1

ACKNOWLEDGEMENT

PREFACE

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

TABLE OF CONTENTS
1.

INTRODUCTION COMPANY PROFILE SWOT ANAYSIS OBJECTIVES RESERCH METHODOLOGY FINDINGS & ANALYSIS CONCLUSIONS RECOMMENDATION BIBLIOGRAPHY

6
8

2.

3.

16/39 41 42
43

4.

5.

6.

7.

53 55 57

8.

9.

INTRODUCTION

My project topic is "Adidas" which is

a shoe company and I am analyzing its Marketing Strategy. I have chosen this particular topic mainly for two reasons. Firstly, since my childhood days I had great interest in the shoes and I like to buy new shoes as and when it comes in the market. The Shoe Company that I most admire is Adidas. Secondly adidas grows as one of the best leading brand in the shoes and other accessories which is admired by all types of generation. Hence I have decided to do my project report on this company. The Adidas mission has changed little since founder Adi Dassler began making sports shoes in the 1920s: to be the best sports brand in the world. The history of Adidas is one of consistently meeting the evolving needs of the athlete. Focusing more on function and less on fashion, Adidas strives to provide athletes with shoes that can make a noticeable difference in their performance. Meeting athlete needs is what makes Adidas the best. Adidas America has continued to build on this history. In February of 1993, Adidas acquired Sports Inc., a US-based sports marketing company founded by former Nike executives Rob Strasser and Peter Moore. Sports Inc. had been working in conjunction with Adidas USA on the design, development, and marketing of the Adidas Equipment line. This line helped rejuvenate and reposition the Adidas brand in the United States by creating an exclusive line focused on fulfilling the functional needs of the athlete and by utilizing the best materials and athlete input in the tradition of Adi Dassler. It offered moisture management, thermal
6

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

COMPANY PROFILE

In German village of

the

small

Herzogenaurach with Adidas

the world began its love affair

(Rynos Company History). In 1920, Adolf Adi Dassler brought to life those three little stripes. With his brother, Rudolph, Dassler manufactured his first sports shoe, made for training, after realizing the need for performance athletic shoes. In1948, the
7

Dassler brothers separated to form their own two separate companies. Dassler formed Adidas and his brother formed Puma, both headquarters in Herzogenaurach. The Adidas mission has changed little since founder Adi Dassler began making sports shoes in the 1920s: to be the best sports brand in the world. The history of Adidas is one of consistently meeting the evolving needs of the athlete. Focusing more on function and less on fashion, Adidas strives to provide athletes with shoes that can make a noticeable difference in their performance. Meeting athlete needs is what makes Adidas the best. Adidas America has continued to build on this history. In February of 1993, Adidas acquired Sports Inc., a US-based sports marketing company founded by former Nike executives Rob Strasser and Peter Moore. Sports Inc. had been working in conjunction with Adidas USA on the design, development, and marketing of the Adidas Equipment line. This line helped rejuvenate and reposition the Adidas brand in the United States by creating an exclusive line focused on fulfilling the functional needs of the athlete and by utilizing the best materials and athlete input in the tradition of Adi Dassler. It offered moisture management, thermal insulation, weather protection, ease of movement, and safety, helping the athlete to perform more efficiently. After the successful creation and launch of Adidas America General Information For over 83 years Adidas has been part of the world of sports on every level, delivering state-of-the-art sports footwear, apparel and accessories. Today, with total net sales of 6.1 billion and net income of 208 million, Adidas - Salomon is a global

leader in the sporting goods industry and offers the broadest portfolio of products. Adidas-Salomon products are available in virtually every country of the world. Our strategy is simple: continuously strengthen our brands and products to improve our competitive position and financial performance. The company's share of the world market for sporting goods is estimated at around 15 percent. Activities of the company and its approximately 100 subsidiaries are directed from Adidas-Salomon AG's headquarters in Herzogenaurach, Germany. Also located in Herzogenaurach are the strategic business units for Running, Soccer and Tennis as well as the Research and Development Center. Additional key corporate units are based in Portland, Oregon in the USA, the domicile of Adidas America Inc. and home to the strategic business units Basketball, Adventure and

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

Turnover and Brand Image

9

The turnover of Adidas company has grown to 16 Million US dollar in 2004-05. Almost 53% of the turnover is from sale of apparel and accessories with the rest from footwear. The Adidas brand is one of the most popular brands as determined by a within brand survey of sportswear brands in the year 2004. Future Plans Turnover is expected to rise to 18 Million US dollar for Adidas India in 2005-06 cash break even is fore cast during calendar year 2005 and an operating break even during 2006. The other Adidas owned brands, salomon & taylor made are expected to hit Indian Adidas stores during 2005 and 2006.

