The brand name “Adidas” came about by combining elements of the founder’s name Adi Dassler. Adi was a son of a shoe factory worker. The history of adidas starts in 1924 with Adolf and his elder brother, Rudolf. They began producing shoes in the tiny town of Herzogenaurach, Germany, in their mother’s laundry room. The brothers established the company Gebrüder Dassler Schuhfabrik (Dassler Brothers Shoe Factory), the birth of the adidas shoe brand. Their goal was to create the ultimate sport footwear for athletes all over the world.
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Over the years, the company performed very well but in 1939, the infamous World War II broke out. Fast forward to 1947, the brothers Adi and Rudolf fell out with one another and soon, they parted ways. Thus, this led to Adi registering the Adidas Brand in 1949 while Rudolf started his own sports brand, Puma. Also, in 1949, Adi patented the widely known three-stripes logo after buying the rights to the logo from a Finnish sportswear brand, Kahru.
Adidas has had many slogans but the one that stood out was “Impossible is nothing”, which was inspired by a Muhammed Ali’s quote. The athletic prowess and sporty attitude have been adidas’s identity right from the beginning of its establishment. The brand has grown with more innovation and focused on creating brand awareness and several other marketing strategies. Adidas group’s mission statement is “Strives to be the global leader in the sporting goods industry with brands built on a passion for sports and sporting lifestyle”.
Adidas is one of the biggest sportwear manufacturer in the world and the biggest in Europe. They have an astonishing global share market of 35 percent. They have won the hearts of many of the customers and is trusted as a strong and reliable brand. The core products now are mainly clothing, footwear and accessories. The current marketing strategy is, “adidas is all in”.
In this report, we will discuss how adidas segments the market, how the company targets its existing group of customers and how they position their products to meet the needs of their targeted customers.
Marketing segmentation can be broken into different factors namely:
This segment the market based on geography and it is important for marketeers as people have different requirement when they are situated in different regions of the world.
This segment the market based on demographic variables such as gender, age, marital status, income, occupation, family size, race, religion and nationality. Among the marketeers, this is seen as one of the most common segmentation practice.
This segments the market on the basis of consumer’s behaviour, choices, preference and decision making. The segments are usually divided based on consumer’s usage and knowledge of the brand’s product.
This segment the market based on consumer’s lifestyle, attitude and personality. This is with the belief that a consumer’s buying behaviour can be largely affected by his or her lifestyle and personality.
Adidas largely targets on psychographic, demographic and behavioural segmentation. The company develops the brand in three different styles according to the segmentation. This way, it allows marketeers to incorporate the marketing mixes of product, place, promotion and price to meet and adjust to the needs of one or many segments.
Based on demographic variables like age, gender and life cycle, Adidas brand their products into range of female, male and kids. The consumers can have products which fit into most demographic possible. The brand has a range of male and female clothing, shoes, eyewear and body-care, in which all the three main sub-brands of Adidas; Style, Performance and originals all have products to cater to the consumers.
Based on psychographic variables like life style, personality and social class, Adidas divides the market into various groups. It was thought that consumers within a given social class have similar buy behaviour, thus, Adidas focus on many different social class. Consumers’ interest in the products is affected by their way of life and what they buy are their way of expression. For example, those that love sporty lifestyle and outdoor activities have the tendency to buy Adidas performance products. Adidas have many other sub-brands or brands that they absorbed that caters to the different lifestyle or social class; Y-3 (High fashion), Taylor-made (Golf) and Reebok.
It is of high importance to satisfy, keep brand-loyal consumers and meet their expectations. Thus, Adidas use behavioural variables to segment the markets, designing products that correspond to their consumers’ personalities. Adidas has a major success in this area as many consumers who are image drivers believes that the brand provides products that looks good, are fashionable and functional too. With consumer’s behaviours and choices in mind, the brands Adidas Originals and Y-3 were created.
The main targeted market for Adidas is the urban youths and adults, usually between 13-40, with competitions to lifestyle. In addition to that, Adidas targets both genders and almost all the social class, less the lower class. Personally, I’ve worked at Adidas for 4 months and what I had figured out was that most consumers were youths and working adults. What I learnt while working there was that most consumers were brand-loyal to Adidas. It says a lot on how adidas influence them and managed to meet their expectations. To appease their targeted audience and cater to their needs, Adidas have sub-brands in NEO, Originals, Y-3, Reebok and Style. These brands allow the brand to exploit market opportunities from all angles and they address various consumers’ needs. In a way, Adidas will be less affected by one-dimensional marketing risk.
