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Providing The Best Possible

Equipment

-Adolf Dassler (1900-1978)

Sung Yon Lee

MKT 3320.001

T/TH 2:30 – 3:45

Professor Julie Haworth

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Company

Location

Established in Germany, Adidas has its global brand headquarter in Herzogenaurach,

Germany. Adidas also has headquarters in North America and South America; Portland,

OR, USA and Panama. Hong Kong, in Asia, works as resourcing point. Adidas stores are

located all around the world, and they can be found on a website http://www.adidas.com.

Organization / Subsidiaries

Adidas group is composed of Adidas, Reebok, Taylor Made, Rockport and Reebok-

CCM Hockey. Adidas group has almost around 46,000 employees. With them, the Group

produced profit of € 13.3 billion in 2011.

Major Activities

Adidas Performance footwear, apparel, and hardware innovation

Reebok Footwear, apparel, and hardware focusing on fitness

Taylor Made-Adidas Golf equipment

Rockport Footwear

Reebok-CCM Hockey Ice Hockey equipmet

Brand History

Adidas Group started in a small town in Bavaria, Germany. Adolf Dassler registered

the “Gebrüder Dassler Schuhfabrik” in 1924 and embarked on his mission to provide athletes

with the best possible equipment. In 1928, Karoline ("Lina") Radke-Batschaue, a German

runner, won the first Olympic champion in the 800m for women, wearing Adidas. Also in

1936, Jesse Ownes winning four gold medals in 1936 Summer Olympics in Berlin,Germany,

wore Adidas. Such achievements were first rewards and milestones for Adidas.

In 1949, on August 18th, Adolf Dassler registered the “ Adi Dassler adidas

Sportschuhfabrik” with 47 employees in  Herzogenaurach, Germany. Later on the day, he

registered a shoe with now famous 3-Stirpes. In 1967, Adidas first showed its apparel through

Franz Beckenbauer's tracksuit.

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Adi Dassler’s secret ingredients for success

were not only the innovative products, but also, his

attention towards athletes. He met with athletes, and

listened what they say and what they want. He

constantly observed what can be changed for their

needs and even invented to help them.

In 1970, Adidas presented TELSTAR, the

official ball for the 1970 FIFA World CupTM. Starting

with TELSTAR, Adidas became partner with FIFA,

providing the official match ball to every FIFA

World CupTM.

In 1972, when Munich held Olympic,

Adidas presented a new logo, the Trefoil, which symbolize performance.

Since established, Adidas expanded to more sports throughout the years. The

expansion came from athletes, who trusted Adidas to make them better. The world’s best

football players, such as the Argentinean national team wore Adidas cleats. Outdoor icon

Reinhold Messner climbed mountains in Adidas shoes, and gymnast Nadia Comaneci scored

a perfect 10, repeatedly.

After death of Adi Dassler in 1978, his son Horst took over the company and

continued to master Adi’s invention. However, in 1987, Horst Dassler’s sudden death put the

family business to end, and Robert Louis-Dreyfus became the new CEO in 1993. With his

partner Christian Tourres, he brought Adidas, which went near bankruptcy, back on the

growth path. Most of Adidas famous innovation, including Torsion (1989), the Equipment

concept (1991), the Streetball campaign (1992) and the Predator football boot (1994), came

from a new marketing team, refocused Adidas on what it has been known for years: making

athletes better.

Since then, Adidas has not only focused on innovation but also expanded its group.

In 2006, Adidas bought Reebok, Rockport, and Reebok-CCM Hockey, and renamed

themselves to Adidas AG. In 2011, the adidas Group acquired the outdoor specialist Five Ten,

and TaylorMade first the golf company Ashworth in 2009 and then, three years later, the golf

equipment company Adams Golf – making the Group even stronger for the road ahead.

