Adidas and its sports product
Understanding the sport consumer is not a simple task. The sport marketer needs to be aware not only of the primary, secondary and tertiary factors that influence consumer decision-making he/she also needs to comprehend both the process and the level of involvement by which the decision to buy or consume is arrived at (Quick, Shilbury & Westerbeek 2003). Other important determinants that must be considered before establishing marketing strategies include the specific demographics and psychographics of the constituent group, along with germane environmental factors. While comprehending the complexity of the sport consumer’s decision-making process is one of the more intricate tasks facing the sport marketer, unquestionably it has become a critical part of marketing management strategy. Although it is not always possible to fully understand how this process takes place, assiduous attention to the unique characteristics of specific consumers, coupled with a broad awareness of how decisions are reached, will provide the sport marketer with a solid framework within which marketing strategies can be developed (Quick, Shilbury & Westerbeek 2003).
Sport-marketing strategies aimed at consumers involving a high involvement purchase process often relate to sponsor products, and include pointing out the specific or unique features of the sponsors’ offering through the sport as a communication vehicle. This may include the provision of maximum technical or personal support for the service or product’s use, and reinforcing the wisdom of the purchase choice. Advertising should be selective. It should target appropriate demographic-psychographic market segments as well as affirm lifestyle and connote quality and excellence (Gratton & Taylor 2000). Globally, sports sponsorship is a massive industry estimated to be worth around billion in 1999, having grown in value by over 300 percent in the 1990s alone. Sports sponsorship is the dominant form of sponsorship, accounting for over two-thirds of all sponsorship activity. The economic viability of any major sports event is normally crucially dependent on the ability of the event organizers to raise substantial revenue through sponsorship. Every major professional sports team now raises a substantial share of its revenue from sponsorship. Sponsorship is pervasive throughout sport, not only at the narrow elite part of the sports hierarchy. The problem is compounded by the unwillingness of many commercial companies to divulge the amount they spend on sports sponsorship (Gratton & Taylor 2000). One company that succeeds in marketing sports goods and engaging in sponsorships is Adidas. Adidas is part of the Adidas Group and is one of the most popular and successful manufacturers of sports apparel. It is a market leader in the industry together with Nike and Reebok. Adidas’ listed revenue for 2008 was €10.799 billion. This was better than the listed revenue in 2007 which was €10.299 billion which translates to about US.6 billion. Adidas has different products ranging from running apparel, basketball apparel, and other sports related apparel. Adidas also has clothing products, toiletries and other accessories that fit the different needs of clients in every country or region they operate in.
Marketing strategy of Adidas
The positioning strategy of Adidas is concentrated on comparing what they can do to what their competitors can do. Positioning happens when the company tries to create a unique identity in the minds of the target market through the sports products. The company makes use of the best positioning strategies that intends to make an identity separate from the competitors such as Nike and Reebok. The positioning strategy of the company focuses on showing the clients that Adidas provides the best sports apparel. The advertising strategy of the company helps the positioning strategy of Adidas in attracting more clients and bringing back old clients. The market of Adidas is different individuals who need all kinds of products for different kinds of sports or sporting events. This market is the one that needs various sports apparel that will satisfy every craving one has. The target market of the company involves almost all sectors of the society. They want to provide varying sports apparel and accessories to young or old, boy or girl. The company also tries to reach out to the non sporting market through the sale of non sporting shirts and apparels. The market segment of the company is divided into the adult and kid segments. There are different brands of sports apparel for the older people and the younger clients. The company makes sure that they cover all the segments in the society they are operating in. The company has specialized prices for the different market segment, this will ensure that the clients will have lesser doubts about taking a look at the company’s product and the products that they can afford. The marketing strategy of Adidas would further be explained through the use of the marketing mix.
