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UNIVERSITY OF BARISAL
Course Title: Principles of Marketing
Course Code: MGT-211
Topic: Marketing strategy of a new product
Submitted To: Nusrat Sharmin Lipy,
Lecturer, Dept. of Management Studies,
University of Barisal.
Sumitted By: Group- 10
Date Of Submission: 01/11/2015
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Students Profile
SL
Name Roll Remarks Marks
1.
Ibne Jobaed Soton 13-MGT-067
2.
Ummey Hafsa 13-MGT-068
3.
MD. Aktaruzzaman Santi 13-MGT-069
4.
Mrinal Kanti Mitra 13-MGT-073
5.
MD. Saiful Islam 13-MGT-072
6.
MD. Mehedi Hasan 13-MGT-070
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Producer:
Bansladesh Sports Ltd. (BSL)
Company name:
Adidas
Company logo:
Product name:
AdiPower
Product Logo:
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Table of Contents
Serial Contents Page
1 Title Page 1
2 Group Profile 2
3 Table of contents 5
4
5
Executive Summary
Franchising with Adidas
7
8
5 Current Market Situation 10
6 Market Description 11
7 Product review 14
8 Competitive review 16
9 Channels and logistics review 19
10 SWOT Analysis 20
11 Objective and issue 22
12 Marketing strategy 23
13 Action Program 24
14 Budgets 26
15
16
Conclusion
Reference
27
27
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ACKNOWLEDGEMENTS
This journey would not have been possible without the support of our family, our honorable
course teacher Nusrat Sharmin Lipy, lecturer, department of Management Studies, University of
Barisal, and friends.
We would like to give special thanks to friends who support us to do this unique work, our
seniors who help us in many ways to make this project come true. Thank you everyone because
each of you gave your valuable time, energy and experiences and we are richer for it otherwise
we may find it so tough to make it true .
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1. Executive Summary
In the world, the demand for sports is growing fast. So the demand for sports materials is also
increasing. Some instruments are used for the protection of any kinds of injuries. The
instruments are being developed day by day. But some materials are not as protective as
required, such as helmet. Several months before Philip huge (opener batsman of Australia cricket
team) had died by being hit by a ball. This accident shocked the cricket lovers a lot. There are
arguments in the newspapers that how much a helmet can protect a player from injuries. The
existing helmets are in a form that fails to protect a batsman fully from injury. So, focusing on
the protection, the company developed a new form of helmet. The managers of the company
strongly believe that the new form of helmet will provide the safety and protection to the
batsman fully. And it will be helpful to avoid any kind of injuries or accidents.
The objective of the business will be to increase the market share by offering the best quality
helmet at a reasonable price that will pave the way to become the market leader. The managers
of the company have every chance to become successful because customers want quality and
protectable helmet and the managers of the company are committed to provide that standards.
To cover the entire market demand the company needs a huge amount of capital. But it is very
difficult for them to finance the total amount of money. That is why the company will have to go
for bank loan. Our total capital for this business will be $8.0 billion. The owners, six partners,
will contribute 80% of the capital and the remaining 20% of the capital will be financed as bank
loan at the rate of 12 percent.
The managers of the company will undertake huge sales promotion and advertising to inform the
customers about the products that will create a huge demand for the products. By advertising,
campaigning, and arranging seminars they will capture 35% of the market shares by 2017. This
success will motivate them to establish the “Adidas SC” (safety cricket) as the leading
sportswear company in the market.
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2. Franchising with Adidas
The legal document of franchising with Adidas is given below;
The agreement made and executed as of this 01 DD 01 MM 14 YY, between BD Sports Ltd, a
sports accessories company located in Bangladesh, Chittagong and Adidas, a sports
accessories company located in Germany, Frankfurt and existing under Franchising Act 2007
W I T N E S S E S :
WHEREAS, the BSL is organized and established under the provisions of
Chapter 504A, Code of Germany, maintain, and operate in sports sector ;
WHEREAS, governmental rules and regulations have made it economically
unfeasible for the City to continue to prove for the distribution of product to
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the company, and BSL has agreed to accept responsibility therefore under
the terms and conditions set forth herein; and
WHEREAS, the Resolutions adopted by the patties hereto, the provisions of
this agreement have been approved by the Board of Directors of Adidas, and
Board of Directors of BSL the execution of this agreement duly authorized,
The agreement will last from 01Janury, 2014 to 01Janury, 2019.
NOW, THEREFORE IT IS AGREED:
1. Conditions Precedent:
The terms and conditions of this agreement and the duties and obligations of
the parties to fulfill the same shall not take effect until the follow conditions
precedent have been satisfied:
a. The Adidas and BLS granting a non-exclusive franchise for a term of
twenty-five (25) years for the purpose of supplying sports accessories.
b. Adoption of all necessary resolutions relating to the conveyance of
interests in real estate in accordance with Section 364.7, Code of
Germany.
If, for any reason, any of the foregoing conditions are not met without fault of
either party, this agreement shall be rendered null and void and of no further force
and effect, and neither party shall have any claim against the other for any
expenses incurred or damages sustained as a result of the negotiations and efforts
attempted in order to complete the objectives of this agreement.
