Adidas Marketing Strategy Case Study: Analysis and Recommendations

This case study provides a comprehensive analysis of Adidas's marketing strategy, focusing on its operations within the UK market. The report begins with an introduction to Adidas, highlighting its global leadership in sportswear and athletic footwear. It then delves into a situational analysis, employing PESTLE and SWOT frameworks to assess the political, economic, social, technological, legal, and environmental factors influencing Adidas's performance, as well as its strengths, weaknesses, opportunities, and threats. The study also examines Adidas's competitive advantage, particularly in relation to its main competitor, Nike, and evaluates the effectiveness of its current marketing strategies. Furthermore, the report explores the STP (Segmentation, Targeting, and Positioning) of Adidas, focusing on specific brands like SLVR sneakers. Finally, the case study concludes with recommended objectives and goals for Adidas, along with proposed marketing strategies aimed at enhancing its market position and competitiveness in the UK.

Marketing Strategy
Case Study: Adidas
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Table of Contents
Introduction......................................................................................................................................3
Part 1................................................................................................................................................4
Situational analysis......................................................................................................................4
PESTLE....................................................................................................................................4
SWOT.......................................................................................................................................5
Competitive advantage (USP)......................................................................................................6
Evaluation of current marketing strategy.....................................................................................7
Part 2................................................................................................................................................9
Segmentation Targeting & Positioning........................................................................................9
Segmentation............................................................................................................................9
Targeting................................................................................................................................10
Positioning..............................................................................................................................11
Recommended objectives and goals..........................................................................................11
Recommend marketing strategies..............................................................................................12
Conclusion.....................................................................................................................................15
References......................................................................................................................................16
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Introduction
Adidas is the global leader in the marketing of sports clothing and athletic shoes. It was founded
by Adolf Dassler during 1920’s. Adolf Dassler fabricated a pair of sport shoes in 1925 and after
some years, he and his brother Rudolph were marketing special shoes for the tennis players and
began creating special shoes for diverse sports. The brand is constructed on latest equipment and
cutting-edge design. It is a global brand and is appraised and appreciated by customers for its
advanced, stimulating and dependable values. The stated firm is organised into three customer-
oriented product separations, namely, forever sports, originals and equipment. The structure of
Adidas products is exclusive to the business and replicates the brand’s commitment in meeting
the varying market drifts. Performance focused footwear, attire and the hardware merchandises
are in the vital spark of the Adidas. Adidas is the leading sportswear manufacturer in Europe and
the second leading in the world. It employs over 60,000 people across the world in 2016. The
worldwide net sales of the company amounted to about 19.29 billion euros in 2016. Footwear
and apparel are the two of the Adidas major segment. In 2016, Adidas become one of the
supreme brands between men and women in terms of sportswear worldwide.
This report will present the marketing strategy of Adidas in the context of UK. It will
present the situational analysis by conducting and PESTLE and SWOT analysis on Adidas UK.
It will also include the competitive advantage of the stated firm and will also evaluate its current
market strategy. The study will include the details about the organisations’ position relative to
the other industry rivals and will include the details of their marketing strategy. It will provide a
critical evaluation to the Adidas competitive advantage over the other brands in the market of
UK. In addition to that, the analysis will choose a brand from the Adidas portfolio and will select
a customer segment on that specific brand. The report will also include the recommended
strategies and objectives for the stated organisation.
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Part 1
Situational analysis
PESTLE
Political- The rule and policy of Adidas is to regulate and monitor unsafe and harmful
substances for the purpose of protecting environment and human health. The another policy
Adidas follows, is to remove PVS making advancement in order to find out the substitutes such
as vinyl, polyurethane, thermoplastic rubber as well as ethyl (Heeg, 2015). The company also
gives training facilities for HR systems, health and safety, employment standard is significant for
the firm. The company also develops groups for monitoring and handling SARS in the UK
factories, disinfectant units as well as washing stations. At last, the company helps and
safeguards the employee’s right through considering every employment policies.
