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Advertising Strategy of AdidasA Comparative Study
Advertising Strategy of AdidasA Comparative Study
M. Atiqur Rahman
Patuakhali science and Technology University Bangladesh atik.bdpalo@yahoo.com www.pstu.ac.bd
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EXECUTIVE SUMMARY
Adidas Inc. is a marketer of sports apparel and athletic shoes. The German manufacturer, through its marketing strategy which rests on a favorable brand image, has evolved into a large multinational enterprise. In keeping with the brand image is its association with the distinctive logo and its advertising slogan, "Impossible is Nothing." In order to maintain and sustain this image, the company makes huge investments in advertising and brand promotion. At the critical time of global economic crisis, Adidas will react to the consumers pessimistic attitude and stressful emotion during this period. It may become a good chance for Adidas because it can take advantage of its previous advertising way of Impossible is Nothing campaign by sponsoring sports stars to express the corporate philosophy of grit, determination, passion and humor, giving people more courage and psychological comfort in face of economic crisis. But besides that, we also focus more about family function especially in Asian countries which emphasize a lot on family, which can provide caring emotional communication. Therefore, from both strong-willed hero worship and water-like fork environment, customers can easily link Adidas image with not only strength, but also warmth. The preferred media we choose are TV, specific magazines, outdoor and internet.
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1.1 INTRODUCTION
Adidas was formed by German sports apparel by the founder Adi Dassler during the 1920s. While Dassler was in his mothers wash room he decided to begin an athletic shoe. After he made the shoe he had help from his brother and twelve other people to produce around 50 handmade shoes per day. These athletic shoes were made for running and training. For over 80 years, Adidas has been part of the world of sports on every level, delivering stateof-the-art sports footwear, apparel and accessories. Today, Adidas is a global leader not only in the shoe industry, but also in the sporting goods industry. Shoes from the Adidas are available in virtually every country of the world. Oddball is proud to carry quality large size Adidas, (www.oddballshoe.com). Recently Adidas and the NBA joined forces and made The Brotherhood. The Brotherhood consists of Tracy McGRady of The Houston Rockets, Dwyane Wade of The Miami Heat, Tim Duncan of The San Antonio Spurs, Chauncey Billups of the Detroit Pistons and Gilbert Arenas of the Washington Wizards. When it came down to it Adidas and the NBA came up with the slogan called Basketball is a Brotherhood. The main focus of The Brotherhood was Adidas to sponsor the NBA. The way these six players were selected was by their athletic ability which is why they are also known as all stars. Then these six players decided to form a series that would help kids to discover their dream by playing with NBA Stars. A strong advertising and public Relation events makes adidas as a worldwide recognized brand and it would be more sustainable in the world market.
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SOWT Analysis:
A SWOT analysis comprise of strength, Weakness, Opportunity and Threats. This four trends are analyze below.
Largest International portfolio of sport ambassadors. Sponsors football teams with maximum fan following in India and USA. Highest brand image in India according to our survey.
WEAKNESSES
Rigid pricing structure. Our survey shows Nike behind Reebok & Adidas in market share in India. Has not do well in Indian subcontinent market.
OPPORTUNITIES
Has a great opportunity to expand international market. Increasing demand on the sportswear. Positive and increasing market trends can increase through the effective advertising. Adidas larger competitor Nike has a grater market share and having a big budget in marketing activity. The newly born several brands like CAT, GAP has increase their advertising budget in recent years. Amount of competitors increasing day by day. Term Paper (8th Semester) Page-6
THREATS
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Brand Loyalty
Brand equity can be defined as the brand assets linked to a brands name and symbol that add to a product or service. This asset can be created and analysed trough the four dimensions, brand awareness, perceived quality, brand associations, and brand loyalty. Brand awareness is the base to affect the consumer perception and even taste. People like the familiar and are prepared to ascribe all sorts of good attitudes to the items that are familiar to them. According to D. Aaker perceived quality is a special type of association, partly because it influences brand associations in many contexts and partly because it has been empirically shown to affect profitability as measured by ROI (Return On Investment) and stock return. Perceive quality, is basically how the customer perceive the brands quality status. Brand associations can be anything that connects the customer to the brand. It can include user imaginary, product attribute, use situations, organizational associations, brand associations, and symbols. Brand loyalty is at the hart of any brands value. The concept is to strengthen the size and intensity of each loyalty segment. Comparative analysis Nike centred their brand equity model on the platforms, the endorsement focus strategy, creating a dominant media presence, development of Flagship stores, NikeTown and subbranding. The Adidas strategies were based on, endorsement focus strategy, advertising, sponsorship programs focusing on major global events, sports associations, and teams, and sub-brands. To create brand awareness both companies have been using endorsement strategies in their brand-building programs. What differs is that Adidas focuses on sponsorship of teams and events e.g. national teams and big sport events like the Olympic Games and different World Championship events. This will help them to create awareness with help from different types of media. In contrast Nike has their focus on individuals like M. Jordan and T. Woods and their success stories. About the second strategy, advertising. Nikes advertising strategy was to create dominant presence in media. Nike created media presence in several trend setting United States cities. TV ads linking Nike to a city were used, but real drivers were huge oversized billboards and murals on buildings that blanketed cities with messages featuring key Nike-sponsored athletes, not products. Adidas took up the competition with Nike through raising their advertising budget to a level that made it possible to compete with Nike on the same
