RETAIL MARKETING

(RM Group 1)

Term Assignment

On

“ADIDAS AUTHENTIC SPORTS”

POST GRADUATE DIPLOMA IN MANAGEMENT

(Term-II; Batch 2019-21)

Under the Supervision of

Prof. BD Nathani

Submitted by
Group 7

Tilak Nath PGFC 1944

Samyak jain PGSF 1934
Pritesh Bag PGMB 1921
Deepak Tyagi PGFC 1925
Saurabh Singh PGMB 1953
201 “

JAIPURIA INSTITUTE OF MANAGEMENT

A-32 A, Sector 62, Institutional Area, Noida- 201309 (U.P.)
17 December,2020

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 Adidas Authentic Sports
INTRODUCTION:
Adidas, the famous multinational brand, was founded in August 1949, headquartered in
Herzogenaurach. Adidas is known for its premium offering in terms of quality and branding.
Adidas could be regarded as the first genuine sports brand as, since its inception, it designs
and manufactures products and sports gears that empowers the athletes in terms of their
efficiency during their play. True to their vision, Adidas is always directed towards innovating
and improving their products according to the growing needs and executional excellence is
their core value. Their primary product lines are footwear, clothing and accessories.

The three stipes in their logo represents their branding and reiterates their authenticity. This
branding strategy became so successful that it is alternatively recognized as “The three stripes
company”.
The various distribution channel that Adidas has are franchises, mass merchandise, specialty
stores and online retails and also their flagships stores are present in all over the globe.
According to the available secondary data, in India, Adidas had 450 authentic stores till 2018
and are aimed to hit the target of 1000 stores by 2020. In March 2019, Adidas India launched

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its biggest retail store at Ambience Mall, Gurgaon, inaugurated by Adidas athlete and Indian
cricketer Rishab Pant.

SALES AND PROMOTION:

Adidas mainly targets the audience aged between 12 to 34 years of age and are actively
involved in sports activities. The sporting area is diverse with Adidas showing serious concern
in gym regulars, football, and NBA players as well as youths who believe in living a sporty
lifestyle.
In order to reach its target market
effectively, Adidas employs effective
marketing communication where it
identifies consumers who have same
wants and needs in the market. Hence,
the company evaluates and compares
the identified groups and then choses
one or more of the group as their
prospect in investments. In its target
market, there is a group comprising of
individuals aged 32 who are affluence and employed. This
group has the purchasing power and mostly consumes the
Adidas goods. In its target market, there is approximately 30%
of consumers who are brand loyalists and though are
categorized as the least affluent.
On the other hand, Adidas targets professionals within the
sports industry who have developed brand loyalty an d
continue to search for high-quality professional products that
are proposed by Adidas. Given the stiff competition and the
need for specialized sportswear, Adidas has increasingly
exploited the untapped “adult sector.”
In 2015, the company had signed Ranveer Singh a prominent
Bollywood actor as a brand ambassador to the company's products. Ranveer then was a
budding actor. The company later decided to use the
people's almost religious adoration for the game
cricket to promote their brand. It soon launched a
new cricket campaign in the country. The campaign
was called “FeelLoveUseHate” with prominent
Indian cricketer Virat Kohli who was associated with
the brand till 2017. In 2020, Adidas appointed former
Miss World Manushi Chillar as the brand
ambassador.

VISUAL MERCHANDISING:
This denotes the positioning and presenting the products inside the retail store in way that it
optimizes the available space and also strategically attracts the customers through better
highlighting of their features and benefits. The visual merchandising is responsible for

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 engaging and motivating the customers to stay longer in the store and thereby compelling
them to make a purchase.

