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ACTIVE LEARNING CASE Adidas: promoting a global sports brand Adidas was established in 1949 by Adolf Dassler and has 2012 Olympic Games become one of the largest brands in the sporting industry. With over 340 independent manufacturing partners span- The clever use of a three-stripe logo design has made the ning Asia, America and Europe, Adidas continually develops Adidas brand recognizable across the world. The Adidas innovative products which help athletes perform to their Group consists of approximately 180 subsidiaries, which very best. Furthermore, Adidas has consistently built its include Reebok, Taylor Made Adidas Golf, Rockport, and CCM marketing campaigns around various iconic athletes and Hockey. The group's product portfolio is vast, ranging from sport personalities. Adidas's involvement with the Olympic footwear and clothing to accessories (bags. watches, eye-Games can be traced back to the debut of Adidas's running wear, etc.). In 2014 Adidas employed 53,731 employees, 33 shoes in Amsterdam (1928). In addition, multiple iconic percent of whom were located in European emerging mar- achievements have involved athletes wearing Adidas's prod- kets, 24 percent in North America. 21 percent in western ucts in the Olympic Games such as: Europe. 8 percent in China, and 8 percent in Latin America. The group's headquarters are located in Herzogenaurach. Jesse Owens. Berlin 1936 (four gold medals: Germany and in 2014 the group's profit was recorded as Muhammad Ali, Rome, 1960 (gold medal: $7.71 billion (6.92 billion). Dick Fosbury, Mexico, 1968 (new back technique for high jumpk and Global marketing strategy Nadia Comaneci, Montreal 1976 (perfect 10). Adidas's marketing beliefs revolve around the philosophy that consumers want choice; hence it incorporates the use of Adidas anticipated that the London 2012 Olympic Games a multi-brand strategy which capitalizes on both a mass-would be a key event at which it could promote its brand and market approach and a niche market or segmenting expand its share of the performance sportswear and fashion approach. The firm maintains a wide range of products but sportswear market. The firm saw the UK as a style trend- with a unifying brand, so managing and enhancing this brand setter in music and fashion for other parts of the world and is its main core competence. Recognizing the importance of this shaped the way it used the 2012 Olympic Games as a effective international marketing Adidas places the majority platform for targeting a more global audience. The sponsor- of its investments in the highest-potential markets. For ship deal agreed by Adidas represented a new record as the instance. Adidas has been heavily investing in emerging broadest range of sportswear rights acquired in Olympic his- markets, such as China and Russia, while simultaneously tory, Adidas gained the right to be the "Official Sportswear targeting underpenetrated markets such as the United Partner of the London 2012 Olympic Games and positioned States itself as the exclusive licensee of all branded London 2012 The ability to make slight modifications in the design of clothing items. To guide this investment Adidas set itself four products has allowed Adidas to acquire a large catalogmarketing objectives: comprising a diverse range of sporting products ranging from mass to niche. Therefore, Adidas is able to take advan- to ensure a clear association as Sportswear Partner of tage of economies of scale and price its products accord- London 2012. Team GB. and Paralympics GB: ingly in order to tap into nearly every country in the world to engage and excite the 14-19-year-old audience in lideally) overcoming any cultural differences. Furthermore, order to drive brand preference in the UK: Adidas has established a series of promotional partner to deliver a licensed product return on investment (RON) ships with an extensive range of sports associations. (branded and event branded licensee rights) and namely UEFA. FIFA, NBA, NFL, NHL, and the Olympic Games. In some cases, these partnerships date back to the earliest to become the most talked about sports brand in 2012. years of the firm. So, how has Adidas used these key sport- One of the crucial factors for achieving its sponsorship goals ing events to engage consumers across the world and pro- was the company's direct involvement with the design and mote its own brand identity? And how effective has this development of the athletes kit. This provided a gateway for strategy been? We examine the firm's involvement with the Adidas to connect with the target audience, while simultane- 2012 Olympic Games and the 2014 FIFA World Cup to ously developing new products to meet commercial sales answer these questions targets. Adidas hired Stella McCartney (Paul's daughter) to create an innovative kit design and this led to the decon- the use of effective social media engagement. In order to structed union jack flag design. engage with Brazilian fans prior to the 2014 World Cup, Adidas involved the use of the likes of Jessica Ennis and Adidas invited fans to cast votes regarding the official name Tom Daley when featuring TV adverts to increase support for of the match ball. After receiving over 1 million votes the ball Team GB. Furthermore, Adidas included TV adverts which was officially named as "Brazuca," which is an informal highlighted the best UK talent across sport, including David expression representing Brazilian Pride. Beckham, Wretch 32. and Derrick Rose. Adidas went on to With a marketing slogan of "All In or Nothing." Adidas was exploit the use of social media when raising awareness of its directly competing against Nike's marketing campaign of campaign and #takethestage on Twitter became the promi- "Risk Everything. Even though Nike had acquired Cristiano nent trend when supporting Team GB. In addition, Adidas Ronaldo at $8.3 million as the second most