10

MARKETING STRATEGIES : AN OVERVIEW OF ADIDAS

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

Theory: what is market research and why it is important. Market research is a method of collecting data which will make you (as a business) more aware of how the people, you hope to sell to, will react to your products or services. Market research will answer questions like: Whether your products or services are needed Who might want to buy your products What age, sex, income occupation etc. are the people I want to sell to.

If there are changes taking place and how this might affect what you sell How well your products or services might sell How much demand there is for what you hope to sell What price would people be prepared to pay

11

Conducting market research There are number of ways in which you can carry out your research but you need to carefully consider why you made this choice and what you hope the evidence will suggest to you. Questionnaires and personal interviews are one of the most common ways in which you can conduct market research, and there are many methods of gathering data this way: Direct Interview, Mail Survey and Telephone interview. Depending on the type of data you hope to collect will have a impact on what you choose to use. I have made use of two type of survey methods, questionnaire and mail survey. I have asked some question about the company my mail and also by direct contacts. The Question I have asked are given in questionnaire part below.

Theory: marketing mix

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

Marketing decisions generally fall into the following four controllable categories: 1. Product 2. Price 3. Place (distribution) 4. Promotion

12

The term "marketing mix" became popularized after Neil H. Borden published his 1964 article, The Concept of the Marketing Mix. Borden began using the term in his teaching in the late 1940's after James Culliton had described the marketing manager as a "mixer of ingredients". The ingredients in Borden's marketing mix included product planning, pricing, branding, distribution channels, personal selling, advertising, promotions, packaging, display, servicing, physical handling, and fact finding and analysis. E. Jerome McCarthy later grouped these ingredients into the four categories that today are known as the 4 P's of marketing, depicted below:

The Marketing Mix

13

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

Product Decisions The term "product" refers to tangible, physical products as well as services. Here are some examples of the product decisions to be made: Brand name Styling Quality Price Decisions Some examples of pricing decisions to be made include: Pricing strategy (skim, penetration, etc.) Cash and early payment discounts Price flexibility Price discrimination Distribution (Place) Decisions
14

Distribution is about getting the products to the customer. Some examples of distribution decisions include: Distribution channels Market coverage (inclusive, selective, or exclusive distribution) Warehousing Distribution centers Transportation Promotion Decisions In the context of the marketing mix, promotion represents the various aspects of marketing communication, that is, the communication of information about the product with the goal of generating a positive customer response. Marketing communication decisions include: Promotional strategy (push, pull, etc.) Advertising Personal selling & sales force Sales promotions

15

Theory: SWOT analysis

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

The Company Adidas entered the Indian market in 1996 by setting up a 100% subsidiary of Adidas AG called Adidas India Ltd. and announced its joint venture with Magnum International Trading Company Ltd. on October 1, 1996.

16

The new joint venture Adidas India Ltd. was incorporated with an initial investment of US $ 205 million with Adidas India Ltd. holding 80% of the equity and Magnum holding the balance 20%. This investment was raised to US $ 6.4 million with the equity structure remaining the same. Currently, the total investment stands at US $ 11.4 Million with the equity structure changing to 91.4% by Adidas and 8.6% by magnum. Adidas Range of Products in India A month after announcing the joint venture, Adidas India Ltd. launched its range of sports footwear, apparel and accessories in New Delhi on November 1, 1996. Subsequently, Adidas products were also launched in Mumbai, Bangalore, Chennai, Hyderabad and Calcutta. Currently, Adidas products are available in 30 cities in India. The range of Adidas products available in India include sports footwear featuring some of the most popular innovations and technologies developed by Adidas such as Feet You Wear, Torsion system and adi wear. The sports footwear available in India includes a wide range of core categories such as adventure, basketball cricket, golf, indoor, running, tennis, training, soccer and workout. Adidas has introduced in India, a wide range of sports wear for both men and women. These include apparel for athletics, basketball, cricket, golf, running, soccer, swimming, tennis and training for Men. The womens range includes apparel for athletics, golf, running, swimming, tennis, training and workout. Accessories include bag packs, campus bags, medium and large kit bags, caps, socks, wrist and headbands.

17

Adidas Markets its products in India through a combination of mega exclusive stores (area of 1000 sq. feet and above), exclusive stores, multi-brand stores and distributors. At present, Adidas is available in 80 exclusive outlets out of which 34 are company owned with 8 new Company owned stores planned for 2005 and in 500 multi-brand outlets in India.

