Adidas is the second largest sportswear and apparels manufacturer (Dogiamis & Vijayashanker, 2009). By far, Adidas holds a market share of 22% (Dogiamis & Vijayashanker, 2009). Adidas had also registered the infamous ‘3 stripes’ as its trademark (Berntson, Jarnemo & Philipson, 2006). The founders of Adidas, Adolf and Rudolf Dassler had the vision of providing athletes with the best suited pair of shoes for their respective sports (Dogiamis & Vijayashanker, 2009). In efforts of achieving that, Adidas is had used the strategy of collaborating with important athletes to gain their insights on the products offered (Berntson, Jarnemo & Philipson, 2006). This contributes to the fact that Adidas had earned the reputation of being innovative and creative at an early stage (Berntson, Jarnemo & Philipson, 2006). Also, the pursue of Adidas to gain greater market share and penetration in the US market, Adidas had acquired Reebok International Ltd. under its empire (Dogiamis & Vijayashanker, 2009). Today, Adidas continues its rich heritage of harnessing technology to make some of the best shoes (Dogiamis & Vijayashanker, 2009). The issue that is discussed later in this paper would be of how Adidas had positioned its product in the market.
2.0 Segmentation, Targeting and Positioning
The process of segmentation, targeting and positioning is shown figure 1 below. Segmentation is defined as dividing the market into distinct group of buyers that possess different needs, characteristics or behaviour that might need separate products or marketing mixes to satisfy their needs and wants (Kotler, Brown, Adam, Burton & Armstrong, 2007). Consequently, the major variables that are used to segment consumer markets are geographic, demographic, psychographic and behavioural variables (Kotler et. al, 2007). Adidas had segment their sports shoes into football, running, basketball, tennis and training (Berntson, Jarnemo & Philipson, 2006). After segmenting the market into groups, the firm can determine the market segment opportunities that are facing the firm (Kotler et. al, 2007). Thus, the next step the firm should take is to evaluate the various segments and to decide on which segments to cover and the ones to serve, which is called targeting (Kotler et. al., 2007). The firm can either use differentiated, undifferentiated and concentrated marketing depending on their target strategy (Kotler et. al., 2007). Lastly, while the firm decides on which market segments to enter, it must decide which ‘positions’ it wants to occupy in the selected segments (Kotler et. al, 2007). Market positioning involves setting the competitive positioning for the product and creating a detailed marketing program (Kotler et. al., 2007). Positioning starts with differentiating the company’s marketing offer so that it make sure the value they providing is greater than the competitors provided. Adidas gains competitive advantage when they success to position themselves as the one who provided greater value. Positioning is further discussed later on.
Figure 1 – Steps in market segmentation, targeting and positioning Adopted from: Kotler et. al., 2007
3.0 Definition of Positioning
There are two types of positioning, that is product positioning and market positioning (Kotler et. al., 2007). Market positioning was discussed earlier while product positioning is defined as the way the product is defined by consumers based on its important attributes or the place the product occupies in consumers’ minds relative to a competing product (Kotler et.al., 2007). Adidas had positioned itself with respect to sports shoes and apparels where its products are low priced and with high performance (Pizam & Mansfeld, 1999). The importance of having a good positioning strategy is to help the company to create its competitive advantage, create a consistent image for a product offering and to utilise particular strengths...