The topic I chose is the athletic clothing brand Adidas.
Adidas, the second largest activewear brand in the world, is a multinational corporation brand that designs and manufactures shoes, accessories, and apparel. This brand has been striving to build on a passion for a “sporting look lifestyle and sports.”
This brand’s apparel and shoes have always caught my attention with not only their style but also the support and cushion of the shoes and the material of their apparel.
Why is this pop culture phenomenon important?
Nowadays, it’s all about the trend, what’s new, and who’s wearing it. Today’s consumers are mostly young and only care about fitting in with the popular styles and brands everyone on Instagram is wearing and it soon becomes the most desirable fashion statement.
The products are extremely comfortable and not only do you see the brand Adidas everywhere due to its popularity, but you see many people wearing the brand along with promoting it because of its style fitting. The impact Adidas has on society is the pop culture of today’s generation which stands out on what people wear and it also brings out the style in today’s fashion.
The history of this pop culture phenomenon, including important dates and events. The brand Adidas had been created in the 1920s by Adi Dassler and his brother Rudolf Dassler, in their mother’s basement. The brothers had made all of the shoes by hand. (James Wrinkler, 2019)
Adidas had originally come out on the market on August 18, 1949. Rudolf had stepped aside to start his own company. Aside from Adi’s brother leaving Adi along with the brand, Adi had decided to create the brand under his name because he wanted to make a difference in athletic performance.
In the 1960s, Aldi had introduced the future street-style staples like the iconic Adidas tracksuit of the three-stripes which has been and continues to be on the brand’s apparel and shoes. (James Wrinkler, 2019)
A sociological perspective and/or theory you will be used to explain the pop culture phenomenon you chose, and how you will use that perspective/theory to analyze the pop culture phenomenon you chose.
From a symbolic interactionist perspective, the brand Adidas chooses the best athletes from around the world to advertise their products to attract customers with trends along with collaborating with famous artists to help promote the brand.
The plan to use athletes and famous artists from all around the world had been successful in promoting the brand.
The brand itself has led me to believe in the manifest function- creating an intended function of a brand that turned out to be extremely beneficial to both the brand and society.
With the manifest function, I believe Adidas takes on a huge representation of most generations, especially in today’s generation. Revealing the trends they have with the apparel and shoes they wear, leads to many wanting to fit in so they purchase the products.
Anytime Adidas comes out with a new tracksuit or sneakers, it isn’t long before it’s advertised on social media and quickly a top-selling item because of the effect of today’s society.
At least one major point which is specific to your pop culture phenomenon and which includes your original thought.
Today’s consumers are mostly young and only care about fitting in with the popular styles and brands everyone is wearing nowadays.
However, I think this causes a certain level of fashion standards, meaning if you don’t have a $2,000 pair of Yeezy’s you’re just not fitting in.
This conflict may lead many young generations to feel left out or feeling unfashionable due to not wearing what everybody else is wearing.
At least three sources, at least one of which must be an academic peer-reviewed journal article, which you will use to support your presentation. Each source must be followed by at least three bullet points summarizing that source.
“The Adidas Brand: Climbing up or Decelerating?”
In this article, it explains the growth of popularity and accomplishments Adidas has encountered over the years.
The popular brand has made an enormous amount of profit and sales in the stock market along with making major contributions to Adidas’ massive revival within the past few years.
Their main focus is focusing on the popularity of today, the interests of customers, and the types of promotions to include to promote the product.
“ADIDAS”
In this article, it emphasizes the sense of movement Adidas has established since the brand became very popular.
Various employers who worked for Adidas have been trying their absolute best to target consumers to be able to transform them into Adidas’ identity by attracting them to buy the products.
Lastly, the article explains the reflection and movement that occurred to attract consumers to this brand.
“Adidas: The Come Up of a Lifestyle Brand”
This article explains the timeline of how the start of Adidas went from being such a small business to a multi-million dollar company.
It also mentions Adi, the creator of Adidas, and how he had been an athlete himself which is another reason why he was encouraged to make a high-quality sport-looking brand.
Lastly, it was the first time pop culture had viewed a huge jump over the merger of sports which influenced the Adidas brand to a large audience.
A conclusion that states what you think you will learn from the research conducted for this assignment as well as the impact the pop culture phenomenon you chose has had on the world.
Towards the end of this research, I got to learn more of how much an impact Adidas has on society, and how this brand has been able to succeed in promoting the product, along with the diverse ways they try to grab consumers’ attention into purchasing the brand.
The impact this brand has on society is towards today’s generation which stands out on what people wear and it also brings out the style in today’s fashion.
Anytime Adidas comes out with a new tracksuit or sneakers, it isn’t long before it’s advertised on social media and quickly a top-selling item because of the effect of today’s society.
Jediar Changel. ‘Adidas & Their Impact on Consumer Culture.’ Archangel Scriptures. 06 Dec. 2010. 10 Oct. 2019
Shah, Alap. “The Adidas Brand: Climbing Up Or Decelerating?” Forbes, Forbes Magazine, 5 Sept. 2018, https://www.forbes.com/sites/alapshah/2018/09/05/the-adidas-brand-climbing-up-or-decelerating/#2a0e284277f4.
RushOrderTees.com. “Adidas: The Come Up of a Lifestyle Brand.” RushOrderTees, RushOrderTees.com, 8 Oct. 2019, https://www.rushordertees.com/blog/brand-marketing-spotlight-adidas/.
Nowadays, advertising serves to encode a message that the target audience may read and have the corresponding feeling. As far as valuable brands are concerned, it is not enough for them to lure society to buy their product. They seem to have a mission to implement certain values in their commercials. Adidas is generally agreed to be one of the trendsetters in this sphere. Therefore, this company provides people with advertisements fully dedicated to the burning issues of this age. In 2020 they released an advertisement entitled “Faster Than.”This is a unique video that provides absolutely no information about the sportswear. Still, it contains motivational words to help one be a better version of oneself.
