Marketing Strategy Of Adidas In The UK: Situational Analysis, SWOT Analysis, And Competitive Advantage

Situational Analysis

Adidas is the global leader in the marketing of sports clothing and athletic shoes. It was founded by Adolf Dassler during 1920’s. Adolf Dassler fabricated a pair of sport shoes in 1925 and after some years, he and his brother Rudolph were marketing special shoes for the tennis players and began creating special shoes for diverse sports. The brand is constructed on latest equipment and cutting-edge design. It is a global brand and is appraised and appreciated by customers for its advanced, Stimulating And Dependable Values. The stated firm is organised into three customer-oriented product separations, namely, forever sports, originals and equipment. The structure of Adidas products is exclusive to the business and replicates the brand’s commitment in meeting the varying market drifts. Performance focused footwear, attire and the hardware merchandises are in the vital spark of the Adidas. Adidas is the leading sportswear manufacturer in Europe and the second leading in the world. It employs over 60,000 people across the world in 2016. The worldwide net sales of the company amounted to about 19.29 billion euros in 2016. Footwear and apparel are the two of the Adidas major segment. In 2016, Adidas become one of the supreme brands between men and women in terms of sportswear worldwide.       

This report will present the marketing strategy of Adidas in the context of UK. It will present the situational analysis by conducting and PESTLE and SWOT analysis on Adidas UK. It will also include the competitive advantage of the stated firm and will also evaluate its current market strategy. The study will include the details about the organisations’ position relative to the other industry rivals and will include the details of their marketing strategy. It will provide a critical evaluation to the Adidas competitive advantage over the other brands in the market of UK. In addition to that, the analysis will choose a brand from the Adidas portfolio and will select a customer segment on that specific brand. The report will also include the recommended strategies and objectives for the stated organisation.     

Political- The rule and policy of Adidas is to regulate and monitor unsafe and harmful substances for the purpose of protecting environment and human health. The another policy Adidas follows, is to remove PVS making advancement in order to find out the substitutes such as vinyl, polyurethane, thermoplastic rubber as well as ethyl (Heeg, 2015). The company also gives training facilities for HR systems, health and safety, employment standard is significant for the firm. The company also develops groups for monitoring and handling SARS in the UK factories, disinfectant units as well as washing stations. At last, the company helps and safeguards the employee’s right through considering every employment policies.

PESTLE

Economic- Adidas is a multinational company which supports nations for declining unemployment situation through raising their numbers of workers each and every year. The growth rate of industrial production in UK was around 1% in 2001- 2003, which was raised by 1.7% in the year 2004. The company was one and only reason behind this enhancement, and only because of Olympic Games.

Social- The products of Adidas can be used by any religion, age and also suit any lifestyle, which is basically in trend with an innovative design in many products (Dickson and Fuss, 2011). The main focus of the firm is on people who participate in athletes and sports; on the other hand, anyone can buy products of Adidas.

Technology- The packaging system which Adidas uses is actually suitable for transfer and transport process, over long routes, extreme weather changes and also in humid conditions. The company also uses environmental- friendly materials and recycled paper for the packaging process.

Legal- The entire management of Adidas follows the United Nations Declaration of Human Rights and also their rules and processes remain for all the available domestic policies and constant with core worker principles of the ILO (Huang et al., 2015).

Environmental- Adidas’s main approach is to handle environmental problems which are as an integral portion of their regular operations and it also contributes to the Adidas Team and to entire business functions.

Strength- Brand image and goodwill is important for any firm that operates in retail marketing. Adidas also have many endorsements for promoting their products. Even the company also remunerate many celebrities to advertise their products and mainly with long term affinity with stars in sports field like Lionel Messi and David Beckham (Jackson, Jankovich and Sheinkop, 2013). The company also has goods responds towards other European markets. The firm’s own retail sales share has developed considerably and recently it operates over 2200 stores worldwide.

Weakness- Adidas operates in various nations across the world and also deals in various currencies as per countries (Ku?ay, 2014). So, any fluctuations in currency deteriorate customer’s sentiments that affect the business of the company. On the other hand, the company has limited financers and financial supports even its marketing budget is still 50% lower than Nike, which simply means that it has to utilize its funds sensibly and have lower visibility in comparison to its rivalry, Nike.

Opportunities- Adidas has an opportunity to globalization as the company is well-known brand, which provides them an advantage. So, when the marketing of their products is done, customers get more interests as this is a known brand (Lebron, 2010). Technologies like, smart phones and internet has meant that the firm are able to attract major customers and also creates much more distribution channels and modes. As trends of health and fitness have increased all over the world, a major market is opened for sports footwear and apparel. Sports footwear and apparels has increased 42% over the last eight years.

