Shaikha Al Falasi (58746) Rand Amin (60415) Ghada Awad (62990) Wara Bokhari (64509) Anusha Vahidy (65195) Section 02 25th April 2018 A look into Adidas Dr. Rania Semaan
Introduction Adidas is a German multinational company and is one of the largest sportswear manufacturers in the entire world (2009). According to their official website, Adidas was founded in 1949 by Adolf Dassler, an avid soccer player of his time, who initially only made sports shoes in his mother's laundry room ("History", n.d.). However, today, Adidas has turned into a household name known and loved by many across the world. The key product categories under Adidas are mainly for the sports; soccer, basketball, track and field, workout gear, and mainly any other outdoor activities you can think of. Adidas’ mission is to be the leading sports brand in the world and they try to accomplish this by establishing themselves in and sponsoring tournaments such as the FIFA World Cup or NBA all star games in order to gain brand awareness and be publicly renown. Overall, Adidas is said to work with around 800 independent factories from around the world that manufacture products in more than 55 countries ("Global Factory Lists", n.d.). In just 2017, the Adidas Group generated 21.22 billion euros in revenue ("Adidas, Nike & Puma revenue comparison 2006-2017 | Statistic", 2017) and from the looks of it, as the years keep increasing, so will the company’s revenues. Adidas and their Consumers Adidas customers are mainly comprised of upper class and upper-middle class social groups. More specifically, they target young adults and children who have a keen interest and passion for fitness and sports. However, Adidas acknowledges the fact that in order to be successful across various customer segments, they need to go above and beyond the act of mass production and mass marketing. To do this, they aim to identify and understand individual consumer motivations and goals related to sports, consumer lifestyle and fitness, and a consumer’s involvement in Adidas as a brand which can help them create meaningful products
and experiences for their consumers that can build a lasting impression and in return create brand loyalty. Adidas aims to fulfil a consumer’s product specific goal in which the purchase of their product can help the consumer see themselves as a better athlete capable to do anything (hence their slogan “Impossible is Nothing”) and in turn improve their self-image. Consumers might be interested in how the quality of products by Adidas differs from its competitors, how much they cost, and how much risk is entailed depending on the purchase. Those who deal extensively with these factors follow a central route to persuasion and so they have a high involvement in purchasing. To please these kinds of customers, as shown in Appendix A, Adidas creates advertisements for high involvement purchaser’s which require cognitive thinking and so they have a lot of information present regarding the functionality and specifications of the product. In this advertisement, marketers design the figure to be the noticed stimuli by the consumer, in this case, the actual product itself, and everything else is regarded to be as the hazy ground. However, those who see Adidas as a low involvement product, or purchase the product solely for its image and prestige rather than functionality follow a more peripheral route to persuasion. Adidas targets these types of consumers mainly through packaging, celebrity endorsements, and by creating advertisements in which the figure is the attractive celebrity wearing a pair of Adidas products as shown in Appendix B.
“What a Dassler” Since their early commencement as a brand, Adidas had always emphasized themselves as a brand fit for sports but more specifically, fit for football. Their first football shoes were described to have “screw-in-studs on lightweight football boots.” After the German national football team faced and won against the then “unbeatable” Hungarians in the 1954 World Cup
final, they didn’t just win a trophy, but their victory would be heard around the world for years to come and make Adidas a popular name to be heard on football pitches everywhere. In the 1954 advertisement for their shoes (Appendix C), Adidas makes use of comparative advertising by placing their shoe next to an orthodox English football boot and claiming that their product is half the weight of the English boot. They further go on to describe the special features of their product perhaps to grab the attention of their consumers with a need for high cognition and since this boot was a fairly new product back then, the marketer’s need to provide consumer with information about the product and its functions was most likely done to ease consumers in into getting comfortable and familiar with Adidas to encourage future consumption. Impossible is Nothing Adidas’ famous slogan “Impossible is Nothing” was not always the brand’s catchphrase. The slogan was coined in 1974 and was actually taken from a quote by Muhammad Ali, a legendary boxer who ruled the ring ("The Adidas Slogan: All You Need To Know", n.d.). Erich Stamminger, a member of the Executive Board of Adidas, describes “Impossible is Nothing” as not just a phrase but an attitude that is known and shared by all athletes around the world. He claims that, “Impossible is Nothing is the concept behind Adidas’ brand positioning “forever sport” that clearly and emotionally communicates our passion for sport. As an athlete you always strive to go further, break new ground, and surpass your limits. So do we as a brand, to achieve our mission to be the leading sports brand in the world” ("The Adidas Slogan: All You Need To Know", n.d.). During this campaign, Adidas began using a positive message framing in order to persuade viewers to purchase their products. Their advertisements also made use of not only a motivational appeal but also humor was used on several instances to attract viewers’ attention
