1

2
ACKNOWLEDGEMENT

3
 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.

4
 TABLE OF CONTENTS

1. INTRODUCTION 6

2. COMPANY PROFILE 8

3. SWOT ANAYSIS 16/39

4. OBJECTIVES 41

5. RESERCH METHODOLOGY 42

6. FINDINGS & ANALYSIS 43

7. CONCLUSIONS 53

8. RECOMMENDATION 55

9. BIBLIOGRAPHY 57

5
 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 the small
German village of Herzogenaurach
the world began its love affair with Adidas
(Ryno’s 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

8
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

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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

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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 women’s 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 P’S): 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.

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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 stands up to the demands of the

sport for which it was designed.

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.

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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 won’t really be a

hot seller, but it will contribute a lot to Adidas brand image. That’s 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 involves—developing of the right product – which can then be put to
right place & sold with the right promotion & price.

VALUE OF IT’S 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 don’t care how

they were made. Further they want that when they order something, the don’t

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 customer’s 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.

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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 India’s 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 company’s 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.

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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 company’s 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 company’s own sales force. They even design the

sales materials for the company’s 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, that’s the most critical factor in the Indian context. Adidas believes it

has to deliver a functional at an affordable price. It’s 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 coverage’s 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 high-

tension 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. Anyone’s life. You don’t 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 (who’d 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 Sachin’s

magic. “Instead of presenting just

one dimensions :

The first ad connects Sachin’s

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 water-

based 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 company’s 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, we’re not an attitude that’s fashionable. We’re 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 wasn’t

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. It’s 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. “We’re 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.

Adidas’s 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 it’s these

stories that sell the shoes to buyers.

While Villota wouldn’t disclose how much of Bryant’s 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 Bryant’s footwear hits the street Nov. 1, coinciding with the

start of the 2003-2004 NBA season. While Adidas won’t comment on the new site’s

features, citing competitive pressure, Villota says it is Adidas America’s 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 Management’s 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/Company’s 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 company’s 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 that’s 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 Men’s & 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
company’s 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
5.47
8

6 3.62
2.61
4 1.79

0
1999 2000 2001 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 US
40% 30%

UK
46 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
adidas nike
45%
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 don’t like them.

18% 0%
happy
not happy

82%

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 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.

0%
14%

quality
other factor

86%

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 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% reebok
others
29%

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 brand’s 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 Made-

Adidas 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.

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 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

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