A Business Review of Adidas Running Shoes

Adidas Running Shoes

Adidas is an international company which is German based. It is responsible for designing and manufacturing athletic wear for example shoes, accessories, and clothes (adidas-group.com, 2014). In Europe, Adidas is the largest sportswear manufacturer whereas globally, the Corporation is the second-largest sportswear manufacturer. The sports shoes that Adidas produces includes running shoes, golf shoes and soccer shoes just to mention but a few. This essay is, however, going to lay focus on Adidas running shoes.

Adidas running shoes are strong, multi-colored shoes that are made in bulk and distributed all over the world in specific chain stores. These shoes are made of different materials, from synthetic to refined leather. Engineered stretch mesh is used to make the mesh technology of the shoe, enabling the shoes to become more breathable and tough. The shoe is also more comfortable (runningshoesguru.com, 2015).

The sole of the shoe is traditionally made from foam but of late, Adidas has added the Springblade design. This new design incorporates micro-foam beads into the sole of the shoe. The micro-foam beads ensure that the shoe has a more responsive feel than its predecessors. This new development guarantees the comfortability of the shoe over a wide range of seasons and temperatures. Runners or joggers who travel different parts of the globe or exercise on different terrains will benefit from the comfortability of this shoe (runningshoesguru.com, 2015).

Although Adidas is the second largest sportswear producer in the world, its market share has been relatively declining since 2011, where it had a 9% footwear market share in the United States. The company’s sales have been notably increasing over the years. In 2015 alone, the company made net sales of 16,915 million Euros. The company has been overlapped by Nike, which has a 48% footwear market share in the US (highsnobiety.com).

On the bright side, Adidas footwear sales have been gradually rising over the years. More people have become aware of the brand and due to intense advertising and superstar endorsement, more people have been keen to buy the footwear brand. In 2000, Adidas sold running shoes worth 5,835 million Euros. In 2001, the sales increased to 6,112 million Euros. In 2002, there was an increase to 6,523 million Euros. In 2003, began to decline. They were 6,267 million Euros. 2004 saw another decline in sales to 5,860 million Euros. The sales slightly increased in 2005 to 6,636 million Euros. The year 2006 experienced a notable shoot in sales to 10,084 million Euros. In 2007, the sales slightly increased to 10,299 million Euros (statista.com).

In 2008, there was another slight increase in sales to 10,799 million Euros. In 2009, the sales slightly decreased to 10,381 million Euros. Sales were back up in 2010 with a recorded 11,990 million Euros. In 2011, sales kept increasing and were up to 13,322 million Euros. In 2012, Adidas running shoe sales were up to 14,883 million Euros. In 2013, sales decreased and were recorded to be 14,203 million Euros. The year 2014 saw a slight increase in sales up to 14,534 million Euros. 2015 has had the highest recorded sales for Adidas running shoes so far, which shot to 16,915 million Euros (statista.com).

Various age groups purchase Adidas running shoes. However, people aged 45-64 years hold the highest percentage of the consumer group, with 23.6% of the market share (www.adidas.com). These are the middle-aged. At this age, the body metabolism slows down hence individuals resort to intensive exercise to keep in check. They will, therefore, be looking for the best sportswear to do their daily running or jogging. Adidas allows famous sports teams to endorse their products. Some of the people in this age group are also fans of these teams, and will purchase the running shoes after seeing their favorite players wearing these shoes.

The largest groups of people who buy Adidas running shoes are men, who make up 83% of the total consumer market. This is mostly because more men than women are involved in sports in the current world. There are also more male than female sports teams that are famous and popular, hence more men are endorsing Adidas running shoes than there are women.

Another reason for men having the higher percentage in consumption of Adidas running shoes is because, for every event, women find it necessary to have different types of shoes. Women can have various types of shoes for casual wear, travel, office wear, events or just hanging out. Men, however, may not feel the need to change their footwear for every occasion they find themselves. Men can have the same shoe type that covers for many occasions.

According to Oxfam Australia, Adidas major goal is leading the sports footwear in the industry. To achieve this, they employ marketing strategies to fuel business development in both established and emerging markets. Adidas has realized that major consumer experience is necessary to attain success. In that light, Adidas has put more focus on marketing in areas with the largest consumer experience geographically. It has decided to invest more of its running shoes, particularly in USA, Russia and China since these are the areas with the highest medium to long-term profitability and growth. Consequently, they are also the major places with the best and largest consumer experience geographically. In respect to all this, it should also be expected that these markets also offer the highest ‘attack’ or competition (Oxfam Australia, 2011).

However, the major question is: How has Adidas managed to create such a big consumer experience in the fore mentioned geographic areas? (Bloomberg.com) First, it should be noted that Adidas sells its products all over the world. For example major promotional moves such as partnerships with internationally recognized sporting apparels (e.g. NHL, UEFA, NBA, FIFA, and NFL).In our case, the most significant partnership was one with The Berlin Marathon 2011 where Adidas partnered with athletes to provide running shoes for all track events.

China, Russia, and the USA have made Adidas running shoes popular due to the increased level of participation in track events, poor eating habits that lead to an obese nation that requires regular exercise in our case running and or jogging being part of it (Popular Mechanics, 2004).