Main body
In fact, it is hard to understand what goods “Faster Than” actually endorses. Judging by the fact that it depicts running people, it might be presupposed that a line of jogging shoes is advertised. Surprisingly, there is no focus on sportswear at all. The topic of sports serves as a background that may catch an eye occasionally. Such an approach to advertising is not new because it underlines one significant fact: Adidas is influential enough to make no effort to induce people to buy something. They may afford a two-minute video telling about something more important than shoes. Their shoes will be sold out because they are top-notch and time-proven.
Admittedly, among the popular social issues that big companies want to promote are inclusion and self-development. This is why “Faster Than” consists of a number of signs that may be easily interpreted by common people. Adidas creates such advertisements to keep pace with modern trends connected with tolerance and universal happiness. By following this advertising strategy, they are bound to get approval from the majority of the representatives of Western societies. It is the main goal of the company to receive as many positive responses as possible. Adidas is likely to expect people watching “Faster Than, To” to say – “I love Adidas because they are so progressive and so true!”
Nevertheless, the gist of any commercial is its manipulative nature. If one tries to decode all the obvious and hidden signs that a good video contains, they will be surprised by the number of tricks to persuade people into doing something. Usually, political parties use as many slogans and declarations as possible. Meanwhile, modern advertising is merged with politics. “Faster Than” cannot but support these politics. For instance, the climax of the advertisement ends with the phrase: “Be faster than inequality!” (StadiumFi, 2020). It is done to show that Adidas supports unprivileged people and kindly makes them support this very brand.
Another idea concerns diversity, especially issues concerning Black Lives Matter. It is generally recognized that without hiring African American actors, no big company can launch their new advertising campaign, avoiding scandals and even arbitration. Positive discrimination has become a must because it is one of the best ways to show a high level of progressive thought. Therefore, the opening frame is a person of color breathing before starting to run. This is a token of tolerance, showing that Adidas does its best to please its African American electorate.
Still, the idea of diversity is not only about skin color but also about body size. Somehow, the company that is expected to motivate people to keep fit does vice versa. According to “Faster Than,” too fast does not mean any aspirations for perfection (StadiumFi, 2020). It is more correct to strive to become a better version of oneself without comparing one’s achievements with their peers’ accomplishments. The advertisements depict unfit people to show that everyone deserves to do sports from time to time wearing Adidas no matter what they look like. It may seem a perfect example of a message promoting inclusion. All people are different, but they are equal and deserve the same.
Nevertheless, some of these signs can be interpreted in a different ways. For instance, the fact that people of color are brought forward may be considered an unnecessary political gesture (Qun, 2018). Some people think that using people of color for political motives or for the sake of profit is exploitation. Companies like Adidas are not interested in these people’s problems at all. They place them in commercials for the same reason admen placed naked women and kittens in each and every advertisement back in time.
As far as body positivity is concerned, there may be a claim that there is no harm in competition between people. Actually, the beauty of sports lies in the fact that people enter a contest. They are compared in body shape and sports accomplishments because there is only one winner. If one looks at sports from the perspective that Adidas supports, they will think that competition as the gist of sports is a corrupted idea. Interestingly, “Faster Than” probably contains the message: “Competition is toxic! It is self-development for the sake of pleasure that modern sports should be”. Still, there can be no development without comparison with others.
Conclusion
In conclusion, big companies tend to use politics to induce people to buy their products. The manipulative nature of modern commercials is advocated by noble motives that turn out to be controversial. Still, they give a company the opportunity to seem progressive in people’s eyes. They try to touch the hearts and souls of different groups of people by promoting diversity. Unfortunately, it may influence people’s opinions about things that have been natural for many years, such as competition.
The age of millennials is indeed a unique time, in which people live, evolve, and advocate for their self-identification. The central theme of the “Yalla! Go For It” campaign assigned by Adidas is primarily the representation of the true version of oneself as part of the social media society. I believe that social networking is mainly used to demonstrate a hyper-idealistic version of oneself that is not necessarily a true version. My campaign is targeted at the female population of the UAE region to reinforce the Emirati women and their uniqueness. For me, the most significant issue is the empowerment of women in the UAE who serve as a model the world should follow.
One of my intended goals is to choose the key hashtag associated with the campaign’s headline and intertwined with its core idea. Therefore, the hashtag that will be incorporated in my campaign is #UNIQUEME. It is short and concise and reveals a strong concept that I aim to manifest in social media advertising. The decision to integrate these two inspirational words emanated from their meaningfulness and manifestation of crucial aspects of my life and, therefore, my identity. The decision to include the hashtag was based on its prevalence in today’s world of social media. It plays an essential role in my life and the millennial generation in general. #UniqueMe so that sticks and stones will not break my bones, but words will never harm me, which is inspired by the song that symbolizes the liberty of choice.
The Background of the Campaign
Adidas is one of the major leaders on the market that pursues changing the future for young female athletes in key cities across the globe. Most importantly, the company addresses the barriers that forced women to drop out of the sport, such as a legacy of inequality and opportunity. In addition, Adidas pursues changing the lack of access, role models, as well as funding, and, thereby, building the women’s future. As such, the company requires a long-lasting change concerning the mental and physical barriers that girls face, as well as the engagement of women into sports.
The Key Insights and Elements of the Campaign
Our generation is a unique and complex phenomenon, which is why the millennials are my target audience for this project. According to Barry, the modern consumer becomes “more sensitive, sceptical, and complex” (11). Thus, it is crucial to generate not only new ideas, but to focus on “problem-solving approach, perceptual choice, and periodic reassessment” (Bono 43). I want to create a campaign for Adidas based on promoting sports in the UAE for the female population, specifically those females who wear headscarves. The advertisement will be showcased in the most prominent areas where teenagers spend most of their time.
