Threats and Opportunities
The scope of this portion of the report will consist of the threats and opportunities of “Adidas (often referred to as “the company”) alongside the threats and opportunities of the Reebok (subsidiary of Adidas) “EasyTone” fitness shoe as an individual product - that might in turn affect its marketing strategy and sales.
Adidas has secured sponsorship agreements with many National Athletic leagues that have increased the company’s visibility to the globe. For example, Adidas is Official Sponsor of the Women’s World Cup 1999 in the USA, promoting its position as the number one soccer brand. This tactic provides exposure and steady advertisement for the company. Not only are consumers constantly seeing the logo and or trademark of the company in advertisements, actual products such as; uniforms, caps, and water bottles are being used and featured during sporting events. Adidas has also strategically signed sponsorship agreements with famous athletes dating back from 1936 with Olymipic Gold Medalist Jesse Owens, one of the first Athletes to be sponsored the company. This impressive tactic creates an image in the mind of the consumer, thus strengthening brand equity.
PURCHASE OF REEBOK
In 2005, Adidas purchased Reebok and set out to revamp its declining sales pattern. Creating a global marketing plan focused on Reebok’s toning aspect entitled “ReeTone”, Adidas expected to have a quadruple in sales in comparison to the sales of Reebok products during its pre purchase era. In 2009, projections expected Reebox to sell 5 million pairs of shoes in the US alone after selling 900,000 pairs in 2009 when the campaign emerged. The return of a strong Reebok brand will only continue to benefit Adidas earnings.
The initial threat faced by the Adidas Company is the large amount of competition in the market for women’s athletic footwear. Of the entire US footwear industry, athletic footwear makes up 30% of sales. Although Adidas is considered a giant in both the Men’s and Women’s athletic footwear market, there are many small companies that together take up a substantial portion of the available market. Some of the competitors include Nike (another major company in the market of athletic footwear), Puma, and New Balance. More competition is present when accounting for the international athletic footwear companies that offer their goods at a cheaper price (ie. Asian and Indonesian countries.) These companies share all share a small niche in reference to Women’s athletic footwear. This creates steep competition for Adidas to target the specific audience. CONTERFIET GOODS
The production of counterfeit goods is a major threat to Adidas. According to market research, counterfeit goods produce billions of dollars in sales annually. Over 99.8 million dollars worth of all seized goods are counterfeit athletic footwear and apparel. Alongside the loss of revenue, Adidas faces a decline in brand equity. Counterfeit goods that are perceived to be actual products of the company are usually of poor quality, diminish consumer confidence in the brand, and promote no sense of uniqueness or exclusivity to consumers who purchase actual Adidas products. The production and sale of replica goods serves as a major threat to Adidas and its brand. Product Threats
The fitness industry consists of a wide range of goods and services that have either the same or similar target markets. Capturing the specific target market of young urban professional women and young mothers with children (ages new born to three years of age) will be the biggest feat when competing with fitness gyms, at home workout products, and personal trainers. Marketing strategies as well as a specific action program will be vital against the threats of this competitive industry.
Due to rapidly changing tastes of shoe buyers,...
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