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Adidas: At the Forefront of an Industry

How has Adidas altered its brand, relative to its business environment, within the last 10 years,

to attract new customers?

Extended Essay in Business

May 2021

Word Count: 3748

Table of Contents
1

How has Adidas altered its brand, relative to its business environment, within the last 10 years, to attract new

customers?

Introduction 2

Methodology 3

External Factors 4

Adapting to Changes in Environment 6

Social Factors Associated with Adidas Branding 7

Adidas Adapting to Social Factors 9

Marketing Mix 10

Corporate Social Responsibility 15

Conclusion 16

Bibliography 18

➢ Introduction
2

How has Adidas altered its brand, relative to its business environment, within the last 10 years, to attract new

customers?

In the 21st century, branding and marketing has become more imperative than ever, when

examining how major sports brands advertise their products. As the range of consumers

increases exponentially, a company's ability to cater to those individuals’ needs and wants, whilst

also producing products that compete in an ever growing market. Numerous advances in

marketing and branding strategy performed by Adidas in the last decade embody that claim.

Through factors such as, but not limited to, work with the Parley organization, the ‘Three Stripe

Life’ movement, and the creation of Adidas Originals,1 Adidas has shifted their marketing

strategy immensely, allowing for their products to appeal to people of numerous ages and

cultures. These marketing changes, paired with the awareness of cultural, and social trends, has

allowed Adidas to thrive in the 21st century, becoming the face-brand in many domains of the

sports world. In the early 2000’s, the sports marketing ‘mindset’ began to change from its

revenue based past2. What had been; how to make the best product for one market, became how

to enhance the sport in which the product was designed for. Numerous advances and changes in

Adidas’s business environment held the need for changes in branding strategy. The objective was

to no longer market a product to achieve monetary milestones; it was to create products that

could enhance the way in which the sport was played, while addressing real world problems in

tandem. Through this, we are able to analyze how Adidas has altered its brand, relative to its

business environment, within the last 10 years, to attract new customers.

➢ Methodology

1 Adidas Annual Report, 2016, accessed August 7, 2020, https://www.adidas-


group.com/media/filer_public/a3/fb/a3fb7068-c556-4a24-8eea-cc00951a1061/2016_eng_gb.pdf.
2 Planning Effective Marketing Strategies for a Target Audeince - Adidas.
https://search.proquest.com/docview/1669465598?accountid=201365.
3

How has Adidas altered its brand, relative to its business environment, within the last 10 years, to attract new

customers?

To investigate how Adidas has created their modern branding strategy, we must examine

the changes that have occurred in Adidas’ business environment, as well as a marketing mix.

When discussing external factors that have contributed to branding change, we look closer at

opportunities, and how Adidas has marketed their products to limit competition, create

overarching needs for buying their products, and increasing media coverage on Adidas products.

In terms of social factor analysis, we must investigate the social aspect of Adidas’s business

environment, as is constituted in our research. Adidas’ social branding strategy not only appeals

to a larger variety of customers, but also involves key arguments in global societies such as

environmental protection, appeal to ethics, and ease of life. Finally, to analyze Adidas using

marketing mix, we must look into the place of marketing, the product itself, the audience to

which the product is being marketed to, as well as the price of the goods themselves. In order to

gain said information, we will be analyzing a combination of corporate reports, advertisements,

reactions to social trends, as well as changing demographics within Adidas’ business

environment. Through these methods of analysis, we will be able to derive how Adidas has

altered its branding within the last 10 years to market its products to attract new customers.

