ADIDAS

INTRODUCTION
Adidas is a German sports apparel manufacturer, part of the Adidas-Salomon
Corporation. Adidas was named after its founder, Adolph (Adi) Dassler, who
started producing shoes in the 1920s in Herzogenaurach near Nuremberg with
the help of his fellow friend Cody. It registered as Adidas AG on 18 August 1949.
The company's clothing and shoe designs typically include three parallel stripes
COMPETITORS
Rudolf Dassler, Adies brother, founded a rival company, PUMA the chief
competitors of Adidas are Puma and Nike. In August 2005, the company
announced that it had made a deal to acquire rival Reebok for $3.8 billion. The
acquisition would increase its market share in North America and allow it to
further compete with Nike. This will propel Adidas to the number two spot in the
foot apparel market behind Nike. Adidas' trademark saying is 'impossible is
nothing'.

||| 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 lineup.

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
their customer base by 20%.
But today, the customer has changed. Andreas Gellner, MD of adidas India, tells
us: Todays Indian customer is aware of international fashion and technology and
he cares about them. He is also a big sports enthusiast. We have also noted the
need for constant changewhich implies faster turnaround for designs and
therefore newer products.
On the other hand, the buying experience is becoming crucial. The retail scenario
in sportswear is changing accordinglymarketers are focusing on shop design
and service and on brand consistency across outlets; they are paying a premium
on technology and innovation. This has also been impacted to a large extent by
the mall mania and the growth of the high street.
From our meeting with adidas marketing executives we gathered information
about how they defined their target demographic. They target the 15-35 age
group, both males and females, with a monthly income of over Rs15000.
The consumer is typically an image-conscious sports fan, but not necessarily a
sportsman.