expensive shoe used YouTube to increase awareness among customers-the endorser ever. Adidas's market research had identified that reactions of individuals who were greeted with David fans were interested more in receiving the latest information Beckham's surprise appearance received over 3.2 million as quickly as possible rather than in the promotion of prod- views. Adidas closely monitored every aspect of its promo- ucts. With this in mind, Adidas developed an innovative live tional campaign, which enabled it to determine whether hour-by-hour calendar which provided all the attention- becoming the Official Sportswear Partner of the London grabbing information fans would need before a game even Games and exclusive licensee of all branded products was started. This required a heavy investment in marketing, but financially effective. Table 13.1 illustrates how Adidas meas- was deemed a success as Adidas's integrated marketing ured each of its marketing objectives. Observing this tabte, strategy generated millions of tweets while making it the Adidas decided that its marketing campaign had paid off as most talked about brand during the 2014 World Cup each of its marketing objectives had been met in accordance Furthermore, Adidas managed to gain the endorsement of with its measures two key players who reached the finals: Lionel Messi and Mesut zit, who wore the Adidas Predator Instinct Battle Pack 2014 FIFA World Cup and F50 soccer boots respectively. Furthermore, capturing a Adidas not only targets the Olympic Games as an iconic event global audience, Adidas has also partnered FIFA World Cup in order to promote its products, but regularly follows a sim- tournaments in order to reward players for outstanding itar social media strategy during prominent soccer tourna- achievements throughout the competition, such as the ments. For the 2014 FIFA World Cup, Adidas was the official Adidas Golden Ball, the Adidas Golden Boot, and the Adidas ball supplier and managed to drive up merchandise sales via Golden Glove Table 13.1 Adidas's marketing objectives and measurements Marketing objective Measurement Ensure a clear association as Sportswear Adidas generated the highest number of articles among local sponsors Partner of London 2012. Team GB, and franked third behind McDonald's and Coca-Cola). Paralympics GB 44 percent of 16-24-year-olds were aware of the sponsorship (Adidas's closest competitor achieved 16 percent). Engage and excite the 14-19-year-old YouGov (a measure of public opinion) score increased from 4.2 to 16.5 during audience in order to drive brand preference in the Games the UK Adidas ranked no. 1 by London 2012 Nielsen audience tracking for categories "inspiring and empowering Adidas Don't stop me now video was the most viewed video on www.bbc. co.uk during the Games .8 million views of #takethestage content on YouTube, including 2.5 million views from 14-24-year-olds. Deliver a licensed product ROI (branded and 2 percent market share growth. event branded licensee rights) 100 million total licensed product sales in 2012. . More sales at Adidas's Oxford Street store in London in one week than at any other Adidas store ever Become the most talked about sports brand in Increased Twitter followers by 25 percent. 2012 32 percent share of sponsor traffic on Twitter 128 million Twitter impressions for #takethestage. As an MNE. Adidas's marketing mix is partly tailored for Olympic Games and FIFA World Cup is extremely expensive, specific markets by identifying factors such as cultural and via the use of well-organized marketing strategies and clear social differences. But it also benefits from the attractive- objectives, Adidas has identified a clear way of engaging ness and selling-power of global sporting superstars.deeply with consumers. It is important to note that Adidas Whatever their nationality or ethnicity, consumers from dif- was largely supportive of Team GB before, during, and after ferent nations and cultures all over the world venerate their the Olympic Games, which helped it ensure the full support prowess and see them as role models to emulate. The of the team's athletes. Effective marketing strategies, such sports entertainment industry is also growing and Adidas as the London 2012 campaign and the "All In or Nothing has emphasized sports marketing within certain global campaign during the 2014 World Cup, and the company's regions, such as China, Russia, the UK, and the United ability to deliver innovative products both underpin the con- States. Adidas aims to be a market-oriented organization tinued success of Adidas. which continually identifies and reviews consumer needs to Sources Adidas Annual Report 2016 Leonid Bershidsky. "Why Adidas boot Nike guarantee that the products it releases meet customer at the World Cup. Bloomberg Vow. July 11 2014: Times 100 Business Case requirements. Adidas aims not just to meet its customers Studies, "Planning effective marketing strategies for a target audience: an Adidas needs but to surpass their expectations by constantly adapt the 2014 world-cup-taught-us-about-ettective-integrated marketing. Chris case study basitlesscasestudies.co.uk: http://www.domarketingpro.com/what- ing its products and acquiring key athletes and sporting per- Daniels Sponsors connect World Cup with US soccer growth." PR Work sonalities to showcase them. Even though gaining December 20, 2013. Sebastian S. Vasich. "Adidas-a global sports strategy Business Development Strategies. January 1, 2012 sponsorship deals with large sports events such as the How could Adidas use international market assessment to maximize sales in different global markets? 2 Why does Adidas focus on promoting a single global brand and how do sports events help this strategy? 3 How would currency fluctuations affect Adidas's profit in the US market? How does Adidas use online platforms and social media to promote its events, its sponsored athletes. and its products