RESEARCH REPORT

ON
“MARKETING STRATEGIES OF
ADIDAS

Report Submitted For The Fulfillment Of The Requirement Of

Degree Of Master Of Business Of Administration

Submitted To Submitted by:

Roll no.:
-4th Sem

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 ACKNOWLEDGEMENT

First and foremost I would want to thank my Institute Janhit Institute of

Education & Information, Greater Noida for giving each and every
student a platform of such nature where even before the completion of
two’s course, interaction with the industry and exposure to the same is
made possible.

I express my immense pleasure and solemn gratitude to Mr. Satish Matta,

Faculty, JIEI, Greater Noida for giving me this opportunity to study an
entire sector very closely.

Last but not the least I am grateful to all those persons who were involved
with me in the project for their co-operation and support.

RAHUL ROHIT

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 TABLE OF CONTENTS

OBJECTIVES OF THE STUDY

AIM / OBJECTIVES OF THE MARKET

INTRODUCTION

DEFINE THE MARKET

MARKETING MIX

METHODOLOGY

FINDINGS AND ANALYSIS

SWOT ANALYSIS

SALES ANALYSIS

COMPETITIVE BRAND & COMPARATIVE ANALYSIS

LIMITATIONS

RECOMMENDATIONS & CONCLUSION

BIBLIOGRAPHY

APPENDICES

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Objectives
of the
Study

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 AIM/OBJECTIVES OF THE MARKET STUDY

1. To understand why customers buys a particular

product.

2. To know the marketing opportunities

3. To understand marketing problems

4. To help in the selection of right course of actions

5. To know about customers acceptance of the product

6. To understand the distribution network

7. To forecast the probable volume of the future sales.

8. To analyze the excepted market share

9. To assess competitive slight policies

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Introduction

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 INTRODUCTION

Our project topic is "Adidas" which is a shoe company and

we are analyzing its Marketing Strategy. We have chosen

this particular topic mainly for two reasons. Since our

childhood days we had great interest in the shoes and We

like to buy new shoes as and when it comes in the market.

The Shoe Company that We most admire is Adidas. Hence

We have decided to do my project report on this company.

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Brief History : In the small German village of

Herzogenaurach the world began its love affair with

Adidas (Ryno’s Company History). In 1920, Adolf “Adi”

Dassler brought to life those three little stripes. With his

brother, Rudolph, Dassler manufactured his first sports

shoe, made for training, after realizing the need for

performance athletic shoes. In1948, the Dassler brothers

separated to form their own two separate companies.

Dassler formed Adidas and his brother formed Puma, both

headquarters in Herzogenaurach.

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The Adidas mission has changed little since founder Adi

Dassler began making sports shoes in the 1920s: to be the

best sports brand in the world. The history of Adidas is one

of consistently meeting the evolving needs of the athlete.

Focusing more on function and less on fashion, Adidas

strives to provide athletes with shoes that can make a

noticeable difference in their performance. Meeting

athlete needs is what makes Adidas the best. Adidas

America has continued to build on this history.

In February of 1993, Adidas acquired Sports Inc., a

US-based sports marketing company founded by former

Nike executives Rob Strasser and Peter Moore. Sports Inc.

had been working in conjunction with Adidas USA on the

design, development, and marketing of the Adidas

Equipment line. This line helped rejuvenate and reposition

the Adidas brand in the United States by creating an

exclusive line focused on fulfilling the functional needs of

the athlete and by utilizing the best materials and athlete

input in the tradition of Adi Dassler. It offered moisture

management, thermal insulation, weather protection, ease

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of movement, and safety, helping the athlete to perform

more efficiently. After the successful creation and launch

of Adidas America

General Information

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For over 80 years Adidas has been part of the India of

sports on every level, delivering state-of-the-art sports

footwear, apparel and accessories. Today, with total net

sales of 6.1 billion and net income of 208 million, Adidas -

Salomon is a global leader in the sporting goods industry

and offers the broadest portfolio of products. Adidas-

Salomon products are available in virtually every country

of the world. Their strategy is simple: continuously

strengthen our brands and products to improve our

competitive position and financial performance.

The company's share of the world market for sporting

goods is estimated at around 15 percent.

Activities of the company and its approximately 100

subsidiaries are directed from Adidas-Salomon AG's

headquarters in Herzogenaurach, Germany. Also located

in Herzogenaurach are the strategic business units for

Running, Soccer and Tennis as well as the Research and

Development Center. Additional key corporate units are

based in Portland, Oregon in the USA, the domicile of

Adidas America Inc. and home to the strategic business

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units Basketball, Adventure and Alternative Sports. The

strategic business unit Golf is based in California. The

business unit Winter Sports is in Annecy, France. The

company also operates design studios and development

departments at other locations around the world,

corresponding to the related business activity. Adidas-

Salomon AG has approximately 13,400 employees

worldwide.

Turnover and Brand Image

The turnover of Adidas company has grown to 45 Million

Rs. in 2005. Almost 53% of the turnover is from sale of

apparel and accessories with the rest from footwear.

The Adidas brand is one of the most popular brands as

determined by a within brand survey of sportswear brands

in the year 2005.

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Future Plans

Turnover is expected to rise to 550 million rupees for

Adidas India in 2006. cash break even is fore cast during

calendar year 2004 and an operating break even during

2005. The other Adidas – owned brands, salomon & taylor

made are expected to hit Indian Adidas stores during 2005

and 2006.

HISTORY OF THE COMPANY

THE TIMELINE OF THE COMPANY

1948

The Dassler and his brother Rudolph and Adolph, separate

and two companies. Adi Dassler forms adidas-a

combination of his nickname, Adi, and the first three

letters of his last name a lowercase “a” is adopted to

further distinguish adidas. He commences production with

47 employees. Rudolph forms Puma, with its headquarters

located across town from adidas in Herzogenaurach.

1949

Adidas adopts the trademark three-stripes.

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1955

The first license is given to a factory in India to

manufacture adidas shoes.

1972

Adidas introduces the “Trefoil” logo.

1984

Kathe Dassler dies, leaving the company to Horst, the

Dasslers’ first-born.

1987

Horst dies at the age of 51.

1987

Ron More is brought in from adidas Canada to run

operations and a new facility is acquired in Warren, New

Jersey.

1988

Adidas is incorporated.

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1989

Rob Strasser and Peter Moore of Sports Incorporated

present adidas with the “Equipment” concept. The

footwear and apparel line is introduced in 1991.

1990

Bernard Taupie purchases 80% of adidas stock.

1993

A group of investors led by Robert Louis-Dreyfus, former

head of the British advertising group Saatchi & Saatchi

P.L.C., acquires control of adidas. Adidas America is

formed in February; Rob Strasser is appointed CEO and

Peterr Moore becomes Worldwide Creative Director.

1993

Rob Strasser dies on October 30. Peter Moore is named

CEO of adidas America n November 9, while maintaining

his role as Worldwide Creative Director.

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1994

Adidas moves from eighth to third position in Indian

Footwear Industry Rankings. Indian Footwear and apparel

sales increase by an estimated 75%.

1995

Adidas goes public on the stock exchange in Frankrurt.

1997

Performance Logo becomes the worldwide adidas logo.

1997

The acquisition of Salomon broadens the Adidas product

range to include Taylor Made for golf products and Mavic

for cycle components.

1997

Adidas achieves record sales and passes the 1 billion

dollar mark in gross sales in the India.

2000

Adidas proudly celebrates the 100th birthday of our

founder, Adi Dassler

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2005.
Sale of Salomon

The Salomon Group (including Salomon, Mavic, Bonfire,

Cliché and Arc’Teryx) is being sold to Amer Sports in
October 2005. The new adidas Group is focusing even
more on its core strength in the athletic footwear and
apparel market as well as the growing golf category. The
legal name of the company will change to “adidas AG” in
May/June 2006.
2006

adidas-Salomon AG acquires Reebok

The closing of the Reebok transaction on January 31, 2006

marks a new chapter in the history of the adidas Group.
By combining two of the most respected and well-known
brands in the worldwide sporting goods industry, the new
Group will benefit from a more competitive worldwide
platform, well-defined and complementary brand
identities, a wider range of products, and a stronger
presence across teams, athletes, events and leagues.

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THE TECHNOLOGY TIME LINE OF THE COMPANY

1925

Leather soccer shoes with nailed studs and track shoes

with hand forged spikes are produced for the first time in

the Dassler factory.