➢ External factors

The flourishing of Adidas and other sports brands in the 21st century is due to many

social, economic, and cultural events that have catalyzed its massive growth. This is in large part

due to the opportunities to sell and create new products, as a result of the influx of buyers and

their changing interests. In the 21st century, the greater fitness community and population has
4

How has Adidas altered its brand, relative to its business environment, within the last 10 years, to attract new

customers?

increased exponentially, and the amount of people becoming customers of sports apparel brands,

has increased in tandem with this trend. This trend shows no sign of slowing, as Adidas’s net

revenue has increased over $5 billion dollars since 2016.3 This continued growth in the athletic

apparel industry is thanks to the diversity of products created. Male and female customers are

now able to purchase apparel that is not only casual and stylish, but trusted for its credibility in

production. This same opportunity is unified through all sports brands, leaving it to the

marketing and appeal of Adidas that allows it to outpace its competitors. Another important

reason to note is the increase of sports players around the world. The age deviation of these

players has now increased, creating opportunity and need for Athletic Apparel brands to mass

produce products of all sizes, for all age groups. Athletic organizations like the NBA, and teams

around the United States of all competitive levels, rely on apparel companies for the production

of their uniforms and apparel. To this point, Adidas was the primary manufacturer of all 32 NBA

teams uniforms and apparel from 2006 until 2017, when this title was given to Nike. Ironically,

during their first season as the NBA’s primary uniform, numerous players had their jerseys

ripped or torn in games. Nike stated, “The quality and performance of all our products are of

utmost importance, We are obviously very concerned to see any game day jersey tear and are

working with the NBA and teams to avoid this happening in the future.4” Since the plethora of

mishaps in the 2017 season, jersey tears and malfunctions have since decreased greatly. Another

way in which athletic apparel brands find new opportunities for apparel production, occurs with

3 Department, Published by Statista Research, and Apr 2. “The Adidas Group's Net Sales Worldwide 2000-2019.”
Statista, 2 Apr. 2020,
4 ABC News, ABC News Network
5

How has Adidas altered its brand, relative to its business environment, within the last 10 years, to attract new

customers?

scientific advancement, pertaining to things such as changes in use of material, increased product

integrity, and cheaper production of the same materials that would have once been too expensive

to produce in bulk. In terms of consumer demand, every customer wants to purchase the most

scientifically safe, and trusted product. In addition, especially in recent years, customers tend to

lean towards the product which is most ecologically, and environmentally safe. These products

are represented well through Adidas’s collaboration with Parley. Adidas has begun using

smarter, more ecologically safe materials within the production of their products, which has

created significant appeal towards their brand name, as it betters their reputation as a company.

Some examples of these products include the aforementioned line of Parley apparel, made from

recycled ocean plastics, or their newer 4D shoe line, in which the soles, and other portions of the

shoe are 3D printed before manufacturing. Through the utilisation of smarter materials, Adidas

has increased their products integrity, as well as made production cheaper.

➢ Adapting to Changes in Environment

In today's day and age, digital marketing and sales are more influential than ever, as

numerous quantities of data and information can be fed to customers more easily than ever

before. Arguably, Adidas is the face of digital marketing within the sports apparel domain,

relying on most of its branding to come digitally; marketing through TV commercials, online

campaigns and celebrity endorsements. During a presentation in 2019, Global Media Director

Simon Peel stated, "Adidas is by no means streets ahead when it comes to marketing

effectiveness. That's not a humble brag, because we're not – but over the past few years we have
6

How has Adidas altered its brand, relative to its business environment, within the last 10 years, to attract new

customers?

started to introduce an element of marketing effectiveness.”5 This statement exemplifies their

efforts to integrate digital marketing as their primary form of advertising in recent years. Peel

states “As an example, about four years ago we didn't have any kind of econometric modelling –

our attribution modelling was based on last click; we didn't do brand tracking. So all of the

basics that exist to show you how much you should be spending on marketing didn't exist."6 By

doing so, Peel says Adidas aims to attract customers by improving the image of the brand

through advertising the brand, rather than the products themselves. This form of “Brand-based

marketing” is immensely present in Adidas’ current marketing strategy, as seen through their

production of “Adidas Originals” and the “Unleash Creativity” campaign. As mentioned by Peel,

Adidas had made the transition from marketing their products, to marketing the brand, through

the use of digitalisation and electronic marketing. This has resulted in immense improvements to

their sales across all aspects of the brand, as the e-commerce approach brought light to all

products. Until their switch in major marketing strategy (of which has no specific date), only

23% of Adidas’ marketing budget was dedicated to brand, and emotionally driven advertising.7

When regarding the effects of the latter switch, Peel accounts, “One of the other things we saw

from the econometric modelling was that our individual business units were not driving their

own business unit sales, so although we believed that football [advertising] was going to drive

football sales, actually it wasn't; football was driving running sales, running was driving

5 Simon Peel, interview, Campaign, last modified October 16, 2019, https://www.campaignlive.co.uk/article/adidas-
overlooked-traditional-medias-ability-drive-ecommerce-sales/1662365.
6 Peel, Campaign
7 Peel, Campaign
7

How has Adidas altered its brand, relative to its business environment, within the last 10 years, to attract new

customers?

