MARKETING PLAN

ADIDAS RUSSIA/CIS
CREATED BY NUR AULIA SARAH (29117101)
MASTER OF BUSINESS ADMINISTRATION ITB YP 57 C


MARKETING PLAN-ADIDAS RUSSIA/CIS 1

 Introduction
Adidas Inc. is the German manufacturer, a marketer of sport apparel and athletic
shoes. The company was named its founder, Adolf (Adi) Dassler, in 1948.

Source: Adidas Website

Adi dassler started out as a baker, but his real passion was making sport shoes. the
selection of images are shoes from adi’s first company, ‘gebruder dasher schuhfabrik’,
currently known as adidas. In the small German village of Herzogenaurach, located 12
miles northwest of Nuremberg, Adolf “Adi” Dassler registered “Adi Dassler adidas
Sportschuhfabrik” on August 18, 1949, following a family feud at the Gebrüder Dassler
Schuhfabrik between him and his older brother Rudolf. Rudolf had earlier established
Puma, which was also headquartered in Herzogenaurach and which quickly became the
business rival of adidas.

At the 1954 World Cup final, when the German national football team, wearing
lightweight adidas football boots with screw-in studs and the iconic three stripes, faced
the unbeatable Hungarians, the Germans’ victory made adidas a household name on
football pitches everywhere.

Adi’s son, Horst Dassler, eventually took the reigns of the company, but after his
sudden death in 1987, the company entered troubled waters. It was first acquired in 1989
by French industrialist Bernard Tapie for a reported €244 million, which Tapie mostly
borrowed. Famous for rescuing bankrupt companies, Tapie decided to move production
offshore to Asia. A record loss in 1992 brought adidas to its knees, and ultimately, it was
taken over by its main bank, French state-owned Crédit Lyonnais, which then engineered
a sale to financier Robert Louis-Dreyfus and other private equity investors in 1993. Robert
Louis-Dreyfus, as the company’s new CEO, and his partner Christian Tourres, turned the
company around and took it public in 1995.

Over time, the adidas Group evolved into a global leader in the sporting goods
industry with a broad portfolio of products available in virtually every country in the
world. In 2013, however, the Group reported that its sales and earnings targets for the year
were no longer achievable due to negative market developments, which included the

MARKETING PLAN-ADIDAS RUSSIA/CIS 2

effects of a weakening currency, the ongoing softness of the global golf market and
unexpected short-term distribution constraints that resulted in the transition to a new
distribution facility in Russia.

❖ Adidas Russia/CIS

For 10 years, Russia was one of the most important markets for the adidas Group
with constantly rising sales and profits. For the five years prior to 2013, the market was
growing 30% to 100% a year, with Russia often rolling out 200+ stores per year. Adidas
described the pace of growth as “simply insane.” In 2012, as increasing wages in emerging
markets supported consumption, Russia/CIS was identified as a key growth market and
one of three “attack markets” within the adidas Group, alongside North America and
Greater China. The three attack markets were expected to contribute around 50% of the
adidas Group total growth under the company’s “Route 2015” plan, with each market
targeting a double-digit compound annual growth rate.

A. MARKET SUMMARY
• Market in the past
❖ Market Share: Russia was one of the most important markets for the adidas Group
with constantly net sales. The market was growing 30% to 100% a year for the five years
prior to 2013.
❖ Leadership: in 1954 in world cup final, German national football team wear Adidas
football shoes, faced the unbeatable Hungarians, The German Victory made Adidas be a
leader in sportwear (shoes) in Russia
❖ Players: Puma, Nike
❖ Market Shifts: wholesale
❖ Costs: Adidas use a traditional method on the shoes making at that time, so the
cost that they’ve spent not really big if we compare it with the present cost. Because
there’s no depreciation expense and another operational expense.
❖ Pricing: Mid-Price, because they used the distributional price so the price is
cheaper than if we buy at the retail.