Thus, I chose public transportation as the aimed place for commercial, namely the female side of the metro, which is designed specifically for females with children. Concerning the fact that I sit along with other females on the metro, I consider it as a great advertising strategy for my campaign.
The critical insight of the “Yalla! Go For It” campaign is to stay true to yourself and be in love with your own body because you only have one. This stands for all the Emirati women who will be inspired by the campaign and challenge themselves in a variety of sports activities. The social media framework for my project is the Instagram platform that is focused on promoting love and respect to own body and engage the female audience into sports.
The advert will be represented inside the train, at the metro entrance and exit, in the magazines, as well the at the Adidas store itself. The core idea of the campaign is to emphasize the unique passion and determination of women in the UAE. The campaign will have its own “Yalla_Go_For_It” nametag on its Instagram profile, which enables every woman involved in it to tag the campaign and, therefore, promote it worldwide. The advert inspires women to appreciate their bodies and shapes and follow this journey.
The critical element of my advertising campaign is the young female who is working out on the beach with a marvellous view on the bay and the ferris wheel. The advert embodies a healthy, enthusiastic, and energized spirit that the girl transmits to the viewer.
She is free to choose a preferred sport within a broad spectrum of activities, whether it is a rugby or tennis. Thus, I added the thinking speech balloons to highlight a wide selection for every female engaged in the Adidas’ campaign. Emirati women fulfil critical roles that shape their future economy and society. Having analysed the role of the women, I now think that the audience will respond well to the “Yalla! Go For It” campaign. I created the visual representation of the advertisement in the store to demonstrate how the female consumers regard the campaign favourably.
Recommendations for Future Practice: Reassessing the Weak Points
One of the major weaknesses is the limited range of visual aids. More specifically, only one advertising poster is used for all the target areas of my project. The proposed solution is to cooperate with inspiring female celebrities, perhaps the Emirati politician or even a female athlete. Previously, I did not question myself about the prominent female figures of the UAE. I examined the list of inspirational Emirati women and was greatly surprised by a large number of females and their incredible achievements.
For instance, the advertising campaign can engage with Nahla Al Rostamani, who is the first female Emirati F3 driver, and focus on the motorsports equipment. The company might work with Mariam Al Safar, who is the first Emirati woman to drive a train in the Middle East and proves that women can be more than the passengers. Asma Al Janahi is another Emirati female who is the female-first fencer and breaks the stereotypical views regarding women’s role in sports.
Conclusion
I consider the benefit of broadening the visual scope and creating more adverts with these prominent women. Although engaging the ordinary females of the UAE might be more efficient as it will inspire and empower more of the general female public. “Yalla! Go For It” is a striking example of a wide array of opportunities one might attain once involved in the campaign. Every woman engaged in this project might create a unique hashtag and inspirational quote based on her personal experience. Hence, each of the target areas will include different posters with different Emirati women to broaden the scope of the campaign and make it a significant change, not only the advert.
Adidas “Break Free” advertisement tells a story about an elderly man trying to escape from a retirement home. The phrase “Break Free” at the end of the video is the only words in the clip, and the commercial uses the slogan to capture the attention of the audience and draw a parallel between the spirit of struggle for freedom and the product. The story is told by showing short silent scenes that are aimed to appeal to people’s feelings and create a strong emotional reaction.
Adidas Break Free Ad Analysis: Essay Main Body
The main character is an elderly man who used to be a runner when he was young. The man is being kept in a retirement home but is craving for freedom (Merher 00.00.00 – 00.01.00). The advertisement is effective because it successfully uses symbols and visual images to provoke emotions in viewers to attach a positive cultural value to the product.
The main character is believable, and his story creates a strong emotional response, making the audience sympathize with the man. It is achieved through the usage of scenes that uncover the personality of the man and his emotions. The clip shows that despite the age and limitations, the man has retained his spirit and the will to keep going forward. Not having access to any equipment, the man utilizes some things that can be found in a nursing home to exercises his body and makes multiple unsuccessful attempts to run away from the institution. Other characters only appear on the screen for just a few seconds, but they also successfully pass the desired message.
The retirement home personnel represents the oppression and the outside forces that want to stop a person from being free. It is shown by the way nurses act, trying to prevent the character from escape and indifferent emotionless looks on their faces. It culminates in the scene where a nurse metaphorically deprives the man from hope by taking away his old shoes (Merher 00.00.53 – 00.00.58). The capturing emotional story and believable characters make the advertisement stand out and increase the chance the audience will remember it.
The advertisement uses symbols and images that appeal to people’s emotions as a persuasive technique. The retirement home is shown as captivity that is created to stop a person from happiness. On the other hand, a pair of old shoes is an embodiment of hope for freedom and a chance to break away from the unwanted and unsatisfying situation, despite all the limitations and boundaries. By contrasting the opposite ideas, the video emphasizes the symbolic value that it is trying to attach to the product.
The ad associates the product with an active lifestyle, but does not express any components of social class, thus targeting a wider audience. The universality of the message makes it personally relevant for most people and provokes emotional reaction and response in a wide range of people, which is very beneficial for the promotion of the product.
Adidas Break Free Ad Analysis: Essay Conclusion
The commercial is effective because it appeals to universal values that resonate with the audience. The authors successfully use images to make the viewers feel in a certain way. The believable characters make the story credible and make the audience empathize, pay attention, and remember what they see. By showing personal importance and history of the shoes for the main character, the commercial presents the product as a symbol of the struggle for freedom, success, and self-improvement. Thus, the ad achieves its primary goal of promoting the brand and the product, making it memorable and recognizable.
Work Cited
Merher, Eugen. “Adidas – Break Free”, YouTube, uploaded by Eugen Merher. 2016. Web.
