weakness in the Adidas is that the manufacturing of

the products of Adidas is not done in India itself it is being

import hence the cost become high and the margin of profit

becomes low that’s why company must give a deep thought on

manufacturing their products in India.

• Another major weakness in the company is that it is not

catering to all the segments which I have already discuss above,

38
 If these two weakness in the company can be eradicated then

the company may earn high profit and better market status.

Opportunities:

• Adidas does have many products for the urban segment or poor

people, but there is hardly any product or we can say that there

are no products for this segment. India is more a rural country,

in the total population of India major part of population lives in

rural area and these people can not afford the costly products of

the company like Adidas hence company must target this

particular segment they must introduce the shoes and other

product according to their demands.

• Also price is one of the major factor which may influence this

type of segment hence company should make their policy

accordingly.

• Company must also consider the range and the variety of the

products as compare to Nike and Reebok.

In my opinion the company must introduce more rage or more

variety in the market to compete with their competitors and also the

customer have more choices to choice the product from.

39
Threats:

• Adidas does not have strong distribution network as compare to

Nike and Reebok in India. Nike has more number of retail

outlet then Adidas and Reebok has a unique distribution

network, the company Reebok not only uses its outlet for the

sale of their product but also use some other shoes company

outlet like “Bata”. In a Bata showroom u can find Reebok shoes

and other products. But this is not a case with Adidas hence

Reebok has an extra advantage over Adidas.

• Adidas do not have any competitive advantage as compared to

Nike and Reebok.

40
 RESEARCH METHODOLOGY

STAGE ONE

The project study started with collection of Secondary Data. The

sources for the secondary data are as follows:

Data Sources

 News Papers

 Magazines

 Internet

 Press articles on Adidas.

Stage Two

I visited the Adidas India Ltd., which is located In Mehrauli (new

Delhi). I Also Met Some Of The Marketing Executives Who Helped

Me Getting The Required Information.

I Also Got Some Of The Information From The Other Resources Of

The Corporate Office Like :

 Company Journals

 Company Catalogs

 Questionnaire (Structured & Non Disguised)

41
 And Other Related Sources.

Primary data:

I have prepared a questionnaire for the general public asking about the

marketing strategy of Adidas, in that particular questionnaire I have

asked some question give in finding and analysis section: (the

questioner is filled by 80 people).

42
 FINDINGS

Company research report

(A) Company Description

Adidas-Salomon AG(ADIDAS). Production and marketing of sports

equipment, footwear and apparel under the brand names of Adidas,
Salomon, Taylor Made and Mavic. Sales of Footwear accounted for
45% of 2004 revenues; Sales of Apparel, 35% and Sales of Hardware,
20%.

(B) Competitor Analysis

Adidas-Salomon AG operates in the Men’s & boys’ clothing sector.

This analysis compares Adidas with three other sport shoe and apparel
manufacturers: Nike Inc. of the United States (2004 sales of $9 billion
of which 59% was Footwear), Reebok International Ltd. of the United
States (2003 sales: $2.87 billion of which 73% was Footwear), and
Amer Group PLC which is based in Finland (2003 sales of 6.46 billion
Finnish Markka [US$996.88 million] of which 24% was Racquet
Sports). Note: not all of these companies have the same fiscal year: the
most recent data for each company are being used.

(C) Sales Analysis

During the first quarter of 2004, sales at Adidas totalled 1.56 billion
euro. This is an increase of 2.7% from the 1.52 billion Euro in sales at

43
the company during the first quarter of 2003. During the previous 17
quarters, sales at Adidas have increased compared with the same
quarter in the previous year.

Sales at Adidas appear to have some seasonally: during each of the

previous 5 years, sales have been highest during the third quarter,
which has accounted for between 28.0% and 32.0% of the annual sales.

Adidas reported sales of 5.38 billion Euro (US$5.35 billion) for the
year ending December of 2004. This represents an increase of 9.0%
versus 2000, when the company’s sales were 5.35 billion Euro. Sales at
Adidas have increased during each of the previous five years (and
since 1999, sales have increased a total of 226%).

D. Recent Sales at Adidas

(Figures in Billions of Euro)

6.06 6.53
8 5.47

6 3.62
2.61
4 1.79

0
1999 2000 2001 2002 2003 2004

In 2002, sales in Latin America were up at a rate that was much higher
than the company as a whole: in this region, sales increased 36.0% to
171.00 million euro. Adidas also experienced significant increases in
sales in Asia-Pacific (up 3.9% to 875.00 million Euro).

