INTRODUCTION TO THEORY

My project topic "Marketing Strategies of Adidas" is concentrated on Adidas

which is a sports brand and we are analyzing its Marketing Strategy. I have chosen
this particular topic mainly for two reasons. Since my childhood days I had great
interest in the sports industry and I like to buy new shoes and sports apparels and
equipment as and when it comes in the market. The company that I most admire in
the sports industry is Adidas. Hence I have decided to do my project report on this
company.

Established in post-war Germany in 1949 (in its current form) by Adolf Dassler, the
Adidas Group has been synonymous with sports and sportswear for the last 60
years. The company has been part of many significant sporting moments,
including but not restricted to the 1954 and 1974 German victories in the football
World Cup, the recently in news Boston and Vancouver Marathons, and all World
Cup and Euro Cup footballs since 1970.

The phenomenal growth of the company has been primarily off the back of clever
sponsorships of key athletes and teams, and also through the design of innovative
new technologies. For example, Adidas was the first footwear brand to develop
football boots with removable studs in the 1954 World Cup, and more recently in
2005, the design of the first shoe with an in-built microprocessor that can adjust
itself as per the runner’s needs. Alongside this, their revenues have been growing
roughly at 11% year-on-year with the financial reports of 2012 showing Revenues
of €14.9 billion and Net Income of €526 million.
5
Adidas Group counts amongst its brands the flagship “Adidas marque”, “Adidas
Originals” and “Taylor Made-Adidas” (golf range), amongst many others. In 2005,
Adidas acquired Reebok for $3.8 billion, thus bringing it closer to its largest rival
Nike in terms of Sales, and making it the number two athletic shoemaker in the
world. Apart from Nike, other competitors for Adidas include Puma, Deckers, Crocs
and Callaway Golf (competing with Adidas’ golf range – Taylor Made).

The operating environment of Adidas is the sportswear and fashion industry, which
has seen outstanding growth since the economic recession. Worth less than $200
billion in 2008, it is projected to grow to $350 billion by the end of 2017. This
growth provides tremendous opportunities for sportswear firms, both large and
small, to expand and establish their business in this arena. Most of the growth in
this segment is provided for by the United States, Brazil, China and Russia, who
together account for 60% of the total growth. However, challenges for the industry
still remain in the form of market saturation in developing countries and the
subdued economic environment.
6
OBJECTIVES OF THE STUDY

To understand why customers buys a particular product. To

know the marketing opportunities

To understand marketing problems

To help in the selection of right course of actions

To know about customers acceptance of the product To

understand the distribution network

To forecast the probable volume of the future sales. To

analyze the excepted market share
7
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 met
some of the Marketing Executives who helped me getting the required information.

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.

Secondary data:

I have collected data from websites, magazines, etc. to come to a conclusion on

the marketing strategies of Adidas.

8
COMPANY PROFILE
Brief History: 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 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

9
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.
10
General Information

For over 80 years Adidas has been a part of India’s sports on every level,
delivering state-of-the-art sports footwear, apparel and accessories. Today, with
total net sales of 19.29 billion euros and net income of 720 million euros, 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 every
country of the world. Their 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 28.3 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 60,000
employees worldwide.

Market Capital and Brand Image

As of May 2016 the market capital of Adidas Company was 30.25 billion euros.
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 2016.
11
History of the Company

The Timeline of the company

1948

The Dassler brothers, Rudolph and Adolph, separate and form two companies. Adi
Dassler forms ‘adidas’-a combination of his nickname, ‘Adi’ and the first three
letters of his last name a lowercase “a” is adopted to further distinguish ‘adidas’.
He commences production with 47 employees. Rudolph forms ‘Puma’, with its
headquarters located across town from adidas in Herzogenaurach.

1949

Adidas adopts the trademark three-stripes.

1955

The first license is given to a factory in India to manufacture adidas shoes.

1972

Adidas introduces the “Trefoil” logo.

1984

Kathe Dassler dies, leaving the company to Horst, the Dasslers’ first-born.
1987

Horst dies at the age of 51.

1987

Ron More is brought in from adidas Canada to run operations and a new facility is
acquired in Warren, New Jersey.

1988

Adidas is incorporated.

1989

Rob Strasser and Peter Moore of Sports Incorporated present adidas with the

“Equipment” concept. The footwear and apparel line is introduced in 1991.

1990

Bernard Taupie purchases 80% of adidas stock.

