Adidas: Brand Equity

History of Adidas

• Bavaria, Germany - 1924
• Adi Dassler
• Three stripes 1949
• Tracksuits
• Robert Louis-Dreyfus & Christian Tourres
• Went public in 1995
• "We knew then, we know now"
• Adidas-Salomon
• Beckham, Muhammad and Laila Ali
• until 2005
• 2005 Reebok

Today

Adidas

Performance

Originals

Lifestyle

NEO

Assignment 1

Brand equity

A. Brand introduction

It all started in a small town in Bavaria, Germany, when Adi Dassler registered the “Gebrüder Dassler Schuhfabrik” in 1924. This company however ended with the foundation of “Adi Dassler adidas Sportschuhfabrik” which he registered in 1949. Then only 47 employees worked for the company. In that year, he produced the first shoe with the nowadays famous three Adidas stripes. The first piece of clothing was the Franz Beckenbauer tracksuit model, which was named after a German Kaiser. This gave the company a whole new perspective as it was until then only famous for its shoes. Adi Dassler’s secret to success was meeting with his athletes and listening carefully to what they say and constantly observing what can be improved or even invented to support their need. After the death of his father, Adi’s son Horst took he company over and let it into the modern sports marketing. Robert Louis-Dreyfus together with his partner Christian Tourres took over the company after the death of Horst and the troubling years that had followed. He turned the sleeping giant from a sales-to a marketing-driven company. In 1995, six years after becoming a corporation, Adidas went public and its new marketing slogan could not sum it up better: “We knew then, we know now”. In 1997, the company name changed to Adidas-Salomon AG after the acquisition of the Salomon Group and its brands Salomon, TaylorMade, Mavic and Bonfire. In 2004, Adidas presented memorable marketing campaigns which included famous athletes such as David Beckham, Muhammad and Laila Ali. In 2006, one year after Adidas and Salomon went their separate ways, the company acquired Reebok. Meaning bringing together two of the world’s most respected and best-known companies in the sporting goods industry. In June, the company was re-named Adidas AG. In 2011, the company also started to engage in fashion.

Thus, the company controls the brands of Adidas, Reebok and Taylor made and sells products in Tennis, Football, Golf, Cricket, Basketball, Gymnastics, Skateboarding.

The brands Adidas splits into Adidas performance, original and life style and nowadays also Adidas Neo.

Adidas sponsorship list is very long and contains many players from different sports, but they also sponsor for example Bayern München, Real Madrid, Juventus and the national Dutch field hockey team.

B. Why did we choose this brand?

o Adidas is the 2nd when it comes to sportswear brands (after Nike)

o It started as a shoes brand, after which their primary focus was sportswear

o However, nowadays it is highly regarded in the world of streetstyle fashion, therefore breaking the boundaries of its market segment

o Trend ‘athleisure’ extremely popular since 2011 and it keeps growing

o The strategy translates that competence in sports into streetwear and fashion because sport is an attitude and a lifestyle

o Creative and innovative approach to sportswear

o Global image not universal

C. “Dimensions of Brand Knowledge” model

Attributes

Non-Product-Related

Price

Because of its style, design and promotions uses skimming prices as well as competitive pricing.

o For run of the mill products, Adidas uses competitive pricing keeping in mind competitors like Nike, Reebok and Puma.

o For products which are newly introduced in the market and are uniquely designed, Adidas uses skimming price.

o Due to their brand equity in the global apparel market, they are higher priced

o Generally unlikely to use penetration pricing as it could damage their brand equity

o Also, consumers often believe higher price = higher quality, therefore Adidas is unlikely to lower their prices

o However, Adidas NEO exists to cater to the younger, more price-conscious customer segment

Packaging

o Utilization of the three-stripes characteristic of Adidas

o The logo – confusing because there are 3

User Imagery

o Young adults, adults as well as children who have passion for fitness & sports

o Targets customers in the age group of 13-40 years but majority of its customers are of 15-30 years of age

o Upper middle class or the luxury class of customers.

