Adidas
Current Market
Situation
Adidas Group and Brand Overview (Adidas Group - Profile, 2013)
Adidas is owned by the Adidas Group, which states its number one guiding principle, is
being “committed to continuously strengthening our brands and products to improve
our competitive position (Adidas Group - Profile, 2013).” A corporation settled inside of
Germany, Adidas Group employs 46,306 people. The Adidas Group began in
Herzogenaurach, Germany in 1920 when Adi Dassler created his first shoe. As a
company, Adidas Group welcomes a multi-brand strategy. This strategy allows Adidas to
work in not only a niche market, but a global market as well. Adidas Group states that
their brands “complement each other like the skills of an exceptionally gifted decathlete
(Adidas Group - Profile, 2013).” Adidas Group currently includes: Adidas, TaylormadeAdidas Golf, Reebok, and Rockport. The Adidas segment of the Adidas Group considers
their main focus to provide customers with all the tools to become a better athlete. The
Adidas brand offers four sub categories: Adidas Sport Performance, Adidas Originals,
Adidas Sport Style, and Five Ten (Adidas Group - Profile, 2013).
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ADIDAS SPORT PERFORMANCE
Adidas Sport Performance focuses on providing athletes of all stages with
sportswear that is at the highest level of innovation and technology. Sport
Performance helps athletes “to achieve their peak performance by making them
faster, stronger, smarter, and cooler.”
ADIDAS ORIGINALS
Adidas Originals takes the sports atmosphere from outside the playing
environment and onto the streets.
ADIDAS SPORT SYLE
Adidas Sport Style can be considered the “Future of Sportswear,” and
encompasses the labels Y-3, Porsche Design Sport, and Adidas NEO. Adidas Sport
Style versatility can be described as “from the track to the catwalk.”
FIVE TEN
Five Ten provides footwear for nonconventional, adrenaline pumping sports:
mountain bike racing, rock climbing, kayaking, and much more. It is a leading
brand within the technical outdoor market and outdoor action sports
community.
THE REEBOK DIVISION
The second most popular division of the Adidas Group is Reebok which has sub
divisions of Reebok and Reebok Classic. Reebok is “American-inspired” brand
with a definite mission: “empower you to be ‘fit for life’.”
TAYLORMADE-ADIDAS GOLF DIVISION
TaylorMade-Adidas Golf encompasses four golf brands under one. The four
brands include: TaylorMade, Adidas Golf, Adams Golf, and Ashworth.
ROCKPORT DIVISION
A revolutionary company that has incorporates an athletic feel in an office
setting; Rockport creates footwear for the office with the same innovation and
technology used to create their sportswear.
Industry Information
i.
SPORTING GOODS INDUSTRY
About the Sporting Goods Industry
Adidas falls under the sporting goods industry, which covers a wide variety of
segments including apparel (20% of revenue), footwear (10%), and equipment
(65%) (Sporting goods industry, 2013). The main leaders of this industry are Nike,
Adidas, Reebok, Mizzuno, and Under Armor. Nike is Adidas’s number one
competitor with the highest market share. This sector is incredibly competitive
which puts a high focus on marketing ability (Sporting goods industry, 2013). The
majority of companies competing in this industry are American companies,
which can help set German-based Adidas apart from the pack.
Environmental Trends of the Sporting Goods Industry
The sporting goods industry is easily influenced by a variety of external,
environmental trends. Increasing technology is a cause for new and innovative
items to continuously be created and therefore making it a necessity for
competing companies to stay up-to-date on the next biggest thing. Also an
increased appreciation for health and a fit lifestyle brought on by the effect of a
health epidemic across the World has put a greater emphasis on buying the best
items to help keep a person healthy. While feeling the pressure to have to best
technological items to keep someone in shape, due to the economic downturn of
recent years, some of these items are too expensive for the general public,
making it crucial for companies to create cheaper, more affordable sporting
goods (Sporting goods industry, 2013).
ii.
FOOTWEAR WHOLESALING
About Footwear Wholesaling
Footwear wholesaling refers to companies that sell all types of footwear like
athletic shoes. The three largest companies (Nike and Adidas being two of them)
make up about 27% of the industry (IBIS World, 2013). The overall revenue of
this industry is $28 billion, but annual growth is down (IBIS World, 2013).