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Financial Data / Annual Report

Net sale by region (2012)

(€ in millions)

Region 2012 2011 Change

Western Europe 4,076 3,922 4%

European

Emerging Market

1,947 1,597 22%

North America 3,410 3,102 10%

Greater China 1,562 1,229 27%

Other Asian Market 2,407 2,103 14%

Latin America 1,481 1,369 8%

Total 14,883 13,322 12%

(http://www.adidas-group.com/media/filer_public/2013/07/31/gb_2012_en)

Net sale by product category (2012)

(€ in millions)

Category 2012 2011 Change

Footwear 6,922 6,242 11%

Apparel 6,290 5,733 10%

Hardware 1,671 1,347 24%

Total 14,883 13,322 12%

(http://www.adidas-group.com/media/filer_public/2013/07/31/gb_2012_en)

Result of 2012 (compared to 2011)

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Currency Neutral

Sales Development2%

Group Sales € 14,883 billion

Wholesale Segment 2%

Retail Segment 14%

29%Other Businesses 17%

TaylorMade-Adidas Golf 20%

Rockport 2%

Reebok-CCM Hockey 9%

Gross Margin 47.7%

Operating Margin 8%

Average Operating Working Capital (20%)

Capital Expenditure €434 million

Net Borrowing Net cash of € 448 million

Net Borrowing / EBITDA ratio (0.3)

Earnings per Share 29% (€ 3.78)

Adidas AG share price 34%

(http://www.adidas-group.com/media/filer_public/2013/07/31/gb_2012_en)

Key Personnel

Executive Board

Herbert Hainer: CEO of the Adidas Group

Glenn Bennett; Global Operation

Robin J. Stalker; Chief Financial Officer

Erich Stamminger; Global Branch

Supervisory Board

Igor Landau; Chairman of Supervisory Board

;Former Chief Executive officer of Aventis S.A., Paris, France

Sabine Baure; Deputy Chairwoman

; Chairwoman of the Central Work Council, Adidas AG

Willi Schwerdtle; Deputy Chairman

; Management Consultant

Dieter Hauenstein; Deputy Chairman of the Work Council Herzogenaurach, Adidas

AG

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Dr. Wolfgang Jager; Managing Director

Dr. Stefan Jentzsch; Partner, Perella Weinberg Partner UK LLP, London, Great

Britain

; Deputy Chairman of the Supervisory Board

Herbert Kauffmann; Management Consultant, Stuttgart, Germany

; Chairman of the Supervisory Board, Munich, Germany

Roland Nosko; Trade Union Official, Headquarter Nuremberg

Alexander PoPov; Chairman, RSFO, Moscow, Russia

Hans Ruprencht; Sales Director Customer Service Central Europe West, Adidas AG

Christian Tourres; Former member of the Executive Board of Adidas AG

Standing Committees

Steering Committee: Igor Landau (Chairman), Sabine Baure, Willi Schwerdtle

General Committee: Igor Landau (Chairman), Sabine Baure, Roland Nosko, Willi

Schwerdtle

Audit Committee: Hebert Kauffmann (Chairman), Dr. Wolfgang Jager, Dr. Stefan

Jentzsch, Hans Ruprencht

Nomination Committee: Igor Landau (Chairman), Willi Schwerdtle, Christian

Tourres

To achieve its goal, Route 2015, Adidas has made management changes in Western

Europe and North America. Adidas announced that “To lead the game and to be closer to

customers and consumers than ever before, the Adidas Group is creating a new market

structure: Western Europe, consisting of Central, North, South, France and Iberia.”

(http://www.adidas-group.com/en/media/news-archive/press-releases/2013/management-

changes-western-europe-north-america/). Since consumer behavior is changing fast in

Europe, Adidas had to find a new way to approach its customers. Herbert Hainer, the CEO of

the Adidas Group, stated that they will go forward with one aligned strategy for Western

Europe. To do so, Gil Steyaert, currently Managing Director North for the Adidas Group, has

been appointed as Managing Director Western Europe. The empty position of Managing

Director North will be substituted by Gavin Thomson.

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Also in North America, to maximize the potential of both Adidas and Reebok, Adidas

Group unites both brands under one management team. Patrik Nilsson, currently President of

Adidas North America, has been appointed as President of Adidas Group North America to

lead the newly united organization. With the unification of two brands, Uli Becker, President

of Reebok North America, decided to leave the Adidas Group after 23 years at the Group.

Recent News

Since 1970 when Adidas presented TELSTAR, Adidas has continued providing the

official match ball for FIFA World CupTM. On November 21st 2012, FIFA announced in

Moscow that Adidas has successfully extended its sponsorship to 2030. Eventually Adidas

achieved an honor of a 60-year partnership with FIFA.