• Market in the Present

❖ Market Share: Though Russia/CIS had historically been one of adidas’s most
important markets, by mid-2014 sales and profit began to decline further amid the
stuggling economy and sanctions imposed on Moscow over the Ukraine Conflict. In
August 2014, Adidas cut its plans for new stores from 150 to 80 year. In March 2015,
Adidas announced it would close 200 shops across Russia due to the poor economic
situation in the country. The economic downturn was blamed on “deteriorating
consumer sentiment”. Additionally, the ruble’s collapse (it lost 40% against the dollar in
just six months) ate into revenues and profits, particularly since most supplier globally
were paid in dollars.

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❖ Leadership: Over time, the adidas Group evolved into a global leader in the
sporting goods industry with a broad portfolio of products available in virtually every
country in the world.
❖ Players: Puma, Nike, Skechers, Kari, Centrobuv
❖ Market Shifts: Wholesales to Retailed Business
❖ Costs: Adidas use a modern method to produce their product, so the cost is higher
that the traditional cost because there are so many expense they must paid such as
depreciation expense, operational expense, etc
❖ Pricing: Adidas have their own retail stores, which focused on full-price sell
through and were deemed one of the main growth drivers for the next years.

• Market in the Future

❖ Market Share: For the future era, the company needs e-commerce to promote and
sell their product. Because now, digital is useful for human life. Many people do not
have more time to come to store for buying some product. Digital system is growing
fast than we thought before.
❖ Leadership: We couldn’t predicted that in the future Adidas still being a leader in
sporting goods industry, because day by day more industry improved their product to
be the leader.
❖ Players: Puma, Nike, Skechers, Kari, Centrobuv
❖ Market Shifts: Combination between Retailed business and e-commerce
❖ Costs: Investing in IT infrastructure
❖ Pricing: Many foreign companies shared the misconception that Russian consumers
had lower expectations than their Western counterparts. In fact, consumers were asking
for more than low cost and superior quality; they expected short response times and
high service levels. While price was still important, reliability and speed were becoming
increasingly significant factors in a company’s distribution strategy.

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 Product Definition
Adidas is engaged in the sporting goods industry, offering a range sport brands
across all sporting categories. Adidas manufactures footwear, apparel and hardware. The
Adidas brand is structured in three divisions: Adidas Sport Performance, Adidas Sport
Heritage, and Adidas Sport Style. The company has approximately 100 subsidiaries in
Europe, the US and Asia, each focusing on a particular market or part of the
manufacturing process.

Product that Adidas want to announce is a mobile application called “Adidas-

Touch”, so consumer could access Adidas apps, to buy, see the catalog, and enjoy services
that we serve to consumer. The service are:

1. C&C or Click and Collect (Content and service on Adidas-Touch, so costumer can
order and buy the product that they wants on Adidas store via Adidas-Touch and after
they paid it, the goods/product sent to their adress and they can try it first, so if the
goods/product that they bought do not fit to their size, they can return it directly via
the officer who bring/sent to the adress with the same product.
2. Customization or “mi adidas.” (Content on Adidas-Touch so consumer can custom
Adidas goods as what they want)
3. “Mi Avidas” (One of the content on Adidas-Touch, there’s an avatar/animation which
is look like what the customer wants which can choose by themself to accompany
them when they choose “Adidas-Touch” and the animation/character can custom
appropriate with what they make)
4. “Mi Gamidas” (Content on the Adidas-Touch where the consumer can play the game
in this apps so they can play the games to killing the boredom.

All of the 3 Services above are the contents of the mobile application. With that all
product, we hope consumer will easier to access that Adidas apps. The consumer just
registered their email to the apps, and then everything goes easier.
We can see adidas product concept below:

Apparel

Sports Kit

Adidas-Touch

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 Competition
Revenue from footwear segment of Nike, Adidas and Puma from 2010 to 2016 (in billion
U.S. dollars)

Based on the graphic above, The competitors of Adidas are Puma and Nike. Here’s the
comparison of the both of them.

❖ STRENGTH AND WEAKNESS ADIDAS’S COMPETITOR

1. Nike
Nike, Inc is the world’s leading innovator in
athletic footwear apparel, equipment and
accessories that is engaged in the design,
development and worldwide marketing and
selling. In this case we provide product
strengths and weakness of Nike, Inc including
technology we used for making product:

STRENGTHS
• Nike is a globally recognized for being the number one sportswear brand in the world
• It has strong sense of marketing campaign by sponsoring top athletes.