Visual Merchandising in Adidas:

• Zoning: It is done on the basis of the Menswear clothing and accessories and
Women’s wear and accessories on two different sections. Other than that, the
maximum space has been allotted to the shoes section that is visually accessible to
the customers right their entry in the store.
• Circulation space: There's approximately 4 - 4.5 feet circulation space between
various fixtures and props located nearby the walls and the central space of the area
that gives ample space for 2 people to browse through the stacked and hung clothes
off the fixtures, simultaneously.
• Lightening: There are track lights installed on the ceiling and also on the width Apart
from this bordering rectangle of track lights in the center of the ceiling, and also there
are track lights indicating the three strips of the Adidas Logo. On the outer right strip,
there are 6 track lights, 2 track lights in the middle and 3 track lights on the outer Left
strip. These tracks are bright incandescent lights that provide ambient lighting to the
store.

PLANNING AND CONTROL:

To foster Adidas brand momentum and accelerate sales and earnings growth, it introduced a
number of initiatives that focus on in addition to the three strategic choices and corporate
culture – Portfolio, North America, Digital and ONE adidas.

▪ Portfolio: This is all about more focus and less complexity. Adidas is constantly revisiting and
sharpening the focus of our brand portfolio, fully concentrating on adidas and Reebok and on
the core competencies in footwear and apparel. This will allow them to reduce complexity and
pursue the consumer in a more targeted and consequent way.

▪ Adidas North America: North America represents the biggest market in the sporting goods
industry with a total share of approximately 40%. It is the single biggest growth opportunity for
the adidas brand. That is why we have made North America a strategic priority and started to
significantly increase our investments into our US business – people, infrastructure, marketing
and point-of-sale – in order to be more relevant and always visible to the consumer.

▪ Digital: The digital transformation is fundamentally changing the way consumers behave and
the way Adidas work. Technology has enabled us to build more direct relationships with
consumers. With relatively young workforce Adidas is in the unique position to continuously
improve the digital capabilities – not only to interact with the consumer, but also to become
faster, better and more efficient in every part of the organization.

▪ ONE adidas: We continuously strive for operational excellence. ONE adidas encompasses a
set of initiatives that will enable Adidas to work smarter, more efficiently and in a more aligned
way.

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Adidas follow a laissez-faire management structure, where an order is given from above, and
then individual groups work towards finishing the job, with interaction only within the sectors.
For example, the design, construction and shipping departments of the basketball shoes
sector will have interaction within themselves, however they are otherwise secluded from the
rest of the company and vice versa. The following is how the company operates in terms of
management functions.

• Planning: The function of goal setting, long term or short term, in order to gain profit.
This is done often in our company, mainly in the form of innovations and new products.
One of our recent goals was to successfully sponsor the FIFA World Cup, and this was
done a high degree of effectiveness. By sponsoring the World Cup, we put a large
investment into football, and with guaranteed results of a large rate of return. These
types of goals are constantly made by the higher-ups, another example would be the
order to create a new pair of D Rose basketball shoes.

• Organizing: As mentioned above, Adidas follows a laissez-faire management

structure, where there is little contact between sectors. Our sectors are
mainly separated by brand, and type. For example, everything relating to football is
one sector, everything relating to basketball is another sector. In these sectors, there
are departments which utilize their skills in order to create the best product possible
for our customers. These departments have contact among themselves, such as the
design department communicating the design to the construction department.
Therefore, roles and responsibilities are distributed to individual sectors, from where
tasks are separated and dispersed among the various departments within the sector
(design, shipping etc), which is done by managers of each sector and department.

• Leading: The function of motivating one's employees. Here at Adidas, we take this
very seriously, and constantly make efforts into motivating our employees. We do this
through the means of contests, competitions, rewards, promotions and fun events such
as Employee Banquets.

• Controlling: The function of managing and disciplining staff in order to accomplish

company goals. Like aforementioned, our sectors are split into smaller departments,
which are easily managed through department managers. The department manager
of the design department would communicate the need for a new design with set
requirements. After doing so, the designers finish the task and send it on to the next
department, where again the department manager assigns roles for each worker.

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 • Staffing: The function of hiring and firing staff members. As mentioned in analytics,
our company requires human labor to operate. This labour need is met through the
staffing function, as the managers of each department finds, through the use of
advertising such as newspapers, the best prospects for the company. After this is
done, the manager can hire the best worker, and teach him/her the workings of the
company. On the other hand, should workers begin to perform poorly, or make
mishaps within the company, it is also a manager’s duty to fire unnecessary workers.

