Adidas is the second largest sportswear and apparels manufacturer (Dogiamis & Vijayashanker, 2009). By far, Adidas holds a market share of 22% (Dogiamis & Vijayashanker, 2009). Adidas had also registered the infamous ‘3 stripes’ as its trademark (Berntson, Jarnemo & Philipson, 2006). The founders of Adidas, Adolf and Rudolf Dassler had the vision of providing athletes with the best suited pair of shoes for their respective sports (Dogiamis & Vijayashanker, 2009).
In efforts of achieving that, Adidas is had used the strategy of collaborating with important athletes to gain their insights on the products offered (Berntson, Jarnemo & Philipson, 2006). This contributes to the fact that Adidas had earned the reputation of being innovative and creative at an early stage (Berntson, Jarnemo & Philipson, 2006). Also, the pursue of Adidas to gain greater market share and penetration in the US market, Adidas had acquired Reebok International Ltd. nder its empire (Dogiamis & Vijayashanker, 2009). Today, Adidas continues its rich heritage of harnessing technology to make some of the best shoes (Dogiamis & Vijayashanker, 2009). The issue that is discussed later in this paper would be of how Adidas had positioned its product in the market. 2. 0 Segmentation, Targeting and Positioning The process of segmentation, targeting and positioning is shown figure 1 below.
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Segmentation is defined as dividing the market into distinct group of buyers that possess different needs, characteristics or behaviour that might need separate products or marketing mixes to satisfy their needs and wants (Kotler, Brown, Adam, Burton & Armstrong, 2007). Consequently, the major variables that are used to segment consumer markets are geographic, demographic, psychographic and behavioural variables (Kotler et. al, 2007). Adidas had segment their sports shoes into football, running, basketball, tennis and training (Berntson, Jarnemo & Philipson, 2006).
After segmenting the market into groups, the firm can determine the market segment opportunities that are facing the firm (Kotler et. al, 2007). Thus, the next step the firm should take is to evaluate the various segments and to decide on which segments to cover and the ones to serve, which is called targeting (Kotler et. al. , 2007). The firm can either use differentiated, undifferentiated and concentrated marketing depending on their target strategy (Kotler et. al. , 2007).
Lastly, while the firm decides on which market segments to enter, it must decide which ‘positions’ it wants to occupy in the selected segments (Kotler et. al, 2007). Market positioning involves setting the competitive positioning for the product and creating a detailed marketing program (Kotler et. al. , 2007). Positioning starts with differentiating the company’s marketing offer so that it make sure the value they providing is greater than the competitors provided. Adidas gains competitive advantage when they success to position themselves as the one who provided greater value.
Positioning is further discussed later on. Figure 1 – Steps in market segmentation, targeting and positioning Adopted from: Kotler et. al. , 2007 3. 0 Definition of Positioning There are two types of positioning, that is product positioning and market positioning (Kotler et. al. , 2007). Market positioning was discussed earlier while product positioning is defined as the way the product is defined by consumers based on its important attributes or the place the product occupies in consumers’ minds relative to a competing product (Kotler et. l. , 2007). Adidas had positioned itself with respect to sports shoes and apparels where its products are low priced and with high performance (Pizam & Mansfeld, 1999). The importance of having a good positioning strategy is to help the company to create its competitive advantage, create a consistent image for a product offering and to utilise particular strengths while seeking specific markets (Pizam & Mansfeld, 1999).
This means that positioning allows Adidas to utilise their distinctive competencies to their best advantage, that is producing low price but high performance sports shoes. Adidas is also targeting a certain class of people, that is women by launching under the idea that the “collection is for women who take their sport and their style seriously” and that women should not have to compromise one for the other under “Adidas by Stella McCartney (Giardina, 2009). Even though Adidas is sponsoring top athletes like tennis player Anna Kournikova, the soccer player Zidedine Zidane and L.
A Lakers’ basketball player Kobe Bryant, the focus for the company is nowadays towards teams, global sports events and sport associations (Dogiamis & Vijayashanker, 2009). Adidas can this way connect itself with emotional events in sport; they sponsor the European football championship, the soccer World Cup and the Olympics. They also sponsor national and local teams around the globe (Dogiamis & Vijayashanker, 2009). Adidas has changed their image from just targeting elite athletes and is now more about participation. (Aaker & Joachimsthaler, 2000) . 0 Positioning 4. 1 Value demanded by target segments Product| Target customers| Benefits| Price| Value Proposition| Adidas -Sports Shoes| Athletes, sports enthusiasts, customers that do sports| Durability, safety and high quality| Relatively lower than Nike(Berntson, Jarnemo & Philipson, 2006)| -Shoes that meet requirement of the sports-protect the athlete from injury-durability to withstand extreme conditions of the sport(Dogiamis & Vijayashanker, 2009)| Table 1 – value proposition of a customer for Adidas’ sports shoes
Figure 2 – The interface of marketing and buyer disposition Table 1 shows the value proposition of a customer for Adidas’ sports shoes. The values discussed in the table are the reasons why Adidas’ customers should purchase shoes from them. On the other hand, Figure 2 shows that when the firm apply the marketing mix principle to market making, targeting the customer, it involves giving value to the targeting criteria (represented by the central box in Figure 2) (Bennet, 1997).