As the contract extends, Adidas presented Brazuca, the official match ball for Brazil

World Cup in 2014. Unlike Zabulani, Brazuca is set to create its own legacy as Telstar,

Tango, and Tricolore did in past. After 600 of world’s top players and former players tested

the ball, Brazuca gained more attention not only from the design but also from the

performance. Dani Alves, one of the famous soccer player playing for FC Barcelona, stated

“My first impression of the brazuca is of a ball that is fantastic, and we're going to have a lot

of fun with it. adidas has created an incredible-looking ball fitting for a tournament as big as

the FIFA World Cup. Most importantly, it plays well on the ground and in the air. I'm sure all

the players will love it!” (http://www.fifa.com/worldcup/organisation/match-ball.html).

CategoryCategory Definition

Even though Adidas Group engages in various fields of industry, its main focus is on

sporting goods. Sporting goods include but not limited to shoes, cleats for individual field of

sports, apparel, bags, and hardware, such as helmets, catchers’ gear, and hockey equipments.

Size of Category

The market of sporting goods in the United States had value of more than $800 billion in

2012.

Category Growth

National Sporting Goods Association (NSGA) reported that the sporting goods

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market report shows 7% increase in sales during 2012 to $59.2 billion according to the 2013

edition of the NSGA Sporting Goods Marketing report. After the increase, NSGA’s Direcotr

of Research and Information Dustin Dobrin said, “We have seen steady growth in the sales of

sporting goods apparel, equipment, and footwear in our research over last three years. The

data we are reporting today shows continued evidence that consumers are not afraid to spend

on sporting goods, which is a positive sign for our industry moving forward.” (Marty

Maciaszek, Sporting Goods Market Report Shows 7% Increase in Sales During 2012). The

sales of hunting and firearms increased 28% in 2012, recording $7.2 billion. Also the sales of

jogging and running shoes recorded 23% increase to $3 billion.

History of Category

National Sporting Goods Association (NSGA) was established in 1927 to fight

against unjust tax on sporting goods at the time. In 1929, East Coast sporting goods

distributors formed Athletic Goods Wholesalers Association (AGWA), and two month later in

March, 1929, Midwestern and Southern sporting goods dealers formed the Sporting Goods

Distributors Association (SGDA). Two months later in May 26th, 1929, the two regional

associations merged and formed Sporting Goods Distributors Association (SGDA). Finally in

1936, the name was changed to National Sporting Goods Association (NSGA).

Methods of Distribution

Most of sporting goods are distributed through wholesale, retail sale, and

ecommerce. One third of sporting goods are sold from sporting goods stores such as Dick’s

sporting goods, Sports Authority, and Academy. One of the biggest sporting goods retailers is

Wal-Mart, making $8.6 billion revenue. 14 percent of sporting goods are sold online.

Realizing that there are more customers finding sports good stores rather than online,

Adidas Group opened its biggest distribution center worldwide in Germany. The center

consolidates all flows and services under one roof for all three sales channels of both Adidas

and Reebok brands. Willing to grow the business to €17 billion by 2015, Adidas Group

showed great expectation on its new distribution center that will provide efficient method to

communicate and commerce with its customers. The center built in Niedersachsenpark,

Germany will work as an important strategic point to deliver its products all across Western

Europe. The Adidas Group expects to exceed 100 million pieces delivered by 2015.

Standardized distribution processes, full automation and integrated IT solutions will ensure a

high level of service to customers across Western Europe.

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Major Players

1. Nike (31%)

2. Adidas (22%)

3. Local Manufacturers (18%)

Seasonal factors

Adidas Group’s sales fluctuate based on season changes. As season changes, sports

played in each season also changes. In winter, Adidas sales of hoods, jackets, and parkas rise.

At the same time, Reebok-CCM Hockey brand’s sales increases with the sales of basketball

shoes. Focusing on fitness, Reebok’s sales also go higher. For summer, it is a good time to

sell swimming suits, flip-flops, and caps. Also there is one special summer comes in every 4

years, World Cup. Not only Adidas and Nike but also many other competitors look forward to

sell more soccer gears, including cleats, shin guard, socks, and balls. Partnering with FIFA,

Adidas especially enjoys the season.

Regional factors

According to the 2012 annual report, 96% of footwear production happens in Asia,

3% in America, 1% in Europe. However, compared to other continent, the sales in Asia is

remarkably low; sales in Europe (40.5%), in America (32,9%), and in Asia (26.6%).