Adidas group is one of the largest multinational producers of sports footwear, apparel, and accessories. Its products are available virtually in every country. Its activities are directed from its headquarters in Herzogenaurach, Germany. Reebok headquarters are located in California (Adidas Group 2012).
Due to the company’s international nature of business, various issues face the company in regards to taxation. One of the major issues that the company deals with every year of its operation is double taxation due to overlapping. Double taxation is experienced when a company or an individual is taxed twice for the same asset or income. This is mostly the case when there are overlapping jurisdictions of taxation and also when assets, incomes, and consequent transactions are subject to these jurisdictions (Caplan, 2003).
To reduce or curb these losses, Adidas Company has taken several measures such as foreign tax credit. A foreign income credit is when an individual or a firm can take credit for taxes against its bills, however, the tax credit has several limitations. A good example is a case of credit being limited to the tax for which the credit is allowable (Caplan, 2003).
On the other hand, the company benefits adversely from the benefits provided by tax treaties. A tax treaty is whereby the mother country of a company enters into a contract with other countries to promote cross-border investment and economic activities. This plays a crucial role in the elimination of double taxation, assists the government bodies to enforce the laws of taxation, and reduce barriers to international investments. Adidas Company has highly benefited from these tax treaties as German and US governments have been striking this type of treaty for over 70 years.
Transfer Pricing
When one part of a big multinational company transfers goods or services to another part in another country the price charged for these goods or services is referred to as transfer price. The main purposes of transfer pricing are to evaluate divisional profits and the calculation of income taxes (Pricewaterhousecooper, 2003).
In Adidas, the transfer of its products can take any form downstream, upstream, or from one subsidiary to another. The main role that is played by the Adidas transfer pricing, is shifting income from high to low tax jurisdictions. For example, if the Adidas products are being manufactured in Germany and transferred to the US for sale, a high transfer price raises divisional income to the German division of the company, and hence increases the company’s tax liability in Germany. It is therefore evident that the company’s incentives of the transfer price depend on the marginal tax rate in the country of the transfer. If the marginal tax rate is higher in the transfer country the company prefers higher transfer prices (David, 2006).
However, there are limits, to which companies can shift income in this manner, in the case where market prices are available for the products transferred, the tax authorities usually impose the market base transfer price. According to David (2006) when the prices based on the markets prove not to be feasible, rules are specified by the US tax laws, and tough rules are set for the companies willing to shift incomes. This act aids in ascertaining that the prices are feasible.
References
Adidas Group. (2012). What We Do. Web.
Caplan, D. (2003). Management Accounting. Web.
David, M. (2006).Transfer Pricing and Taxation. Web.
PriceWaterHouseCooper. (2003). Corporate taxes 2002-2003: Worldwide summaries. New Jersey: John Wiley and Sons.
Adidas started operating in 1949 in Germany. Today it is one of the most recognized brands in the world. It is important to note that it is mostly known for foot-ware although it also produces accessories and clothing. The company has heavily invested in marketing communications and has one of the most recognized logos in the world.
Main body
When looking at the Adidas website, one can quickly see the target audience. It is interesting because the target audience has mainly been divided into two groups: men and women. However, there are various pages that are specific to kids, sports lovers and brand enthusiasts. For instance, a whole web page is dedicated to Beyoncé’s Ivy Park clothing line which she did in collaboration with Adidas. The site is also relatively easy to navigate for different users looking for different items.
Each of the categories is further sub-divided to make selection and browsing of the different brands easy. For example, the kids’ section has youth, children and babies and toddlers to make it easy for the user to get the item they require easily.
The site is significantly creative. It has used different multimedia to enhance its appearance. The use of graphics, videos, images and text in a creative manner also ensures that users stay on the site longer. Additionally, the site has animated tabs that are highlighted when the cursor is on them to encourage the user to click them. A creative combination of colors, fonts, capital and small letters also enhances the creativity of the site.
The site has also used a minimalist approach to enhance its appearance. For instance, it has creatively used white space to enhance its creative look. Additionally, the landing page has minimal tabs so that it does not appear crowded. The web pages have a significant number of tabs as they present the different items the brand has. Capital letters have been used sparingly. For instance, to highlight the different sales offered. This also enhances the creative minimalist approach.
The site is a great addition to Adidas IMC. It is not only creative but also gives the required information about the products. It is easy to navigate through the site and get what one is looking for. Additionally, it has user support in case it is needed by the user.
Conclusion
Several suggestions can be made to improve the website as one of the elements of Adidas IMC. For instance, the site should collect more data from the users to ensure they customize the consumer journey better for their users. Also, the site can reduce the pain points that the consumer suffers. For instance, the site has two tabs for the creators club and join creators club. From the onset, the user cannot tell the difference between the tabs, making it a pain point. Also, the company should consider linking the website to its other digital platforms.
At the beginning of the year 2009, Adidas Company marked the first quarter by closing its European and Asian headquarters as a result of a sharp drop in its profits.
Herbert Hainer, the CEO and Chairman of the Adidas Group, claimed that this would go a long way in ensuring that great savings would be achieved. In the description of the restructuring process, there has been a new creation of the organisational structure aimed at yielding some long-term developments in the company. In the restructuring process, the aim of the company was to get closer to the consumer through its products.
The company sought to develop new levels of management in its structure, where different initiatives would be developed to come up with more effective sales strategies. This restructuring was also meant to look at key markets, in which a global retail market structure would be adopted to enhance financial gains. Lastly, the company sought to have a € 100 million as its annual savings for all the costs incurred (Barton 2).
These restructuring processes were of importance in the financial aspect and business situation. As with the creation of a structure in the organisation, this would enhance realignment in the business. In turn it would report Adidas efforts to successfully compete with the international markets, albeit in a challenging environment.