1928

Dassler purchases his production building in

Herzogenaurach. 100 pairs of shoes are produced daily.

Late 1920s

Dassler begins producing soccer balls.

1929

Dassler fills his substantial order of 10,000 pairs of shoes.

1930

Dassler introduces soccer shoes with nail-stripe trim.

1931

The first tennis-specific shoe earns one of the more than

700 patents awarded to Adi Dassler.

1935

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400 pairs of shoes are being produced daily.

1937

Dassler now produces shoes for eleven sports. 800 pairs of

shoes are produced daily.

1946

Dassler produces sports shoes made of sailcloth from

military tents and rubber from leftover American fuel

tanks after World War II.

1940’s

Dassler introduces arch support lacing and an early type

of speed lacing.

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1948

Adidas develops the first indoor track shoe.

1949

Adidas produces the first soccer shoes with molded rubber

studs.

1950

Adidas produces the first “Samba” soccer shoe, made for

better traction on ice, snow and hard frozen ground.

1953

Adidas produces the first track shoes with changeable

spikes.

1953

Adidas produces the first sports bag.

1954

Adidas begins producing soccer boots with screw-in

studs, helping Germany win the World Soccer

Championships in Switzerland. The screw-in studs

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enable the game to be played under vastly different

conditions without slipping.

1954

2,000 pairs of shoes are produced daily.

1956

Adidas develops nylon soles for soccer shoes.

1957

Adidas produces the first track shoe with nylon half-

soles.

1960

Adidas develops a rubber toe protector and rubber

foxing for the training shoe.

1963

Adidas introduces nylon half-soles with molded in-

thread inserts.

1964

Adidas introduces outsoles with bending zones, which

provide flexibility.

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1964

Adidas produces a track shoe weighing only 96 grams,

the lightest track shoe in the world at that time.

1967

Adidas develops heel padding to protect the Achilles

tendon.

1967

The first adidas tracksuit is produced.

1968

Adidas introduces injection-molded, multi-studded,

polyurethane soles.

1968

“Achille,” the first real jogging shoe, is launched on

the market.

1968

Adidas introduces the “adilette” health sandal.

1972

Adidas introduces rain soles.

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1973

Adidas introduces the plastic Ghilly lacing system.

1973

Adidas introduces “adicourt” sole for indoor tennis

surfaces.

1974

Adidas begins tennis racket production.

1974

Adidas introduces its first leisure shoe.

1975

Adidas introduces the “adistar 2000,” the first track

shoe for syntheticd track surfaces.

1976

Adidas introduces the first cross-country ski binding.

1976

Adidas introduces “TRX” jogging shoes.

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1977

For the first time a soccer shoe is developed with a

dual-density sole material. The “Copa Mundial,” the

world’s largest selling soccer shoe ever, is launched.

1979

Adidas introduces shock-absorbing elements for

sports shoes.

1979

Adidas introduces outsoles with beveled studs.

1982

Adidas develops soccer shoe sole materials in three

different degrees of hardness.

1985

Adidas introduces the “APS,” the first running shoe

with an adjustable shock absorption system.

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1986

Adidas introduces the first soccer shoe with bayonet

fastening and ceramic screw-in studs.

1988

Adidas introduces the Torsion system, which allows for

multi-directional flexibility. It was designed to give the

midfoot support during twisting and flexing motions,

and proves to be revolutionary in the sports shoe

market.

1991

Launch of the Equipment line: a new, performance-

oriented and functional, shoe and textile line.

1993

Adidas lunches “Tubular Technology,” the first shoe

with total customization possibilities.

1994

Predator technology for soccer footwear results in

more powerful, accurate shots.

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1995

Traxion Technology combines the grip of screw-ins

with the comfort of molded cleats.

1995

Adidas introduces “Point of Deflection System”

technology for running shoes. This outsole technology

provides improved shock absorption and stability by

deflecting and dispersing pressure at the point of

impact.

1996

Adidas introduces “Feet You Wear,” a concept which

provides extra stability by copying the design of the

human foot.

1999

Adidas introduces Teflon-coated fabric for swimwear

to reduce drag.

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2003

a.D.S (adidas Drainage System): Used primarily in

Adventure products, the a.D.S. is a patented system

integrated into the midsole of a shoe. Its perforated

internal midsole allows for maximum water drainage in

wet environments

2006

Introduced ClimaProof: Light, breathable fabrics that

block wind, rain and snow while allowing heat and sweat

to escape through evaporation, keeping you dry and

comfortable in even the harshest conditions

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 FOOTWEAR TECHNOLOGIES

adiPRENE

 Shock absorbing material under the heel.

 Provides heel cushioning and stability.

 Provides extra absorption of harmful impact forces.

 Adds stability a ground contact.

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adiprene

 Elastic material under the forefoot.

 Allows a more efficient push-off.

 Retains natural forces at toe-off for added forefoot

efficiency.

 Maximizes energy use.

torsion

 Helps control of the natural independent rotation of the

heel and forefoot.

 Creates stability and control.

 Helps the forefoot adopt to surfaces easily.

 Maintains mid-foot support.

Traxion
 Lugs in shoe bottom provide optimal ground

penetration and maximum grip.

 Lug placement optimizes comfort while increasing

surface contact.

 Adds stability at ground contact.

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 Meets the specific needs of different sports and

surfaces.

Pro-Moderator
 Usage of TPU as lightweight mid-sole support system

reduces weight of shoe giving greater mobility.

 Improved durability of mid-sole adds to life of shoes

providing consistent and stable run.

 Direct moulding on mid-sole frees your foot from thick

inserts giving improved toe-all.

GeoFit Frame

 An Internal footwear technology that enhances fit and

comfort by placing padding in anatomically correct

areas.

 Every piece of anatomically moulded padding follows

the form of the foot, evenly distributing pressure for the

ultimate fit.

 Improved padding means improved comfort. Improved

comfort equals an enchances sense of stability, further

providing more protection.

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 It eliminates the internal heel counter by extending the

TORSION bar to act as an external heel counter, thus

reducing weight.

Quickstrike

 Light outsole improves flexibility.

 Abrasion resistant lugs absorb impact.

 Precise location of outsole lugs-gives consistent

performance.

 Improves cushioning and durability

adiwear

 A non-marking rubber outsole compound that offers

better abrasian resistance than any other outsole

material.

adiTUFF

 An abrasion resistant material used in the toe and / or

lateral forefoot of the shoe’s upper It protects the upper

from excessive wear.

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Define
the
Market
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 Define the Market

Some of the theory we have used in my project

are as follows :

Theory: what is market research and why it is

important.

Market research is a method of collecting data which will

make you (as a business) more aware of how the people,

you hope to sell to, will react to your products or services.

Market research will answer questions like:

• Whether your products or services are needed

• Who might want to buy your products

• What age, sex, income occupation etc. are the

people I want to sell to.

• If there are changes taking place and how this might

affect what you sell

• How well your products or services might sell

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• How much demand there is for what you hope to sell

• What price would people be prepared to pay

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Conducting market research

There are number of ways in which you can carry out your

research but you need to carefully consider why you made

this choice and what you hope the evidence will suggest

to you.

Questionnaires and personal interviews are one of the

most common ways in which you can conduct market

research, and there are many methods of gathering data

this way: Direct Interview, Mail Survey and Telephone

interview. Depending on the type of data you hope to

collect will have a impact on what you choose to use. we

have made use of two type of survey methods,

questionnaire and mail survey. We have asked some

question about the company by mail and also by direct

contacts. The Question we have asked are given in

“questionnaire part” below.

Theory: marketing mix

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The Marketing Mix (The 4 P's of Marketing)

Marketing decisions generally fall into the following four

controllable categories:

• Product

• Price

• Place (distribution)

• Promotion

The term "marketing mix" became popularized after Neil

H. Borden published his 1964 article, The Concept of the

Marketing Mix. Borden began using the term in his

teaching in the late 1940's after James Culliton had

described the marketing manager as a "mixer of

ingredients". The ingredients in Borden's marketing mix

included product planning, pricing, branding, distribution

channels, personal selling, advertising, promotions,

packaging, display, servicing, physical handling, and fact

finding and analysis. E. Jerome McCarthy later grouped

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these ingredients into the four categories that today are

known as the 4 P's of marketing, depicted below:

The Marketing Mix

These four P's are the parameters that the marketing

manager can control, subject to the internal and external

constraints of the marketing environment. The goal is to

make decisions that center the four P's on the customers

in the target market in order to create perceived value

and generate a positive response.

