Marketing Communications Models and Their Application to Adidas - Research Paper Example

MARKETING RESEARCH REPORT ANALYSIS Marketing communications models and their application to Adidas Introduction Adidas Company deals with sports shoes and clothing. It is a maker and a designer of sports ware. The company has its headquarters in Germany. The company’s acquisition of Reebok was fundamental for its operations. This is because the acquisition gave the company a competitive advantage. The company managed to acquire a considerable market share. The company is responsible for the sale of products used in a variety of sporting activities including cricket, basket ball, football and other activities. The products offered by the corporation are availed in all countries of the globe (George, Carraher, Doerr & Dandy 2012). The company employs strategic marketing, with an objective of improving the brand strength, acquiring a competitive advantage and raising its performance in terms of finances. The subsidiaries in other countries receive management information from the headquarters in Germany (George et al. 2012). The company’s success attributes to its unique marketing communication approaches that enable it achieve an excellent market segment. This paper describes the marketing communications models, celebrity endorsement and product placement applying the models to Adidas Company. Overview of sports market Statistics on sports apparel usage indicate a possibility of an increase in sports equipment market value. From 2008 to present, the market value has been rising, an implication that Adidas can benefit from the market growth by attracting customers through appropriate marketing plans (George et al. 2012). Situational analysis Situation analysis involves the analysis of the company by considering political, economical, social and technological factors. The analysis takes into account both the strengths plus weaknesses of Adidas (George et al. 2012). PESTEL analysis Political One of the current strengths of the company is the political stability that exists in United Kingdom. This enables the company perform well as the political environment plays a significant role in business operations. Political challenges that Adidas might face is the influence of regime policies on the purchase of goods (Brassington & Pettitt 2007). Economic The company is subject to both the challenges and strengths that relate its economic environment. The company has already established a strong economic base thus; it is possible to maintain its status through adequate strategic management. Adidas encounters challenges in cases of unstable interest rates likely to result to inflation (Pringle & Huisman 2011). Social The company benefits from the high population that exists in towns. As the education levels in UK are high, many people are likely to participate in sports in order to remain fit. This influences the amount of purchases (Brassington & Pettitt 2007). The company encounters challenges that relate to work situations. For example, most jobs in UK do not allow a considerable leisure suitable for a person to participate in sporting activities. This aspect negatively affects the well-being of Adidas. Technological The company is already ahead in terms of technological development. It uses current superior technology to manufacture its products. This makes the company produce attractive goods with proper brand equity. However, Adidas encounters problems with the employees due to demand of technologists (Wilson & Gilligan 2005). The company is expected to develop excellent information communication technologies in the future. Environment Adidas gains its strengths due to participation in sustainability reporting in which it accounts for the amounts of pollutants released to the environment. This indicates the company’s efforts in minimizing the emission of harmful gases. The challenge that the company faces may emanate from government policies that require companies to reduce emissions to levels that are ineffective in terms of cost (Pringle & Huisman 2011). Legal Legal aspects influence the operation of the company either positively or negatively. For example, the government may impose high taxes that may adversely affect the business. The company is bound by legislation that protects people’s welfare, such as the trade descriptions act (Pringle & Huisman 2011). SWOT analysis Strengths The strength of the company lies on its ability to sponsor sports globally. The company has strong management evident in all its branches worldwide. The company has attained an excellent brand due to unique approaches of brand equity (Wilson & Gilligan 2005). Other strengths include participation of the company in corporate reporting and adherence to environmental laws. Weaknesses The corporation has not been able to sustain low prices despite their involvement in production of quality products. There are problems concerning customer service, especially in the case of online purchases (Adidas 2012). The company may experience weaknesses due to competition from other