Analyzing Adidas: Marketing Fundamentals and Environment Impact

This report provides an analysis of Adidas' marketing fundamentals, focusing on how these principles are applied within the organization and the impact of the global pandemic. It covers key marketing activities, including the differentiated marketing strategy targeting young adults and the upper-middle class. The report uses the STP model to examine segmentation, targeting, and positioning strategies, highlighting Adidas' focus on demographic segmentation and premium pricing. Furthermore, it delves into the marketing mix, analyzing price, place, product, and promotion, and evaluates internal factors using SWOT analysis to identify strengths, weaknesses, opportunities, and threats. The report also explores external factors impacting Adidas, such as competition and economic conditions, concluding with insights into how Adidas can navigate its dynamic business environment.

MARKETING
FUNDAMENTALS
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Table of Contents
INTRODUCTION...........................................................................................................................3
TASK ..............................................................................................................................................3
Marketing....................................................................................................................................3
STP analysis................................................................................................................................4
Marketing mix.............................................................................................................................5
Internal analysis..........................................................................................................................7
External analysis.........................................................................................................................9
CONCLUSION .............................................................................................................................12
REFERENCES .............................................................................................................................13
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INTRODUCTION
Marketing fundamentals are the essential marketing functions which needs to be
performed within an organization or in businesses such as B2C and B2B. The fundamentals of
marketing discusses about the factors which are related to price, place, product, promotion,
people, processes and physical evidence through which an organization can effectively market
their product that can support companies in meeting their targets and gain competitive advantage
from them. The fundamentals of marketing focuses on research, communication, creativity,
evaluation, revision and delivery (Lisa Kefalos, 2014). Adidas is a German multinational
company which was founded by Adolf Dassler in the year 1924. the company was formerly
known as Dassler Brothers Shoe Factory which designs and manufactures shoes, clothing and
accessories. The global pandemic have been affecting the companies at larger extent which have
been responsible for hampering the business and its stability at greater level. The pandemic have
been responsible for making business face serious consequences which can affected business
growth. The report will define how pandemic have been responsible for creating an impact on
the internal and external business environment. The report will discuss about the fundamentals of
marketing and how this can be helpful in evaluating the internal and external factors of business.
The report will be evaluating the internal factors which exist within the organization with the
help of appropriate framework through which the organisation can determine the dynamic
business environment. On the other hand, the study will also discuss about external business
environment which influences the business at larger glance and such factors will be identified
with the help of right framework.
TASK
Marketing
Marketing refers to the activities that needs it be followed by the companies through
which they can promote the buying and selling products of the company (ALEXANDRA TWIN,
2021). The concept of marketing acts as discipline through which the company can maintain
relationship with the company through which an organization can maintain their competitive
position in dynamic business environment. The concepts of marketing is used to define the price,
place, product, promotion through which an organization can enhance their competitive position
within the industry and make business more profitable.
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In relation Adidas, the marketing strategy of the sports brand is differentiated marketing
strategy through which the company can target young adults and children as well which will be
helpful in meeting targets of the company. The brand majorly targets costumers who belong to
upper middle class or luxury class through which the company can generate higher revenues and
focus on strengthening the competitive position within the industry (AYBEK, 2020). The
marketing activities of Adidas helps the company in creating a unique business value through
which they can maintain their competitive position and maintain higher profit margin. These
marketing activities help Adidas in sustaining within the industry for longer period of time span
by maximizing the customer base of the company.
STP analysis
STP strategic model is the strategic approach of modern marketing in which the
companies can streamline their communication processes. This approach of modern marketing
focuses on commercial effectiveness, selecting valuable segments and then developing
marketing mix through which the company can effectively segment their market and position
their product range that will support in meeting organizational objectives. The STP approach is a
marketing technique which is used by companies for dividing the market through which they can
simplify the market that needs to be targeted. This framework is helpful in planning effective
positioning strategies that can be used to position the products and services effectively which can
support companies in meeting the targets.
The STP approach, in relation to Adidas is addressed underneath:
Segmentation- Market segmentation is the initial stage in which the target market is
broadly classified into vagarious groups in the basis of their similar characteristics. In order to
divide the market, the company can divide them on the basis of segment their marketplace on the
basis of size, age, religion, gender and many others. In relation to Adidas, the company target
young costumers between the age of 14-40 years which helps them in becoming the competitive
and highly differentiating brand within the industry (Baines and et.al, 2021). The company
focuses on the demographic segmentation factors where they consider age, gender, ethnicity and
income as the basis of their market segmentation strategy through which they can meet demands
of consumers.
