Marketing & Management Adidas Case Study with Examples

Questions: 1. Assess the importance to Adidas of using both above-the-line and below-the-line communication. 2. Explain how successful you feel the high cost use of sponsorship has been to Adidas? In your answer suggest other ways in which you feel this promotional budget might have been beneficially spent. 3. Assess the usefulness of Adidas use of social media in its Take the Stage campaign. 4. Young people are a dominant market segment of Adidas target market. Justify whether you feel that this restricts the market for their products, or do you feel that they are doing the correct thing? Answers: 1. The communication of messages that will create attention and attraction for the brand and the product could be both above-the-line and below-the-line. The communications strategies are so done to ensure that the message conveys a commercial as well as a valuable meaning. Thus while promoting a brand or a name, using of these two tactics is essential. Adidas used both above-the-line and below-the-line promotional communication to infuse a sense of strength and importance on their promotional message. It particularly used the sponsoring of the attire for Team Great Britain (Team GB) in the Olympic Games. The line here refers to the awareness or attention level on the marketing objective. The above-the-line communication strategy is using of media and advertising techniques to deliver a message that will rouse the general interest of the public. On the other hand, a below-the-line communication strategy is where the direct selling occurs. It also involves sponsorships of programs, public relation campaigns and social media campaigns that drive the message home. The most significant factor for which a combination of both is utilised by marketers is that while above-the-line communication creates an interest and calls for attention, a below-the-line activity convinces the people of the brand name and its objective. Thus, above-the-line communication creates a brand image and below-the-line activity fosters the brand identity and takes the first step in building a brand trust. Apart from these factors there are some significant differences between the two types of communicating strategy. It is not only the end goal that is defined by the use of the strategies, but also the type of target audience that is targeted through the communication. While ATL or Above-the-line communication will act in favour of a large audience, a BTL or Below-the-line communication will ensure that the target group is limited and it will remove costs and generate more mobility. Again, when the target group is large and complex it is better to use an above-the-line strategy to communicate the message as a whole, it will ensure that the message is universally distributed. Thus, a below-the-line strategy is used when he target group to whom the message is to be delivered is small and limited. It will ensure that it is less costly as there is no wastage on delivering the message to people who are not concerned. In this case scenario, Adidas has a large group of people who forms its customer base. Not only does people wear the brand but are genuinely interested in it. But again the sports lovers are a limited section of people who will buy branded clothing for practising or completing their sporting activity. Hence, it would be effective to make use of both the strategies to ensure that the best of both the methods are applied to receive the ultimate result. The above-the-line campaign of Adidas includes advertisements on TV that features the best sports personality and talents. These ads place the products strategically in the limelight. These advertisements were not restricted to TV but used every available media to showcase the glamorous aspect of the brand. These ads carried a different message than the other sponsor ads and focused on the passion for sports feature. It resulted in creating a niche market for the campaign. Later on, the advertisements changed into the below-the-line mode to a drive of sending the customers to visit the website. It was a more valued communication through which Adidas created a corporate reputation by upholding its strategy to showcase new talents and provide them with life-changing opportunities to meet their favourite sports stars. This "take the stage" activity is termed below-the-line as it did not directly promote the brand name or the product. But at the same time created an identity and built a reputation regarding Adidas' role in the society (Tustin, 2002). The social media campaign and the videos shared on YouTube featuring the Team GB athletes and David Beckhams surprise visit to the photo booth, generated wide awareness of Adidas promoting the sport. Thus, it can be seen how the right mixture of the two kinds of communication strategy played a great role in ensuring that the anticipated message is perceived. Also, it leads to the creation of an image of Adidas being the most popular sports brand in the international scenario and its concern and associatedness with the love for sports. Also, companies like Adidas make a mixture of above-the-line and below-the-line communication processes to effectively measure the success of their activity. The above-the-line communications could be measured by the sales growth and the number of footfalls. A below-the-line communication will not show direct result but will be perceived by the genuine interest of the people and through the response that is gathered from the media. Thus, it is important for Adidas to utilise both the methods of promotion to ensure that its extensive marketing message is delivered to all the targeted groups and the potential groups in an effective manner. Also, the heritage of Adidas being associated with the Olympics could only be focused on the efficiency of the promotional activity that will showcase the attachment and of the brand with the greatest sports event of all times. Finally, it is the wise and clever use of documentaries and TV spots that created the charm of the "Take the Stage" campaign. The above-the-line adverts and the below-the-line documentaries and social media campaigns were significantly important in creating a brand value. This brand value was sustainable as it created an image of the brand that was attached to the brand for a long time. Also, the use of both the type of communication is effective in reducing cost and targeting a wide number of people. An extensive marketing campaign means targeting a greater number of people. Again, for a major event like the London Olympics a brand that is the official sponsor should go all out in its marketing strategies. Thus, the application of both types of communication will promote the message from the front directly and indirectly. This would ensure that the brand perceived in the positive light and is given thought. In the end, the use of above-the-line communication was done to create hype that is very much essential for a sponsor. Also, the use of below-the-line communication program would ensure that the brand is successful in delivering its message and creating a brand image and corporate reputation by directly linking the people with the brand and the Games. It is an example of integrated marketing approach that is done to gain a path breaking success. 2. Sponsorships are one of the significant marketing strategies utilised by the company. The London 2012 was the perfect platform for utilising the sponsorship tactics to create a convincing market base. It is one of the costliest sponsorship programs as Adidas was the first sportswear to offer designer sportswear supplied for all the rounds to Team GB. The branding of the entire event and the Team was effective in establishing itself as a market leader among sportswear brands. The cost efficiency of the activity is still doubted. Adidas has been the tier-one sponsor of the event that paid a 100 million and was the most talked about brand during the entire game. The designing was the most expensive segment along with the Team GB kit. This public relation activity created the platform for further promotions. The campaign also invested in digital activities of including videos and social media feedbacks. Thus, digital media campaigns could be cost effective in a lot way. It is the expenses on the setting up of the booths, celebrity endorsements and involvements as well as the talent contests that took up the most costs. The adverts that guided the people to the websites were also an extravaganza and hence, overall it was the huge investment that led to the success of the campaign. The investment of Adidas in the Olympic was very far-reaching, and it transcended the original marketing of the brand and was successful in achieving incredible results. It is proven by the fact that during the game week the Oxford Street story of the brand achieved sales figure beyond normal than the other stores of the brand. The critics thus acclaimed that this was one of the most incredible marketing activity of all time. Thus, it could be said that the high cost incurred by the Company in the sponsorship activity was effective to a large extent in deriving the result it anticipated. But a loss was perceived in the sector of people's views as according to half of the world Nike was perceived as the brand associated with the sponsorship of London Olympics 2012. Where brands like Adidas invested a fortune in establishing a global exposure and fostering positive values for the brand, it was Nike who somewhat stole the show away (Davies, 2012). This was because the most visible endorsements were not done by Adidas but by Nike. The non-sponsor campaigns were not free to associate themselves directly with the Game or the buzz words. Thus, it was the social media campaigns, the tweets, the videos and the posts that created the hype of the product. It is seemed that Nike was mentioned 25000 times more than Adidas, and so were the tweets. The growth in the Facebook and Twitter page was significant. Also, it was a very smart move to make the athletes wear Nike off the fields and on side events. This success of Nike questions the success of the heavy cost of Adidas' sponsorship program. Hence, few recommendations are suggested to the ways the promotional budget could have been used by Adidas to derive similar success, yet in a very constructive and cost efficient manner. Firstly, it was essential to draw clearly a line between the above-the-line and the below-the-line promotional activity that was adopted. A below-the-line activity is a most necessarily un-conventional way of promoting, but the use of TV adverts to drive the viewers to the website was blurry and convincing. Also, it required much spending for shooting the adverts. A below-the-line promotion of the event like sales promotion, public relations would have fetched similar result. Also, the use of social media pages and linking the websites to the social media pages would have informed the target audience. Secondly, the promotional budget could be divided into conducting separate promotional programs that would benefit the financially weak athletic aspirants of the country. This would have been an effective public relation program that would create a lot of positive vibes. The word of mouth would be effective in creating hype and upgrading the corporate reputation. Also, this activity would have directly linked the campaign with the London Olympics 2012. Also, Adidas could have gone the Nike way of promoting the essence of achieving and spreading of emotional stories through advertising alone. The sponsorship of the event meant taking up of greater responsibilities and more cost and expenditure in the promotion of games and the kits. Although, the event was successful, it would have saved a lot of money spend on designing the kits. Finally, Adidas could have used sales promotion and direct selling methods to ensure that its involvement was perceived. In the store promotions and marketing activities like distributing game tickets or souvenirs. Live show on the stores and branding of sports bar would have fetched more crowds