Region 2012 2011 Change

Western Europe 4,076 3,922 4%

European

Emerging Market

1,947 1,597 22%

North America 3,410 3,102 10%

China 1,562 1,229 27%

Other Asian Market 2,407 2,103 14%

Latin America 1,481 1,369 8%

Total 14,883 13,322 12%

(http://www.adidas-group.com/media/filer_public/2013/07/31/gb_2012_en)

Products within CategoryShare of Category by Product

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The global athletic footwear market was valued at $74.7 billion in 2011, and it is

forecasted that the value will go up to $84.4 billion in 2018. Unlike the current regional

market share, by 2018, Asia Pacific will account the largest market share of 41.6%, which is

slightly higher than European market share will be. The growth is expected by several

reasons; increasing population, rising health awareness, and launch of innovative footwear

designs and technology.

The market share of the global athletic footwear market of the key players, including

Nike, Adidas, Puma, and Asics, is more than 50%. Positioned as the leading player among the

key players, Nike records estimated share of 30% in 2012. The next following record goes to

Adidas Group of 22% (Adidas 16% / Reebok 6%).

Global Market Share of athletic footwear

Athletic Footwear; Global Market Shares

Nike 31%

Adidas 16%

Reebok 6%

Puma 7%

New Balance 6%

Asics 5%

Converse 4%

K-Swiss 2%

Skechers 5%

Others 18%

Total 100%

Footwear Sales of the Leading Players in the Market

(in millions)

Company Fiscal 2011 Fiscal 2012 Compound Annual Growth Rate

(CAGR) 2010-2012

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Nike $11,518 $13,426 14.2%

Adidas $8,132 $9,018 13.3%

Puma $2,006 $2,078 5.8%

Asics $1,857 $1,940 5.0%

(http://www.forbes.com/sites/greatspeculations/2013/04/11/nike-shares-can-find-some-zip-on-emerging-market-sales/)

Product-Form Description

Since 2005 when Adidas Group acquired Reebok, the market share of Adidas Group

has been continuously increasing, chasing market leading company, Nike. Even though the

sales of Reebok have decreased sharply for a second quarter, Adidas Group stated that its

2012 sales will increase by a high single digit percent, which is lower that what AG

previously forecasted; almost 10 percent of rise in sales. The fallen sales of Reebok came

from losing a major American football contract. Besides the losing contract, Reebok

discovered a fraud at an Indian unit, and its toning shoes fell out of favor. Also, Adidas Group

has been threatened by U.S. hockey players to wipe out the entire season. The sales that

Adidas Group gets from North American hockey have been around €100 million. Even

though Adidas outperformed its rivals, Nike and Puma, in 2012, taking market shares in

contested countries, such as China, Adidas shares were down 3.2 percent by 1010 GMT. Even

with such a downgrade, Adidas Group maintained number two position in the sporting goods

market, chasing Nike fast.

New Product Introductions

Facing 2014 Brazil World Cup, Adidas presented new uniforms for the national

teams, including defending champion, Spain, Germany, Mexico and Argentina. Also Brazuca,

the official match ball of 2014 FIFA World Cup is made by Adidas, as all of the balls such as

Telstar in previous World Cup since 1970 have been. Also newly presented, Samba pack

soccer cleats take the main page of the Adidas brand webpage.

Innovations

Adidas, providing official match balls to FIFA World Cup in every 4 years, pursue to

make the roundest and best ball. From the first World cup to 1966 World cup, a variety of

balls were used in each year World Cup, until Adidas presented Telstar in 1970. The black

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and white color in the ball was Adidas’ consideration for the monochrome television at the

time. Since Telstar and Tango, there had been less complaints on the match ball until

Fevernova, official match ball for 2002 Korea and Japan World Cup, criticized for being too

light. Jabulani, 2010 South Africa World Cup ball, was the most disliked ball ever since

World Cup began in 1930. 2010 World Cup was infamous for the least goal scored. Also both

kickers and goalkeepers dislike the ball due to the inaccuracy of the ball movement; hard to

kick where the kickers want to, and hard to determine where the ball goes. To regain the fame

of Tango, Adidas made the best ball ever, Brazuca, tested more than two and a half years to

reduce drag and bring a truer flight.

