Adidas New Strategy Marketing

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Executive Summary

Adidas used to be the most dominant sportswear manufacturer in Europe. This success it achieved through production of performance-geared shoes.

High profile athletes in both track athletics and soccer used these shoes, making their fans want to be associated with them. Many athletes have shown just how much they trust Adidas shoes, for it has helped them achieve high performance. Sportswear is currently the replacement for casual clothing for the youth.

Kang and Esterl (2006) noted that, in the manufacture and sale of sportswear, Adidas has a market share of 22%. It is trailing behind only on competitor, Nike, which has a market share of 33%. Adidas has developed a new strategy that combines marketing and technology. This strategy together with its focus on innovation has significant objectives that are supposed to steer Adidas ahead of Nike in terms of market share.

The purchase of Reebok by Adidas in 2005 has also started to yield positive results in terms of market share expansion. They have taken over emerging markets in Latin America Asia ahead of Nike. On top of that, Adidas is concentrating growing its image as sportswear and general clothing manufacturer. This will help in its ambition of being a head of Nike in the sportswear industry.

Adidas is also bringing new products in the market, most of which counter Nike’s already released products. Adidas-score is one such product. This product will be launched in the United Kingdom next football season. Marketing strategies are in place, and these are geared towards making Adidas-score a household brand. Football fans are the target market for Adidas-score. Marketing strategies target these fans.

Introduction

Adi Dassler is the personality who created the German brand, Adidas, in 1949. According to Jobber and Fahy (2009), “the company was built based on three principles: creating the best sports shoe, protecting athletes from injuries and offering them a durable product” (p.245). Adidas group prides itself in making the customer their primary focus.

After World War I, Dassler (as a teenager) dedicated his time helping his family create slippers from damaged military bags. He then consulted doctors, and coaches in designing shoes for a given sport. Athletes loved his shoes, making them be used in Olympics in the decade that followed.

According to Haig (2004), “Dassler was not just a good innovator. He also had a brain for marketing. He knew that if Adidas would have completely different shoes for different sporting activities, there would have to be an element of unity. In 1949, he came up with the idea of putting three stripes on the side of his shoes, so everyone would be able to tell they were Adidas just by looking at them.

It was not until 1996, however, that the three stripes became the Adidas corporate logo” (8). The legacy of Dassler is still alive to date, and the company still focuses on the performance aspect of the products it produces. Adidas over the years has transformed from manufacturing shoes into all sportswear. Its market has also transformed from sportswear to fashion of the world.

Between 1980 and 1990, Adidas was hard hit by financial difficulties and commercial problems. This made it be overtaken by Nike, a sporting product manufacturing company, which was formed in 1970. Nike is currently Adidas’ key competitor in the manufacture of sportswear. Adidas recovered from this financial crisis, and in an effort to regain its dominance, it purchased Reebok in 2005.

Capon (2008) stated that Adidas focuses on leading sporting activities in marketing its products. It is an official sponsor of the World Cup. Adidas also sponsor sports personalities individually. David Beckham, a famous footballer, is one such personality.

He is the Adidas spokesperson and has a lifetime contract with Adidas that is worth $161 million. The American based basketball star, Tim Duncan is also a beneficiary of such sponsorship.

SWOT analysis

Adidas has been in the sporting market for many years. It has been operational for more than 60 years since its inception. This will make the Adidas-score have a solid background before launch. Adidas’ leadership in the market (about 22%) will make also give the new product, Adidas-score an advantage in its launch.

The brand, Adidas, is a strong brand already. The new channel of production in the name of Adidas-score will be readily accepted as football fans are the target market. The distribution chain of Adidas is vast in the United Kingdom. It has retail outlets at strategic positions in the UK. Adidas-score will thus not have trouble in storage and distribution.

Adidas has been experiencing financial difficulty since the 1980’s. This is a crucial setback because the management is not sure whether there will be enough cash to implement a marketing strategy of Adidas-score. Adidas is also associated with Germany as it is a German-based company.

German products are not that welcome in world markets. Other nations especially the United Kingdom have residents who naturally shun away goods manufactured in Germany.