Originals, Originals was driving training."8 This carryover of consumership as a result of

Adidas’s branding was a primary cause of change in branding strategy.

➢ Social Factors Associated with Adidas Branding

In recent years, Adidas has shown large transitions into incorporating social and ethical

issues and trends into their marketing, in order to appeal to a larger pool of customers. In terms

of the social aspect in which Adidas has altered their marketing processes, they have increased

the presence of advertising intended for more health-conscious consumers. This comes as a result

of Adidas wanting to better their image as a brand, and promote positive consumption in the

athletic apparel industry. As aforementioned, consumers are more health conscious than ever,

and a primary goal in Adidas’ 2012 mission statement was to become the most talked about

sports apparel brand9, causing an increase in Adidas’s want to cater to the individual needs of its

consumers. This resulted in a positive effect in demand for Adidas products, specifically those

that had key connections in their advertising to being, ‘Health-conscious products’, an example

of this being their product collaboration with Disney Consumer Products10. Adidas has also

gained incredible traction through their social media campaigns, many of which will be

discussed later within this paper. One social media campaign to highlight is the “Unleash

Creativity” campaign, which highlighted the cultural differences between differentiating global

citizens through celebrity endorsement, and how unleashing creativity can lead to personal

breakthrough. This campaign, although short lived, brought anew the use of international,

8 Peel, Campaign
9 Umar Farooq, "Adidas PESTLE Analysis," Marketing Tutor (blog), entry posted January 31, 2019,
https://www.marketingtutor.net/adidas-pestle-analysis/.
10 Farooq, "Adidas PESTLE Analysis,"
8

How has Adidas altered its brand, relative to its business environment, within the last 10 years, to attract new

customers?

cultural advertising into sports apparel marketing. This campaign was one of the originals of its

kind, to highlight different races or cultures, and the advantages or disadvantages that someone

of that culture may have faced in order to play the sport, and how things like creativity and

courage allows for strength. This is seen in a plethora of other marketing campaigns by other

sports apparel brands such as Sports England’s, “This Girl Can”, Nike’s “Dream Further”, and

“Courageous”, to name but a few sports marketing campaigns that fall into this category. The

strategy of below the line marketing is seen to be quite effective, as it connotes a sense of

inclusiveness to any consumer, thus increasing a particular brand's pool of customers.

➢ Adidas Adapting to Social Factors

One key point in Adidas’s 2012 mission statement, was to, “Engage and excite the 14-19

year old audience in order to drive brand preference in the UK”11, prior to the 2012 London

Olympic Games. The objective of this point was to grasp the attention of young consumers who

were possibly fans of the games, and become the front running brand for such a large scale

event. This objective was accomplished, to say the least, as Adidas was ranked #1 by London

2012 Nielsen audience tracking for categories ‘inspiring’ and ‘empowering’12. Its “Take the

Stage” content, found on Youtube, grossed over 8 million views in total, 2.5 million of which

came from viewers in a 14-24 year old age band. In the following years, Adidas was questioned

as to whether their products catered to either athletes, or consumers, as some still felt that the

products available were not intended for purchase by any customer. These queries would be

11 Adidas Group : Consumer Products - Company Profile, SWOT & Financial Report. London: GlobalData plc,
2014. https://search.proquest.com/docview/1553181859?accountid=201365.
12 Adidas Group, 20
9

How has Adidas altered its brand, relative to its business environment, within the last 10 years, to attract new

customers?

challenged in the years to come, through numerous campaigns that highlighted the inclusiveness

of Adidas as a brand.