44
GROWTH

Adidas is a constantly growing company. It is global in scope with the

majority of its sales coming from Europe, followed by the United

states, with the smallest percent of Adidas’ sales coming from Asia.

Adidas sales have grown significantly each year from 1994 to the

present. Adidas is the leading producer of sporting goods in Europe

and it is second in the overall world market, just behind Nike. Nearly

55% of Adidas revenues come from Europe, while 37% come from

the Americas, and only 9% of revenues come from a growing Asian

market.

For anyone not familiar with the structure of this company (since it is

not based out of the USA), it is much like US based competitor Nike.

Adidas has stock traded on exchanges in Frankfurt and Pairs, and its

ticker symbol is ADDDY. The pie chart below shows exactly how the

ownership of the company is spread out across the world. Most of the

ownership comes from Europe, while a substantial 30% comes from

the United States, and the rest from Asia.

45
 Asia
5%

Europe US
40% 30%

UK
25%

Adidas is a growing company as stated above, but how much and how

fast? As you can see from the graph of net sales over the past five

years, sales have grown rather exponentially, although growth slowed

in 1999. This growth in sales comes from not only an improving world

economy, but from Adidas’ marketing efforts to make it one of the

most popular sporting goods brands.

This shows that Adidas does not have a large market share in Asia as

compare us and Europe and my questionnaire (given below) also

suggest that company can improve a lot the certain areas are marketing

distribution and competing with the competitors. The company has to

become innovator not follower they must do something differently to

come with the flying colors.

46
 DATA ANALYSIS

1. How does u rate the company marketing strategy as compare to

the other competitors company like Nike, Reebok etc.?

Out of 80 people 36 had said Adidas have a good marketing strategy

and should continue like this only, 24 had said Nike is more better then
Adidas, 16 said Reebok is good and 4 said others.

others
5%
reebok
20% adidas
adidas nike
45%
reebok
others

nike
30%

47
 2. Do u think that the company Adidas is giving its customer what
they want in terms of quality and prices or value for money?

Out of 80 people 68 person are satisfy with the quality and the
price of the product and other says that they are not satisfy.
happy
not happy

not happy
15%

happy
not happy

happy
85%

48
 3. Do u think that the advertisements and the brand ambassador of
the company is good enough?

Out of 80 people 66 person said yes they like the advertisement

very much and rest said no they don’t like them.

18% 0%
happy
not happy

82%

49
 4. What things u keep in mind while purchasing shoes will it be
quality, advertisement, price or design?

Out of 80 people 69 person had said that the product must have good
quality and good design and other said they purchase these shoe for
status symbol only.

0%
14%

quality
other factor

86%

50
 5. If u have to purchase shoe except Adidas which shoe it will be
and why?

Out of 80 people 42 have said Nike, 23 said Reebok and 15 others,

which shows that the main competitor of Adidas is Nike. They have
given different reason for that some said Nike and Adidas are have
same range of products and there quality and prices is also same, so
different people have different opinion.

19%

nike
52% reebok
others
29%

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 6. What do u think that the company Adidas must do to improve
its marketing strategy?

Most of people said Adidas has a good marketing strategy but the
company should launch more products or u can say more variety to
their products.

52
 LIMITATIONS

 The research project has been completed with ease

and comfortably. No particular limitation or

shortcoming was realized during the analysis.

 Also, due to time constraints, enough justice could

not be done to the project.

53
 CONCLUSIONS

ADIDAS in INDIA has always been driven by its Value-for-money

strategy. The company needs to identify critical success factory and

work assiduously towards achieving it.

As the world grows to become one, many problems will arise that
cannot be solved. One of the primary challenges associated with
globalization is balancing conflicting and competing objectives. In the
case of Adidas, it has faced such problems already and how they have
dealt with them is with flexibility and calmness. Despite what could
be higher costs, Adidas has chosen to stick with their human right
codes and Standards of Engagement rather than continue to be
associated with subcontractors who treat works in inhumane ways. As
Adidas has grown worldwide, it has had to deal with problems of
heterogeneity vs. homogeneity. In other words, in an increasingly
heterogeneous and global world, diversity in the workplace has
appeared to emerge as an issue. Companies, including Adidas are no
longer homogenous in the sense that their companies have grown
worldwide. And as a result, Adidas has had to make worldwide
headquarters and produce information and products in several different
languages. Having to spread its workforce, Adidas has come to
depend on intangibles.