A joint model with Reebok has been established to restructure the company’s strategy, which has made it possible to achieve synergy. It is through such collaboration that Adidas products have found their way into foreign markets throughout the world. With this strategy, the consumer and the company are in a good relationship. In addition, this has made finances in the company gain increased significance due to increase in volume of sales.
The Chairman of the Adidas Group firmly states that adopting some game changing structures, such as collaborating with other companies, has the potential to refine their business, which is a core task in bringing the consumer and the Adidas brands closer. The first quarter had reported a drop in sales. Therefore, to the business, it was necessary to seek new ideas in an aim to eliminate any unnecessary cost that would in turn contribute to business success.
To adopt a restructuring process that would be flexible and effective, Adidas (in partnership with other companies such as Reebok) came up with a joint operating model in European and American. With this strategy, major markets have been accessed with less difficulty. Through this form of collaboration, either partners remains as a single entity, but with renewed strength in its financial sector.
Complexity reduction is another restructuring strategy at Adidas Group, where simple products have been greatly accepted in the society. This, in turn, increases the volume of sales.
With the above initiatives, a better and healthy business environment has been achieved and financial sustainability will be achieved in the long run. One of the financial and business reasons that influenced restructuring at Adidas was to save on cost of up to € 100 million. Through this, the company expected € 1.8 billion of its annual sales (Beaudry and Groves 2).
Another reason was to reduce the regional offices to retail shops, which would bring the consumer closer to the company. Avoiding subsidiaries in the company would contribute to the cutting on costs and an increase in revenue.
The business restructuring observed in 2009 was primarily through management. It reported an increase in the company’s revenue and healthy financial reports. With the elimination of regional office, there has been a strong bond resulting from an interaction between global organisation and the local markets.
This holistic approach is still being adopted, especially with an increased market speed supported by technologies that are connecting Adidas Group to the rest of the world. In the process of restructuring the company’s own retail business, there is evidence of improved growth in retailers.
For instance, this has motivated Adidas Group to appoint a Chief Retail Officer with the responsibility of managing the company’s products (Barton 4). The development of a new organisational structure in different departments such as Finance and Information Technology has enhanced sharing of services. In addition, it has cut on costs, hence a good way of financial saving.
The collaboration between Adidas Group and other companies such as Reebok helps the company to identify different synergies. In fact, this is achieved through restructuring process where clear strategies have been developed. With these strategies, company and employees interests have been considered. Synergy has brought about success, with all the strategies under implementation being handled and planned adequately. Through this, a lot of cost is saved due to collective sharing of responsibilities.
There is much creativity derived from synergy and through integration, restructuring and dependency, the group has adopted a corporate culture that has helped in achieving its financial and business goals. Synergy has also been a good way of creating sustainability because it has brought about a strong relationship between the company and its material suppliers and stakeholders. This restructuring strategy of having supportive members in the group has the effect of achieving collective performance.
The process of business restructuring is one of the most essential processes carried out by businesses to improve their efficiency. Business restructuring is an integrated process aimed at reducing cost of production while increasing profits earned through the incorporation of best practices.
It normally entails modification of business strategies in a bid to maximize profits among other benefits. Therefore, just like any other changes done in businesses, restructuring features on areas such as value creation, supply chain managements, and business operation modifications just to mention a few.
Adidas is one of the companies that have undergone corporate restructuring in the recent past. In 2009, Adidas announced that it was in the process of restructuring its corporate structure in order to increase shareholder value. This paper is an in-depth analysis of the restructuring processes of Adidas and the effects the restructuring process.
Adidas is a Germany–based company whose headquarters are situated in Portland. It normally deals with the production and distribution of sportswear products with the brand Adidas. The decision by Adidas to have its organization restructured was after a fall in its profits in 2009. That year, Adidas had reported a 6 per cent decline in sales falling from $3.49 billion to $3.43 billion.
The company also noted significant decline in its sales in all regions apart from the Latin America. Actually, North America reported the highest fall with a 17 per cent decline of its currency neutral sales. In addition to this, Adidas experienced a fall in its market share price by 3 cents per share.
This in turn significantly affected its income hence making huge losses forcing it to have its corporate structure restructured. Thus, in order to speed up the process of revenue growth while cutting costs, Adidas indicated that it would implement a number of changes within its organizational structure. First, the restructuring was geared towards cost reduction techniques.
In this, the management of Adidas made sure that the cost of producing and distributing their products was as minimal as possible. For instance, Adidas could achieve this by restructuring their production and distribution channels to sizes that are cost effective yet achieving the set objectives. Secondly, the restructuring of Adidas was aimed at making it a high performing company within its region and all over the globe. This objective was achieved as Adidas products have been widely used globally from 2009.
Adidas made use of advertising and communication strategies to make their products known globally thus attracting a large group of customers. Reorganization of resources as well as the identification of outsourcing opportunities was yet another activity carried out in Adidas restructuring. Adidas improved its processes to serve a larger group of customers thus realizing efficiencies.
In 2009, the Attorney General of Adidas created a Global Retail segment, which was to manage an increasing number of stores that dealt with Adidas products. The retail segment was to be headed by a chief retail officer who was to be responsible for all the new locations, putting more emphasis on the underperforming retail locations. According to the AG, a chief sales officer would be recruited to head the wholesale business section, which is responsible for the distribution of products to retail partners.
In the discussed restructuring process of Adidas, its operations were not affected since no major changes took place. If anything, the company anticipated a cost saving of about 100 million euro or $ 133 million within the 2009/2010 financial year. According to the company’s CEO, the restructuring process would make the company achieve a higher level of success in addition to other long-term benefits. The company’s CEO made it clear that focusing on market developments was one of the objectives of restructuring.
From the above discussion, it can be clearly concluded that the idea of having Adidas restructure its corporate structure was inevitable given the huge losses it had incurred in the first quarter of the 2009/2010 financial year. Having the wholesale business placed under the management of a new chief sales officer would significantly improve the sales of the company, which had previously declined by 6 per cent.