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Product Decisions

The term "product" refers to tangible, physical products as

well as services. Here are some examples of the product

decisions to be made:

• Brand name

• Styling

• Quality

Price Decisions

Some examples of pricing decisions to be made include:

• Pricing strategy (skim, penetration, etc.)

• Cash and early payment discounts

• Price flexibility

• Price discrimination

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Distribution (Place) Decisions

Distribution is about getting the products to the customer.

Some examples of distribution decisions include:

• Distribution channels

• Market coverage (inclusive, selective, or exclusive

distribution)

• Warehousing

• Distribution centers

• Transportation

Promotion Decisions

In the context of the marketing mix, promotion represents

the various aspects of marketing communication, that is,

the communication of information about the product with

the goal of generating a positive customer response.

Marketing communication decisions include:

• Promotional strategy (push, pull, etc.)

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• Advertising

• Personal selling & sales force

• Sales promotions

Theory : Swot analysis

This theory tells about the company strength, weakness,

opportunity and Threats. This theory is very important for

the company because this theory tell the weakness and

the strong points of the company and if company knows it

weakness and it strong points then company becomes

easy operative and also the profits as well as the market

share of the company get increased.

The Company

Adidas entered the Indian market in 1996 by setting up a

100% subsidiary of Adidas AG called Adidas India Ltd. and

announced its joint venture with Magnum International

Trading Company Ltd. on October 1, 1996. The new joint

venture – Adidas India Ltd. – was incorporated with an

initial investment of Rs. 8000 million with Adidas India Ltd.

40
holding 80% of the equity and Magnum holding the

balance 20%. This investment was raised to Rs 475 million

with the equity structure remaining the same. Currently,

the total investment stands at Rs. 500 Million with the

equity structure changing to 91.4% by Adidas and 8.6% by

magnum.

Adidas’ Range of Products in India

A month after announcing the joint venture, Adidas India

Ltd. launched its range of sports footwear, apparel and

accessories in New Delhi on November 1, 1996.

Subsequently, Adidas products were also launched in

Mumbai, Bangalore, Chennai, Hyderabad and Calcutta.

Currently, Adidas products are available in 30 cities in

India.

The range of Adidas products available in India include

sports footwear featuring some of the most popular

innovations and technologies developed by Adidas such as

Feet You Wear, Torsion system and adi wear. The sports

footwear available in India includes a wide range of core

41
categories such as adventure, basketball cricket, golf,

indoor, running, tennis, training, soccer and workout.

Adidas has introduced in India, a wide range of sports

wear for both men and women. These include apparel for

athletics, basketball, cricket, golf, running, soccer,

swimming, tennis and training for Men. The women’s

range includes apparel for athletics, golf, running,

swimming, tennis, training and workout. Accessories

include bag packs, campus bags, medium and large kit

bags, caps, socks, wrist and headbands.

Adidas Markets its products in India through a combination

of mega exclusive stores (area of 1000 sq. feet and

above), exclusive stores, multi-brand stores and

distributors.

At present, Adidas is available in 75 exclusive outlets out

of which 34 are company – owned with 8 new Company –

owned stores planned for 2006 and in 450 multi-brand

outlets in India.

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Marketin
g Mix

43
 MARKETING-MIX ( FOUR P’S): ADIDAS

THE PRODUCT:

Whatever your athletic preference, you can now purchase

an extensive range of Adidas footwear and apparel online.

From running shoes to baseball cleats, eye wear to

lanyards, collegiate licensed jackets to good old fashioned

cotton T-shirts, all things sport are available at the Adidas

store.

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 .

45
46
HOW DO ADIDAS CREATE ITS PRODUCTS

Adidas goal is to create a product that is honest – it

must perform. The rule is simple: form follows

function.

Technology and functional design. A development

team makes the actual prototypes. These prototypes

are then presented to the retail market by the

marketing department.

An Adidas product is the result of the intense thought

and creative energy of many different people. The

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following is a general outline of how we create our

performance-based products.

1. The marketing department evaluates athletes’

needs and develops a basic concept of how

those needs should be met. This concept is then

presented to the design department.

2. Based upon this concept from the marketing

department, the design teams sketch possible

prototypes.

3. The people from design and marketing consider

the prototype sketches together, narrowing the

selection to those they anticipate will most

successfully meet athletes’ needs.

4. The development department then works with

the design department to create an actual

prototype from the selected sketches.

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5. Three separate groups – marketing, design and

development – meet and discuss how to improve

the prototype.

6. Samples are wear-tested to ensure the product

meets Adidas standards for performance and

durability and stands up to the demands of the

sport for which it was designed.

7. Preview samples are presented to key accounts

and consumer focus groups for feedback. Based

upon this information, final changes are made.

8. Samples are distributed to Adidas sales

representatives for presentation to retailers.

9. The finished product is delivered to retailers.

A. As A BRAND

At Adidas –you have got to be sporty. At Adidas the

brand awarding is been taken rather seriously at its

headquarters. Adidas wants to bring inline skates into

India.

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What that kind of stuff got to do with Indian market?

Yes, it won’t really be a hot seller, but it will

contribute a lot to Adidas brand image. That’s the

Adidas way of doing it – image is a critical part of

branding strategy the world over.

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The idea of the company is to introduce performance

specific sports shoes in the Indian market by building

images around the world & at the same time create

the need for these shoes at the ground level.

Adidas already has heavy weight sportsmen such as

Sachin Tendulkar, Leander Paes & Mahesh Bhupathi

endorsing the brand in India. They had the image,

apart from endorsing the performance element in the

brand. Adidas steps out of crease with a clear sports

positioning. Adidas will take on arch Nike with almost

the same positioning. Its working with promising

athletes to give them a taste of its products. Adidas

nowadays is capturing an attitude that is sports

related.

Adidas in fact did go through a limited fashion phase.

Adidas says – that you are tempted to make quick

buck but we would like to stick to the sports brand

image because that make us fashionable.

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B. Words of G. Kannan (Director – Marketing)

“Our Secret is our commitment to the sports process.

We develop shoes that take into account the needs of

a particular sports & the role of this brand is driven

by this factor”.

Good news for Adidas is that even in the casual

market, the trend is towards being sporty. Going to

Gym is fast graduating from a mere fad to serious

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body building, strengthening & toning. This is

reflected in the clothes that people wear today. The

three stripes, for instance is unique property which

can be reinvented in various forms as trends changes.

C. For Adidas the product plays an eminent role

in the enhancement of their corporate as well as

sports image:

ADIDAS SAYS –

“Nothing compromised. The most innovative Adidas

products created specifically to help make you a better

athlete. For Adidas, product is not just a assortment of few

items. But it involves—developing of the right product –

which can then be put to right place & sold with the right

promotion & price.

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54
VALUE OF IT’S PRODUCTS FOR ADIDAS

Our goal is to create a product that is honest – it must

perform. The rule is simple: form follows function.

As studied earlier an Adidas product is the result of

the intense thought and creative energy of many

different people. If a company sell an automobile, is it

selling a certain no. of nuts and bolts, some metal

sheet, an engine and four wheels?

If a company sell a delivery service, is it selling so

much wear and tear on a delivery truck and so much

operator fatigue? As per Adidas the answer to these

question is instead what we are really selling is the

satisfaction, use or profit the customer wants.

Adidas says that all the customer wants is, that

whatever product they purchase should fulfill all their

needs and preferences. They don’t care how they

were made. Further they want that when they order

something, the don’t really care how much out of the

way the driver had to go or where he/she has been.

55
They just want their package. That means for them

only the final service matters.

As per Adidas the idea of product potential customer’s

satisfactions or benefits is very important. Adidas

says that the total product is not just a physical

product with its related features, but it includes

accessories, installation, instruction on use, the

package, perhaps the brand name which fulfills some

psychological needs a warranty and confidence that

service will be available after the purchase.

PLACE AND PHYSICAL DISTRIBUTION:

A: Place

Adidas is very much concerned about its second “p”.

as per Adidas place and physical distribution of the

product is something on which almost every company

spends a handsome amount of money.

Hence Adidas takes a good care of its place and

physical distribution process. Adidas has appointed

56
marketing specialists who are taking care of the

supply of the product and their distribution channels

and process.

