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

6. Power of Suppliers
 How much power do suppliers have?

7. Power of Suppliers
 Low
 There are very many suppliers and therefore
lots of choice and little supplier power

8. Power of Buyers
 How much power do buyers have?

9. Power of Buyers
 High
 Since there is such competition, all of which
are competing for brand recognition, buyers
have a lot of choice and power

10. Threat of Substitutes
 How severe is the threat of
substitutes?

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

20. SWOT Analysis - Threats
 What are some potential threats?

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

27. Pros and Cons of Mobile
Marketing
 Pros….?

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

29. Pros and Cons of Mobile
Marketing
 Cons….?

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?