Adidas business plan is built around three strategic choices that enables them to focus on
consumers:

• Speed – How they deliver: Putting the consumers at the heart of everything they do
and serving them in the best possible way means that they need to ensure that they
always find fresh and desirable products where and when they want them. They will
become the first true fast sports company.
• Cities – Where they deliver: Urbanization continues to be a global megatrend. Most of
the global population lives in cities. Cities are shaping global trends and consumers’
perception, perspectives and buying decisions. They have identified six key cities in
which we want to over-proportionally grow share of mind, share of market and share
of trend: London, Los Angeles, New York, Paris, Shanghai and Tokyo.

• Open Source – How they create: This is all about collaboration and innovation. About
learning and sharing. We are opening the doors of our brands inviting athletes,
consumers, and partners to co-create the future of sport and sports culture with us.

DETAILS ABOUT MANUFACTURER:

According to Adidas most of their products are outsourced. There are only a limited number
of company-owned factories. They are in Germany, Sweden, and Finland. 5 company-owned
sites operate in the United States and 3 in Canada.
Adidas had more than 1,000 independent factories around the world. Some of the largest
portion of the outsourced manufactured product output come from China, Indonesia, Thailand,
India, Vietnam, and Turkey.
Besides own employees, workers in suppliers’ factories play a central role in our sustainability
program. To enforce compliance with our Standards we have a multi-level monitoring and
enforcement process in place, including the use of an innovative rating system for the
assessment of our suppliers. The rating results are shared with our Sourcing teams and
incorporated into the overall supplier rating that influences our decision whether and to which
extent we continue the business relationship with a specific supplier. This transparency and
integration with sourcing decisions is fundamental to the success of our efforts to drive
improvements in workplace conditions.
In addition to our own monitoring activities, we value independent and unannounced
assessments by independent third parties to demonstrate the credibility of and provide verified
information about our program to stakeholders. As a member of the Fair Labour Association
(FLA), adidas is subject to external assessment by independent monitors, participation in the
FLA third-party complaint system and public reporting. In 2005, the monitoring program of
adidas was accredited by the FLA for the first time; re-accreditation took place in 2008 and in

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2017. This decision was based on independent factory monitoring and verification reports of
supplier facilities and a thorough audit of monitoring protocols, training programs and auditing
systems.
Working closely with key strategic partners, the vast majority of our products are produced in
around 100 manufacturing facilities worldwide. We value long-term relationships: By the end
of 2018, 84% of our strategic suppliers have worked with adidas for more than ten years and
42% have a tenure of more than 20 years. The length of our supplier relationship is determined
by specific performance criteria which is regularly measured and reviewed.
Adidas has outsourced most of its production. Overall, we work with around 700 independent
factories from around the world that manufacture our products in more than 50 countries
(Status: 2018). Our supply chain is global and multi-layered, with many different types of
business partners, some of whom are directly contracted factories, while others are not. In
2018, the top five countries per region by number of supplier sites were:
Asia: China, Vietnam, Korea, Indonesia and India
America: United States, Brazil, Argentina, Canada, and El Salvador
EMEA: Germany, Turkey, Italy, United Kingdom, and Spain

The foundation stone for the Rs500-crore footwear manufacturing plant of Apache Investment
Holdings, a supplier to Adidas, was laid on Saturday February 25 at Mambattu village in
Nellore district of Andhra Pradesh, India. Apache Footwear is a Singapore-based contract
supplier of footwear to Adidas shoes, and the plan is for a US$12 million production facility on
a 315-acre site. The plant will create about 30,000 new jobs over a four year period. Apache
will reportedly set up the plant in an economic zone for exports. Adidas has shut down the
majority of their German manufacturing bases in order to outsource from cheaper Asian
countries. Apache already have a presence in China and the US and employ 30,000 plus with
more than 60% of them being women. The State Government has agreed to allot the land at
Mambattu in Tada for 25 years under a lease for one rupee to develop the special economic
zone and the government will invest in training. Apache will have the advantage of a ten-year
tax-free holiday and will also be provided with all the necessary infrastructure facilities. Phase
one of the project is scheduled to be ready by the year-end. Later, the project will be
complemented by a tannery at a suitable location nearby. The company expects the workforce
to reach around 7,000 in the first year, 15,000 in the second, 20,000 in the third, and 30,000
by the fourth year. Adidas have been chosen as the official supplier of footwear for the Beijing
Olympics and Apache is an exclusive supplier of footwear to Adidas