Brand AnalysisTop Brands by Dollar or Unit Sales (Footwear)

Brands Revenue (2012)

Nike € 17.559 Billion

Adidas € 14.883 Billion

Asics € 1.752 Billion

New Balance € 1.416 Billion

Puma € 2530 Million

Li Ning € 80.726 Million

K-Swiss € 16.201 Million

Skechers € 1.134 Million

Reebok Part of Adidas Group

Converse Part of Nike

As seen from the chart, among the top brands of sporting goods, Nike and Adidas

Group take the most percentages. Therefore, it can be stated that even though there are more

than 10 brands that are categorized as top brands, Nike and Adidas Group, including their

subsidiaries, are the actual market leading top brands.

Growth Trends of Top Brands

Nike

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Nike has shown an increase in its revenue by 9% in third quarter and 7% in fourth quarter

of fiscal 2013. Such an increase came mostly from North America, Central and Eastern

Europe, and emerging markets. The revenue from North America rose 18%, followed by

Central and Eastern Europe (12%), and emerging markets (16%). The rise of revenue in such

regions is from rising economic prosperity in the regions.

Adidas

Adidas Group presented its annual report 9 months of 2013. According to the annual

report that covers up to third Quarter 2013, the net sale is € 11.013 billion; 40.7% comes from

Europe, 33.8% from America, 25.5% from Asia. Compared to 2012, sales in Europe slightly

increased by 0.2%. Rising almost 1% in sales, America, where 2014 Brazil World Cup will be

held, became worthy of notice in 2014. Even though the sales percentage in Asia dropped

over 1%, compared to 9 months 2012, sales in China has risen 6%. In other Asian markets,

the sales decreased 10% compared to 2012. Western Europe sales also dropped 9%.

Category Shared by Country and by Region

Both Adidas Group and Nike are mainly competing in North America, mostly in the

United States. In 2014, the competition will move south to Brazil. Also Asian markets,

especially China, will be an important region to win over the long rivalry.

Consumer ProfileDemographic of Users

Gender: Male / Female

Age: Toddlers-Seniors

Nationality: Any countries that have Adidas stores / any place one can access Internet

Occupation: Athlete, Jogger, Doctor, Nurse, who needs comfort on one’s feet,

spending most of day standing or walking/running

Income Level: Anyone who can purchase one’s shoes for more than average of $50

Frequency of Purchase/Usage

According to the study of School of Business Nanyang Polytechnic, located in

Singapore, only 8% of surveyors buy Adidas product once a month. 61% answered that they

purchase once or twice a year.

Place of Purchase (2012)

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Wholesale (64%)

Retail Store (23%)

Online (13%)

Heavy-User Profile

Adidas brand states its target consumers as sports people involved in various sporting activities such

as soccer, rugby, swimming, athletics, and basketball. The most famous soccer player, wearing Adidas cleats, is

an Argentinean player Lionel Messi, playing for FC Barcelona. Also Real Madrid C.F. from La Liga uses Adidas

uniform. Washington Wizards’ (NBA) point guard John Wall wears Adidas basketball shoes. BJ Upton (Tampa

Bay Rays) wears the latest Adidas baseball cleats. Also from Major League Baseball (MLB), Ryan Howards of

Philadelphia Phillies wears Adidas cleats. Sidney Crosby, one of the most famous ice hockey players from North

America Hockey League (NHL), uses Reebok equipment, including skates, helmets, and stick.

Awareness and Attitude

As the second market leading brand, Adidas is well-known and has built its

awareness through both online and offline advertisement. Famous athletes wearing Adidas,

Reebok, Reebok-CCM Hockey, and TaylorMade-Adidas are the walking advertisements.

Also the slogan “Impossible is Nothing,” is one of the methods that increased awareness of

Adidas, as “Just do it,” reminds Nike.

Decision Makers vs. Purchaser

N/A at present

Normal Purchase Cycle

From the annual report from 2010 to 2012, it can be seen that there are most net sales

in third Quarter; €4,173 million (2012), €3,744 million (2011), €3,468 million (2010). Also in

all of the three years annual report, it is commonly found that first quarter net sales were the

lowest; €3,369 million (2012), €3,273 million (2011), €2,674 million (2010).

Brand Loyalty/Switching

There is a less chance of switching for professional athletes, because most of sporting

goods supply brands make products fit to players. However, general customers may switch as

their favorite athletes changes.