In the United Kingdom, women are not greatly catered for in terms of sports. Anon (2004) reported that there was an increase in the number of women interested in sport, in the United Kingdom. Adidas-air thus has a good opportunity to design a female version of Adidas-score boots.

Adidas can form mergers with the local shoe retailing firms in the UK. This will help boost distribution. These retailers also have loyal customers who will be introduced to the Adidas-score.

Major threat of Adidas-score is competition. Nike already has a version of this shoe in the market with the name “Nike Total90 Shoot III”. This is a threat because the market share of Nike is about 10% more than that of Adidas. Another threat is taxation.

Being German-based, the UK government may increase the tax just to target Adidas. Lastly, price war between Adidas-score and Nike Total90 Shoot III that may be initiated by the launch of Adidas-score will be a setback.

Marketing mix

The product is Adidas-score, a variation of the Adidas boots on the current market. These boots are introduced to offer a variety to the consumers. A key factor that will influence the price of Adidas-score is the price of Nike Total90 Shoot III, which is the rival product. Currently, a pair of Nike Total90 Shoot III goes for $40. The price range of Adidas-score will be from $35 to $39 per pair.

Other factors such as changes in consumer buying trends may also affect the price of the product. The place is the United Kingdom. Adidas-air will be sold in all Adidas retail store all over Britain.

There will also be an online order portal, which residents of the UK can use to buy the boots. Delivery system will be in place that takes the shoes to buyers in their respective locations. Promotion campaigns will be via television advertisements.

Much focus in the mix is to provide a price that is lower than that of a similar product in the market. Quality of production will be high. This will make the product sell itself hence reducing promotional campaigns. If the product sell itself because of its robust identity, there will not be a need for promotions.

Microenvironment

Adidas has enough employees in all departments to oversee the successful launch of the product into the market. There are about fifty employees in the marketing department alone. Different departments will work hand in hand to ensure that the product is a success. Target customers of the Adidas-score are male football fans.

This is not a problem because more than 70% of the male populations in UK are active supporters of local football. There is enough supply of raw material that is used to manufacture the product. Competitors like Nike will not be a problem to Nike air because their price is higher than Adidas-score’s launch price. This move will instead intimidate them and make consumers go for the cheaper version of the same shoe.

Digital strategy

Digital strategy is a business strategy that employs the application of information technology. Ofek and Wathieu (2010) noted that, “digital products and services are playing an increasingly central role in consumers’ everyday lives” (para. 1).

Manufacturers should take advantage of information technology while marketing. There are numerous digital marketing media channels. These include websites, voice broadcasts, cell phone text messages, banner ads on websites, and pod casts.

Digitizing Adidas-score

Adidas will roll out a global digital strategy. This strategy will find its base on a few football brand Ambassadors. Because the target market is in the UK, the ambassadors will be chosen from the English premier league. For budget purposes, only five players from this league will represent the new product: Adidas-score.

Recommendations for the players to play this marketing role include Andy carol from Newcastle United, Theo Walcott from Arsenal, James Milner from Manchester city, Wayne Roonie from Manchester United, and John Terry from Chelsea football club.

Janoff (2006) noted that the use of high profile football personality in this advertising capacity has worked well for Adidas in the past. This was in 2008 when Steven Gerald, Ricardo Kaka and Lionel Messi were the ambassadors for the boots famously known as Predator and F50.

Jones (2008) suggested that mobile phone users should have the opportunity to download product show rooms in their handset. These showrooms will display the Adidas-score boots by use of videos and animations featuring Andy carol, Theo Walcott, James Milner, Wayne Roonie, and John Terry.

Football fans should have the privilege to download visitones (visual ringtones), of the selected players, attempt almost impossible football feats. On top of that, this campaign should give football fans the opportunity to send a text message to retrieve information about their nearest Adidas retailer.

They will also be able to access football content, video clips and games branded with the Adidas-score label. The mobile use strategy is part of a larger digital push facilitating football fans to use the Adidas portal. In this portal, there will be videos, photos and information regarding the selected football ambassadors associated with the Adidas-score band.