Product
Although most of the buying decisions are centered on the ability of a product to satisfy a customer need at a price the customer is willing to pay, a business has to ensure that it meets its legal obligations with regard to the products it sells. It also has to consider its long term image in the eyes of the public. It is therefore necessary to ensure that a product conforms to legal standards and provides value for money. Product innovation is becoming increasingly necessary for businesses to keep customers interested in their product range (Gillooley & Varley 2001). The company’s sports products are made from high quality components and materials. The sports products of Adidas are made of comfortable materials that are perfect for all types of sports related activities. The sports products have different designs and characteristics that meet the various needs of their market. The materials and components used for production came from reliable and trustworthy suppliers. The suppliers were chosen well and are known in their respective field. The sports products underwent well tested processes that ensure its durability and comfort. After production Adidas’ apparels undergo product testing before it is sold to the markets. The company also has consumer response team that can be contacted anytime. This response team provides assistance to clients who have issues with some of the products. The company’s products are one of the main reasons for the company’s success and it contributes to the rise of the company’s profits. The company’s products sets them self apart from the competitors in the sports apparel market.
Price
The market pricing approach is used when the environmental improvement under consideration causes an increase or decrease in real outputs and/or inputs (Hussen 2000). A variety of motivations explain the adoption of a new customer approach by global companies. A major reason is the cost of conducting personal visits or customer sales call continues to increase. Firms cannot afford to allow their sales force to make unproductive sales calls. Firms have come to believe that a more efficient method of marketing is to establish and maintain long-term relationships with their customers. When a long-term relationship is established and nurtured, it is less necessary to spend significant amounts of money advertising to make customers aware of the product offering and then employing a sales force to stimulate demand for unwanted products/services to potential customers. Global customers expect low manufacturing costs, excellent design, and having their needs met (Ford Honeycutt & Simintiras 2003). The company’s pricing are valued according to the quality of the products. The company makes sure that it maintains well made products that will have the same value as what the client pays for it. The price of the product is considered through determining the cost of making the product, the salaries of people producing the product and the other expenses made in the creation of the product. With such price the company maintains the product to be of high quality and durability. The company’s price range varies in the different countries they operate in; the company makes sure that all considerations have been made before pricing a product.
Place
The factors which determine choice of a channel, or channels, of distribution are both external and internal to the organization. These factors show how the options open to organizations are restricted. For example, small companies may not have the resource or expertise to become involved in foreign direct investment; markets with low break-even sales volumes favor low-cost channels such as licensing or exporting. The existing distribution methods will determine whether single or multiple channels are developed. Host country policies are important since any special standards, import quotas or duties will increase the cost to the consumer and disadvantage foreign suppliers in relation to domestic ones (Mccall & Stone2000). There are different places of selling for the product. Aside from its branches in different countries the company allows its product to be sold in different non competitor stores. The different non competitor stores helps in making sure that the company is able to sell to various clients in different places. The different channels of distribution help in strengthening the relationship of the company with the clients. It also establishes some relationship with non competitors. Another channel of distribution for the company is the internet website. The company’s website features an online shopping function wherein transactions can be made without the buyer being physically present in the company’s store. The company’s website provides a graphical and written description of the products the company offers. The payments for the online transaction are also done online. Payments can be done through credit cards; the delivery of the product will take a few days for shipping.
Promotion
Effective marketing communications with the customers are essential for business success. Advertising forms the central plan of most communications programs. The information conveyed in advertisements may be in the form of words or symbols. It can work to educate, persuade or simply to inform. An image can be supported or created, enquiries can be elicited and the functions of a product can be demonstrated. Advertising is far more likely to reinforce rather than create a good image (Ruskin-Brown 1999). A strong image is a function of the positive experiences which people have with a product or company. Attempts to create a positive image, while providing poor products or services, are likely to make customers cynical. A common mistake made in advertising is the tendency to over promise. While a creative advertisement may make a consumer buy a product once to try it, it cannot force them to repurchase. Thus, if a product does not deliver on the promise made in the advertisement this too will create resentment and negative feelings (Ruskin-Brown 1999). The company promotes its different sports products through various means. One is through the internet. The internet website gives different kinds of information about the sports products; it then details the price of a product and the available sizes. The internet is a good medium because most people use it. Another form of advertisement is TV commercials wherein the product is given a visual presentation. Moreover a form of advertisement is different sponsorships the company engages in. Through the sponsorships of different sporting and non sporting events the company gets to promote its products.