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Advertising / Marketing CommunicationsCreative Strategies of Top Brands

The article, Nike’s new marketing mojo, of CNN money picks out how Nike has

changed its marketing strategy more effectively. Nike has cut its spending on TV and print

advertising in the U.S. by 40%, even though its total marketing budget got higher to where it

hit a record $2.4 billion in 2011. The decision Nike made went to the right direction. When a

17-year-old, who spends 20% more on shoes than his parents, has changed its communication

method from television to computer, big television campaigns are no longer effective.

“Connecting today is a dialogue,” said Mark Parker, CEO of Nike. Turning sight into the

social media, Nike observed a big change. In past, the biggest audience Nike could attract

was the Super Bowl, when 200 million people turned their TV on. However, after Nike spent

$800 million, which is a greater percentage of its U.S. advertising budget than any other top

100 U.S. advertisers on nontraditional advertising in 2010, Nike can communicate with 200

million people any day online. Nike has always been a pioneer in the field. In 2005, Nike

opened its ID online store, where customers can custom their own shoes, and the online store

became a hit that let Nike reach $100 million sales. Also in 2006, Nike cooperated with Apple

and presented Nike+; synchronizing jogging data with an iPod.

In 2010 South Africa World Cup, Nike presented an ad “Write the Future,”

introducing its Nike Football Facebook page. The ad was so successful that it gathered 8

million views in a week. Besides Facebook, Nike uses Twitter as another communication

method. As seen, Nike’s Twitter followers outnumber any other late comers of the social

media marketing.

Adidas is chasing Nike rapidly by forming the social media marketing team. Adidas

is trying to bring more immediacy to its online conversations. Adidas is hoping that the

combination of speed and cultural relevance can propel its social media messages to the

forefront of online conversations. As seen in 2012 London Olympic, Adidas’ reactive

approach made last minute changes to tactical ads in response. Also in 2011, Adidas

randomly gave out a left shoe from several giant shoe boxes. People can get a free pair when

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they bring the shoe they got to the newly opened Adidas store in Melbourne, Australia. Both

the store and the Group gained awareness from the region. Both Nike and Adidas have

proven that the earlier companies move out of TV ads, the more chances they will get to

communicate with their customers.

Specific Promises, Appeals, Claims, Special Effects

In 2013, Adidas released its new sneakers technology, “Springblades” on August 1st.

The sneakers contain a new feature of sole with multiple blades in a row instead of a flat

bottom. The new sole is built to compress and release the energy to propel the body forward.

Also in 2012, Adidas brand presented adiZero, which promised the less weight to propel

more speed. Using groundbreaking technology to develop lighter material, Adidas continues

its innovation through the new adiZero. When Adolf Dassler, the founder of Adidas, was

alive, he promised that he will make the best possible equipment. Even more than 30 years

after, he kept his promise.

MediaCategory and Brand Spending

As most companies do, Adidas Group spends most on sales force and marketing

working budget. In 2012, Adidas annual report stated that Adidas Group had spent €1,885

million on sales force, and €1,502 million on marketing working budget. These two budgets

are taking nearly 30% of the total expenses. The marketing working budget consists of

promotion and communication spending such as promotion contracts, advertising, and events.

Seasonality / Regionality

The sales of Adidas Group contain seasonal products. With such a reason, the

revenues and earnings may vary within the fiscal year. The spring and summer products’ sales

tend to be higher in the first and third quarter of fiscal year. The fall and winter products’

sales are higher in the second and fourth quarter of fiscal year. Launching both apparels and

footwear, Adidas and Reebok brands are especially affected highly by the seasonality. Adidas

Group sales are also affected by regionality. While Adidas and Reebok brands are world

widely spread out, TaylorMade-Adidas and Reebok-CCM Hockey are not as abundant as

Adidas and Reebok brands. There is less chance for Reebok-CCM Hockey to enter in Asian

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market, where ice hockey is not as popular as it is in Europe and North America. For

TaylorMade-Adidas Middle East is the worst market to enter.

Media Employed by Top Brands

TV ads

Events (Olympics, World Cup, World Series, Super Bowl)

Printing ads

Promotion (holiday sales)

PromotionsPromotions used in Category

EventsCouponsPromotion Code

Major Brand Promotion Types and ExamplesAdidas Coupon Facebook: Coupon code / Promotion Code

Adidas Webpage: Events

Nike Promotion Facebook: Coupons / Promotion Code

Nike Webpage: Events

Internet and New MediaWebsite

Adidas

www.adidas.com

https://www.facebook.com/adidasoriginals?fref=ts

https://twitter.com/adidas

Reebok

www.reebok.com

https://www.facebook.com/ReebokUS?fref=ts

https://twitter.com/Reebok

TaylorMade Golf

www.Taylormadegolf.com

https://www.facebook.com/TaylorMadeGolf?fref=ts

https://twitter.com/taylormadegear

Reebok-CCM Hockey http://reebokhockey.com/en

http://ccmhockey.com/

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https://twitter.com/ReebokHockey

https://twitter.com/CCMHockey

Purpose of Site / Ecommerce Activities / Social Media Activities

Through the websites, consumers can fulfill their need just as they can in stores.