1993

A group of investors led by Robert Louis-Dreyfus, former head of the British

advertising group Saatchi & Saatchi P.L.C., acquires control of adidas. Adidas
America is formed in February; Rob Strasser is appointed CEO and Peterr Moore
becomes Worldwide Creative Director.

12
1993

Rob Strasser dies on October 30. Peter Moore is named CEO of adidas America n
November 9, while maintaining his role as Worldwide Creative Director.

1994

Adidas moves from eighth to third position in Indian Footwear Industry Rankings.
Indian Footwear and apparel sales increase by an estimated 75%.

1995

Adidas goes public on the stock exchange in Frankfurt.

1997

Performance Logo becomes the worldwide adidas logo.

1997

The acquisition of Salomon broadens the Adidas product range to include Taylor
Made for golf products and Mavic for cycle components.

1997

Adidas achieves record sales and passes the 1 billion dollar mark in gross sales in
the India.
2000

Adidas proudly celebrates the 100th birthday of their founder, Adi Dassler

Sale of Salomon

The Salomon Group (including Salomon, Mavic, Bonfire, Cliché and Arc’Teryx) is
being sold to Amer Sports in October 2005. The new adidas Group is focusing
even more on its core strength in the athletic footwear and apparel market as well
as the growing golf category. The legal name of the company will change to

“adidas AG” in May/June 2006.

2006

Adidas-Salomon AG acquires Reebok

The closing of the Reebok transaction on January 31, 2006 marks a new chapter
in the history of the adidas Group. By combining two of the most respected and
well-known brands in the worldwide sporting goods industry, the new Group will
benefit from a more competitive worldwide platform, well-defined and
complementary brand identities, a wider range of products, and a stronger
presence across teams, athletes, events and leagues.
13
THE TECHNOLOGY TIME LINE OF THE COMPANY

1925

Leather soccer shoes with nailed studs and track shoes with hand forged spikes
are produced for the first time in the Dassler factory.

1928

Dassler purchases his production building in Herzogenaurach. 100 pairs of shoes

are produced daily.

Late 1920s

Dassler begins producing soccer balls.

1929

Dassler fills his substantial order of 10,000 pairs of shoes.

1930

Dassler introduces soccer shoes with nail-stripe trim.

1931
The first tennis-specific shoe earns one of the more than 700 patents awarded to
Adi Dassler.

1935

400 pairs of shoes are being produced daily.

1937

Dassler now produces shoes for eleven sports. 800 pairs of shoes are produced
daily.

1946

Dassler produces sports shoes made of sailcloth from military tents and rubber
from leftover American fuel tanks after World War II.

1940’s

Dassler introduces arch support lacing and an early type of speed lacing.

1948

Adidas develops the first indoor track shoe.

1949

Adidas produces the first soccer shoes with molded rubber studs.
14
1950

Adidas produces the first “Samba” soccer shoe, made for better traction on ice,
snow and hard frozen ground.

1953

Adidas produces the first track shoes with changeable spikes.

1953

Adidas produces the first sports bag.

1954

Adidas begins producing soccer boots with screw-in studs, helping Germany win
the World Soccer Championships in Switzerland. The screw-in studs enable the
game to be played under vastly different conditions without slipping.

1954

2,000 pairs of shoes are produced daily.

1956

Adidas develops nylon soles for soccer shoes.

1957
Adidas produces the first track shoe with nylon half-soles.

1960

Adidas develops a rubber toe protector and rubber foxing for the training shoes.

1963

Adidas introduces nylon half-soles with molded in-thread inserts.

1964

Adidas introduces outsoles with bending zones, which provide flexibility.

1964

Adidas produces a track shoe weighing only 96 grams, the lightest track shoe in
the world at that time.

1967

Adidas develops heel padding to protect the Achilles tendon.

1967

The first adidas tracksuit is produced.

1968

Adidas introduces injection-molded, multi-studded, polyurethane soles.

15
1968

“Achille” the first real jogging shoe, is launched on the market.

1968

Adidas introduces the “adilette” health sandal.

1972

Adidas introduces rain soles.

1973

Adidas introduces the plastic Ghilly lacing system.

1973

Adidas introduces “adicourt” sole for indoor tennis surfaces.

1974

Adidas begins tennis racket production.

1974

Adidas introduces its first leisure shoe.

1975

Adidas introduces the “adistar 2000,” the first track shoe for synthetic track
surfaces.

1976

Adidas introduces the first cross-country ski binding.

