SWOT Analysis - Competitor Analysis - Product Strategy - Marketing Plan Assessment Answer

Marketing Plan Assignment Help

Assignment Task

3 possible problems

1. The price is too high and no one would buy our products.
2. The quality of the product is not stable.
3. The demand of the products might be less than we expect.

Features of our product/service that distinguishes our business from our competitors.

• We offer customization for the product so customers can have their fully personalized shoes to wear on.
• The products lead a new trend in shoe industry which we transfer friction into electricity and store it in the shoe. When customers want to charge their phone or tablet or other electricity products, they can easily get electricity from the shoes, never have to bring heavy power bank again!
• The shoes have sensors which can monitor how many steps you have taken, how far you have walk/run, how many calories have you burned. Users can get these information through the app which connect to the shoes. We know although some of the smart phones already have these kind of functions, but our sensors can provide users a more precise number so users can get a more precise data.
• We will offer a website to customers who bought our product to show the details of the product. And users can register their shoes on the website to an extra one year warranty.

Marketing Plan Checklist

• Executive Summary

• Company Description

• Strategic Focus and Plan

? Mission Statement

? Goals/Objectives

? Marketing and Product Objectives

? Competitive Advantage

• Situation Analysis

? SWOT Analysis

? Company Analysis

? Competitor Analysis

? Customer Analysis

? Industry Analysis

• Market-Product Focus

? Market-Product Grid

? Target Markets

? Points of Difference

? Positioning

• Marketing Program

? Product Strategy

? Price Strategy

? Promotion Strategy

? Place Strategy

• Cost Breakdown

• Organization

• Implementation Plan
• Evaluation and Control

Executive summary

The following report is about the marketing plan of Adidas for the various kind of products such as Adidas Running shoes and Adidas Originals, and their implementation of the plans of the campaign by using the combination of marketing communication to attract their target customers.

Company description

The company named as Adidas was brought into life by Adolf (Adi) Dassler, who was also helped by his older sibling Rudolf Dassler in the decade of 1920 as Gebruder Dassler Schuhfabrik, at Herzogenaurach in Germany. The first major event which made the company to be recognized was the 1928 Olympic Games which were held in the city of Amsterdam where they were the main suppliers of the shoes for the German track and field teams. In the year 1948, a new brand was brought in front of the world named as Puma by Rudolf when he decided to part ways with his brother. The main founder of Adidas was thus Adolf Dassler as he decided to patent the three-strip logo in the year 1949 and named it Adidas after his own name. The growth of Adidas has been substantial since that day (Baker, 2014). The main family running the company, Dassler family, decided to retire in the year 1989 and Robert Louis-Dreyfus became the chairman of the main board in the year 1993. The new CEO of the company was appointed in 2001 in the name of Herbert Heiner.

The Saloman group was taken over by Adidas in the year 1997. This takes over changed the name of the company to Adidas-Salomon AG. However, in the year 2005, Adidas decided to sell its subsidiary, Saloman to Amer Sports Corporation. In the year 2006, Adidas took over one of the best sports brands in the world, Reebok, and again the name was changed to Adidas AG.

Nike is the only brand that leads Adidas AG in sporting goods and sportswear in the world. Adidas brand is operational in America, Europe and Asia. The main headquarter of the company is at Herzogenaurach, Germany, and with 39,596 employees approximately.

Adidas AG enjoys a global success by manufacturing apparel and accessories for multifarious sports such as Baseball, Basketball, Football, Cricket, Golf, Running, Gymnastics, Lacrosse, Skateboarding< Tennis and even Kabaddi. And because of such variety of products, Adidas AG is estimated to have employed 60,617 employees by the end of the year 2016.

Strategic Focus and Plan

Mission statement

The Adidas group has always incessantly striven to lead the global market for sportswear and goods industry by maintaining the passion and zeal for sports and an active lifestyle which is etched in the foundation of the company. We are persistent in committing to strengthen our competitive niche as much as we can by constantly improving the quality and marketing of our brands and products.

Financial goals

1. Our team continually works to introduce strategies like “limited offer” and discounts in order to reduce the cost of our products and have more quantity for the customers to buy. By such steps, we hope to increase our revenue by 20% in 2018.
2. On the other hand, we also intend to reduce the cost by at least 15% by conducting the manufacturing in our time efficient speedy factories which will result in a higher volume of production, thereby reducing the cost of the fixed cost (Piercy, 2014).
3. We at Adidas also believe that women are no less than men. So other than constantly introducing trendy yet comfortable sportswear and accessories for women in sundry fields of sports and activity, we intend to employ more female sales representatives to help females choose a more apt product for themselves, ultimately increasing the number of female clients hopefully by 20% by the year 2018. We have been also working on providing better customer care in light of such goals.