Targeting- With the help of targeting strategies, Adidas focus in targeting the existing
customers through which they can target the consumers, create positive influence on the target
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group and increase the profitability of the company. With the help of premium pricing strategies,
the company focus on targeting upper middle class and luxury class customers through which
they can sell greater number of their premium range of product that can support companies in
meeting targets and in generating higher revenues. Some of the other factors which are
considered by Adidas while targeting the market segment are- segment size and growth, segment
structural attractiveness and company objectives and resources.
Positioning- In order to position the products and services, Adidas is positioning the
product and services through speed, cities and open source. The company focuses on positioning
their products in target cities through which they can meet consumer demands and also attract
new consumers through which the profit margin of Adidas can be increased. Adidas also
collaborate with customers through which they can promote and position their products and
services effectively and meet organizational objectives (Bizarrias and et.al, 2020). The company
also sell their product range through distributors and retailers through which they can ensure
meeting the demands of consumers.
Marketing mix
Markeitng mix is the comprehenesive marleitng plan hich focuses on different areas of
busienss. The 4 P's of marketing which are focused under this category are- price, place, product
and promotion. Markeiting mix is the practice of marketing which aasisit the companies in
forming decisions through which the company can effectively target consumers by promoting the
products and services that can increase comeptitive position and brand presence of the company.
The marketing mix in context of Adidas is pxplained below:
Price- Price is an essentail factor in markeitng and this has been respeonbile for creating
an imapct on the organziation. By focusing on Adidas, the company sell their products at
premium price range which have been targeting the middle class and luxury class customers
(Fahim Shah, 2022). The premium pricing startgy of Adidas acts as challenge for the company
which affects the profitabiity and cutmer base of the company. As the production of Adidas is
done in Asia, this has been offereing opportunity for comapny to gain access to cheaper labour.
Wheras, due to the global pandemic, Adidas struglled due to their high quality and premium
pricing strategy of the company. The company is following premium prcing strategy whcih is
creating competitive challeneg for the company and this is also affecting the position and
customer base of the company which makes the company face serious consequences.
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Place- Adidas is a gloabl comapny which is positionig their products and services in
many countries. The company is operating through retail stores, e-commerce websites and
franchises. The website of Adidas allow consumers to personalize the products through which
they can meet targets. The website of Adidas offers the opportunity to the company to reach
larger number of custmers through which they can generate higher revenues. During the
padmeic, the use of online website offered opportunity for business growth and incline in
profitability when Adidas was offering discountrs and offeres which supported in meeting targets
and profit margins. As the company is operating in various countries, this can be helpful in
meeting targets where larger number of customers can be attarcted (Butaney, 2020). The
company also focus on distributing their products to varuious places thriohgh which consuer
demands can be met easily which will assit the company in creating a comeptitive position and
loyal customer base within the industry.
Product- Adidas is a renowned bgradn which is operating in sportswear industry and is
the second largets manufactures of sportswear in the world. The company is offreing a
diversified range of products- footwear, apparel and acessories. The company manufactires
products whcih can be which can be used by mens, womens and kids. As the diversoty in
product in high, this can be helpful in offereing cosnumers vaariety of shoes, clothing and
accessories. During teh times of COVID-19, this is oen of the factor which is respeonbile for
creating an imapct on the sakles and manufacturing of goods and services of the comany. Due to
the pandemic, the comapny faced declne in sale of their products due to tebiur premium pricing
strategies.
Promotion- Tis is the part of markeitng strategy in which comapnies focuses on using
traditional and online markeitng approaches by which tehy can promote the products and
services.in order to promote the products and sertvices, Adidas makes use of advertysimnstes,
television, print magazines, newspapers and social media platdfrms through which the company
can promote their products and services through whcih they can attract customers at larger level
(Chernev, 2019). The brand also follows celebrity endorsement whcih is an efective strategy
through which they can make significant ifnleunce through which the company can target
customers at greater level. Adidas colloborate with celebritites, such as- Beyonce, Kanye West
anhd opther celebritites through which they can create a strong influence in the target market
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whch will be helful in atarcting customers at larger level and support in developinbg brand image
within the industry.
Internal analysis
Internal analysis is the examination and evaluation of internal components of company
which can be tangible and intangible and supports companies in forming decisions through
which the growth of business can be managed by creating a strategic plan. The approach of
evaluation of internal analysis can be stated as systematic analysis of internal strengths and
weakness of business.
