Adidas Brand Study

12/20/2010

ADIDAS BRAND STUDY

Submitted To: Prof Freda J Swaminathan Prof. Jayshree Sundar

Faculty

Strategic Brand Management

FORE School of Management,

New Delhi

Submitted By:

Shivi Aggarwal ( 91051) Madhusudan Partani ( 90129)

FMG-18A

FORE School of Management,

New Delhi

Brand Study

Strategic Brand Management Page 1

Introduction The idea was as simple as it was brilliant. Adi Dassler’s aim was to provide every athlete with the

best possible equipment. It all began in 1920, when Adi Dassler made his first shoes using the few

materials available after the First World War. Today, the Adidas product range extends from

footwear and apparel to accessories for all kinds of different sports.

The Journey Adidas as earlier mentioned started its operation in 1920 as a small workshop. But its transformation

into a large corporation and become one of the top global brands has a story within.

In 1949 Adi Dassler first registered Adidas in the commercial register (Handelsregister) in Fürth (near

Herzogenaurach). The official name of the company back then was “Adolf Dassler Adidas

Sportschuhfabrik”. And then the enterprise was transformed into a corporation

(“Aktiengesellschaft”) in 1989.

In 1997, Adidas acquired the Salomon group, and the company’s name changed to Adidas-Salomon

AG. The Salomon group also included the TaylorMade golf brand. In October 2005, the Salomon

business segment, including the related subsidiaries was sold to the Finnish Amer Sports

Corporation. The company changed its legal name to “Adidas AG”. And then On January 31, 2006,

Adidas-Salomon AG acquired Reebok International Ltd. By combining two of the most respected and

well-known brands in the worldwide sporting goods industry, the new Group benefits from a more

competitive worldwide platform, well-defined and complementary brand identities, a wider range of

products, and a stronger presence across teams, athletes, events and leagues. And in June 2006, the

company’s name is changed to Adidas AG.

Since the very beginning of Adidas, the corporation, the employees and the organization followed

the three guiding principle of “To produce the best shoe to serve the needs of the Sport; TO Protect

the athlete from Injury, and to make the product durable” These principles were followed by the

founder Adolf Dassler (the Man who gave Adidas its name) . From the very beginning, a passionate

athlete himself, from the very beginning Adi Dassler was in close contact with sports participants and

was always present in person at important sports events. Parallel to the rapid developments in

sport, Adi Dassler strove to specialize and optimize his products. Adi Dassler was the first

entrepreneur to use sports promotion in order to make the public aware of his innovations. He

started using well-known athletes as advertising for his products. And then Aggressive publicity

became one of the cornerstones of his corporate policy.

Brand Study


Brand Portfolio Adidas( name derived from Adi Das The name of its Founder) has three major brands namely Adidas,

TaylorMade and Reebok.

Adidas Adidas has two sub brands under it namely Sports performance and Originals.

The guiding principle of the Adidas Sport Performance Division is to

equip all athletes to achieve their “impossible”. Adidas Sport

Performance brings its passion for great products to athletes

in all sports and mainly focuses on four key categories globally: football,

running, training and basketball. It has various product categories

ranging from Sport, to body care to Eye care.

The Sport Style Division is the home of Originals, defined as authentic

sportswear, the Fashion Group, which is the future of sportswear, and

Style Essentials, the fresh sport-inspired label made accessible for style-

adopting youth. Together they offer consumers products from street

fashion to high fashion, all uniquely inspired and linked to sport.

Inspired by its roots in sport and women’s fitness, Reebok is

a global brand that is committed to developing innovative products

which will allow Reebok to own Women’s Fitness, challenge the

Men’s Sport category and revive its Classics heritage. It has brands like

Reebok-CCM Hockey and Rockport under this Brand.

TaylorMade is a leader in the industry and the number one metal wood

supplier. It focuses on consumers who seek the most innovative,

performance-enhancing golf equipment available, including

technologically superior drivers, fairway woods, irons, putters and balls.

The brands like Adidas Golf and Ashworth popular brands in Golf are

part of this Brand.

Brand Study


CBBE Model

Salience Adidas continuously makes efforts to increase awareness about its brand by various modes of

communication. To mention, The Covert Advertising (Displaying large Sized Shoes) at Public places,

sponsoring Sports events and associating it with sportsmen. Also since Adidas is into Only Sports

category, there is also a high chance of recall and clear Brand Need. Being synonym to quality in

Sports increases both Depth and breadth of Brand. As mentioned before Adidas is not only into

sports foot ware but has also entered sports accessories, personal care products for sports person

increasing the Brand breadth.