1976

Adidas introduces “TRX” jogging shoes.

1977

For the first time, a soccer shoe is developed with a dual-density sole material.

The “Copa Mundial,” the world’s largest selling soccer shoe ever, is launched.

1979

Adidas introduces shock-absorbing elements for sports shoes.

1979

Adidas introduces outsoles with beveled studs.

1982

Adidas develops soccer shoe sole materials in three different degrees of hardness.

16
1985

Adidas introduces the “APS,” the first running shoe with an adjustable shock
absorption system.

1986

Adidas introduces the first soccer shoe with bayonet fastening and ceramic screw
in studs.

1988

Adidas introduces the Torsion system, which allows for multi-directional flexibility. It
was designed to give the mid-foot support during twisting and flexing motions, and
proves to be revolutionary in the sports shoe market.

1991

Launch of the Equipment line: a new, performance-oriented and functional, shoe

and textile line.

1993

Adidas lunches “Tubular Technology,” the first shoe with total customization
possibilities.

1994

Predator technology for soccer footwear results in more powerful, accurate shots.
1995

Traxion Technology combines the grip of screw-ins with the comfort of molded
cleats.

1995

Adidas introduces “Point of Deflection System” technology for running shoes. This
outsole technology provides improved shock absorption and stability by deflecting
and dispersing pressure at the point of impact.

1996

Adidas introduces “Feet You Wear,” a concept which provides extra stability by
copying the design of the human foot.

1999

Adidas introduces Teflon-coated fabric for swimwear to reduce drag.

17
2003

A.D.S (Adidas Drainage System): Used primarily in Adventure products, the

A.D.S. is a patented system integrated into the midsole of a shoe. Its perforated
internal midsole allows for maximum water drainage in wet environments

2006

Introduced ClimaProof: Light, breathable fabrics that block wind, rain and snow
while allowing heat and sweat to escape through evaporation, keeping you dry and
comfortable in even the harshest conditions
18
MISSION

The Adidas Group strives to be the global leader in the sporting goods industry
with brands built on a passion for sports and a sporting lifestyle. They are
committed to continuously strengthening their brands and products to improve
their competitive position.

Authentic: Adidas is the first genuine sports brand. They were founded by a true
athlete whose one guiding principle was to make equipment that makes athletes
better.

Passionate: Passion is at the heart of sport and of every true athlete. Passion
knows no borders, no age and no race. Passion is what drives athletes to succeed
and is what drove Adi Dassler to make his first pair of athletic shoes in 1920.

Innovative: There is continuous innovation in every area of their business – from

product technologies that help athletes perform better to communications that help
athletes understand their brand and their products.

Inspirational: Being inspirational helps build and maintain relationships with the
athletes. It is their emotional connection to their heritage, their athletes and to sport
that inspires them to create products that, in turn, inspire others.

Committed: Adidas commitment to their athletes and sport is uncompromising,

unwavering and forever. They will continue to sponsor, advice, listen to and
support athletes with the same resolve as Adi Dassler.

Consumer focused: and therefore Adidas continuously improves the quality, look,
feel, and image of their products and their organizational structures to match and
exceed consumer expectations and to provide them with the highest value.
Global organization: that is socially and environmentally responsible, that
embraces creativity and diversity, and is financially rewarding for their employees
and shareholders.

They are dedicated: To consistently delivering outstanding financial results.

19
ADIDAS GROUP VALUES

Performance

Sport is the foundation for all that Adidas does and executional excellence is a
core value of their Group.

Passion

Passion is at the heart of their company. They are continuously moving forward,
innovating, and improving.

Integrity

They are honest, open, ethical, and fair. People trust them to adhere to their word.

Diversity

Adidas know it takes people with different ideas, strengths, interests, and cultural
backgrounds to make their company succeed. They encourage healthy debate
and differences of opinion.
20
ADIDAS GENERAL APPROACH

The ambition of the Adidas Group is to be a sustainable company.

SUSTAINABILITY PROGRAMME

Being a sustainable business is about striking the balance between shareholder

expectations and the needs and concerns of their employees, the workers in their
supply chain and the environment. Adidas truly believes that acting as a
responsible business in society is not only an ethical obligation, but will also
contribute to lasting economic success.

Adidas has been working towards sustainability for many years and recognize that
the task ahead of them is a marathon, not a sprint. It is about preparedness and
setting the right pace, having both the drive and stamina to make the distance. And
most of all, it is about endurance: overcoming setbacks and difficulties, keeping
the finishing line always in the forefront of their minds.