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• Nike has no factories, rather it uses contract factories to get work done which makes ‘it
quite a lean organization. It has contracts with above 700 shops globally in about 45
different countries.
• They manufacture high quality at the lowest price.
• Customer can buy nike product with nike application directly.
• Customer can make their own shoes based on what they wants.

Weaknesses
• Ongoing Perception of Poor Labor Practices: It wasn’t long ago that Nike was facing intense
criticism of its labor practices and work conditions. However, over the past 20 years, it
has undertaken efforts to improve conditions for its roughly one million contract
workers. While conditions have improved, many of its factories in developing countries
still do not meet Nike’s own standards. The company itself has acknowledged that the
low wages for some of its workers remains a concern. Safety issues at certain locations
are also an issue. If some type of disaster were to occur at one of its facilities, this would
no doubt hurt the company’s image.
• High Prices: Due to its strong brand, Nike can typically command a premium on the
products it sells, which in turn supports higher margins and profitability. However, the
cost of its footwear is higher than most of its competitors, which make its products out
of reach for many customers around the globe, particularly in emerging markets. There
is also the risk of declining demand when an economy falls into recession, as consumers
have lower discretionary spending for non-essential items.

2. Puma
STRENGTH
•Puma is the main producer of enthusiast
droving shoes and racing suits in booth
formula one and nascar.
•It has entered inti partnership with
famous company like Ferrari and BMW.
•Puma was the official sponsor of the FIFA
Football World Cup.
•Puma brand is very innovative and has a
very rich Research and Development team.
The company produced the first screw boots for football and “Mexico 68” with the
innovative brush soles, which were the most comfortable running shoes.

Weaknesses
• PUMA has tough competition, and limited market share, from large companies such as
Nike and Adidas who are in the same market.
• They have less financial strength compared to other brands in the industry meaning
that they may not be able to invest in new products or technologies where others might
(MBASkool).

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❖ POSITION EACH COMPETITOR’S PRODUCT AGAINST NEW PRODUCT

Each competitor have their own segmentation, product, and positioning its
product. We can use perceptual mapping and what they position itself to know where
they are stands. But first, we can see from each competitor’s segment, target and position.

BRAND SEGMENTATION TARGET POSITIONING

ADIDAS Young men, women and Urban upper-middle and Adidas stands for
children who have upper class passion for sports
passion for fitness and
sports

NIKE Sport Enthusiasts Men, women and Nike offers high quality
children from urban sports products at a high
upper-middle and upper price which gives
class satisfaction and comfort

PUMA Sportsmen, Men and Urban young upper Puma is an international

women who like sporty middle class and upper brand with creativity,
energetic apparel with a class men and women energy and style in their
spray of uniqueness in apparel at a very
their apparel affordable price

Table above us show the segment, target and position each brand. In this
case we will see the position of new Adidas product position in the market. In the figure
above we can see the perceptual mapping of Adidas and their competitor. The horizontal
axis show us price. The vertical axis show us service that each brand give, based in table x.

SERVICE BRAND

NIKE ADIDAS PUMA

RESERVATION - CNC -
ORDER

RFID - V -

CUSTOMIZE MODEL NIKE ID MI ADIDAS -

DIGITAL CATALOG - EA -

SFS V V V

PRODUCT RETURN V V -

APPLICATION THAT V - -
CAN BUY DIRECTLY

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Based on the perceptual mapping above, we can see that Adidas competiting with Nike
and Puma, both in price and service or quality of its products are also competing
especially with the market leader, Nike. Because of that condition, so Adidas need a
strategy to be number one leading in the market.

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 POSITIONING

Perceptual Mapping
high
SERVICE

high
PRICE

• Positioning of product or service

Based on the Perceptual Mapping above, we can know that Adidas has a high price
and the service keep up high too. In fact, consumers especially in Russia were asking for
more than low cost and superior quality; they expected short response times and high
service levels. While price was still important, reliability and speed were becoming
increasingly significant factors in a company’s distribution strategy.