In relation to Adidas, the below stated frameworks are used in order to evaluate and
understand the internal business environment:
SWOT analysis
SWOT analysis is the framework which is used to evaluate the internal factors that
already exist within the company. This framework is used to evaluate the strengths, weakness,
opportunities and threats of the company (Hole, Pawar and Khedkar, 2019). SWOT analysis is
the internal evaluation framework which can be helpful in identifying the factors which exist
within the organisation and are creating an impact on the operations and profit margins of the
company.
Talking about Adidas, SWOT analysis is used for evaluating the internal business
environment which is discussed beneath:
STRENGTHS
 Diversified portfolio- This has been a
strength for company in which Adidas
have been offering a varied range of
products which helps them in creating a
strong and larger customer base
(Kotler, Kartajaya and Setiawan, 2021).
Adidas is offering various types of
products, such as- apparels, shoes and
accessories which is the reason for
incline in interest of customers within
the brand.
WEAKNESS
 Premium price range- Due to higher
price range, this acts as weakness of the
company in limited consumers. As the
company is offering higher quality and
premium products, this has been the
reason of weakness which created an
impact on the customer base of
company.
 Fewer product line- This is one of the
biggest weakness of Adidas which
makes company face higher
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 Strong financial position- Global
marketplace is another strength for
Adidas, as the company is operating in
international marketplace through
which the organization can maintain
their competitive position and profit
margins within the industry.
 Distribution network- Adidas is
selling through online and offline
mediums through which the company
can target larger number of area and
audience which is the strength of
company (Hitesh Bhasin, 2019). With
the help of strong distribution network,
this supports the company in creating
larger customer base through which the
company is able to mange their
financial position in the industry.
competition within the industry. The
scope in product range is high and this
leads to higher competition and such
factors acts as weakness for Adidas due
to limited availability of options.
 Outsourced manufacturing- As the
company is operating globally, this has
been the challenge that is faced by
company where Adidas is outsourcing
production around of 93% to third part
manufactures which makes the
company dependent on such
manufactures and this has been the
weakness for company. As the
company is manufacturing their
products in Asian market, this
dependence has been the weakness for
company which creates a negative
impact on the quality of the products
and services.
OPPORTUNITY
 Market development- By entering into
a new market can bring opportunity for
Adidas through which they can ensure
business success which will be helpful
in facing competition and generating
higher revenues for the sports brand.
This can bring opportunity for
development of the company through
entering a global marketplace which
will also offer larger geographical area
THREATS
 Higher competition- Although Adidas
is one of the global brand and this bring
threats to the company, as there are
many other companies which are
possessing higher competition with the
brand (Moroz, Tsal-Tsalko and
Chaikin, 2018). Such factors are
responsible for creating threat to
Adidas where the profit margin and
position of company within the industry
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for attracting consumers.
 Expansion in product line- Through
expansion in product line can be an
opportunity for Adidas, in attracting
higher number of customers and will
also support the brand in meeting the
targets. Through expanding the product
line, this will be helpful for Adidas in
differentiating the company from its
competitors.
 Incline in demand for premium
products- As the consumers lifestyle is
rapidly changing, due to the change in
their income and day to day activities,
this has been responsible for increasing
the demands of premium products in
global marketplace (Moscato and De
Vries, 2019). Amid the global
pandemic, the companies have been
offering heavy discounts and due to
change in living standard, consumers
are more interest in premium range of
products which can be an opportunity
for business in generating higher
revenues and increasing sale of their
products.
can be influenced negatively.
 Imitation of products- As the
company is offering limited product
range and this has been one of the
threat for Adidas where other
companies ca easily imitate their range.
There are many companies which are
offering similar product s like Adidas at
lower prices, this creates a threat for the
profitability and competitiveness of the
company.
 Supplier dominance- Due to the
majority of production being
outsourced, the bargaining power of
suppliers is high which can create an
impact on the profitability and
sustainability of the company (Negoiţă
and et.al, 2018). Due to high bargaining
power of suppliers, this creates a threat
fort the company in maintaining their
competitive position a this is also
responsible for creating an impact on
the competitive position of the
company.
External analysis
External business environment is the environment which exist outside of the
organization. The factors which are involves in external factors of business are responsible for
creating an impact on the companies in which can create positive as well as negative impact. The
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external business environment can be assessed with various frameworks. In simple terms,
external analysis is the process which assist in evaluating change that have been occurring in
industry and can also significantly influence current business operations of business. External
analysis is the study of environment in which the companies can adapt to change and streamline
their current products through which they can meet the customer base effectively. The global
pandemic is responsible for creating a huge impact on the products and customer base of the
companies.
