Marketing Communication of Adidas and Nike - Essay Example

?MODULE OF ASSESSMENT: FOR BY LOCATION: ID: Word count: Contents: pageExecutive summary……………………………………………………………………………………….3 Introduction………………………………………………………………………………………………….4 Background………………………………………………………………………………………………….4 PESTEL………………………………………………………………………………………………………….4 Brand……………………………………………………………………………………………………………...4 Market Share……………………………………………………………………………………………….5 Target Market……………………………………………………………………………………………..5 Positioning…………………………………………………………………………………………………….6 Review and Analysis of the Communication Mix………………………………………….6 Advertising…………………………………………………………………………………………………6 Sales Promotion…………………………………………………………………………………………8 Sponsorship…………………………………………………………………………………………………….8 Direct Marketing………………………………………………………………………………………9 Personal Selling…………………………………………………………………………………………..9 Public Relations………………………………………………………………………………………………10 Recommendations and Communication Plan………………………………………………………..10 Bibliography………………………………………………………………………………………………………..12 EXECUTIVE SUMMARY This report commences with background analysis on the sports clothing and foot ware in the United Kingdom. Adidas and Nike are some of the vibrant brands that provide the sports clothing and foot ware in the United Kingdom (Roberts, 2001, pp. 170-172). These two major companies majorly use the retailers to be able to reach the vast market of United Kingdom. The retailers are widely spread out in all major and small towns and cities within UK and this provides a wider access to the market (Netherlands. Economische Voorlichtingsdienst. Bibliotheeken Documentatiecentrum, 1987, p. 35) Nike and Adidas have used several marketing tools to reach the market. There are several PESTEL factors that affect these tools, e.g., the environmental factors which determine the competition from the other brands and economic factors such as the decreasing inflation rates which determine the prices of the products and affect the marketing budget. Public relations are used as the companies cannot survive in isolation. These products are introduced to the public through the constant interaction with the customers by the employees and different stake holders. Direct marketing is employed as the company needs to know and get feedback and responses from the consumers through e-mails and online buying concerning their feeling concerning the products. Sales promotion is another marketing tool that is used in rewarding the consumers. This creates an incentive for consumers to buy. This is done through the coupons, samples, free trials and illustrations. Advertising is used and it is more effective when done through the audio visual. Report Title: Date To: From: 1.0 Introduction 1.1 Background. Nike and Adidas are the major brands in the United Kingdom sporting and footwear industry. These major brands have been able to take up other brand names such as the latest acquisition of Reebok by Adidas Company (Netherlands. Economische Voorlichtingsdienst, 1987, p. 35). Due to the recent increasing costs of production and wages, United Kingdom has been experiencing a decline in the number of sports ware companies and this means that a majority of the sportswear products are imported, approximately 95% of the products. In the consolidated retail sportswear market in United Kingdom, there are only four major leading retail groups which include the Sports Direct and JJB Sports (Roberts, 2011, p. 45). Over the past few years, the consumption and purchases of sporting and foot wear have declined slightly. This is evidenced by a decrease in the consumers’ spending from 6.3% in 1996 to 5.8% in 2000. There has been intense competition in the sports wear market due to the import penetration by other international brands, thus, causing the pricing pressures (Roberts, 2011, p. 47). 1.2 PESTEL The sports and foot ware industry in United Kingdom has recently been faced with a few PESTEL factors. In particular, the economic factors which have greatly affected the cost of sports clothing and foot ware due to the increase in the taxation of the sector. The economic factors have also greatly dealt a great blow on the industry through the price deflation (Collins, 2005, pp. 91-93). There has been an increase in the prices of the cotton which is the major raw material for the production of the sports clothing. This has been linked with the environmental factors due to changes in the weather patterns leading to low cotton production (Collins, 2005, pp. 91-93). The intense competition provided by the foreign brands is another environmental factor that is again posing to be a great challenge to the domestic brands in the United Kingdom. 