Non-financial goals

1. We are striving to enable constant product availability in all our showrooms and factories and also ensure a better accessibility by faster delivery options.
2. We continually introduce innovations and novel technology in our products like our recent idea of converting one form of energy into other gave rise to the trend in shoes that convert friction energy to electric energy.
3. Adidas AG is endorsed by multifold celebrities who are the best in their fields and they represent the authentic, raw desired moment that is showed in each and every moment of Adidas.
4. We will always keep on creating something new by executing the latest hi-tech shoe technology.
5. We also intend to overtake almost 60% of the market by collaborating with the retailers to have more shelf space for Adidas. Thereby augmenting our market presence.

   We will also organize a number of promotions and better advertisements for our brands and products that have a competitive price, however, a better design and innovations than other brands.

Competitive Advantage

1. Differentiation

Adidas 'differentiation strategy aims to make the house of finest and extremely pioneering brand which not merely trades sportswear but nonetheless also have a positive impact on consumers' lifestyles. To attain this approach, the brand has established an amount of extremely groundbreaking products and also teamed up with top designers of the fashion industry who helped in creating both fashionable and functional sportswear (2016 model of Adidas). This decision has steered a large number of buyers across the globe to practice the products of the Adidas as a trend rather than sportswear, which has allowed the share of the market of Adidas’ to rise in streak with the share of the market. Commercial policy, as a portion of the product line of the Adidas, Adidas Popular (pop) will use a variation policy which is similar to user-centric to stand out in the markets which are developing in Asia. In spite of the relatively high-priced retail, Adidas Popular (Pop) will be appealing to the 19 to below 30-year-old consumers basically targeted who wish to adopt the lifestyle of Adidas. This variation policy will need the input from production and marketing departments, and even from the unit of R & D, to capture the consumers' desires and in a product which precisely meets the needs of their requirement. To analyze the achievement of the variation policy, the organization will assess the product rates with the authentic sales and development of the company (Solomon, 2014).

Unions

Planned partnerships are very important for businesses, as it is witnessed by the decision of Adidas to build an association with Reebok to enter the outsource making to some other party in China and market of the North America to reduce the cost of production. In tally, this brand has also made an agreement with distributors such as franchisees and the wholesalers to make a step in the markets which are costly for the association. In the absence of these planned alliances with distributors and manufacturers in China, Adidas Pop's visualization would be extremely expensive or impossible to keep it in a place. In result, as planned collaboration become more and more popular in the business world, these brands are not all time useful to the various parties who are involved.

Price leadership

The developer of price leadership is Michael Porter price leadership is means of cost leadership is a means of creating a modest advantage by keeping low prices. If the product prices of Adidas are less than that of other competitors, likely to create a viable advantage. It is vital to note, in result to, the keeping of the lower prices is a task which is not easy. The prices should have a check throughout the process, from commencement to conclusion.

SWOT Analysis

• Strengths

1. Legacy & heritage: From giving wings to the dreams of Jesse Owens in 1936 Olympics to facilitating Sachin Tendulkar’s unthinkable feat of 100 centuries, Adidas has been instrumental in creating the greatest moments of sporting history. Or Adidas likes to call it “Impossible is Nothing”.
2. Diversified Portfolio:Over the years, Adidas has created a distinct portfolio across various vocations be it sportswear, leisurewear, gym wear and toiletries. The firm has a strong foothold in Football and Basketball clothing as well as sporting equipment. One of the firm's subsidiaries Taylor Made has created several benchmarks in the Golfing world. The firm is also venturing into uncharted territories of Skateboarding and Mixed Martial Arts.
3. Strong financial position:With an unprecedented store footprint of 2400 stores and assets amounting to $4.3 Billion, the company is in a strong position to conquer the sporting world.
4. Distribution network: With a large network of stores strategically placed across the globe along with convenient distribution centres and tie-ups with all major online retailers and departmental stores, Adidas has a robust distribution network to facilitate timely delivery of finalized products as well as raw materials (Czinkota & Ronkainen, 2013).
5. Creating a customer base with the help of wider sporting branding: Adidas is one of the major sponsors in FIFA a well as NBA events. Also, the firm is the chief jersey sponsor of close to 200 teams across various sports. The company has also appointed regional as well as goal sports icons such as Lionel Messi, Kevin Durant, Kevin Pietersen etc. as its brand ambassadors to reach a wider customer base.
6. Collaborations & memberships:The firm maintains healthy ties with various global organizations such as International Labor Organization and International Finance Organization to facilitate healthy work environments and a sustainable business model.