MARKETING-MIX ( FOUR PS): ADIDAS

THE PRODUCT:
18

Whatever your athletic preference, you can now purchase an extensive range of Adidas footwear and apparel online. From running shoes to baseball cleats, eye wear to lanyards, collegiate licensed jackets to good old fashioned cotton T-shirts, all things sport are available at the Adidas store. HOW DO ADIDAS CREATE ITS PRODUCTS Adidas goal is to create a product that is honest it must perform. The rule is simple: form follows function. Technology and functional design. A development team makes the actual prototypes. These prototypes are then presented to the retail market by the marketing department. An Adidas product is the result of the intense thought and creative energy of many different people. The following is a general outline of how we create our performance-based products. 1. The marketing department evaluates athletes needs and develops a

basic concept of how those needs should be met. This concept is then presented to the design department. 2. Based upon this concept from the marketing department, the design teams sketch possible prototypes.

19

3.

The people from design and marketing consider the prototype sketches together, narrowing the selection to those they anticipate will most successfully meet athletes needs.

4.

The development department then works with the design department to create an actual prototype from the selected sketches.

5.

Three separate groups marketing, design and development meet and discuss how to improve the prototype.

6.

Samples are wear-tested to ensure the product meets Adidas standards for performance and durability and sport for which it was designed. stands up to the demands of the

7.

Preview samples are presented to key accounts and consumer focus groups for feedback. Based upon this information, final changes are made.

8.

Samples are distributed to Adidas sales representatives for presentation to retailers.

9.

The finished product is delivered to retailers.

20

As A BRAND At Adidas you have got to be sporty. At Adidas the brand awarding is been taken rather seriously at its headquarters. Adidas wants to bring inline skates into India. What that kind of stuff got to do with Indian market? Yes, it wont really be a hot seller, but it will contribute a lot to Adidas brand image. Thats the Adidas way of doing it image is a critical part of branding strategy the world over. The idea of the company is to introduce performance specific sports shoes in the Indian market by building images around the world & at the same time create the need for these shoes at the ground level. Adidas already has heavy weight sportsmen such as Sachin Tendulkar, Leander Paes & Mahesh Bhupathi endorsing the brand in India. They had the image, apart from endorsing the performance element in the brand. Adidas steps out of crease with a clear sports positioning. Adidas will take on arch Nike with almost the same positioning. Its working with promising athletes to give them a taste of its products. Adidas nowadays is capturing an attitude that is sports related.

21

Adidas in fact did go through a limited fashion phase. Adidas says that you are tempted to make quick buck but we would like to stick to the sports brand image because that make us fashionable. . For Adidas the product plays an eminent role in the enhancement of their corporate as well as sports image: ADIDAS SAYS Nothing compromised. The most innovative Adidas products created specifically to help make you a better athlete. For Adidas, product is not just a assortment of few items. But it involvesdeveloping of the right product which can then be put to right place & sold with the right promotion & price. VALUE OF ITS PRODUCTS FOR ADIDAS Our goal is to create a product that is honest it must perform. The rule is simple: form follows function. As studied earlier an Adidas product is the result of the intense thought and creative energy of many different people. If a company sell an automobile, is it selling a certain no. of nuts and bolts, some metal sheet, an engine and four wheels?

22

If a company sell a delivery service, is it selling so much wear and tear on a delivery truck and so much operator fatigue? As per Adidas the answer to these question is instead what we are really selling is the satisfaction, use or profit the customer wants. Adidas says that all the customer wants is, that whatever product they purchase should fulfill all their needs and preferences. They dont care how they were made. Further they want that when they order something, the dont really care how much out of the way the driver had to go or where he/she has been. They just want their package. That means for them only the final service matters. As per Adidas the idea of product potential customers satisfactions or benefits is very important. Adidas says that the total product is not just a physical product with its related features, but it includes accessories, installation, instruction on use, the package, perhaps the brand name which fulfills some psychological needs a warranty and confidence that service will be available after the purchase.

23

PLACE AND PHYSICAL DISTRIBUTION: A: Place Adidas is very much

concerned about its second p. as per Adidas place and physical distribution of the product is something on which almost every company spends a handsome amount of money. Hence Adidas takes a good care of its place and physical distribution process. Adidas has appointed marketing specialists who are taking care of the supply of the product and their distribution channels and process. Process used assorting progress Entire range, which is available is put together to give a target market what it wants. Marketing specialists put together an assortment to satisfy some target market. His is usually done by those who are close to the retailers only.

24

B: Physical distribution As per Adidas nearly half of the costs of marketing is spend upon the physical distribution. To take care of this problem Adidas has appointed marketing managers who decides how the transporting and storing functions should be divided within a channel. TRUCKS

In Adidas, except the export products, trucks are considered to be the best medium for transport. The flexibility of trucks makes them really good for moving small loads for short distances. They can travel on almost any road. According to Adidas they can give extremely fast service. Also trucks causes less breakage in handling.