• Consumer Promise
With this product and service, consumer can get what they want and what they
need, color, size, model effectively and efficiently in the same time.

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 Communication Strategies

• Messaging by Audience
The message’s impact on the audience which we want to give is Rational appeals.
This method attempts to prove the product's quality and usefulness to the consumer.
Marketing strategist Ken Orwig affirms that forms of proof may include stating the
product's benefits, performing a product demonstration or citing facts or statistics. When
the advertiser uses rational appeal, it is also appealing to the consumer's logic, persuading
the consumer to choose the result it desires.

• Target Consumer Demographics

Russia’s Internet User based on statistic survey

Based on the statistic

data, we can see that
internet user in russia
increased every year. So
we can assume that they
prefer something they
get from internet than
get something directly.
So, the target of the
product is “Adidas
internet user”

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 Packaging & Fulfillment

LOGIN

touch SIGN UP

Click For Start!

MI ADIDAS

PRIMARY COLOR : WHITE

SECONDARY
COLOR:
SHOES CATEGORIES:

DELIVERY:

• Product Packaging
This product have a simple theme to make the consumer easily use it.
• COGs

The application/software is free if we download it on appstore/android, because

the price of the goods/product is an accumulation of COGS, marketing and another
complementary instruments.

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 Launch Strategies

• Launch plan
The plan that we have to launch this product are:
1. When the consumer buy Adidas products on retail, we might offer the
consumer to try Adidas new application.
2. There will be some discounts 10% for consumer who buy with the
application
3. Make an event to introduce Adidas application in Department Store,
Shopping Centre, etc such as music event.
4. Social Media (ex: endorsement)

• Promotion budget
Fund allocation for the launch product can be seen from the diagram below

Event Social Media

Social Media
40%

Event
60%

MARKETING PLAN-ADIDAS RUSSIA/CIS 13

 Public Relations

• Strategy and Execution

Public Relations involves a variety of programs designed to maintain or enhance a
company's image and the products and services it offers. Successful implementation of an
effective public relations strategy can be a critical component to a marketing plan. A
public relations (PR) strategy may play a key role in an organization's promotional
strategy. A planned approach to leveraging public relations opportunities can be just as
important as advertising and sales promotions. Public relations is one of the most effective
methods to communicate and relate to the market. It is powerful and, once things are in
motion, it is the most cost effective of all promotional activities. The strategy that we have
in “Adidas-Touch” is with make a collaboration with big company to make a music event
to introduce this apps to consumer and cooperate with public figure via instagram,
youtube or other social media to review this apps to build consumer trust and image.
Strategies that we have to Public Relations:
❖ Sponsorship&Events
Sponsorship is the fastest growing form of marketing. With this in mind, you can
find unlimited opportunities to broaden your competitive advantage by increasing your
credibility, image, and prestige in sponsoring events attracting your target market. We
make a deal with big company to cooperate when we make events and make a deal with
several media telecommunication companies. For the events, we decided to make such as
a music event,game competition and running competition to make consumer interest.

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 Advertising

• Strategy and Execution

1. Overview of strategy
Advertising seeks to promote the seller’s product by means of printed and
electronic media. This is justified on the grounds that messages can reach large numbers
of people and make them aware, persuade, and remind them about the firm’s offerings.
From a marketing management perspective, advertising is an important strategic device
for maintaining a competitive advantage in the marketplace. Advertising budgets
represent a large and growing element in the cost of goods and services.
Strategy Adidas application on advertising such as put the advertisement in the
billboard that everybody could see it easily, such as at the crossroads, at the center of the
city, at the townside, and wherever everybody’s belong especially in the place that
crowded.
2. Overview of media and timing
These are some relative merits of major advertising media:
Outdoor, Magazines, Online Newspaper, Instagram, Youtube, and another social
media advertising. The themes of advertising that we choose to posting the product will
be adjusted with the moment that happen on that time.example: on december, we used
christmas for the themes of the advertising.