PEST Analysis
Political
Adidas is aware of the political situation of every country they operated in; the company has made sure that it has a reasonable position with regards to political issues. Adidas and its different branches in different countries are continuously prepared for any problems concerning the political sector. Any political noise is irrelevant to the company. Unless the political environment will change rules that relate to their operations, Adidas and its different branches prefer to stay away from such subject. The political climate in most countries they operate in is stable and free from too much political noise. The political environment has allowed the liberation of the market, liberation of the market paved the way for improvement of services. The legal forces in the different domestic markets Adidas operates in try to make sure that there is fairness and equality in terms of laws in that region. The legal forces of domestic market can create changes in the way business is done by Adidas. The laws of most countries they have operated in have not been a hindrance to the growth of Adidas. It has provided the much needed help in making sure that the company will achieve its goals. Adidas and other shoe manufacturing companies make sure that they follow the different laws of the market they engage transaction in. Adidas don’t want to risk their client’s welfare and the industry’s image by breaking local and international laws. Adidas makes sure that the transactions they engage in will have a legal basis and will be sanctioned by local or international legal organizations.
Economic
Adidas can be said to be economically stable for the past years. Its economic stature is doing well that’s why they continue to try to improve their products to give the best to their clients. Adidas and its different branches have acquired good profits due to their products that are of high quality and the ambiance of the different branches they have. It is not only the internal economic situation of the company should be taken note of but also the economy of the country they operate in. The economic forces can dictate the actions of Adidas and its branches, if the economy is doing well of Adidas and its branches can offer new services but if the economy is in a worse state then of Adidas and its branches have to reduce unnecessary expenditures and un important actions. The economy of the US domestic market has given opportunities to Adidas and other shoe manufacturing companies. The status of the economy has paved the way to Adidas and other shoe manufacturing companies to prosper in the region and help in proving that the domestic market is one the premier region that houses the industry.
Social
The socio cultural force serves as the conscience to Adidas and its different branches. This force ensures that Adidas and its different branches will not do things they know can ruin the company’s reputation with the society. This force ensures that the company will consider first its environment before making any decisions. Adidas and its branches have made sure that they adhere to the traditions and culture of the people in the places they operate in. Adidas makes sure that the products they offer will be accepted by the general public. Adidas does not authorize the delivery of some services they know will cause outbursts or complains from different groups in the society. Adidas makes sure that they do not violate any belief. They make sure that all personnel know and fully understand the culture of a country they operate in and its citizens. Adidas also engages in social activities that tend to develop a better relationship between them, the clients and the society they are operating in. Adidas engages in charitable activities, community involvement at its different branches and personnel involvement. In knowing the environment better, Adidas and other shoe manufacturing companies make use of demographic data. Demographic data helps the industries to decide regarding how their product will be made so that clients can appreciate it. It will help in deciding on how a product should be changed to meet the demands of the region and a certain market. The demographic data is used to check for the need of the domestic market and what are the needs of certain groups of the environment. Adidas and other shoe manufacturing companies make sure that the products they sell are proven to cause minimal problems to the environment. Adidas and its branches put up certain regulations on what type of product they will sell. Adidas and their production plants in various countries have introduced better waste management strategies that aim to reduce pollutants and create a cleaner environment for the future. Adidas makes sure that its waste system is organized to prevent any mistakes from the personnel.
Technological
Adidas offered new innovations in its technological aspect and introduced new concepts with regards to manufacturing shoes. Adidas and its subsidiaries uses highly advanced and better performing manufacturing production systems. Adidas, its branches and its subsidiaries introduced an online purchase system wherein people can just go and log on to the internet, find Adidas’ website and then purchase a shoe or any sports related product that they like. Adidas also makes use of the best kind of security systems to their production, storage and online facilities. The production and storage facilities have cameras in its vital parts to protect the personnel from criminal activities. It also has secure method of communication for the delivery and storage of products. The security crew of Adidas is well trained for all types of situations. Since technology rapidly changes Adidas, its branches and its subsidiaries make sure they are updated to what is happening and they can adjust to these changes. If other companies use new technologies to provide services Adidas, its branches and its subsidiaries have the technology capable of competing with such technologies. The technological forces dictate the trends in the sports products industry, these forces is the one that determine what should be used to provide to create the best product so that customer satisfaction can be given Adidas and its subsidiaries relies on its kind of service and the products created by the technological forces; the products of these forces are the ones that can give Adidas, its branches and its subsidiaries advantage over their rivals and success in the sports product industry.
