The Brand-building Efforts of the Companies - Adidas - Case Study Example

Building Brands: Creating Added Value for the Inserts His/Her Inserts Grade Inserts Name (06, December, 2009) CONTENTS 1. Introduction ..................................3 2. Marketing...3 3. Product from consumer's perspective....4 Analysis of Adidas.4 Products .4 Marketing Mix5 Brand Positioning...5 Market Segmentation and Targeting..6 Promotion...6 4. Adidas in Competition....................................................................7 5. Conclusion................................7 6. References .8 Introduction Marketing is the process of interesting potential customer and clients in your products and/or services. The name of the game in marketing is attracting and retaining a growing base of satisfied customers. Creating and implementing a marketing plan will keep your marketing efforts focused and increase your marketing success. (Susan Ward, About.com Guide) Marketing is also about creating and maintaining satisfying relationships with customers through various strategies, methodologies, tactics and media that create value for both the marketer and the customer. It is also one of the most important tools of doing business and promoting an organization's goods and services. Moreover, marketing serves as a contact between the firms and customers for the fulfillment of needs of both the parties. Therefore, it needs to be customer-focused in order for the business to be profitable and productive. This paper will be concentrating on assessing the changing needs and wants of customers, the brand-building efforts of the companies and how different companies use the marketing mix to create value for their customers. Marketing The term 'Marketing' is a very wide concept including several different sub-concepts in it. It is defined as the process whereby companies identify, analyze and fulfill the needs and wants of customers, involve in value-creation process and focus on building profitable relations with customers in order to get value from them in return (Kotler, Armstrong 2006). In short, marketing is your strategy for allocating resources (time and money) in order to achieve your objectives (a fair profit for supplying a good product or service). (Ed Zimmer 1992) Customer's needs and wants The two important basic concepts in marketing are named as needs and wants, which are the elements of human psychology. It is extremely important to meet the needs and wants of customers to drive sales, which is the basis of most businesses. Needs are necessary for the human survival and one cannot go further in life if deprived from what one needs. While, wants are the extended form of human needs which are backed up by one's culture, personality and social status. In present marketing environment, the needs and wants of customers are constantly changing and shifting. The consciousness about raising living standards, increase in disposable income, changing trends and fashions have moved the consumers' preferences from being traditional towards being modern and advanced. Also, though some customers know what they want, some simply don't know. And some may have an idea of what they want without that necessarily corresponding with what they need. It, therefore, depends on the marketing team to draw the needs and wants out of them in order to devise a plan and accomplish goals. (Tim Millett) Product from consumer's perspective In today's era of increasing marketing management efforts and spread of advanced media, consumers have attached great expectations to the products they consume. The basic objective of a product for the consumers is to satisfy their needs and to be of value for them i.e. a product should be able to deliver the benefits to the customers equal to the costs they have paid for it. The product benefits the customers at three levels: Core Product refers to the basic product and its benefits that consumers are seeking. Actual Product includes the product's outward features like brand name, design, packaging, labeling, and quality, Augmented Product defines the additional consumer services such as after-sales services, warranty, installation, delivery and credit services that consumers look for. Brand A brand refers to the symbol, letter, name or characteristic which distinguishes a product from those of its competitors in a unique way. It helps the product position itself in the mind of customers through its features, qualities and characteristics. In other words, it is the emotional and psychological relationship that the marketer shares with the customers. Strong brands elicit thoughts, emotions, and sometimes physiological responses from customers.(Jay Ehret, The Marketing Spot) Analysis of Adidas a. Products Among many other globally famous products, Adidas is one of the most popular brand names having its companies operating and serving worldwide. The brand has a long history of its efforts to establish itself into global markets including those of Russia, France, Germany, Greece, Romania, Argentina, Spain, Mexico, Japan and Nigeria. Adidas mainly produces sports goods, accessories and footwear for both men and women. Besides sports footwear, the company also produces other products such as bags, shirts, watches, eyewear and other sports and clothing related goods. The company is the largest sportswear manufacturer in Europe and the second biggest sportswear manufacturer in the world, after its U.S. rivalNike. Its product line includes football kits and equipments, tennis racquets and apparel, Cricket shoes and kits, basketball, gymnastics, rugby, lacrosse and skateboarding shoes. b. Marketing Mix Adidas has adopted a marketing mix good enough to create and maintain customers' loyalty to the brand and to position it at the same time. Adidas carries with it the slogan "Impossible is Nothing". The product element of Adidas' marketing mix includes a crystal-clear mission "to be the leading sports brand in the world". It has premium-price strategy whereby its products are sold on high prices and make it a top-notch brand earning higher profits and giving it a distinct position in the market among all other brands (Adidas Group 2007). The main key to the success of Adidas is the number of endorsement deals it has developed with world-class athletes. Recent sports figures representing adidas don't only score high marks in their game - they also score high in their celebrity quotient. British football star David Beckham's relationship with adidas has no doubt lent itself well to the brand's visibility in the UK. (Vivian Manning-Schaffel2002) 'Reinvention' is the word that has made Adidas what it is today. Its success in advertising includes the 'punch-lines' that it uses in its ads. A 'punch-line' or 'tag line' is one of the most creative tools that can affect the customers psychologically or move their emotions and enthusiasm which, in turn, forces them to buy the products. Adidas does so by promoting big people