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The Nike customer associated the Nike brand with words like sports, attitudes and life style. Reasons for that is one can relate to or identify one self to Nikes marketing campaigns like Just do it and the companies front athletes like Michael Jordan and Tiger Woods. For Adidas one image study of consumers found the brand very trendy, modern and cool. The survey was made in late 1990s. All marketing actions that both companies are implementing will hopefully result in loyal customers. Adidas introduced a subbrand in 1990 to serve the high-end products for all categories of shoes and apparel. The Equipment subbrand would represent the best, whatever the product was. The low-end products, for the normal consumer still have a high technology and level of innovation because of their inheritance of the older innovations and technology from the Equipment line. This strategy made the Adidas brand take on a different meaning; it still meant participation, emotion and performance. This was a success strategy for Adidas so successful that Nike copied their idea and introduced their own line, the Alpha line, based on the same idea. Nike advanced from $1 billion dollars in 1986 to $ 9.9 billion in 2002, Adidas advanced from $1.7 billion in 1992 to $4.8 billion in 1998. According to sales figures for the both companies, it seems that both Nike and Adidas companies have succeeded to create a brand loyal customer who perceives the Nike and Adidas products as top quality.
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3.1.3 Seasonality:
Since The Brotherhood is made up of The NBA the seasonality will be during the fourth quarter. The reason for this is that the basketball season begins in October which is in the fourth quarter. The time of day in which The Brotherhood would be run on television is during the evening while the NBA is holding their regular games. When it comes to the Internet The Brotherhood is advertise daily and at all times.
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3.2.3 Infomercials
There are two types of infomercials, described as long form and short form. Long form infomercials have a time length of 30 minutes. Short form infomercials are 30 seconds to 2 minutes long. Infomercials are also known as direct response television (DRTV) commercials or direct response marketing. The main objective in an infomercial is to create an impulse purchase, so that the consumer sees the presentation and then immediately buys the product through the advertised toll-free telephone number or website. Infomercials describe, display, and often demonstrate products and their features, and commonly have testimonials from consumers and industry professionals. Adidas arrange several infomercials in the sports based program.
3.2.4 Celebrities
This type of advertising focuses upon using celebrity power, fame, money, popularity to gain recognition for their products and promote specific stores or products. Advertisers often advertise their products, for example, when celebrities share their favorite products or wear clothes by specific brands or designers. Celebrities are often involved in advertising campaigns such as television or print adverts to advertise specific or general products. Adidas use David Bekham as their brand ambassador and many more celebrities in every region to promote their product.
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CONCLUSION
Both Adidas and Nike have used the same theoretical systems to create their brand building programs. The companies are benchmarking each other, using the techniques from each others successes, when Nike launched their subbrand product Alpha line which was benchmarked on Adidas already launched subbrand of the Equipment product line for the elite of sports men. We can find many similarities like endorsements strategies and the companies advertising strategies. What differs in the endorsement strategies is that Adidas focuses in sponsoring teams and global events, while Nike have their center of attention on stars in specific sport like basketball and Michael Jordan or in golf and Tiger Woods. About advertising do both companies have about the same scale and scoop of advertising but they try to communicate different messages. These messages from Adidas is; the only one you compete with is your self whereas Nike communicate a provocative, aggressive winner attitude which can be related the American sports attitude You dont win silver, you lose gold. As we can understand the two companies are aiming at nearly the same targeted customer group but with a slightly differentiation of attitude. Adidas stand for a competing and winning over your self-attitude, and Nike stands for a winning over everyone attitude. We in the group think this differentiation is based on the differences in culture between the two companies and between Europe and USA. As an overall reflection one can see that Adidas had to overcome, that the both companies had the same target group. Adidas choose a brand-building strategy that built on the same theoretical criterias as Nike. But they created a differentiation in identity of the brand (see comparing analysis in the Kapferer Prism Model above) compared to Nike. Adidas had the same strategy within creating equity value to their brand. They challenged Nike in endorsement strategy, and in advertising, but with a slight difference in communicated message, by doing it trough the same medias. To differentiate them self and make totally own awareness activities, events like Adidas Streetball Challenge was created. Events like those communicated the Adidas brand around the world. According to the results and positions the brand-building programs have given both Adidas and Nike in the sport industry, one can say that branding have been a totally determining factor. On top of that they made it so good that they are used as models in higher education.
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