Adidas Sponsorship - Target Market Evaluation and Match with the Brand Adidas - Business Plan Example

Adidas Sponsorship Proposal Affiliation Adidas sponsorship proposal Table of Contents Table of Contents 2 Environmental analysis 4 Target market evaluation and match with the brand Adidas 5 Financial goal and budget 6 Sponsorship benefits 7 Sponsorship pricing strategy 7 Contract negotiation 8 Executive summary Sporting is vital to youths because it is a major environmental influence on physical growth, mental growth, and development (Perez-Rodrigo & Aranceta, 2001). Sporting activities during youthful stage will influence ones preferences and practices later in life. To ensure that youths receive proper growth and that they stay healthy, I propose sponsorship outreach project by Adidas. Adidas is a company that focuses on sporting activities, and its brand specializes in footwear and apparel. The company is very popular with sports activities where its brand image is promoted in sports such as running, basketball, football and tennis. The brand TaylorMade-Adidas Golf offers items identified with golf clubs, footwear, and attire. Different organizations produce most of the part of the products of Adidas. To minimize the expense of production Adidas has outsourced its significant part of production to an alternate organization located in Asia. The primary target customers for Adidas are people of around 13-30 years of age who are involved in diverse types of sports. The company produces high-quality brands to create interest in its audience at an affordable price. Along this category of customers, there is also a smaller target of clients who are not into sports but they shop for at the company for big logo’s and the look of the brands for their fashion interests. This category includes those between the ages of 16-25 years working middle class both feminine and masculine. This project will be offered to all Chinese youths who will take part in the Great marathon war. This sponsorship will run for seven years and will allow the youth participants to nature their talents in sporting activities as well as developing healthy bodies. The obesity rate in youths is increasing year after year (American Heart Association, 2013). Obesity in youths amid the ages 12-19 augmented from 6.1% in 1971-1974 to 18.2% in 2007-2012 (American Heart Association, 2013). This increment is not to be taken lightly and needs to be addressed for the future of our youths. The objective of this sponsorship is to give youths the opportunity to take part in sporting activities in order to enable them develop their talents and develop healthy bodies. Environmental analysis Chinese environment will have a great influence on the sponsorship of Adidas to the youths who are its target market. Among the key environmental factors in China are the political, social, environmental, technology and legal factors. Technology in China is one of the key aspects that will affect the sponsorship. China is a country that is top in terms of technology advancement, and this will offer it an opportunity to reach the target youths through integrated marketing communications such as promotion, public relations, and direct marketing. Adidas, on the other hand, is an organization that is advanced in terms of technology and adjusts effectively to the changes in technological trends in any country. This trait will make it best suit for the sponsorship. The social environment factor in China also favors Adidas sponsorship in the Great marathon event. China a country that is engraved in a traditional Chinese culture that regards sporting activities as an important characteristic. Sporting activities today have become commercial centers, and this implies that Adidas will be at an advantage and through the sponsorship; it will be a profit making entity. The legal system also will be a contributing factor to the success of the sponsorship by Adidas. The Physical Health Law developed in the year 1995 acknowledges the programs for physical fitness coupled with a series of regulations. With the end goal of advancing the health and physical condition of the overall population, the law will push the youths to turn up and benefit from the sponsorship in order to meet the National Physical Exercise Standard (Law et.al, 2008). The National Wide Fitness Program in China will see Adidas sponsorship be accepted in its target population easily. The political system in the China also will help in the success of Adidas sponsorship in the Great marathon war because of its system of governance. The system of governance oversees the proper functioning of the sporting affairs in the country. The 1980 policy of the open door is still upheld in China and has played a significant role in structuring sporting activities in China. Target market evaluation and match with the brand Adidas As noted in the beginning, Adidas will concentrate much on sponsoring the youths at the Great marathon event and thus the youths are its preferred market segmentation. This segmentation of its target market thus compels it to follow a concentration strategy that will enable its brand to penetrate the market. A couple of techniques will be used to achieve this, and the key strategy is sponsoring the youths in the event with Adidas branded attire. Adidas will prefer highlighting their brands on the on the participants kit (Chien, Cornwell, & Pappu, 2011). The youths will be required to wear these kits as they participate in the marathon, and the kits will be informed of caps and shirts. At the event also, Adidas may choose to market its brands by offering tables that are branded with its logo. This will be an alternative cheap technique of marketing as the event will be in the highly populated Chinese state thus the cost per person for the relative brand exposure will be low. The participating youths will be passing by every