• Weaknesses

1. Premium price range: The brand charges a substantial amount of the products they offer from their customer base. Although this does not deter the firm's loyal customer base in first world countries but creates a serious drawback in emerging markets.
2. Third party outsourcing: A large part of the production of Adidas products, approximately 93%, is done by third-party companies, mostly from Asia. The major chunk of manufacturing is done in Asia due to the cheap labour and resources available. This results in over-dependence on Asian markets. Also, the quality and logistics are grave concerns in this highly competitive industry.
3. Limitedproductline:The Company along with its subsidiaries caters a very limited market of activewear and leisurewear. There is less scope for fashion-related changes as compared to a normal lifestyle clothing company.

• Opportunities

1. Changing Lifestyle: Saturation in developed economies, the rise in income levels as well as raising awareness about fitness among the people have open various new grounds for active wear manufacturers.
2. MarketDevelopment:Over the last few years all the major sports companies are expanding their interests in the emerging markets and Adidas should follow suit to stay relevant and competitive.
3. Product line expansion: Opportunities in different realms will be there for grab for Adidas if it expands its product line (Nagle et al., 2016). For e.g. recently Adidas launched a lifestyle shoe segment called "Yeezy Boost” in collaboration with rapper Kanye West which has been selling like hot cakes.
4. Premium products demand: The growth rate of Adidas premium range is about 32% when it comes to demand in the Australian market. This is a prime indicator of things to come in all the emerging markets of the world
5. Backward integration:Adidas can gain a lot by incorporating operational measures in their R&D methodology to ease out patent securing and lower costs.

• Threats

• Competition:Adidas faces a severe competition from market leaders Nike. Nike enjoys a pretty loyal customer base which Adidas has been trying for years to breach. Also, Adidas faces competition from local players as well on the grounds of pricing if not quality.

• Dominant Suppliers: The majority of the production of Adidas is done by the partner companies to which the major production works are outsourced. This allows the outsources to have a dominance over the bargaining, thus leading to logistical nightmares in terms of production and supplies.

• Regulatory Government: A large chunk of production at 35% is manufactured by Chinese companies and Asian companies carrying out 93% of total production, local government norms can make or break a company’s fortunes.

Industry analysis

The multinational sportswear conglomerate has created diversified trends for different geographic regions of its sale like in Asia region, Europe, North America and the remaining regions wherein “the maximum amount of shareholding is done by North America when it comes to the value of the footwear products in the world from 2014-2020”, as reported by Reportlinker on Jan 28. Because of the growth in population and changes in lifestyle, the demand for footwear all across the globe is also growing. The segment of footwear is categorized as -

1. Footwear types- athletic & non-athletic footwear

2.Consumer group

3. Geography

For the athletic footwear segment, there are four subcategories- shoes for hiking, insert shoes, sports shoes and shoes that can be used in backpacking. The most number of retail outlets are shared by Adidas and Nike. They also share globally the most loyal fans and a very good department for distribution. Roberts, D reported on June 23 2017, “The market shared by top five brands are Adidas, which holds 23% of the share (this is an increase of 209% in a year), Skechers holds the shares at 20% (a bump of 39%), Converse holds shares at 12% (no change), Sperry is at a share of 4% and Keds occupies 2%”

Customer analysis

The brand Adidas targets several types of customers by our hi-tech sports shoes. The ages between 20-40 and middle-upper group are more capable of purchasing the products according to their higher interest in fashion and sports. High-income customers along with high tech product lovers are the perfect target customers as they are going to find our prices affordable and reasonable. For such customers, functionality has an upper hand over appearance so they can invest in shoe technology that enables them to connect their phones with the shoes and thus set any desirable function for their shoes (Shank & Lyberger, 2014). Also, allowing them to charge their phones by the friction energy produced by working out in their shoes. Lastly, another type of an important customer group is the athletes who indulge in training and running more than any other group. And since most of their activity is practiced outside in the even very inconsistent weather, they will benefit by investing in our hi-tech sneakers which can be changed to a waterproof setting via their smartphones, thus preventing the potential damage.

