Segmentation,targeting & positioning - Essay Example

Segmentation, Targeting & Positioning Index I. Introduction II. Marketing Strategy II.i. Segmentation II.ii. Targeting II.iii. Positioning II.iii.a. Marketing Mix II.iv. Competitors Analysis III. Summary IV. References V. Introduction The paper is about segmentation targeting and positioning strategies of consumer goods and evaluation of its effectiveness. The consumer goods we have taken here are sports products and the companies are Adidas and Nike. We all know the rivalry between these two sport giants. Nike has gained much attraction among the marketing expert after its ambush marketing strategy in Atlanta-Olympics 1996. This paper starts with the simple definitions and introduction on Marketing and than moves to the strategy section, where it discuss the latest strategic moves of these companies. VI. Marketing Strategy Marketing is a process of planning executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals. (Kotler, Marketing Management, Pg 8) Every product available in market today has been targeted to a particular segment and the brand is positioned to fulfill the needs of that target group. Adidas and Nike both have secured a strong place in the sporting goods sector. They follow different strategic approaches to serve their consumer group and attract them. "Adidas is one of the truly great global brands," said Mike Levy, founder, Chief Executive Officer and Chairman of SportsLine.com and Chairman of Sports.com. VI.i. Segmentation Segmentation is an approach midway between mass marketing and individual marketing. Each segment’s of buyers are assumed to be quite similar in wants and needs, yet no two buyers are really alike. (Kotler, Marketing Management, Pg 257) The segmentation of the marketer Adidas is very clear. It is catering the specific sports need of consumers. The product ranges from Sports footwear, Sports apparel, Specialty sports products, Sports equipment, Leisurewear and accessories. The market is segmented on the basis of sex, age and specific product needs. In the clothing they have offered tracksuits outdoor clothing, waterproofs, football kits, swimwear, skiwear, clothing for aerobics, fitness, golf, racket sports and various team sports. Wherein in sports footwear Cross trainers, running shoes, outdoor boots, football shoes / boots, footwear for aerobics, fitness, racket sports, golf, bowling, snow sports and other sports. Being a global company, the strategy of Adidas in the segmentation of different part of the world is local. According to the sports requirement Adidas have chosen various marketing mix and communication strategies. It is developing its leading positions in all its Major Markets. Adidas is continuously developing and strengthening its position in various market segments and various markets. VI.ii. Targeting A marketer can rarely satisfy everyone in a market. (Kotler, Marketing Management, Pg 8) The above mentioned statement is emphasizing on the need of having a segmented target market for the marketer. In the case of Adidas it’s quite clear. VI.iii. Positioning Adidas have positioned itself as a sports brand. In its communication strategies at several occasions the brands have been endorsed by various sports icons. It has established itself as a global sports brand and all it communication strategy is focused on. VI.iii.a. Marketing Mix The marketing Mix includes product price place and promotions. Adidas has been continuously working on each to for its overall marketing strategy process. It has been continuously developing its products, promoting it through various modes of communications like print, publicity, advertising etc. It has revived and worked on its distribution channels. Being a global player its strategy on distribution channels is one of the factors for its success. It has to make the product available according to the markets to its area of operations. Product Adidas have followed reinvention strategy for its marketing and product lines. On its website, Adidas acknowledges that "The markets and industry in which we compete are transforming rapidly, paced by the evolution – or revolution – in how sports are defined. Adidas keep on identifying the changing requirements of sports world. Apart from the fundamental and famous games it entered into satisfying the need of consumers of the other significant sport lines like skating, surfing, golf, hiking, biking etc. It sponsors the small and big sports of local and region specific areas. It keeps on innovating and improving products. From the comfort level, specific requirements to the looks the R&D departments continuously work towards that. As per one report, Adidas generates close to 60 new foot-friendly designs each year. Adidas ensures the quality of the product. The product quality has direct impact on customer satisfaction. A satisfied consumer means additional sales. A satisfied consumer will spread the word of mouth and at the same time ensures the repurchase of the product. Place Global Presence: AS per the information available on their website: To accelerate our top-line growth going forward, we will intensify our activities with key accounts, step up own-retail initiatives and increase our focus on selected consumer groups (e.g. women). On a regional basis, our efforts start in Europe, where we will extend our leadership position with our “Winning in Europe” program to drive both top- and bottom-line growth for the coming years. In North America, our goal is to significantly increase both market share and profitability within the next