Environmental Trends
Ever since the economic downturn of 2008 the footwear wholesaling industry is
not expected to make a full recovery until 2018. But it is not just because of
economic issues plaguing the World; retailer’s are have control over price-setting
and are depleting the footwear wholesalers. An increase of cheap imports and
foreign labor has created an environment of low prices and even higher
competition, making it very hard for wholesalers to turn a profit on their goods
(IBIS World, 2013).
Adidas Group and Adidas Brand Revenue and Market Share History 2010-2012
i.
ADIDAS GROUP
Based on
The Financial Year Ending on December 31, 2010 (2010 annual report, 2010)
Revenue: €11.99 billion
Net Income: €567 million
Number of Shares Outstanding: 209,216,186
For the Financial Year Ending on December 31, 2011 (Group at a glance, 2011)
Revenue: €13.32 billion
Net Income: €613 million
Number of Shares Outstanding: 209,216,186
For the Financial Year Ending on December 31, 2012 (Group at a glance, 2012)
Revenue: €14.88 billion
Net Income: €526 million
Number of Shares Outstanding: 209,216,186
ii.
ADIDAS BRAND
The Financial Year Ending on December 31, 2010 (2010 annual report, 2010)
Revenue: 72% of Adidas Group Sales
Net Income: €8.714 billion
For the Financial Year Ending on December 31, 2011 (Group at a glance, 2011)
Revenue: 74% of Adidas Group Sales
Net Income: €9.867 billion
For the Financial Year Ending on December 31, 2012 (Group at a glance, 2012)
Revenue: 76% of Adidas Group Sales
Net Income: €11.344 billion
SWOT Analysis: Adidas Group and Adidas
i.
ADIDAS GROUP SWOT ANALYSIS
Strengths
 Adidas Group has a long history since being created in 1924; therefore, Adidas
holds an elevated brand value (MBA Skool, 2012)
 Adidas Group sponsors major sporting events, teams, and athletes such as: USA
Gymnastics, World Cup, AC Milan, David Beckham, and Anna Kournikova
(Wikipedia, 2013)
 Adidas Group offers a variety of products from shoes, to clothes, sports
accessories, and sports equipment
 Adidas Group is a very big company with a workforce of over 450,000 (MBA
Skool, 2012)
 Marketing strategies and technology for the products has continued to be
original over the years
Weaknesses
 A high level of competition in the field of sports accessories and apparel
 Some brands offered by Adidas Group may be considered too expensive for their
target market (MBA Skool, 2012)
Opportunities
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Its variety of brands will allow the Group to try a more diverse amount of
products
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A change in public attitude toward a more fitness-oriented lifestyle creates
greater demand for athletic and fitness apparel
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Adidas Group has a lot of endorsement deals with up-and-coming sports teams
and players
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Adidas Group continues to build its brand through sports academies
Threats
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Competition develop a wider variety of styles
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Competition develop a wider variety of cheaper sports equipment and
accessories
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An increase of counterfeit products can decrease brand value and image
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Reebok and Adidas compete against each other as industry leaders, despite both
being owned by the Adidas Group
ii.
ADIDAS BRAND SWOT ANALYSIS
Strengths
 The Adidas brand has a high level of brand recognition
 The Adidas brand offers three categories of apparel to provide more of a
selection to potential buyers
 Along with active sportswear, the Adidas brand offers apparel to satisfy outdoor
needs through the company Five Ten
 Adidas is always amongst the top of its product category and continues to create
cutting edge technology in the form of sportswear and accessories
 Although owned by Adidas Group (which owns many other brands) the Adidas
brand has the same namesake as its owner, meaning it has the highest
recognition
Weaknesses
 Directly competes with Reebok for funds and attention from owner-Adidas
Group
 Being based in Germany can be a stigma; Americans like to support Americanmade products and keep money internal
Opportunities
 Adidas produces about 60 new show designs yearly (MBA Skool, 2012)
 The Adidas brand can always take chances and be more innovative and stylish
 The Adidas logo is highly recognizable because it is a part of everything the
Adidas Group does
Threats
 High level of aggressive competition
 An increase of counterfeit products can decrease brand value and image (MBA
Skool, 2012)
 Trying to overcome first place Nike to become the number one in its industry
Current Advertising and Communications Campaign
i.
