Marketing Principles: Adidas

FASHION MARKETING MARKETING PRINCIPLES FINAL ASSIGNMENT Adidas Originals Lecturer: Francoise Tellier, Student Name: Rita Zheng ID: 005FM711 Level 1. 1. 1, Date: 9/5/2011 TABLE OF CONTENT I. Part 1 Introduction of the Brand ———————————————————————-4 II. Part 2 EXTERNAL ENVIRONMENT ANALYSIS ———————————————5-17 a. Macro Marketing Environment Analysis ———————————————————5-11 i. Political ——————————————————————————————————-5 ii.

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Economical —————————————————————————————————6 iii. Social culture ————————————————————————————————7 iv. Technological ————————————————————————————————8 v. Environment ————————————————————————————————-9 vi. Legal ———————————————————————————————————10 vii.

Industry Analysis Growth and Trends analysis—————————————————–11 b. Micro Marketing Environment Analysis ——————————————————–12-17 viii. Market Segmentation ———————————————————————————–12 ix. Target Consumers analysis —————————————————————————–12 x. Competitors analysis ——————————————————————————–13-16 a.

Competitor 1 ————————————————————————————–14-15 i. Product + pictures + analysis ———————————————————————14 ii. Price —————————————————————————————————-15 iii. Place + pictures + analysis ————————————————————————15 iv. Promotion + analysis ——————————————————————————-15 b.

Competitor 2 ——————————————————————————————16 v. Product + pictures + analysis ———————————————————————16 vi. Price —————————————————————————————————-16 vii. Place + pictures + analysis ————————————————————————16 viii. Promotion + analysis ——————————————————————————-16 xi.

Medias analysis identify the different fashion medias in China—————————————–17 III. Part 3 INTERNAL MARKETING ENVIRONMENT ANALYSIS ————————–18-20 MARKETING STRATEGY & MARKETING MIX ————————————————————18 c. Marketing Strategy and USP ————————————————————————18 d. Marketing MIX —————————————————————————————–18 IV.

Marketing Recommandations ——————————————————————————-19 V. Conclusion ——————————————————————————————————–20 VI. Sources and references —————————————————————————————-20 I. PART 1 INTRODUCE OF THE BRAND COUNTRY: Germany ESTABLISH YEAR: 1924 REGISTER YEAR: 1949 PRODUCT CATEGORY: Sport clothes, sport accessory (watches, glasses, etc. ), skateboards, shoes, etc. FOUNDER: Adolf Adi Dassler

CONTROLLING COMPANY: Nuremberg , Germany. At present adidas has three series: Adidas Performance, Adidas Originals and Adidas Style. Adidas Originals use the clover logo. Clover became the adidas logo since 1972. At that time all of the adidas products used this logo. The shape of the clover looked like a world map. It emblem the three lines extend all of the world. But from 1996, the clover logo was only used for the adidas originals. The Adidas Originals are based on the best products in the adidas history modification a little bit of the style and materials then re-published.

The adidas originals are more fashion than before. In 2001, the first Adidas Originals store opened in Berlin, Germany. Later that year, another Adidas Originals store opened in Tokyo, Japan. Not long before, the third Adidas Originals store opened in New York’s Soho district. In March 2007, the first Adidas Originals stores opened in Shanghai. The Adidas Originals concept store in ZhengDa Square in Shanghai is the second Adidas Originals store in China after the one opened in The Place in Beijing, and was also the first concept store in Shanghai.

Maybe it is because each of the classical collections has a unique story, in people’s eyes the classic collections always has the connotation, and always with a fresh vitality and fashionable breath. In the fall of 2002, adidas originals collections limited edition in China for the first time. From shoes, clothing to accessories, each one is the high-quality product in design, and let the fashionable people fondle admiringly. II. Part 2 EXTERNAL ENVIRONMENT ANALYSIS a. Macro Marketing Environment Analysis i. POLITICAL People’s Republic of China is based on socialist or communism in its political system.

It is a one party state controlled by the Chinese Communist Party. Over the years China has successfully put country stability as their main focus to ensure continuous economic growth. However in 2009 there were ethnic unrest in the region Xinjiang and Tibet which do not pose any threat to its political stability (Central Intelligence Agency, 2011). This turn of events has China shifted its political viewpoint to create stable and sustainable economic growth; with social welfare focused on the outskirts of China, minority ethnics and minority groups’ interests (Canfei, 2003).