In order to evaluate the business environment, a comprehensive study of Adidas is
explained beneath:
PESTEL analysis
PESTEL analysis is the evaluation of factors which exist within the external business
environment. This framework is helpful in evaluating the external factors that creates an impact
on the activities and performance of the company. This tool is also used in situation analysis by
which the forces that can affect the organization can be identified (Ovidijus Jurevicius, 2022).
The forces which are determined with the help of PESTEL analysis are- political, economic,
social, technological, environmental and legal factors.
In order to evaluate the external business environment of Adidas, the study of PESTEL
analysis is depicted below:
Political Factors- The political factors, such as- trade policies and political unrest are
some of the factors which are responsible in creating an political issues which can negatively
influence the competitive position of the company in global marketplace. For maintaining the
position in global marketplace, Adidas have to manage in facing such global issues. Some of the
other political issues which are faced by the companies are- government and taxation systems,
restrictions related to imports and exports are some of the factors that are influencing the
operations of Adidas within the international marketplace (Savina, 2021). As the company is
operating in international marketplace, this leads to worldwide brand presence and for creating
positive brand image, Adidas needs to resolve their complex supply chain issues. In order to
maintain global performance, Adidas face various issues related to trade policies and political
instability which can hampers the performance of company. Whereas, Adidas outsource there
products from different countries, which can be helpful in reducing the manufacturing cost.
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Economic Factors- The economic factors, such as- unemployment, wage rates, taxation,
inflation, interest and exchange rates are some of the economic factors which are responsible or
creating an impact on the operations of the company. Adidas is manufacturing their products in
China due to labour intensive products at lower cost and for that the company needs to plan
pricing strategies of their products effectively through which the company can attract more
number of customers and generate higher revenues. After the global pandemic, the market
situation have been worsen, it order to ensure growth and opportunity of business, Adidas must
research where they should sell and distribute their products and services.
Social Factors- The social factors, such as- culture, lifestyle, religion are some of the
factors which can influence the performance of Adidas. Such social factors are responsible for
affecting the brand image and consumer loyalty of the customers. The target audience of Adidas
is health conscious and this has increased the popularity of brand among such target market and
in people engaged in sports (Terech, A., 2018). The sale of company can be increased if the
incline in number of health conscious people increases. Apart from that, Adidas also values
corporate volunteer program which will be helpful in supporting communities and encouraging
people towards living healthy lifestyle. Adidas also focuses on analysing the healthy trends and
preferences through which they can cater the needs of their employees and generate higher
revenues.
Technological Factors- For maintaining a competitive and dominant position in the
market, Adidas must adapt new technologies which will be helpful in strengthening their
competitive position within the industry. The products of Adidas must be tested under a variety
of conditions which will be helpful for the brand in maximizing the performance of their
products and services. Adidas can expand and invest in research and development through which
they can develop a better knowledge of technology that can be helpful in creating unique and
valuable products that can also help business in facing high competition with other brands by
creating unique products.
Environmental Factors- Adidas is engaged in offering sustainable products and in
order to eliminate the hazardous substances from the environment, Adidas use natural material
for manufacturing their products and services through which they can meet their responsibility
towards the environment (Visser, Sikkenga and Berry, 2019). The company is also working with
the initiative in which they are following “low waste initiative program” through which the
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brand focuses on material and prices of manufacturing. From the program, Adidas is focusing on
reducing the carbon emission from the environment.
Legal Factors- Adidas have ownership of intellectual properties and IP systems which
have been acting as source of legal protection in global marketplace. The brand have designed
patents through which they can protect the company against any infringements in the dynamic
industry (Pererva, Kobieliev and Dolyna, 2020). In 2014, Adidas have trademarked their
products and services through which they can ensure no other company can make similar product
which will be helpful in forming unique brand image and value in the industry.
CONCLUSION
From detailed analysis of above report, it can be stated that business environment
comprises of various elements where internal and external factors are responsible for creating an
impact ion the companies which exist within such environment. Marketing fundamentals acts as
the primary principles of marketing that supports business in promoting the the products and
services that are offered by the company. The internal factors are those factors which exists
within the companies and can create an impact on the company. This can be stated that Adidas
have been a part of dynamic business environment where the company have been creating their
brand image with the help of their strong network and financial position through which they can
meet demands of consumers and ensure higher competitive advantage within the industry.
Internal analysis defines the strengths and weakness of company by evaluating the internal
factors which can internally influence business.
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