Adidas Brand Study

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The report studies the Brand "Adidas" and its aspects like CBBE, Brand Prism, Positioning, Target Segment.

This is made by Shivi Aggarwal and Madhusudan Partani, Students of FORE School of Managemnt.

Contact: madhu.partani@gmail.com

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Adidas Brand Study

  1. 1. 12/20/2010ADIDAS BRAND STUDY Submitted To: Submitted By: Prof Freda J Swaminathan Prof. Jayshree Sundar Shivi Aggarwal ( 91051) Madhusudan Partani ( 90129) Faculty FMG-18A Strategic Brand Management FORE School of Management, FORE School of Management, New Delhi New Delhi
  2. 2. Brand StudyIntroductionThe idea was as simple as it was brilliant. Adi Dassler’s aim was to provide every athlete with thebest possible equipment. It all began in 1920, when Adi Dassler made his first shoes using the fewmaterials available after the First World War. Today, the Adidas product range extends fromfootwear and apparel to accessories for all kinds of different sports.The JourneyAdidas as earlier mentioned started its operation in 1920 as a small workshop. But its transformationinto a large corporation and become one of the top global brands has a story within.In 1949 Adi Dassler first registered Adidas in the commercial register (Handelsregister) in Fürth (nearHerzogenaurach). The official name of the company back then was “Adolf Dassler AdidasSportschuhfabrik”. And then the enterprise was transformed into a corporation(“Aktiengesellschaft”) in 1989.In 1997, Adidas acquired the Salomon group, and the company’s name changed to Adidas-SalomonAG. The Salomon group also included the TaylorMade golf brand. In October 2005, the Salomonbusiness segment, including the related subsidiaries was sold to the Finnish Amer SportsCorporation. The company changed its legal name to “Adidas AG”. And then On January 31, 2006,Adidas-Salomon AG acquired Reebok International Ltd. By combining two of the most respected andwell-known brands in the worldwide sporting goods industry, the new Group benefits from a morecompetitive worldwide platform, well-defined and complementary brand identities, a wider range ofproducts, and a stronger presence across teams, athletes, events and leagues. And in June 2006, thecompany’s name is changed to Adidas AG.Since the very beginning of Adidas, the corporation, the employees and the organization followedthe three guiding principle of “To produce the best shoe to serve the needs of the Sport; TO Protectthe athlete from Injury, and to make the product durable” These principles were followed by thefounder Adolf Dassler (the Man who gave Adidas its name) . From the very beginning, a passionateathlete himself, from the very beginning Adi Dassler was in close contact with sports participants andwas always present in person at important sports events. Parallel to the rapid developments insport, Adi Dassler strove to specialize and optimize his products. Adi Dassler was the firstentrepreneur to use sports promotion in order to make the public aware of his innovations. Hestarted using well-known athletes as advertising for his products. And then Aggressive publicitybecame one of the cornerstones of his corporate policy.Strategic Brand Management Page 1
  3. 3. Brand StudyBrand PortfolioAdidas( name derived from Adi Das The name of its Founder) has three major brands namely Adidas,TaylorMade and Reebok.AdidasAdidas has two sub brands under it namely Sports performance and Originals. The guiding principle of the Adidas Sport Performance Division is to equip all athletes to achieve their “impossible”. Adidas Sport Performance brings its passion for great products to athletes in all sports and mainly focuses on four key categories globally: football, running, training and basketball. It has various product categories ranging from Sport, to body care to Eye care. The Sport Style Division is the home of Originals, defined as authentic sportswear, the Fashion Group, which is the future of sportswear, and Style Essentials, the fresh sport-inspired label made accessible for style- adopting youth. Together they offer consumers products from street fashion to high fashion, all uniquely inspired and linked to sport. Inspired by its roots in sport and women’s fitness, Reebok is a global brand that is committed to developing innovative products which will allow Reebok to own Women’s Fitness, challenge the Men’s Sport category and revive its Classics heritage. It has brands like Reebok-CCM Hockey and Rockport under this Brand. TaylorMade is a leader in the industry and the number one metal wood supplier. It focuses on consumers who seek the most innovative, performance-enhancing golf equipment available, including technologically superior drivers, fairway woods, irons, putters and balls. The brands like Adidas Golf and Ashworth popular brands in Golf are part of this Brand.Strategic Brand Management Page 2