54
The knowledge, worldwide experience and diversity that an Adidas
employee can bring to the table are valuable. Recently, how successful
companies are in the global world is increasingly derived from
intangibles, such as these, that organizations cannot own. Adidas is
greatly affected by these external influences since indeed it is a global
company. For some it is not common knowledge that Adidas is a
German company. This is a result of good global business. Adidas
has created a product that is global and with that diversity and
knowledge greatly affect the company. Adidas must be able to easily
adapt to different cultures and must be culturally aware when
conducting business. The long list of Adidas subsidiaries where it
conducts business proves that Adidas is constantly adapting to cultural
changes and must be extremely diverse. Because of this necessity,
knowledge is greatly valued. Great changes occur in this industry and
as a result, new ideas, intuition and inspiration are an asset that is a
necessity in this industry and to remain a global company. Who leads
this knowledge and maintains diversity are the managers, yet they too
are facing new changes.

55
 RECOMMENDATION

 For 2004, the Adidas brand’s new divisional structure will be in

place to start delivering positive results for the Group. Adidas

America will remain a challenge but nevertheless will deliver

qualitative sales improvements in the second half of 2005. Top-

line growth is expected in all other regions. Double-digit

growth from Salomon is projected as a result of the continued

innovative strength and the increasing profile of their products.

The integration of Mavic with Salomon, which began in 2002,

will continue in 2005, with further synergies between the two

brands. At Taylor Made-Adidas Golf, increased marketing and

sales support will target ambitious golfers, and solid growth in

all the major golf markets is expected to continue.

 In addition to these positive top-line developments, gross

margins are expected to remain within a range of 41% to 43%,

operating expenses will decline as a percentage of sales, and as

a result net income is projected to increase by 15%.

 Adidas is currently ranked third in almost every category in the

global athletic shoe industry. However, they rank second only

to Nike in terms of sales. The main competitors of Adidas

include Nike and Reebok However, other smaller competitors

56
 include Fila, Puma and Easy Spirit. Adidas commands only

5% of the athletic shoe business in the U.S., compared with the

40% for the fearsome Nike, but the rejuvenated Adidas has

climbed to within easy reach of Reebok, which has been

struggling in the past couple of years. Adidas is also steadily

regaining market share lost to other brands such as L.A. Gear

and Fila (Fortune, 2000)

 Since acquiring their current president, Louis-Dreyfus, Adidas,

a wholly owned subsidiary, has competed with a whole new

strategy. Aside from cutting the whole line of German senior

management, Louis-Dreyfus also fired management in Asia,

who failed to match competitors’ low costs in subcontracting

shoemaking to local companies. While Louis-Dreyfus fought

bring down costs, he also took a gamble on the side. Adidas

began to focus on global marketing.

But the battle has only started, and the foreign sports companies are

here for the long term. They can sustain losses for years to come in

order to gain market share. What they are doing at present, is building

up distribution networks to cover every nook and corner of the country

and, setting up manufacturing facilities.

57
Only those Indian manufactures which have a strong focus on

manufacturing and technological upgradation will survive in the long

run, although with a much smaller market share than they have at

present. Small companies will be sidelined totally and will exit from

the sports market altogether. ADIDAS in INDIA has always been

driven by its Value – for-money strategy. The company needs to

identify critical success factory and work assiduously towards

achieving it.

58
 ANNEXURE

QUESTIONNAIRE

1. How do u rate the company marketing strategy as compare to the

other competitors company like Nike, Reebok etc.?

 Adidas  Nike

 Reebok  Others

2. Do u think that the company Adidas is giving its customer what they
want in terms of quality and prices or value for money?

 Happy  Not Happy

3. Do u think that the advertisements and the brand ambassador of the

company is good enough?

 Happy  Not Happy

4. What things u keep in mind while purchasing shoes will it be

quality, advertisement, price or design?

 Quality  Otaher factor

59
5. If u have to purchase shoe except Adidas which shoe it will be and
why?

 Nike  Reebok

 Others

6. What do u think that the company Adidas must do to improve its

marketing strategy?

______________________________________________________

____________________________________________________

60
 BIBLIOGRAPHY

Books:
PHILIP KOTLER, MARKETING MANAGEMENT,
EDITION 2005.
V.S RAMASWAMY AND S. NAMAKUMARI MARKETING
MANAGEMENT, SECOND EDITION.

WILLIAM STANTON.J, MICHALL J.ETJEC, BRUCE

J.WALKER FUNDAMENTAL OF MANAGEMENT.

RAVICHANDRAH.N COMPETITION IN INDIAN INDUSTRY.

Web Sites
• www.adidas.com
• www.indiainfoline.com
• www.webcrawler.com
• www.indiatimes.com

Class Notes is referred

Magazines
• A&M
• Business India
• India Today
• Business Today

Newspapers
• The Times of India
• The Hindustan Times
• The Economic Times

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