Process used – assorting progress

Entire range, which is available is put together to give a

target market what it wants. Marketing specialists put

together an assortment to satisfy some target market. His

is usually done by those who are close to the retailers

only.

B: Physical distribution

As per Adidas nearly half of the costs of marketing is

spend upon the physical distribution.

To take care of this problem Adidas has appointed

marketing managers who decides how the

transporting and storing functions should be

divided within a channel.

Note: Physical distribution can be varied endlessly in a

marketing mix and in a channel system.

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TRUCKS

In Adidas, except the export products, trucks are

considered to be the best medium for transport. The

flexibility of trucks makes them really good for moving

small loads for short distances. They can travel on almost

any road. According to Adidas they can give extremely

fast service. Also trucks causes less breakage in handling.

PROMOTION:

Adidas is one of the India’s biggest company of sports that

spends nearly $10 million on its sales promotion and

advertising in Indian Market.

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Adidas believe that it just cannot be taken lightly. It is a

very important aspect of products life cycle. It is the

process which is responsible for the growth or decline in

the sale of the product.

Adidas thinks that promotion is communicating

information about the product between the seller and the

buyer to change attitudes and behavior.

To handle the company’s promotional activities Adidas has

employed marketing managers, wherever the Adidas is

located. These marketing managers look after process of

the promotion of the products of their company.

59
As per Adidas the marketing managers promotion job is to

tell the target customers that the right product is available

at the right place and at the right time and especially at

the right price.

Adidas thinks that only taking the product to the

customers is not a task of the company. But company

takes a very important look about how the product

works and this message is communicated to their

consumers. Because a wrong message can lead to the

end of their products life.

Sales Promotion

Adidas is the most popular amongst its rival for its

excellent sales promotional activities.

As per Adidas they say that they themselves are

responsible for the encouragement of the customer to

by their products. Adidas believes sales promotion

tries to compliment the company’s selling efforts.

60
STEPS THAT ADIDAS TAKE TO PROMOTE SALES

In the last years the Adidas has almost given sale to

its products 6 to 7 times i.e. almost twice in a year

Adidas goes for discount on sales. They arrange

contest.

In order to motivate the employees of the

company Adidas also prepares training material for

the company’s own sales force. They even design the

sales materials for the company’s own sales force to

use during the sales calls.

As per Adidas, people see same message in different

ways. They may interpret the same words differently.

So Adidas always tries to deliver the message which

everyone can easily understand.

ADVERTISING

As per Adidas advertising can get results in a

promotion blend. Good results are obtained at a cost

of course. The amount spent in the Unites States for

61
advertising is growing. Continuously, from World War

II to 1980 it went from $1 billion to $50 billion.

Adidas also spends nearly $2.9 million on its

advertising throughout the world. Adidas in India is

spending almost $17 million on advertising.

The heavy weight players like Sachin Tendulkar,

Leander Paes and Mahesh Bhupathi are already

attached with their ad-campaigns.

62
PRICING:

Adidas is clear, it wants to become the no. one sports

brand in India, a choice brand for all brands. So far so

good, but how will it tackle a price conscious market

like India?

Adidas feels that being a high energy business Adidas

introduces 600-700 articles every six months –

enables the brand to remain fresh and bring on an

international and Indians the brand from the price

stand point.

Price, that’s the most critical factor in the Indian

context. Adidas believes it has to deliver a functional

at an affordable price. It’s a tough job – to maintain

the integrity of the performance and still come out

with a product a right price point. Globally shoes start

at $50. But in India as the perceived need is lower,

you have to make the product more affordable.

To tackle this, Adidas came out with speed 2000, a

product priced at Rs.995 with the help of local and

63
Hong Kong source people. Adidas however feels that

its just the matter of time before India coverage’s the

world on this front. It is very difficult to operate on a

lower price point and maintain integrity of product,

but its been barely 3 years since the sports market

has taken off.

The original sector is just 20% of the total market and

80% of the volumes comes from sporty shoes. But our

market is producing products at a price that is

relevant to the consumers.

Adidas feels that as the volume go up, Adidas will try

and work out price points as people graduate with

better understanding of quality and price perception.

Volumes are bound to go up. Adidas started at the

time when India had no strength out in the sports

products market in 1989 – 90. Its then licensing

partner Bata, and it had limitations of what it could

have put behind the brand. So company took the next

best step when the licensing agreement ended to

take a bigger share in business.

64
To conclude we can say that Adidas is putting all

efforts to bring down the price consciousness in the

Indian market. Company is trying to make products,

which are easy to afford and still maintain the

integrity of their performance.

Growth has been phenomenal for Adidas even given

the base is small. In 1998 Adidas grew by 25%, 1999

by over 50% and this year Adidas is expecting more

than 50% in terms of value in both shoes and apparel,

while the industry growth as a best case estimate has

been 20-25%.

MARKETING STRATEGY – ADIDAS OTHER

STRATEGY

Adidas, the brand with three stripes, seems to use the

elements of high-tension in its ads. Remember the

Sachin Tendulkar commercial? How everything is

near-frozen, and the shattering glass signifies

release. Release of tension. Adidas gives you a

chance to but the boundaries – in every sphere.

65
Only now, the setting is not the playground or the

track or the court, it is the urban landscape – with its

omnipresent traffic jams, crowded streets and so

forth. This way, Adidas becomes a part of life.

Anyone’s life. You don’t have to be the high-voltage

performer to be a part of the Adidas family. And it

goes beyond that – Adidas becomes something that

makes you better. Not just as an athlete, but as a

sports person, a better human being.

One of the advertisement: The spot featuring

Boldon, shows him chasing a thief (who’d stolen a TV

set when its owner was in the bath) through the dark

streets. To help a man (the owner, in a towel) in

distress. And he uses all the power that he can, to do

what he has to do and what he needs to do. And

Adidas helps him perform better, than he would

otherwise have been able to. This is perhaps shown in

an oblique way when the spot ends at the feet of

Boldon and the bather.

66
One is wearing a pair of Adidas shoes while the other

is barefoot. Adidas makes you better, goes the base.

In short, the other man could have done as well as

Boldon. The bather reads any man. Any man who

wears Adidas. And Adidas goes beyond athletic

performance – it becomes everyday life. In stark

reality. Though humorously and light, it has a deep

meaning.

MARKETING: ADIDAS

In 1997, Adidas became Adidas-Salomon with its US $1.4

billion purchase of Salomon, a French manufacturer of skis

and other sporting goods. The deal put Adidas one step

closer to competitor and world market leader Nike, and

one step ahead of Reebok.

Salomon, aside from its winter sport equipment, also owns

golf club brand Taylor Made and cycle brand Mavic. The

merger makes Adidas/Salomon the second largest sport

marketer in the world, and number one in Europe.

67
Salomon is currently very strong in North America and

Japan, and Adidas has the largest market share in Europe.

Adidas is, like Nike, very active insuring sponsorships

advertising deals with celebrities. Some of the most

famous are Martina Hingis (tennis), Kobe Bryant

(basketball), Peyton Manning, Paul Palmer (swimmer), jan

Ullrich (racing cyclist) and the New York yankees. David

Beckham, Patrick Kluivert and Zidane all wear Adidas

boots, the Predator Accelerator.

LEVERAGING ON SACHIN: ONE MAJOR PART OF

MARKETING STRATEGY IN INDIA

Continuing its association with trump card Sachin, the

local four-ad print campaign tries to connect Adidas’

product attributes with Sachin’s magic. “Instead of

presenting just one dimensions :

The first ad connects Sachin’s choice of a heavy bat with

Adidas’ Falcon Dorf light weight shoes. Says the headline:

‘Sachin likes his bat heavy, not his shoe.’

68
The second new shoe range to be introduced for the first

time in India. Sub-branded ‘Aksu’ and priced at Rs 2,299,

these are athletic sandals primarily meant for water-based

adventure sports. Finally, The next ad will convey that

Adidas covers various price points by promoting its

existing Portland range priced at Rs 1,499 and 1,799 (the

leather version).

The importance of celebrity sponsorship and events to

Adidas is illustrated by Robert Louis-Dreyfus’ letter in the

company’s 1998 annual report :

“When it comes to showcasing our brands, 1998 was truly

exceptional. Early in the year, the Winter Olympics

focused the attention of sports enthusiasts on Nagano. In

summer, the Soccer World Cup in France attracted more

spectators than any single sports event before. When the

French team, promoting the three stripes, won the World

Cup, we could not have wished for more. These were great

times for our brand.’