Competitor Analysis

Although the market of sports goods and products has quite a few competitors such as Under Armour, Lotto and Warrior, Adidas and NIKE among them are the leaders in US markets, US & Europe, respectively. The analysis of the competition can be very crucial as it allows a better understanding of the competitors and the capability to create goals for progression.

Michael Porter's Model of Five Forces (1980) analyzes the major forces which can foster the competition. According to Porter, to get ahead of the competition, the three variables would be helpful. Differentiation, global cost leadership and focus are those three variables (Boone & Kurtz, 2013). The companies that provide the products at lower prices will be profited more if the market has same product range or line. In the market for active wear, there is a great differentiation in products, ranging from style, use of tone to ergonomics. The same opposite can happen if there is a difference in the sports goods and products that there is good and even better capacity that highlights the highest price. Both Adidas and Nike are the leaders in the quality of their products and have set a standard for the same. This previous week, a new kind of boots was launched by Adidas that were without laces. They are known as Adidas ACE 16+ PURE CONTROL designed for better firm releases.

The image compares Adidas vs Nike with the help of the sponsorship they provide to the major soccer playing nations in the last tournament of soccer.

Due to Adidas and NIKE, the sports industry of soccer boots is majorly a duopoly with the world leader being Nike and other brands like Jordans, Nike and Converse.

While analyzing the market shares and trends of New Balance, it is lagging behind in terms of followers and online presence.

Social platform followers on Twitter, Facebook and Instagram:

The above image provides a quick look at all the subscriptions that New Balance gets when compared to Adidas and Nike. This information was recorded in December 2015. It is clearly visible that NB cannot compete with both top brands as of now. As social platform provides a better reach to the people, it is of urgent concern to NB as they do not have followers or likes or any other kind activities that could lure customers.

The conclusion is that Nike's presence on the web is largest and more than Adidas. Porter defines that making a product in a different way can provide an edge in the competition which is accumulated by the same kind of product. But this sports industry has a wide variety of products to choose from, making competition tougher (Holtbrügge & Schuster, 2017). New Balance must work very hard with the help of marketing plans and marketing teams to come up with something that could possibly bring a revolution or even a small crack in this very big sporting products industry. New Balance must come out with an innovation that checks all the boxes of being a great product. This new product will attract the consumers of Adidas and Nike as well to which will help NB to gain some ground over the competition. The same achievements were achieved by NB in the field of running shoes. Stuck at the low subscriptions, New Balance is expanding and is becoming increasingly popular over famous websites such as 'Prodirect' that now stores them.

Market-Product Focus

While the technically strong and superior products are the main market penetration point for Adidas, very good and focused marketing with proper planning and implementation has also been important for Adidas to achieve success.

The most effective promotional methods of the giant sportswear business were the association of famous celebrities such as sports idol or celebrities. The customers are highly satisfied with the quality of the product due to the smart associations with celebrities. This helps in increasing the sales and revenue of the brand (Perrone & Wodonga, 2015). The products purchased from a reputed company provide the assurance of quality and the services provided which will be motivation for further purchases in future.

Adidas has a loyal and big customer base which can be made bigger by increasing the customer loyalty and the engagement of the customer with the product. This will provide Adidas with a competitive edge over others. The best thing that Adidas can do is by taking regular feedback from the people about the improvements that it can do to make better products. This will help Adidas in creating a long-lasting relationship with the customers providing more profit and revenue.

Listening to the customers, conducting different surveys and campaigns, the satisfaction of customers’ surveys online, in stores and in the marketplace, Adidas and the loyal customers can be benefited from the additional value that will help in generating greater profits and this will also help Adidas in providing the exact product desired by customers.

In addition, Adidas’ association with popular athletes and famous people to work on the various clothes, products or shoes helps in creating greater quality sports goods for the masses. This association will attract customers which will, in turn, generate greater profit, sales and revenue for the company and will successfully complete the research and development of the product.