25

PROMOTION: Adidas is one of the Indias biggest company of sports that spends nearly $10 million on its sales promotion and advertising in Indian Market. Adidas believe that it just cannot be taken lightly. It is a very important aspect of products life cycle. It is the process which is responsible for the growth or decline in the sale of the product. Adidas thinks that promotion is communicating information about the product between the seller and the buyer to change attitudes and behavior. To handle the companys promotional activities Adidas has employed marketing managers, wherever the Adidas is located. These marketing managers look after process of the promotion of the products of their company. As per Adidas the marketing managers promotion job is to tell the target customers that the right product is available at the right place and at the right time and especially at the right price. Adidas thinks that only taking the product to the customers is not a task of the company. But company takes a very important look about how the product works and this message is communicated to their consumers. Because a wrong message can lead to the end of their products life.

26

Sales Promotion Adidas is the most popular amongst its rival for its excellent sales promotional activities. As per Adidas they say that they themselves are responsible for the encouragement of the customer to by their products. Adidas believes sales promotion tries to compliment the companys selling efforts. STEPS THAT ADIDAS TAKE TO PROMOTE SALES In the last years the Adidas has almost given sale to its products 6 to 7 times i.e. almost twice in a year Adidas goes for discount on sales. They arrange contest. In order to motivate the employees of the company Adidas also prepares training material for the companys own sales force. They even design the sales materials for the companys own sales force to use during the sales calls. As per Adidas, people see same message in different ways. They may interpret the same words differently. So Adidas always tries to deliver the message which everyone can easily understand.

27

ADVERTISING As per Adidas advertising can get results in a promotion blend. Good results are obtained at a cost of course. The amount spent in the Unites States for advertising is growing. Continuously, from World War II to 1980 it went from $1 billion to $50 billion. Adidas also spends nearly $2.9 million on its advertising throughout the world. Adidas in India is spending almost $17 million on advertising. The heavy weight players like Sachin Tendulkar, Leander Paes and Mahesh Bhupathi are already attached with their ad-campaigns. PRICING: Adidas is clear, it wants to become the no. one sports brand in India, a choice brand for all brands. So far so good, but how will it tackle a price conscious market like India? Adidas feels that being a high energy business Adidas introduces 600-700 articles every six months enables the brand to remain fresh and bring on an international and Indians the brand from the price stand point. Price, thats the most critical factor in the Indian context. Adidas believes it has to deliver a functional at an affordable price. Its a tough job to maintain the integrity of the performance and still come out with a product a
28

right price point. Globally shoes start at $50. But in India as the perceived need is lower, you have to make the product more affordable. To tackle this, Adidas came out with speed 2000, a product priced at Rs.995 with the help of local and Hong Kong source people. Adidas however feels that its just the matter of time before India coverages the world on this front. It is very difficult to operate on a lower price point and maintain integrity of product, but its been barely 3 years since the sports market has taken off. The original sector is just 20% of the total market and 80% of the volumes comes from sporty shoes. But our market is producing products at a price that is relevant to the consumers. Adidas feels that as the volume go up, Adidas will try and work out price points as people graduate with better understanding of quality and price

perception. Volumes are bound to go up. Adidas started at the time when India had no strength out in the sports products market in 1989 90. Its then licensing partner Bata, and it had limitations of what it could have put behind the brand. So company took the next best step when the licensing agreement ended to take a bigger share in business. To conclude we can say that Adidas is putting all efforts to bring down the price consciousness in the Indian market. Company is trying to make

29

products, which are easy to afford and still maintain the integrity of their performance. Growth has been phenomenal for Adidas even given the base is small. In 2002 Adidas grew by 25%, 2003 by over 50% and this year Adidas is expecting more than 50% in terms of value in both shoes and apparel, while the industry growth as a best case estimate has been 20-25%.

30

31

MARKETING STRATEGY ADIDAS OTHER STRATEGY

Adidas, the brand with three stripes, seems to use the elements of hightension in its ads. Remember the Sachin Tendulkar commercial? How everything is near-frozen, and the shattering glass signifies release. Release of tension. Adidas gives you a chance to but the boundaries in every sphere. Only now, the setting is not the playground or the track or the court, it is the urban landscape with its omnipresent traffic jams, crowded streets and so forth. This way, Adidas becomes a part of life. Anyones life. You dont have to be the high-voltage performer to be a part of the Adidas family. And it goes beyond that Adidas becomes something that makes you better. Not just as an athlete, but as a sports person, a better human being. One of the advertisement: The spot featuring Boldon, shows him chasing a thief (whod stolen a TV set when its owner was in the bath) through the dark streets. To help a man (the owner, in a towel) in distress. And he uses all the power that he can, to do what he has to do and what he needs to do. And Adidas helps him perform better, than he would otherwise have been able to. This is perhaps shown in an oblique way when the spot ends at the feet of Boldon and the bather.