ADIDAS “ALL IN” CAMPAIGN
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Slogan: “All In”; “Impossible is Nothing” (Griner, 2011)
Originally launched in 2011 (Griner,2011)
Created by the Montreal-based agency Sid Lee (Griner,2011)
Biggest and most expensive marketing campaign launched by Adidas in their
history (Griner,2011)
The original spot that set the tone for the campaign was a 60-second commercial
featuring heavy hitters such as: David Beckham, Katy Perry, B.o.B., and Derrick
Rose (Griner,2011)
It is aimed at a younger audience to try and convince them to go “all in” in every
aspect just like the celebrity endorsers (Kilmartin, 2012)
Adidas believes these “all in” moments create the feeling behind great street and
sports style (Kilmartin, 2012)
In 2012, Adidas moved the campaign away from just focusing on athletes going
“all in” and how more average people also go all in (Kilmartin, 2012)
Adidas wanted to reach a bigger audience by using an online platform that will
tell the stories of athletes while they are going “all in” (Kilmartin, 2012)
The Adidas Group focused on all mediums for the “All In” campaign including:
commercial spots, print advertisements, celebrity endorsements, social media,
websites, and more (Kilmartin, 2012)
An unique aspect of the 2012 portion of the campaign includes the fact that the
Olympics was taking place in London and provided Adidas with plenty of time to
advertise towards a huge audience and influence them to become a part of the
action in their own way (Kilmartin, 2012)
Another unique aspect is the break-out song from the ad spot (“Civilization” by
Justice) created more buzz about the campaign and gave the advertisements
more positive reviews (Marketing campaign review, 2011)
Without the excitement from the music and the footage, some critics believed
that the “All In” campaign was too similar to campaigns already put on by other
sports giants and that the theme of these advertisements is becoming
monotonous (Marketing campaign review, 2011)
Adidas
Competitive
Analysis
i.
DIRECT COMPEITITION
Nike
Perhaps the biggest name in the sports world would have to be Nike, and
rightfully so when you consider just how big their market share is. Founded in
1964 by the Oregon track coach Bill Bowerman, stands Nike, Adidas’ biggest
direct competitor. Nike started as a shoe company, but today, the Nike
“Swoosh” can be seen on watches, socks, and just about any sports related
product. Nike coined the advertising slogan “Just Do It” 25 years ago, and it can
be seen on everything from billboards to t-shirts around the world. Nike is a
company that promotes its products by using top athletes such as Lebron James,
Michael Jordan, and Rafa Nadal. The brand can be seen in just about any sport
ranging from football to race walking, and at any level from high school soccer
jerseys to the new NFL jerseys and everywhere in between. Nike can be seen on
every media outlet, and like many top companies, is making a big social media
push (Nike, 2013).
Under Armour
Right below Adidas in terms of market share stands Under Armour. The relatively
new company was started by Kevin Plank of the Maryland football team in 1995,
and has since taken off in the sporting world. Under Armour started by making a
form fitting under-shirt and has since began making everything from water
bottles to sunglasses. The popular slogan “Protect This House” can also be seen
around the world in many different advertising strategies and the “UA” logo is
very recognizable. Under Armour also uses top athletes such as Michael Phelps,
Tom Brady, and Bryce Harper to promote their products in many different
sports. Under Armour runs numerous Ads in magazines, while their “Protect This
House” commercial their claim to fame. Under Armour, like Nike, can be seen
sponsoring teams at all levels of competition, all around the world (Under
Armour, 2012).
Reebok
Founded in 1895 as a shoe company, Reebok has since moved into all sectors of
the sports market (Reebok logo, 2012). Reebok, a part of the Adidas Group, has
taken on the growing sport of Crossfit, as a primary means to promote their
products. While Reebok sponsors the sport of Crossfit, it has also made itself a
very popular yoga and general fitness brand. Reebok is currently using the
campaign, “The Sport Of Fitness Has Arrived” to push their Crossfit line of
apparel and shoes. Their newest commercials feature popular Crossfit athletes
sporting the Reebok brand and you can expect to see the Reebok brand more
and more and the sport of Crossfit (Zmuda, 2012).
ii.
