BRAND IN THE HAND MOBILE MARKETING AT ADIDAS

BSAD 331 DR. B. MUKERJI

Alex Dorward, Liam McGean, Matthew Tomlinson, Yixi Yao

Target Market
Through its brand in the hand campaign, Adidas is looking expand its reach to target 12-24 year olds Hopefully reaching customers outside the sporting sphere Adidas also targets soccer segment in Europe, basketball and Hip Hop (or Urban Cool) segment in North America

Porters 5 Forces - Competition

High Adidas faces stiff competition from numerous smaller competitors (NewBalance, Asics, Columbia), as well as from very large players (Nike, Reebok)

Threat of New Entrants

How severe is the threat of new entrants?

Threat of New Entrants

Medium Although is it relatively easy to produce sportswear and accessories, it is difficult to effectively compete in such a market Promotional costs are very high for this market

Power of Suppliers

How much power do suppliers have?

Power of Suppliers

Low There are very many suppliers and therefore lots of choice and little supplier power

Power of Buyers

How much power do buyers have?

Power of Buyers

High Since there is such competition, all of which are competing for brand recognition, buyers have a lot of choice and power

Threat of Substitutes

How severe is the threat of substitutes?

Threat of Substitutes

Very Low There are no substitutes for clothing and shoes There are different types of shoes/clothing, however, if somebody requires soccer cleats, they cannot substitute these with another type of shoe

PEST Analysis - Political

What are some political factors that may affect the industry?

PEST Analysis - Political

Regional laws regarding unsolicited mobile marketing

PEST Analysis - Economic

Dot Com stock market decline in 2000 may make people doubt the importance of mobile marketing Price of newer technology phone features are more expensive therefore affordability issues arise Increased online advertising popularity resulted

PEST Analysis - Socio-Cultural

Increased use of internet Frequent use of cellular phones More than half of the media consumption will be digital by 2007 (estimate) Consumers became hostile towards perceived intrusion on their lives by advertising

PEST Analysis - Technological

2.5G and 3G mobile phones

Transfer

speeds similar to wireless broadband 2.5G usage is estimated to go from 8% - 68% from 2003-2006 (Europe) 3G usage is estimated to go from 0% - 28% from 2003-2006 (Europe)

Personal Mobile Gateways

SWOT Analysis - Strengths

Strongly recognized brand image Growing customer base within the USA Global Revenues more than $6 billion Largest supplier of sportswear in Europe Advertisements available in a variety of languages Adidas spends more of its marketing budget on new media than its competitors, 25%

SWOT Analysis - Weaknesses

Adidas does not have the majority of market share in US

Nike

held 40% market share

Adidas was not the leader in the European soccer market in 2003
Nike

edged out Adidas for the first time

Adidas spends less on advertising each year compared to its greatest competitor (Nike)

SWOT Analysis - Opportunities

What are some potential opportunities?

SWOT Analysis - Opportunities

In 2003 70% of Europeans had mobile phones In 2003, 23% of Europeans had mobile phones with newer technology, allowing for more innovative advertising strategies A lag in the US mobile phone market gives companies an opportunity to test their strategies first on the European market Youth spending on mobile media is rapidly increasing

SWOT Analysis - Threats

What are some potential threats?

SWOT Analysis - Threats

Limited bandwidth within the US Regulatory delays and diverging delayed the introduction of 3G into the US Increased competition in domestic market Consumers recognize minimal amounts of traditional advertising
Ie.

8 minutes a year of Adidas advertising per person

Competitive Analysis
Nike is the global leader in athletic footwear In the US Market:

Adidas

16% of athletic footwear market share (16% Reebok, 40% Nike) Companies compete by signing proathletes such as Michael Jordan (Nike), Kobe Bryant (Adidas), Allen Iverson (Reebok) In 2003, Nike had 60% of basketball segment, Adidas had 20%, and Reebok

Competitive Analysis (contd)

Nike spent $1.4 billion on advertising and promotion compared to Adidass $900 million (2004) Adidas sponsored 2004 EuroCup Nike sponsored Manchester United in 2002, and increased advertising during the World Cup.

Competitive Analysis (contd)

Both Adidas and Nike began new media advertising Nike charged users for all content downloaded to cellular phones Adidas, as part of Urban Cool, partnered with MTV to bring ringtones, wallpapers, and games

Marketing Mix

Price
Varies

depending on product Run DMC shoes cost $70 Missy Elliott Remix Boots cost $120 Consumers are price insensitive

Product
Sportswear

and accessories

Place
No

applicable information found in the case

Marketing Mix

Promotion
Significant
This

amounts of promotion required

includes traditional promotion techniques such as print, billboards, TV, and cinema Internet marketing Also includes innovative promotion techniques such as live billboards and mobile marketing
Mobile

marketing seen as the future of Adidas marketing in order to break through the clutter of advertising

Pros and Cons of Mobile Marketing

Pros.?

Pros of Mobile Marketing

Breaks through the clutter

There is an abundance of traditional advertisements

More personal, richer advertising possible

More

meaningful and effective

Is not as intrusive as traditional media since consumers have to give consent Data can be collected that can help study what consumers want Attracts consumers outside the sporting sphere
Broadens

their brand image

Pros and Cons of Mobile Marketing

Cons.?

Cons of Mobile Marketing

Potential for intrusive, unsolicited, unpopular marketing (spam SMSs) Difficult (and possibly expensive) to develop compelling content that users want Does not reach everybody Content isnt always available due to possible service interruptions Possibility of increased use of mobile marketing and consequently getting lost in the clutter again Fragmented and complex due to many different handsets and carriers, different types of functionality, and different preloaded apps

Conclusion

Should Adidas continue with mobile marketing?