Economic- Adidas is a multinational company which supports nations for declining
unemployment situation through raising their numbers of workers each and every year. The
growth rate of industrial production in UK was around 1% in 2001- 2003, which was raised by
1.7% in the year 2004. The company was one and only reason behind this enhancement, and
only because of Olympic Games.
Social- The products of Adidas can be used by any religion, age and also suit any lifestyle,
which is basically in trend with an innovative design in many products (Dickson and Fuss,
2011). The main focus of the firm is on people who participate in athletes and sports; on the
other hand, anyone can buy products of Adidas.
Technology- The packaging system which Adidas uses is actually suitable for transfer and
transport process, over long routes, extreme weather changes and also in humid conditions. The
company also uses environmental- friendly materials and recycled paper for the packaging
process.
Legal- The entire management of Adidas follows the United Nations Declaration of Human
Rights and also their rules and processes remain for all the available domestic policies and
constant with core worker principles of the ILO (Huang et al., 2015).
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Environmental- Adidas’s main approach is to handle environmental problems which are as an
integral portion of their regular operations and it also contributes to the Adidas Team and to
entire business functions.
SWOT
Strength- Brand image and goodwill is important for any firm that operates in retail marketing.
Adidas also have many endorsements for promoting their products. Even the company also
remunerate many celebrities to advertise their products and mainly with long term affinity with
stars in sports field like Lionel Messi and David Beckham (Jackson, Jankovich and Sheinkop,
2013). The company also has goods responds towards other European markets. The firm’s own
retail sales share has developed considerably and recently it operates over 2200 stores
worldwide.
Weakness- Adidas operates in various nations across the world and also deals in various
currencies as per countries (Kuşay, 2014). So, any fluctuations in currency deteriorate
customer’s sentiments that affect the business of the company. On the other hand, the company
has limited financers and financial supports even its marketing budget is still 50% lower than
Nike, which simply means that it has to utilize its funds sensibly and have lower visibility in
comparison to its rivalry, Nike.
Opportunities- Adidas has an opportunity to globalization as the company is well-known brand,
which provides them an advantage. So, when the marketing of their products is done, customers
get more interests as this is a known brand (Lebron, 2010). Technologies like, smart phones and
internet has meant that the firm are able to attract major customers and also creates much more
distribution channels and modes. As trends of health and fitness have increased all over the
world, a major market is opened for sports footwear and apparel. Sports footwear and apparels
has increased 42% over the last eight years.
Threat- Adidas sports footwear and apparels operates in an oligopolistic market, which means
market is quite dominating by some companies. Recently, Nike is the market leader and major
competition for Adidas and some other companies like Puma and Reebok are also highly
competitive. The company is majorly depend in sports business, so the firm has to continuously
monitor the market for popularity of big events and sports events such as Olympic Games that
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assure huge sales (Lebron, 2010). On the other hand, Adidas sells its products virtually in
different countries all over the world. So, it gains revenues, profits, owns assets, incurs liabilities
and also pays expenditures in different countries using different currencies. Hence, fluctuations
in currency rate would adversely affect the profitability of Adidas.
Competitive advantage (USP)
The major Competitors of Adidas in UK are
1. Nike
2. New Balance
3. Puma
4. Fila
5. Converse
The main opponent of Adidas in the UK marketplace is Nike which has the market share of more
than 35%. There are also some other participants in the UK market, which are slighter in size
than Nike, such as New Balance, Fila, Puma and Converse. All these competitors are situating
their energies to diminish the Adidas market share but the stated company with its strong market
segmentation and positioning strategy is beating its rivals (Mandal, 2017). The stated firm
benefits from its footwear brands which are specially manufactured for teenagers. The high grade
of the alignment to the technical expansion has fashioned the desired valued from the consumers,
mainly from the business’s strategy to deliver them with required technical applications (Lebron,
2010).
