Adidas Marketing Strategies Analysis

Introduction

Marketing is referred to the activity of creating, communicating and promoting the buying or selling of any product or service through advertisement as well as delivering the products or services to consumers to ensure they have received value through the process. The concept of marketing is to satisfy consumers, improve sales, increase profit and be at a competitively advantageous position by defeating the competition in the industry. In this report, market segmentation, targeting and positioning along with competitive position map of Adidas is to be explained along with the way they are going to influence the future marketing strategies of the organisation. If you need further insights or support, consider seeking marketing dissertation help to strengthen your understanding. Later, three future strategic marketing objectives are to be mentioned and the way integrated approach is important for marketing communication for Adidas is to be explained.

Market Segmentation and Targeting of Adidas

Market segmentation is referred to the process that is implemented for dividing the market into segment or groups which includes potential customers based on various characteristics. The segments created are developed of consumers who are going to respond to the existing marketing strategies of the organisation in a similar manner (Mahdi et al. 2015). Adidas is seen to use different nature of market segmentation divide a larger market into small groups of customers.

Geographic Segmentation: The geographic segmentation is the one in which the organisation divides the market into groups of consumers based on geography (Cruz and Karatzas, 2016). This is because consumers from different geographic segment have different needs and demands to be fulfilled in the product. In the case of Adidas, the geographic segmentation includes the worldwide circulation of product to the urban population through various outlets (www.adidas-group.com, 2018b). It is significant part for Adidas’s future marketing strategies as it mentioned that the world urban population is going to increase at a massive rate which ensures that to be able to capture increased number of consumers within the population the future strategies is to be made accordingly. It is evident as the UN declared that at the present 54% of the population is living in urban areas and by 2050 it is going to increase to 66% (www.unesco.org, 2013). Thus, in future Adidas would be able to capture a wider market area along with increased consumers due to its urban-based selling of goods worldwide.

Demographic Segmentation: The demographic segmentation is referred to the division of the market based on the consumer –demographic variables like income, age, family size and others (Vilnai-Yavetz and Tifferet, 2015). In case of Adidas, the demographic segmentation includes targeting people of ages between 15 to 35 years along with having income above $15,000 and the company focuses on attracting both men and women to their products (www.adidas-group.com, 2015). The division of the market to attract teenagers and younger generation to Adidas’s products is significant for the future marketing strategies of the company because the world population statistics indicates that young people under the age of 30 are increasing at large. It is evident as people under 30 years of age represent nearly 50.5% of the world’s total population (www.unesco.org, 2013). This means that the young people and teenagers are at a concerned number within the world population which in turn ensures that the future strategies are to be focused on this aspect of Adidas to flourish the business. However, not focusing on the consumers who are above the age of 35years by Adidas is going to act in a negative manner for its future strategies as it would lead the company to experience financial loss for their business. This is because the older population represent half of the population of the world and the mean age of the population is also increasing indicating the rise of older people in larger number (www.unesco.org, 2013). The segmented markets of the organisation that target both men and women have the opportunity of being able to attract increased number of consumers of both genders (Schmid et al. 2018). This is significant for the future marketing strategies of Adidas as it indicates that they are able to frame their business in such a way so that consumers of both genders are equally satisfied to avail their products ensuring increased market expansion.

Psychographic Segmentation: The psychographic segmentation is made based on the lifestyle, activities, interest and opinions of the people (Reisinger et al. 2019). The psychographic market segment of Adidas includes targeting affluent consumers as well as upper-middle-class consumers. They execute this target by providing superior quality products under premium pricing strategy to the consumers (www.adidas-group.com, 2015). It is done with the intention that the premium positioning of the brand is created within the minds of the consumers. The upper class and upper-middle-class individuals have adequate finances to be spent for availing luxurious or premium priced products compared to the middle and lower class individuals (Yeoman and McMahon-Beattie, 2018). Thus, targeting the upper-class segment is important for the future marketing strategy of Adidas as it would offer them the opportunity to have proper flow of financial spending by their potential consumers to avail their premium priced products ensuring the better economic condition of the company. However, not focusing on the lower class and middle-class population poses threat to the future marketing strategies of Adidas being unable to attract the whole market to incur more revenue.

