Measuring Sources of Adidas Brand Equity - Essay Example

BRAND MARKET STRATEGIES, ADIDAS By MEASURING SOURCES OF BRAND EQUITY: ADIDAS Companies use a collection of brand equities to represent their products in the market (Voolnes, 2012, p. 6). Brand equity refers to the commercial value that is derived from the perception of consumers on any given brand name of particular products in the market as opposed to the product itself. Ataman (2003: 45) notes that the effect to the consumer is in the brand name and not the product itself. Companies use logos, trademarks and a collection of other symbols to present this information to the customers. The use of these symbols is meant to try and capture the customer mindset so that they can be thinking about the company products at all times through the items they possess at home (Estes, Gibbert, Guest, & Mazursk, 2012, p. 97). This can well be explained by use of the customer-based brand equity model that brings together the requirements for a publicly renowned brand in the market. A B C D E F KEY: A; Consumer Brand Resonance (mindset to one brand) B; Consumer Judgments (Most appropriate brand) C; Consumer Feelings (self-confidence and assuring) D; Brand Imagery (the three stripes) E; Brand Salience (Most noticeable among competitors) Source: Ataman, 2003 The relationship is supposed to exist between the brand salience and the final resonance that the consumers have in their minds. The objectives of every process above are; creation of active loyalty, rational emotional connections and a deep set brand awareness. To therefore measure the sources of brand equity, the management team especially the brand managers must take into account the facts that they must be aware of how consumers shop and use their products and the actual knowledge that the customers have on these products (Aaker, 2003, p. 253). Adidas AG has extensively used the theorized procedures above to create relevance of their brands in the market with keen awareness that they face stiff competition from other companies like Puma and Nike. The company understands that creation of an attachment to its products by the customers is a procedure. The symbol below represents the company logo that represents the brand imagery as indicated on the logo model above. Source: Adidas, 2012 The image appears on all the brands produces by the company. The three stripes are the ultimate identity of the company. Apparently the company ventures into production of sports attire and facilities. When the customers use these, there is a sense of cohesion between the product and the customer. A theoretical perspective of this issue brings to mind two ways of capturing the customer mindsets; through qualitative and quantitative ways. Adidas Company has used both qualitative and quantitative techniques as sources of measuring their brand equity. For instance, taking the example of the product below, the customer is supposed to be able to create an association between the product’s quality, the company brand (three stripes) and their associative nature. The major use of a brand is to capture the mindsets of the customers (Motion, 2003, p. 1083). Measurement of brand equities require the management to be aware of two important issues; the shopping/use characteristics of the brand and the emotional attachment of these customers to the brand. Source: Adidas, 2012 These shoes have an effect on the customer and the comfort created in using them develops an association that would resonate in the mind of the consumer for longer. The consumer would then identify other Adidas items by use of the three stripes indicated on these products. The aspect of free association as applied by Adidas resonates in other practical fields such as team sponsorship. The company supports Bayern Munich Football Club. The association between the successes of this giant team resonates in the minds of the consumers and the sight of the players putting on the company’s boots sends the feelings of the many fans to do the same. The position of the company in the market is superbly supreme. It has managed to stay ahead of the other companies mentioned as the leading brand in the market. This was exclusively seen in England in 2012 during the Olympics. The company was the leading sponsor of the games and highly developed its sources of brand equity. INTRODUCING AND NAMING PRODUCT AND BRAND EXTENSIONS Estes, Gibbert, Guest and David Mazursky (2012:91) determined that 80% of all products introduced into the international market each year are brand extensions. It is therefore important for all marketing researchers and brand managers to understand this aspect if they are to effectively satisfy their customers. Companies seek to retain their celebrity status in the market as far as their brands are concerned. Fida, Syed, Hussein and Shah (2013: 41) argue that there are several ways of introducing brands in the market. The choices may be based on development of a new independent brand, combining the new and existing brand and then there is application of the existing brand, the brand family and the new product to be introduced. Different types of brand extensions exist; line extensions and category extensions. The line extension is further divided into either horizontal or vertical extensions. In the line extensions, the company would be required to produce a brand in which case the parent brand acts as the base foundation upon which the new brand will be built. The area has to be in a new market segment but the product category remains the same. In the category extension, the parent brand is applied to introduce a different product category from the one currently being served. Adidas Company has been in operation since 1928 and there has been diversification of its products to wide range. Initially, the owner of the company, Adi Dassler only concentrated on production of shoes that were used for sports. There has been an evolution over the periods in time. The company has had a history of product introduction and extension in the market. Way back in 1936, the founder, Dassler drove to an Olympic village from Bavaria and persuaded Jesse Owens, a US sprinter to use his spikes. This was before the spikes were introduced to the market. Owen hauled four gold medals using these spikes and this cemented a new beginning for the introduction of the Adidas products. The methods attracted a high level application