Through open market initiatives by Chinese government to attract and invite investors some policies were implemented, which includes reduction in taxation to foreign companies, creating designated free trade zones such as Shanghai and Shenzhen, investing in public amenities and facilities to attract foreign investors, and continuously liberalizing their trade regulations to create attractive and impactful investment center (Platt, 2010). Protective policies and measures were liberalized accordingly by China.

Thus, it is obvious that China from the political viewpoint fits well into foreign investors’ radar with assurance of stability and gradual liberalization of its protective policies. Its obvious China is hot right now and the buzz about China’s fashion and luxury world pervades all forms of media throughout the world. Despite this daily barrage of news, it’s impossible for anyone outside China (or not visiting regularly) to really grasp how fast things are moving here.

Not only are brands desperate to get a foot hold in China and capitalize on China’s booming retail market, but also Chinese citizens, particularly young people have an amazing hunger for everything ‘fashion’. Everywhere you go in China you can see and feel this with fashion shows and editorials screened on planes, trains, subway stations and buses and featured in every print media you can imagine. It’s also impossible to leave the house without seeing some fashion related advertising everywhere you go.

Perhaps the most fundamental area you can see this rapid change is in what people are wearing. Here at The Maosuit we are yet to figure out an accurate way to measure China’s changing fashion consciousness, but as China’s GDP growth hovers around 10% year on year we predict that if such an index existed China’s Gross Domestic Cool would be growing well above 50% a year. http://essaysforstudent. com/Business/Paul-Smith-China/91577. html ii. ECONOMICAL China’s economy development since the great revolution has changed from communism or socialist economy towards open market concept.

In 2010, China was the global number one exporter and their economy in terms of size overtook Japan and only remains behind United States. China’s continuous and gradual reforms started with phasing out agriculture activity; followed by liberalization of prices, fiscal decentralization, open banking and financial system, creation of share market, large amount of private sector investment, and large foreign direct investment. China’s GDP recorded at USD 7. 9 trillion and compounded annual growth rate of 11% for the next five years proves that the country is creating many opportunities to businesses.

Foreign Direct Investment stands at USD 108 billion (Huang et. al. , 2010; Central Intelligence Agency, 2010). Regarding economic problems China currently faces are inflation and increasing local government debt. Inflation rate of 6% had surpassed the government’s target of 3%. China is expected to have some form of tightening to control the rising inflation in 2011. Another pressing economic matter is the rising local government debt, which swelled as a result of stimulus policies, and is largely off records and potentially low-quality debt.

China economic challenges are (a) to encourage local demand through reducing its household savings; (b) creating and maintaining ample employment opportunities for its citizens; (c) fight graft; and (d) control environmental pollution and social disparity related to the economy’s rapid transformations (Huang et. al. , 2010). In 2009, world recession reduced foreign demand for China’s exports, but China rebounded quickly, outperforming all other major economies in 2010 with GDP growth around 10%. The economy appears set to remain in the double digit growth rate in 2011.

China’s ruling government knows that they cannot depend too much on their exports for continuous growth but instead to focus on improving its local consumption (Central Intelligence Agency, 2011). China is fast becoming one of the leading global markets worldwide. While the majority of the world has struggled due to the economic downturn China has thrived. There are many reasons for this but the main one is Chinas membership of the World Trade Organization. As recently as 10 years ago China was a lot less successful economically it’s truly amazing how far China has come in this short period of time.

Chinas GDP is now an astonishing 5 times what it was 10 years ago. (GDP is market value of goods and services produced in a year, in a country. ) ( http://www. theodora. com/wfbcurrent/china/china_economy. html ) iii. SOCIAL CULTURE * Population Overview. China has 1. 38 billion people and has annual population growth rate of 0. 66%. 19. 8% of the population is below 15 years of age, 72. 1% of the population aged between 15 to 64 years old and remaining 8. 2% age 65 and above. Median age for China is 35. 2 years, 34. 5 years for males and 35. 8 years for females. 43% of the population lives in urban areas with average growth rate of 2. 7%.

The growth figure shows many of its citizens in millions are actually migrating to urban areas. Literacy rate in China stands at 91% for adults aged 15 years and above. (Central Intelligence Agency, 2011) * Society and Culture Overview. Language used throughout the country is mandarin, consist of Chinese characters, both written and spoken. Most university graduates put emphasis on their students to learn English; however it is best if foreign investors entering China to learn up their language (Fong et. al. , 2007). According to Qiu (2010) most societal values are from the teachings and practice of Confucianism, Buddhism and Taoism.