SUSTAINABILITY STATEMENT

Adidas’s commitment to manage their business in a responsible way is rooted in

the Group’s values and principles. Their understanding of becoming a sustainable
company is outlined in the Adidas Group Sustainability Statement:

PERFORMANCE, PASSION, INTEGRITY, DIVERSITY

These are the Adidas Group values. They help Adidas to create brands that their
customers believe in and they commit them to playing by the rules that society
expects of a responsible company. Unlike sport, society’s rules are not always
written down.

Adidas discovers them by engaging with the people that their business touches,
learning above all that companies are expected to be accountable for their actions.
So Adidas is committed to reporting publicly on the steps that they take to have a
more positive impact on society and the planet.

For the Adidas Group, this means designing products that are environmentally
sound, and reducing the environmental impacts of their day-to-day operations and
in their supply chain.

It is about setting workplace standards for their suppliers to meet and helping them
to ensure fair, safe and healthy conditions in their factories. Importantly, it also
means looking after the well-being and careers of their employees – the

21
company’s biggest asset – and making a positive contribution to the communities
where they operate.

Adhering to all applicable laws, directives and guidelines is a business imperative. But
that is not enough. Adidas is continuously striving to improve their performance and
their standing in society. They set themselves targets that stretch them, regularly
review their progress and set themselves new goals.

That is what the world’s leading athletes do, and it is what Adidas must do as a global
leader in the sporting goods industry.

The Sustainability Statement outlines the guiding framework for becoming a more
sustainable company, and provides information on Adidas individual missions in
Social and Environmental Affairs, Environmental Management, Human Resources
Management and Community Affairs.

Adidas proactive approach in managing sustainability issues is an inherent part of the

Group’s Corporate Governance framework and risk management system.

SUSTAINABILITY STRATEGYX

In 2010, the Adidas Group presented the most comprehensive and aligned

Strategic Business Plan ever created: Route 2015. Over these five years, they

aimed to achieve qualitative and sustainable growth by building desirable, leading

brands in the consumers’ and customers’ perception. Consumers want the

products they buy to be the best, helping them perform at their best. However,

nowadays they increasingly expect companies to do more than only consider

social and environmental issues. They want to buy products from companies that
are at the leading edge in terms of making a difference to the world at large.

Adidas knew that they can only follow this route if they are fully committed to

managing their business operations in a sustainable way. While they have made

big progress in laying the foundations for success in previous years, they must

continue to drive innovations and to strengthen their systems and processes.

To become a truly sustainable company, Adidas have taken a mature approach for

the following five areas:

§
Products and planet: The Adidas Group strives to integrate environmental

thinking and acting into its daily operations. They empower their own employees to

develop smarter solutions in product creation and be more resource efficient. The

goal is to substantially improve the Group’s environmental footprint by changing

their processes across every part of their value chain, from innovation and product

design via development and manufacturing operations to their own stores and

other sales channels. They have set measurable targets to be achieved by 2015

and progress against these targets will be measured on an annual basis.

22
Compliance in the supply chain: They acknowledge that they have a

responsibility to the workers in their suppliers’ factories. Respecting their rights and
ensuring health and safety and environmental protection is important to us. It was
concern for their welfare and rights that led us to write a supplier code of conduct they
call their "Workplace Standards". The Standards are a contractual obligation under
the manufacturing agreement the Adidas Group signs with its business partners. They
help us select manufacturing partners and serve as guiding principles in the early
identification and treatment of potential issues of concern at their suppliers’ sites. Over
the years, they have developed a detailed approach to ensure that their suppliers, as
well as those suppliers used by their licensees and agents adhere to their Workplace
Standards.

Partnerships and stakeholder engagement: As a company they do not operate in

isolation; they rather seek feedback from internal and external stakeholders by
carefully listening, responding and engaging with them. To develop appropriate and
innovative ways of embedding sustainability thinking and processes within their
organization, they interact with their own employees. Externally, they look for
innovative forms of partnerships and collaboration that drive change in the industry. To
achieve this, they engage in multiple ways with peers, civil society, governments,
investors, analysts, customers, industry alliances and others.