SWOT

Threat- Adidas sports footwear and apparels operates in an oligopolistic market, which means market is quite dominating by some companies. Recently, Nike is the market leader and major competition for Adidas and some other companies like Puma and Reebok are also highly competitive. The company is majorly depend in sports business, so the firm has to continuously monitor the market for popularity of big events and sports events such as Olympic Games that assure huge sales (Lebron, 2010). On the other hand, Adidas sells its products virtually in different countries all over the world. So, it gains revenues, profits, owns assets, incurs liabilities and also pays expenditures in different countries using different currencies. Hence, fluctuations in currency rate would adversely affect the profitability of Adidas.

The major Competitors of Adidas in UK are

1. Nike
2. New Balance
3. Puma
4. Fila
5. Converse

The main opponent of Adidas in the UK marketplace is Nike which has the market share of more than 35%. There are also some other participants in the UK market, which are slighter in size than Nike, such as New Balance, Fila, Puma and Converse. All these competitors are situating their energies to diminish the Adidas market share but the stated company with its strong market segmentation and positioning strategy is beating its rivals (Mandal, 2017). The stated firm benefits from its footwear brands which are specially manufactured for teenagers. The high grade of the alignment to the technical expansion has fashioned the desired valued from the consumers, mainly from the business’s strategy to deliver them with required technical applications (Lebron, 2010).

The Unique Selling Point (USP) of Adidas is its uniqueness. The company is manufacturing 3-D printed shoes as it seems to an imaginative way in order to take the sports shoes to the next level. These shoes not only look amazing but it could be created for specific individuals and can be cratered for their own feet. Another uniqueness about Adidas shoes that makes it superior than the others is its one piece leather uppers. The uppers of the Adidas shoes are basically everything but the sole. Adidas has created beautiful shoes that boast a seamless upper that allows for greater flexibility and style.           

Adidas utilises diverse types of marketing approaches in order to become the market frontrunner but the major risk for the company is that its strategies are easily imitative by contestants such as Nike. The stated firm has a custom of taking the funding of major sports occasions around the world. It sponsors football events and basketball clubs (Borowski, 2011). In order to become the market leader in sports products and apparels, Adidas assimilated Reebok in 2005 to upsurge its market share. The main intention behind this is to deal in both sports and daily life usage apparels. Recently, it engaged in an agreement with Samsung to create a shoe + phone publicity operation (Moser, Muller and Piller, 2006). In this planned partnership, both the businesses are trying to cultivate a phone that could be used with shoes while exercise. Adidas has a history of advanced technology and in its current marketing strategy has told the stakeholders that 50% of its transactions would be through speed-enabled merchandises. The company is about to complete redesigning of its occupational model from range preparation to product formation, locating, supply chain and sales.         

Competitive Advantage (USP)

STP is a short term for Segmentation, Targeting and Positioning. It is the basic thought of marketing, which is related on how to appraise and select a target marketplace for manufactured goods or service. There are usually five stages for an organisation to get its STP. The first step is about choosing the approaches and purposes. Next is to define how to split the market for the company’s best profit. The third is to appraise the segment appeal and after that to select a target market grounded on the gathered evidence (Abdullah Saif, 2015). The final step is about identifying and developing a positioning strategy to reach the desired target market.

Segmentation of marketplace is the practice of isolating the market of possible consumers into groups, or sections, which is grounded on dissimilar characteristics. The segmentation shaped are very much collected of consumers that reply likewise to the business’s marketing approaches and also shares traits such as comparable benefits, requirements or locations. Every successful organisation has its marketing approaches which they utilise purposefully. The market in which a company sell its merchandises and services is very significant to the organisation processes. Adidas advertises its products and services to athletes of all ages over the world. The stated company aims in marketing its merchandises to specialists and unprofessional athletes. Market division plays a very crucial part in the company’s marketing approach. Each market is different so businesses enterprises have to be careful while selecting right marketing strategy. The main motive of market segmentation is to permit the management of the company to regulate the marketing mixes, namely, product, price, promotion and place, in order to encounter the requirements of one or more precise segments.      

Adidas, the biggest sportswear producer in the Europe and second largest sportswear producer in the glove always concerns about the buying attitudes and behaviours. The SLVR shoes from Adidas are a smart fashion leisurewear within the Adidas Sport Style. The tag is embattled to attract the stylish teens of UK who are fully involved in life, be it in social interacting, family friends, outdoor or sporting events.

In the context of UK, Adidas usually focuses on demographic and psychographic segmentation. For the SLVR sneakers from Adidas, demographic segmentation is widely used by the company as it refers on dividing the marketplace into sets grounded on demographic variables, such as age and sex. SLVR sneakers which is a mart fashionable sportswear is mainly targeted to fashionable teens and young adults, age ranging from 13-19 years, who are fully engaged in life.