This is because the distribution and marketing responsibilities would be bestowed to one individual thus ensuring proper audit in case of failure. Given the fact that Adidas deals with sportswear, which in most cases are seasonal because of the seasonality of sporting events, proper marketing was essential. This would ensure that the company makes high sales during the sporting events to cater for the costs incurred during low season.
Segmentation of the retail group was also significant in the restructuring process as it enabled Adidas deal with its close competitors like Reebok. Finally yet most importantly, synergy was achieved after the process of restructuring since the management of the company was structured in a way that efficiency was achieved. However, it should be noted that restructuring comes with certain costs that feature in the financial statements of the restructured company.
The US is one of the developed economies in the world. Its economic growth coupled with other factors such technological development, legal, social, and political stability have significantly enhanced the country’s attractiveness to domestic and foreign investors.
The apparel industry has attracted major players such as Nike, Addidas, and Reebok, which has led to an increment in the intensity of competition and degree of rivalry in the industry. As one of the industry players, Addidas incorporation focuses at increasing its market share both in its domestic and foreign market. Marketing is one of the most important aspects that the firm has incorporated in its operations.
The firm has formulated and implemented a multi-faceted market awareness strategy. The strategy constitutes an integrated marketing communication, which entails diverse methods of creating awareness. Advertising is amongst the promotion methods that the firm has adopted.
The intense competition in the apparel industry is motivating marketing managers to formulate marketing mix strategies. The marketing mix strategies formulated have to align with the target market (Lamb, Hair, & McDaniel 2012.). In a bid to enhance the effectiveness with which its brands gain effective market penetration, Addidas ensures effective coordination of its promotion, distribution, and pricing strategies.
Miller (2009) asserts that it is paramount for marketing managers to develop in-depth and up-to-date information regarding customers’ product needs. Therefore, it is important for marketing managers to understand the consumers’ buying behaviour.
Understanding the consumers’ decision-making process is paramount in firms’ effort to influence consumers in their decision making process. Over the years, Addidas has been committed to influencing consumers in their decision making process through advertising.
Aim and scope of the report
The objective of this report is to conduct a broad analysis of Addidas advertising campaign. The report takes into account the consumer’s decision-making process, involvement levels or risk perception, and the marketing mix strategies adopted by the firm. The report also incorporates a critique and recommendations on the ad campaign.
Analysis
In 2004, Addidas allocated $50 million of its marketing budget to advertising, which was the largest budget that the firm has ever committed to advertising. The campaign was undertaken through various mediums such as television, the Internet, and print media. The campaign aimed at enabling the firm to attain an effective market position especially within the sports footwear and apparels market.
Through the campaign, Addidas would market its diverse footwear and apparels products. The decision to engage in such an advertising campaign hinged on the fact that the firm had kept aloof with regard to the sports market for a considerable duration. Consequently, it needed to develop an edge in the apparel market.
The consumer buying process, involvement Levels/Risk Perception
Prior to purchasing a product or service, consumers engage in a broad decision making processes (Kumar 2008). This aspect explains the importance of marketers to develop a comprehensive understanding of the consumers’ decision-making process. The decision making process varies depending on the nature of the product that consumers intend to purchase and the level of risk involved (Reid & Bojanic 2009).
Products that customers attach high value to are considered to have a high degree of involvement. On the other hand, other consumer products such as purchasing toothpaste have a low degree of involvement (Kurtz & Boone 2009). According to Reid and Bojanic (2009), some products involve a high degree of risk.
The various risks involved in the purchasing process include social risk, functional risk, financial risk, psychological risk, and physical risk (Ferrell & Hartline 2008). Some purchases are characterised by a relatively a higher degree of risk as compared to others. Consequently, the decision making process that consumers undertake is also dependent on the degree of risk involved.
In their purchasing process, one of the aspects that consumers consider is the brand. Consumers make their decisions based on their previous product experiences. Therefore, if they become satisfied with a particular product or service, they are likely to repurchase it in the future.
The consumers’ decision-making process entails a number of steps, which include problem recognition, information search, identification of product, evaluation of alternative options, actual purchase, and post purchase evaluation.
By investing in the advertising campaign, Addidas sought to influence consumers at different points of their decision making process. The advertising campaign was effectively designed by incorporating a catchy slogan, viz. “impossible is nothing”. The message of the slogan aimed at encouraging consumers to overcome their individual challenges that they perceive as being impossible.
A number of factors influence consumers in their purchasing process. Some of these factors relate to situational, social, and psychological influences (Pride & Ferrell 2012). Psychological influences refer to the consumers’ self-concept, perception, motives, and lifestyles.
The social influences arise from various sources such as family members, reference groups, opinion leaders, roles, social class, electronic networks, culture, and subcultures. On the other hand, situational influences refer to purchasing reasons, the buyers’ mood, social surrounding, and condition. In designing its “Impossible is Nothing” campaign, Addidas objective was to influence consumers’ psychology in their purchasing process.
The campaign targeted consumers aged between 12-34 years old who are actively involved in sports irrespective of their social status, passion, and personal challenge. Adoption of such a slogan presented the advertising campaign as a campaign against oneself. Through the campaign, Addidas influenced consumers’ emotions in addition to challenging them to attain higher achievements.
The adoption of such a slogan was very effective in influencing the consumers’ decision-making process with regard to apparels. The slogan challenged consumers to try out issues in order to achieve higher goals. The basis of the ad campaign was that nothing is impossible if attempted. The effectiveness of designing the ad campaign made the message to resonate in the mind of the target audience.
Upon identification of the product to purchase, consumers undertake a comprehensive evaluation of alternatives, which arises from the fact that the market presents consumers with a wide range of products and services to choose. The alternatives considered are determined depending on the consumers’ past knowledge or association with a given product.