The schools of thought are influential and have evolved through out the years to form Chinese way of thinking, acceptable values and practices. China business culture put emphasis on guanxi; which means relationship, thus business practices in China focuses on building relationship rather than following protocols in business practice (Fong et. al. , 2007). Chinese values thrift and persistence; the business culture also reflects this values where actions today influences the future generations is of great concerns. Griffin ; Pustay (2007) research shows four important cultural characteristics in China, (i) which is persistence (i. . , willingness to strive for excellence), (ii) respect for relationship (i. e. , guanxi in dealing with all matters), (iii) thrift (i. e. , always look for ways to reduce cost and minimal expenses), (iv) and sense of shame (i. e. , importance of guarding against actions that may cause or bring bad image to self and family). Hofstede’s Framework classify China as a collectivism country where decision making process depends on group consensus; high power distance; Chinese people accepts the reality of inequality, weak uncertainty avoidance; ambiguous situations accepted, aggression and emotions not shown.

Tend towards masculinity in business dealing where competitions and performance are important success factors. Lastly weak time orientation where waiting time for interviews and business dealings can lasts as long as the meeting requires (Fletcher & Brown, 2005). iv. TECHNOLOGICAL Currently, China an emerging country, technological advancement in the nation is still relatively slow compared to developed countries. However, China has recognized the importance of technology in ensuring development has created a pool of human capital well versed in engineering, telecommunications, manufacturing and information systems.

The talent pool supply has helped China improved its manufacturing industry. Improvement in science and technology creates job opportunities in the manufacturing sector and also improve quality of life (Dicken, 2007). Many high end technology companies have set up base in China as their hub for their Asia operation. For example, Google, Dell, Apple and Microsoft have its offices in China and have their own research center which employs talented Chinese locals. Through foreign direct investment and technology transfer from developed countries, China is catching up in terms of technology advancement (Mellahi, 2005). . ENVIRONMENTAL Chinese governments consider environment sustainability as one of its top priority in approving business which has impacts on the environments. However there are many loopholes and high corruption in the system that makes the enforcement weak. Many laws and restrictions were drafted to protect the environment and government bodies are working with non-governmental organizations to achieve sustainable environment management (Daniels et. al. , 2008). vi. LEGAL Legal and Legislature Overview.

China’s legislature is mainly derived from the soviet and continental civil code of principles. The judiciary consists of Supreme Peoples’ Court; where judges are appointed by the ruling party, Local People’s Courts consists of High, intermediate and basic courthouse to handle cases of various degree of differences and importance. Constitutionally, the court system exercises judicial power independently and technically is free of interference from administrative and public organizations, and individuals.

The Supreme People’s Court oversees the process of justice by local courts and special courts, while courts at higher levels supervise the judgment of courts at lower levels. Business dealings usually are arbitrated and seek for out of court settlements as the preferred method in China. In order to speed things up for businesses to solve sour dealings, China has set up international trade and economic arbitration to assists in mediating international and also local cases (Central Intelligence Agency, 2011). vii. Industry Analysis Growth and Trends analysis

Consulting Group United States to a report released Wednesday by 2020 years of Chinese customers of fashion consumer spending will reach 1. 3 trillion yuan Boston consulting firm of 5,000 aged 14 to 45 years to visit the Chinese people, concluded the report, ‘seize the strong growth of Chinese fashion market,’ the report it states that ‘the face of the next wave of growth, just sit back and enjoy is not enough. the next 10 years of growth patterns over the past 10 years is very different(http://www. f-paper. com/). Therefore, the fashion company must fully understand the Chinese customer groups and retail changes. ‘Cultural Revolution’ of young people born after the main force of China’s fashion consumption 20, 30-year-old customers, the ‘Cultural Revolution’ of young people born after the fashion consumer is considered the main force of China’s purchasing power, they have been above the average of 18%. ‘They do not eat that kind of bitter parents, most now have a good job – all translated into a strong spirit of optimism(Women News http://www. f-paper. com/). ‘the report said.

The report also predicts that the next 10 years, Chinese women, and living in mainland cities, second and third tier cities, people will also spend more money on fashion products. American and European brands seeking growth in China Face saturated domestic market and recession, American and European brands have to rely on to seek growth in overseas expansion, however, the fashion brand in this area has just started. Zara currently has 70 stores in China, Gap is only five, compared years ago to enter the Chinese market, sports brands Nike and Adidas have been open about 6,000 stores.