and could have been cost effective at the same time. It is suggested because; during the Olympics the crowd would be most at this places, and thus it would be easy targeting them and driving the idea home. The sports bar and stores would be the most authentic ground for sales promotion activities. Hence, the studies and the case study show that the Olympic "Take the Stage" campaign of Adidas was very successful in creating a strong market base and hype. But is also seen that the expenditure on the campaign and the sponsorship was huge, in comparison to other non-sponsored sports brands, the targets and sales achieved was a bit lower and thus a list of activities that would involve both above-the-line and below-the-line is suggested. These activities would not only directly hit the right note but would also be very cost effective and hence would have proved to be a proper spending of the huge promotional budget. 3. Adidas made a very wise use of a mixture of traditional and digital media to promote its "Take the Stage" campaign for London Olympics 2012. The activities like the photo booth, YouTube videos of the athletes singing and the Adidas take-the-stage app were brilliant marketing ideas that created a lot of buzz regarding the game and the brand. It is seen that the digital media is the most sought after media option of today's world. With the availability of smartphones and the many social media sites, it connects people, especially the youth across the world. It is the best platform available to marketers to reach the youth base and gain maximum share. It works like the word of mouth. People consider them as authentic and put more trust in an article that is approved by others. That is the unique benefit of social media uses Adidas uses that in these campaigns. Adidas has 13 million fans in Facebook and 138k followers in Twitter. But even then, it could be said that social media stands out for quantity than quality. It is already seen that more people hang out in the virtual platforms than on real world. Thus, it is perceived as most to effective to engage the people in these platforms and provide them access to the brands. According to Adidas, it is the digital mentality that is the reason behind the emergence of the social media channels. The fundamentals of marketing are used on the social media platform. The first criteria are to create a clear objective of what is needed to be accomplished. In this case, the objective was to ensure that Adidas becomes the talk of the town for the London Olympics. It wanted to generate the spirit of sports with the zeal to achieve big. Secondly, a company must understand what their customer is, what their need is and how to reach them. Adidas was already aware of the digital mindset and knew that the best platform to reach their potential customers that are the youth is through the social media platforms. It is these places where the sports lovers flock even for their daily updates. Again, the customers of the brand are mostly young people who are into sports or sportswear as they find it cool. Other people are fans of the athletes or are sportsperson themselves. The social media is the platform where these people get their daily dose of news and information, a platform to portray t hemselves and their talents and hence the brand would find majority of their followers and potential customers in these regions (Macleod, 2012). The next stage is to understand what they need and hence the market surveys or patterns shows that the most desperate needs of the people are to get involved with the Olympics. Also, it is seen that these young people love impersonating their favourite athlete or wear what they are wearing. It is a symbol of their love for the celebrity, the social standard and fashion sense. Hence, an opportunity can be provided to the common people to be near their favourite stars or get their hands on articles and clothes that are worn by their favourite stars. The third segment of marketing is the creation of a compelling storyline that will create value and help in connecting with the target group online. For summer Olympic 2012, Adidas gave the opportunity for the kids of UK to get involved with the game. They rolled out videos and stories of the local heroes and activities of kids. It was a huge localised campaign of engagement. This videos and success stories were presented online. To differentiate Adidas from the rest of the brands, the brand recruited 32 young people who were the ambassadors for each district of London. There were 32 documentaries and two TV spots. It showed how Adidas realized the dream of many and then went on showing the individual story of Team GB. This was the value and the connection that was provided. The usefulness of the social media campaign lies in the fact that the number of mentions of #TakeTheStage and @adidasUK in Twitter and Facebook were maximum and crossed over 100,00o and 15,000 times. These results were equally potent even at the time of the closing ceremony. These numbers and figures provide proof to the fact that the campaign was accepted, appreciated by the people. As people will view this page and will share it further, the message will be spread. It does not require must cost in creating a page or uploading a video online. The 24-hour availability of the fans and their constant sharing of feeds, mentions and likes kept the brand name in the forefront for the entire games. This in turn led to the sale of items and the Oxford Street store gaining an unprecedented sales record (Campaignlive.co.uk, 2015). Another essential factor that is noticed is the attribute of social media as a marketing platform. A marketing communication is more effective when there is a two-way street that delivers a message and at the same time gains feedback. This feedback is useful in assessing one's techniques and brings about the required change. Hence, the social media platforms offered pathways of gaining consumer insight. The direct comments, the number of lines were the feedback that helped the brand in structuring and strengthening its campaign strategy. The campaign focused more on quality than over quantity as created the value and sustained it. The campaign was very simple yet very compelling. Starting from the first looks to the opportunities to meet their stars, Adidas created and maintained the idea of delivering value. Thus, it is seen that social media could be a very effective portal for creating a buzz and keep that buzz alive. Also, for brands like Adidas, who cater to the younger generation, this field proves to very useful in reaching them and connecting them with the brand. It is the smart and innovative use of the massive opportunities that led to the success of the overall campaign. 