INDIRECT COMPEITION
Polo Ralph Lauren
Although not a typical sporting brand, Polo Ralph Lauren does take on sports
such as Golf and Tennis. Polo Ralph Lauren is a “Classic Fashion” brand that
started in 1968 by Ralph Lauren. Polo advertises itself primarily as a clothing
company that can be sporty, but you wouldn’t typically see them worn in
competitive sports (Ralph Lauren biography, 2013).
Lacoste
A brand similar to Polo Ralph Lauren, Lacoste is another high-end retailer.
Lacoste began the trend of showing a company’s logo on the exterior of their
apparel. The company is a popular, preppy brand that specializes in tennis
apparel, but is primarily worn outside of sports. Lacoste advertises in many
media outlets such as magazines and commercials, and the company can be seen
all around tennis and golf events. Lacoste provides the French Olympic Team
with classically tailored uniforms and warm-ups, which helps maintain their
sophisticated perception (Manning-Schaffel, 2006).
Lululemon
The new face on the block is Lululemon. The company is a yoga and general
fitness brand that is growing very fast. Like Lacoste and Polo Ralph Lauren,
Lululemon is not typically worn in competitive sporting events, but is more of a
casual sporting brand that can be worn doing day to day activities. Lululemon
holds another similarity to Polo and Lacoste because it is considered a more
luxurious brand then the average workout clothing line. However, the brand
separates itself from the pack by utilizing social media such as Twitter, Pintrest,
Fourscquare, and Instagram to target their audience of young females. Lulu was
also the first company to join Zite and makes popular, viral Youtube videos.
Lululemon, like Reebok, is also making a large push in the Crossfit sector of the
sports world. Lulu could be seen as the next big brand in the fitness and sporting
goods industry (Wexler, 2012).
Adidas
Target Market
Profile
(Information retrieved from Claritas and Tapestry Databases)
OVERVIEW
The client audience for Adidas is massive. The market mix covers people from all ages.
Adidas being a distributor of shoes and clothing can sell to practically anyone. From young boys
and girls to middle aged adults, and to even the elderly Adidas sells to them all. Therefore
there is not one specific age group of people Adidas focuses on. Being mostly known as a shoe
company Adidas tries to provide likable shoes to all of its customers. Since Adidas tries to sell
shoes to everyone it makes the product selection almost endless. They have shoes for runners,
shoes to wear casually, and shoes for just about every sport a person can play. When looking
for a specific type of shoe, other than dress and formal shoes, Adidas probably has a shoe to fit
that specific category.
With Adidas selling to just about anyone they still have their most profitable customers
they focus on. Yes, Adidas makes shoes for people of all ages, but focuses mostly on kids and
young adults when trying to market their brand. Kids and young adults are the biggest
marketing segment Adidas is trying to sell too. The reason for this is because they want to
establish a brand loyalty with people at young ages. Forming a brand relationship with
customers at a young age helps Adidas have a good reputation on people for years to come.
Targeted Segments according to Claritas Database
According to the Claritas database one of the largest segments Adidas would focus on
would be the blue blood estates segment. The reason for this is because they are one of the
wealthiest segments, and also have large families with several kids. The characteristics of the
blue blood estates segment are families with million dollar homes, expressive cars, and they are
usually graduates from nice expensive universities across the country. The parent’s age in this
group ranges from 45-64, and they have several kids to make for a large family. The ideal goal
for Adidas would be to establish a good long-lasting relationship and reputation with the blue
blood estates segment. When Adidas establishes a good reputation with this particular group
they lock up great profit for several decades. Adidas will have good profit for years to come
because the blue blood estates families are extremely wealthy, and will be buying Adidas brand
shoes and clothes several times throughout the year. When a family is buying a lot from
Adidas it establishes a custom within the family to keep buying Adidas products. Also the
children start becoming accustomed to buying products for the same company throughout
their life. People in the blue blood estates segment typically spend a lot of money on several
products at once. For example, when a person who belongs to this segment is shopping for
products they can buy whatever they want without really caring about the price because they
have so much money to spend, and will buy several items every time they are shopping. It is
always great for a company to have wealthy customers that spend hundreds of dollars toward
that company. Therefore, if Adidas wants to have steady long turn profits they should defiantly
focus and market for the blue blood estates segment. Another great segment for Adidas is the
winner’s circle.
