The primary objective of this portfolio strategy is to ensure that our brands seize market and category opportunities through well-defined and coordinated go-to-market strategies. Each brand is responsible for the execution of its strategic focus by creating a constant stream of innovative and inspiring products and generating communication strategies that represent each brand and category in an engaging and compelling way with their target consumers.
Driving the long-term development of adidas and Reebok
To secure long-term sustainable growth for the Group, Global Brands is focused on driving the development of the adidas and Reebok brands. The overall strategic goal is to achieve qualitative, sustainable growth by building desirable brands in consumers’ and customers’ perception.
In 2010, Global Brands played a central role in the creation of Route 2015, the adidas Group’s five-year strategic business plan. The adidas and Reebok brands are expected to deliver 90% of the targeted growth for the Group in that period.
Brand architecture – portfolio strategy
01
PURE
PERFORMER ATHLETIC
STYLITE ATHLETIC
CLASSIC BRAND
DRIVEN SPORT
INSPIRED STYLE
ADOPTER STYLE
SETTER
COMPETITIVE SPORTS ACTIVE SPORTS CASUAL SPORTS SPORTS FASHION
Areas within adidas and Reebok that were identified as key contributors and game changers for the adidas Group include:
– Gaining sales and market share in the key global categories running and basketball with adidas Sport Performance
– Expanding adidas Sport Style into fast fashion with adidas NEO
– Establishing Reebok as the leading fitness and training brand
– Leading the industry in the fields of customisation and interactivity across categories.
Focus on the consumer The consumer is at the heart of everything we do. This is the first and most important realisation, and we must adhere to it to deliver long-term success.
As part of its function, Global Brands has mapped out our target consumer universe which spans from our roots in sport – the pure performer – through to today’s style setters who have embraced sporting goods brands see 01.
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To be successful across consumer segments, we acknowledge that a strategy of mass production or mass marketing is no longer sufficient.
Only by identifying and understanding consumers’ buying habits, their fitness level, their motivations and goals for doing sport and their individual lifestyle, can we create meaningful products, services and experiences that build a lasting impression. In this respect, we have identified five key global trends which will be important to address with our brands and sub-brands over the duration of Route 2015:
– Fit for life: Sport is no longer just about competing and winning. Sport is becoming more embedded in consumers’
everyday lifestyles. Motivations and goals are becoming more holistic, relating to fun, socialising and quality of life.
– You are what you know and what you do: Society is embracing a life-long learning attitude, and placing more emphasis on what we know and do versus what we have and where we come from.
– Celebrating individuality: Consumers increasingly fulfil their desire to differentiate from one another by being more creative – on the one hand mixing and matching products and services they need, and on the other hand seeking personalised offerings tailored for them.
– Together is better: There is an increasing need for meaningful social interaction, both online and offline, as consumers are forced to be more mobile, and the rise of digital technologies makes it easier for them to connect with like-minded people.
– Back to basics: For everyday life, products and services are desired to be simple and authentic, making consumers’
lives easier, rather than complicating things further. There is a growing interest in outdoor activities, reflecting the desire to reconnect and be in tune with nature.
To match these trends and fulfil consumer demands, Global Brands teams will need to adhere to the following principles:
– Create the unexpected in terms of product and brand experience – Create the highest emotional
connection between our brands and the consumer
– Be prepared for the next generation, anticipating change
– Simplify to the maximum
– Show excellence in execution, meaning we have to make sure we are consistent in whatever we do, from the idea to the communication at the point of sale, and in the worldwide web.
Brand architecture and differentiation We believe that our multi-brand structure gives us an important competitive advantage. Through our brand architecture, we seamlessly cover the consumer segments we have defined, catering to more consumer needs, while at the same time keeping clarity of brand message and values. In each case, the positioning of adidas and Reebok and their respective sub-brands is based on their unique DNAs – their history and their values.
As a true global brand with German roots, adidas through its sub-brands is targeting competitive sports based on innovation and technology with adidas Sport Performance. This sub-brand is the multi-sport specialist.
Our positioning here clearly starts in producing the best products for use in specific sports such as football, basketball, running and regional sports.
We then seek to leverage brand loyalty and strength in innovation in other categories. adidas Originals and adidas Sport Style leverage the potential in sports lifestyle and fashion markets.
Reebok, conversely, is an American-inspired global brand and starts with fitness and training as the backbone for the brand’s positioning, especially for active and casual sports. Consumers who identify with Reebok’s values and positioning will subsequently also be attracted to the brand when they go for a run, or play basketball. Therefore, Reebok capitalises on the opportunity to leverage its technology concepts and designs also into specific sports categories. Reebok thus bridges the two ends of the consumer spectrum, from performance athletes to style setters
see 02. Through these differences in positioning, we are therefore not cannibalising each other in the market, but rather challenging and supporting each other as friendly competitors with different target groups in mind.
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Each brand and sub-brand is separately responsible for bringing its respective positioning to life, through the creation of products and communication tools that not only support the commercial functions in their day-to-day business activities, but also provide the platform and framework for long-term market share and profitability improvements.
While adidas and Reebok each have unique identities, heritages, technologies, designs and reputations, the strategic principles and methods for driving future sales growth and profitability improvements are common to both.
These include:
– Leadership in product innovation to excite and inspire the consumer – Marketing and communication
leadership
– Activation and validation via a relevant set of promotion partnerships – Extending brand reach and appeal
through strategic partnerships.