Their employees: They are the most important asset of their company! Becoming the
leader in the sporting goods industry depends upon the potential, dedication,
knowledge and performance of their employees and excellence of their leaders. As
such, they place considerable effort into creating a work environment that stimulates
innovation, team spirit, engagement and achievement. They promote a performance
culture based on strong leadership and therefore link employee compensation to
Group and individual achievements. They aim to continuously develop their
employees with opportunities for career progression, while upholding a culture that
celebrates diversity and encourages global mobility. They also know how important it
is to continue to attract and recruit new people to the Adidas Group. To become a
world-class recruiter they have launched innovative programs to raise their profile with
potential employees.

Community engagement: As a multinational enterprise, the Adidas Group is present

in many countries around the world and its business operations impact people’s lives
in those communities. While there are many possible ways to get involved in aid or
community programs, the challenge is to know the local needs of the communities.
They therefore have chosen a largely decentralized and brand-oriented approach for
community involvement, recognizing that people in the local offices best understand
the needs and cultural sensitivities of their communities.

23
ADIDAS GREEN COMPANY

Green Company is the name which Adidas gave to its environmental program at
their own sites around the globe.

It was launched in 2008 and builds on years of environmental initiatives, drawing

them together into a coherent program to improve the environmental performance
of their administration offices, manufacturing sites and distribution centers.

Adidas Green Company vision is to become a zero-emission company by:

Embedding environmental best practice in everything they do Maximizing

environmental efficiency gains

Supporting and harnessing their people’s passion for a greener planet.

Adidas set ambitious targets in the areas of energy, water and paper consumption,
carbon emissions and reduction of household waste, and each individual site – be
it one of their offices, distribution centers or their own factories around the globe –
contributes to meeting these targets. Adidas knows this cannot be done without
the active involvement of their people. It is in their daily working lives where they
need to make the changes that will result in the Adidas Group being a more
sustainable company, one that achieves its environmental ambitions. So Adidas
has established the Green Team concept.

CERTIFICATION TO ISO 14001X

In order to manage and influence environmental impacts at their own sites, Adidas
have implemented a global Group headquarter-based environmental management
system that is certified according to the international standard ISO 14001. Twelve
major locations around the globe already have certified systems in place which
are linked into the global Group system. More sites plan to join this system and to
become certified within the next years.

24
25
ISO 14001 CERTIFICATION - INTERNAL COMMUNICATION

As of December 2013, the following sites of the Adidas Group have certified environmental
managements systems:

Name of site

Region

EMS

Certified

standard

since
Adidas Group Central Management for Green

GLOBAL

ISO 14001

2010

Company, Herzogenaurach, Germany

Adidas Office, Portland, USA

AMERICAS

ISO 14001

2010
Reebok Headquarters, Canton, USA

AMERICAS

ISO 14001

2010

TaylorMade-adidas Golf Headquarters,

AMERICAS

ISO 14001
2010

Carlsbad, USA
Adidas Group Distribution Centre, Spartanburg,

AMERICAS

ISO 14001

2010

USA
Reebok-CCM Hockey Headquarters and

AMERICAS

ISO 14001

2010

Distribution Centre, Montreal, Canada

Adidas Group Headquarters, Herzogenaurach,

EMEA

ISO 14001

2011

Germany
Sports Licensed Division Factory, Indianapolis, USA

AMERICAS

ISO 14001

2011
Adidas Footwear Factory, Scheinfeld I, Germany

EMEA

EMAS; ISO

1998; 2012

14001
European Distribution Centre, Scheinfeld II,

EMEA

ISO 14001

2013

Germany
Distribution Centre, Uffenheim, Germany

EMEA

ISO 14001

2013
Adidas Office, Stockport, United Kingdom

EMEA

ISO 14001

2013
26
FINDINGS & ANALYSIS

The findings in this analysis are based mainly on surveys and reports done by
established organizations which are hereby compiled to give a summarized view
on the topic of dissertation.

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 2015-2016 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 India (2014 sales of Rs. 400 billion of which 59% was Footwear) and Amer
Group PLC which is based in Finland (2005 sales of 6.46 billion Finnish Markka
[Rs. 4000 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.
27
v
What sports do you play in your leisure time?

a. Cricket b. Football

c. Lawn tennis d. Others

60 50 40 30 20 10 0

Cricket Football Lawn Tennis Others

In the analysis it is found that 60% of the respondents play cricket in leisure
time and 20% play Football, 15% play Lawn Tennis and 5% play other sports.
This is a poll taken by the company website for their Sports Week promotion.

v
Popularity of brands of shoes in the sports category

The options include mainly famous brands like-

Adidas

Puma

Nike
28
45 40 35 30 25 20 15 10 5 0

Adidas Puma Nike Others

It is found that most of the respondents are aware of Adidas, Nike and Puma
and few of the respondents are aware of Speedo, Reebok and Woodland, Lee
Cooper.

v
How did you know about the products of the Adidas?

