Adidas India: Expansion & Strategy
Topics covered
Adidas India: Expansion & Strategy
Topics covered
Adidas segments its market by demographics such as age, gender, income level, occupation, and family life cycle. It targets all age groups, with special products for kids, offers shoes for both men and women including specific brands like Stella McCartney for women, and appeals to upper middle-class customers. The company focuses on urban youth and professionals, aiming at those who engage in sports during leisure time. Adidas also tailors marketing strategies to social classes and trade areas by evaluating potential locations for expansion .
Adidas enhances market effectiveness through strategic retail partnerships by collaborating closely with retailers to improve in-store experiences, which is critical in a market dominated by price competition and lack of differentiation. Such partnerships help Adidas by attracting consumers seeking value-added services and experiences beyond just the products themselves .
Adidas' commitment to sustainability is reflected in being named one of the Global100 most sustainable corporations, emphasizing its reputation and brand trust. This sustainability recognition influences its strategy to maintain competitive leadership in the sporting goods sector, attract environmentally conscious consumers, and shape an eco-friendly brand image that bolsters its market position and customer loyalty .
Adidas has focused on massive expansion, aiming to establish 1,000 stores in India by 2020, leveraging its reputation as one of the most trusted footwear brands after being recognized among the Global100 most sustainable corporations in 2014. The company targets premium customers including urban youth, working professionals, and families, with a strategy to penetrate principal consumption centers through significant stand-alone stores and partnerships with retailers for an improved in-store experience .
Adidas emphasizes staff training and development by subjecting selected salespeople to a 2.5-month onboarding training focused on communication, soft skills, and sales, supplemented with monthly training sessions. Store managers undergo a 6-month training program. The emphasis on continuous learning includes a variety of delivery methods such as classroom instruction and on-the-job coaching. Staff compensation includes a salary with potential bonuses or incentives .
Adidas considers factors such as accessibility, proximity to key urban areas, and customer traffic flow when selecting store locations. For instance, the store on Shastri Road, Kottayam, is advantageous due to its frequent bus services, proximity to the town, and accessibility including a nearby railway station. These considerations are crucial for maximizing customer footfall and enhancing convenience, ultimately driving sales .
Challenges for Adidas' expansion in India could include logistical complexities, cultural diversity in consumer preferences, and intense competition in the retail sector. Mitigation strategies might involve adapting product lines to local tastes, expanding partnerships with local retailers for better market penetration, and leveraging technology to optimize supply chains and store operations to ensure efficient scalability .
Adidas tailors its product offerings by considering the family life cycle, serving married individuals with children through products like Stan Smith sneakers for men and Reebok models for kids. This approach accounts for family-oriented purchasing behaviors and caters to the needs of entire household units, reinforcing brand loyalty across different family stages .
Adidas' core values include performance, passion, integrity, and diversity. These values align with their mission to be the global leader in sporting goods by building brands with a passion for sports, continuously improving their competitive position. Performance is emphasized as they regard sport as foundational, while passion drives innovation and improvement, integrity builds trust, and diversity is seen as essential for success .
Adidas targets urban youth and working professionals because these demographics reflect a lifestyle that aligns with the brand's identity as a sporting and lifestyle company. These groups are likely to value brands that offer performance and style, making them attractive for a company focusing on innovation and active living, thus ensuring a robust customer base for its products .