1. BRAND IN THE HAND
MOBILE MARKETING AT
ADIDAS
BSAD 331
DR. B. Alex Dorward, Liam McGean, Matthew
MUKERJI Tomlinson, Yixi Yao
2. 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
3. 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)
4. Threat of New Entrants
How severe is the threat of new
entrants?
5. 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
11. 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
12. PEST Analysis - Political
What are some political factors that
may affect the industry?
13. 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
14. 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
15. PEST Analysis - Technological
2.5G and 3G mobile phones
Transferspeeds 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
16. 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%
17. 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)
18. SWOT Analysis - Opportunities
What are some potential opportunities?
19. 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
21. 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
22. 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
23. 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.
24. 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
25. Marketing Mix
Price
Variesdepending 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
26. 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
Mobilemarketing seen as the future of Adidas
marketing in order to break through the clutter of
advertising
28. 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
30. 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
31. Conclusion
Should Adidas continue with mobile
marketing?