CUSTOMER NEEDS:
Customer experience is king
In the last few years, Adidas has become a leader in leveraging digital channels to promote
and sell their products. They have become a top brand by harnessing various innovative ways
to incorporate digital technology into their overall marketing strategy. Joseph Godsey, VP of
Digital Strategy and Delivery at Adidas outlined the three key channels that Adidas relies on
to drive its digital presence.First, the company understands that online messaging can be
tailored to match the passions of any individual consumer. This allows them to unify their
messaging throughout a consumer’s buying experience. Second, Adidas doubles down on

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their consumer focus by labelling them a “creator consumer.” A creator consumer is someone
who wants to take part in the creation of brand content rather than be a passive recipient.
From focus groups to online reviews, Adidas ensures that their customers are heard and their
voices impact brand strategy. Finally, Adidas uses technology to fuse a customer’s online and
offline experiences. They have improved the current buying journey by launching Adidas
Confirmed, an app that lets consumers reserve products to pick up in store and leave reviews.
They have innovated by creating Glitch, a football cleat that can only be purchased through a
dedicated app. In every facet of their digital strategy, Adidas aims to put the consumer’s needs
first while pushing the envelope of what’s possible.

Consumers are the new influencers

Adidas’ use of social media is a particularly inspirational piece of digital strategy. Specifically,
Adidas created separate Instagram and Twitter accounts to highlight the contributions of their
influencers and customers called Adidas Originals. Interestingly, these accounts actually have
more followers than the main accounts. Under the banner “We Are Originals,” Adidas
promotes user-generated content. It also showcases unique partnerships with Instagram
influencers. By creating content and messaging for each influencer they partner with, Adidas
is able to foster a more genuine relationship between the brand, the influencer, and their
followers.

HOW CUSTOMER SHOP IN IN-STORE:

The world of retail is changing — perhaps faster than at any time in history. How can a small
retailer keep up with what customers want? One way is by keeping up with the latest retail
insights from retail consulting firm BRP. The company does a wealth of consumer surveys to
find out what today’s shoppers want from retailers.
Adidas Customers want in-person service they can’t get online. This is crucial to differentiating
your store from the one-dimensional online shopping experience. According to research from
BRP, 79% of consumers say personalized service from a sales associate is an important factor
in determining where to shop. Customers are more than willing to share their personal data if
it helps you provide a better experience.
According to BRP, 87% of customers want a consistent experience across all shopping
channels. Even larger retailers are still playing catch-up in this area. Customers expect a
seamless transition between shopping on your website (if you have an e-commerce site) and
shopping at your store. For example, 56% want to be able to have a shared shopping cart
across channels (such as putting something in your cart on desktop and having it show up on
your phone), but just 7% of retailers offer this capability. Shoppers also want to be able to buy
products online, then pick them up in store, or buy products online and return them to a
physical store.
VIEWS OF CUSTOMER ON ADIDAS:
Adidas is more than simply a athletic products producer, it possess a distinctive personality
that is “positive, brave, undefeated and confident” and through which it has owned a huge
brand equity.
Adidas target market falls within the 20- to a 29-year-old age group who are athletes or are
passionate about sports and this segment is considered as the strongest consumer market.