1.2 Brand Adidas is an International brand which supplies its products to the United Kingdom. This company produces both women and men clothing, foot ware and accessories. These items include foot ware, shirts, pants, outer wear and shorts, base layer, bags, watches, eye wear, shirts and shoes, football balls, tennis racquets, which it sponsors the players with. Adidas is a group that comprises Reebok Sportswear Company, Tailor Made Adidas Golf Company and Rockport Company (Haig, 2010, pp. 10, 34). Adidas brand has tried and is trying by all means to improve on the consumer brand loyalty and has had several strategies to improve on the marketing of its products. (Haig, 2010, pp. 10, 34) 1.3 Market Share Adidas is the largest sportswear producer in Europe. Adidas faces high competition from Puma and Nike, international companies that are well known and have greatly increased their market outreach. The company’s revenue has gradually increased from €10.084 in 2006 to €11.99 billion in 2010. Target Market Adidas targets the sporting market and gets involved in nearly all sporting activities taking place in the world. This is shown by the devotion it has shown to the athletes through supporting nearly all sporting activities, e.g., rugby, basket ball etc. Adidas also targets the major sporting events through sponsoring some of the athletes with accessories. This helps build the brand name and may be used in the improvement of the consumer brand loyalty (Brunner, 2008, p. 54). Adidas targets the young people who are devoted to sports and athletics between 12 years and 24 years (Brunner, 2008, p. 32). 1.4 Positioning Adidas has positioned itself well in the sporting and foot ware market. This has been successful through the use of advertisements. These advertisements feature athletes using their products. The sponsorships advanced to the athletes have also greatly helped the company in positioning itself well in the market. The company has also participated in corporate social responsibility activities that have improved people trust towards its products (Talloo, 2007, p.207). 2.0 Marketing Communication Review. 2.1 Introduction Market communication plays a great role in creating a close relationship between the company and the customers. In the late 1990’s, Adidas divided its brand into three groups, namely, Adidas Performance, Adidas Originals and Style Essentials each with different purposes. The Adidas Performance group was contrived to preserve their devotion to the athletes while Adidas Originals was formulated to pay attention to fashion and life-style. This was also aimed at making it easy for the company to keep in touch with customers who are spread all over the world through setting different marketing agencies (Bruner, 2008, p. 20). 2.2 Advertising Review Adidas has come up with a mainstream slogan “Impossible is Nothing” which was started by 180/TBWA established in Amsterdam. This has also been aided by TBWA/Chiat/Day in San Francisco basket ball campaign. This ad lures people to buy Adidas products especially the sports shoes since Gold, the main target, can be lost in flash, months before stepping on the track. There are various ‘impossible is nothing’ ads which have endorsed various athlete celebrities such as NBA Star Tracy Mc Grady and Muhammad Ali (Bruner, 2008, p. 60). Adidas has majored in the audio visual advertisements. It has appeared in a number of games, e.g., Sony Play Station and ZX spectrum. These advertisements have appealing elements to customers and thus are able to see the satisfaction that the athlete in the advert is feeling. Most of the adverts show an athlete who is contented with the Adidas product Adidas has been able to employ various ads which are indirect and this allows the consumer think for himself or herself. This is a unique tactic that Adidas has used as consumers are fed up with the direct adverts by other companies. This is an Adidas ad ‘all day I dream about sneakers’ (Link: http://www.graphicmania.net/adidas-creative-advertising/) Even with the competitors available in the market, Adidas does not feel threatened as it has majored with the audio visual advertisements which have been able to endorse celebrity athlete. The use of the celebrity in the adverts makes all the customers yearn to be associated with the celebrity and this will boost the sales. Adidas has been able to focus on a small segment of the target group. Through the use of the advertisements with the athletes Adidas has also been able to target the athletes who purchase the products as they believe in their quality (Egan, 2007, p. 11). The audio and visual advertising has been repeated several times in the television channels and stations thus able to reach a larger population at the same time. This