Enough said on geographic consumer experience: it is of importance to explore Adidas running shoe success from a household experience point of view. According to Annual Report, It has been proved statistically that the largest consumer experience on a household's income point is in Western Europe generating 25 per cent of the retail for the company. It was followed by North America closely with 21 percent of an average household income of fifty thousand dollars which mostly made it manageable. China, Russia, and Latina made up the rest of the percentage, with other businesses making a sizeable contribution (Annual report, 2012).

Presently, Adidas owns one hundred and thirty outlets that are franchised in Beijing and many others around the world (Dubai Chronicle). Of these entire worldwide ventures, there is none that has the largest percentage of consumer experience like the one in Santilun, Beijing. This is not only because it’s the largest Adidas outlet but also because it has got outstanding facilities and services. The technology is up to date coupled with the latest consumer products and god customer service. Notably is the wide floor area that allows for customer adventure and displaying of the luxurious brands that Adidas has to offer. Customer satisfaction and experience stands at eighty-two percent according to latest statistics with management aiming to reach a record ninety plus percent.

It is correct to assume that China’s large population, its significant economic power force and a population that enjoys a good average pa capita household income annually are the major factors for Adidas good customer reception especially in the Santilun store outlet (Adidas Giants.com) . Europe’s large and leading demand for Adidas shoes also helps push the vast customer experience.

Adidas is based in one hundred and sixty countries with an annual production of six hundred and sixty million product units that generate fifteen billion Euros (all figures according to 2014/2015 statistics).Consequently, Western Europe especially Germany own or rather control the largest percentage of consumer units per outlet type.

It’s of importance to note and remember that Santilun in China recorded the highest customer experience, but when it comes to consumer units, Western Europe can be termed as the kingpin. The question thus asked is how does Western Europe achieve this? To consider first of all is that Western Europe is made up of many countries (e.g. Germany and Russia) which makes it a big and sizeable market on its own. According to Marxe Wolfe, most Western Europe countries are great economic powerhouses. Of the six hundred and sixty billion units produced, Western Europe controls twenty-five percent of the production units (Marxe Wolfe Contemporary Art, 2010) . This is approximately one hundred and seventy billion production units yearly.

Adidas primary marketing strategy is through its unique branding characterized by three parallel bars. This has enabled it to have a significant percentage of consumer units by brand categorically in the larger parts of Europe. Though it is difficult to give the brand statistics per unit of figures, it is way easier to do so by a basis of monetary value. Take for example its partnership deal with NBA, NBDL AND WNBA partnership that was estimated to be over four hundred million USA dollars for a clothes deal.

However, its consumer branding as said earlier comes from Europe due to its major partnerships and sponsorships of major clubs, for example Real Madrid, Bayern Munich, Juventus, Marseille, Ajax, Benfica, Lyon, Manchester United and FC Goa. It distinctively does not stop there but also goes ahead to brand itself through national teams of Germany, Sweden, Argentina, Wales, Spain, Colombia, Mexico, Japan, Russia, Denmark, Venezuela, and Paraguay.

Adidas also sponsors many notable players such as Steven Gerrard, Lionel Messi, Paul Pogba, Xavi, Arjen Robben, Angel Di Maria and Manuel Nuer. The most considerable consumer branding experience though by Adidas was the sponsorship of Manchester United kit deal for a record-breaking seven hundred and fifty million Euros (Man utd.com).

When it comes to pricing of merchandise, pricing units play an important role. The largest pricing unit by Adidas is drawn from its 2014/2015 net income flow of six hundred and sixty million units of production. All prices are constant and the same in all markets and countries for equity in market comparison .Adidas uses skimming as well as competitive methods of pricing due to brand reasons and major competition base from rivals like Reebok. It does not use penetrative pricing but upholds the high price point due to consumer psychological reasoning that the higher the price, the better the quality.

Adidas running shoes are clearly one of the most sought after sportswear in the current sports world. Not only do they come in many different colors and designs, but they are also extremely comfortable and durable as well. Adidas running shoes are available for both men and women. As if that is not enough, they are designed to suit every age group and every shoe size.

Our online store, adidashoes.net, offers the most affordable prices for Adidas running shoes. The following is a catalog of the Adidas shoes available:

• Adidas Pure Boost shoes- 140$

• Adidas Pure Boost ZG Limited Edition-150$

• Terrex-X King Shoes- 160$

• Terrex Agravic GTX Shoes- 160$

• Terrex Agravic Shoes- 140$

• Climaxheat Rocker Boost Shoes- 105$ down from 150$!

We deliver orders across the United States, Asia, Africa, Europe, and Canada upon order. Shipping is inclusive of the invoice fee. Our online website is www.adidashoes.net. Our shops are located in Canada, Detroit, North Carolina, Illinois, Texas, China, South Korea, Japan, Kenya, Ghana and South Africa.

To promote Adidas Running Shoes, we have liaised with the manufacturer to cut the prices of some shoes, for example, the Climaxheat Rocker Boost, which is down to a tempting 105$ from 150$. We have also collaborated with the manufacturer to stock the most recent Adidas shoe, YEEZY. It is supposed to appeal the age group of 14-17, which happens to be the group that has the lowest percentage of Adidas running shoe purchases. Our first order arrives next month! Order quickly! The shoe comes in limited editions.

For every shoe pair bought, there is a gift hamper which for men includes AXE cologne, an extra pair of shoe laces and headphones. For women, we have snuck in Demure perfume, a pair of Calvin Klein Yoga pants and headphones as well. Hurry while the offer lasts!