Understanding Markets

Students Name & ID Number Nurziyod Daminov: 0170NENE1011 Mavlonbek Soliev: 0086MWMW0612 Abdulbosid Pozilov: Johongir Tursunov: 075DBKL0211

Module Title: Understanding Markets Programme: Bachelor of Arts (HONS) Business Studies Semester: Two Academic Year Period: February 2013 May 2013 Lecturer: Reena Nadarajah Date of Completion and Submission: 16 April 2013

Bachelor of Arts (HONS) Business Studies

Understanding Markets

1.0 Introduction 1.1 Background of Adidas Nowadays adidas is one of the largest producers of sports equipment and sportswear. Adidas was founded in 1920 by Adolf Dassler. On August 18 1949 Adi Dassler first registered adidas in commercial register in Furth in German. After death of Adolf Dassler his wife, son and daughter continued his business. Name of Adidas was taken from name Adolf Dassler. (Adi from Adolf, das from Dassler). In 1993 Robert Louis-Dreyfus became CEO of the company and began great changes in history of adidas. (Lantis, 2010) Adidas started moving from being manufacturing and sales based company to marketing company. In 1997 adidas acquired the Salomon Group and began called as adidas-Salomon Group but after sale of Salomon Group Adidas restored its legal name Adidas group in 2006. In This year Adidas acquired Reebok international Ltd. By combining two well-known brands, new group begin to make more profit. Presently, Adidas has more than 48.000 employees around the world. The companys headquarters is situated in Herzogenaurach and more than 2.500 people working at there. Current CEO of the company is Herbert Heiner. Now adidas largest sports brand in Europe, Second largest in the world after Nike. The company offers its product through tree main brands. These brands comprehend footwear, apparel and hardware in three segments. (Jones, 2012) Adidas sells its products over 170 countries of the world and about 2400 adidas and Reebok shops globally. In history adidas sponsored many Olympics Games and it helped become famous among sport brands. So there are many famous people that prefer adidas: Joe Frazier,
2 1.0 Introduction | Adidas

Bachelor of Arts (HONS) Business Studies

Understanding Markets

Zinedine Zidane, Muhammed Ali, Eusebio, Michel Platini, David Beckham and etc.

Adidas

group includes some brands like: Adidas Sport Performance, Adidas Sport Stile, Five Ten, Taylor Made, Reebok, Adidas Golf, Dams Golf, Ashworth and Rockport. In report of 2012 adidas amount of net sales was 14.9 billion. (report, 2013) In global market adidas has enough competitors. For example: Nike, Puma and Callaway Golf Co. Current market capture of adidas is about 20.7 bln.

2.0 SWOT analysis of adidas

Strengths In many events it is biggest sponsor. Strong management team. Strong control over its distribution channel. Good financial position Competitive pricing Strong brand name Effective Marketing strategy Strong international operations Market leadership Strong online presence Successful new product in innovation Opportunities Available technological innovation Entering new markets Expand product and service lines Market diversification Change in consumer lifestyle Expand customer base Threats Competition from foreign market Competitors actions Changing consumer patterns Increase in taxation Financial slowdown New competitors entering the market Price war between competitors Growing power of suppliers to set price Weakness High price in some products E-commerce limited in USA Online customer service isnt helpful Limited product line Low quality in services and some products

2.0 SWOT analysis of adidas | Adidas

Bachelor of Arts (HONS) Business Studies

Understanding Markets

Merger takeover

2.1 Strengths of the company As mentioned adidas is leader of Europe on sportswear and equipments. The leadership helps to The Company to sell its products widely and create opportunity to enter new market. One of the main reasons for becoming so famous is adidas sponsored many sport events and sports individuals. Especially, in football, Basketball, golf, swimming, regby and tennis brought it high success. Individuals as David Beckham, Nassim Hamed, Eusebio, Zinedine Zidane and Mikel Trophe and etc helped to adidas become so famous by their high results. In additional, adidas hosted all Football World Cup, Euro Cup and Olympics Games. Adidas Largest provider of football balls in the world and almost all big football events use adidas balls. (Jfad, 2008)
4 2.0 SWOT analysis of adidas | Adidas