has triggered high sales and improved on the public image of Adidas Company (Shimp, 2008, p. 8). The main disadvantage of using the television in advertising is the short lived messages which, if the consumer is not attentive, will not get to see them. This is because the commercial advertisements aired by the television stations are short lived because of high cost charged on them (Smith, 1999, p. 202). The use of the television does not provide immediate feedback from the consumers of the products and Adidas may not be able to understand the needs of the customers. The company, therefore, needs to start embracing the latest technologies such as social networks to communicate with the customer (Talloo, 2007, p. 207). 2.3Sales promotion Adidas uses both the push and pull strategy in marketing its products. It uses the pull strategy to pull the consumers into its channel through its retailers by personal selling and promotions. This has been shown through the emphasis that Adidas has placed on the marketing communication tools in reaching the consumers. Adidas has employed some of the pull tactics to help boost its sales. One of the tactics it has employed is organizing for games for people to come and play and use the coupons. The push strategy involves persuading the middlemen to push the products through the various distribution channels to the final consumer through promotions and personal selling (Claywood, 1997, pp. 141-145). Adidas aims to entice the consumers to buy its products and decoy the consumers away from the competitors’ products. This has enabled Adidas record higher sales as the consumers get to purchase more and more of the products. The promotions have also been used to enhance the relationship as personal selling will involve direct contact with customers and will get immediate response. This can be used to improve on the consumer needs and interests (Claywood, 1997, pp. 141-145). Due to increased promotions due to high competition levels, the customers have also been able to increase on their consumption, and this has greatly boosted the sales of Adidas products (Chandrasekar, 2010, p. 304). 2.4 Sponsorship Review Adidas is a major event and sports sponsor both locally and internationally. Over the past few years, the company has increased on its promotion and support budgets. Adidas is a major financial supporter and supplier of the National Basketball Association (NBA). It sponsored the NBA players with new game Jerseys that were used in the 2010-2011 games (Bruner, 2008, p. 34). Adidas is the major sponsor of the All blacks, New Zealand national Rugby team, the Los Pumas, the Eagles and Stade Francois. It is also the main Cricket sponsor of the England Cricket team. In addition, Adidas has been sponsoring actions such as the London Marathon and the Adidas Sundown Marathon in Singapore (Bruner, 2008, p. 37). This creates an appeal to customers and the audience and improves overall sales of the company. 2.3 Direct Marketing Review Direct marketing is a marketing communication strategy where there are no intermediaries involved between the company and the customer. This is usually conducted through the telephone, direct mails; direct response broadcast advertising and online shopping. This activity is always concerned with the direct communication with the target groups that consume a lot of goods that are expensive (Mohr, 2009, p.89) Adidas does employ this method though not widely used in all sections through the direct mailing, the telephone and the online shopping. Though this does not involve face to face interaction with the customers, it enhances feedback and responses from customers, and this can be used to improve on the consumer needs. This also creates convenience to customers as they will not need to face the traffic snarl-up while heading to the stores to purchase the items. Direct advertising does not create good relations with customers as it would have with the personal selling (Talloo, 2007, p. 210). 2.6 Personal Selling Adidas has employed personal selling through the yearly exhibitions of the new products at the respective retailers and exhibition rooms. These exhibitions and the retail stores are always open all year round which offers any viewing services to consumers. The use of personal selling aims at improving the customer relationship and increasing sales (Chandrasekar, 2010, pp. 365). Through this, Adidas is able to identify prospective customers. The personal selling provides Adidas with an opportunity to change advertisement strategy to suit and satisfy the customer’s information needs. This also allows the marketer to listen to various needs and concerns of the individual consumers (Talloo, 2007, p. 207). Personal selling proves to be costly to the producer, and the number of people reached may be limited as this involves reaching each individual at a personal level. Adidas has tried to overcome this through the use of the integrated system of communication activities (Chandrasekar, 2010, pp. 365). 