INDUSTRY OVERVIEW

The global fashion apparel industry is one of the most important sectors of the
economy in terms of investment, revenue, trade and employment generation all
over the world. Apparel industry has short product life cycles, tremendous
product variety, volatile and unpredictable demand, long and inflexible supply
processes. Some trends that are prevalent now are:

The sports apparel market accounts for 15% of the overall global clothing market.

Consumers eagerly purchase apparel, but they seek value, investing in brands that
offered style with durability plus function. Less concerned about projecting an
image with logos, consumers focused instead on how brands could make them
feel more confident and discerning.

The fast growing markets are the use of ecommerce and social media. As
ecommerce is driving an exponential expansion of choice, brands need to work
harder at cultivating loyalty. A good brand experience could make the difference.
Technology is enabling brands to tailor their communications for diverse
audiences and geographic locations. Technology and apparel continue to
converge, and brands meet consumer needs for clothes that suited their healthy
and active lives. Google has announced an operating system called Android Wear
to drive innovation in wearable.
Adidas competes in the Sports Apparel/Accessories category of the Apparel
Industry. The company strategy as explained by the Group CEO Herbert Hainer is
to inculcate the fast trendier adaptability from the changing market dynamics and
to focus on innovation. Agility will be the key competitive advantage for Adidas
Group in the coming years. Adidas’s closest competitor or direct competition is
with NIKE, the current market leader in this category.
BRAND ARCHITECTURE
“HOUSE OF BRANDS” Brand Architecture

Adidas
Group

Taylor
Adidas Reebok
Made
 Master Brand Adidas

Adidas Sports Adidas Adidas Sports

Sub-brands Perfomance Originals Style

ADIDAS Sports Performance: The Adidas Sports Performance range consists of sport
merchandise and equipment designed for athletes and sports enthusiasts.

ADIDAS Originals and Sports Style: Adidas Originals and Sports Style ranges mainly cater to
individuals who are trendy, fashion savvy and have adapted sportswear as part of their fashion
lifestyle.

BRAND VISION
“Our passion for sports makes the world a better place”

BRAND CONTRACT
Adidas will be brilliant: Provide our consumers with premium, innovative and
functional products that boost their performance and give them the winning
edge.

Adidas will be different and creative: Focus on creative designs and

technologically advanced products

Adidas will be passionate & inspirational: Craft a high emotional connection

between the brand and consumer. With Adidas, impossible is nothing.
Adidas will be committed and honest: Deliver consistently on quality products
and excellence in execution so to further strengthen brand reputation and
desirability.

Adidas will be sustainable and responsible: Products that are adherent to social
and environmental obligations.

Adidas will be consumer-focused: Keep up with the ever evolving consumer

trends, anticipate and deliver new sports-fashion styles and designs. (Adidas
Originals and Adidas Sports Styles)

BRAND POSITIONING
Adidas has a very distinguished history and a strong connection with sporting
world. Adidas has positioned itself as sporty brand by associating itself with major
sports events, famous sports celebrities and enthusiastic sports loving people.
One major strategy to achieve this is the brand’s broad and unique sports product
portfolio, with expertise spanning from footwear, apparel and equipment for
professional athletes to premium fashion. It allows Adidas to address multiple
consumer needs, exploit different market opportunities. Adidas commitment to
product innovation with clearly defined benefits and its rich heritage
differentiates the brand from competitors and provides a solid platform for future
growth.
 Adidas Sports Performance: Play to Win

Adidas Originals: Celebrate Originality

Adidas Sports Styles: Style your Life

SEGMENTATION AND TARGET MARKET

GEOGRAPHIC

Region Western Europe, North America,

Greater China, Russia/CIS, Latin America,
Japan, Middle East, Africa and other
Asian Markets (MEAA)
Density Urban, semi-urban
DEMOGRAPHIC

Age 14-29 years old

Gender Male and Female
 Income medium to high income
Occupation Athletes, coaches, students, working
individual.
Social class SEC A and B

PSYCHOGRAPHIC

 sports enthusiasm,
 Sports lifestyle
 Sports apparel as a fashion
 searching for next fashion trend,
 Athlete or non-athlete looking
Lifestyle for best equipment,
 looking for cutting edge design,
 Multisport specialist and Sport
player such as football;
basketball; running; training.
o Receptive to innovation
o sports person
o Spirited
o Goals oriented
Personality o Ambitious
o Quality conscious
o Seek excitement
o Outdoorsy

Behavioral
Decision taker User of Adidas product
Occasions Gym regular, playing sports, going to
match e.g. football, basketball to
support teams,
Brand Freaks
Image Seekers
Benefits Quality
Reliability
image seeker
comfort