Adidas Originals massively expanded their advertising efforts with the “Three Stripe

Life” movement combining appealing slogans with celebrity endorsement, in order to attract a

new set of customers. The “Three Stripe Life”, slogan and movement, created by Adidas, was

representative of the culture of Adidas itself, specifically pertaining to the domain of American

Football. Originating in early 2017, “Three Stripe Life” was used as a campaign to illustrate the

culture and life of Adidas, advertising schools and teams representing nothing but Adidas gear.

Its objective, to exemplify the culture of the, “Three stripes logo recognised in markets across the

world.”13 In the 2018-2019, this advertising campaign moved to predominantly American

football, as an entire line of both American football cleats, gloves, and other accessories were

released for public purchasing, all embroidered with Three Stripe Life. The carry over of

Adidas’s influence in the world of American football continued, with the boom of 7v7 Football

in America. ‘America's favorite sport’ was no longer limited to 5 months out of the year, as the

7v7 season for high school football players lasted throughout the entire offseason. Adidas’

influence bled through the birth of this new world of football, through sponsorships of major 7v7

organizations like Pylon 7v7. In addition, the national championship for 7v7 teams, was hosted,

and completely run by Adidas US. Through the influence of Adidas’ marketing, and influential

people such as Ryan Lacey, Adidas found an entirely new way to create and market new

products, through the boom of 7v7 football in America.

13 Planning Effective Marketing Strategies for a Target Audeince - Adidas. London:


10

How has Adidas altered its brand, relative to its business environment, within the last 10 years, to attract new

customers?

➢ Marketing Mix

When analyzing how any organization brands their products, it is imperative to look

towards their marketing mix, specifically the four P’s: product, pricing, place, promotion. As

pertaining to Adidas’s marketing mix, Adidas sought to find the balance between all 4, in order

to meet their customers' needs. Adidas aimed to sell the right products, at the right price, in the

right place, all while using the most efficient modes of promotion14. In terms of marketing for the

right product, Adidas has always focused its branding on representing a movement, and a culture

within its consumer-base. A very visible example of this is the London games of 2012. Adidas

being the main sponsor of the games, allowed Adidas to explore new ways to innovate in order

to provide the best quality of athletic apparel for Olympic athletes. In addition, Adidas served as

more than a brand for athletic gear as a result. In 2012, the Olympics hosted over 10,000 athletes

from over 200 nations across the globe, giving Adidas infinite opportunity to expand their

consumership, as prideful fans of the Olympics could purchase Olympic attire, all branded and

produced by Adidas. In tandem with Adidas being the sportswear sponsor of the 2012 Olympic

Games, Adidas sought to find major improvements in technology in order to provide for athletes

of all sports represented in the games.

Another major discussion when analyzing the marketing mix of an organization, is the

price of their goods, and how it is modulated based on the demographics of their target market.

Through a combination of Below-the-Line marketing, competition with other brands, and

14 Pratap, Abhijeet. “Marketing and Branding Strategies of Adidas.” Notesmatic, 24 Aug. 2019,
notesmatic.com/marketing-branding-strategies-adidas/.
11

How has Adidas altered its brand, relative to its business environment, within the last 10 years, to attract new

customers?

specific brand equity, Adidas has been able to achieve price leadership, allowing for greater

affordability than its competitors. The use of price skimming can be incredibly lucrative for

brands, especially during holiday seasons, or times of usual sales. High-low allows companies to

sell their products at a higher price than their competitors, yet massively discount their products

on other occasions. This allows for a greater appeal of their products during times of discount,

without the risk of losing revenue15. When comparing the effectiveness of this strategy in

competition to other athletic apparel brands such as Nike or Reebok, Adidas is extremely

attractive to consumers during times of mass purchasing such as the holiday season, eg. Black

Friday. In 2014, Adidas had the largest number of retail stores worldwide with 2913 stores,

outlets, and concession type stands across the globe16.