4. Sports are related to physical exercise and are considered as a part of youthful life. It is generally up to the age of 40 that most people are related to sports, and the number is very low. Although, sports is loved by people of all ages it is the young people who are more related to it. Thus, sports lovers are not necessarily the sports buyers. Big sports brands like Adidas and Nike find the young people as their major market segment. Starting from basic sports shoes and fittings to sportswear's and kits are manufactured, designs and sold by these brands (Germano, 2015). Another reason for which the young people are considered as the dominant market segment of Adidas is the social status quo that is attached to the use of sportswear brands. Their favourite sports celebrities easily influence the young people and try to impersonate or copy their styles. Also, peer pressure makes the young people buy stuff and avail products that are considered to be socially top-notch. Thus, it is these reasons that make the big shot brand like Adidas target this person for all their marketing activities. But the dominance of these target market restricts the growth and marketing opportunities of the brand to a certain extent. The youth are targeted by all the sports brands and thus it would be wise for Adidas to concentrate on other segments also. Obviously the brand cannot promote its sports kits and swimwear to people aged above forty. But the promotion of branded relaxing wears, plain tees and other sports memorabilia would attract this target segment. The collection of sports-related memorabilia is a favourite hobby of many people; the brand could easily target them. On the other hand, kids could be targeted with their product range that is custom-made for kids. Printed or graphic clothes with images of sports personalities are a huge favourite among the kids and teenagers. They are a very crucial segment of the brand and will cover the future customer group of the brand. Among the young people, it is mostly the male segment that is targeted by the brand as sports are more related to men. Although, there are enough young women who are involved or interested in sports, the number of aged women interested in branded sportswear and kits is very less. Thus, while it could be said that focusing on a single dominant market would lose away on a great number of people from other segments; it is also seen that the brand won't do well focusing on other segments (Reuters UK, 2015). The kids below twelve years of age are consists of only a miniscule part of the youth segment. The old people are very less compared to the dominant segment and focusing on them would mean changing the brand's original way of doing business. This would affect the brand image and might lose the dominant market group to a large extent. The products that are marketed by the brand are essentially made to cater the dominant market, and it could hardly be said that the dominant market segment of the youth will restrict the sale of the products. Hence, raises the question of whether it is a correct thing to focus on a single segment of the youth to target the marketing of the products. The answer is yes. It is quite right that focusing on a single group does whisk away some major consumers. But the company will suffer great losses if it focuses on some other segments. The product range of the brands are geared, kits and clothing articles that are embossed with the logo, and this is the trademark that incites interest among the dominant target group. For the aged it is more of quality than the market hype that helps them in making the purchase decision. Adidas to gain strong marketing ground uses social media into target its marketing messages to the target consumers. This opportunity will be lost to an extent if the target groups consist of aged people. The traditional media of broadcast and print would be more effective in targeting these people. The cost of advertising and marketing through traditional media is costly and time consuming without any proper methods of evaluating and gaining feedback. Hence, it is another reason that shows why the brand should majorly concentrate to its original and most dominant market segment. Also, while the other sports brands focus on the young people, Adidas moving out of the scenario will be fraught with risk. The brand would lose out on the competitive ground and would require re-positioning of the brand. It is safer and much more competitive to invest in the most popular market segment of the industry. A brand restructuring and repositioning requires in-depth market study, expenditure and different marketing techniques. This might not yield the anticipated result and will totally change the brand image. It would create a very negative impact on the brand. Thus it could be said that for a premium brand like Adidas, sticking to its original idea but at the same time creating different marketing campaigns would ensure that the company continues to enjoy equal fandom and success in the market, and its resources are best utilised. Thus in conclusion it could be said that Adidas has gained a well-deserved accolade through its London 2012 Olympics "Take the Stage" campaign. The campaign targeted not only the dominant youth group but also the sports lovers of UK. It created a very moving story on the success of the athletes and the local heroes