69
Adidas has reached an agreement with ISL Marketing G of

Switzerland to become an official sponsor of the 2000

UEFA European Championships. Adidas will have access to

the official emblems, mascot and trophy for the design of

its own products..

In 1998, the overall Adidas budget for promotion and

sponsoring accounted for nearly 15% of turnover.

The positioning is being communicated through its global

campaign-released worldwide in February 1999 but in

India, only in May-as well as through a four-ad print

campaign developed locally by RK Swamy/BBDO. Says G

Kanan, general manager, marketing, Adidas: “We are the

only brand with heritage in sports. As a brand, we’re not

an attitude that’s fashionable. We’re an attitude that is

relevant all the time.

The campaign also introduces a new brand line for Adidas:

‘Forever Sport’. The line sums up the “deeply-felt” and

“long-term love affair” (it has been involved with sports

since 1928) that Adidas has with sport in all of its forms.

70
Interestingly, the new brand line has been introduced

almost after a decade, when it was using ‘Earn your

stripes’ as its tag-line. The company dropped it during the

late 80s after it found that it wasn’t connecting too well

with its consumers.

71
But the golden question is that will the campaign

make Adidas run?

The company expects the campaign to strengthen the

image of the brand since research had indicated that

neither of the three multinational sports shoe brands

present in India had a clear image: most were perceived

as diffused brands and personality-led. Says Kanan:

“Sachin has and will play a major role in pushing the

brand. He is important, as there are certain values a

consumer needs to know about Adidas. But after a certain

duration, we have to present a global perspective too and

hence the Forever Sport campaign.”

72
Interestingly, Adidas claims that it did not want to be

caught up in the clutter of the World Cup

promotions-and deliberately chose not to associated with

the World Cup. Instead, according to Kanan, the campaign

has been broken now to coincide with the peak season

(April-June). “The World Cup is incidental. It’s too large an

event to make significance for us”, says Kanan.

However, the company is maintain a steady and dominant

presence in the media during the Cup: strewn over select

channels like Star, Discovery, and ESPN are the Sachin ads

promoting Adidas. “Star News is delivering good value

while through Discovery, we can catch the elite

customer”, Kanan says.

Although Kanan admits that the sports shoe and apparel

market is at a nascent stage, he claims that Adidas has

grown by over 250 per cent from last year. As a company

that takes pride in not joining the price brawl, Adidas does

not intend to bring down the prices of its products. Says

Kanan, “We don’t look at driving down the market by

73
lowering the price. We are willing to wait for the market to

evolve.”

For Adidas, the real breakthrough, says Kanan, has come

through a combination of strategies: signing on Sachin,

Leander and Bhupathi; expanding its reach (it opened 45

stores last year); a revamped range which covers a band

of price points; and support to the brand. "“e built-in value

pricing in our products, and supported them through

sports icons who are looked up to. We have realized that

to have just one good guy endorsing your brand is more

important than having several unknown faces”, says

Kanan

The company is enlarging the scope of its business by

concentrating on apparel. “Apparel is driving the business.

Most consumers start experimenting with the brand

through apparel”, admits Kanan. Essentially perceived as

a male brand, Adidas however defends its range by

pointing out that currently it has 50 items out of a total of

250, for women.

74
Further, Adidas is planning to add 30 new stores this

year. “We’re looking at driving the market through

exclusive stores”. Says Kanan. The logic is clear: use

Forever Sport to ensure sales forever.

Never achieved profitability and collapsed under

the weight of its own unrealized ambitions.

Adidas’s objective with the new line of footwear is to

generate sales leads through its Web site, either through

direct purchase or a retailer finder. Villota says that every

style of footwear has a story, particularly those endorsed

by star athletes, and it’s these stories that sell the shoes

to buyers.

While Villota wouldn’t disclose how much of Bryant’s

Adidas footwear is sold online, he did say one of three

visitors to the Bryant portion of the Adidas site

demonstrated purchase intent by clicking through to the

store or to the retail finder.

The Adidas - Salomon Executive Board will propose paying

a dividend of CC 0.92 per share to the Annual General

75
Meeting of Shareholders on May 10, the same amount as

in the previous year.

THE ADIDAS LOGO

The “Trefoil” was adopted as the corporate logo in 1972. It

represents the heritage and history of the brand. In 1996,

it was decided that the Trefoil would only be used on

heritage products. Examples of product featuring the

Trefoil logo include the Stan Smith, Road Laver, A-15

warm-up, and Classic T-shirt.

Equipment

The Adidas Equipment line was launched in 1991. This line

of footwear and apparel represents the most unique and

functional of Adidas products. Equipment is the ultimate

expression of what is uniquely possible by design when

form follows function.

76
In January 1996, the Three-Stripes brand mark became the

worldwide Adidas corporate logo. This logo represents

performance and the future of the Adidas brand. This logo

is used in all advertising, printed collateral and corporate

signage.

Since 1949, the Three-Stripes have been an integral part

of our brand and product designs. This trademark has

become synonymous with Adidas and its dedication to

producing high-quality athletic products to help athletes

perform better.

77
Methodolo
gy

78
 METHODOLOGY

STAGE ONE

The project study started with collection of Secondary

Data. The sources for the secondary data are as follows:

Data Sources

 News Papers

 Magazines

 Internet

 Press articles on Adidas.

Stage Two

We visited the Adidas India Ltd., which is located In

Mehrauli (new Delhi). We Also Met Some Of The Marketing

Executives Who Helped Me Getting The Required

Information.

79
We Also Got Some of The Information From The Other

Resources Of The Corporate Office Like :

 Company Journals

 Company Catalogs

 Questionnaire (Structured & Non Disguised)

 And Other Related Sources.

Primary data:

We have prepared a questionnaire for the general

public asking about the marketing strategy of Adidas, in

that particular questionnaire We have asked some

question give in finding and analysis section: (the

questioner is filled by 80 people).

80
Findings
and
Analysis

81
 FINDINGS & ANALYSIS

Company research report

(A) Company Description

Adidas-Salomon AG(ADIDAS). Production and marketing of

sports equipment, footwear and apparel under the brand

names of Adidas, Salomon, Taylor Made and Mavic. Sales

of Footwear accounted for 45% of 2003-2004 revenues;

Sales of Apparel, 35% and Sales of Hardware, 20%.

(B) Competitor Analysis

Adidas-Salomon AG operates in the Men’s & boys’ clothing

sector. This analysis compares Adidas with three other

sport shoe and apparel manufacturers: Nike Inc. of the

India (2004 sales of Rs. 400 billion of which 59% was

Footwear), Reebok International Ltd. of the India (2005

sales: Rs. 90 billion of which 73% was Footwear), and

Amer Group PLC which is based in Finland (2005 sales of

6.46 billion Finnish Markka [Rs. 4000 million] of which 24%

was Racquet Sports). Note: not all of these companies

82
have the same fiscal year: the most recent data for each

company are being used.

83
 QUESTIONNAIRE

1. What sports do you play in your leisure time?

a) Cricket

b) Football

c) Golf

d) Jogging

e) Lawn tennis

f) Skiing

g) Swimming

h) Others

50 50
45
40
35
30
25
20
15
10 10 10 10

5 5 5 5 5
0
Golf
Football

Jogging

Skiing

Others
Tennis
Cricket

Swimming
Lawn

84
In the analysis it is found that 50% of the respondents play

cricket in leisure time and Football, Golf 5%, Jogging

10%, Lawn Tennis 5% and Swimming 10% and

others 10%.

2. What are the shoe brands you are aware of?

25 25 25 25

20

15

10

5 5 5 5 5 5

0
sketchers
Adidas

Reebok
Nike

Newbalance
Speedo
Fila
Puma

It is found that most of the respondents aware of Adidas,

Nike and Adidas and rest of the respondents aware

of Speedo, Fila, Puma Newbalance and Sketchers

and Woodland, Leecooper.

85
3. How do you rate the company marketing

strategy as compare to the other competitors

company like Nike, Reebok etc.?

Out of 80 people 36 had said Adidas have a good

marketing strategy and should continue like this only,

24 had said Nike is more better then Adidas, 16 said

Reebok is good and 4 said others.

others
5%
reebok adidas
20%
nike
adidas
45% reebok
others

nike
30%

86
4. Do you think that the company Adidas is giving

its customer what they want in terms of quality

and prices or value for money?