companies offering sport apparel, such as Nike and Puma. Opportunities The company has an opportunity for promoting diversity through production of diverse commodities. This will enable the company take advantage of the already established market. The company can monitor the operations of Nike and other competitors in order to identify their weaknesses (Wilson & Gilligan 2005). Through this approach, the company can maintain or improve its performance by offering the consumers unique products that suits their needs. The company has an opportunity of merging with other companies with the aim of improving its performance. The company has an opportunity of consumers change in lifestyles (Wohlfeil & Whelan 2006). The company can use this opportunity to offer products that are in line with the changing lifestyles. This is possible if the company employs unique marketing techniques, such as market research. Through marketing research, the company can be aware of the market conditions hence; produce in accordance to consumer demands. The company can lay sufficient strategies for market entry (Adidas 2012). Entering new markets is an opportunity because the company can establish itself before competitors emerge. Adidas can utilize technological innovations to its advantage, for example, Information Communication Technologies (ICT) can help the company improve operations (Wilson & Gilligan 2005). Threats The company faces threats from companies such as Nike which has incorporated diversity. Production of fake Adidas goods is a problem that threatens the company’s welfare. The company is likely to perform poorly if; it is fails to be dynamic with the changing consumer demands (Wilson & Gilligan 2005). The company is subject to losses if it cannot respond immediately to the abrupt changes in consumer needs. This means that the company has a responsibility of studying consumer trends in order to be in line with various changes. The company faces threats that relate to market consolidation plus tactical associations of its competitors (Wilson & Gilligan 2005). This is undesirable to Adidas’s performance because the company can lose its haggling power and face price wars. These aspects threaten the company’s performance in terms of sales and profitability. Adidas Company is exposed to threats that concern the political environment. For example, terrorism can lead to poor performance. Changes in policies regarding to trade, import restrictions and undesirable taxation threaten Adidas’s welfare. Porter’s forces on Adidas The Porter’s forces depict the company’s well-being in terms of profitability and attraction of customers. Although the company is facing competition from Nike and other companies, it has management to perform various acquisitions responsible for its success (Pringle & Huisman 2011). Adidas has overcome the threat of substitute goods through strategic marketing (Renko, Sustic & Butigan 2011). Other factors that have affected the operation of the company include barriers to entry and bargaining. Consumer analysis The purposes of consumer analysis are to perform segmentation, targeting plus positioning of competitors. Consumer analysis is fundamental to Adidas Company because it allows identification of consumers with similar characteristics and requirements (Pringle & Huisman 2011). The company can take advantage of the group identified by offering the required products. Consumer segmentation can be behavioral, psychographic, geographic and demographic (Pringle & Huisman 2011). Adidas consumers are both young middle aged and old. However, the main customers that the company targets, are the young, and middle aged. Most consumers participate in sports such as athletics, soccer and basketball. As the company possesses an established brand, it attracts different customers (Pringle & Huisman 2011). Adidas offers high quality goods, but their prices are high compared to other competitors such as Puma. The prices for Nike and Adidas are almost the same hence; positioned in the same place. The ability of Adidas to attract customers lies on its unique marketing strategies that have led to development of excellent brand equity. Marketing objectives Adidas intends to emerge the leader of sports brand around the globe (Pringle & Huisman 2011). Through innovation, the company manages to maintain top position in the market. Innovation and unique marketing strategies enable the company to cope with other competitors by producing high quality products. Adidas bases its advertising on the psychological perspectives of people (Wilson & Gilligan 2005). For example, if a person sees a celebrity in Adidas products he is likely purchase the product due to the emotional influence. The company incorporates product placement and endorsement as the main advertising methods. Product placements impact purchase of products because the viewer of a movie in which the product appears familiarizes with the product and its features. These aspects influence consumer’s choice of goods (Wilson & Gilligan 2005). Adidas’s objective is to ensure that its brand is well