Behavioural Segmentation: The behavioural segmentation is executed by dividing the population based on the usage, behaviour and decision-making pattern of buying products (Funk et al. 2016). The behavioural segment of Adidas targets the consumers who are a sports lover, athletes, regular gym users and others (www.adidas-group.com, 2015). The key products of Adidas mainly include footwear, sportswear, sports equipment and toiletries that are used by physically-fit individuals or sports personals or individuals who have the urge to remain physically fit through exercise and playing (www.adidas-group.com, 2018a). Thus, targeting sports-loving individuals is significant for future marketing strategies of Adidas as they would be able to maintain the different image of their products that relates to physical fitness. This would ensure more normal people would love to buy them as using their brand would help them to portray their image as physically fit individuals. Further, the nature and design of formal footwear demanded by the normal individuals are different the sporting loving personal (Wagner, 2018). Thus, focusing on attracting the individuals who love sports would help future market strategies of Adidas to understand the way they are to add new features into their products so that their products stand out in the market under the sports section.

Targeting: The targeting strategy of Adidas include influencing youth between the age group of 15-35 who belong from the upper middle class and upper classes along with have preference for using sportswear which is fashionable and stylish in nature (www.adidas-group.com, 2018b). This is because there are increased numbers of young generation individuals in the UK and the upper-class people are concerned with the brand name compared to the price.

Competitive Positioning/ Perceptual Mapping of Adidas

The competitive position map is helpful for the organisations to determine their position and their competitors’ position in the market from the perspectives of the buyers for developing a market positioning strategy for their products or services (Khanal, 2017). The competitive position map of Adidas informs that they are in the market position where they offer high-quality products at premium prices and is competing in this position with other companies such as Puma, Nike, New Balance and others (report.adidas-group.com, 2018). Puma is acting as a key competitor for Adidas in the high quality and premium price market position by providing similar variety of products with similar quality as per Adidas to the consumers. Moreover, like Adidas who has Reebok, Runtastic and Matix as subsidiaries to sell their products under different brand names Puma similarly has Tretorn and Cobra Golf Labels as subsidiaries to increase the sales of their products under different brands (www.adidas-group.com, 2018a; about.puma.com, 2018). Further, it is evident that Adidas is facing effective competition from Puma the percentage of sales growth is 24% for Puma in 2018 compared to 8% for Adidas (about.puma.com, 2018a, report.adidas-group.com, 2018). This means that Puma’s sales growth is increasing at a massive rate compared to Adidas which poses Puma as a threat for them in the coming future of being able to take over their market. However, Adidas offers better quality and comfortable products compared to Puma and they are quite new in respect to experience required to identify the key needs of the target consumers compared to Adidas. This is evident as Puma was formed after family feud with Adidas. Moreover, the Puma’s products are seen to be priced less compared to Adidas and sometimes are seen to experience issues with maintaining quality (report.adidas-group.com, 2018; about.puma.com, 2018a).

In 2018, the total revenue collected by Nike is nearly €32.35 billion whereas the revenue of Adidas in the year was €21.218 billion (s1.q4cdn.com, 2018; report.adidas-group.com, 2018). This is because Nike has wide network of sales compared to Adidas that helped them in creating increased sales resulting them to collect more revenue compared to Adidas. Moreover, Nike being the most trusted brand worldwide compared to Adidas, Puma and others has led it is to be a key competitor of the company. In soccer, basketball, running and other athletic games, it is seen that often Nike is the brand chosen mostly by players to avail their required products compared to Adidas (money.cnn.com, 2018). This indicates that Nike has greater brand positing in the market compared to Adidas that has led it often outperform them in the industry posing as a key competitor for Adidas. New Balance is seen to manufacturing shoes that have better strength and endurance to bear the harsh environment faced by athletes compared to the shoes of Adidas, Nike and Puma as well as priced at higher range than Adidas. They are also seen to be key sponsors in the Olympic committees, UEFA, various national basketball teams and other sports (www.insidesport.co, 2018). In this respect, Adidas is facing increased competition from New Balance in the sense of quality of the products provided them in the market.

In high quality and low price market position, K-Swiss, Decathlon and Fila are acting as a key competitor of Adidas. It is evident as the products developed by K-Swiss, Decathlon and Fila are seen to be far lower in price compared to Adidas. However, though the qualities are quite higher and similar to Adidas but these brands are unable to create the extent of comfort experienced while wearing Adidas. Moreover, Adidas has higher brand image in the market as a premium product compared to K-Swiss, Decathlon and Fila which ensure that Adidas is performing at a better position than these companies but yet stiff competition in relation to quality is being experienced from them by Adidas (report.adidas-group.com, 2018). In the low quality with low price market position, Sparx is seen as a competitor for Adidas. This is because Sprax is developing products by copying the designs and quality of Adidas which has led it to be thought as substitute for the brand which is creating threat for Adidas being replaced in the market among the middle-class population.