time, and thus they will be exposed to Adidas brand. Adidas will also offer prices for the best performers in the marathon. Through this, it will get a public mention at the awards ceremony that will be held at the end of the event. Moreover, Adidas will utilize their marketing materials such as the banners, flags, and pamphlets, which they will set up at the event. Adidas will also buy sports rights that will enable it delivers huge amounts of TV exposure. Through this sporting right, they can develop a narrative around their involvement and thus will be able to be exposed to new market opportunities. Financial goal and budget The sponsorship by Adidas is driven towards some financial goals that will sustain it in its continued operation. One of the key financial end goals is profitability. Under profitability, Adidas will be geared towards earning more revenue than the costs it incurs on operating expenses. Additionally, the organization will be aiming at achieving high cash flow rates because with a high cash flow rate, it will be able to maintain its operating activities and cover up for the basic expenses. Event budget INCOME Amount (£) Projected ticket sales total 240000 Sale of cap 100000 T-shirt sales 90000 Donations 150000 TOTAL INCOME 580000 Expenditure Amount (£) Advertising 35000 Venue hire and equipment hire 9000 Insurance, permits and licenses 6000 Services such as security 10000 TOTAL EXPENDITURE 60000 Sponsorship benefits Through the sponsorship, Adidas will accrue a wide range of benefits. Some of these benefits are a raised brand awareness, build brand positioning through its partnership in the event, create internal emotional commitment to the brand and act as corporate hospitality that promotes good relations between the participants in the event. A significant benefit that Adidas will get through its sponsorship of the event is the retention of customers. Retention of customers is a key challenge faced by most of the organization, and this sponsorship event will act as a breakthrough for Adidas in retaining most of its clients (Stahl et.al, 2012). The participants in the event also stand to benefit from both the financial support that will be offered as well as other forms of sponsorships from Adidas. Competitive advantage is also another key benefit that Adidas will accrue.Through its pricing strategy, consumers will shift from buying Nike products that are Adidas key competitor. Additionally, by positioning its sponsorship in the Great marathon, it will be at a competitive advantage because strong positioning and product personality are highly promising in the athletic market. Consumers are always willing to pay cheap prices for high-quality products and thus Adidas will be able to threaten the market of its key competitors and be at an added advantage. It will also have an advantage as compared to its competitors because signing of the contract for the event sponsorship increases its power of supply which in turn leads to high number of sales of the companies products. Sponsorship pricing strategy In coming up with the pricing strategy, Adidas will put in some considerations such as how the event will be in terms of market, the lead time prior to the event, the economic situation in China and the uniqueness of the brand it is going to offer the participants who are its preferred target market. The best pricing strategy to employ in this event will be market penetration strategy. This strategy will allow for the setting up of a low price for Adidas brands in order to attract a great quantity of buyers and a large market share (Biscaia et.al, 2013). The setting of the low price will enable Adidas to penetrate the market deeply and faster. High sales will follow, and this will reduce the company’s production cost hence it will consider cutting down the prices even further. Contract negotiation After Adidas has been chosen as the sponsor for the event, it will follow various steps to ensure that the target market well understands its contract. It will sit down with the main stakeholders in the event in order to explain to them what their marketing goals entail in their target market and their marketing plan. Additionally, we will negotiate the sponsorship packages and after settling on the best sponsorship package, we will schedule a time to present the package to the stakeholders at the event. Afterward, we will review the sponsorship and make necessary changes where need arises and if the stakeholders are satisfied, then Adidas will execute the sponsorship. Adidas will then present to the stakeholder and execute summary containing the elements of the contract and will advise them on how to take advantage of the sponsorship. References Biscaia, R., Correia, A., Rosado, A. F., Ross, S. D., & Maroco, J. (2013). Sport sponsorship: The relationship between team loyalty, sponsorship awareness, attitude toward the sponsor, and purchase intentions. Journal of Sport Management, 27(4), 288-302. Chien, P. M., Cornwell, T. B., & Pappu, R. (2011). Sponsorship portfolio as a brand-image creation strategy. Journal of Business Research, 64(2), 142-149. Law, K. S., Wong, C. S., Huang, G. H., & Li, X. (2008). The effects of emotional intelligence on job performance and life satisfaction for the research and development scientists in China. Asia Pacific Journal of Management,25(1), 51-69. Perez-Rodrigo, C., & Aranceta, J. (2001). School-based nutrition education: lessons learned and new perspectives. Public Health Nutrition, 4(1), 131-139. Stahl, F., Heitmann, M., Lehmann, D. R., & Neslin, S. A. (2012). The impact of brand equity on customer acquisition, retention, and profit margin. Journal of Marketing, 76(4), 44-63. The American Heart Association (2013). Overweight & obesity: Statistical fact sheet. Retrieved from: http://www.heart.org/idc/groups/heart-public/@wcm/@sop/@smd/documents/downloadable/ucm_319588.pdf Read More