Performance Adidas is known for its quality in goods. One of its underlying principles is to provide best quality

goods to sportsman. Thus there is high performance satisfying Customer’s functional needs. The

aspects like quality, reliability, durability which is major parameters in buying shoes, Adidas by

providing specialised goods has minimised the risk on non-performance. Also the style and design

and price are favourable.

Imagery Brand Adidas from its very beginning has associated itself with Sports person and major sports

event. Thus it is perceived as aspirational product. The user profile includes popular and successful

sports players who are also aspirations. Also the History attached with Adidas, the name itself is

derived from the Founder (Adolf Dassler) who was also very passionate sportsperson. And History of

Adidas is also associated with success in many World cups.

Judgements Consumers perceive Adidas products as finest quality. Due to its High Performance and Good

Imagery, the Overall Quality of Brand is very good. The superlative quality and better performance

leads to Brand credibility and Brand superiority over other brands.

Feelings It becomes highly difficult to comment upon Brand feelings without doing a survey of customers. But

analysing the comments of users and their testimonials and also analysing the communication of co.

Feelings associated with brand Adidas is Fun and Excitement. The Passion to Compete along with a

sense of self respect is associated with it.

Resonance Resonance is Indicator of Brand Loyalty. Since the target segment is much focused and Adidas is able

to fulfil their needs by providing specialised and customised products with promise of superior

quality. Also the Loyalty can be revalidated from the fact that the sales of Adidas have been growing

at CAGR of 11.8% for the period of 5 years1

1 Financial Reports of Adidas for 2005 to 2009

Brand Study


Picture 1 CBBE Model- Adidas

Target Market From the website and various campaigns led by Adidas for its various brands as above mentioned,

the primary target market has been sports person. Over the years the target customer for Adidas

was Sportsperson both men and women. It has aimed and is successful in providing not only shoes

but every equipment, accessory and also cares items. It has entered into a foray of Electronic

Communications by launching mCoach a Mobile with Training and guide. But all the products the

Adidas deals into target the sportsperson and all its products have a sporty look.

Brand Identity

Name Adidas is derived from the Initials of its Founder Adolf (Adi) Dassler. But now the name has become

synonym to sports need for Sportsmen. Also the name is easy to pronounce, easy recall ability and

not confused with any other brand.

Brand Study


Logo The Logo is bright, Sporty and easy to recognise. It has few

distinct features making it easily distinguishable with other

brands like three line breaks. Also Name is written in small

caps.

Slogan The Slogan of Adidas “Impossible Nothing” though it has just two words, but it says a lot; It

stimulates the sportiness and enthusiasm in minds of consumer. The slogan is very apt with the

product it is into and the message and perception it wants to make.

Brand Positioning Adidas tries to position itself as Sporty brand by associating itself with Major Sports events,

Aspirational and successful sportspersons, and also by creating commercials full of energy. The

slogan as mentioned above is also very sporty. The primary positioning which Adidas wants to make

is of Super quality sports good for Sporty persons.

Kapferer Model Brand Identity Prism Analysing Brand Adidas with reference to Brand Identity Model

Picture 3 Kapferer Model Brand Identity Prism -Adidas

From the above model it is very clear that the personality of Adidas is very conservative and

collective and is perceived to be of European Culture. Also there is strong relationship between each

of the parameter and each other are in sync with others. All the parameters are related to Sports,

Enthusiasm, reliability and quality.

Brand Study


Position Re-Shuffle Adidas over the years has constantly positioned itself as brand for Hard core Sports person. All of its

communication campaigns feature Healthy sporty men and women and majorly sportspersons. And

this has been a success mantra for adidas. Since its founder Mr.Dassler has the principle of providing

the best quality goods to sportsmen and also the same is the company’s objectives, thus targeting

sportsperson or aspiring sportsperson is very much relevant.

Adidas has gained core competency in sports Goods by means of remaining in constant touch with

sportspersons and identifying their needs. This competency has given a competitive advantage to

Adidas over its competitor. The expertise of sports knowledge has helped Adidas in acquiring related

brands like TaylorMade and Reebok. Also it has entered into other sports equipments and Sports

merchandise.