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The company is focused on targeting and strengthening its brand with the next generation of
athletes in the 14- to 19-year-old age group.
At Adidas, it all starts with digital.
“Digital is one of our core strategic priorities. We have ambitious goals that we’ve set until
2020,” says Joseph Godsey, Global Head of Digital Brand Commerce at Adidas. “We want to
create a consumer experience that is premium, connected and personalized. We will measure
ourselves rigorously in how the various digital touchpoints come to life across those three
dimensions, and we believe they will be core to reaching our overarching targets for sales,
consumer experience net promoter score, and ultimately engagement and lifetime value.”
The customer of adidas look for supreme quality in good price they want comfortable at the
same time stylish product .

CUSTOMER QUESTIONNAIRE OF ADIDAS:

According to above chart we got to know that 50% of our respondents are more attracted
towards the display in adidas store how the stores are displaying different categories in a
different way to make it more visible and more attention seeker.

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According to this chart there in no consistency in purchasing the adidas products as most of
our respondents tend to buy such adidas products when they feel a need for the same. The
major reason behind this was that they were quite satisfied by the durability and by the
comfort of the product so they find it very convenient to buy the product when the demand of
such arises so there were less respondents who buy monthly or yearly.

According to the graph most of our respondents tend to buy products from the official adidas
stores (the sole dealers ) instead of buying them from the multi dealer shops the major
reason behind this was that they will get more collections in the sole stores because of the
larger shelf space, they can access more of their premium products and the information
regarding the upcoming products.

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According to the above graphs around 56% of our respondents have a very clean and
sanitized experience inside the stores which leads in staying for longer time period in stores
hence end up with a purchase.

Around 72% of our respondents got largely quality of the product as the company offers
great quality to their customers and the discounts and offers too. So, these are some major
parameters which influences a customer’s purchasing decision.

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According to the above chart most of our respondents’ price, product range, quality and the
durability is the major preference of the customers for the adidas and the least while the
least important preferences are the sales promotions and affiliation to FIFA world cup.

RECOMMENDATION:
Since Adidas is an expert in sports performance sector, Adidas can expand their market by
invest in manufacture nutrition supplements that’s specially design for different kind of sport
athletes. And their athletes will consume them for better performance, this is indirectly
promoting their products quality. We are recommending Adidas to open their own gymnasium
branches which is a new market and new product service as diversification. Adidas can focus
to emerge their market to China and India as these countries having high population with
increasing buying power and now, they are more aspiring to western lifestyles. Adidas can
invest more in R&D sector to discover more environment friendly material to manufacture their
product such as now they are developing the Adidas Future craft Bio fabric, a biodegradable
running shoe. Adidas should concentrate more on the technology. Recently they can build up
a creative design of growing more Smart Shoes for their consumers. These shoes will realize
an upheaval in the field of sports in light of their expanded performance and dependability. By
building up the imaginative shoes will fabricate a strong brand relationship among individuals
and Adidas because this will make individuals believe that Adidas is not kidding about
enhancing their athletic performance by acquiring more development and innovation in its
goods. The smart shoes should have minor sensors and processors who likewise needs to
capacity to store with help of battery. These shoes help an athlete’s execution and stamina
through detecting its body temperature, heart beat and encompassing temperature etc. This
data from sensors will help the chip to change pad and air pressure in the shoes. As we as a
whole realize that the athletes used to change their shoes after a short period, in this manner
Adidas can developing to make the electronic equipment utilized as a part of the shoes
recyclable and reusable. The hardware will be additionally insignificant in weight because the
heaviness of the equipment would make an issue from athletes. They can develop to include
a GPS system with the shoes 13

Adidas has done a great deal in the fields of Olympics, Football and Basketball yet has not
accomplished more in the field of cricket. Cricket is the greatest undiscovered market for sport
clothing and shoes and furthermore prevalent in Asian Countries. Adidas ought to target

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Cricket and comparative different amusements with more consideration and intense
techniques. By focusing on the cricket Adidas can go into a portion and build up its position all
the earlier because the other brands have still not entered the Cricket Segment Fully. Adidas
should increase the cost of advertising. They lack advertisements on their social media,
channel and so on. Increase the advertising cost will help the company make more interesting
advertisement to attract the customers on the social media or others way. The more attractive
advertisement, the more profit the company will gain.

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