32

One is wearing a pair of Adidas shoes while the other is barefoot. Adidas makes you better, goes the base. In short, the other man could have done as well as Boldon. The bather reads any man. Any man who wears Adidas. And Adidas goes beyond athletic performance it becomes everyday life. In stark reality. Though humorously and light, it has a deep meaning. MARKETING: ADIDAS In 1997, Adidas became Adidas-Salomon with its US $1.4 billion purchase of Salomon, a French manufacturer of skis and other sporting goods. The deal put Adidas one step closer to competitor and world market leader Nike, and one step ahead of Reebok. Salomon, aside from its winter sport equipment, also owns golf club brand Taylor Made and cycle brand Mavic. The merger makes Adidas/Salomon the second largest sport marketer in the world, and number one in Europe. Salomon is currently very strong in North America and Japan, and Adidas has the largest market share in Europe. Adidas is, like Nike, very active insuring sponsorships advertising deals with celebrities. Some of the most famous are Martina Hingis (tennis), Kobe Bryant (basketball), Peyton Manning, Paul Palmer (swimmer), jan Ullrich (racing cyclist) and

33

the New York yankees. David Beckham, Patrick Kluivert and Zidane all wear Adidas boots, the Predator Accelerator. LEVERAGING ON SACHIN: ONE MAJOR PART OF MARKETING STRATEGY IN INDIA Continuing its association with trump card Sachin, the local four-ad print campaign tries to connect Adidas product attributes with Sachins magic. Instead of presenting just one dimensions : The first ad connects Sachins choice of a heavy bat with Adidas Falcon Dorf light weight shoes. Says the headline: Sachin likes his bat heavy, not his shoe. The second new shoe range to be introduced for the first time in India. Sub-branded Aksu and priced at Rs 2,299, these are athletic sandals primarily meant for waterbased adventure sports. Finally, The next ad will convey that Adidas covers various price points by promoting its existing Portland range priced at Rs 1,499 and 1,799 (the leather version).

34

The importance of celebrity sponsorship and events to Adidas is illustrated by Robert Louis-Dreyfus letter in the companys 1998 annual report : When it comes to showcasing our brands, 1998 was truly exceptional. Early in the year, the Winter Olympics focused the attention of sports enthusiasts on Nagano. In summer, the Soccer World Cup in France attracted more spectators than any single sports event before. When the French team, promoting the three stripes, won the World Cup, we could not have wished for more. These were great times for our brand. Adidas has reached an agreement with ISL Marketing G of Switzerland to become an official sponsor of the 2000 UEFA European Championships. Adidas will have access to the official emblems, mascot and trophy for the design of its own products.. In 1998, the overall Adidas budget for promotion and sponsoring accounted for nearly 15% of turnover. The positioning is being communicated through its global campaign-released worldwide in February 1999 but in India, only in May-as well as through a four-ad print campaign developed locally by RK Swamy/BBDO. Says G Kanan, general manager, marketing, Adidas: We are the only brand with heritage in sports. As a brand, were not an attitude thats fashionable. Were an attitude that is relevant all the time.

35

The campaign also introduces a new brand line for Adidas: Forever Sport. The line sums up the deeply-felt and long-term love affair (it has been involved with sports since 1928) that Adidas has with sport in all of its forms. Interestingly, the new brand line has been introduced almost after a decade, when it was using Earn your stripes as its tag-line. The company dropped it during the late 80s after it found that it wasnt connecting too well with its consumers. But the golden question is that will the campaign make Adidas run? The company expects the campaign to strengthen the image of the brand since research had indicated that neither of the three multinational sports shoe brands present in India had a clear image: most were perceived as diffused brands and personality-led. Says Kanan: Sachin has and will play a major role in pushing the brand. He is important, as there are certain values a consumer needs to know about Adidas. But after a certain duration, we have to present a global perspective too and hence the Forever Sport campaign. Interestingly, Adidas claims that it did not want to be caught up in the clutter of the World Cup promotions-and deliberately chose not to associated with the World Cup. Instead, according to Kanan, the campaign has been broken now to coincide with the peak season (April-June). The World Cup is incidental. Its too large an event to make significance for us, says Kanan.