Psychographic segmentation is utilised in order to split the marketplace into sets which is built on the social class, life style or behaviour features. Adidas, in the UK emphasis on social class as people within the social class tends to have like buying behaviours and characters. It also uses income, gender, and family income division to differentiate their marketplace for its SLVR sneakers.

Market Targeting is about evaluating dissimilar market segments. It is important for an organisation to look on three factors: market section size and growth, sections structural appeal and business’s purposes and resources. Adidas must adopt the stated market coverage strategy which is about differentiated marketing (Piller, Lindgens and Steiner, 2012). In order to utilise this, Adidas agrees to target several market sections and also delivers distinct proposals to them. Adidas has three types of products for its consumers, namely, Performance, Originals and Style.

This table shows the sub brands of Adidas:

The label of SLVR is targeted to appeal to the fashionable teens and young adults who are fully engaged in life (Piller, Lindgens and Steiner, 2012). This brand allows Adidas to meet numerous customer needs, grab the market prospects and is very less exaggerated by one-dimensional market risks.

Market positioning plays an important role in a company’s operations and assist in getting success. The definition of positioning can be taken as the marketing strategy which is developed in order to make a brand occupy a separate position, comparative to the rival brands in the minds of the purchaser. It is not about what a corporation does to its product, but it is about what it creates in the mind of the customers regarding that product (RICE, JAMISON and DAVIS, 2016). As Adidas is emphasized in manufacturing and selling sports products and apparels, it invested a lot of money in major sports events around the globe to promote and position its products. It also uses celebrities and well-known sports clubs to endorse products. The stated firm also constantly uses innovative technique in order to increase the superiority of the products and recruits best artistes to create its products. Adidas targets its consumers who like sports, such as FIFA world cup or through NBA games.

It can be identified that Adidas has more opportunity in participating in major occasions and it could aid the firm in improving brand equity and could also increase the target market.        

SMART is the acronym of the different variations that could be used to provide more comprehensive definition of goal settings. SMART stands for Specific, Measurable, Achievable, Relevant and Time Bound

Specific: The goal and objectives of Adidas must be vibrant and precise; or else the business would not be able to emphasis on its efforts and will not feel completely motivated to achieve the goals. While drafting it goals, Adidas must consider what it wants to achieve and why this particular goals is important (RICE, JAMISON and DAVIS, 2016). The management of the stated firm must also consider who are involved in these goals what resources of the company are involved in achieving it.

Measurable: It is very important for Adidas to have assessable goals, so that it could track its development and stay encouraged. Monitoring the progress will help the firm in staying focused, meeting the deadlines and feeling the excitement of achieving the objectives and goals of the company.

Achievable: the objectives of Adidas must be achievable. It must be realistic and it must stretch the company’s abilities. It is important for the stated firm to recognise the overlooked opportunities which would help it in getting closer to its goals.

Relevant: It is important for Adidas to ensure that its objectives and goals matters to its business operations. All business enterprises need provision and support in accomplishing its goals but it is critical to retain control over them.

Time Bound: It is important for Adidas to create a specific time frame for its objectives and goals so that it could have a deadline in order to focus on and something to work towards.    

Adidas is one of the topmost brands in the sports and footwear marketplace. The corporation has seen its portion of ups and downs. The stated firm started in 1936 and is amongst the one of the oldest footwear brands of the planet. The corporation is facing stiff competition from Nike but has overcome the struggle by aiming youngsters and sports concerned customers. 

The marketing mix of Adidas SLVR Sneakers

Products: Adidas has different subsidiaries and delivers sports apparels and products with different names. SLVR sneakers from Adidas come in various design and styles, and are tough and athletic. The purpose of Adidas is to deliver the best footwear to its consumers who have the mixture of technology and design. The stated merchandises of the company are not need based. In spite of this, the shoes are manufactured and accepted by consumers to gratify their needs and requirements. In the same way, the attires of the Adidas are directed to deliver relief during heavy movement. The SLVR sneakers are now regularly used by teenagers and young adults of UK as a style statement.  

Pricing: Adidas, for its SLVR sneakers, and for the reason of its style and design and advertisings, uses skimming rates and competitive pricing. For run on mill goods, Adidas practices modest pricing by keeping in minds for its opponents like Nike and Puma. But for its SLVR sneakers newly designed shoes, which are recently familiarized in the market, and are differently designed, the stated firm uses skimming pricing strategy (Turner, 2014). The aimed consumers of Adidas are the upper middle class and high end consumers. The corporation not uses penetrative pricing strategy as it will disturb the brand equity of the Adidas. The higher valuing benefits the organization in the price quality attitude and sues to this; buyers think that an upper price means superior quality. 