like Mohammad Ali and Emil Zatopek and makes a positioning in the market. It does not only spend its money on advertising; but it focuses more on the implementation and execution of its creative concepts. Its places its products exclusively at big stores and differentiates them by adopting competitive prices. c. Brand Positioning The lifestyle and fashion have become the main influencing points when it comes to choice of goods form the viewpoint of consumers. The parameters like innovation, sophistication and product quality are primary factors due to which most of the consumers prefer branded goods (Leand 2001). To create brand awareness and to position them in the market among tough competitors as Nike, Adidas uses brand endorsement strategy to give its products strength and value. It concentrates more on the sponsorships of teams and events and uses them as a part of its promotion strategies. The company has positioned all its products by carefully identifying and sizing its target market, understanding customers' needs and problems and designing strategies for winning from its customers. Its products and their distinguishing features, styles and designs have given it an edge over its competitors in consumer's minds. Apart from this, performance-oriented footwear, apparel and hardware products will always remain the lifeblood of adidas. However, adidas is also committed to incorporating the growing importance of lifestyle, fashion and music inspiration into the sports arena and adidas products. This strategy allows the brand to create a unique adidas experience and mean more to more consumers. (Adidas-salomon.com) d. Market Segmentation and Targeting The major segments that Adidas is divided into are sports apparel, athletic footwear and sports goods equipment. Its target consumers include both the players and the common public. The reason that consumers prefer and like Adidas' products is that it has a stylish variety of footwear and bags and other accessories. Its cutting-edge aesthetic designs are liked by the consumers. By segmenting itself for sports industry, the company has been able to better understand and address the changing needs and preferences of sports people and youngsters. Moreover, the company has selected premium segment to target in which the consumers are ready to pay higher prices for the products enabling the company to make higher or supernormal profits. The target market basically includes the urban youth who is mainly concerned about fashion, style, looks, comfort and sophistication. The Adidas shoes are quite welcomed by young people; they have high qualities and beautiful shapes. Adidas is a symbol of young, rich and dynamic. It is also a leader of fashionable trends. They are designed in various types to meet people's different requirements, such as sports shoes, casual shoes and so on. Different shoes can match with different clothes.(www.ehow.com) The Adidas brand gives all the qualities in its products simultaneously. They deliver value for the money. Adidas has managed geographic, psychographic, behavioral and income segmentation. It is concentrated more into semi-urban and urban cities and among reasonably high income earners. The benefits of products are mostly sought by brand freaks, athletes and sports enthusiasts. e. Promotion Adidas has adopted different successful ways of promoting its products to the consumers. Besides launching its advertisements on television and bulletin boards, Adidas has also expanded its business online i.e. its strategy of doing business includes e-commerce too. In this way, the company has increased customer awareness, sales and ultimately, its profits. Its products are divided into three main categories: Adidas Performance is the manufactured, designed and symbolized for athletes; Adidas Originals directs its centeredness towards lifestyle, sophistication and fashion; and the group Y-3 has been given the products of the category Style Essential. The main and recent promotion strategy has been promoting sales of footwear through use of professional and popular athletes. Experimentation and change are other key points that are involved in the promotion of Adidas. It has gone from the black and white executions to bright and energetic colors and designs. Adidas in competition The sports goods and apparel industry possess cutting-edge Adidas in competition with its biggest rival, Nike. Both companies are in rigorous competition fighting for their market shares and profits through their creative efforts. Consumers of all ages and fields prefer the apparel and goods of these brands. That is the reason these giants have segmented their markets to even those people who are not sports freak. The quality, innovation and comfort delivered by them in their products have made the consumers follow them. However, to keep up with the competition, adidas generates close to 60 new foot-friendly designs each year. Tactics have been revised in getting these products out for consumption. As a result, products have been repositioned in higher-end and sports specialty stores. As their main competitor has sprinkled flagship NikeTown stores throughout the US, Europe and Australia, Adidas has also embarked on a foray into retail. The first adidas-Solomon megastore launched in Paris last year to capitalize on the brand awareness in that market; France scored victories in both the 1998 World Cup and 2000 European Cup football championships. (Vivian Manning-Schaffel,2002) What differs in the strategies is that Adidas focuses on sponsoring global events, while Nike pays attention on stars in specific sport like basketball and Michael Jordan or in golf and Tiger Woods. Conclusion Marketing strategies have made businesses grow. New technologies and tools are emerging everyday to help companies add value to their products and satisfy their consumers. At the same time, competition is increasing making it harder and more demanding for the companies to ensure their survival. The best way in the building of the brand is to build an intimate relationship with the customer using one-to-one marketing strategy. Adidas is one exemplary company which has established itself and is leading the sports industry globally. It, therefore, appears that Adidas has honed its strategy to become a revitalized contender in today's competitive sporting goods market and is now duly recognized as the sneaker of yesterday and today. Bibliography: Susan Ward, Viewed April 19, 2010 Kotler P., Armstrong G., 2006, Principles of Marketing. Pearson Education Inc. Ed Zimmer, 1992, The Entrepreneur Network, Ann Arbor, MI, Viewed April 19, 2010 Tim Millett, Viewed April 18, 2010 Jay Ehret, The Marketing Spot, Viewed April 18, 2010 Vivian Manning-Schaffel,2002, Viewed April 19, 2010 Adidas-salomon.com, Viewed April 19, 2010 www.ehow.com, Viewed April 19, 2009 Judy Leand., 2001. Adidas, Viewed December 06, 2009,. Adidas Group., 2007, Adidas Strategy, [online] Available from Read More