Bachelor of Arts (HONS) Business Studies

Understanding Markets

Adidas considers most innovative sport company. Every year it produces about 60 footfriendly design. For example: In 2002-2003 company launched ClimaCool and A3 in running shoes category. The company sold 500.000 pairs in A3 and over million ClimaCool shoes. Nowadays adidas sells its products in 170 countries. By the help of strong brand name it can enter every new market. Adidas first largest sports brand in Europe and second in the world. (Riper, 2009) 2.2 Weaknesses Adidas is one of the strongest brands of the world but it has enough weaknesses. For instance: high cost of products. Original adidas shoes cost fluctuate between $60 - $350. Because of adidas uses high quality products. However the cost may be very expensive for many peoples. Adidas sells 67% of its products in Asia and many Asian countries cant afford to buy these expensive shoes. So adidas decreases price by decreasing quality of product. As a result many people can buy these shoes cheaper price. Nowadays many world brands began to work in ecommerce market but adidas still has not good online shopping system and online services also very poor. In additional, Nike always competes with adidas. In US market Nike already became main provider. (Anon., 2010) 2.3 Opportunities As Adidas experiment with new techniques like miCoach, the programme for optimizing the training-process, the company follows the trend to join sporting-goods with electronic tools like heart-frequency-meter or Smartphones. Following this trend and developing a right marketing strategy means that the organization has the possibility to enhance its exchange. (group, 2011)

2.4 Threats Main treats for adidas are its competitors Puma, Nike. They already become giants of sporting goods industry. In additional, newly born brands like CAT, New Balance and GAP have increased their advertising in recent years. On the other hand increasing oil price also affects because of rubber, as well as transportation costs.
5 2.0 SWOT analysis of adidas | Adidas

Bachelor of Arts (HONS) Business Studies

Understanding Markets

Many adidas products are very expensive many new competitors offers products that cheaper than adidas. As a result amount of sales are decreasing.

3.0 Segmentation
Every organization has a successful marketing strategy is a great strategy. In the market you are selling is very such important as a in your

organization,

marketing

company Adidas for athletes of all ages around the world. Adidas, the market of professional athletes. Segmentation fans play an important role in the marketing strategy. Unique in the market,

organizations need to be careful in choosing the right one (s). Adidas sports the largest sportswear manufacturer in Europe and the second largest in the world, a different attitude and practice people. Sellers develop a separate program for each customer segmentation, Adidas primarily focus on demographic and psychographics segmentations. Thus, the development of brand adidas in three different styles. (Lipsey, 2006) 3.1 Demographic Segmentation The population is divided into groups based on demographic variables such as gender and age. This method was used in the clothing and shoes market. Adidas brand products in a variety of men, women and children by age and life cycle segmentation and gender segmentation. Adidas has a branded range of men's and women's clothing, shoes, and body care and eye wear. The original style of the Adidas brand. (Andrev, 2006) 3.2 Psychographic Segmentation Psychographic segmentation used to split the market into groups based on social class, lifestyle and personality. Adidas is focused on the upper class people in the upper class tend to have similar stores. States are also used as gender, race, income, family life cycle in different
6 3.0 Segmentation | Adidas

Bachelor of Arts (HONS) Business Studies

Understanding Markets

segments of the market, but they make it a little easier and Adidas is a brand for many people around the world. (Plus, 2007)

4.0 Targeting and Positioning Strategy Adidas use a variety of strategies to become the market leader in the market. This is a serious threat to their strategy easily copied competitors such as Nike now from Adidas, the company has a tradition of being sponsored events such as the Olympic Games, World Championships and many European games. Adidas is a sponsor of the Olympic Games in Beijing. Adidas also be used to support different football teams in Germany, as the appearance of the company in Germany. After the acquisition of Reebok is also used to support the football team and the Los Angeles Lakers and the New York Giants football team, as well. Adidas is the brand ambassador of the famous works such as Venus Williams and Curt Schilling. (Roll, 2006) Most of Asia and Africa in need and have no company with operations such as Adidas and Nike Adidas won the competition with Nike in India, Japan and China. They now have the ability to develop strategic cooperation between local companies to increase their market share and become more successful in the market. For example, in China, Adidas is developing a strategic partnership with Li Ning and Nike, he could easily win partnership. In addition to local sporting events in the market, it cannot use the brand in the target market and can bring more customers. Adidas cannot cope with the consumer market with low prices and the perception of a new segment of the market to bring their products to compete with Nike. (Shimp, 2010) It is a direct competitor to Nike, Adidas player with this phenomenon, let his boots, which can steal the thunder Hyperdunks hold the star point guard Derrick Rose, Chicago, Adidas wants to bring their products and the people who tried the brand. Adidas shoes light, location for the use of unique and desirable compared to competing products in the minds of target consumers. (Yashin, 2006)

4.0 Targeting and Positioning Strategy | Adidas