Out of all the respondents 37% had said from the Television, 22% had said
from Newspapers, 36% said from the Internet and 5% said others.

This is a poll by Business Today in 2016 to get to know about the awareness of
consumers of this category.

5%
37%
Television

36%

Newspaper

Internet

Other

22%
29
v
The next chart shows customer satisfaction for the brand Adidas a.
Happy b. Not happy

78% of the sample size are satisfied with the quality and the price of the
product and 22% say that they are not satisfied.

Poll by Business Today (2016)

Times magazine conducted a survey among Adidas loyalists when David
Beckham was the brand ambassador for the company. They wanted to
know whether the customers were happy with the way they choose the
brand ambassador.

There was a comments section too, where the voters could express their
views.

No 18%

Yes 82%

Yes No
30
It turned out that 82% people were satisfied, they liked the way Adidas was
choosing their brand ambassador.

v
What are the things you keep in mind while purchasing shoes?

a. Quality and Design b. Advertisement

c. Price d. Others

Ads
Others
9%
4%

Price

24%
Quality &

Design

63%
Survey done by Nielsen India

Out of the full sample strength, 63% people said that the product must have
good quality and design and 24% said that price is the most influential factor,
while 9% said advertisement and 4% said other factors.

If you have to purchase shoes from a brand except Adidas, then which?

a. Nike
b. Puma

c. Reebok
d. Others

Reebok
Others

5%

10%
Nike

Nike
Puma

Puma
52%
Reebok

33%

Others

Survey done by Nielsen India

31
What do you think that the company Adidas must do to improve its marketing
strategy?

Most of people said Adidas has good marketing strategies but the company
should launch more products or you can say more variety to their products.

They also need to enter all the sports as many sports like wrestling, badminton
and lawn tennis are gaining popularity rapidly.

Some also suggested that Adidas needs to reduce its price as well in order to
expand their sales and target more customers
32
SWOT ANALYSIS OF ADIDAS

Strengths:

The main strength of Adidas is its Product Quality. The quality and the material
used in Adidas is very good. The company has a good brand image in the market,
the publicity and the advertisement is also commendable and lastly, the company
holds a healthy market share.

Weakness:

The major weakness of Adidas is that the manufacturing of the products of Adidas
is not done in India itself, it is being imported hence the cost becomes high and the
margin of profit becomes low that’s why the 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 discussed above, if these two weaknesses 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 but for the rural segment,
there are hardly any products or we can say that there are no products. India is still
a rural country if we go by the numbers, in the total population of India major part
of population lives in rural areas 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 products according to their demands.
Also price is one of the major factors which may influence this type of segment
hence company should make their policy accordingly.

Adidas must also consider the range of products as compared to Nike and
Reebok. In my opinion the company must introduce more range or more variety in
the market to compete with their competitors and also the customers have more
choices to choose the product from.

33
Threats:

Adidas does not have strong distribution network as compared to Nike and
Reebok in India. Nike has more number of retail outlet than Adidas and Reebok
has a unique distribution network. The company Reebok not only uses its outlet for
the sale of their product but also use some other shoes company outlet like “Bata”.

In a Bata showroom you can find Reebok shoes and other products. But this is not
the case with Adidas hence Reebok has an extra advantage over Adidas.

Conclusion:

Adidas is one of the manufacturing sectors which needs to produce more output
by implementing new technologies, new tariffs and new consumer satisfaction
value added services. Further, it is still the largest manufacturer in the world in
terms of geographic reach & quality.

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.

Adidas has to come up with new marketing strategies tailor-made for India if it
needs to increase the number of customers it has.
34
Problems that cannot be solved

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 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 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.

Measuring Intangibles & Valuing Diversity

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 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.
35
SALES ANALYSIS

During the last quarter of 2016, sales at Adidas totaled 20 billion euros. This is an
increase of 2.7% from the 19 billion euros in sales at the company during the first
quarter of 2016. During the previous 17 quarters, sales at Adidas have increased
compared with the same quarter in the previous year.