Sponsorship

Over the years, marketing oriented sponsorship in football has risen to a new level. Manufacturers of different products want their brands to be associated with football. They have made it their business to sponsor clubs, personalities or sporting events.

In exchange, they get an exclusive in advertising their merchandise and making their products famous. Anon (2006) said that the most effective way of attracting the attention of football fans was associating one’s brand with their favorite team. This strategy has proved to be true so far.

Football sponsorship with a difference

One vital strategy that Adidas will employ, in an aim to draw attention to the Adidas-score, is the use of sponsorships. By becoming the official sponsor of the English premier league (EPL), Adidas will have its brand notorious in various broadcasting stations that are associated with the league. This will not be easy to achieve, as the current sponsor of the EPL is Barclays bank.

Barclays bank has been the official sponsor for the EPL for several years. Even though their contract is supposed to end at the beginning of the coming season, there are rumors that renewal of the contract is inevitable.

Adidas should also contend for the same, as it will make the brand a household name for the football fans across England. Gohier (2010) found out that, “Adidas remains the most recognizable sponsor of soccer in Europe’s five largest markets” (para. 4).

Sponsoring the EPL is a robust strategy that will make the media attract attention of the football fans to the products that Adidas offer. Match officials; the referee, his two assistants and the fourth official will all wear jerseys with the Adidas logo and the Adidas-score boots as their shoes.

As part of the strategy, these officials will wear shoes of different colors. This will attract the attention of football fans in England. Adidas may also make it big by re branding the premier league name to: The Adidas-score Premier league.

Other than sponsoring the premier league, Adidas will also sponsor at least five teams in the league. Sponsoring the team would imply that all players of that team including the coach to wear Adidas-score boots in all matches that they play for the team.

These will also be worn in all video and photo shoot sessions and during interviews that require players to wear boots. In so doing, the Adidas-score brand will become famous, and every football fan’s dream will be to own them.

Even though all these sponsorship deals are expensive to implement, their long time goals are far more rewarding. If Adidas successfully capture all aspects of marketing by sponsorship, sale of the Adidas-score will be amplified in the UK. It will take Adidas much less time to market this boot by sponsorship than using any other marketing strategy.

Conclusion

Adidas is the second to Nike in the global market in terms of sportswear merchandise production. They have a long time plan to turn the tables and regain their initial prowess in this. As part of this, they have an ongoing plan to launch “Adidas-score”, a new boot. The main challenge is the strategy to for marketing this new product.

The most significant factor is identifying the target buyers. In this case, males residing in the UK are the most targeted group. They form the majority of the population interested in sports. Then various advertising and promotion techniques are put into consideration.

Adidas will use sports personalities in advertising their products. Key footballers like Wayne Roonie, James Milner, Theo Walcott, John Terry and Andy Carol will be at the forefront of these campaigns. Adidas will actively engage in sponsorship deals with, the EPL, clubs and individual players. This will strengthen the Adidas-score brand, making it a household name.

References

Anon (2004) Adidas. Marketing Week, P.83.

Anon (2006) Adidas unveils details of American strategy. Marketing Week, 29(15) p.6.

Capon, C. (2008) Understanding Strategic Management. London, Financial Times.

Gohier, P. (2010) Nike’s new three-minute ad is the latest in the company’s ongoing effort to beat Adidas at soccer. Maclean’s, 64(2).

Haig, M. (2004) Brand Royalty. London, Kogan Page Ltd.

Janoff, B. (2006) And 1 Marketing Strategy: Make Nike, Adidas Sweat. Brandweek, 47(12).

Jobber, D. and Fahy, J. (2009) Foundations of Marketing, 3rd Edition. New York, McGraw-Hill International (UK) Ltd.

Jones, G. (2008) Adidas plots mobile drive for boot lines. Marketing, (00253650), p.12.

Kang, S. and Esterl, M. (2006) At World Cup, Nike and Adidas Fight for Top Spot. Wall Street Journal, (Eastern Edition).

Ofek, E. and Wathieu, L. (2010) Are You Ignoring Trends That Could Shake Up Your Business? Harvard Business Review.

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