of UK. It generated a sense of passion and zeal to achieve in everything. The social media was very widely used as a below-the-lone promotional tactics. The combination of the different techniques, sponsoring of Team Great Britain created the overall hype and helped Adidas take the centre stage in world sports brand industry. Conclusion The Adidas sponsorship campaign of London Olympics 2012 was one of the most successful events of history. The well known sportswear industry took the initiative to not only sponsor the event but Team Great Britain and provide branded and designed sportswear and kits for the events. The company utilised both above-the-line and below-the-line communication strategy to deliver its message widely and extensively (Tustin, 2002). Thus, while above-the-line advertisements called for immediate sales, the below-the-line communication was effective in creating hype and building reputation. The high cost of the campaign was a bit of an extravaganza but was quite effective in reaching the targets. The report highlights the issues and cites examples in providing a recommendation to the effective use of the promotional budget in reaching a greater success. One personal observation is the fact that it is not always the expanse, but the creativity and imaginative ideas that lead to the success of the endeavours. While Adidas spend a lot, Nike adopted better creative methods. But in an overall measure, the different range of activities undertaken by the brand and a combination of above-the-line and below-the-line communication was significant in the success. The company also utilised social media pages and links to the greatest extent to reach their ultimate customers and fans. It created a word of mouth or in this case sharing to generate views, and it was mentioned record-breaking times (Campaignlive.co.uk, 2015). The sportswear culture is more prevalent among the youth and these people could be found easily and successfully through the social media portals and could be targeted and communicated efficiently. The social media portals also offer methods for measuring success. Hence, the decision was excellent and drives maximum people to the websites. Finally, the company made a very wise decision by targeting the dominant market segment through the event. The dominant segment comprises of the young people who are most attracted to branded sportswear for its attachment to the celebrities and due to peer pressure. The company could have targeted older people, but then they would have to provide different products to the target segment (Reuters UK, 2015). This change would not only have created a negative impact but is also ambiguous and risky and will mar the company image. Hence, by targeting kids and teenagers, the company adopted the correct strategy to help the local heroes and make them feel the brand. This enhanced the brand image and reputation and also generated huge sales. The observation made on these is the use of suspense, celebrity endorsement and amazing public relation activities used wisely to target the niche market. The use of social media was right on the mark and the company utilised all its resources. The issues that are identified is the fact that is not much clear demarcation between above-the-line and below-the-line communication that is utilised by the company for the event. This has lead to certain confusion regarding the individual success of the two types of communications strategy. Also, it is hard to define the less costly measures that could be taken for promoting such a large event. The social media promotion was a huge success and wise approach while the target market is still doubted. The research was conducted through the texts and market studies and articles that are available on the internet. The key sources were the criticism of the marketing activity and the company profiles that provided the relevant information and filled up the gap present in the case study. It was thus an extensive research process that provided the solutions and ideas and helped to identify the issues. Personally the exercise was effective in describing and providing much insight into one of the biggest marketing campaigns that were ever taken. Also, there are some brilliant examples and amazing ideas that provide ample opportunities for learning the different marketing techniques and applications that could be used. The task was not only educative but provided rich insight and help for future endeavours. Thus, it could be said that the task is quite successful in providing knowledge, information and opportunity. Also, a lot has been learned about Adidas and the strategies and visions of the brand. The insight is important, and the ability to identify issues and methods are great steps for the learning activity. References 1. Campaignlive.co.uk, (2015).Advertiser of the Year: Adidas. [online] Available at: https://www.campaignlive.co.uk/article/1163680/advertiser-year-adidas [Accessed 16 Aug. 2015]. 2. Davies, L. (2012).Team GB rocks to Queen as Adidas pulls off marketing coup. [online] the Guardian. Available at: https://www.theguardian.com/sport/2012/aug/12/team-gb-rocks-to-queen [Accessed 16 Aug. 2015]. 3. Germano, E. (2015).How Adidas Aims to Get Its Cool Back. [online] WSJ. Available at: https://www.wsj.com/articles/how-adidas-aims-to-get-its-cool-back-1427072066 [Accessed 16 Aug. 2015]. 4. Macleod, D. (2012).Adidas Take The Stage at 2012 Olympics - The Inspiration Room. [online] The Inspiration Room. Available at: https://theinspirationroom.com/daily/2012/adidas-take-the-stage-at-2012-olympics/ [Accessed 16 Aug. 2015]. 5. Reuters UK, (2015).Analysis - Adidas marketing push an uphill battle against cool Nike. [online] Available at: https://uk.reuters.com/article/2014/08/08/uk-adidas-nike-rivalry-idUKKBN0G81MR20140808 [Accessed 16 Aug. 2015]. 6. Tustin, D. (2002).The relationship between above-the-line advertising and below-the-line promotion spending in the marketing of South African products and services. [Place of publication not identified]: [publisher not identified].