The Adidas Brand

Q: "Brands vary on the amount of power and value they have in the marketplace. A powerful brand has high Brand Equity"

Intro

"Brand equity is the marketing and financial value associated with a brand's strength in the market"

(Dibb and Simkin - pg 73)

Some of the factors that contribute to the creation of high brand equity are brand association, awareness, attractiveness to buyers and brand loyalty. For a company to see major success it must establish and sustain high brand equity. The preference in the marketplace for one particular brand is not simply a preference based on the cost, quality or style of its products. It is also influenced by the personality, reputation and image of the brand and how often and how well they are communicated. What experience is the brand promising or associating with? Who is endorsing the brand?

The sportswear market; it has some of the strongest and most valuable brands in the world. The CFO of Adidas, Dean Hawkins recently said,

"our biggest asset isn't on our balance sheet, and that's our brand"

http://www.shsu.edu/~mkt_ssm/mkt575/Shoes.htm

The following essay will discuss some of the elements in Adidas's brand development that have led to it securing a place in the worlds 100 top brands and will look to the future plans it has in place to maintain its high brand equity.

Adidas dates back to 1948. It is derived from the first syllables of its founders first and last name - Adolf Dassler who began making shoes in 1920. His vision was to supply professional athletes with the very best in footwear for their respective fields. He registered the unmistakable "three stripes" which to this day remains the Adidas trademark. Adidas could be considered the first sports company to use "celebrity endorsement" for their products. Germany won the Soccer World Cup in 1954 and the team wore the first football boots with screw-in studs developed by Adidas. Adolf was an athlete himself. He always worked closely with sports professional and made personal appearances at sporting events. He came up with a product innovation for every major sporting event and before long had created the optimal shoe for nearly every discipline.

http://www.Adidas-group.com/en/overview/history/History-e.pdf

In the 1960's the company moved into sport apparel and equipment. In 1970 the "Telstar Ball" became the official match ball for the first televised FIFA world cup. It was the roundest football of it's time and it's white and black design made it clearly visible on the Television.

http://www.Adidasgroup.com/en/bizmedia/WorldCup/Ball_History/press_release_e.pdf

As the company grew bigger it was damaged by family quarrels - Adi\'s brother, Rudolf started a rival firm Puma. His son, Horst, split with his parents and opened a rival branch in France, complete with its own designers and factories. Horst eventually took over the parent company in 1985, he died only 2 years later and for a short time the company was run by a French man called Bernard Tapie. At this stage Adidas was haemorrhaging money and when it's - Robert Louis-Dreyfus took over in 1993, it needed considerable attention to bring it back to it's former glory. Under his guidance Adidas has moved from being a manufacturing and sales based company to being a marketing based company. Louis - Drefus cut cost but injected extra cash into marketing in order to promote growth. He maintained expenditure on sports sponsorship and increased expenditure on other outlets. The company undertook new marketing strategies for further growth. For example the "Originals line" was re-introduced which was highly successful as 70's style fashion become popular again. http://www.its.caltech.edu/~xiuqin/strategy/Adidas.htm

The Adidas brand is now segmented into three divisions: Adidas Sport Performance Adidas Sport Heritage and Adidas Sport Style.

Adidas initially positioned itself as a brand for professional athletes. Over time the brand became more mainstream. By the 90's Nike and Reebok were out marketing Adidas in their target market as 14 - 24 year olds no longer considered them "cool". At the start of the new millennium Adidas managed to reposition itself as the brand with the reputation for having the best athletic shoe. Its claim that

"Its brand values - authenticity, inspiration, honesty and commitment - are derived from sport" is shown through an ongoing involvement with the Olympics athletes and sponsorship of major sporting events like The World Cup. Endorsement deals with world-class athletes like David Beckham, Anna Kournikova and Jonah Lomu have contributed to its resurgence. Reinvention and an alignment to how people think and what makes them tick have also been important focuses for Adidas brand repositioning . According to their website

"The markets and industry in which we compete are transforming rapidly, paced by the evolution or revolution in how 'sports' are defined. Team sports like soccer and basketball will always be fundamental parts of sporting competition but eclectic, individual sports such as snowboarding and inline skating have grown".

By associating itself with these sports Adidas has certainly increased their brand recognition. When Adidas launched the world's first intelligent runner at $250 they wanted to position it to reach the "iPod generation" to achieve this music was an essential element to their campaign . Adidas's latest evolution has been to go back to its roots as a performance orientated sports brand which is reflected in the \"Impossible Is Nothing\" campaign which was launched initially in 2004 and globally in 2007. The campaign was driven by Adidas\'s efforts to shift its marketing focus to reach its target audience, 12- to 24-year-old consumers involved in sports. Based on statistics showing that men between the ages of 18 and 34 spent more time online than watching television, Adidas also shifted some of its marketing to the Internet.

The marketing mix is "The 'tactical toolkit' of product, place, price and promotion that marketers manipulate in order to satisfy their customers and implement their target market strategies."

(Dibb and Simkin - pg 168)

Focussed consideration on getting