Even though only 14% of total sporting good consumers shop online, the websites are not

only for online shopping but also for communication place between Adidas Group and its

customers. All of the subsidiaries have their Facebook page and Tweeter. Through these

social media, Adidas Group can easily figure out what consumers want and how they want.

The desire for a differentiated product for individual was expressed in social media that

finally made it possible to design one’s product online. The Group not only communicates

with consumers, but also advertises its products by uploading videos and pictures.

A good example of social media activity of TaylorMade occurred in February 2012,

at the PGA Tours Northern Trust Open, when TaylorMade Tour staff pros wore hat with

single heart on the front, where TaylorMade logo should be. The heart represented the

“Driver Love” by TaylorMade marketing campaign. The television viewers were invited to

text a specified number whenever they saw a “heart hat” during the tournament telecasts for a

chance to win an R11S driver.

Adidas Group expects to build at least 500 Adidas and Reebok stores over 5 year

period, and by 2015 its ecommerce business will increase to €500 million. From the 2012

annual report, since 2010, the sales from ecommerce has been continuously rising; from €55

million in2010, €89 million in 2011, to €158 million in 2012.

Will AG Brand Value Increase Next Year 2014?90% of AG’s annual net sales are come from Adidas and Reebok brands. However,

the sales of Reebok brand have fallen sharply since 2012. Also to make the situation worse,

Reebok has been threatened by U.S. hockey players to wipe out the entire season. The only

hope that AG can have is 2014 FIFA World CupTM in Brazil. Since 1970, partnered with

FIFA, Adidas has noticed that after every World Cup season, its sales jumped higher and

maintained for 4 years until the next World Cup. In 2010, the net sales of Adidas Group are

recorded as €11,990 million. It was first year the net sales were over €11,000 million ever.

Because Spain won the cup, and most of Spanish players were wearing Adidas cleats, the

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sales of Adidas soccer cleats after the 2010 World Cup overtook the sales of Nike soccer

cleats. Therefore, the focus on Adidas in 2014 should not only be on how much awareness

Adidas gains but also how many more products Adidas will sell more than Nike.

Brand ExploratoryGender Ration of Respondents

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Male58%

Female42%

Gender

The survey was taken at 7 to 5 ration of male and female respondents.

The average age of 12 respondents is 23.4. Since the survey is about the athletic brands, the

range of respondents’ age is from 18 to 32 years old.

Brand Awareness

Nike Adidas Reebok Under Armor

Brand Awareness 5 4 1 2

Male 2 3 0 2

Female 3 1 1 0

0.5

1.5

2.5

3.5

4.5

5.5

When surveyors were given with a blank sheet of paper, they were asked to write a

sporting good brand that comes first in mind. Most of female respondents, 3 out of 5 female

respondents, wrote Nike. Then the rest were evenly divided into Adidas and Reebok. 3 male

respondents answered Adidas. 2 other respondents write Under Armor, and the rest answered

Nike.

Brand Association

Lee 21

Expensive

Comfortable

Innovative

Fashionable

0 2 4 6 8 10 12

3

11

2

8

1

7

2

4

2

4

0

4

Female Male Brand Association

For the brand association, the respondents could pick two among the given choices;

fashionable, innovative, comfortable, and expensive. When they first think of Adidas, 11

people out of 24 picked comfort part of the apparel and footwear. 8 people considered the

products as fashionable. Only 3 people think Adidas is expensive.

Influence for Purchase

8%

25%

25%17%

25%

Influence for purchase

AdvertisementBrand ImageFamily and FriendsPersonal preferenceOthers

50% of respondents’ choices of Adidas are affected by the images that already took

in their mind or their family and friends’ minds. Another 25% of respondents answered other.

They stated that the reason they choose Adidas is Lionel Messi. Surprisingly, only 8% of

respondents answered the advertisements lead them to purchase Adidas.