The Unique Selling Point (USP) of Adidas is its uniqueness. The company is
manufacturing 3-D printed shoes as it seems to an imaginative way in order to take the sports
shoes to the next level. These shoes not only look amazing but it could be created for specific
individuals and can be cratered for their own feet. Another uniqueness about Adidas shoes that
makes it superior than the others is its one piece leather uppers. The uppers of the Adidas shoes
are basically everything but the sole. Adidas has created beautiful shoes that boast a seamless
upper that allows for greater flexibility and style.
Here is head to head comparison between Nike and Adidas on global context
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Figure 1: Comparison between Nike and Adidas
Source: (Mandal, 2017)
Evaluation of current marketing strategy
Adidas utilises diverse types of marketing approaches in order to become the market frontrunner
but the major risk for the company is that its strategies are easily imitative by contestants such as
Nike. The stated firm has a custom of taking the funding of major sports occasions around the
world. It sponsors football events and basketball clubs (Borowski, 2011). In order to become the
market leader in sports products and apparels, Adidas assimilated Reebok in 2005 to upsurge its
market share. The main intention behind this is to deal in both sports and daily life usage
apparels. Recently, it engaged in an agreement with Samsung to create a shoe + phone publicity
operation (Moser, Muller and Piller, 2006). In this planned partnership, both the businesses are
trying to cultivate a phone that could be used with shoes while exercise. Adidas has a history of
advanced technology and in its current marketing strategy has told the stakeholders that 50% of
its transactions would be through speed-enabled merchandises. The company is about to
complete redesigning of its occupational model from range preparation to product formation,
locating, supply chain and sales.
Here is the sale of Adidas across the globe due to its marketing strategy.
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Figure 2: Adidas Total Sales
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Part 2
Segmentation Targeting & Positioning
STP is a short term for Segmentation, Targeting and Positioning. It is the basic thought of
marketing, which is related on how to appraise and select a target marketplace for manufactured
goods or service. There are usually five stages for an organisation to get its STP. The first step is
about choosing the approaches and purposes. Next is to define how to split the market for the
company’s best profit. The third is to appraise the segment appeal and after that to select a target
market grounded on the gathered evidence (Abdullah Saif, 2015). The final step is about
identifying and developing a positioning strategy to reach the desired target market.
Segmentation
Segmentation of marketplace is the practice of isolating the market of possible consumers into
groups, or sections, which is grounded on dissimilar characteristics. The segmentation shaped are
very much collected of consumers that reply likewise to the business’s marketing approaches and
also shares traits such as comparable benefits, requirements or locations. Every successful
organisation has its marketing approaches which they utilise purposefully. The market in which a
company sell its merchandises and services is very significant to the organisation processes.
Adidas advertises its products and services to athletes of all ages over the world. The stated
company aims in marketing its merchandises to specialists and unprofessional athletes. Market
division plays a very crucial part in the company’s marketing approach. Each market is different
so businesses enterprises have to be careful while selecting right marketing strategy. The main
motive of market segmentation is to permit the management of the company to regulate the
marketing mixes, namely, product, price, promotion and place, in order to encounter the
requirements of one or more precise segments.
Adidas, the biggest sportswear producer in the Europe and second largest sportswear
producer in the glove always concerns about the buying attitudes and behaviours. The SLVR
shoes from Adidas are a smart fashion leisurewear within the Adidas Sport Style. The tag is
embattled to attract the stylish teens of UK who are fully involved in life, be it in social
interacting, family friends, outdoor or sporting events.
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In the context of UK, Adidas usually focuses on demographic and psychographic
segmentation. For the SLVR sneakers from Adidas, demographic segmentation is widely used by
the company as it refers on dividing the marketplace into sets grounded on demographic
variables, such as age and sex. SLVR sneakers which is a mart fashionable sportswear is mainly
targeted to fashionable teens and young adults, age ranging from 13-19 years, who are fully
engaged in life.
Figure 3: Adidas SLVR Sneakers
Psychographic segmentation is utilised in order to split the marketplace into sets which is
built on the social class, life style or behaviour features. Adidas, in the UK emphasis on social
class as people within the social class tends to have like buying behaviours and characters. It also
uses income, gender, and family income division to differentiate their marketplace for its SLVR
sneakers.