36

However, the company is maintain a steady and dominant presence in the media during the Cup: strewn over select channels like Star, Discovery, and ESPN are the Sachin ads promoting Adidas. Further, Adidas is planning to add 30 new stores this year. Were looking at driving the market through exclusive stores. The logic is clear: use Forever Sport to ensure sales forever. Never achieved profitability and collapsed under the weight of its own unrealized ambitions. Adidass objective with the new line of footwear is to generate sales leads through its Web site, either through direct purchase or a retailer finder. Villota says that every style of footwear has a story, particularly those endorsed by star athletes, and its these stories that sell the shoes to buyers. While Villota wouldnt disclose how much of Bryants Adidas footwear is sold online, he did say one of three visitors to the Bryant portion of the Adidas site demonstrated purchase intent by clicking through to the store or to the retail finder. The newest version of Bryants footwear hits the street Nov. 1, coinciding with the start of the 2003-2004 NBA season. While Adidas wont comment on the new sites features, citing competitive pressure, Villota says it is Adidas Americas most ambitious integration of Web content and electronic marketing.
37

The Adidas - Salomon Executive Board will propose paying a dividend of CC 0.92 per share to the Annual General Meeting of Shareholders on May 10, the same amount as in the previous year. This decision to maintain a stable dividend level, despite the EPS decline in 2004, underlines Managements confidence in its ability to achieve its 2005 targets. Management views 2004 as a year of consolidation and restructuring and has increased the pay out percentage to reward long-term shareholders. THE ADIDAS LOGO

The Trefoil was adopted as the corporate logo in 1972. It represents the heritage and history of the brand. In 1996, it was decided that the Trefoil would only be used on

38

heritage products. Examples of product featuring the Trefoil logo include the Stan Smith, Road Laver, A-15 warm-up, and Classic T-shirt.

Equipment
The Adidas Equipment line was launched in 1991. This line of footwear and apparel represents the most unique and functional of Adidas products. Equipment is the ultimate expression of what is uniquely possible by design when form follows function. In January 1996, the Three-Stripes brand mark became the worldwide Adidas corporate logo. This logo represents performance and the future of the Adidas brand. This logo is used in all advertising, printed collateral and corporate signage. Since 1949, the Three-Stripes have been an integral part of our brand and product designs. This trademark has become synonymous with Adidas and its dedication to producing high-quality athletic products to help athletes perform better.

39

ADIDAS:
Overview/Companys Financial Facts

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

SWOT ANAYSIS
Strengths: The main strength of Adidas is his Product Quality. The quality and the material uses in Adidas is very good. The company has a good brand image in the market, the publicity and the advertisement is also very good and lastly company hold a heathly market share in the market.

40

Weakness: The major weakness in the Adidas is that the manufacturing of the products of Adidas is not done in India itself it is being import hence the cost become high and the margin of profit becomes low thats why company must give a deep thought on manufacturing their products in India. Another major weakness in the company is that it is not catering to all the segments which I have already discuss above, If these two weakness in the company can be eradicated then the company may earn high profit and better market status. Opportunities: Adidas does have many products for the urban segment or poor people, but there are hardly any product or we can say that there are no products for this segment. India is more a rural country, in the total population of India major part of population lives in rural area and these people can not afford the costly products of the company like Adidas hence company must target this particular segment they must introduce the shoes and other product according to their demands. and also price is one of the major factor which may influence this type of segment hence company should make their policy accordingly. Company must also consider the rage of products as compare to Nike and Reebok. In my opinion the company must introduce more rage or more variety in the market to compete with their competitors and also the customer have more choices to choice the product from.
41

Threats: Adidas does not have strong distribution network as compare to Nike and Reebok in India. Nike has more number of retail outlet then Adidas and Reebok has a unique distribution network, the company Reebok not only use its outlet for the sale of their product but also use some other shoes company outlet like Bata. In a Bata showroom u can find Reebok shoes and other products. But this is not a case with Adidas hence Reebok has a extra advantage over Adidas.

OBJECTIVES OF THE STUDY

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

To find out Adidas and Nike are main competitors but Nike is more preferred brand then others. To find out that how Adidas hold to the market and what are the areas in which Adidas can improve.

42

RESEARCH METHODOLOGY
STAGE ONE The project study started with collection of Secondary Data. The sources for the secondary data are as follows: Data Sources News Papers Magazines Internet Press articles on Adidas.

Stage Two I visited the Adidas India Ltd., which is located In Mehrauli (new Delhi). I Also Got Some Of The Information From The Other Resources Of The Corporate Office Like : Company Journals Company Catalogs Questionnaire (Structured & Non Disguised) And Other Related Sources.