North American region of the Adidas Group generated 21 percent of the

company's retail net sales.X

Sales at Adidas appear to have some seasonality: 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.
The above graph shows the increasing net sales of the adidas groups worldwide.
The net sales touched its peak in 2016, declining in 2013 after a significant
increase in 2012. The transition from 2014 to 2015 has been quite significant.
36
LIST OF COMPETITIVE BRANDS AND
COMPARATIVE ANALYSIS

NIKE

REEBOK

FILA

SPEEDO

NEW BALANCE

SKETCHERS

PUMA
37
COMPETITIVE ANALYSIS

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 India, compared with the 40% for the fearsome Nike, but
the rejuvenated Adidas has climbed to within easy reach of Reebok, which has
been struggling in the past couple of years. Adidas is also steadily regaining
market share lost to other brands such as India. Gear and Fila (Fortune, 2013)

The Future

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 up gradation 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.
38
COMPARATIVE STUDY WITH REEBOK

The main intention behind setting up the company by J. W. Foster was one of the
best reasons possible: athletes wanted to run fast. So, in the 1890s, Joseph
William Foster made some of the first known running shoes with spikes in them.
By 1895, he was in business making shoes by hand for top runners; and before
long his fledgling company, J. W. Foster and Sons, developed an international
clientele of distinguished athletes. The family owned business proudly made the
running shoes worn in the 1924 Summer Games by the athletes celebrated in the
film “Chariots of Five”.

In 1958, two of the founder’s grandsons started a companion company that came
to be known as Reebok, named for an African gazelle.

By 1981, Reebok’s sale exceeded Rs. 65 million, but a dramatic move was
planned and in 1982, Reebok introduced the first athletic shoe designed especially
for women; a shoe for a hot new fitness exercise called aerobic dance. The shoe
was called Freestyle, and with it Reebok anticipated and encouraged three major
trends that transformed the athletic footwear industry: the aerobic exercise
movement, the influx of women into sports and exercise, and the acceptance of
well-designed athletic footwear by adults for street and casual wear.

Explosive growth followed, which Reebok fueled with product extensions in which
it also became a leader. The freestyle is now a classic and is Reebok’s best selling
athletic shoe of all time. Reebok’s performance aerobic shoes have progressed
through several generations.

In the late 1980s, Reebok began an aggressive expansion into overseas market.
Its products are now available in more than 170 countries and are sold through a
network of independent and Reebok owned distributors. Creating innovative
products that generate excitement in the market place has been a central
corporate strategy ever since Reebok introduced the Freestyle shoe. In the late
1980s, a particular fertile period began with ‘The Pump technology’ and continues
today, with break through concepts and technologies for a host of sports and
fitness activities.

In February 2004, Reebok launched Rbk – a collection of street-inspired footwear

and apparel hook-ups designed for it and woman who demand and expect the
style of their gear to reflect the attitude of their lives – cool and edgy, authentic
aspirational. As Rbk is inspired by today’s street fashion, its marketing needed to
be culturally relevant as well. A new global marketing campaign, called the

“Sounds and Rhythm of Sport” was launched in January 2004, and it energized
industry by blitzing the market with Rbk product launches, television and print ads,
consumer and retail promotions, and events.

39
The global sports apparel market is highly fragmented, with basic discount brands
to high-end fashion name brands competing for market position. The U.S.-based

Nike is the world’s leading brand in athletic footwear and apparel, and the most
valuable sports business brand in the world. Nike has higher global revenue than
its main competitors, Adidas and Puma. North America is a key market for Nike, as
about 45 percent of its global revenue was generated in North America in 2015,
mainly from footwear sales.

Adidas is the largest sportswear manufacturer in Europe, and the second largest in
the world, just behind Nike, with almost 17 billion euros in annual revenue and a
brand value of 6.2 billion U.S. dollars. Adidas employed approximately 55,555
people worldwide in 2015. Just as Nike, footwear is the most important category
for Adidas. In 2015, nearly 50 percent of the Adidas Group net sales were
generated by the footwear category.
40
Puma, also another leading sporting brand in the world, has a long-term mission of
becoming the most desirable sport lifestyle company in the world. Europe, the
Middle East and Africa, as well as Americas are the most profitable markets for
Puma, as these regions account for nearly 70 percent of Puma’s consolidated
sales in 2015. Describing themselves as the 'blue mountains', Puma has been
trying to incorporate more edge, creativity and uniqueness into their designs with
their collaborations with fashion designers such as Sergio Rossi and Alexander
McQueen, and singer Rihanna. Collaboration with celebrities and fashion
designers is a common strategy amongst these leading sports brands, as they aim
to maintain their share of the market by broadening their product lines.
This statistic displays net profit of sports equipment manufacturers Adidas and
Puma from 2006 to 2016. In 2008, Adidas reported 642 million Euros in net profits,
compared to 233 million euros reported by Puma.