Targeting
Market Targeting is about evaluating dissimilar market segments. It is important for an
organisation to look on three factors: market section size and growth, sections structural appeal
and business’s purposes and resources. Adidas must adopt the stated market coverage strategy
which is about differentiated marketing (Piller, Lindgens and Steiner, 2012). In order to utilise
this, Adidas agrees to target several market sections and also delivers distinct proposals to them.
Adidas has three types of products for its consumers, namely, Performance, Originals and Style.
This table shows the sub brands of Adidas:
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Brands of Adidas Target Market
Performance Consumers who like sports. The product is available
everywhere around the world where sports are played and
watched.
Originals This sub-brand focuses on street wear and life-style fashions
Style This segment targets a forward-thinking fashion consumer.
The label of SLVR is targeted to appeal to the fashionable teens and young adults who
are fully engaged in life (Piller, Lindgens and Steiner, 2012). This brand allows Adidas to meet
numerous customer needs, grab the market prospects and is very less exaggerated by one-
dimensional market risks.
Positioning
Market positioning plays an important role in a company’s operations and assist in getting
success. The definition of positioning can be taken as the marketing strategy which is developed
in order to make a brand occupy a separate position, comparative to the rival brands in the minds
of the purchaser. It is not about what a corporation does to its product, but it is about what it
creates in the mind of the customers regarding that product (RICE, JAMISON and DAVIS,
2016). As Adidas is emphasized in manufacturing and selling sports products and apparels, it
invested a lot of money in major sports events around the globe to promote and position its
products. It also uses celebrities and well-known sports clubs to endorse products. The stated
firm also constantly uses innovative technique in order to increase the superiority of the products
and recruits best artistes to create its products. Adidas targets its consumers who like sports, such
as FIFA world cup or through NBA games.
It can be identified that Adidas has more opportunity in participating in major occasions
and it could aid the firm in improving brand equity and could also increase the target market.
Recommended objectives and goals
SMART is the acronym of the different variations that could be used to provide more
comprehensive definition of goal settings. SMART stands for Specific, Measurable, Achievable,
Relevant and Time Bound
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1. Specific: The goal and objectives of Adidas must be vibrant and precise; or else the
business would not be able to emphasis on its efforts and will not feel completely
motivated to achieve the goals. While drafting it goals, Adidas must consider what it
wants to achieve and why this particular goals is important (RICE, JAMISON and
DAVIS, 2016). The management of the stated firm must also consider who are involved
in these goals what resources of the company are involved in achieving it.
2. Measurable: It is very important for Adidas to have assessable goals, so that it could
track its development and stay encouraged. Monitoring the progress will help the firm in
staying focused, meeting the deadlines and feeling the excitement of achieving the
objectives and goals of the company.
3. Achievable: the objectives of Adidas must be achievable. It must be realistic and it must
stretch the company’s abilities. It is important for the stated firm to recognise the
overlooked opportunities which would help it in getting closer to its goals.
4. Relevant: It is important for Adidas to ensure that its objectives and goals matters to its
business operations. All business enterprises need provision and support in
accomplishing its goals but it is critical to retain control over them.
5. Time Bound: It is important for Adidas to create a specific time frame for its objectives
and goals so that it could have a deadline in order to focus on and something to work
towards.
Recommend marketing strategies
Adidas is one of the topmost brands in the sports and footwear marketplace. The corporation has
seen its portion of ups and downs. The stated firm started in 1936 and is amongst the one of the
oldest footwear brands of the planet. The corporation is facing stiff competition from Nike but
has overcome the struggle by aiming youngsters and sports concerned customers.
The marketing mix of Adidas SLVR Sneakers
Products: Adidas has different subsidiaries and delivers sports apparels and products with
different names. SLVR sneakers from Adidas come in various design and styles, and are tough
and athletic. The purpose of Adidas is to deliver the best footwear to its consumers who have the
mixture of technology and design. The stated merchandises of the company are not need based.
In spite of this, the shoes are manufactured and accepted by consumers to gratify their needs and
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