Adidas is a multinational corporation that designs, manufactures and sells shoes, clothing and accessories. It is the largest sportswear manufacturer in Europe and the second largest in the world, after Nike. Around the world Adidas employs roughly 57,000 people and its headquarters is located in Herzogenaurach, Germany along with other key locations in Amsterdam, Portland, Boston, Shanghai, Hong Kong and Panama. Adidas focuses on two core brands namely Adidas and Reebok. – (Adidas, 2018)
Adidas was founded by Adolf Dassler who made shoes in his mother’s laundry room in Bavaria, Germany after his return from World War I. Thereafter, Adolf Dassler’s older brother, Rudolf joined the business and it was registered as Dassler Brothers Shoe Factory “Gebrüder Dassler Schuhfabrik” in 1924 and embarked on Adolf’s mission to provide athletes with the best possible equipment. As the company grew, it began making specialist shoes for different sports such as Football, Baseball, Cricket, Golf, Basketball etc. – (Adidas, 2018)
Adidas uses differentiated targeting strategy to target young adults, adults as well as children who have a passion for sports and fitness. Although it targets customers in the age group of 13-40 years, majority of its customers are of 15-30 years of age who hail from upper middle and the luxury class standard of living. User and benefit based positioning are the strategies Adidas use to create a distinctive image in the mind of the prospective consumer. By emphasizing the value of quality products from a trusted brand, Adidas is able to maintain its brand essence. – (Bhasin, H 2018)
Some of Adidas key competitors include: Nike Inc., Puma SE, Converse, Fila, New Balance etc.
Task One – Perceptions of marketing and the role of social media in the organization
The different perspectives on marketing from different business functions within the organisation
Marketing is vital to the success of any organization, it is the management process responsible for identifying, anticipating, and satisfying customer requirements profitably. It is about understanding the competitive marketplace. It enables one to tap in key trends, identify something that people or businesses want, developing a product or service that meets this need at the right price and promoting this product or service at the right place and time. – (The Chartered Institute of Marketing, 2018)
The perceptions of marketing from other business functions in Adidas.
Human Resources All Adidas brand centers’ employees wear standard uniforms that display the company’s name and contact information, thereby contributing to an additional source of marketing.
When there are vacancies in the organisation, the marketing department would assist in advertising the company so as to attract the best and most suitable candidates
Finance Adidas is constantly reviewing its products’ prices to ensure the stability and maintenance of its competitive edge and market position. The aims of this process is to ensure that the prices offered are desirable to customers and financially profitable for the company.
Production Adidas is constantly analyzing the market in which it operates in to identify trends, customer expectations and behaivours, competitors etc., so as to produce products that are in synchronization with the latest trends and will be demanded and wanted by consumers.
Sales Adidas has a social media platform on which it advertises and communicates to its current and prospective customers about its product line. It also uses this platform to announce discounts and special offers in order to maximize its sales revenue.
Customer Service Adidas has a speedy response system on its official website where customers can leave their inquiries and get responses shortly after. The brand centers also have forms that customers fill out to provide information on how Adidas can improve itself and better serve them.
Company Reputation For years, Adidas has worked closely with a number of organisations on both a local and global level to actively support and positively impact communities. Adidas’ programs are built on three complementary pillars – community involvement, employee engagement and corporate giving – determined by local cultural, economic and social factors. These approaches position Adidas in a positive spotlight, thereby acting as a contributing factor in the consumer’s purchasing decision.
The role of online channels, notably social media, as a successful digital marketing tools in your organisation
“Digital marketing encompasses all marketing efforts that use an electronic device or the internet. Business leverage digital channels such as search engines, social media, emails and their websites to connect with their current and prospective customers.” – (Alexander L 2018)
Social media refers to websites and applications that allows people to share contents such as photos and videos quickly, efficiently and in real time. “Users engage with social media via tablets, computers, smartphones etc.” – (Investopedia, 2018) Because of its extensive usage and popularity, businesses saw the opportunity for interacting, promoting and advertising their products and services to customers more effectively and successfully than conventional methods of marketing.