However, when the customer’s perspective is taken, the targeting criteria remains unchanged but the customer’s purchase activities that includes sourcing for best supplier suggests that the strategy of the individual stresses on the motive that drives the process is consumption rather than targeting (Bennet, 1997). Buyer disposition is the process whereby the potential customer thinks through, evaluates, seeks counsel about, reflects on and deciding on the suitable source of supply for the product (Bennet, 1997).
The value that the buyers seek upon when buying can be based on price, performance, reputation of the supplier and on results or outputs received from buying the product (Bennet, 1997). This can be supported by the value disposition for adidas shoes in table 1. In addition, buyers may also seek for technical capability, and also symbolic attributes such as uniqueness, irreplaceability as well as brand status of the product (Bennet, 1997). 4. 2 Perceptual Map Adidas Nike
Figure 3– Product Positioning map based on the prices and performance for sports shoes Even though the position of Adidas is so high in the industry, it faces fierce competition from other industry giants such as Nike, Reebok and New Balance. Adidas has to identify the ‘position’ of the brand in the mind of customers. This can be done through the analysis called perceptual mapping. The attributes used to compare Adidas’ products with its competitors products are price and performance.
Figure 3 shows the perceptual map of Adidas and its competitors. 4. 3 Competitive advantage Adidas was one of the first companies to use professional athletes to promote their brand by sponsoring them and giving them free shoes (Aaker &Joachimstaler, 2000). They used the concept sport promotion to develop better products but also in advertising were they used stars like Maria Sharapova (Giardina, 2009). Besides that, they also sponsor football teams such as Chelsea.
They also have a history of sponsoring the Olympics and other competitions and sporting events and since 1979 they design and manufacture the official World Cup football (Dogiamis & Vijayashanker, 2009). Adidas also partners with Samsung in producing a shoe plus a phone scheme that uses wireless biometrics to display information on an adidas-branded Samsung phone (Dogiamis & Vijayashanker, 2009). This gives Adidas a competitive advantage from the rest of the players in the industry. Moreover, selling different products which are signed by its contracted athletes or teams also creates product differentiation.
Furthermore, Adidas has stepped up before other brands by beginning its production of shoes which are “codesigned” by the customer (Giardina, 2009). Adidas had a survey by Berger (Adidas) and Dr. Piller (TUM, Munich, Germany) has shown that customers prefer these shoes to the standard ones (Giardina, 2009). Adidas also differentiates its products by having Stella McCartney designing the shoes which creates a competitive edge for adidas by differentiating themselves from the other industry players. 4. 4 Marketing Program to Achieve Desired Positioning
Product| Target customers| Benefits| Price| Value Proposition| Adidas -Sports Shoes| Athletes, sports enthusiasts, customers that do sports| Durability, safety and high quality| Relatively lower than Nike(Berntson, Jarnemo & Philipson, 2006)| -Shoes that meet requirement of the sports-protect the athlete from injury-durability to withstand extreme conditions of the sport(Dogiamis & Vijayashanker, 2009)| Table 1 – value proposition of a customer for Adidas’ sports shoes The price, promotion, place and product contributes to the perceived value of the product (Teas & Argawal, 2000). With reference to Table 1, The price of sports shoes for Adidas is relatively cheaper than Nike however, is more expensive than other industry players (Dogiamis & Vijayashanker, 2009). In relation to the quality provided by Adidas, the sports shoes are considered relatively cheap. Thus, this is in line with Adidas’ positioning strategy of low priced, high quality product. Adidas promotes its brand and products through innovative advertising.
Other than that, Adidas usually place their stores at shopping malls and places that are usually filled with crowds of people (Dogiamis & Vijayashanker, 2009). The purpose of doing this is to make their brand noticeable to the public and also to attract customers into their shops. Adidas also stresses on quality of product (Dogiamis & Vijayashanker, 2009). They do this by producing sport shoes that are durable, even when exposed to the extreme condition of the sports (Dogiamis & Vijayashanker, 2009).
This also contributes to the achievability of the positioning strategy adopted by Adidas. 5. 0 Conclusion For Adidas to obtain majority of the market share and overshine Nike, it is compulsory for Adidas to come up with positioning strategies that are more outstanding than its competitors. Though Adidas has established its name and image in consumer’s mind, it needs to make an impact to dominate the market. Afterall, marketing is all about creating an impact of images in consumer’s mind.