Out of 80 people 68 person are satisfy with the quality and

the price of the product and other says that they are not

satisfy.
happy
not happy

not happy
15%

happy
not happy

happy
85%

87
5. Do you think that the advertisements and the

brand ambassador of the company is good

enough?

Out of 80 people 66 person said yes they like the

advertisement very much and rest said no they don’t

like them.

18% 0%

happy
not happy

82%

88
6. What things you keep in mind while purchasing

shoes will it be quality, advertisement, price or

design?

Out of 80 people 69 person had said that the product must

have good quality and good design and other said they

purchase these shoe for status symbol only.

0%
14%

quality
other factor

86%

89
7. If you have to purchase shoe except Adidas

which shoe it will be and why?

Out of 80 people 42 have said Nike, 23 said Reebok and

15 others, which shows that the main competitor of

Adidas is Nike. They have given different reason for that

some said Nike and Adidas are have same range of

products and there quality and prices is also same, so

different people have different opinion.

19%

nike
52% reebok
others
29%

90
8. What do you think that the company Adidas must

do to improve its marketing strategy?

Most of people said Adidas has a good marketing strategy

but the company should launch more products or u can

say more variety to their products.

91
ADIDAS : OVERVIEW / COMPANY’S FINANCIAL FACTS

For over 80 years Adidas has been part of the world of

sports on every level, delivering state-of-the-art sports

footwear, apparel and accessories. Today, with total net

sales of Rs. 60000 million, Adidas-Salomon is a global

leader in the sporting goods industry and offers the

broadest portfolio of products. Adidas-Salomon products

are available in virtually ever country of the world. Our

strategy is simple: continuously strengthen our brands

and products to improve our competitive position and

financial performance. The company’s share of the world

market for sporting goods is estimated at around 15

percent.

Internal Environment Analysis

It is one thing to discern attractive opportunities and

another to have the competencies to succeed in these

opportunities. Each business needs to evaluate its Internal

strengths and weaknesses periodically. It can do so by

using s form like the one shown in the marketing Memo

92
“Checklist for Performing Strength/Weaknesses Analysis”.

Management—or an outside consultant—reviews

marketing, financial, manufacturing and organizational

competencies and rates each factor as a major strength,

minor strength, neutral factor, minor weakness, or major

weakness.

Clearly, the business does not have to correct all its

weakness, nor should it gloat about all its strengths. The

big question is whether the business should limit itself to

those opportunities where it might have to acquire or

develop certain strengths. For example, managers at

Texas Instruments (TI) split between those who want TI to

stick to industrial electronics (where it has clear strength)

and those who want the company to continue introducing

consumer electronic products (where it lacks some

required marketing strengths).

Sometimes a business does poorly not because its

departments lack the required strengths but because they

do not work together as a team. In one major electronics

company, the engineers look down on the salespeople as

93
“engineers who couldn’t make it”, and the salespeople

look down on the service people as “salespeople who

couldn’t make it”. It is therefore critically important to

assess interdepartmental working relationships as part of

the internal environmental audit.

94
 Swot
Analysis

95
 SWOT ANALYSIS OF ADIDAS

Strengths :

The main strength of Adidas is his Product Quality. The

quality and the material uses in Adidas is very good. The

company has a good brand image in the market, the

publicity and the advertisement is also very good and

lastly company hold a healthily market share in the

market.

Weakness:

The major weakness in the Adidas is that the

manufacturing of the products of Adidas is not done in

India itself it is being import hence the cost become high

and the margin of profit becomes low that’s why company

must give a deep thought on manufacturing their products

in India.

Another major weakness in the company is that it is not

catering to all the segments which I have already discuss

above, If these two weakness in the company can be

96
eradicated then the company may earn high profit and

better market status.

Opportunities:

Adidas does have many products for the urban segment or

poor people, but there are hardly any product or we can

say that there are no products for this segment. India is

more a rural country, in the total population of India major

part of population lives in rural area and these people can

not afford the costly products of the company like Adidas

hence company must target this particular segment they

must introduce the shoes and other product according to

their demands. and also price is one of the major factor

which may influence this type of segment hence company

should make their policy accordingly.

Company must also consider the rage of

products as compare to Nike and Reebok. In my opinion

the company must introduce more rage or more variety in

the market to compete with their competitors and also the

customer have more choices to choice the product from.

97
Threats:

Adidas does not have strong distribution network as

compare to Nike and Reebok in India. Nike has more

number of retail outlet then Adidas and Reebok has a

unique distribution network, the company Reebok not

only use its outlet for the sale of their product but also use

some other shoes company outlet like “Bata”. In a Bata

showroom u can find Reebok shoes and other products.

But this is not a case with Adidas hence Reebok has a

extra advantage over Adidas.

Conclusions :

ADIDAS in INDIA has always been driven by its Value-for-

money strategy. The company needs to identify critical

success factory and work assiduously towards achieving it.

98
Problems that cannot be Solved

As the world grows to become one, many problems will

arise that cannot be solved. One of the primary

challenges associated with globalization is balancing

conflicting and competing objectives. In the case of

Adidas, it has faced such problems already and how they

have dealt with them is with flexibility and calmness.

Despite what could be higher costs, Adidas has chosen to

stick with their human right codes and Standards of

Engagement rather than continue to be associated with

subcontractors who treat works in inhumane ways. As

Adidas has grown worldwide, it has had to deal with

problems of heterogeneity vs. homogeneity. In other

words, in an increasingly heterogeneous and global world,

diversity in the workplace has appeared to emerge as an

issue. Companies, including Adidas are no longer

homogenous in the sense that their companies have

grown worldwide. And as a result, Adidas has had to

make worldwide headquarters and produce information

and products in several different languages. Having to

99
spread its workforce, Adidas has come to depend on

intangibles.

Measuring Intangibles & Valuing Diversity

The knowledge, worldwide experience and diversity that

an Adidas employee can bring to the table are valuable.

Recently, how successful companies are in the global

world is increasingly derived from intangibles, such as

these, that organizations cannot own. Adidas is greatly

affected by these external influences since indeed it is a

global company. For some it is not common knowledge

that Adidas is a German company. This is a result of good

global business. Adidas has created a product that is

global and with that diversity and knowledge greatly affect

the company. Adidas must be able to easily adapt to

different cultures and must be culturally aware when

conducting business. The long list of Adidas subsidiaries

where it conducts business proves that Adidas is

constantly adapting to cultural changes and must be

extremely diverse. Because of this necessity, knowledge

is greatly valued. Great changes occur in this industry

100
and as a result, new ideas, intuition and inspiration are an

asset that is a necessity in this industry and to remain a

global company. Who leads this knowledge and maintains

diversity are the managers, yet they too are facing new

changes.

101
 Sales
Analysis

102
 SALES ANALYSIS

During the first quarter of 2005, sales at Adidas totalled

120 billion rupees. This is an increase of 2.7% from the

120 billion rupees in sales at the company during the first

quarter of 2004. During the previous 17 quarters, sales at

Adidas have increased compared with the same quarter in

the previous year.

Sales at Adidas appear to have some seasonally: during

each of the previous 5 years, sales have been highest

during the third quarter, which has accounted for between

28.0% and 32.0% of the annual sales.

Adidas reported sales of 320 billion rupees for the year

ending December of 2005. This represents an increase of

9.0% versus 2004, when the company’s sales were 320

billion Rupees. Sales at Adidas have increased during each

of the previous five years (and since 1997, sales have

increased a total of 226%).

103
 RECENT SALES AT ADIDAS

(Figures in Rs. )

(In 10 Lac)

6.06 6.53
5.47
8

6 3.62
2.61
4 1.79

0
1999 2000 2001 2002 2003 2004

In 2004, sales in India were up at a rate that was much

higher than the company as a whole: in this region, sales

increased 36.0% to 110 million Rs. Adidas also

experienced significant increases in sales in Asia-Pacific.

104
Competitive
Brand
&
Comparative
Analysis

105
 LIST OF COMPETITIVE BRANDS AND
COMPARATIVE ANALYSIS

1. NIKE

2. REEBOK

3. FILA

4. SPEEDO

5. NEW BALANCE

6. SKETCHERS

7. PUMA

106
 COMPETITIVE ANALYSIS

Adidas is currently ranked third in almost every

category in the global athletic shoe industry. However,

they rank second only to Nike in terms of sales. The main

competitors of Adidas include Nike and Reebok However,

other smaller competitors include Fila, Puma and Easy

Spirit. Adidas commands only 5% of the athletic shoe

business in the India., compared with the 40% for the

fearsome Nike, but the rejuvenated Adidas has climbed to

within easy reach of Reebok, which has been struggling in

the past couple of years. Adidas is also steadily regaining

market share lost to other brands such as India. Gear and

Fila (Fortune, 2004)

The future

But the battle has only started, and the foreign sports

companies are here for the long term. They can sustain

losses for years to come in order to gain market share.

