adidas in India3
Scope of Study6
Targeting & Positioning16
||| Background |||
adidas AG is a German sports apparel manufacturer, part of the adidas Group. It registered as adidas AG on 18 August 1949 (with lower-case lettering: "adidas"). The company was named after its founder, Adolf (Adi) Dassler, who started producing shoes in the 1920s in Herzogenaurach, near Nuremberg, with the help of his brother Rudolf Dassler who later formed rival shoe company PUMA AG. The company's clothing and shoe designs typically include three parallel stripes of the same color, and the same motif is incorporated into adidas' official logos.
adidas plans to become the leader in the organised sports footwear and sportswear market.
||| adidas in India |||
adidas first entered India in 1989 through a licence agreement with Bata. adidas later re-entered India for the second time in 1996 through a joint venture with Magnum International Trading Company Ltd with an initial investment of $2.5 million to form adidas (India) Trading Pvt. Ltd. adidas holds a 100 percent stake in the company.
The company launches every six months between 600 and 800 new designs in footwear and between 1,500 and 2,000 new designs in apparels. The apparel range is priced between Rs279 and Rs2700, while the footwear is priced between Rs499 to over Rs12499. adidas' products in India are sold through 140 own outlets (excluding multi-brand outlets).
The company, which is known for football and running shoes, introduced its cricket gear in India in 2004.
The company adheres to strict quality and design specifications and uses the manufacturing unit of Lakhani Footwear to manufacture the locally produced adidas range in India.
Around 30-40 percent of the components are locally sourced.
||| Industry Scenario |||
(as of 2003-04)
Footwear brands drew up ambitious plans targeting a larger audience and higher market share.
MNC brands like Reebok and Adidas launched television commercials after a gap of four years and brand shops were filled with a fresh and upgraded product line-up.
The new distribution strategy focused on extending the reach rather than exclusivity and at broad-basing distribution through tie-ups with branded retailers and setting up shop in shopping malls.
For adidas, sales of higher priced footwear recorded strong growth in 2003-2004 and the company expected to close the year with a 30 percent growth.
Pre-1997, adidas had tied up with Bata and Woodland and first began exploring multi-brand outlets and retail malls.
Reebok was slated to grow by almost 30 percent against 22 percent in 2002-03 and focused on its global Performance Range products. Bata started retailing other brands like Reebok, Nike and Lee Cooper.
As of 2005-06, the current premium sports goods market in India was valued around Rs 500 crore. Within this market, adidas enjoys considerable brand equity and is considered among the leading international brands in the country.
||| Scope of Study |||
Our group has selected the Indian Footwear (Athletic) as Product Category. The main multinational players in this industry are Nike, Puma, Fila, adidas & Reebok. Indian players include Action Shoes Ltd., Liberty Footwear Co., and Bata India Ltd. This report will mainly consider Nike & Rbk (Reebok) as competitors for adidas. By way of research, we have conducted a consumer survey, as well as spoken to a few retailers of the 3 top brands in the industry.
||| Consumers |||
In 1999, when adidas entered the Indian market, it introduced the cheapest range of shoes it had ever sold. The new line took into account the importance of affordability in the Indian market, and the company expected the move to expand...