User status Regular user, potential user

 Usage rate Medium to heavy usage
High; due to aggressive marketing
Buyer Readiness: Awareness campaigns and high logo recognition of
three stripes
High; as consumers trust the brand in
Knowledge
terms of quality and durability
High; consumers already associate
themselves with sports personalities and
Liking
perceive this brand as high standard
brand.
Consumers of Adidas prefer the brand as
compare to its competitors because
Adidas has already differentiated itself
Preference in terms of quality and sportswear,
durability and value for money with
innovation as compare to Nike and other
competitors etc.
Persuasive advertisement and
campaigns, persuaded people to buy the
brand that they can compete in sports
Conviction
with confidence as “Impossible is
nothing”, by getting quality and
designed products.
Finally high conversion rate to purchase
Purchase
the product and easily available.

Target Customer
Adidas Sports Performance

The target market are Sports personality and people who have the passion for
sports and also play sports, both male and female, age between 14-29 years old,
require quality, reliability, durability and value for money with brand image and
design and belong to Sec A and B. Adidas' strongest consumer market is with the
20- to 29-year-old age group who are athletes or are passionate about sports. The
company is focused on targeting and strengthening its brand with the next
generation of athletes in the 14- to 19-year-old age group. The sports
performance categories are Football, Running, Basketball, Training, Outdoor,
American Football, Rugby, Tennis, Handball, Table Tennis, Volleyball, swimming,
boxing, cycling and wrestling.

Adidas Originals and Adidas Sports Style

The Adidas Originals and Adidas Sports Style sub-brand strives to take the brand’s
heritage and design leadership to capture further potential customers in the
sports lifestyle and fashion market and offer consumers products from street
fashion to high fashion, all uniquely inspired and linked to sport. Street wear and
lifestyle sports fashion represents a unique opportunity for sporting goods
companies. These consumers are looking for substance and craft and are inspired
by stories and looking for more options to express their individuality. Adidas
Originals and Sports Styles usually offer collections in Footwear, Apparel,
Accessories, Denim.

FUNCTIONAL AND EMOTIONAL MUSCLES

Functional muscles
 Provide best quality goods to sportsman.
 Innovation.
 Reliability Protect athlete from injury.
 Durable product.
 Enhance performance.
 Authenticity.
 Technologically advanced.
 Consumer-safety products.
  Body care.

Emotional muscles
 Fun and excitement.
 Street fashion and high fashion.
 Revive classics heritage.
 People can associate themselves with sports person.
 Aspirational product.
 The name itself is derived from the founder (Adolf Dassler), who was a
passionate sportsperson.
 A sense of confidence “impossible Is nothing”
 History of Adidas is associated with success in many world cups.
 Sense of self-respect associated with it.
 Brand credibility and brand superiority over other brands
 Thrill of victory, compete and accept the challenge confidently.
 Self-esteem is more considered than money.
 Design: consumers feel triumphant at getting high design to maintain a
standard and aesthetically pleased
 People will have a joyful running experience because of the perfect fit, and
peace of mind that their body is well-supported.

ADIDAS CBBE MODEL

RESONANCE
Brand loyalty, Deep
engagement, high
Community involvement.

Judgments Feelings
Youth culture evolution,
Democratic, Strong and
hip hop music,
 Analysis of Adidas based on CBBE

Identity of the brand

Salience:
Salience is what the customers think when the brand name is mentioned and how frequently do
they think about it. The consumers immediately associate the brand name Adidas with the
sportsmen and the sports events sponsored by it. As it has now increased its product line to
include accessories, personal care products and the like which increases the depth and breadth
of the brand. 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 has helped
them to create awareness with help from different types of media.
Meaning of the brand

Performance:
Adidas clearly associates it with sports specially football and the traits which makes the
consumers aware of the brand are the quality of the products it supplies, the feeling of being
‘cool’ and the durability of the products. Adidas has created the awareness of their product by
using the word comfort ability which makes the consumer think about the sustaining power and
comfort whenever he/she goes to buy a shoe.

Imagery:
From the very beginning, Adidas focuses on the image of being a product directly targeted to
people who love sports. Consumers not only prefer the quality of the products over others but
feel that they could actually perform better with these products. Moreover people have an
impression of it being a fashion trend and want to remain updated to maintain a long lasting
relationship with the brand. Adidas has always mainly focused on football kit and the equipment
associated with it and that is why it remains a major company in the supply of team kits for
international clubs and teams.