  4. 4. Brand StudyCBBE ModelSalienceAdidas continuously makes efforts to increase awareness about its brand by various modes ofcommunication. To mention, The Covert Advertising (Displaying large Sized Shoes) at Public places,sponsoring Sports events and associating it with sportsmen. Also since Adidas is into Only Sportscategory, there is also a high chance of recall and clear Brand Need. Being synonym to quality inSports increases both Depth and breadth of Brand. As mentioned before Adidas is not only intosports foot ware but has also entered sports accessories, personal care products for sports personincreasing the Brand breadth.PerformanceAdidas is known for its quality in goods. One of its underlying principles is to provide best qualitygoods to sportsman. Thus there is high performance satisfying Customer’s functional needs. Theaspects like quality, reliability, durability which is major parameters in buying shoes, Adidas byproviding specialised goods has minimised the risk on non-performance. Also the style and designand price are favourable.ImageryBrand Adidas from its very beginning has associated itself with Sports person and major sportsevent. Thus it is perceived as aspirational product. The user profile includes popular and successfulsports players who are also aspirations. Also the History attached with Adidas, the name itself isderived from the Founder (Adolf Dassler) who was also very passionate sportsperson. And History ofAdidas is also associated with success in many World cups.JudgementsConsumers perceive Adidas products as finest quality. Due to its High Performance and GoodImagery, the Overall Quality of Brand is very good. The superlative quality and better performanceleads to Brand credibility and Brand superiority over other brands.FeelingsIt becomes highly difficult to comment upon Brand feelings without doing a survey of customers. Butanalysing the comments of users and their testimonials and also analysing the communication of co.Feelings associated with brand Adidas is Fun and Excitement. The Passion to Compete along with asense of self respect is associated with it.ResonanceResonance is Indicator of Brand Loyalty. Since the target segment is much focused and Adidas is ableto fulfil their needs by providing specialised and customised products with promise of superiorquality. Also the Loyalty can be revalidated from the fact that the sales of Adidas have been growingat CAGR of 11.8% for the period of 5 years11 Financial Reports of Adidas for 2005 to 2009Strategic Brand Management Page 3
  5. 5. Brand StudyPicture 1 CBBE Model- AdidasTarget MarketFrom the website and various campaigns led by Adidas for its various brands as above mentioned,the primary target market has been sports person. Over the years the target customer for Adidaswas Sportsperson both men and women. It has aimed and is successful in providing not only shoesbut every equipment, accessory and also cares items. It has entered into a foray of ElectronicCommunications by launching mCoach a Mobile with Training and guide. But all the products theAdidas deals into target the sportsperson and all its products have a sporty look.Brand IdentityNameAdidas is derived from the Initials of its Founder Adolf (Adi) Dassler. But now the name has becomesynonym to sports need for Sportsmen. Also the name is easy to pronounce, easy recall ability andnot confused with any other brand.Strategic Brand Management Page 4
  6. 6. Brand StudyLogo The Logo is bright, Sporty and easy to recognise. It has few distinct features making it easily distinguishable with other brands like three line breaks. Also Name is written in small caps.SloganThe Slogan of Adidas “Impossible Nothing” though it has just two words, but it says a lot; Itstimulates the sportiness and enthusiasm in minds of consumer. The slogan is very apt with theproduct it is into and the message and perception it wants to make.Brand PositioningAdidas tries to position itself as Sporty brand by associating itself with Major Sports events,Aspirational and successful sportspersons, and also by creating commercials full of energy. Theslogan as mentioned above is also very sporty. The primary positioning which Adidas wants to makeis of Super quality sports good for Sporty persons.Kapferer Model Brand Identity PrismAnalysing Brand Adidas with reference to Brand Identity ModelPicture 3 Kapferer Model Brand Identity Prism -AdidasFrom the above model it is very clear that the personality of Adidas is very conservative andcollective and is perceived to be of European Culture. Also there is strong relationship between eachof the parameter and each other are in sync with others. All the parameters are related to Sports,Enthusiasm, reliability and quality.Strategic Brand Management Page 5
  7. 7. Brand StudyPosition Re-ShuffleAdidas over the years has constantly positioned itself as brand for Hard core Sports person. All of itscommunication campaigns feature Healthy sporty men and women and majorly sportspersons. Andthis has been a success mantra for adidas. Since its founder Mr.Dassler has the principle of providingthe best quality goods to sportsmen and also the same is the company’s objectives, thus targetingsportsperson or aspiring sportsperson is very much relevant.Adidas has gained core competency in sports Goods by means of remaining in constant touch withsportspersons and identifying their needs. This competency has given a competitive advantage toAdidas over its competitor. The expertise of sports knowledge has helped Adidas in acquiring relatedbrands like TaylorMade and Reebok. Also it has entered into other sports equipments and Sportsmerchandise.But One Critical observation is, after acquiring Reebok and Taylor made, they are retained asseparate