Strategic marketing objectives of Adidas for next three years

The three strategic marketing objectives of Adidas are as follows that are to be maintained for the next three years:

Objective 1: To maintain long-term sustainable growth in the market area by making the existing and new consumers attracted to them as well as create wider market operation of Adidas

The maximisation of the market area operation is required to be made by Adidas so that in the next three years they are able to serve in the areas that are still not within their reach to sell their products. It is required for Adidas to become more frequently used brand to be availed easily by increased consumers like one of its key competitor that is Nike which is presently seen to operate in areas larger than Adidas. As mentioned by Shahidehpour and Alomoush (2017), large market area operation helps the organisation to collect more revenue. This is because an increased number of consumers can be attracted to buy products which in turn increase the sales of the company that also helps them in collecting more finances from the market. Further, the objective of consistent long-term sustainable growth helps the organisation to ensure consistent change as per the changing prospect in the market and avoid taking unnecessary decision or steps that would offer them momentary relief from issues (Ortiz‐de‐Mandojana and Bansal, 2016). Thus, the objective of sustainable growth is to be ensured and meet by Adidas so that their position in the market remains stable and is improved compared to the present in the next three years.

Objective 2: To develop better innovation for ensuring improved comfort from the products of Adidas

The improvement of comfort and quality of the products by Adidas is required so that in the next three years they are able to act in a competitively advantageous position in relation to New Balance. This is because at the present scenario New Balance provides better quality even though at increased prices than Adidas in the market that has led them to avail key sponsorship from various sports organisations. Thus, Adidas by improving their quality would be able to create better image of them in the market in the next few years making them able to create better growth in the market.

Objective 3: To ensure better brand positioning in the sports industry so that their products are preferred over other organisations

Adidas required improving their current brand position in the market within the next three so that they are able to outperform their key competitors who are posing them threat for the sales growth. The improved brand positioning leads organisations to use it as a persuasive tool for business development as it act to nurture and create increased sales (Nguyen et al. 2016). Thus, it is required to be another key objective for the next three years so that the Adidas as a brand becomes the chief sports brand that is more availed than any one brand in the sector.

Discussing the way and the reason behind implementation of integrated approach to marketing communication planning and its importance for Adidas

The integrated approach to marketing communication is used by the business organisation so that all nature of communications used are carefully linked together at all levels ensuring work in harmony (Luxton et al. 2015). The integrated approach to marketing communication planning helps in coordinating the communication elements such as sales promotion, advertising, public relations (PR), direct and online marketing to create a understandable, consistent and compelling brand message to be communicated by the company (Kitchen and Burgmann, 2015). Thus, it is to be used in achieving the mentioned market objectives for Adidas so that the organisation can be able to develop a potential and improved brand message to be informed to the public to improve the brand image of the organisation which is required for ensuring sustainable growth in the market. This is because improved brand images lead the consumers to prefer the products supplied by the brand and promote the product to other consumers through word-of-mouth that in turn increases the sustainability of the brand in the market. As mentioned by Muñoz-Leiva et al. (2015), an integrated approach to marketing communication helps to win new customers as well as assist to maintain long-term healthy relationship with the consumers. This is because in integrated approach the customer feedbacks are valued and monitored in an effective manner. Thus, this aspect of the integrated marketing communication is going to help Adidas to understand where improvements in their products are to be made and would lead the employees to understand which elements they are required to focus so that better innovation and improved comfort can be provided by Adidas compared to its competitors. The integrated marketing communication is seen to save time to quickly determine the nature of marketing tool to be used to improve the market operation of the organisation. Moreover, this nature of communication in marketing helps the marketers to use various innovative ways in promotion of their brand to wide number of consumers (Laurie and Mortimer, 2019). Thus, it is to be used by Adidas so that they are able to use best tools available within less time in the next three years to create maximum increase in the market area of their operation for outperforming their competitors like Nike.

Conclusion

The above discussion informs that according to geographic segmentation Adidas targets market worldwide. According to demographic segmentation, Adidas attracts people between 15-35 years who belong from the upper middle class and upper-class families. As per psychographic segmentation, Adidas targets people who are concerned with being physically fit and prefer premium products. As per behavioural segmentation, Adidas targets individuals who are sports enthusiasts or are involved in athletes. The competitive position map of Adidas indicates that the key competitors in the similar market orientation where they perform are Nike, Puma, New Balance and others. Later, three strategic marketing objectives are made for next three years that include increase of their market operation, improved brand positioning and better quality development.

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