Adidas hosts numerous group stakeholders through their partnership approach, their

objective described as, “Engaging openly with stakeholders and establishing leadership

approaches for transparency and disclosure is a fundamental part of our approach to

sustainability.”17 An example being Adidas’s partnership with the German Partnership for

sustainable textiles, their key objective; to promote measurable social, ecological and economic

improvements along the textile and apparel supply chain18. Through the partnership with

effective stakeholders, and promotion of positive, ecological and economic goods, Adidas is able

to appeal to a far greater consumer market. In the early 2010’s, Adidas took strides to improve
15Abhijeet, “Marketing and Branding Strategies of Adidas.”
16 O'Connell, Liam. “Number of Adidas Stores Worldwide 2008-2018.” Statista, 2 Apr. 2020,
www.statista.com/statistics/268442/number-of-retail-stores-of-the-adidas-group-worldwide-by-store-type/.
17 “Partnership Approach.” Adidas, www.adidas-group.com/en/sustainability/managing-sustainability/partnership-
approach/.
18 Adidas Annual Report. 2016, www.adidas-group.com/media/filer_public/a3/fb/
a3fb7068-c556-4a24-8eea-cc00951a1061/2016_eng_gb.pdf. Accessed 7 Aug. 2020.
12

How has Adidas altered its brand, relative to its business environment, within the last 10 years, to attract new

customers?

the life of workers and employees, specifically within their manufacturing facilities. Through a

partnership with International Labor Organization (ILO)19, Adidas was able to establish far more

efficient working environments in manufacturing facilities, thus increasing productivity. Both the

Adidas design group and creative team, have taken pride in enticing consumers with new, trendy

and innovative sportswear through new designs and promotional campaigns. Ryan Lacey,

Grassroots sports marketing lead, has been incredibly influential within the promotion of Adidas

to young football players around America. As aforementioned, his promotional choices and

Adidas American football prowess has led it to be a leading brand in the sport, especially within

the 7v7 domain. Additionally, campaigns such as, “Adrenaline”, and “Impossible is Nothing”,

have given consumers an opportunity to buy vintage style Adidas products, refined with the new

and innovative technology used within other Adidas products.

Through endorsements from major celebrities such as Pharell Williams, with Human

Race, and Kanye West, with YEEZY, Adidas has not only been able to appeal to athletes, but to

Streetwear fanatics as well. In competition with major brands such as Supreme and Palace,

competing in the domain of Streetwear is a daunting task for any brand, regardless of size. Both

examples mentioned before, YEEZY and Human Race, have been able to establish themselves as

lucrative products in the streetwear world, especially YEEZY. In 2019, it was projected that

YEEZY grossed over 1.3 Billion Dollars in sales20, not including the resale market which tends

19 Adidas Annual Report, 81


20 Jones, Riley. “Kanye West's Yeezy Sneakers Did $1.3 Billion Last Year.” Complex, Complex, 24 Apr. 2020,
www.complex.com/sneakers/2020/04/kanye-west-yeezy-sneakers-did-1-3-billion-last-year/.
13

How has Adidas altered its brand, relative to its business environment, within the last 10 years, to attract new

customers?

to sell the same products at prices more than 100% greater than their original retail cost. As a

result, Adidas established itself in another pool of consumers, equally as populated and lucrative.

A key point when analyzing the marketing mix of Adidas, is to look towards where

Adidas sells its products, and why the place in which a product is sold has an impact on the

marketing of the product. Adidas boasts many different ways of purchasing goods, whether that

be through retailers, showroom style sales, online sales, or distribution channels. McKinsey

Global Institute’s predicts that by 2025, consumption in emerging cities will grow to 10 trillion

dollars annually21. Adidas focuses greatly on this prediction, as their Top City Strategy, aims to

centralize a large sum of their consumership into six primary large cities: Los Angeles, New

York, London, Paris, Shanghai and Tokyo22. By centralizing their market, Adidas hopes to more

than double their annual revenue. In addition to this, Adidas looks to distribute its products to

many retailers, who do not necessarily have an Adidas title. Stores like Foot Locker, and skate

shops around the world all house Adidas products, yet are not directly affiliated with the brand

itself. Through this action, Adidas expands its distribution channel, allowing for more purchase

opportunities within different communities. As Adidas continues to expand their distribution

channel and means of selling products, new technology will develop, allowing for new methods

of selling products to willing customers around the globe. Of the 23.64 billion euros amassed in

revenue by Adidas in 2019, the sales were distributed through stores as follows: 53% concept

stores (Footlocker, Finish Line etc.), 42% factory outlets, and 5% concession corners/other.