for the Adidas products from all over the world. This, according to Ataman (2003:19) was a line introduction in which these spikes were being introduced in line with the other shoes that the athletes had adopted. The difference here was the product category. This has applied from then up to these days. The hallmark of this introduction was in 2005 when the company introduced the Adidas 1 brand. This was the first ever shoe to use a microprocessor that is capable of performing millions of calculations per second when being used. For instance, it is able to automatically adjust the shoes’ level of cushioning that makes it suit the changing environments on the track. Moreover, in November of the same year, the company introduced a new version of the Adidas 1. It was more soft and firm to use. Other forms of line introductions and extensions include introduction of the adi-star salvation 3, the adi-star ride 3 (replaced adi-star cushion 6) and many others (Adidas Group, 2012, p. 05). In terms of categories as a method of product extension, the company has been able to develop and introduce complete football kits for teams (for example the German national football team), tennis rackets for superstars like Andy Murray and golf accessories amongst all other popular games and sports. This is a categorical extension where the company produces, names and extends parent brands to different product categories from the one it serves. The company positioning has been great on these introductions and extensions. For instance, immediately after introducing the Adidas 1 micro-processor, the company landed an 11 year deal to become the official NBA clothing provider. In 2012, the company was recording the highest revenue based on these product extensions, naming and further introductions (Adidas Group, 2012, p. 45). The conclusive remark here pits Adidas as the leader in introductions to the market as well as product extensions. MANAGING BRANDS OVER GEOGRAPHIC BOUNDARIES AND MARKET SEGMENTS Companies are either localized or multinational (Keller, 1993, p. 19). The multinational companies operate in different countries and are therefore have to manage their brands across regional and international markets. These are also in relation to the market demographic and cultural segments. There are many reasons for diversifying the market and going international, prime of which is to generate higher revenues from the international expanded market (Keller, 2001, p. 820). Market segments are also a reason to bring to focus when considering the management criteria when going international. The definition of the different bases of segmentation in marketing is important in developing the brand marketing plan in the different segments. For instance, the USA in the 2000 census revealed that the Asians and the Hispanics accounted for 28% of the population. This, translated into purchasing from an economical perspective translated to just over one trillion dollars in the annual purchasing power. Global branding has a collection of advantages to the company. As stated, the company is able to get high revenues. These are realized through economic economies of scale in production and distribution. There would also be uniform brand marketing practices. The company must therefore be aware that there are diverse consumption behaviors in different parts of the world (Schultz, 2004, p. 10). As stated, Adidas is a German company but it has managed to develop its brands over the three mentioned geographic and market segments. The internationalization of the company brands and therefore a need to manage them was developed as early as Dassler was able to notice the growing international market in 1936 when Jesse Owen won several gold medals under the sponsorship of the company. Management starts at local level where there are local teams in Germany with international players. Adidas has highly encouraged corporate management schemes to effectively manage the international brands. The Adidas AG group at initial level has different sections that, on corporate basis manage the international brands. The group has Reebok as corporate company. Besides this, it has Rockport, Ashworth and a collection of other Tailor-made companies as well as direct involvement in management of the teams that they sponsor. Most of the management is made on the basis of management of individual sports in the different countries. In India for instance, the company manages its brands through support for cricket. This is however corporately done by use of local advertisement companies that incorporates the Adidas products into the victory that the team earns. It has no specified support for countries but supports teams that bring it glory. A victory for an individual or a team also generates into it becoming the winner in terms of what it can produce next (Ritson, 2008, p. 33). In the segmentation section for instance, the company takes into account the four bases of segmentation; geographic, demographic and psychographic and behavioral. Most prolific is the use of international idols to develop a psychographic segmentation brand management. For instance, the company used Selena Gomez as its NEO style icon. In conclusion, the company has a very resound connection of corporate association with the different segmentation markets. Every market segment is managed by the social icon associated with it. Yohji Yamamoto Company in Asia manages the Asian affairs with affiliate command from Bavaria in Germany. References Aaker, D 2006, Building Strong Brands, Free Press, New York, NY. Amis, J, Slack, T & Berrett, T 2009, ‘Sport sponsorship as distinctive competence.’ European Journal of Marketing, Vol. 33 No. 3/4, pp. 250-272. Ataman, Berk. "A note on the effect of brand image on sales." Journal of Product 12.4 (2003): 237-270. Estes, Zachary, et al. "A dual-process model of brand extension: Taxonomic feature-based and thematic relation-based similarity independently drive brand extension evaluation." Journal of Consumer Psychology (2012): 86-101. Fida, syed and Hussain Shah. "International Brand Analysis of NIKE, ADIDAS AND PUMA: A Decade of Glory." INTERNATIONAL JOURNAL OF BUSINESS AND ECONOMIC RESEARCH 1.1 (2013): 60-70. Group, Adidas. Pushing Boundaries, Adidas Annual Group Report 2012. Print . New York: Adidas, 2012. Motion, Judy, Shirley Leitch and Roderick J. Brodie. 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