Assignment on BPSM

Strategic Planning for Product FRONTRUNNER

Submitted by:Manish Ranjan Singh MBA (General), 2nd yr AMF- 18

About The Company

Name:- Adidas AG Industry:- apparel, accessories Area Served:- Worldwide Products:- Footwear, sportswear, sports equipments Revenue:- 11.99 billion (2010) Operating income:- 894 million (2010) Profit:- 567 million (2010) Company Profile Adidas AG is a German sports clothing manufacturer and parent company of the Adidas Group, which consists of the Reebok sportswear company, TaylorMadeAdidas golf company (including Ashworth), and Rockport. Besides sports footwear, Adidas also produces other products such as bags, shirts, watches, eyewear, and other sports- and clothing-related goods. Adidas is the largest sportswear manufacturer in Europe and the second biggest sportswear manufacturer in the world. Adidas was founded in 1948 by Adolf Dassler, following the split of Gebrder Dassler Schuhfabrik between him and his older brother Rudolf. Rudolf later established Puma, which was the early rival of Adidas. Registered in 1949, Adidas is currently based in Herzogenaurach, Germany, along with Puma. The company's clothing and shoe designs typically feature three parallel bars, and the same motif is incorporated into Adidas's current official logo. The company revenue for 2010 was listed at 11.99 billion. MISSION To become the best sports brand in the world.

 To that end, never equate quantity with quality.

EXECUTIVE SUMMARY OF THE PRODUCT ADIDAS launches front runner in India. The product, a cross training sports shoe will be sold under the brand name FRONTRUNNER. They come under the

category of consumer goods for fitness and health.

IDEA BEHIND THE PRODUCT The basic idea behind launching this product is to help out in making calculated and well monitor workouts.

 An idea of freshness as with shoes customer will be provided with 20 perfumed strips that make you to feel fresh even after using the shoe for long hours. PRODUCT OVERVIEW

FRONTRUNNER has a sensor placed under the sole and comes with a portable digital indicator.

The indicator keeps track of the distance covered and the speed at which you walk/run. Foam based foot contour The foam which is made of polyurethane that adjusts the lowest layer of the shoe by spreading itself according to the different shapes and sizes of feet to give it a complete snug and cushioned fit. Polyurethane is a unique material that offers the elasticity of rubber combined with toughness and durability. It uses Triple-Shock-Absorption technology which provides long term light weight cushioning. Perfumed strips placed under the soles to keep your shoes and feet smelling fresh as ever.
MAXIMUM SPREADING OF THE PRESSURE

Mainly in the heel area an enormous pressure arises, which will be led directly from the foot the spine and the joints. By the construction of the new Triple-Shock-Absorption it comes clear, how to block the pressure and to absorb it by the 3 components. The extremities will be released considerably. Special Feature

ADIDAS not only offers comfort and enables you to make a fashion statement but takes care of your health too

How is it Helpful.?

MAXIMUM SPREADING OF THE PRESSURE Mainly in the heel area an enormous pressure arises, which will be led directly from the foot the spine and the joints. The new Triple-Shock-Absorption, blocks the pressure and absorbs it by the 3 components. The extremities will be released considerably. The curvature of the spine and damaged discs are the consequences of missing shock absorption. Therefore the foot contour technology comes to good effect. The foam based polyurethane forming he lowest layer of the shoes adjusts according to the various shapes and sizes of feet. This is essential to get a complete fit of the shoes.

ACCESSORIES FRONTRUNNER provides an armband to place the digital indicator.

 FRONTRUNNER comes with a small portable digital indicator which displays the distance covered (km) and the speed (km/ph).

To keep your shoes and feet smelling fresh Sesmo comes with 20 long lasting perfumed strips which can be placed under the soles. FOOTWEAR INDUSTRY OVERVIEW Indian footwear market is estimated at about Rs 19,900 crore with a growth rate of 8-10 per cent. The category covers casual, formal, semi-formal and sports shoes along with sandals for men and women. Mens segment accounts for 59 per cent of the market, while womens segment contributes 41 per cent.