21 Schild, Guido. “Adidas Brand Distribution Strategy - Global Brand Best Practice in Action.” Brand Growth
Inspiration, 10 Dec. 2018, www.brand-experts.com/brand-best-practice/brand-distribution-strategy.
22 Schild, Adidas’ State of Top City Presence
14

How has Adidas altered its brand, relative to its business environment, within the last 10 years, to attract new

customers?

➢ Corporate Social Responsibility

In addition to reasons previously mentioned, Adidas has seen a multitude of external

events that have contributed to its expansion as a brand. Through philanthropic campaigns and

partnerships, as well as self-expression for consumers, Adidas has flourished as a leading

fashion, sportswear, and apparel company within the last 5 years. In 2016, Adidas developed a

plan on how they would create new products, combining both innovation and technology.

Entitled the “5 Pillars”, Adidas aimed to expand, “Brand Desire” by combining Athlete

Innovation, Manufacturing Innovation, Sustainability Innovation, Digital and Experience

Innovation, and Female Athletes Innovation23. A large component of these objectives, pertaining

to sustainability innovation, is Adidas’s partnership with Parley for the Oceans, an organization

with the initiative to conserve ocean wildlife, as well as minimize the pollution of our seas. In

2016 Adidas aimed to produce over one million shoes made of Parley ocean plastic. In

collaboration with Adidas, Parley worked globally, providing kits for soccer clubs such as Real

Madrid, and creating a line of sneakers, and American Football cleats, that were available for

sale globally.

Through collaboration with organizations like Parley, apparel brands are able to create a

narrative for their products that tie to real world problems, allowing consumers to become a part

of something larger than themselves by purchasing goods. By making consumers aware of how

they are positively impacting a major world problem, customers are driven to continue to make

purchases, as long as the quality of product is upheld. The philanthropic image of a company like

23 Adidas Annual Report. 2016


15

How has Adidas altered its brand, relative to its business environment, within the last 10 years, to attract new

customers?

Adidas creates both product opportunities and attraction for customers. Adidas has allowed for

the choice as the consumer, an idea not as common with leading competitors. Adidas preaches

power to the creators, encouraging consumers to be creative within what they do with their sport,

their fashion, and their money. By giving the chance for individuality, as well as creating a

diverse consumer pool, Adidas has become a leading athletic apparel company.

➢ Conclusion

In an ever changing economy and world, the actions taken by brands to uphold their

image, and promote good quality products, must be monitored closely. Although struck with

environmental and health criticisms in the early 21st century, the strides taken by Adidas in the

last decade have more than eradicated the controversy Adidas previously faced. Any brand must

face controversy in order to correct themselves and expand to a greater public; a goal defined in

Adidas’s yearly reports. I predict that Adidas will continue to adjust their branding strategy in

tandem with changes that occur within their business environment. Predictions as to what this

environment will look like in the decades to come are impossible to make accurately, yet we may

predict that environmental and technological changes will continue to occur as they have in the

last decade.

To conclude, Adidas has been able to increase consumership (shown by net sales) by

44% within the last decade through their adjustments to their business environment, taking

advantage of opportunity, and optimizing their marketing mix. Through these mentioned, paired

with external social events that have occured, Adidas has been able to brand their products to

attract a multitude of new consumers.


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How has Adidas altered its brand, relative to its business environment, within the last 10 years, to attract new

customers?

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How has Adidas altered its brand, relative to its business environment, within the last 10 years, to attract new

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adidas-overlooked-traditional-medias-ability-drive-ecommerce-sales/1662365

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notesmatic.com/marketing-branding-strategies-adidas/.

Schild, Guido. “Adidas Brand Distribution Strategy - Global Brand Best Practice in Action.” Brand Growth
Inspiration, 10 Dec. 2018, www.brand-experts.com/brand-best-practice/brand-distribution-strategy/.

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