known by consumers. The company’s marketing approaches (product placement and celebrity endorsement) ensures a strong brand. Another objective Adidas is to ensure that the target customers have adequate information regarding the products (Wilson & Gilligan 2005). The company can create an understanding of the product aspects such as its characteristics and competitive advantage. The company aims to produce goods that suit consumer needs. This is crucial in building their brands and creating a prolonged association with the customers. The aim of the company is to promote performance through innovations (Wilson & Gilligan 2005). Innovations allow the company to offer products of high quality and latest fashions. As the company builds its brand and position in the market, its chief objective is to become a leading producer of sporting products. Celebrity endorsement Various studies on consumer psychology indicate a positive impact of celebrity endorsements on the sale of products. Adidas Company has applied the concept through efforts in sponsoring a variety of sporting activities. Celebrity endorsements have been evident in FIFA cup, NBA and even in athletics (Marber, Wellen, Wurtz & Xiaoke 2012). Celebrity endorsements have aided Adidas brand equity making the company’s performance congruent. Examples of celebrity endorsements performed by Adidas include Derrick Rose, famous for the Chicago Bulls point guard, Lionel Messi famous soccer player and other individuals involved in different sports. The use of celebrities to promote products is crucial because celebrities influence other people to purchase the products (Renko et al. 2011). Product placement The company has used the media to perform product placements for the purpose of improving and maintaining its brand. This was evident in various movies, for example, the 2007 movie Blades of glory, and Mao’s last Dancer in 2009 (Brassington & Pettitt 2007). Product placement is vital in advertising because the viewers or audience of a movie or television become familiar to the products. This method is effective because potential users emanate from the audience (Marber et al. 2012). Apart from improving brand awareness, product placement raises the memory of the user thus; improving purchases. Product placements can alter consumer’s altitude towards a product. Implementation Adidas success attributes to the company’s unique methods of media advertising. The use of celebrity endorsement has led to the success of the company by affecting the psychology of consumers. Marketing methods employed by Adidas have improved its brand equity enabling it to emerge victorious in the market (Marber et al. 2012). Adidas success in meeting a considerable market share emanates from the company’s efforts in the implementation of marketing strategies. Recommendations and conclusions The company should integrate market research in order to be innovative enough to meet the demands of consumers. Through innovations, the company can incorporate new technologies for the purpose of improving efficiency. Adidas should ensure that it treats its employees in a suitable manner. This may be through motivational strategies such as provision of medical cover, remuneration and other incentives (Wohlfeil & Whelan 2006). Motivated workers perform well by exploiting their talents and skills. Adidas should incorporate appropriate methods in order to produce cost effective goods. In this way, the company will overcome various threats by the competing companies. The company can be successful if it produces high quality products at low costs (Adidas 2012). Adidas should increase its involvements in celebrity endorsements and product placements since the practice has proven positive in building brand equity. Bibliography Brassington, F, & Pettitt, S 2007, Essentials of Marketing, Second Edition, Pearson Education Ltd. Wilson, R.M.S, & Gilligan, C 2005, Strategic Marketing Management, Third Edition, Elsevier Butterworth-Heinemann. Renko, N, Sustic, i, & Butigan, R 2011, Designing marketing strategy using the five competitive forces model by Michael e. porter -- case of small bakery in Croatia, International Journal Of Management Cases, vol.13, no. 3, pp. 376-385. George, J, Carraher, S, Doerr, A, & Dandy, R 2012, A validity study of porters industry analysis, Allied Academies International Conference: Proceedings Of The Academy Of Strategic Management (ASM), vol.11, no.1, pp. 3-6. Pringle, J, & Huisman, J 2011, Understanding Universities in Ontario, Canada: An Industry Analysis Using Porters Five Forces Framework, Canadian Journal Of Higher Education, vol.41, no.3, pp. 36-58. Wohlfeil, M, & Whelan, S 2006, Consumer Motivations to Participate in Event-Marketing Strategies, Journal Of Marketing Management, vol. 22, no.5/6, pp. 643-669. Marber, A, Wellen, P, Wurtz, M, & Xiaoke, Y 2012, marketing warfare: a case study from the 2008 beijing olympics, International Journal Of Business & Public Administration, vol.9, no.2, pp. 11-18. Adidas 2012, Event, pp. 32-33, Business Source Complete, EBSCOhost, viewed 28 November 2012. Read More