brands targeting different customers like Reebok for Women; this creates confusion inminds of customer and also by this way Adidas is not leveraging its Brand value. Thus it would bebetter if Reebok and Taylor made though will remain as brand but will become part of Adidas likeAdidas Sports and Adidas Originals.Brand Extension StrategiesGiven the origins of Adidas, it is understandable why the brand was focused purely on sportsperformance and technology for most of its existence. However, the Adidas Style brand extension,which targets a broader audience with casual street wear, is responsible for 20% of total brand sales.The untouched target group propelled Adidas through the roof in the 1980s was that of Hip-Hopmusicians and break dancers!Thats 20% of total sales that may not have existed if Adidas didnt think to market to a newaudience and decided to stick with sports.Reorganization of Group Provides Solid Platform For GrowthIn 2009, the adidas Group took the strategic decision to move from a vertically integrated brandstructure into a functional multi-brand structure for the adidas and Reebok brands. This led to thecreation of a Global Sales function responsible for the commercial activities and a Global Brandsfunction responsible for the marketing activities of both brands. In addition, the Global Salesorganization was split into Wholesale and Retail, to cater more appropriately to the different needsof these two distinctive business models. This new structure follows two important principles: tofoster further alignment and strengthen brand management to drive long-term sustainable growth,while at the same time ensuring coordinated and best practice execution in the marketplace.Diverse Brand PortfolioConsumers want choice. To maximize our consumer reach, it has embraced a multi-brand strategy.This approach allows it to tackle opportunities from several perspectives, as both a mass and a nicheStrategic Brand Management Page 6
  8. 8. Brand Studyplayer, providing distinct and relevant products to a wide spectrum of consumers. In this way, eachbrand is able to keep a unique identity and focus on its core competencies, while simultaneouslyproviding the Group with a broad product offering, increasing its leverage in the marketplace. It alsoallows adidas to address multiple consumer needs, tackle market opportunities from various anglesas well as be less affected by one-dimensional market risks. Currently, the brand focuses on 5 globalpriorities:Football: expanding market leadershipRunning: building credibility with high-performance athletesTraining: creating new consumer experiencesBasketball: increasing global footprintOutdoor: the athletic brand in the outdoorsInvestments Focused on Highest Potential Markets and ChannelsAs a Group, it targets leading market positions in all markets where it competes. However, withalmost 180 subsidiaries worldwide, it has prioritized our investments based on those markets whichoffer the best medium- to long-term growth and profitability opportunities. Therefore, to fullyexploit market opportunities, it tailors the distribution strategy to present brands to the consumer inthe most impactful way.Brand’s Broad and Unique Product PortfolioIt spans from apparel and footwear for professional athletes to premium fashion. It allows adidas toaddress multiple consumer needs, exploit market opportunities from various angles as well as beless affected by one-dimensional market risks. Adidas’ commitment to product innovation and itsrich heritage differentiates the brand from competitors and provides a solid platform for futuregrowth. That means adidas intends to inspire, support and equip all athletes in the best possible wayto help them achieve their optimal performance.Strategic Brand Management Page 7
  9. 9. Brand StudyRecommendationsBrand ConsolidationAs already mentioned, adidas has four sub brands ( as mentioned above) of these two are subbrands of Adidas and two are positioned as separate brands. Instead of this it will be beneficial if allbrands are made as sub brands of adidas. By this none of the brand will lose their positioning and aclear corporate brand structure will be made.Reshuffle PortfolioAt present adidas has a very wide range of products lengthening and widening its product mix.Different Shoes of different variety and different features for each sport namely Cricket, Hockey, andFootball etc... Also Different apparels, merchandise and Sports equipments. Thus it is per senecessary to re shuffle the product basket. A Concentrated approach will be advisable.Focus on Emerging markets like IndiaAccording to Venn research Inc., The Indian sports equipment market had total revenue of $2,069.1million in 2009, representing a com-pound annual growth rate (CAGR) of 7.1% for the periodspanning 2005-2009. Thus there is huge scope and opportunity for Brand like Adidas to increase itspresence in emerging countries.Creating a Flexible Supply ChainSpeed and agility is the key to outpacing the competition. It is committed to meeting the full rangeof customer and consumer needs by ensuring product availability in the correct size and colour,providing game-changing technical innovations and also the latest high-end fashion product to thehighest quality standards.Strategic Brand Management Page 8

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