But One Critical observation is, after acquiring Reebok and Taylor made, they are retained as

separate brands targeting different customers like Reebok for Women; this creates confusion in

minds of customer and also by this way Adidas is not leveraging its Brand value. Thus it would be

better if Reebok and Taylor made though will remain as brand but will become part of Adidas like

Adidas Sports and Adidas Originals.

Brand Extension Strategies

Given the origins of Adidas, it is understandable why the brand was focused purely on sports

performance and technology for most of its existence. However, the Adidas Style brand extension,

which targets a broader audience with casual street wear, is responsible for 20% of total brand sales.

The untouched target group propelled Adidas through the roof in the 1980s was that of Hip-Hop

musicians and break dancers!

That's 20% of total sales that may not have existed if Adidas didn't think to market to a new

audience and decided to stick with sports.

Reorganization of Group Provides Solid Platform For Growth In 2009, the adidas Group took the strategic decision to move from a vertically integrated brand structure into a functional multi-brand structure for the adidas and Reebok brands. This led to the creation of a Global Sales function responsible for the commercial activities and a Global Brands function responsible for the marketing activities of both brands. In addition, the Global Sales organization was split into Wholesale and Retail, to cater more appropriately to the different needs of these two distinctive business models. This new structure follows two important principles: to foster further alignment and strengthen brand management to drive long-term sustainable growth, while at the same time ensuring coordinated and best practice execution in the marketplace.

Diverse Brand Portfolio

Consumers want choice. To maximize our consumer reach, it has embraced a multi-brand strategy. This approach allows it to tackle opportunities from several perspectives, as both a mass and a niche

Brand Study


player, providing distinct and relevant products to a wide spectrum of consumers. In this way, each brand is able to keep a unique identity and focus on its core competencies, while simultaneously providing the Group with a broad product offering, increasing its leverage in the marketplace. It also allows adidas to address multiple consumer needs, tackle market opportunities from various angles as well as be less affected by one-dimensional market risks. Currently, the brand focuses on 5 global priorities:

Football: expanding market leadership

Running: building credibility with high-performance athletes

Training: creating new consumer experiences

Basketball: increasing global footprint

Outdoor: the athletic brand in the outdoors

Investments Focused on Highest Potential Markets and Channels As a Group, it targets leading market positions in all markets where it competes. However, with almost 180 subsidiaries worldwide, it has prioritized our investments based on those markets which offer the best medium- to long-term growth and profitability opportunities. Therefore, to fully exploit market opportunities, it tailors the distribution strategy to present brands to the consumer in the most impactful way.

Brand’s Broad and Unique Product Portfolio It spans from apparel and footwear for professional athletes to premium fashion. It allows adidas to address multiple consumer needs, exploit market opportunities from various angles as well as be less affected by one-dimensional market risks. Adidas’ commitment to product innovation and its rich heritage differentiates the brand from competitors and provides a solid platform for future growth. That means adidas intends to inspire, support and equip all athletes in the best possible way to help them achieve their optimal performance.

Brand Study


Recommendations

Brand Consolidation As already mentioned, adidas has four sub brands ( as mentioned above) of these two are sub

brands of Adidas and two are positioned as separate brands. Instead of this it will be beneficial if all

brands are made as sub brands of adidas. By this none of the brand will lose their positioning and a

clear corporate brand structure will be made.

Reshuffle Portfolio At present adidas has a very wide range of products lengthening and widening its product mix.

Different Shoes of different variety and different features for each sport namely Cricket, Hockey, and

Football etc... Also Different apparels, merchandise and Sports equipments. Thus it is per se

necessary to re shuffle the product basket. A Concentrated approach will be advisable.

Focus on Emerging markets like India According to Venn research Inc., The Indian sports equipment market had total revenue of $2,069.1

million in 2009, representing a com-pound annual growth rate (CAGR) of 7.1% for the period

spanning 2005-2009. Thus there is huge scope and opportunity for Brand like Adidas to increase its

presence in emerging countries.

Creating a Flexible Supply Chain Speed and agility is the key to outpacing the competition. It is committed to meeting the full range of customer and consumer needs by ensuring product availability in the correct size and colour, providing game-changing technical innovations and also the latest high-end fashion product to the highest quality standards.

Adidas Brand Study

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