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RecommendationEven though Adidas, compared to Nike, has much longer history, the current market

position is behind Nike. One reason Adidas Group is behind Nike is that its subsidiaries are

not from the same parents. Nike owns Nike original, Jordan, Nike Golf, etc. all from its root.

However, Adidas Group purchased Reebok, Rockport, and Reebok-CCM Hockey in 2006.

TaylorMade-Adidas Golf joined Adidas Group in 2011. The sum of parts will never be

greater than whole. Adidas Group is recommended to tune its subsidiaries into one

masterpiece to fuel the chase after Nike.

Also as Nike did in past, AG needs to cooperate with other firms, such as Google and

Apple as Nike did, in order to expand its target customers. For example, if Adidas and

Reebok brands cooperate with Xbox and let the gamers gain points by just purchasing Adidas

and Reebok products, it will be a win-win strategy for both AG and gamers, who lack outdoor

exercises.

Lee 23

Work Cited

http://www.adidas-group.com/en/media/news-archive/press-releases/2013/

management-changes-western-europe-north-america/

http://leads-project.eu/partners/adidas

http://adidas-group.corporate-publications.com/2009/gb/en/structure-and-strategy/

research-and-development.html?start=1

http://adidas-group.corporate-publications.com/2011/gb/en/group-management-

report-our-group/research-and-development.html

http://www.adidas-group.com/en/group/history/

http://www.adidas-group.com/en/group/headquarters/

http://espnfc.com/news/story/_/id/1623296/fifa-adidas-extend-world-cup-sponsor-

deal-2030?cc=5901

http://www.fifa.com/worldcup/organisation/match-ball.html

http://www.adidas-group.com/media/filer_public/2013/07/31/gb_2012_en.pdf

http://www.adidas-group.com/media/filer_public/2013/07/31/gb_2012_en.pdf

http://www.adidasgroup.com/media/filer_public/2013/07/30/

adidasgroup_distributioncenter_en.pdf

http://www.statista.com/topics/961/sporting-goods/

http://www.mcafee.cc/Classes/BEM106/Papers/2009/Adidas.pdf

http://www.forbes.com/sites/greatspeculations/2013/04/11/nike-shares-can-find-

some-zip-on-emerging-market-sales/

http://www.reuters.com/article/2012/11/08/us-adidas-results-

idUSBRE8A709V20121108

http://www.prweb.com/releases/2013/11/prweb11284300.htm

http://www.independent.co.uk/sport/football/international/from-the-tango-to-the-

brazuca-via-the-jabulani-a-brief-history-of-the-world-cup-ball-8986057.html

http://www.sec.gov/Archives/edgar/data/1065837/000119312513312361/

d575844d10ka.htm

http://file.irasia.com/listco/hk/lining/annual/2012/ar2012.pdf

http://www.kswiss.com/media/pdf/10K1212.pdf

http://public.thecorporatelibrary.net/Annual/ar_2012_167156.pdf

http://www.puma-annual-report.com/GB/2012/IndexGBEN.jsp?

Lee 24

chapter=08&slide=0#

http://www.asics.com/global/img/investors/ar2012.pdf

http://investors.nikeinc.com/Theme/Nike/files/doc_financials/AnnualReports/2012/

index.html#select_financials

http://www.adidas-group.com/media/filer_public/2013/11/07/q3_2013_en.pdf

http://www.trefis.com/stock/nke/articles/205350/key-trends-impacting-nikes-

performance-in-2013/2013-09-11

http://www.adidas-group.com/media/filer_public/2013/07/31/gb_2011_en_1.pdf

http://www.marketingweek.co.uk/news/adidas-to-maximise-real-time-marketing-

opportunities/4006566.article

http://management.fortune.cnn.com/2012/02/13/nike-digital-marketing/

http://partnershipactivation.com/headlines/2011/7/17/adidas-drives-store-traffic-with-

shoe-box-marketing-stunt.html

http://news.instyle.com/2013/07/19/editor-tested-adidas-springblades/

http://thepeninsulaqatar.com/life-style/looks-a-more/187818/adidas-adizero-

promises-less-weight-and-more-speed

https://www.facebook.com/NikePromotion

https://www.facebook.com/AdidasCoupon

http://www.adidas-group.com/media/filer_public/2013/07/31/gb_2010_en.pdf