MARKETING PLAN-ADIDAS RUSSIA/CIS 15

 Pricing
• Pricing
• Summarize specific pricing or pricing strategies
In order to make this application, we need some preparation for the pricing
process:
a. The costs of application are largely based on features, complexity and platform.
b. Application with the back end servers will almost always cost more.
c. Simple application for one flatform will start around $25.000
d. More complex application cost six figures but can push up over $1.000.000
e. Costs will also vary based on who builds it.

• Strategy
In order to make mobile application, there should be some strategy to make the
application going public and people wants to use and try it.

a. First, there will be some discount 10% for consumers who buy the products of
Adidas through “Adidas-Touch”
b. Second, make a special choice for consumers who wants to buy the product via the
application service

MARKETING PLAN-ADIDAS RUSSIA/CIS 16

 Distribution
• Distribution strategy
Strategy of distribution in this product is distribute this app by app store on iphone
and android, so the consumer can access it easily because everybody nowadays have
mobile phone android or iphone, so we distribute the application on both of them.
Furthermore, we distribute to consumer directly, so if the consumer visit Adidas retail in
department store, at the cashier, we give a simple description about Adidas apps
• Channels of distribution
As we already said above, we distribute this apps to the app store. So the channel
of this distribution are app store on android and iphone
• Distribution by channel

tv magazine online outdoor/cinema

outdoor/cinema tv
18% 18%

online
18%

magazine
46%

MARKETING PLAN-ADIDAS RUSSIA/CIS 17

 Vertical Markets/Segments

• Vertical market opportunities

1. Specific market segment opportunities
Adidas can be the only manufacturer that offer a mass customization program on
services that combine fit, function and aesthetic design.
2. Address distribution strategies for those markets or segments
❖ Discuss Specific market segments
The vertical market opportunities that we choose is “Adidas Internet User”
the strategy that we have is collaborate with eBay, amazon.com , etc so the
consumers are capable buy Adidas product easily and pay it online.

MARKETING PLAN-ADIDAS RUSSIA/CIS 18

 International
• International distribution
International distribution is the processes, relationship and fullfilment that you set
in place to get your product into overseas markets. Not to be confused with international
e-commerce. That’s just international shipping. International distribution is about
wholesaling into new countries. If you choose to control distribution in each country you
operate in you will need to research and understand your legal requirements regarding
distribution agreements, customs &duty taxes, terms and conditions in each and every
country.
• International pricing strategy
Pricing strategies matrix

LOW QUALITY HIGH

LOW
ECONOMY PENETRATION

PRICE
SKIMMING PREMIUM

HIGH

1. Penetration Pricing
The price charged for products and services are set artificially low in order to gain
market share. Once this is achieved, the price is increased.
2. Economy pricing
This is no frills low price. The costs of marketing and promoting a product are kept
to a minimum.
3. Skimming Pricing
Price skimming sees a company charge a higher price because it has a substantial
competitive advantage. However, the advantage tends not to be sustainable. The
high price attracts new competitors into the market, and the price inevitably falls
due to increased supply.
4. Premium Pricing
This approach is used when the marketer wants the consumer to respond on an
emotional rather than rational basis.

MARKETING PLAN-ADIDAS RUSSIA/CIS 19

To make new product going to international scale, the company can use “Adidas-Touch”.
With those aspects, all consumers from around the world are capable to order or to view
the product. Also, we will working together and collaboration with the third party (e-
commerce platform such as amazon.com and eBay)

MARKETING PLAN-ADIDAS RUSSIA/CIS 20

 Success Metrics

Clear
vision &
Objectives
alignment

Employee Resource
inter-personal
Skills Alignment

Achieving
Matrix

Transparent
Role
Communication
Clarity

Clear
Processes

• First year goals

For this company, the first goals that need to be achieved are
A. People are aware about the mobile application of Adidas, called Adidas-Touch
B. People are going to download the mobile applications
C. The increasing number of sold product
D. Increasing number of net income for the company

• Additional year goals

A. Sustainability of the mobile applications
B. Make better improvement

• Measures of success/failure
Measures of success
A. When there are about 500.000 people who make orders via mobile apps
B. When there are major increasing number of net income

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 Measures of failure
A. When less than 100.000 people who downloads the mobile applications
B. When the net income is decreasing

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 Schedule
• 18-month schedule highlights

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