Information and marketing strategy
Developing a competitive strategy means developing a broad formula for how a business is going to compete, what its goals should be and what policies will be needed to attain those goals. Competitive strategy is a combination of the ends or goals for which the firm is striving and the means or policies by which it is seeking to get there. A competitive strategy requires the consideration of matters that determine the upper limits of what it can reasonably accomplish. An organization’s strengths and weaknesses are reflected in its profile of assets and skills relative to competitors. This profile includes financial resources, technological posture, brand identification and so on (Proctor 2000). The personal values of an organization are reflected in the motivations and needs of key executives and other personnel who implement strategic decisions. Strengths and weaknesses along with values determine from an internal point of view what competitive strategy a company can successfully adopt. Strategies have to be developed and implemented as part of the business management process. Most firms do have some form of regular cyclical planning. However, in an era of rapidly changing business environments such as those being experienced in the 21st century, the cyclical planning process does face many problems (Proctor 2000).
Strategic market management is motivated by the assumption that the planning cycle is inadequate to deal with the rapid rate of change that can occur in a firm’s external environment. To cope with strategic surprises and fast-developing threats and opportunities, strategic decisions need to be precipitated and made outside the planning cycle. It is useful to have a real time information system rather than periodic continuous monitoring of the environment. In addition, efforts to develop strategic flexibility are likely to be helpful. The latter involves strategic options that allow quick and appropriate responses to sudden changes in the environment. An important dimension to strategic market management is to be proactive rather than simply reactive to environmental change. The firm can itself bring about change in the environment. It is possible to make a sizeable impact on governmental policies, customer needs and technological developments. The goal is to develop market-driven strategies that are sensitive to the customer (Adcock 2000). Rapidly changing markets, new technologies and a shortage of skills and resources have made firms think in terms of building relationships with other companies so that together they can present a more powerful front. This has led to a shift from an emphasis on competition, to an emphasis on strategic collaboration. The latter varies ranging from vertical channel relationships and supplier/manufacturer collaboration, to horizontal relationships in the form of strategic alliances and joint ventures (Adcock 2000). Information is important to Adidas marketing strategies because it provides the backdrop for the strategies. It serves as a blueprint for the company’s marketing strategy. Information helps Adidas determine the best marketing strategy for a certain period. Information is a consideration for Adidas before in introduces a new marketing strategy. It is also considered once there is a need to reduce the current strategies.
Relationship between marketing and organizational strategy
Adidas’ marketing and organizational strategy are interrelated because both want to make sure that the satisfaction of the customer is the top priority. Adidas marketing strategy wants to make sure that clients are attracted by the different sports products, the organizational strategy of the company focuses on the creation of the best kind of product. Once a sports product is created and potential clients have been informed of the product, satisfaction will soon follow once the client purchases a sports product. Adidas’ organizational strategy pertaining to environmental relations helps the company reach its marketing objectives and it also provides a boost for the company to reach its overall goals. The social strategy of Adidas helps in creating a better image for the company; it then helps the firm achieve its marketing goals.
How Adidas has embraced e-business strategies?
Adidas made full use of e-business and integrated it with their marketing strategy. As mentioned earlier Adidas has an online shopping function for their website. In the online shopping function of the website, transactions can be made without the buyer being physically present in the company’s store. The payments for the online transaction are also done online. Payments can be done through credit cards; the delivery of the product will take a few days for shipping. Adidas used e-business to reach more clients and provide them an easier means to purchase their different sports products. Adidas made sure that all aspects of e-business would be used and taken advantage of.
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