Points of difference

1. The main concern of Adidas is to develop a strong competitive advantage over its rivals, but this is not easy due to the presence of other big brands like Puma, Nike, New Balance (Chanavat & Desbordes, 2017). Adidas holds the advantage in the concept of value add-ons. Highly quality product offering should be Adidas' concern to gain an advantage over its rivals.
2. The market is divided into various attributes. The rivalry is one of the major attributes that exist among major companies such as Nike, Adidas, NB and Timberland. It must be noted that these companies are marketing companies as the main manufacturing part of the products is done by the outsourced companies.
3. Adidas may be behind Nike when it comes to sports goods, athletic wear or apparels, it is highly successful in the field of commercial enterprising since its inception. The applied effort, encouragement and up-to-date spirit of innovation and technological excellence have allowed Adidas to generate a competitive advantage so powerful that its rivals struggle to defeat. The steel inclination towards technological updates and advancements has helped Adidas to create the added value for customers, in particular by the policy of the company which can provide various technological applications like sports shoes for high performance, to meet the particular needs of the client.

In the end, this translates that Adidas provides customized and performance-centric products for each and every customer. Few apparel companies have the ability to achieve this feat and as a matter of fact, it looks like what famous designers do with the beautiful models.

Marketing Program

Products Strategy

There are primarily 4 subsidiaries of Adidas group. First: Adidas, present in the clothing and footwear market. Second: Reebok, outperforming Adidas it is considered as Adidas group’s most successful subsidiary. Third: Rockport focuses on outdoor apparel, footwear, and accessories, and the fourth is Taylor made which specializes in golf equipment, clothing, etc. Reebok performs the best among these four subsidiaries (Hertrich & Mayrhofer, 2015).

From the portfolio of several products, footwear acts as Adidas’s primary product. The designs come in different styles without compromising with the athletic and robust finish. Accessories and clothing act as Adidas's secondary range of products. Reebok being stronger in range of footwear, Adidas is considered stronger in the clothing market.

Price Strategy

The type of designing, styling, and promotions done by Adidas enables them to use prices that are low and competitive. In order to account for the competitors such as Puma and Nike, the prices for "run of the mill" products are set competitive (Ritter, 2014). Skimmed pricing is done for the uniquely designed products that are introduced for the first time in the market.

The brand value of Adidas apparels market enables them to use price skimming making them expensive to buy. Adidas targets its customers from the high-end and the upper middle class of the society. Adidas avoids using sharp prices as that may impact the Adidas's brand value. According to customer's perception, it is also believed that the higher prices of the products are justification for the better quality. Consequently, prices are rarely lowered by Adidas.

Place Strategy

Adidas's points of sale include it's exclusive retail outlets wherein company directly supplies the products. Retail chain showrooms containing products of multiple brands exhibit Adidas's footwear and clothing products wherein a distributor is responsible for all the supplies. Online sales are the last point of sale of the Adidas's products (Chernev, 2015).

Promotion Strategy

Various methods are used by the company to market its products while primarily focusing on the product placement and television. The creative team of Adidas tries to fill adrenaline in the clients using full of energy and very creative advertisements (Armstrong et al., 2015). The ads are potential enough to attract the customers towards the brand by sending an attractive marketing message to them.

The slogan of Adidas, "Impossible is nothing" acts as a very compelling statement for the brand.

The relation of the brand with the great players such as Sachin Tendulkar, Ronaldinho, and Lionel Messi and others makes the brand very popular among the masses across international borders.

Sponsorship is given by Adidas to various sporting giants such as Real Madrid, Great Britain, France (in football), and South Africa and England (in cricket) and other such teams.

Cost Breakdown

The Adidas' products may be less costly than those of Nike or other competitors in order to gain the competitive advantage in the market. Since the cost is managed by all the involving entities of the supply chain from the very beginning to end, maintaining lower prices of the products is not an easy task.

Organization

Proper organization of different levels of the supply chain is crucial in maintaining the demand and supply of products in the market. This is achieved by Adidas in the following ways:

1) Manufacturing unit> Adidas points of sale> End customer

2) Manufacturing unit> Distributor/Supplier> Showrooms of multiple brands

3) Manufacturing unit> Online fashion websites / Adidas website> End customer

Distribution channels remain motivated because of high margins of operation which are the result of Adidas' fabulous brand value.

Implementation Plan

Adidas' implementation plan operates with the sole objecting of providing the best quality of footwear for the customers that are tailored by combining the technology with design (Hollensen, 2015). The company makes efforts to provide an appeal to its products which is not defined by the need rather the products appeal to fulfil the customers' desires and wishes. Similarly, the garments are given an appeal to offer comfort while doing any physical activity.