(Appendix D).This advertisement is very eye catchy and strongly appeals to those with avoidance goals and uses a negative goal to get the message across. They are implying that by buying our products, you can avoid putting your kids in danger and will avoid what is about to happen in the picture (the child touching the electricity socket). The combination of humor and negative goals make the advertisement extremely effective. Adidas ads play an important role in altering consumers’ attitudes towards the brand through their attitude towards the ad. Their already strong beliefs about the brand means that any positive feelings aroused from an Adidas ad can lead to a positive attitude towards the brand. Although throughout this campaign their slogan stayed the same, Adidas made sure to engage in cosmetic variation which meant changing bits and pieces from their ads to re-attract customer senses incase of sensory adaptation. The differences in one advertisement as compared to another were emphasized to be JUST above viewers’ just noticeable difference (jnd) and this further avoided sensory adaptation. Adidas did this by making sure the main theme of their ad is recurring but the celebrity’s, scenarios, and background music are almost always changed. The Customer is Always Right Adidas has to ensure that their customers are satisfied and are willing to continue buying their products. To do this, they establish reinforcement schedules which can primarily take three forms: total, systematic, and random. Amongst the three mentioned reinforcement schedules, Adidas offers a random reinforcement schedule and a systematic reinforcement schedule. Adidas does this by offering a customer loyalty card known as the “3Stripes” card. According to the 3Stripes website, this card can be received after a single purchase at any Adidas store. After the 3Stripes card is registered, the member automatically gets assured to be the first to know about any exclusive events, products, or special offers (3stripes, n.d.). Furthermore, a 3Stripe card
holder gets a special discount on certain Adidas products throughout the year. Additionally, they also get 30% discount voucher for the month when it is their birthday (3stripes, n.d.). Another strategy Adidas adopts to influence customer satisfaction is through the act of shaping. Shaping refers to how companies attract customers before they engage in purchase. This usually consists of offering coupons or starting campaigns such as offering a discount to the first 50 customers. Adidas is not different than other brands when it comes to shaping. Coupons such as “get 15% off on next purchase” are available on websites such as “Groupon” and “RetailMeNot.” A.D.I.D.A.S - All Day I Dream About Sports. Included in Adidas’ target audience is primarily sports participants, including athletes at the highest level of their sport career as well as non-athletes that are motivated or inspired by sports. Studies show that Adidas’ association to its German heritage has contributed to its brand image, and quality to be perceived positively due to its European link. Adidas is associated with so many other words, thoughts, and activities and whether it was intentional or not, Adidas benefits in one way or another. However, the sports company has primarily taken advantage of its heritage and adopted it as an asset for its brand image, linking its European heritage to portray a high-end image of the brand so the products would be perceived as high quality in terms of performance. However, high-end products are usually associated with a premium, therefore the higher the quality, the higher the price. Using the perceived quality and price-quality relationship, Adidas’ high end image and high quality products are reflected on its prices as well. Consumers’ perceived price fairness can be evaluated by comparing Adidas’ prices to the prices of their biggest competitor - Nike. Nike may have comparatively lower prices, but it is consistent with their “cool” instead of high-end image. Consumers can compare prices internally as well by
comparing the prices between Adidas’ different major product lines: Adidas Sports Performance, Adidas Originals, and Adidas Style. Each product line is priced differently according to their characteristics and performance level targeting different types of consumers: 1. High physical activity enthusiasts 2. High risk perceivers (“specialised”, “cool”, “trendy”, “sporty”, “professional”) Millennial Hysteria - All In Adidas has built a loyal following through marketing its products using advertisements, campaigns, and limited-edition products to fuel up excitement and achieve high demand. Through their production journey, Adidas has not just maintained high quality products, they have also differentiated themselves by launching exclusive, limited edition shoe lines that are unique and one of a kind, in collaboration with famous celebrities. Today’s youth have a fixated consumption behavior in relation to sneakers. They have a passionate interest in sneakers where they are willing to go to extensive measures to secure them by dedicating their time and money. Sneakers are considered collectible trophies, and therefore the more unique they are, the more desirable they become. Yeezys, limited-edition, premium priced sneakers, were produced in collaboration with famous artist Kanye West who has an extensive youth following who are dedicated to him and collecting his line for a trendy look. These limited edition products help adapt to consumer innovators and their need for uniqueness as the acquisition of limited edition shoes would help enhance their personal and social identity. Additionally, in appendix E, Adidas can be seen making use of stimulus discrimination in their ad by using the tagline “Fake hurts Real. Imitations are poorly made, giving you no protection." This ad emphasizes on how important it is to own an original pair of Adidas rather than a “me-too” imitation which will most likely result in you getting injured. However, if you
own the original brand, the three stripes are signified to protect you from injury. The objective of the marketer’s persuasive message in this ad is to coveney Adidas’ unique benefits effectively and differentiate it from their competition. Adidas hopes to convince consumers to be able to clearly distinguish between their original products and that of imitators. Diving Deeper into the Brand Companies like Adidas need to be aware that their choice of ambassador for their brand is very important because through the ambassador, they are communicating the image of the brand. Keller (2015) says that the brand personality needs to match the celebrity’s image for the endorsement to prove to be effective. For example, if Adidas wants to promote a sports product through a celebrity that does not engage in any sports, consumers may not purchase the product as the promotion may seem fake. Adidas creates synergy and credibility between their products and their endorser as they choose a successful athlete to promote their products, and in that way, the athlete’s position in the public gives him the opportunity to attract customers due to his ability to make them want to be like him. When a successful athlete such as David Beckham, James Harden, Lionel Messi etc. endorse an Adidas product, this improves not only their reputation, but the brand’s reputation too along with establishing trust in the consumers mind and attractiveness towards the brand. To further communicate their image as a sports oriented brand, Adidas makes the use of football players to endorse their brand. As mentioned earlier, the use of football players creates synergy between Adidas’ products and the endorsers. Renowned football player Lionel Messi recently signed a “lifetime” deal with Adidas for $10 million dollars (Nelson, 2015). This means that Messi has to wear their footwear on the pitch at least until the end of his career. By doing so, Adidas boosts their source credibility and since Lionel Messi is a football player and wears