Response to the brand

Judgment
Due to the better quality and durability of the product, consumers perceive it to be a superior
and credible brand on which they can rely. The shoes are not only worn out of function now, they
have become a youth culture which has evolved the way consumers connect with Adidas. As a
fashion brand, Adidas owns music and it marked the beginning of the hip hop culture because of
which people are attached to it emotionally.

Feelings:
People attach the words fun and excitement for the brand Adidas which reveals their feeling
towards the brand. After reading and researching how people feel about the brand, it came to
the front that people are so passionate and excited for this product, to the extent that they feel
as if they have access to the most desired stuff because when they see that the stars and the
sportsmen whom they have been following are also wearing the same brand, people feel it is
very democratic and emotionally attach to it. The feeling of wanting to play and being strong is
what makes the brand Adidas.

Relationships

Resonance:
Resonance deals with the customer loyalty which is won by Adidas through customization of their
products according to the desires of the consumers and it actively engages the customers by
designing different campaigns. For example: For the World cup, Adidas created six episode, live
streaming series called The Dugout as well as real time reaction videos. The content of this
included everything from world famous footballer Q and A’s to post match recaps earning Adidas
the title of fastest growing brand of sports on YouTube. Actions like these make the customers
stay connected to the brand and emotionally attach to it.

SWOT
 Strengths Weakness
Touch point branding
Strong Legacy Premiun Priced Range
Diversified Portfolio Outsourced Manufacturing
Joint Ventures and Collaborations
Major Clubs Sponsor

SWOT

Opportunities Threats
Changing lifestyles Competition
Backward Integration Replicas
Expansion in product line Negative image through brand
Increased demand of premium Products ambassador
Main Stream Sports Lifestyle Government regulations

SWOT Analysis
Strengths:

1. Branding by creating touch points with the community: Celebrity endorsements and
sponsoring major sports organizations such as FIFA, UEFA, NBA and Olympics has
increased the awareness of Adidas in the market and also increased the highly targeted
customer base.
2. Strong Legacy: Adidas was started in 1949 and has come a long way to establish itself as
a strong youthful brand.
3. Diversified portfolio: The Company has a much diversified product portfolio ranging from
sports shoes to clothing and accessories with Adidas being the premium segment and
Reebok in the mid-range.
4. Joint ventures and Collaborations: Joint ventures with English fashion designer Stella
McCartney, Vulcabras SA , Generation Adidas and others have given Adidas strong brand
value and prominent in the market.
5. Apparel provider of international teams and clubs: Adidas is the apparel provider of NBA
(National Basketball Association), international football kits and uniforms.

Weakness:
6. Premium price range: High price range due to innovative technology & Production
methods have made the brand affordable to limited customers only, especially in
developing countries.
7. Outsourced manufacturing: Adidas has 93% of production outsourced to 3rd party
manufacturers (largely to Asia) to avail of low labor cost & easy availability of resources.
They are running a risk of over dependency on outsourcing especially in Asian markets.
Also, the overall quality of products perceived by the consumers of developed economies
is a major concern as far as brand is concerned.
Opportunities:
8. Changing Lifestyle: With the saturation of developed economies, changing taste &
preferences, education & changing lifestyle of developing economies, there is a steep rise
in the demand of premium goods & services.
9. Expansion in product line: Expanding its product line will open a new set of opportunities
while at the same time it can differentiate itself from the competitors by following this
strategy.
10. Backward integration: This will be smart strategy if followed by Adidas as it will help
Adidas to secure their patent rights & also integrate their R&D with the operational team
in order to work in open system.
11. Increasing demand of premium products: This tells us the future business opportunity
& expanding market size of developing economies.
12. Connections with sports: With the connections and collaboration of Adidas with
international teams and clubs, customers are getting more inclined towards the brands
and connect to it.

Threats:
13. Competition: Although Adidas is a global brand but it is facing fierce competition from
other brands like Nike which is No.1 brand and Adidas being in 2nd Position in this
premium segment. Besides this, there is regular competition from local players,
substitutes and market penetrators.
14. Supplier Dominancy: Due to majority of its production being outsourced; Suppliers have
more bargaining power then the company.
15. Government Regulations: With its 35% products manufactured in China & 93% of
production happening in Asia, Import regulations, duty& tariffs plays a critical role in the
pricing and success of the company.
16. Replicas: The brand is facing a threat of replica Adidas products available on the internet
which are priced much lower than Adidas.
17. Negative Image: The sponsored athletes like Kobe Bryant are reflecting negative image
of the brand through their illegal activities like sexual abuse.
Estimated Brand Equity
Market Value $17.1 Bn
Brand Value $6.8 Bn
Sales $19.5 Bn
Profits $650 Mn
Brand Revenue $14.9 Bn