The winner’s circle is another great segment Adidas should market for. The winner’s
circle is a lot like the blue blood estates segment. The Claritas database describes the winner’s
circle as elite suburban families that have an income of over a hundred thousand dollars. Also
the Claritas database labels the winner’s circle lifestyle as people who shop at Ann Taylor, visit
theme parks, and usually have very nice big cars. Adidas needs to be focusing on this segment
a lot when it comes to there marketing planning. If Adidas can establish long-lasting
relationships from this segment they will defiantly benefit from it. The reasons are very similar
to the reasons for the blue blood estates segment. This is because both segments are wealthy
families with many children. Therefore, when families become frequent buyers of Adidas it will
have a long lasting impact on the kids as well. It is a goal for Adidas to become frequent to
young kids because it will insure a lot of profit and good business for Adidas for many years
down the road. The winner’s circle parent’s age from 35-54, therefore they are a little younger
than those of the blue blood estates segment. Also the winner’s circle families are not as
wealthy as the families of the blue blood estates, but are still very wealthy which is great for
Adidas. If Adidas is able to make frequent buyers out of people of theses segments it will have
a positive impact on the entire Adidas Company as a whole.
Targeted Segments according to Tapestry Database
The Tapestry database is another great source to find good segments for Adidas. The
suburban splendor is the first segment that sticks out for Adidas to be focusing on. The
suburban splendor’s households are located in metropolitan areas throughout the U.S. and
price range for their homes are around three hundred thousand dollars. The age for people
belonging to this segment ranges from 35-63, and most tend to be predominantly white
neighborhoods. The suburban splendor segment is perfect for Adidas because these families
are wealthy, and they are upper class in society. Therefore, people belonging to this segment
have no problem with spending a lot of money buying several different Adidas products. The
suburban splendors are one of the top segments to buy luxury cars according to the tapestry
database that means this group is looking to spend money, and tend to buy whatever they
really want. With this being known Adidas needs to get these types of people interested into
buying more Adidas shoes and clothing. The suburban splendors are some of top spenders in
the country, so therefore Adidas defiantly wants to get this group to buy as much of their
products as possible.
Another great segment for Adidas to sell to is the top rung segment. The
tapestry database labels this segment as people who can afford to indulge in what every the
want. The people in the top run segment are some of the wealthier if not the wealthiest in the
entire tapestry database. With that being said these people usually spend tons of money on
professional cleaning and lawn services to maintain their homes, and take care of any service
work they need. The people in this segment spend a lot of money with no hesitation. They
usually have a lot of premium channels of television such a HBO and Showtime. Also top rung
residents enjoy more of the finer things in life such as good food and wine for meals, and enjoy
taking nice vacations to places all over the world. With the amount of money people in this
segment have it would be great for Adidas to make these people regular customers. The more
top run customers Adidas can have the better it will be for the company overall. This is because
top rung customers shop and buy products they like constantly, and will continue to do so for a
very long time. So if Adidas is able to get a lot of customers in this segment it will do wonders
for the company as far as profitability and reputation. With top rung customers buying Adidas
products it also proves that Adidas has some of the best products in the marketplace, which is
great for any company to establish.
Adidas
Current Agency of
Record Analysis
(Information retrieved from Advertising Redbooks or Agency Compile Databases unless
otherwise noted.)
MULLEN
Headquarters: Boston, Massachusetts
Offices in: New York, Los Angeles, Pittsburgh, Winston-Salem NC, San Francisco.