43

FINDINGS
Company research report (A) Company Description Adidas-Salomon AG(ADIDAS). Production and marketing of sports equipment, footwear and apparel under the brand names of Adidas, Salomon, Taylor Made and Mavic. Sales of Footwear accounted for 45% of 2004 revenues; Sales of Apparel, 35% and Sales of Hardware, 20%. (B) Competitor Analysis Adidas-Salomon AG operates in the Mens & boys clothing sector. This analysis compares Adidas with three other sport shoe and apparel manufacturers: Nike Inc. of the United States (2004 sales of $9 billion of which 59% was Footwear), Reebok International Ltd. of the United States (2003 sales: $2.87 billion of which 73% was Footwear), and Amer Group PLC which is based in Finland (2003 sales of 6.46 billion Finnish Markka [US$996.88 million] of which 24% was Racquet Sports). Note: not all of these companies have the same fiscal year: the most recent data for each company are being used.

44

(C) Sales Analysis During the first quarter of 2004, sales at Adidas totalled 1.56 billion euro. This is an increase of 2.7% from the 1.52 billion Euro in sales at the company during the first quarter of 2003. During the previous 17 quarters, sales at Adidas have increased compared with the same quarter in the previous year. Sales at Adidas appear to have some seasonally: during each of the previous 5 years, sales have been highest during the third quarter, which has accounted for between 28.0% and 32.0% of the annual sales. Adidas reported sales of 5.38 billion Euro (US$5.35 billion) for the year ending December of 2004. This represents an increase of 9.0% versus 2000, when the companys sales were 5.35 billion Euro. Sales at Adidas have increased during each of the previous five years (and since 1999, sales have increased a total of 226%). D. Recent Sales at Adidas
(Figures in Billions of Euro)
6.06 6.53

8 6 4 2 0 1999 2000 2001 1.79 2.61 3.62

5.47

2002

2003

2004

In 2002, sales in Latin America were up at a rate that was much higher than the company as a whole: in this region, sales increased 36.0% to 171.00 million euro.
45

Adidas also experienced significant increases in sales in Asia-Pacific (up 3.9% to 875.00 million Euro). GROWTH Adidas is a constantly growing company. It is global in scope with the majority of its sales coming from Europe, followed by the United states, with the smallest percent of Adidas sales coming from Asia. Adidas sales have grown significantly each year from 1994 to the present. Adidas is the leading producer of sporting goods in Europe and it is second in the overall world market, just behind Nike. Nearly 55% of Adidas revenues come from Europe, while 37% come from the Americas, and only 9% of revenues come from a growing Asian market. For anyone not familiar with the structure of this company (since it is not based out of the USA), it is much like US based competitor Nike. Adidas has stock traded on exchanges in Frankfurt and Pairs, and its ticker symbol is ADDDY. The pie chart below shows exactly how the ownership of the company is spread out across the world. Most of the ownership comes from Europe, while a substantial 30% comes from the United States, and the rest from Asia.
Asia 5%

Europe 40%

US 30%

46

UK 25%

Adidas is a growing company as stated above, but how much and how fast? As you can see from the graph of net sales over the past five years, sales have grown rather exponentially, although growth slowed in 1999. This growth in sales comes from not only an improving world economy, but from Adidas marketing efforts to make it one of the most popular sporting goods brands. This shows that Adidas does not have a large market share in Asia as compare us and Europe and my questionnaire (given below) also suggest that company can improve a lot the certain areas are marketing distribution and competing with the competitors. The company has to become innovator not follower they must do something differently to come with the flying colors.

47

48

DATA ANALYSIS

1. How do u rate the company marketing strategy as compare to the other competitors company like Nike, Reebok etc.? Out of 80 people 36 had said Adidas have a good marketing strategy and should continue like this only, 24 had said Nike is more better then Adidas, 16 said Reebok is good and 4 said others.

others 5% reebok 20% adidas 45%

adidas nike reebok others

nike 30%

49

2. Do u think that the company Adidas is giving its customer what they want in terms of quality and prices or value for money? Out of 80 people 68 person are satisfy with the quality and the price of the product and other says that they are not satisfy.
happy not happy

not happy 15%

happy not happy

happy 85%

50

3. Do u think that the advertisements and the brand ambassador of the company is good enough? Out of 80 people 66 person said yes they like the advertisement

very much and rest said no they dont like them.

18%

0% happy not happy 82%

51

4. What things u keep in mind while purchasing shoes will it be quality, advertisement, price or design? Out of 80 people 69 person had said that the product must have good quality and good design and other said they purchase these shoe for status symbol only.

14%

0%

quality other factor

86%

52

5. If u have to purchase shoe except Adidas which shoe it will be and why? Out of 80 people 42 have said Nike, 23 said Reebok and 15 others, which shows that the main competitor of Adidas is Nike. They have given different reason for that some said Nike and Adidas are have same range of products and there quality and prices is also same, so different people have different opinion.