Place: Adidas mainly sale its products in UK through retail channels. The business has its private stores in which the merchandises are delivered straight through the corporation. In addition to this, many multi brand outlets also have Adidas attire’s and footwear on exhibition. Another mode for the distribution of the merchandises is online (Wirtz and Elsäßer, 2016). The products are also sold through online mediums and e-commerce websites such as Amazon.com, and also through the online website of Adidas.

Here is the distribution network of Adidas:

Adidas promotes its products through various advertising channels but most of the advertising is done through TV and product engagements. The squad of Adidas tries to inspire the adrenaline in their patrons via ads that are made very imaginative and are filled with energy (Wirtz and Elsäßer, 2016). The tagline of the company “Impossible is nothing” is itself a very influential speech for the brand. After TV, product assignment is second way of advertising of Adidas for its SLVR sneakers. It links up with top sportsmen around the world such as Lionel Messi, Ronaldinho and Sachin Tendulkar. Adidas also include some artistic outdoor processes as well as events advertising in order to publicise its products.     

From the above marketing mix of Adidas, it could be said that the stated firm is on correct way. It needs focus more on its well-defined target market in order to completely analyse its customer’s special needs. The narrower the target market is; the more company could focus on serving them better (Turner, 2014). Another thing that Adidas could do is analysing its rivals properly. Adidas is facing very tough competition from Nike, which is why Adidas have to focus more on its rival strategies. If a customer is looking for sport products, and if are not satisfied with the company’s products, he or she will make sense of the alternatives to compare the company against.  

Conclusion

It has been found in the study that Adidas promotes its products through numerous marketing channels but most of the promotion is done through TV and product placements. The team of Adidas tries to inspire the adrenaline in their consumers through ads that are made very artistic and are filled with energy. The tagline of the company “Impossible is nothing” is itself a very powerful statement for the brand. The report also identified that the goal and objectives of Adidas must be clear and specific; otherwise the company would not be able to focus on its efforts and will not feel completely motivated to achieve the goals. While drafting it goals, Adidas must consider what it wants to achieve and why this particular goals is important. The management of the stated firm must also consider who are involved in these goals what resources of the company are involved in achieving it.

References

Abdullah Saif, N. (2015). How does Marketing Strategy Influence Firm Performance? Implementation of Marketing Strategy for Firm Success. International Journal Of Innovation And Economic Development, 1(3), pp.7-15.

Borowski, A. (2011). Adidas marketing strategy. Norderstedt: Grin Verlag.

Dickson, M. and Fuss, F. (2011). Effect of acceleration on optimization of Adidas Bounce shoes. Procedia Engineering, 13, pp.107-112.

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Huang, K., Dyerson, R., Wu, L. and Harindranath, G. (2015). From Temporary Competitive Advantage to Sustainable Competitive Advantage. British Journal of Management, 26(4), pp.617-636.

Jackson, D., Jankovich, R. and Sheinkop, E. (2013). Hit brands. Basingstoke: Palgrave Macmillan.

Ku?ay, Y. (2014). The Social Media Reflections of Communication Applications of Entities Operating in Sportswear Sector “Examples of Nike, Puma and Adidas”. AJIT-e: Online Academic Journal of Information Technology, 5(14), pp.37-59.

Lebron, W. (2010). Adidas Latest Shoes. SSRN Electronic Journal.

Lebron, W. (2010). The Best Fashionable Nike Shoes – Nike Air Rift. SSRN Electronic Journal.

Mandal, P. (2017). Understanding Digital Marketing Strategy. International Journal of Scientific Research and Management.

Moser, K., Muller, M. and Piller, F. (2006). Transforming mass customisation from a marketing instrument to a sustainable business model at Adidas. International Journal of Mass Customisation, 1(4), p.463.

Piller, F., Lindgens, E. and Steiner, F. (2012). Mass Customization at Adidas: Three Strategic Capabilities to Implement Mass Customization. SSRN Electronic Journal.

RICE, H., JAMISON, S. and DAVIS, I. (2016). Footwear Matters. Medicine & Science in Sports & Exercise, 48(12), pp.2462-2468.

Turner, T. (2014). German Sports Shoes, Basketball, and Hip Hop: The Consumption and Cultural Significance of the adidas ‘Superstar’, 1966–1988. Sport in History, 35(1), pp.127-155.

Wirtz, B. and Elsäßer, M. (2016). Social Media Marketing: Das Fallbeispiel Adidas. WiSt – Wirtschaftswissenschaftliches Studium, 45(8), pp.453-458.

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