Usage Imagery

o Sporty situations

o However, the reality is that the products are often used in non-sport-related occasions (again, popular as leisure wear, streetstyle)

o The divided portfolio aids in segmenting the usage imagery

Product-Related

Benefits

Functional

The functional benefit of Adidas is to have clothing and shoes that fit well and that allows you to perform well during practicing a sport.

Experiential

The company tries to sell an experience of a good feeling during sport. A feeling that you can do anything. So Adidas is trying to let consumers think they can perform better in sport by wearing their clothes and shoes.

Symbolic

As Adidas tries to collect the biggest Athletes in their fields of clothing and shoe wear. The consumer when buying get a feeling of connectedness to their favorite athletes as well.

Attitudes

D. Two examples of how the brand is doing for “the new challenges”

Focusing on the “sneakerhead hype” – sneakers are nowadays probably the most important ‘clothing article’ and people are investing in them more than before (I need to source this) – retro trend the most popular

• Lead through design:

o Adidas brought back the Stan Smith and the Superstar silhouette from the sixties, adjusted the design a little bit and managed to overtake Nike in the US with regard to the sales numbers

o U.S. market share for sneakers is now up to 11.3% as of May 2017, almost doubled from 6.3% last year

• Invest in people:

o Yeezy clothing + sneaker line / Kanye West

o Human Race collaboration with Pharrell Williams

o Y-3 clothing line in collaboration with Yohji Yamamoto

o Alexander Wang, Jeremy Scott

o Adidas has changed the game with its “willingness to embrace non-athlete social influencers who have resonated well within current consumer trends,” according to Baird analyst Jonathan Komp

E. What and how does your brand do to make sure that they overcome the challenges mentioned in order to lead effectively in today’s tumultuous and exciting brand environment?

• Collaborations with prestigious designers and celebrities

o Pharrell Williams, Kanye West

o Jeremy Scott, Alexander Wang, Yohji Yamamoto (Y-3), Raf Simons

o make the brand more suitable for everyday life and enter the "high-fashion" or "street-fashion" segment

o Higher prices, outstanding designs,

• Release of limited numbers of sneakers

o Human Race NMD by Pharrell Williams, some silhouettes are only released for "friends and family"

o Make "friends and family" marketing agents for Adidas, through shared content on social media

o By releasing only limited numbers, demand remains unsatisfied for most and thereby a hype is created, which can for example be observed through enormously high resell-prices

• Adidas
• Reebok
• Taylor

Tennis, Football, Golf, Cricket, Basketball, Gymnastics, Skateboarding

sponsorships

Why Adidas?

• 2nd in sportswear brands
• It started as a shoes brand sportswear
• Nowadays streetstyle fashion
• Creative and innovative approach to sportswear
• Global image not universal

breaking the boundaries of its market segment

• ‘Athleisure’
• The strategy translates that competence in sports into streetwear and fashion because sport is an attitude and a lifestyle

Price

• Price skimming
• Competitive pricing
• Higher-priced
• Adidas NEO

Packaging

User Imagery

• Young-adults & children
• Fitness & sports
• 15-30
• Upper middle class

User Imagery

Usage Imagery

SPORTS!

Usage Imagery

Functional

• well-designed fit
• performance improvement
• sports

Functional

Experiential

• feeling good, being sporty and healthy
• Adidas = performance improvement

Experiential

Symbolic

• Famous athletes
• Connectedness

Symbolic

The Staple

• Globally known logo
• Example: Superstars / Stan Smiths
• Became a consumer staple in the USA

The Staple

Global Image

• Slavic culture
• A pair of Adidas sweatpants is a consumer staple "for every Russian man" in order to express themselves as part of Slavic culture

Stan Smith

Superstar

Market Share

6.3% 2016

Market Share

11.3% 2017

Yeezy

Human Race

ft. Pharrell Williams

...and more

Alexander Wang, Raf Simons, Jeremy Scott, Yohji Yamamoto