By incorporating a catchy slogan, Addidas managed to influence consumers in their search for alternative footwear and apparel products. Additionally, the firm managed to change and reshape the consumers’ perception by positioning itself as the most inspirational sportswear company.
Ultimately, the firm re-energised its brand, thus increasing its market share. Additionally, the decision to undertake such an advertising campaign also aimed at enhancing the firm’s competitive edge.
Marketing mix
Product strategy
In its operation, Addidas is committed at ensuring that its customers achieve a high level of satisfaction. One of the ways through which the firm intends to achieve this objective is by being innovative.
The firm has over the year’s undertaken comprehensive market research, with an aim of improving the firm’s effectiveness and efficiency with regard to its research and development processes. Consequently, the firm has developed sufficient capability in designing apparels and footwear products that are appealing to its customers.
In a bid to satisfy the entire market, Addidas has incorporated the concept of product diversification, which is evidenced by the fact that the firm produces products to meet the needs of both genders. In the process of designing its footwear and apparel products, Addidas ensures that its products are comfortable, and thus consumers can derive value and a unique experience.
Additionally, the implementation of the “Impossible is nothing” made consumers to develop a strong link with the firm’s products. Wearing Addidas’s products makes most consumers to develop a feeling of being a champion in whatever they do.
Pricing strategy
Price is one of the factors that consumers take into consideration in their purchasing processes. Through pricing, marketing managers can influence consumers tremendously. One of the ways through which this aspect is possible arises from the fact that price communicates value. Some consumers perceive high price as a representative of quality (Ferrell & Hartline 2008).
Thus, it is important for firms’ management teams to formulate effective pricing strategies. In the process of marketing its products, Addidas has incorporated diverse pricing strategies. Some of the strategies that the firm has adopted include penetration pricing, premium pricing, and psychological pricing.
The firm uses penetration pricing when introducing new apparels and footwear products. On the other hand, psychological pricing applies in the firm’s -effort to influence the consumers’ emotions in the decision-making process.
Promotion strategy
Creating marketing awareness is the first step towards a firm’s effort to attain profit maximisation (Pride & Ferrell 2012). In a bid to create sufficient market awareness, Addidas adopted integrated marketing communication in its advertising campaign. The firm implemented this goal by incorporating diverse market communication mediums such as television, print media, the Internet, and outdoor advertising.
The firm ensured that the television commercials were remarkably persuasive, and to achieve this element, the firm contracted 22 professional sports athletes across the sports spectrum to endorse its products. The commercials also involved a narrative of successes achieved by people who perceived some tasks being impossible.
As a result, the firm managed to inspire people to think about their obstacles and come up with ways of overcoming the same. The objective of the narratives was to inspire consumers to wear Addidas apparels and footwear when trying out what seems impossible to them irrespective of the outcome.
The TV commercials specifically aired on leading sports channels viz. Zee Sports, 180 Amsterdam, TBWA, and ESPN STAR. The firm ensured that the frequency of airing the commercial increased during primetimes such as during the UEFA Champions League and news time.
In a bid to reach its target market, Addidas used the Internet to create awareness to consumers aged between 18-24 years. The decision to use the Internet revolved on findings of a market research conducted by the firm. The research revealed that consumers within this age bracket spend a substantial amount of time surfing the Internet.
Therefore, using the Internet would significantly increase the firm’s effectiveness in influencing its target market (Doren, Fechner & Green- Adelsberger 2000). The firm also designed a website called adidas.com, through which it marketed its products. The website was effectively designed by incorporating audios and state-of-the-art graphics that motivated the target audience to spend a considerable duration on the site.
The firm also ensured that the website was interactive as possible by giving potential customers an opportunity to post and share their incredibly impossible stories.
Individuals who posted the most incredibly impossible stories were given an opportunity to attend a tennis match with Justine Hennin Hardenne, a free-kicking session with David Beckham, and a swimming session with Aussie ace Ian Thorpe. The firm also undertook advertising through homepages of various search engines such as Yahoo, MSN, Google, and ESPN.
Additionally, the firm also used other tactics such as posting adverts on billboards, expansive wall-scrapers, and building climbing. Addidas also used sponsoring techniques to create market awareness to the sports fraternity.
For example, the firm was the official sponsor of the 2006 World Cup, and in 2004, the firm sponsored the Olympics. Currently, the firm sponsors a number of football clubs such as AC Milan, Liverpool, Real Madrid, Bayern Munich, and the New Zealand’s national rugby team. With regard to print media, the firm posted adverts on various sports magazines and newspapers.
Distribution strategy
Addidas has adopted direct and indirect distribution channels in a quest to ensure that its products are accessible to a large number of customers. One of the direct distribution methods that the firm has employed entails establishing retail outlets in the market. The retail outlets are in strategic locations to promote accessibility to a large number of customers.
Additionally, the firm has also utilised the Internet to distribute its products by incorporating the concept of online shopping, which occurs through the firm’s website. Additionally, Addidas has also entered into contracts with various large retailers such as supermarkets and hypermarkets across the world. The contracts stipulate that the retail outlets should trade in the firm’s products.
Critique and recommendations
The advertising campaign undertaken by Addidas was very effective. The firm adopted an effective slogan that appealed the consumers’ emotions. Consequently, the firm managed to influence the consumers’ decision-making process. Additionally, the firm adopted effective marketing strategies that enabled its products to gain sufficient market penetration.
The adoption of integrated marketing communication enabled the firm to create sufficient awareness regarding its products. The firm’s success in its advertising campaign is evident given that the firm experienced an increment in its market share especially in the European market such as France, Germany, Italy, UK and Spain.
Additionally, the firm’s sales share also increased with a 20 per cent margin. As a result, Addidas successfully outperformed its major rival companies such as Nike, Reebok, and Puma.
