Addidas Marketing Plan

Introduction

The overall purpose of this marketing plan is to launch the shoe at the beginning of the year, before for the UK soccer (football) season starts. The situational analysis undertook by this plan is regard as a tools to helps identifying an areas of macro and micro environment in order to investigate current consumer tendencies and make appropriate plan to expand new market and then increase sales.

On the basis of situational and competitors’ analysis the plan undertakes SWOT analysis which shows that Adidas has strength in brand recognition and product innovation but lack of efficient advertisement.Moreover, Although continues sponsor to event provide a huge chance to take market share,Economy crisis and competitor are the two main threats

In Marketing mix , The plan develop the right mix of 4Ps’ tools to appeal to target customers and increase customer yield in order to meet the objective. The monitoring section provides the guidelines for monitoring of the results of the marketing campaign.

External Marketing Audit

The analysis of the macro environment

Policy:

• The alliance between Adidas with Xbox have an effect on sports, lifestyle and video game (Leornardo,2005).
• Adidas policy is to control and monitor harmful substance to protect environment and human health.

Economic:

• World cup 2010 wills great success for Adidas in term of sale. Adidas expected record sale around 1.5 billion Euro because the last year record sale 1.3 billion Euro [Adidas, 2010].
• Adidas had only achieved about 34% of its market share and being pulled-down by its major competitor’s Nike [Adidas, 2010].

Social:

• Adidas are more focusing toward people or teenagers who keen on sports and athlete (Scribd,n.d).
• Customers nowadays like to use this product because it lifestyle and trendy.

Technology:  By using advanced technology it construct Adidas to produce environment friendly product.

Environment:

• Adidas used this slogan “to become a zero-emissions company” due to decreased environmental impact of their business (Adidas 2010).
• Almost 95 percent products are manufacturer. Thus, Adidas launched environment management system to reduce environment impact ( G-force, n.d).

The analysis of micro environment

1. Customer. Adidas’s customers in the market have different categories. However, we suggest that Adidas should focus on two main categories; psychographic and demographic. For psychographic, based on groups of customer segmentations could track Adidas to the community’s needs and wants that is accordingly to the lifestyle and activities. For demographic, use human population such as age and income plays a major role. Teenagers, athlete and people who are keen on sports. This is those leaning towards trendy and sporty.
2. Suppliers. Adidas have a strong bargaining power to dictate the price at which they buy their raw materials, as there are a large number of competitive suppliers especially in Asia. Since adidas makes contracts with famous athletes or team(such as Chelsea FC,liverpool FC,NY Gaints,LA lakers,David Beckham)to promote and avdertise its product.Moreover,there is great comprtition observed to sign contract with famous sporting events(Olympic Game,NBA,FIFA world cup and Eurcup),which is a fact that make supplier’s bargaining power bigger
3. Competitors. Comprising a major part of the increasingly consolidated industry,The improved customer spending in this industry has supported impressive growth of top footwear companies likeNike.Inc. And German neighbor PumaAG.The pie chart of Industry leader in total market share is shown below.

 SWOT analysis

Strength:

•  Brand reputation: Adidas,as one of the biggest sportswear brand(Adidas annual report ,2010) in UK occupies 35% market share (Adidas Group,2009) has won the strength of strong brand name recognition.
•  Product innovation and long list line: Adidas widen its portfolio by consistently launch new product.Also, it served market area including footwear,hardware,apparel,snowboard,golf-related in order to cater specific audience need and help in attracting and strengthening relationship with customer to improve revenues
•  Technology and design: Adidas applied advanced technology and new material in making durable,high-quality shoes.Moreover,its fashionable design is better than competitors.
•  Advertising Campaigns Sponsorship: Adidas has planned and implemented major advertising campaigns.Also,Adidas has sponsored many sporting envents like Olympics ,Streetball,Soccer,FIFA world Cup,Tennis..these events reinforced the brand’s value to an existing customer base

Weakness:

•  Unfocused strategy: The Unfocused strategy of Adidas,which has a broad product portfolio can not translate into a high profitability and quit barrier of market is cost.
•  Short-history: Adidas fall behind with NIKE in promotion and building relationship with football club.
•  Limited budget allocation to advertisement. Adidas suffered from a significant slowdown in consumer spending and high levels of promotional activity due to the adverse macroeconomic climate. Also.Group sales decreased 6% as a result of declines in the Wholesale(Adidas Group,2009). Which made Adidas has been under financial pressure
•  Few influential athletes in Brand Ambassador portfolioPoor ad agency