“Adidas is a global brand; a sporting superpower that sells quality products and deals with the biggest stars in sports.” – (Frontier, 2018) To successfully market and handle such a major customer base effectively, Adidas has an active and vibrant social media platform where it communicates frequently to its current and prospective consumers about its product line. Adidas has numerous social media accounts with Facebook, Twitter, YouTube, Pinterest, Instagram etc., all of which have millions of users each day. The company saw the opportunity and benefit of utilising this platform and so exploited it to its maximum potential. Social media provided Adidas with easy access to millions of customers that they advertise their product line to, thus leading to the creation of brand awareness. The platform became a medium through which Adidas could share inspiring content to encourage purchases and engage consumers. It also helped to display the reliability of Adidas as a brand ‘the whole family can trust’. – (Kelly, A 2018) The platform strengthened the relationship between Adidas and its customer base, by facilitating greater interaction and communication. The platform provided measurable statistical data on the demand and engagement of consumers on social media websites, which delivered meaningful information that could aid crucial decision making. “Social media was also used by Adidas to share its varying campaigns and community focused content that displayed the community oriented company value, which acted as contributing factor in the consumer’s purchasing decision.” – (Kelly, A 2018) Social media has not only facilitated a perfect medium of advertisement for Adidas, but it has helped to generate and maximize sales revenue greatly for the company. Undoubtedly, social media plays an important and successful part in the marketing of Adidas and its product line.
Word Count: 761
Task Two – Analysis of the marketing activities and macro environment of the organisation
Analyse the strengths and weaknesses of your chosen organisation’s marketing activities
Adidas’ marketing activities mission is to be the best sports company in the world. Marketing activities relates to the activities and events occurring at the launch and after the launch of a product or service, mainly conducted with aim of raising awareness for the commodity in order to generate maximum sales.
The strengths of Adidas marketing activities would include celebrity endorsements – Lionel Messi, David Beckham etc., of its product line and the sponsoring of major sports organisations such as FIFA, NBA, UEFA and Olympics which has proliferated the awareness of Adidas over the years. Secondly, the brand “Adidas” itself is a major contributory factor to the marketing activities’ success, as it carries a high level of popularity and brand recognition. – (Pratap, 2018) Thirdly, the tagline “Impossible is Nothing” is one of the biggest asset of the Adidas company, as it showcases the importance of fitness and the importance of striving hard for anything you desire. – (Bhasin, H 2018) The tagline communicates to and inspires customers to be the best versions of themselves. Adidas determination and perseverance to be the leading sports brand in the world is a perfect representation of this succinct, yet meaningful statement. Fourthly, the workforce of Adidas is consisted of confident, talented, and innovative employees, who work with passion and enthusiasm for sports and the brand. Fifthly, Adidas product line encompasses wide array of products ranging from shoes to clothing and accessories. This wide variety of quality products makes it more accommodating to appeal to its customer segmentation. Lastly, Adidas is a global brand and it has retail outlets in many metropolises around the world, which makes it easily accessible for its customers. – (MBA Tutorials, 2018)
The weaknesses of Adidas marketing activities would include the high competitive pressures faced from Nike, Puma and other similar brands. Because these brands also possess a notable degree of market share in the industry, it makes customer retention and loyalty challenging for Adidas. – (Pratap, 2008) Secondly, due to the accumulated concentration on marketing, the company’s marketing and operating expenses have increased as result. Lastly, Adidas is sports company that charges premium prices for its product line, therefore its marketing efforts only appeal to a limited sector/segment. – (MBA Tutorials, 2018)
Analyse the organisation’s macro environment. Comment on the impact of the external environment on the organisation’s marketing activities.
Adidas is a major sports company that produces high quality products for a large customer base. Its global operation has inevitably expose it to several factors that can impact its performance. The PESTLE Analysis is used to examine these factors. It is a framework used to examine the impact of external factors on an organisation’s performance. The acronym stands for political, economic, social, technological, legal and environmental factors.
Political Factors – Adidas place a huge emphasis on political stability in the countries it operates in. Risks such as terrorism, nationalization, war, expropriation can lead to a significant loss in time and money because there will be delay in product deliveries and shipments. – (UK Essays, 2018) Another factor would include the different tax regulations that exist in countries, as Adidas have operations in numerous countries, it must abide by the legal guidelines and regulations of that country.
