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Extended Essay
Extended Essay
How has Adidas altered its brand, relative to its business environment, within the last 10 years,
May 2021
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
Marketing Mix 10
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
➢ Methodology
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
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
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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
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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
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
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How has Adidas altered its brand, relative to its business environment, within the last 10 years, to attract new
customers?
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
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How has Adidas altered its brand, relative to its business environment, within the last 10 years, to attract new
customers?
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,"
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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
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
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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
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
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
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.
14 Pratap, Abhijeet. “Marketing and Branding Strategies of Adidas.” Notesmatic, 24 Aug. 2019,
notesmatic.com/marketing-branding-strategies-adidas/.
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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,
Adidas hosts numerous group stakeholders through their partnership approach, their
objective described as, “Engaging openly with stakeholders and establishing leadership
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.
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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
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
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
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
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How has Adidas altered its brand, relative to its business environment, within the last 10 years, to attract new
customers?
events that have contributed to its expansion as a brand. Through philanthropic campaigns and
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, 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
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
How has Adidas altered its brand, relative to its business environment, within the last 10 years, to attract new
customers?
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17
How has Adidas altered its brand, relative to its business environment, within the last 10 years, to attract new
customers?
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