three to five years. In Asia, we are striving to become the market leader with top positions in the regions major markets. In Latin America, we expect to continue to deliver the strong growth seen during 2004. It is continuously upgrading its merchandise and distribution channels, Adidas have its own high end specialty retail outlets. Apart from that it will be available at other local stores as well. It has launched its first Adidas-Solomon megastore launched in Paris. Price Consumer always associates value with the price. Higher the price higher will be the value this is a normal notion. The promotional strategy of Adidas has been based upon the target market. The pricing decisions have been affected by various factors like demand, cost of the product and others. The pricing and product strategy of Adidas varies with the markets. Like in the Asian markets which are price sensitive, the low priced products occupy the major space on the shelf. Promotion and Communication Strategy The promotional strategies are targeted to create top-of-mind awareness among the consumer and prospect customers. Being a sports brand, the best place to for it is the sports events and activities apart from the regular communication processes to reach the target audience. Adidas has been one of the key sponsors in sponsoring the mega events across the globe. It has sponsored 2002, World Cup, Winter Olympics etc. It has to face very strong competition strategies by Nike during all its sponsorships. Nike has been very innovative in a way to capitalize on these sports and at the same time utilize its financial resources carefully. The strategy adopted by Nike was Ambush Marketing. Adidas claims that, "the brand values of the company – authenticity, inspiration, honesty and commitment – are derived from sport." Adidas’ performance in the Asian market has shown a continuous growth and revenue generation. British football star David Beckham has endorsed the Adidas brand. This has given a strong brand image to Adidas. When people think about Beckham the brand Adidas comes into their mind. This way Adidas have gained consumer mindshare as well. The relationship of Beckham and Adidas has not just worked in UK market but also it has given a pace to the global market. This was due to the fact that Beckham is one of the most liked stars worldwide. Beckham had led his team to victory of FIFA World Cup in year 2000. Europe is the largest market for the Adidas products and visibility and mindshare of consumer here is directly linked with the sales. Apart from it Adidas have American-bred tennis star Anna Kournikova in their Brand ambassadors list. Both Beckham and Kournikova appear frequently in news and other publicity materials, where the opportunity to recall Adidas increases. This provides more and frequent visibility to them. Competitors Analysis Adidas’s nearest competitor is Nike. Though, various other local and global brands are also giving competition at various product and market segments. Adidas is focusing more on football than Nike and Reebok. On the other hand Rebook has larger share in leisure clothing and gymnastic equipment ranges whereas Umbro Europe is leading in replica football club strips that includes the Manchester United and the England national squad. In general, the strategies followed by various players in the sport industry, is mentioned below: Most of the companies widely contract with prominent and influential athletes, teams and sports leagues. Large companies like Nike, Adidas, and Reebok etc invest heavily advertising and sponsor athletes or teams. They actively sponsor sporting events and activities. They utilize trademarks and logo on nearly all of products to identify the company and to distinguish their products from the goods of others. Successful companies fully utilize variety of distributions, including independent distributors, licensees, sale representatives, subsidiaries and branch officers. They pay attention in timely and fastest delivery. Focus all resources on product design and marketing Their efforts to innovate new ways and patterns to maximize profitability with minimum investments. They try to access to local market directly and attract local consumers conveniently Advance and fast designing to more comfortable, cost effective products for the consumer to meet their demands on various levels. Summary We have seen the various factors of marketing strategy. From the segmentation, targeting to the positioning of a product marketer has to keep various factors in his mind. These factors are pricing strategies, distribution strategies, Quality, Awareness, reputation, brand image and benefits offered to the customer. We also discussed the competitor strategies for the various marketing efforts. The sport product industry is continuously growing along with the growth of overall world economy the purchasing power, the time and devotion to sports is increasing. Marketers are trying to get the bigger share of the cake and sustaining the share through devising various strategies on marketing mix. I. References Kotler, Philip, Marketing Management, Prentice-Hall Inc. New Jersy, 10th Edition, 2000 http://www.adidas-group.com/en/news/archive/2000/2000-07.asp accessed on 31 Dec 2005 http://www.brandchannel.com/features_profile.asp?pr_id=71 accessed on 31 Dec 2005 http://www.marketingprofs.com/4/eweiss1.asp accessed on 31 Dec 2005 http://www.adidas-group.com/en/overview/strategy/default.asp accessed on 31 Dec 2005 http://www.zyman.com/headlines/nike_brand_strategy_12-6-2004.asp accessed on 31 Dec 2005 Read More