Opportunity

• Strategic acquisitions and agreement: The company made a few strategic acquisitions like announces long-partnership with Stella McCartney ,acquired Valley Apparel Company of Cedar Raoids and Maxfili brand help strengthen company’s sport performance and improve product’s sales
• Supply-chain and manufacturing initiative: Adidas has successful reduced the manufacturing time and production time in order to reduce inventory costs.Also,plan to implement a new model for supply chain to reduce the time taken and improve cost efficiency.
• Sponsoring sporting events: Sponsoring of sporting events helps Adidas bring great recognition and also help the company in building Sport Heritages

Threat

• Competition: Adidas have intense competition with Nike,which has a grater market share and having a big budget in market activity,Also newly born several brands like New Balance,Reebok, CAT,GAP has increase increased competitive levels.
• Weak Economy The adverse economic conditions has significantly affect near future under the continues weak economic conditions. Especially in UK and European countries.
• The exchange rate risk will impact on the profits.
• The labor force cost and other input cost will on the rise.

Marketing Objective

The Adidas Score will be launched as a fashion sport sub-brand and it is similar with the Adidas Original.

This aim will be met through the fulfilment of the following objectives:

1.  Making penetration:The sales of the new sub-brand will be supported by Adidas’ large base of loyalty customer. Increase market share and overall sales in Adidas store and gain awareness of casual customer
2.  Market development: The basic marketing objective of the first year marketing plan of Adidas Score is the sale is expected have a sustainable growth of 13% at the end of the year. Market share will reach 20% within the UK sport industry.
3.  Awareness: Regarding the successful marketing strategy of Adidas Original, Adidas Scores will be niching into a high status and high end sport fashion brand image which is differentiated from professional sport.

The core Strategy

According to nowadays situation that the football industry is full of competition and competitors continues to set more kinds of football-wear product to grasp market. Therefore,The overall strategy that Adidas used is Market-penetration strategy(Kotler and Armstrong, 2008) and differentiation focus strategy(Porter,2002) .

Market-penetration strategy:

•  Market is targeted at high-end fashion, and aims on creating a fashion sport lifestyles which can be adopted not only young people but also fashion fans at elder age level. The brand is trying to attract the customer who is more conscious with brand class.
•  Adidas Score will take great advantage of the existing distribution channel of Adidas sport fashion sub-brand to help Adidas Score positioning in the sport fashion area and control the distribution cost.Also the Store in Internet would be more convenience to access.

differentiation focus strategy

•  Adidas exploring of new potential market and specifying addressing customers segments. Also, Adidas divided its sub-brand into different level and support their product sales by upgrading the awareness of the brand image. From 2002, Adidas has set foot into premium fashion area, and innovatively develop sport-inspired sub-brands which geared with the same Adidas log, such as Y-3, Essentials, SLVR, and Adidas Stella McCartney.
•  Competitor is targeted as Nike. Unless Nike haven’t a sub-brand which reach the standards as high as Adidas do in fashion area. But Nike has a competitive product Total 90 shoot II. Although the Adidas Score also has football element, it is positioned very similar as Adidas Stella McCartney which is design for tennis but the collection is very close to luxury brand like Dior or D&G. Thus, Adidas Score’s philosophy should be differentiated from Total 90 shoot II and try to create a higher standard in fashion area that Nike cannot catch up with.

Marketing Mix

Product:

• The product of Adidas Football support that positioning in Fashionable Life-style catalogue should be use different strategy to cater young groups whose age is 10-30, also who are football fans and want to wear football casual shoes in their spare time. It means making product sufficiently different and distinct from rival offerings(Chris Collins and Linda Trenberth 2005). This including following aspects:
• Shape and Style Design: According to a buying behaviour study (Krishna 2009) , Style is key issue in choosing shoes,which take over 35% .Therefore, This new product would add fashionable elements and apply riotous color. Such as providing elegant cool figure;Offering glorious color like Black,Blue,Golden,Red and Pink and ;Continue to use soccer shape but add thicken sole.
• Quality and Durable Quality is another important issue affect buying behaviour process. About 8% people regard it as significant element.(Krishna 2009)Therefore, The product, which equip a special sole that adapts its cushioning level to a runner’s size and stride can enhance comfort .In addition,The unique anti-friction material will also equip to gain abrasion resistance
• Personality. In order to satisfy special need ,Provide DIY website for online customers to design the shoes by themselves with flash active. A limit number parts on the Adidas soccer’s surface can be changed before delivery.