Adidas’ footwear during a game, this increases the effectiveness of consumers being able to decode Adidas’ message the way they want it to be decoded by the consumers. Adidas Cares Brands cannot solely rely on the product itself for sales or profit. In order to improve their brand image, which will ultimately lead to higher sales, a lot of brands tend to engage in institutional marketing in order fulfill their corporate social responsibility (CSR). This means that the brand must, to put in simpler terms, do something to give back to society. Adidas has related to consumer’s emotions by supporting worthy causes, to change their audience’s affective attitude towards the company. According to them, they have been involved in aiding refugee camps for years now, and their goal is mentioned in a statement on the Adidas group website, “Our overall approach to support refugees follows our three-pillar model that is based on humanitarian aid, close collaboration with public authorities and external partners as well as volunteers, and the development of possible employment integration” (2018). Moreover, in 2010, Adidas announced a “Sustainability Strategy” which was run for a period of 5 years. The strategy basically focused on spaces where sports are played (fields for football, oceans for surfing etc.) and how these spaces are endangered due to human-made problems such as climate change. The Adidas group focused on two main areas, product and people and further divided it into water, materials and energy and empowerment, health and inspiring action, respectively. According to the article, “Adidas Group Launches New Sustainability Strategy”, Adidas took action such as using better material, for instance, they used Better Cotton, Recycled Polyester, and Ocean Plastic (2016). Other than this, they also reduced energy consumption and water consumption. Lastly, they empowered and educated their workers by informing them about the importance of physical health and the importance of exercising their
rights. Adidas’ commitment to corporate social responsibility has quite an effect on the consumer’s perception of the brand. When consumers create positive attitudes towards Adidas because of the brand’s worthy contributions to society, it raises Adidas’ brand image and brand awareness and can even create a positive buzz or a positive word of mouth for the brand. Moreover, Adidas also taps into the consumer’s affective component from the tri component model by supporting initiatives relating to Breast Cancer Awareness Month. They showed support to the initiative by releasing a new pink-themed sneaker for charity. The Ubersonic 2 Think Pink (Appendix F) was released in 2016, with sales of every shoe going to support AKTIV Against Cancer, an organization that works to help cancer patients continue to lead active lives after diagnosis. The limited edition shoes were available online and in Adidas stores worldwide. These types of initiatives and movements helps positively trigger affective Adidas consumers and guide them to conation which can be any behavior they can engage in such as purchasing or even just leaving a positive review for Adidas. Package Image Packaging conveys the image the the brand communicates to the buyer and Adidas understands the importance of packaging and the connotations that consumers understand based on packaging. It includes color, shape and material and Adidas has been working creatively to produce a wide range of packaging- with a purpose to each. Adidas have a standard cardboard shoe box for most of their shoes and although they might vary from time to time they all look really similar. For instance, they all have the same 3 stripes and the logo on the side- but the color varies. This use of stimulus generalisation allows their customers to easily recognize their standard shoe box. But, Adidas also uses packaging to convey other messages depending on the product. For instance, when Adidas launched a hoodie that helps the athlete focus, it was a brand
new idea and this concept was never seen before in the market, Adidas wanted to portray it as an exclusive and premium product and therefore hired an art studio in London to create a premium package (Theinspirationgrid.com, 2018). This premium packaging is an extremely clean design, with the use of white and black and is very detail oriented, unlike their traditional minimal packaging. This makes the product stand out and emphasise that it is premium and a product that has never been seen in the market. (Appendix G) Conclusion In conclusion, Adidas focuses on their consumers by focusing on their target market, this is done by focusing on strategies that focuses on the upper-class and upper-middle class. Also, Adidas focuses mainly on young adults and their self-image. Adidas understands the consumer’s motivation and this can be seen in their slogan, campaigns and advertisements dedicated to the youth empowerment. Adidas always makes sure that the customer is right by using specific reinforcements such as total, systematic and random strategies. They also maintain their image by using celebrity endorsement and football players. This is used to emphasize on their brand image and help maintain a positive image towards the brand. The brand also dedicates CSR strategies to help focus not only on the products but the people too by participating in refugee camps. Adidas also uses the packaging image to portray an exclusive and premium products and image.
References
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Appendix A
Appendix B
Appendix C
Appendix D
Appendix E
Appendix F
Appendix G