Economic Factors – Adidas pays keen attention to inflation, unemployment rate, taxation and per capita income, as an incremental increase and decrease in these factors would impact the company’s profitability significantly, either positively or negatively. Another factor would include fluctuations of interest rates, as this leads to instability of the stock market and thus affects the economic growth of the country as well. – (Marketing Dawn, 2018)
Social Factors – Adidas being a global brand, its design and innovation of its products is affect by factors of race, culture, language, religion, gender, buying habits and lifestyle. These stated factors guide Adidas in the way it operates and implement its strategy. – (Research Gate, 2018)
Technological Factors – Adidas has not only incorporated technological advances in its production processes but also in its products e.g. Smart Ball. Another factor would include technological communication channels; Adidas has a large social media platform where it communicates to the its customers on a regular basis about its product line and special offers.
Legal Factors – Adidas has to be aware of legal constraints such as: Press Complaints Commission (PCC), Trade Description Act, Advertising Authority Standards(ASA) etc. so as to not be plagiarized from a third party trademark. – (Research Gate, 2018) Other factors would include various laws and regulations e.g. workers’ rights, health and safety, equal opportunities etc. that Adidas must adhere to in order to operate legally within that geographical area/country.
Environmental Factors – Adidas has taken initiatives to reduce its environmental footprint by making sure its factories do not use restricted substances in its products manufacturing, which will, in turn reduce Volatile Organic Compound emissions. Also, in 2007, the sports company started a program called “Better Place”, which aims to encourage the utilization of more sustainable and environmentally-friendly materials in its product manufacturing, without compromising on functionality and quality performance. – (Research Gate, 2018)
Adidas’ macro environment definitely impacts the way it conducts its marketing activities. For instance, if Adidas wants to advertise its product line in another country, it must be conscious of the culture, norms and what is considered to be appropriate in that geographic region, so as to not offend anyone. Also, there are guidelines and regulations that Adidas must follow before conducting its marketing activities in certain geographic areas. Before executing an extensive marketing campaign, Adidas would research the current political and economic stability of that country, mainly to ensure the profitability of their returns. Adidas also has to ensure that its marketing activities pose no threat or harm to the environment.
Word Count: 901
Task Three – Organisational Buying Behaivour and the Importance of Segmentation
Explain the organisational buying behaivour and the influences on organization buying decisions in the context of your chosen organisation
Organisation buying behaivour is the decision-making process by which formal organisations establish the need for purchased products and services and identify, evaluate and choose amongst alternative brands and suppliers.
Reference List
Adidas (2018). Adidas at a glance. Available at: https://www.adidas-group.com/en/group/profile/. Accessed 30th October 2018
Adidas (2018). History. Available at: https://www.adidas-group.com/en/group/history/. Accessed 30th October 2018
Bhasin, H. (2018). Marketing strategy of Adidas. Available at: https://www.marketing91.com/marketing-strategy-of-adidas/. Accessed 30th October 2018
Alexander, L (2018). What is Digital Marketing? Available at: https://blog.hubspot.com/marketing/what-is-digital-marketing. Accessed 28th October 2018
Investopedia (2018). Social Media. Available at: https://www.investopedia.com/terms/s/social-media.asp. Accessed 28th October 2018
Kelly, A. (2018). Adidas Social Media Playbook. Available at: https://www.slideshare.net/AlexisKelly4/adidas-social-media-playbook. Accessed 31st October 2018
Frontier (2018). How Adidas Kills It on Social Media I Live And Social Blog. Available at: https://www.frontierconsulting.co/blog/adidas-case-study/. Accessed 31st October 2018
Pratap, A (2018). Adidas SWOT Analysis. Available at: https://www.cheshnotes.com/2017/07/adidas-swot-analysis/. Accessed 1st November 2018
MBA Tutorials (2018). Adidas SWOT Analysis. Available at: https://mba-tutorials.com/marketing/swot-analysis-marketing/1704-adidas-swot-analysis.html. Accessed 1st November 2018
The Chartered Institute of Marketing (2018). What is Marketing? Available at: https://www.cim.co.uk/qualifications/get-into-marketing/. Accessed 4th November 2018
UK Essays (2018). Marketing Audit of Adidas. Available at: https://www.ukessays.com/essays/marketing/marketing-audit-of-adidas-marketing-essay.php. Accessed 4th November 2018
Marketing Dawn (2018). PESTLE Analysis of Adidas. Available at: http://marketingdawn.com/pestle-analysis-of-adidas/. Accessed 4th November 2018
Research Gate (2018). Adidas Group Strategy Analysis. Available at: https://www.researchgate.net/publication/281740663_ADIDAS_GROUP_Strategy_Analysis. Accessed 4th November 2018