According to Mullen (2013), Mullen is a full service contemporary agency, incorporating
disciplines from clever to digital marketing, social influence and public relations, mobile
marketing, media planning and buying, direct response and performance analytics. The
employees at Mullen are determined to create remarkable work that is unique and generates
attention, rather than settling and being comfortable with previous work. They are committed
to achieving results, and are open-minded to any strategies, suggestions, tools, people,
resources, or technologies that might offer a solution to their clients.
Current Billings: $83,000,000 (Inside View, 2013)
Top Ten Clients:
 JetBlue
 Zappos
 Barnes Noble/NOOK
 Google
 Honda/Acura
 LivingSocial
 Match.com
 Timberland
 Olympus
 TRESemmé
Philosophy/Mission Statement:
“Our philosophy is Unboard – we harness the power of creativity, technology, media
and community to help our clients achieve their greatest ambitions in a post-digital,
consumer-controlled world. We believe the biggest threat to brands isn’t rejection, but
rather indifference, so we set out to make our clients’ brands a productive part of
consumer lives and to make spending time with those brands worthwhile.” (Mullen,
2013)
Recent Awards:
2012 – Cannes Lion – Bronze – Planet Fitness “Locker Room”
2011 – AdWeek – Media Plan of the Year in Alternative Media – JetBlue “Celebrity
Baggage”
2011 – Hatch Award – Best of Show – JetBlue “Ground Rules”
2010 – Fast Company – “Top 10 Most Innovative”
SID LEE
Headquarters: Montreal, Quebec
Offices in: New York, Amsterdam, Paris, Toronto
“Sid Lee is known as one of the most multidisciplinary firms in the world, creating brand
platforms that span advertising, architecture and retail design, branded content and
entertainment, digital and social media, branding, and reputation management.” The company
has great experience in food, beverage, and restaurant advertising, as well as experience in
sports, recreation, and fitness brands. Advertising for Adidas is managed in the New York
office.
Current Billings: $44,000,000 (Inside View, 2013)
Top Ten Clients:
 Absolut Vodka
 Adidas
 Cirque du Soliel
 Dentyne
 IMAX Corporation
 MGM Resorts International
 Warner Bros Games
 Suzuki
 Red Bull
 Wines from France
Philosophy/Mission Statement:
“We believe that organizations, individuals and even societies depend, now, more than
ever on creativity to flourish. Creativity in our view is a byproduct of the diversity that
emerges by eliminating boundaries between disciplines and cultures; business and art.
In our view, companies that recognize this and come to appreciate and master creativity
will outperform those that master operations and innovation. Our mission as artisans
and professionals is to help companies recognize and unleash the commercial potential
of creativity.” (Sid Lee, 2013)
Recent Awards:
2012 CLIO Awards – Silver – Red Bull
2012 EUROBEST – Silver – Ubisoft
2012 Grand Prix Design – Project of the Year – Salon Urbain Place Des Arts
2011 Forbes- Top 5 Most Performing Agencies
2011 Marketing MAG Awards – Branded Content
ATTIK
Headquarters: San Francisco, California
Additional Office: Hermosa Beach, California
“Attik is a creative communications agency, which specializes in developing branded
advertising and interactive experiences. Their goal is to get the world talking, staring, blogging
and most importantly, remembering their clients' brands.” The company specializes in many
services, including branding, design, digital, promotions, sports marketing, and strategic
planning/research. Attik has experiences with industries including apparel/fashion,
arts/entertainment, telecommunications, as well as restaurants and healthcare.
Current Billings: $22,000,000
Top Ten Clients:
 Adidas
 Coca-Cola
 Lexus
 Scion
 Sony Online Entertainment
 National Football League (NFL)
 Under Armour
 Toyota
 Adobe
 Nike
Philosophy/Mission Statement:
“ATTIK was not born out of tradition, and we've evolved organically to address
challenges. Our capabilities reflect this growth, with a full spectrum of design,
interactive and advertising services. We believe that an integrated offering is not a
patchwork of media solutions, but a cohesive set of experiences that work together to
tell a story, invite participation and inspire consumers. Our clients challenge the norm.
They seek out 'what's next' for their brand, and are looking to engage consumers in new
and innovative ways.”
Recent Awards:
2013 – Favourite Website Awards (FWA) – Mobile Site of the Day (May 23)
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r
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