Leadership in product innovation to excite and inspire the consumer Through Global Brands, we are determined to address every consumer in a specific and unique way – with product initiatives that generate trade and consumer interest.
We believe that technological innovation is essential to sustainable leadership in our industry. By leveraging the extensive R&D expertise within the Group, adidas and Reebok continuously challenge the boundaries of functionality and performance. In addition, innovation plays a significant role in differentiating the adidas and Reebok product offerings in the minds of consumers.
For example at adidas,
personalisation is one of the brand’s lead innovation concepts, and it is an adidas goal to be the most personal sports brand by 2015. At Reebok, innovation focus is on fitness and training, where a priority is creating products that provide a material benefit to the consumer in terms of strength, conditioning and flexibility see Research and Development, p. 110.
By creating inspiring product and brand experiences, adidas and Reebok strive to enhance their positions as premium brands. This, in turn, is an important catalyst to sustaining and improving the brands’ gross margins, therefore making continuous innovation an important enabler for future profitability improvements.
Brand differentiation
02
FITNESS AND TRAINING The performance brand and
multi-sport specialist
“FIT FOR PERFORMANCE”
FITNESS AND TRAINING
The fitness and training brand
“FIT FOR LIFE”
Cricket
Running
American sports Hockey
Basketball Tennis Olympic sportsRunningFootball Regional &American sports
Basketball Tennis
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Marketing and communication leadership
To be competitive in the sporting goods industry, brands must have a clear profile towards their target consumer. To achieve this, adidas and Reebok are focused on creating inspirational and innovative brand marketing campaigns and communication techniques to build brand equity and support the achievement of the Group’s commercial goals.
A key tenet of our marketing and communication strategy is to harness the emotion of sport and the benefits of a sporting lifestyle across all communication channels. Both adidas and Reebok regularly bring new global marketing concepts to life, which can be easily leveraged to create simple and powerful brand messages and support an array of product offerings. For example, adidas will use the “One Brand Anthem”
platform to transcend its key categories and sub-brands in 2011. Reebok will continue its global campaign, which will use the motto “Ree” as a guiding theme for the brand’s communication with consumers. The key message of the campaign is simple. Reebok
“ReeDefines” sport and style, bringing fun and joy back into consumers’ lives.
In addition, Global Brands also
endeavours to ensure all of its brands are at the forefront of new communication techniques, particularly as information flow becomes faster and faster. Through investment in digital marketing and technologies, both adidas and Reebok are empowering and encouraging consumers to interact in personal dialogues with the brands. Whether through in-store or online customisation platforms, digital social networks or digital broadcast mediums, these methods are providing a new scope of consumer experiences in a real-time and cost-effective way.
Activation and validation via a relevant set of promotion partnerships The utilisation of promotion partners such as federations, teams, leagues, events and individuals is an important part of endorsing brand positioning, and an area to which the Group dedicates significant resources. This not only serves as a vehicle to showcase the credentials of adidas and Reebok products in the performance arena, but also to facilitate the extension of the adidas and Reebok brands in the sports-inspired lifestyle market. Both adidas and Reebok follow a partnership strategy geared to best reflect their respective positioning in the market.
One of the guiding principles of adidas is to equip all athletes to achieve their
“impossible”. As such, adidas brings its passion for great products to the biggest stages in the world with sponsorship agreements for the FIFA World Cup, the NBA, the European Rugby Cup and the upcoming London 2012 Olympic Games.
In addition, adidas has an extensive roster of high-profile sports teams such as AC Milan, Liverpool FC, FC Bayern Munich and Real Madrid in football, the New Zealand All Blacks in rugby, American universities like UCLA and Notre Dame, as well as high-profile individuals such as FIFA World Player of the Year Lionel Messi, football icon David Beckham, basketball stars Derrick Rose and Dwight Howard, marathon legend Haile Gebrselassie, athletic stars Tyson Gay and Jeremy Wariner and tennis stars Justine Henin, Caroline Wozniacki and Andy Murray.
To activate and validate its key concepts, Reebok is partnering with top women’s and men’s sport athletes.
In Women’s, Reebok is partnering with some of the world’s top women’s fitness instructors renowned for their inspirational approach to fitness.
In Men’s Sport, some of the most recognisable athletes support Reebok, including Peyton Manning, John Wall as well as Lewis Hamilton. In addition, the brand holds exclusive, long-term licensing agreements with the National Lacrosse League in North America, giving Reebok the exclusive rights to manufacture and market both authentic and replica uniform jerseys and sideline apparel.
Extending brand reach and appeal through strategic partnerships adidas and Reebok have both success-fully pursued design and co-branding strategies with complementary partners.
For example, adidas has partnered with Yohji Yamamoto, Stella McCartney and Porsche Design, designing sports-inspired fashion, high-end functional ranges or even luxury sportswear. adidas Originals continues to engage in unique collaborations with well-known brands such as Burton, Vespa and Star Wars, that ensure adidas remains relevant to the style-conscious streetwear consumer.
In Women’s Fitness, Reebok and Cirque du Soleil continue their strategic partnership, which has given rise to inspiring new workout experiences and product collections. In fall/winter 2010, Reebok launched its first collection with Giorgio Armani S.p.A. The global style credentials of the EA7 and Emporio Armani labels combined with Reebok’s fitness and training heritage and technologies fit together to provide a new perspective and concept in the global sports style marketplace.
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