China’s fashion industry has plenty of room for growth in the coming years but also holds hidden risks. To evaluate the Chinese fashion industry’s investment environment, Forbes conducted an interview with Jeacy Yan, a partner at investment company IDG in Beijing and a member of the 2011 Forbes China Fashion 25 List. China is transforming itself from an export-oriented economy into a consumption-driven economy. IDG sees fast growth in consumption as a sustainable trend in China and has for a few years been very positive on Chinese consumer brands and the services sector.

Fashion brands account for a big part of consumer brands and naturally fashion companies in China have became a target for IDG. They see great growth potential in high-end casual wear, fast-fashion brands and luxury brands. As for the women’s shoes sector, Belle is clearly the market leader while other players like Daphne, ST&T, Kisscat and Stella Luna are also performing well , adding that this sector still enjoys high growth and there is still space for new brands, especially in the mid to high-end range. (http://www. wantchinatimes. om/news-subclass-cnt. aspx? id=20110627000039&cid=1202&MainCatID=12) b. Micro Marketing Environment Analysis i. Market Segmentation * Geography segmentation * Density : urban and semi-urban cities * Demography segmentation * Age : 15 to 35 * Income level : > RMB 5000 * Social class : Upper middle, lower upper and upper class * Gender : Male and female * Behavioural segmentation * Benefits : Athletes Gym regulars Sports lovers Brand freaks * Psychography segmentation * Experiencers * Achievers * Image drivers * Strivers ii.

Target Consumers analysis The target market of adidas is the urban youth with the brand proposition ‘competition to life style’. The principle consumption centres namely the metros are also a potential target market. iii. Competitors analysis * Industry Adidas is in sportswear, apparel and sports accessories industry. The main competitors of adidas in the industry are NIKE and PUMA since it acquired REEBOK in January, 2006. RUNNING: shoes, spikes, socks FOOTBALL: studded boots, stockings, team kits, warm up suits BASKETBALL: shoes, jerseys and shorts, team kits

GILF-TAYLORMADE: hats, gloves, bags, vintage clubs (golf sticks), golf balls, putters CASUAL: footwear and clothing, apparels and accessories * NIKE NIKE is currently the world leader in sports good industry with a brand value of$12,672 million. The company concentrates on style and technology with a high price range og the products. FOOTBALL: boots, jerseys, shorts, stockings, team kits, warm up suits BASKETBALL: shoes, jerseys and shorts, team kits GILF: shoes, golf balls, apparel ATHLETICS: shoes, spikes, compressor apparel, training kits CASUAL: footwear, apparels and accessories

Product: NIKE AIR FORCE Analysis: 27 years later, every single AF1 is a work of craftsmanship. Completely remastered for the crispest lines and finest comfort. Inside, we’ve re-sculpted the padding, eliminated interior seams and calibrated the fit. Outside, a whiter white, laser-sharpened leather edges and a redesigned deubre to allow laces to lie absolutely flat. Premium leather upper Polyurethane midsole with full-length Air-Sole unit for sweet shock absorption and a smooth ride Rubber outsole for grip and durability Remastered seamless interior for comfort.

New sculpted tongue and ankle padding. Price: RMB 699 — RMB 1,589 Place: Nike has 81 stores in Shanghai. Most of the Nike store are opened in the business district and downtown. Promotion: With every change of the season, Nike must scale promotion campaigns. The promotion such as sales 50% off or even more must attract more people buy their products. * PUMA AG A German based company best known for its football shoes and athletic shoes. The competition from PUMA has become stronger after the 2008 Olympics in which the Jamaican sprinter Usain Bolt broke records and six gold medals.

Bolt was wearing PUMA shoes! FOOTBALL: boots RUNNING: shoes, studs, warm up suits and training kits MOTORSPORT: apparels, equipments and footwears GILF: golf balls and apparels SALING: chute, board shorts, cruising jackets and accessories CRICKET: bats, gloves, pads, footwears, training kits, apparels and equipments. Product: 65cc Ducati Analysis: 65 cc Ducati is a motor sports shoes. Its light and leisure is suitable for the race. The shoes has become a trend cool dazzle shoe style. Price: RMB 800 — 1500 iv.

Medias analysis identify the different fashion medias in China * ADIDAS ORIGINALS IPHONE APP You can snap a pjoto of any sneaker tat catches your eyes and you unique technology will scan the current stock, find the closest match and offer product info and relate contend at your fingertips. Choose and organized your favourites, share with friends and find stores near you. Just snap, tap and map to have the sneakerheads’ best kept secrets in the palm of your hand. http://www. adidas. com/originals/us/#/content/iphone-us III. Part 3 INTERNAL MARKETING ENVIRONMENT ANALYSIS

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