2.7 Public Relations review Through the various sponsorships, Adidas has tried to improve on its public relations. Public relations are aimed at improving the relations of the company with the public through obtaining a good corporate image and good publicity. Public relations helps Adidas build its image and the public gets to know about the products offered by the company and understand the company too. This helps in creating customer loyalty towards the product a strategy that help in positioning the product in the minds of the target customers (Claywood, 1997, p. 142). 3.0 Recommendations Adidas has greatly tried to advertise its products in the different media and has endorsed various athletes in their advertisements. This is quite a great step as the ‘Impossible is Nothing’ campaign earned laurels within the marketing arena. Though this has improved on the sales, Adidas need to consider reaching the whole global market using the different channels and Medias in the various developing countries. This will help the company attain high sales as the audience will familiarize and learn more about it before using the products. There are hardly frequent and repeated adverts in the media in the developing and less developed countries. This can improve on sales in these areas. Adidas needs to increase on the personal selling and the sales promotion budget as this influences the word of mouth communication and consumers can get an experience with the products. The information by the sales representatives tends to be more reliable than the advertisements. The sales promotion will boost the sales as the consumers demand more of the promotions. Adidas main target audiences are the young people who are more interested and devoted to athletics. This main target group includes the young people between the ages 12 to 24 years. Adidas needs to consider the other age groups as they may still need the shoes or accessories in their daily activities such as hiking, jogging and going to the gymnastic for personal exercises. The old age can be targeted as they may require the accessories for healthy exercises (Hansen, 2007, p. 123). 3.1 Marketing Communication Plan I would not change a thing on the Internet as there has been an advance by the company to increase sales by getting to the young consumers through the Internet. The only thing that I could do is to put more pressure is for the marketing agency to use the latest marketing channels such as social networks. For a good marketing plan, I will need to understand the competitor’s plan to be able to come up with a better one and the audience characteristics and market behavior. I will increase the marketing budget to improve on the personal selling and the sales promotions (Smith, 1999, p. 79) I would ensure that there is a balance created between the different marketing communication tools in budget allocation. Bibliography Bruner, C., 2008. Great Stories: Adidas: All Day I Dream About Sport. Cyan Communications. Chandrasekhar. ,2010. Marketing Management: Text & Cases. Tata McGraw-Hill Education. Claywood, L. C., 1997. The Handbook of strategic Public Relations and Integrated Communications. McGraw- Hill Professional, pp.141-143. Collins, C. and Trenberth L., 2005. Sports Business Management in Aotearoa/ New Zealand. Cengage Learning Australia, pp. 94-95. Economist Intelligence Unit (Great Britain)., 1990. Retail Business. Market Reports, Issues 383-388, pp.61-74. Egan, J., 2007. Marketing Communications. Cengage Learning EMEA.11. Haig, M.. 2011. Brand Success: How the World’s Top 100 Brands Thrive and Survive. Kogan Page Publishers. Hansen, F., and Christensen, R. S., 2007. Emotions, Advertising and Consumer choice. Copenhagen Business School Press DK. Mohr, J. J., Sengupta, S. and Slater, F. S., 2009. Marketing of High-Technology Products and Innovations. Jakki Mohr, pp. 379-382. Netherlands. Economische Voorlichtingsdienst. Bibliotheeken Documentatiecentrum. 1987. Economic Titles/abstracts. Nijhoff vol.14. Roberts, I., 2001. Advanced Leisure and Recreation. Heinemann. Shimp, A. T., 2008. Advertising, promotion and other Aspects of Intergrated Marketing Communications. Cengage Learning. Smith, R. P., Berry C. and Pulford A., 1999. Strategic Marketing Communications: New ways to Build and Integrate Communications. Kogan Page Publishers. Talloo. 2007. Business Organization and Management. Tata McGraw-Hill Education. p. 207. Read More