brand in hand
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BRAND IN THE HANDMOBILE MARKETING AT ADIDAS
Alex Dorward, Liam McGean, Matthew Tomlinson, Yixi Yao
BSAD 331DR. B. MUKERJI
Target Market
Through its “brand in the hand” campaign, Adidas is looking expand its reach to target 12-24 year olds
Hopefully reaching customers outside the sporting sphere
Adidas also targets soccer segment in Europe, basketball and Hip Hop (or “Urban Cool”) segment in North America
Porter’s 5 Forces - Competition High Adidas faces stiff competition from
numerous smaller competitors (NewBalance, Asics, Columbia), as well as from very large players (Nike, Reebok)
Threat of New Entrants
How severe is the threat of new entrants?
Threat of New Entrants
Medium Although is it relatively easy to produce
sportswear and accessories, it is difficult to effectively compete in such a market
Promotional costs are very high for this market
Power of Suppliers
How much power do suppliers have?
Power of Suppliers
Low There are very many suppliers and
therefore lots of choice and little supplier power
Power of Buyers
How much power do buyers have?
Power of Buyers
High Since there is such competition, all of
which are competing for brand recognition, buyers have a lot of choice and power
Threat of Substitutes
How severe is the threat of substitutes?
Threat of Substitutes
Very Low There are no substitutes for clothing and
shoes There are different types of
shoes/clothing, however, if somebody requires soccer cleats, they cannot substitute these with another type of shoe
PEST Analysis - Political
What are some political factors that may affect the industry?
PEST Analysis - Political
Regional laws regarding unsolicited mobile marketing
PEST Analysis - Economic Dot Com stock market decline in 2000 may make
people doubt the importance of mobile marketing Price of newer technology phone features are
more expensive therefore affordability issues arise
Increased online advertising popularity resulted in increased online advertising cost
PEST Analysis - Socio-Cultural
Increased use of internet Frequent use of cellular phones More than half of the media
consumption will be digital by 2007 (estimate)
Consumers became hostile towards perceived intrusion on their lives by advertising
PEST Analysis - Technological
2.5G and 3G mobile phones Transfer speeds similar to wireless
broadband 2.5G usage is estimated to go from 8% -
68% from 2003-2006 (Europe) 3G usage is estimated to go from 0% -
28% from 2003-2006 (Europe) Personal Mobile Gateways
SWOT Analysis - Strengths
Strongly recognized brand image Growing customer base within the USA Global Revenues more than $6 billion Largest supplier of sportswear in Europe Advertisements available in a variety of
languages Adidas spends more of its marketing
budget on new media than its competitors, 25%
SWOT Analysis - Weaknesses
Adidas does not have the majority of market share in US Nike held 40% market share
Adidas was not the leader in the European soccer market in 2003 Nike edged out Adidas for the first time
Adidas spends less on advertising each year compared to its greatest competitor (Nike)
SWOT Analysis - Opportunities What are some potential opportunities?
SWOT Analysis - Opportunities In 2003 70% of Europeans had mobile
phones In 2003, 23% of Europeans had mobile
phones with newer technology, allowing for more innovative advertising strategies
A lag in the US mobile phone market gives companies an opportunity to test their strategies first on the European market
Youth spending on mobile media is rapidly increasing
SWOT Analysis - Threats
What are some potential threats?
SWOT Analysis - Threats
Limited bandwidth within the US Regulatory delays and diverging delayed
the introduction of 3G into the US Increased competition in domestic
market Consumers recognize minimal amounts
of traditional advertising Ie. 8 minutes a year of Adidas advertising
per person
Competitive Analysis
Nike is the global leader in athletic footwear
In the US Market: Adidas 16% of athletic footwear market
share (16% Reebok, 40% Nike) Companies compete by signing pro-
athletes such as Michael Jordan (Nike), Kobe Bryant (Adidas), Allen Iverson (Reebok)
In 2003, Nike had 60% of basketball segment, Adidas had 20%, and Reebok 15%
Competitive Analysis (cont’d)
Nike spent $1.4 billion on advertising and promotion compared to Adidas’s $900 million (2004)
Adidas sponsored 2004 EuroCup Nike sponsored Manchester United
in 2002, and increased advertising during the World Cup.
Competitive Analysis (cont’d)
Both Adidas and Nike began “new media” advertising
Nike charged users for all content downloaded to cellular phones
Adidas, as part of “Urban Cool”, partnered with MTV to bring ringtones, wallpapers, and games
Marketing Mix
Price Varies depending on product Run DMC shoes cost $70 Missy Elliott Remix Boots cost $120 Consumers are price insensitive
Product Sportswear and accessories
Place No applicable information found in the case
Marketing Mix
Promotion Significant amounts of promotion required
This includes traditional promotion techniques such as print, billboards, TV, and cinema
Internet marketing Also includes innovative promotion techniques
such as “live billboards” and mobile marketing Mobile marketing seen as the future of
Adidas marketing in order to break through the clutter of advertising
Pros and Cons of Mobile Marketing
Pros….?
Pros of Mobile Marketing
“Breaks through the clutter” There is an abundance of traditional advertisements
More personal, richer advertising possible More meaningful and effective
Is not as intrusive as traditional media since consumers have to give consent
Data can be collected that can help study what consumers want
Attracts consumers outside the sporting sphere Broadens their brand image
Pros and Cons of Mobile Marketing
Cons….?
Cons of Mobile Marketing
Potential for intrusive, unsolicited, unpopular marketing (spam SMS’s)
Difficult (and possibly expensive) to develop compelling content that users want
Does not reach everybody Content isn’t always available due to possible
service interruptions Possibility of increased use of mobile marketing
and consequently getting “lost in the clutter” again
Fragmented and complex due to many different handsets and carriers, different types of functionality, and different preloaded apps
Conclusion
Should Adidas continue with mobile marketing?