In a bid to improve the chances of success, Addidas should have widened the scope of the advertising campaign. Increasing the age bracket of the target audience is one of the ways through which the firm should have improved the outcome of the advertising campaign for the firm would have increased its sales revenue.
In addition, to increase its sales revenue, the firm should have adopted other advertising mediums such as the radio. This would have increased the firm’s effectiveness in creating market awareness.
Reference List
Doren, D, Fechner, D & Green-Adelsberger, K 2000, ‘Promotional strategies on the World Wide Web’, Journal of Marketing Communications, vol. 6 no. 1, pp. 21-35.
Ferrell, O & Hartline, M 2008, Marketing strategy, Thomson South-Western, Mason.
Kumar, S 2008, Case studies in marketing management, Pearson Education India, New Delhi.
Kurtz, D & Boone, L 2009, Contemporary business 2009 update, Sage, New York.
Lamb, C, Hair, J & McDaniel, C 2012, Essentials of marketing, South-Western Cengage, Mason.
Miller, S 2009, The essential MBA, Sage, New York.
Pride, W & Ferrell, O 2012, Marketing, Cengage Learning, Ohio.
Reid, R & Bojanic, D 2009, Hospitality management, John Wiley and Sons, New York.
Background of CSR of employments in Adidas, Nike and Rebook
Different companies have incorporated different corporate social responsibility initiatives in their strategic plans. Although the three companies namely, Adidas, Nike and Rebook are in the sports products and apparel industry, they all have different CSR initiatives.
In its sustainability plan which is part of Adidas’ CSR program, the company states that it would like to be a world class recruiter through the inclusion of aspects like ranking, speed, cost and quality (Huang 2011). In addition, the company would like to be among the ten top employers in the market by embracing diversity in the workplace.
Currently, Adidas has ensured workforce diversity through the inclusion of employees from different ethnic background. A report by CSR adds that Adidas plans to ensure its leadership succession plan is well placed whereby 80% of the senior management positions will be held by internal employees (Huang 2011).
According to Adidas Group (2007), part of the company’s CSR ensures that discrimination is not practiced during recruitment and employment processes.
Nike is an international company which does not allow discrimination in the workplace by embracing diversification. Part of the CSR process as Adidas involves ensuring that its human management practices are improved, in addition to ensuring freedom of expression (Nike Inc. n.d). In addition, it seeks to reduce the number of hours that its employees work overtime in a bid to ensure employee satisfaction.
According to Dutton (2008), Nike Inc. has been developing an employment related CSR that incorporates education and leading as an example model in the shoe industry. The implication made is that Nike has been putting into place better working conditions and education on its suppliers to incorporate CSR that caters for employment part.
Nike 2006 CSR report on employment indicated that there was need to train and recruit employees equally and reduce the hours allocated for overtime in the company. In addition, it collaborates with its suppliers to develop worker training programs and offering human resource practices like better pay and working conditions (Dutton 2008),
On the other hand, Reebok on its CSR of employment has put into place policy which ensures that it incorporates diverse employees and encourage their workers to practice the same. In addition, it has put into place initiatives that ensure that employees shall not work for more than 60 hours in a week inclusive of overtime (Reebok 2008).
This human resource management practice has also ensured that employees work for at least 6 days a week and afford a single day for a rest. In aspect of hiring and employment, Reebok CSR advocates for non-discrimination on issues like salary, hiring, benefits, retirement, termination, discipline, advancement, assignments, and training opportunities (Reebok 2008).
Non-retaliation policy is part of Reebok CSR which ensures that employees can express their concerns freely without coercion by the management. Reebok seeks to ensure safe and healthy environment for its employees.
Positive and negative aspects of CSR of employers in Adidas, Nike, Reebok and Puma
The shared positive aspects of CSR initiative among Adidas, Nike, and Reebok include the principles of eliminating forced labour and abolishing child labour. None of these companies engages in the aforementioned labour practices which are against international labour laws. Employers have to ensure that the better working conditions and employees training initiatives are put into places as part of employers CSR.
For instance, Adidas Group has been able to get CSR certification, recognition and rewards from NGOs because of the same (Huang 2011).
With regard to negative aspects, Adidas has been on the forefront in ensuring that it instills CSR in Asia and other parts such as employee training, better working conditions, and employees engagement in decision making. Such efforts mean that the company has to incur financial costs, and this is a negative aspect of CSR (Adidas Group 2007, p.5).
Nike employers have been working with suppliers to implement worker training programs which would lead to better performance and increase in production (Dutton 2008). For instance, through CSR that target better working conditions among Nike’s suppliers it is possible to increase productivity. Cost has always been a negative aspect of CSR.
For example, Nike in 2008 carried a root cause analysis audit on its suppliers and its company to determine the challenges it faces which is a cost to the organization (Dutton 2008). In addition, Nike involves its stakeholders such as employees in seminars (Nike Inc. n.d). Moreover, feedback reports on CSR have been developed through stakeholders’ engagement process which in one way is a negative aspect.
Furthermore, Nike has been initiating employment initiatives in Thailand and Indonesia where locals are employed despite their low levels of education (Frank n.d). This may in return lead to low levels of productions and effectiveness among the employees.
One of the positive aspects of Reebok CSR of employers is paying the employees above, minimum wage and offering the employees safety and better working conditions (Economist 2002). As a result, performance and productivity are improved. A negative aspect of Reebok’s CSR of employers is the cost incurred in training its employees in the short run.
Reference List
Adidas Group 2007, Striving to improve performance: Corporate responsibility report 2007. Web.
Dutton, G 2008, ‘How Nike is changing the world, one factory at a time’, Ethisphere.
Frank, W n.d, Successful partnership for CSR activities in Thailand: The Nike village development project. Web.