19% nike 52% 29% reebok others

53

5. What do u think that the company Adidas must do to improve its marketing strategy? Most of people said Adidas has a good marketing strategy but the company should launch more products or u can say more variety to their products.

54

LIMITATIONS

The research project has been completed with ease and comfortably. No particular limitation or shortcoming was realized during the analysis. Also, due to time constraints, enough justice could not be done to the project.

55

CONCLUSIONS

ADIDAS in INDIA has always been driven by its Value-for-money strategy. The company needs to identify critical success factory and work assiduously towards achieving it. As the world grows to become one, many problems will arise that cannot be solved. One of the primary challenges associated with globalization is balancing conflicting and competing objectives. In the case of Adidas, it has faced such problems already and how they have dealt with them is with flexibility and calmness. Despite what could be higher costs, Adidas has chosen to stick with their human right codes and Standards of Engagement rather than continue to be associated with subcontractors who treat works in inhumane ways. As Adidas has grown worldwide, it has had to deal with problems of heterogeneity vs. homogeneity. In other words, in an

increasingly heterogeneous and global world, diversity in the workplace has appeared to emerge as an issue. Companies, including Adidas are no longer homogenous in the sense that their companies have grown worldwide. And as a result, Adidas has had to make worldwide headquarters and produce information and products in several different languages. Having to spread its workforce, Adidas has come to depend on intangibles.

The knowledge, worldwide experience and diversity that an Adidas employee can bring to the table are valuable. Recently, how successful companies are in the global
56

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

knowledge and maintains diversity are the managers, yet they too are facing new changes.

57

RECOMMENDATION
For 2004, the Adidas brands new divisional structure will be in place to start delivering positive results for the Group. Adidas America will remain a challenge but nevertheless will deliver qualitative sales improvements in the second half of 2005. Top-line growth is expected in all other regions. Double-digit growth from Salomon is projected as a result of the continued innovative strength and the increasing profile of their products. The integration of Mavic with Salomon, which began in 2002, will continue in 2005, with further synergies between the two brands. At Taylor MadeAdidas Golf, increased marketing and sales support will target ambitious golfers, and solid growth in all the major golf markets is expected to continue. In addition to these positive top-line developments, gross margins are expected to remain within a range of 41% to 43%, operating expenses will decline as a percentage of sales, and as a result net income is projected to increase by 15%. Adidas is currently ranked third in almost every category in the global athletic shoe industry. However, they rank second only to Nike in terms of sales. The main

competitors of Adidas include Nike and Reebok However, other smaller competitors include Fila, Puma and Easy Spirit. Adidas commands only 5% of the athletic shoe business in the U.S., compared with the 40% for the fearsome Nike, but the rejuvenated Adidas has climbed to within easy reach of Reebok, which has been
58

struggling in the past couple of years. Adidas is also steadily regaining market share lost to other brands such as L.A. Gear and Fila (Fortune, 2000) Since acquiring their current president, Louis-Dreyfus, Adidas, a wholly owned subsidiary, has competed with a whole new strategy. Aside from cutting the whole line of German senior management, Louis-Dreyfus also fired management in Asia, who failed to match competitors low costs in subcontracting shoemaking to local companies. While Louis-Dreyfus fought bring down costs, he also took a gamble on the side. Adidas began to focus on global marketing. But the battle has only started, and the foreign sports companies are here for the long term. They can sustain losses for years to come in order to gain market share. What they are doing at present, is building up distribution networks to cover every nook and corner of the country and, setting up manufacturing facilities. Only those Indian manufactures which have a strong focus on manufacturing and technological upgradation will survive in the long run, although with a much smaller market share than they have at present. Small companies will be sidelined totally and will exit from the sports market altogether. ADIDAS in INDIA has always been driven by its Value for-money strategy. The company needs to identify critical success factory and work assiduously towards achieving it.

59

BIBLIOGRAPHY
Books:
PHILIP KOTLER, MARKETING MANAGEMENT, EDITION 2005.

V.S RAMASWAMY AND S. NAMAKUMARI MARKETING MANAGEMENT, SECOND EDITION. WILLIAM STANTON.J, MICHALL J.ETJEC, BRUCE J.WALKER FUNDAMENTAL OF MANAGEMENT. RAVICHANDRAH.N COMPETITION IN INDIAN INDUSTRY.

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

Magazines
A&M Business India India Today Business Today

Newspapers
The Times of India The Hindustan Times The Economic Times

From Company
Company Journals Company Catalogs

60