* Adidas - Excluding goodwill impairment of 265 million U.S. dollars.

41
LIMITATIONS

Each report has to have some limitations and restrictions. Hence the report we
have made also have some limitations regarding various aspects of the report

The Limitations are as follows:

Time

As far as time is concerned, there was no restriction of time as sufficient time was
being provided to all the students for this project report. Time was never a
constraint, in order to complete the project report. But we could have tried to make
report much better if we would have little more time because of the late availability
of the executives of the concerned companies. We got late appointment and due
to which I was not able to compile report in time, We was able to complete the
report during the last days of the submission of this report, cost factor which
restricted met to do anything more creative.

Though I had tried my level best to reduce the possibility of errors, but if any, we
would like to request all the readers to forgive me by considering me as a normal
human being and also take each and every responsibility of possible errors on my
shoulders.

Miscellaneous

Though we have put my very best efforts in making this project report but because
of some unavoidable problems and circumstances we had to face lots of problems.

Sometimes we didn’t get the appointments with the concerned company’s

executives which further delayed the project report a bit.
Secondly, all the required information was not available to me, so we had to put
extra efforts in order to get that information. But there could be some information
which is still missing. Therefore, we request the readers of the project report to
kindly forgive me.

42
RECOMMENDATIONS & SUGGESTION

Turbulent is the word that aptly describes the scenario in sports industry in last
two last financial years. By frequent price cuts in market and larger than live
Marketing game plans, competition reached its new highs and lows. It is no longer
sufficient to just be competitive. A company which has to survive has got to have
competitive advantage. One needs to take strategic initiative in the short run to
achieve the desired “positioning” in future. One has to foresee ‘tomorrow’.

Understanding competition today involves three levels:

Competition for intellectual leadership for new ideas that create new advantages.

Competition for translating these ideas into product/service faster than others.

Competition for market share.

Following tips are helpful in combating competition:

Do not nature and paradigm because today “anything is possible”.

Search for newer markets than expanding your customer base.

Come out with state of the art, feature packed affordable and competitive advantageous
products.

Set Benchmarks for growth.

Improve up on distribution channels for viable coverage of the market.

Wear out competition through trend setting, inimitable tactical moves based on our
infrastructure strengths.

The strategic intent should be clear down the management.

Work on your strengths i.e. Infrastructure, financial base, backward integration.

Pop and merchandising material should be made as per international market.

Corporate Training Programs for Development of manpower from external faculty.

43
CONCLUSION

We have so far identified the various areas on which Adidas and other major
sports companies need to improve upon to achieve the desired level of
competitiveness. These improvements would give Adidas and the other sports
companies’ base to compete with the MNCs and help the Indian companies to
reduce the impact of MNCs on the Indian Market in the future. Indian
manufacturers will have to react quickly because any delay in reacting to the threat
posed by the MNCs would only give the MNCs time to establish them in the
market. With their expertise and financial capacity they would be nearly impossible
to compete with once they get a firm foot hold in the market.

The Future

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 up gradation 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.

RECOMMENDATIONS:

They should encourage new products.

Bring innovations in the existing products.

•They should conduct more surveys in order to know about customer satisfaction
level.

• Easy access for communication should be provided in the rural areas.

SUGGESTED STRATEGIES:

Market Development

Market Penetration

Product Development

44
BIBLIOGRAPHY

Web Sites

www.adidas.com www.indiainfoline.com www.google.com

www.indiatimes.com www.statista.com www.nielsen.in
www.businesstoday.in www.forbes.com www.sportskeeda.comX

Magazines

A&M

Business India India Today

Business Today

Newspapers

The Times of India

The Hindustan Times The Economic Times

Books:
MARKETING MANAGEMENT, New Millennium Edition, Phillip Kotler

nd
MARKETING MANAGEMENT, 2 Edition, V.S Ramaswamy and S.
Namakumari

FUNDAMENTAL OF MANAGEMENT, J. William Stanton, Michall J. Etec,

Bruce J. Walker

COMPETITION IN INDIAN INDUSTRY, N. Ravichandrah

45