What they are doing at present, is building up distribution

107
networks to cover every nook and corner of the country

and, setting up manufacturing facilities.

Only those Indian manufactures which have a strong focus

on manufacturing and technological upgradation will

survive in the long run, although with a much smaller

market share than they have at present. Small companies

will be sidelined totally and will exit from the sports

market altogether. ADIDAS in INDIA has always been

driven by its Value – for-money strategy. The company

needs to identify critical success factory and work

assiduously towards achieving it.

108
COMPARATIVE STUDY WITH REEBOK

Reebok

The main intention behind setting up the company by J. W.

Foster was one of the best reasons possible : athletes

wanted to run fast. So, in the 1890s, Joseph William Foster

made some of the first known running shoes with spikes in

them. By 1895, he was in business making shoes by hand

for top runners; and before long his fledgling company, J.

W. Foster and Sons, developed an international clientele

of distinguished athletes. The family owned business

proudly made the running shoes worn in the 1924

Summase Games by the athletes celebrated in the film

“Chariots of Five”.

In 1958, two of the founder’s grandsons started a

companion company that came to be known as Reebok,

named for an African gazelle.

By 1981, Reebok’s sale exceeded Rs. 65 million, but a

dramatic move was planned and in 1982, Reebok

introduced the first athletic shoe designed especially for

women; a shoe for a hot new fitness exercise called

109
aerobic dance. The shoe was called Freestyle, and with it

Reebok anticipated and encouraged three major trends

that transformed the athletic footwear industry : the

aerobic exercise movement, the influx of women into

sports and exercise, and the acceptance of well-designed

athletic footwear by adults for street and casual wear.

Explosive growth followed, which Reebok fueled with

product extensions in which it also became a leader. The

freestyle is now a classic and is Reebok’s best selling

athletic shoe of all time. Reebok’s performance aerobic

shoes have progressed through several generations.

In the late 1980s, Reebok began an aggressive expansion

into overseas market. Its products are now available in

more than 170 countries and are sold through a network

of independent and Reebok owned distributors. Creating

innovative products that generate excitement in the

market place has been a central corporate strategy ever

since Reebok introduced the Freestyle shoe. In the late

1980s, a particular fertile period began with ‘The Pump

technology’ and continues today, with break through

110
concepts and technologies for a host of sports and fitness

activities.

In February 2004, Reebok launched Rbk – a collection of

street-inspired footwear and apparel hook-ups designed

for it and woman who demand and expect the style of

their gear to reflect the attitude of their lives – cool and

edgy, authen aspirational. As Rbk is inspired by today’s

street fashion, its marketing needed to be culturally

relevant as well. A new global marketing campaign, called

the “Sounds and Rhythm of Sport” was launched in

January 2004, and it energized industry by blitzing the

market with Rbk product launches, television and print

ads, consumer and retail promotions, and events.

The “Sound and Rhythm of Sport” global marketing

campaign features Reebok’s NBA, NFL and teanis athletes

paired with the music industry’s edgiest hip-hop and rap

artists. The television spots showcase the moves and

motion of the athlete energized by the rhythm of the

artist’s music.

111
In this comparative analysis between reebok and adidas,

we have chosen three products each from the two

brands and classified out their details.

112
 COMPARATIVE STUDY WITH PRODUCTS

I. CATEGORY : SHOE (REEBOK)

Reebok and Unit Casual Shoe Mens

(Release Date : Dec. 12, 2004)

Item No. : 1387196

Price : Rs. 3,600.50

Features :

 Soft pad

 Supple upper bed

 Comfort

 Support

 Moulded EVA sock liner

 Moulded Midsole

 Cushion

 High abrasion rubber outsole

 Traction and durability

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Style and design

This street inspired footwear was designed for young

people who want the style of their gear to reflect the

attitude of their life. This G6 lifestyle

This street inspired footwear was designed for young

people who want the style of their gear to reflect the

attitude of their life. This G6 lifestyle footwear provides

clean, court inspired designs that mirror distinct style and

flavour. Reebok has consented to donate fifty cents of

proceeds of each pair sold to charitable causes.

114
CATEGORY : SHOE (ADIDAS)

Adidas supernova T-MAC 3

Item no. : 3636825

Price : Rs. 4,500.00

Features

 Comfort

 Soft and stretchable mesh

 Foot-hugging inner bootie

 Optimal cushioning support

 Full-grain leather upper with stretch mesh

 adiPRENE + forefoot cushioning

 Shock-absorbing adiPRENE heel

 Moisture wicking, antimicrobial ortholite sockliner

 Non-marking carbon rubber outsole

 Style and design

115
 This modern classic is the choice of high level professional

players all around the world. The supernova T-Mac3

features the highest quality craftsmanship coupled with

pure performance. The adiPRENE optimizes grip on soft to

very soft natural playing surfaces and excellent feel and

fit.

NIKE :

COMPARISON BETWEEN REEBOK G UNIT CASUAL

SHOE MENS AND ADIDAS SUPERNOVA T-MAC3

SHOES

Reebo Adidas Nike

k
Comfort √ √ √
Support √ √ √
Moulded EVA sockliner √ √ √
Cushion support √ √ √
Supportive pad √ × ×
Moulded midsole √ × ×
Supple upper bed √ × ×
Traction and durability √ √ √
High abrasion rubber outsole √ √ ×
Soft and stretchable mesh × √ ×

116
Foot hugging inner bootie × √ ×
Moisture-wicking, antimicrobial √ √ √
ortholite sockliner
Carbon rubber outsole √ √ ×
Fore foot cushioning × √ ×
Shock absorbing heel √ √ √
Style and design √ √ √

117
Limitations

118
 LIMITATIONS

Each reports has to have some limitations and restrictions.

Hence the report we have made also have some

limitations regarding various aspects of the report

The Limitations are as follows:

Time

As far as time is concerned. There was no boundation of

time as sufficient time was being provided to all the

students for this project report. Time was never a

constrain in order to complete the project report. But we

could have tried to make report much more better if we

would have little more time because of the late availability

of the executives of the concerned companies. We got late

appointment and due to which I was not able to compile

report in time, We was able to complete the report during

the last days of the submission of this report, cost factor

which restricted met to do anything more creative.

119
Though I had tried my level best to reduce the possibility

of errors, but if any, We would like to request all the

readers to forgive me by considering me as a normal

human being and also take each and every responsibility

of possible errors on my shoulders.

Miscellaneous

Though we have put my very best efforts in making this

project report but because of some unavoidable problems

and circumstances we had to face lots of problems.

Sometimes we didn’t get the appointments with the

concerned company’s executives which further delayed

the project report a bit.

Secondly, all the required information was not available to

me, so we had to put extra efforts in order to get that

information. But there could be some information which is

still missing. Therefore, we request the readers of the

project report to kindly forgive me.

120
Recommendati
ons &
Conclusion

121
 RECOMMENDATIONS & CONCLUSION

Turbulent is the word that aptly describe the scenario in

sports industry in last two last financial years. By frequent

price cuts in market and larger than live Marketing game

plans, competition reached its new highs and lows. It is no

longer sufficient to just be competitive. A company which

has to survive has got to have competitive advantage.

One needs to take strategic initiative in the short run to

achieve the desired “positioning” in future. One has to

foresee ‘tomorrow’.

Understanding competition today involves three

levels:

 Competition for intellectual leadership for new ideas

that create new advantages.

 Competition for translating these ideas into

product/service faster than others.

 Competition for market share.

122
Following tips are helpful in combating competition:

 Do not nature and PARADIGMS because today

“anything is possible”.

 Search for newer markets than expanding your

customer base.

 Come out with state of the art, feature packed

affordable and competitive advantageous products.

 Set Benchmarks for growth.

 Improve up on distribution channels for viable

coverage of the market.

 Wear out competition through trend setting,

inimitable tactical moves based on our infrastructure

strengths.

 The strategic intent should be clear down the

management.

 Work on your strengths i.e. Infrastructure, financial

base, backward integration.