Neo label is created to appeal to image-driven teens who are fully engaged in life, be it through family, friends, social networking, sporting or outdoor activities. Y-3 caters to consumers of higher social class as they tackle the high fashion industry. Reebok offers another dimension to the market and offers consumer a whole different variety of style and fashion. Adidas Originals promotes classic style which collections comprise of products such as clothes, sneakers and accessories. Additionally, it caters to all genders and target consumers based on their preference, personality and lifestyle. As an example, skateboarders would like the Originals brand as the brand listened to their needs and design sneakers to cater to them. The trefoil logo of Originals has become relatable to many consumers, whether they are artists, musician, skaters, sneakerheads or sports fan.
Youths and young adults nowadays all relates to one artiste/musician/athlete/celebrities in one way or another and Adidas recognised this strongly. Therefore, Adidas and its sub-labels collaborated with many designers and artiste to produce products that were widely popular with consumers. Yohji Yamamoto, Jeremy Scott, Kanye West, Stella McCartney, Lionel Messi, these are collaboration just to name a few. Adidas and Kanye West’s Yeezys collaboration sneakers were the top selling sneaker of the year 2016. These attracted many first-time consumers and made brand-loyal consumers continue patronising their stores and buying their products.
The competitive advantages Adidas have over its competitors are its product quality, distribution network and brand equity. It had over two thousand and four hundred stores worldwide which account to over four billion dollars business. To associate the brand with the communities, Adidas have sponsored multiple world events such as NBA, FIFA and The Olympic games. Also like it was mentioned previously, Adidas collaborated with many celebrities like Kanye West and Lionel Messi to appeal to their targeted audience. Adidas aims to “help shape the future of sports and sports culture” and has promised to build a larger collaborative network with famous creatives, athletes, consumers and other partners to achieve that. Also, in the market, the brand is known to provide the best products, products which are often comfortable, durable and functional. By having strong relationships with organisations such as International Finance Corporation or International Labour Organisation has given the Adidas the edge over its competitors for a sustainable business.
Adidas has a wide range of products which includes, apparel, equipment, footwear and services. They cater to everyone that has an interest in sports, from elite teams and professional athletes to just common people like your friends or families who loves sport. The focus is to become consumer’s favourite and build on a strong brand image through design innovation and product. The selling point is that Adidas use both low and high pricing strategy. Lower promotional prices attract more customers while they also offering regular higher priced products. Adidas must adopt this strategy in consideration to its competitors, however, this also enables Adidas to cater to bigger segment of consumers. The downside is that low promotional price can give rise to a perception of poor quality and affects the image of the brand. Thus, in general, Adidas maintain high prices with exceptions to introductory pricing on new releases.
To move the brand forward, Adidas recently adopt the “Creating the New” marketing strategy. Their brands are what they connect with their consumers, thus, the success of its brand defines the success of the business. Their core brands, Reebok and Adidas, have strong identities in sports. Reebok targets on the fitness consumer while Adidas caters to athletes. Through their unique way of leading sports brands, Adidas caters for the desires and needs of more consumers than any of its competitors. With the new strategy, Adidas will get closer to consumers more than ever before. To achieve that, Adidas’s plan is based on three choices or strategy; Speed, Cities and Open Source.
Speed: Adidas will become the first true fast sports brand: Fast in internal decision-making, fast in satisfying consumer needs.
Cities: Adidas have identified six key cities, Los Angeles, New York, Paris, London, Tokyo and Shanghai. They want to grow share of mind, share of market and share of trend in these cities.
Open source: They will be the first sports brand that invites athletes, consumers and partners to be part of their brands.
In conclusion, we learnt that Adidas wants to be the global leader in the sporting world and they segment the markets mainly on Geographic, Behavioural and Psychographic variables. Similarly, we learnt that Adidas caters to youths and adults of different genders and of most social classes. We also see how Adidas position themselves in the market, how they want to move forward in the future and also incorporating the different marketing mixes. Personally, I believe the brand would only continue to grow as they cater to consumer’s needs and often meet their expectations. The brand will continue to a mount a serious challenge to Nike in the market. All in all, many of the other similar brands out there could use Adidas as a business role model and learn from them to better their brands.