Place:

The Annual report of Adidas(2010) claims that “Global Sales is organised into two operating segments, Wholesale and Retail”, The distribution channels like sporting goods chains, department stores, independent sporting goods retailer buying groups, lifestyle retail chains and e-tailers are very important(Adidas Annual Report,2010).Therefor,The channel that offer this new product should be as following:

• Regular channels. Those channels like franchise house, agent store, franchised outlet and on-line shop are stable and easy to assess. Combin variety channels improves wide coverage and gain sales figures.
• In gym. The support product is a gym shoes, its function is bring more comfortable to sports. As a result, the new shoes product can be sold in gym and fitness center. When soccer fans watch a game, every athletes can give the powerful advertisement to the products with their energy and passions.
• In fashion brand store. This shoes not only a kind of gym shoes, but also be endowed with healthy concept and fashion style.

So, cooperate with fashion brand, put the new products into fashion stores and match with the attractive clothes can arose people’s attention. Such as the two fashionable brands “Next” and “Bank”,which provide fashion clothes as well as shoes. Putting new product into those shop to balance the consideration of customers in comfortable sport shoes and fashion

Price:

According to the survey, Only 11.3% of the person consider that price is the major factor when buying (Krishna, 2009).Also,Another survey indicate that 38.9% male and 39.6% females regard that style is main factor influenced choosing shoes (Krishna, 2009).What can we learn from that the large number of target customer is price-insensitive and half of them is Irrational buyers.

Therefore, As a fashion-orientation life-style shoes,which Positing in High-end Market,The price strategy should be continue with its former price strategy,which employs ” premium-price strategy “(Adidas,2009). The price should be acceptable to meet high demand rate which can be 75 pounds ,which is little less than the average price of Original serious.

• DIY shoes. The price of On-line DIY shoes that available on retail should be add 10-15 Pounds for its personality service and the cost of logistics.
• Special edition shoes: The price of Special edition can be 10 Pounds more than original one .

Organization, Implementation and Control

The organization for marketing should be logical and will help the company improve the marketing process (Spewak & Hill, 1992).Also, A good implementation can help company achieve mission completely. Therefor, An efficient Organization including following departments:

Market Department:

Market Department should take responsibility for market research and market analysis in early stage.

It needed manager to outline statements and polices for the marketing plan. after the order was made, managers in each marketing department are responsible to conduct series of marketing researches and analysis’s such as industry evaluation, SWOT, and a series of marketing strategic planning need to be made such as marketing mix and a SMART objective is necessary to ensure the marketing planning is reliable.

R&D Department:

This department including design team,who should be sensitive enough to judge what the customer will want to buy .However, Before passing the final design sketches to supplier, it need “vision day”,”pre-selection meeting”,”review meeting” with buyers,merchandisers and to ensure all concept and design of product is well.

Purchase Department:

Buyers in Purchase department deal with suppliers in various countries to choose suitable skills suppliers and manufacturers . It highly need that buyers have closely relation with QAs,designers and merchandisers.

Logistics

Responds for product delivery. It requires that all products arrive in-store at the correct time

Sales Department:

After production release. Sales department need to respond for distribution and promotion.

Reference

1. Adidas annual report (2009) Available at: http://www.adidas group.com/en/investorrelations/assets/pdf/annual_reports/2009/GB_2009_En.pdf/ (Accessed: 25 November 2010)
2. Krishna, S.N. (2009) Assessing Youth’s Buying Behavior towards Sports Shoes: A case study of Nike .Master degree thesis. University of Halmstad School of Business and Engineering
3. Miraj, R. (2004) Consumer preferences towards Branded Sports Shoes. Available at: http://www.slideshare.net/mirajrajput/consumer-preferences-towards-branded-sports-shoes/ (Accessed: 5 December 2010)
4. Georgios Dogiamis, Narain Vijayashanker(2009)Adidas:Spring Ahead of Nike.Available at:
5. http://www.mcafee.cc/Classes/BEM106/Papers/2009/Adidas.pdf/ (Accessed:12 December 2010)