123
  POP and MERCHANDISING material should be made

as per international market.

 CORPORATE TRAINING PROGRAMMEA for

Development of manpower from external faculty.

We have so far identified the various areas on which

ADIDAS and other major sports companies need to

improve upon to achieve the desired level of

competitiveness. These improvements would give ADIDAS

and the other sports companies base to compete with the

MNCs and help the Indian companies to reduce the impact

of MNCs on the Indian Market in the future. Indian

manufacturers will have to react quickly because any

delay in reacting to the threat posed by the MNCs would

only give the MNCs time to establish themselves in the

market. With their expertise and financial capacity they

would be nearly impossible to compete with once they get

a firm foot hold in the market.

The future

124
But the battle has only started, and the foreign sports

companies are here for the long term. They can sustain

losses for years to come in order to gain market share.

What they are doing at present, is building up distribution

networks to cover every nook and corner of the country

and, setting up manufacturing facilities.

Only those Indian manufactures which have a strong focus

on manufacturing and technological upgradation will

survive in the long run, although with a much smaller

market share than they have at present. Small companies

will be sidelined totally and will exit from the sports

market altogether.

ADIDAS in INDIA has always been driven by its Value – for-

money strategy. The company needs to identify critical

success factory and work assiduously towards achieving it.

125
Bibliograph
y

126
 BIBLIOGRAPHY

Web Sites

www.adidas.com

www.indiainfoline.com

www.webcrawler.com

www.google.com

www.indiatimes.com

Magazines

A&M

Business India

India Today

Business Today

127
Newspapers

The Times of India

The Hindustan Times

The Economic Times

Books:

PHILIP KOTLER, MARKETING MANAGEMENT, NEW

MILLENNIUM EDITION

• V.S RAMASWAMY AND S. NAMAKUMARI MARKETING

MANAGEMENT, SECOND EDITION.

• WILLIAM STANTON.J, MICHALL J.ETJEC, BRUCE J.WALKER

FUNDAMENTAL OF MANAGEMENT.

• RAVICHANDRAH.N COMPETITION IN INDIAN

INDUSTRY.

128
Appendice
s

129
7APPENDICES

ANNUAL GENERAL MEETING 2007

Agenda

1. Presentation of the adopted Annual Financial

Statements of Adidas-Salomon AG and of the

Consolidated Financial Statements as of 31 December

2007.

Presentation of the Management Report of Adidas-

Salomon AG and of the Group Management Report as

well as of the Supervisory Board Report for the year

2007.

2. Resolution on the Appropriation of Retained Earnings

Voting Results : 13,557,668 YES

Abstentions No

The executive board and the supervisory board propose to

resolve on the appropriation of the retained earnings

amounting to EUR 41,739,375.24 as follows:

130
Payment of a dividend of EUR 0.92 per no-par-value share

on the stock capital (fully dividend-entitled) of EU

116,093,352. The dividend shall be payable on May 11,

2008. The remaining amount shall be carried forward to

new account.

Total dividend EU 41, 721, 264.00

Carried forward to new account EUR 18,111.24

Retained Earnings EUR 41,739,375.24

From a tax point of view, a partial amount of EUR

18,549,342 of the dividend will be paid from the EK 40 and

does therefore entail corporation imputation tax credit in

the amount of EU 9,274,671. The remaining amount is

paid from the untaxed EK 01 and does not entail a

corporation imputation tax credit.

3. Resolution on the ratification of the actions of the

Executive Board for the year 2007

Voting Results: 9,44.097 YES

1.432 No

131
 578.504 Abstentions

The Executive board and the supervisory board propose

the ratification of the actions of the Executive Board

members for the year 2003, including the members who

retired in 2003.

4. Resolution on the ratification of the actions of the

supervisory board for the year 2003.

Voting Results : 13.006.246 YES

1,272 NO

578.574 Abstentions

The Executive Board and the Supervisory Board propose

the ratification of the actions of the Supervisory Board

members for the year 2003.

5. Election of the Supervisory Board

Voting Results: 13.026.283 YES

22.375 NO

556.884 Abstentions

132
The Supervisory Board is composed in accordance with

Articles 96 section 1, 101 section 1 of the German Stock

Corporation Act and Article 7 section 1 No. 1 of the

German Co-determination Act.

Dr. Thomas Russell, member of the Supervisory Board,

has resigned from his office as Supervisory Board member

with effect from the end of the Shareholders ‘Meeting on

May 10, 2004.

The Supervisory Board proposes to the Shareholders

Meeting to elect.

ADIDAS-SALOMON CONSOLIDATED BALANCE

SHEETS DEC. 31 2007 (Euros in ‘000)

Dec. 31 Dec. 31 Change

2007 2006 in %

Cash and cash equivalents 84,995 104,706 (18.8)

Accounts receivable 1,253,193 1,133,103 10.6
Inventories 1,273,062 1,294,033 (1.6)
Other current assets 266,929 254,183 5.0
Total current assets 2,878,17 2,786,02 3.3

9 5
Property, plant and 377,865 310, 068 21.9

133
equipment, net
Goodwill, net 580,069 601,028 (3.5)
Other intangible assets, net 91,131 77,633 17.4
Deferred tax assets 147,873 131,063 12.8
Other non-current assets 107,760 112,643 (4.3)
Total non-current assets 1,304,69 1,232,43 5.9

8 5
Total assets 4,182,87 4,018,46 4.1

7 0
Short-term borrowings 196,038 279,422 (29.8)
Accounts payable 629,701 532,299 18.3
Income taxes 111,020 76,318 45.5
Accrued liabilities and 346,876 390,250 (11.1)

provisions
Other current liabilities 110,040 90,388 21.7
Total current liabilities 1,393,67 1,368,67 1.8

5 7
Long-term borrowings 1,569,773 1,617,370 (2.9)
Pensions and similar 92,088 85,021 8.3

obligations
Deferred tax liabilities 41,552 31,748 30.9
Other non-current liabilities 13,019 10,570 23.2
Total non-current 1,716,43 1,744,70 (1.6)

liabilities 2 9
Minority interests 58,157 89,750 (35.2)
Shareholders' equity 1,014,613 815,324 24.2
Total liabilities, minority 4,182,87 4,018,46 4.1

134
interests and 7 0

shareholders' equity
Rounding differences may arise in percentages and totals

for figures presented in millions as calculation is always

based on the figures stated in thousands.

135
 ADIDAS-SALOMON CONSOLIDATED STATEMENT OF

CASH FLOWS (IAS) (EUROS IN THOUSANDS)

2007 2006
Operating activities:
Income before taxes 376,344 346,620
Adjustments for:
Depreciation and amortization (incl. 148,037 132,704

goodwill)
Unrealized foreign exchange losses, net 15,277 7,616
Interest income (12,061) (12,979)
Interest expense 107,772 108,517
Gains on sales of property, plant and (4,063) (4,440)

equipment, net
Operating profit before working 631,306 578,038

capital changes
Increase in receivables and other current (128,157) (115,767)

assets
Decrease/ (Increase) in inventories 32,165 (230,394)
Increase in accounts payable and other 71,161 8,014

current liabilities
Cash provided by operations 606,475 239,891
Interest paid (110,400) (105,313)
Income taxes paid (112,015) (144,993)
Net cash provided by/(used in) 384,060 (10,415)

operating activities
Investing activities:

136
Purchase of goodwill and other intangible (42,338) (24,562)

assets
Purchase of property, plant and (159,733) (124,815)

equipment
Proceeds from sale of property, plant and 23,293 14,141

equipment
Acquisition of subsidiaries net of cash (19,519) 0

acquired
Decrease in investments and other non- 9,300 1,808

current assets
Interest received 12,061 12,979
Net cash used in investing activities (176,936 (120,449)

)
Financing activities:
(Decrease)/Increase in long-term (47,667) 132,967

borrowings
Dividends of adidas-Salomon AG (41,721) (41,736)
Dividends to minority shareholders (51,349) (2,692)
Capital contributions by minority 0 4,970

shareholders
(Decrease)/Increase in short-term (88,283) 71,517

borrowings
Net cash (used in)/provided by (229,020 165,026

financing activities )

137
Effect of exchange rates on cash 2,185 1,436
(Decrease)/Increase in cash and cash (19,711) 35,598

equivalents
Cash and cash equivalents at beginning 104,706 69,108

of year
Cash and cash equivalents at end of 84,995 104,706

year

138