The overall share of organised retail is 20 per cent and is expected to reach 25-30 per cent by 2015. Urban India is estimated to contribute 70 per cent to the overall footwear market in FY 2012. Exclusive-brand outlets account for over 50 per cent of the footwear market followed by multi-brand outlets at 28 per cent. The preference for branded products is on the rise with a growing consumer preference to shop from organised retail locations like malls/large format stores. Key brands in India are Bata, Liberty, Clarks, Woodland, Khadims, Metro, Red Tape, The Loft, M&B Footwear, Da Milano, Timberland, Puma, Nike, Adidas, Reebok, M&B, Rockport, Provogue, Lee Cooper, Converse, Nine West, Aldo, Relaxo etc.

Indian footwear market is estimated at about Rs 19,900 crore with a growth rate of 8-10 per cent annually.

India ranks second among the footwear producing countries next to China. India produces more of gents footwear while the worlds major production is in ladies footwear. India is an attractive destination for technology and investments, because of following facts:Availability of abundant raw material base Large domestic market and The opportunity to cater to world markets MARKET SHARE Category Mens Shoes Ladies Shoes Kids Shoes Percentage 45% 40% 15%

SWOT

ANALYSIS STRENGTH Result oriented approach. The brand is going to be well accepted in the country. Quality and Comfort. Perfume strips (Launched for the first time)

WEAKNESS It may be unable to achieve projected sales. Varied consumer preference.

OPPORTUNITY The market is always open for innovation. Participation within a growing market. High penetration levels. The large increase in customer base that follows with the acceptance of the product by one customer. Changing needs of customers. Innovation according to the changing preferences of the new generation. THREAT Existing players in the market. Chances of idea of product being copied. Change in consumer preferences.

Strategy and Implementation Summary

TARGET MARKET SEGMENT STRATEGY Targeting strategy or targeting is the selection of the customers you wish to serve. The decisions involved in targeting strategy include: Which segments to target? How many products to offer? Which products to offer in which segments? Age -15 years - 45 years; Gender -Male and female; Life Cycle- Sports personality, youngsters, married, unmarried; Occupation -Sportsman, students, fashion oriented people, adventurous; Social Class- Upper middle class, upper class

PRICING STRATEGY The price is the amount a customer pays for the product. It is the only revenue generating element amongst the 4ps, the rest being cost centers. The pricing strategy should be made with the following objective: To Maximize Profits To Meet a Specific Target Return on Investment To Achieve a Target Sales Level To Maintain or Enhance Market Share To Meet or Prevent Competition In the case of FRONTRUNNER, the company followed the Skimming Pricing strategy. The practice of price skimming involves charging a relatively high price for a short time where a new, innovative, or much-improved product is launched into the market. MARKETING/PROMOTION STRATEGY Adidas FRONTRUNNER marketing strategy will communicate to the target customer segments that its product clearly exceeds all of the competitors. The strategy will employ several methods to communicate the innovative and distinct message of the product. The first will be a print advertising campaign. TV Adds Print Media Hoardings Posters Radio Adds Internet Adds Collaborating with health and sports clubs. Sponsoring sports activities

It would be one of the esteem product of the company, which would help the company generate huge amount of revenue. Hence, the company should focus on the grand launch of the product. For this, it should appoint any renowned sports icon which would gain additional promotion for the company and help the positioning of the brand. The company should also focus on the launch offer, which would gain initial attention from the customer.
SALES STRATEGY

The sales strategy recognizes the need for the company as a whole to back up its superior product offerings with excellent service. This mantra is important because if there was not a service organization to back up the product, there would be no customers after the second or third purchase. Consequently, the sales strategy will focus on customer support and making the customer's experience with FRONTRUNNER shoes as positive as possible. This strategy will use account managers that look after individual customers, ensuring that their needs are being met. The account managers will be responsible for a certain number of existing accounts as well as will be provided the resources to attract new accounts. REVENVUE PROJECTIONS Indian branded sports shoes industry is sized about Rs750cr and expected to grow about 850cr by 2012. Approximately 55% of Indian branded sports shoes market is dominated by Adidas along with Reebok and expected to have revenue of around Rs500cr by 2012 end.The company is expecting to contribute FRONTRUNNER about 4-5% of total sales of Adidas generating about Rs50-60cr sales by 2012 end.