2. Effective Date
The effective date of this agreement shall be the first day of the month of January
2014
3. Assets and Liabilities
In consideration of the assumption of the responsibility relating to the supplying
sports accessories by Adidas from and after the effective date, the BSL agrees to
transfer to Adidas the sum of $10,00,000 and all assets owned by the Adidas
relating to its sports acessories, including but not limited to any and all sports
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accessories such as ball, helmet, net, protective equipment’s, racquets, rods and
tackle, sticks, bats, clubs, wickets, bases, footwear, flying discs.
4. Revenue
Adidas will get only 1.37% from the sale of products.
5. Risk of Loss
All risk of loss shall remain with the BSL until the assets have been transferred to
Adidas.
6. Documents
The companies agreed to execute and deliver any and all documents that may be
necessary in order to carry out the transactions contemplated by this agreement. As
of the effective date, this agreement shall be deemed to constitute an assignment
and transfer from the BSL to Adidas of all the assets that are the subject of this
agreement.
7. Default
In the event Adidas defaults in the performance of this agreement, the BSL shall
have the right to change the franchise and render any transfers made hereunder null
and void.
3. Current Market Situation
The company started in a wash room and conquered the world. And in-between, the managers of
the company scored big and also, sometimes, struggled to reach their goals. They have done their
best for the best. They have improved and grown. Looking ahead to the future, always
remembering where the company came from. This is story of the company.
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Every great story has a beginning. This one started in a small town in Bavaria, Germany. After
first steps in his mother’s wash kitchen, “AdiDassler” registered the “Gebrüder Dassler
Schuhfabrik” in 1924 and embarked on his mission to provide athletes with the best possible
equipment. Gold medals in Amsterdam (1928, LinaRadke) and Berlin (1936, Jesse Owens) were
first rewards and milestones – and only the start of the company’s story.
As the world changes, so do the company. While a computer in your shoe seemed a bit weird in
the ‘80s, it now is a professional training system: mi-Coach allows athletes track, record and
improve their performance in sports, including football, running or basketball. It becomes a
category of its own.
On top, Adidas launches a new sub-brand: “Adidas SC” (Safety cricket) targets the cricketers
with safety tools such as helmet. And the ICC cricket world cup 2015 becomes a happening on
the Adidas safety channels, providing the safety needs of the cricketers.
The product is the new form of helmet that is highly protective to any kind of injuries in the
cricket. The batsman will feel comfort by using this helmet while playing.
4. Market Description
Sport industry is a market in which people, activities, business, and organizations involved in
producing, facilitating, promoting, or organizing any activity, experience, or business enterprise
focused on sports. It is the market in which the businesses are products offered to its buyers are
sports related and may be goods, services, people, places, or ideas.
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The last 20 years have brought remarkable growth and change to the sporting goods industry.
The term "sporting goods" once comprised only equipment like golf clubs, basketballs and tennis
rackets. With the recent explosion in apparel and footwear sales, though, the industry has moved
far beyond equipment manufacture. Skyrocketing marketing budgets have resulted in top-name
athletic endorsements and relentless branding, and athletic companies' logos are now easily
among the most recognizable corporate trademarks in the world. This work both a valuable text
for students and an indispensable handbook for professionals, offers insight into every major
function of the sporting goods industry.
Industry background and Overview
Significant trends
Growth rate
Key success factors
Outlook for the future
a) Industry Background and Overview:
According to (www.adidas-group.com) Adidas, founded in 1949, by AdiDassler,is a sports
apparel manufacturing company. Starting with athletic footwear such as running shoes and
soccer shoes, they currently manufacture a wide range of products such as bags, watches, shirts,
and accessories.
They are the 2nd largest sportswear manufacturer, behind Nike inc. Adidas group is made up of
three companies Reebok, Taylor Made Adidas Golf Company, and Rockport. The revenue of
Adidas as in may 2010 is $14878 Million According to (www.biz.yahoo.com).
b) Significant Trends:
The company is growing fast day by day. The company is using modern instruments in its
production and other processes. As a result, its brand value, market shares, and competitive
advantages are increasing.
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c) Growth Rate:
The growth rate of adidas company is increasing day by day. The position of adidas product
(newhelmet) is stars that means high growth rate and high market shares. The managers of the
company will also focus on the growth rate and the market share to develop thes products as a
stars.
d) Key Success Factors:
The key success factors of the venture are as follows;
The breakeven point
Advantages in sourcing materials
Technological innovations in the
Manufacturing or distribution process
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A favorable geographical location
Access to skilled employees or inexpensive labor
An effective pricing strategy
e) Outlook for the Future:
The company want to provide the safety tools of cricket specially helmet that will protect the
cricketers from any kinds of injuries. The managers of the company want to see our business in
the top position in future. They want to capture the lion share of the market. They want to
capture 35% of the market share by 2021.
5. Product Review
Several months before Philip huge (opener batsman of Australia cricket team) had died by being
hit by a ball. This accident shocked the cricket lovers a lot. There are arguments in the
newspapers that how much a helmet can protect a player from injury. The existing helmets are in
a form that fails to protect a batsman fully from injury. So, focusing on the protection, we
developed a new form of helmet. The managers of the company strongly believe that the new
form of helmet will provide the safety and protection to the batsman fully. And it will be helpful
to avoid any kind of injuries or accidents.
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The product is the new form of helmet that is highly protective to any kind of injuries in the
cricket. The batsman will feel comfort by using this helmet while playing.
The description of the venture is arranged by the following points;
Nature of the business
Personnel needs
Size of the business
a. Nature of the Business:
The managers of the company will operate their business as a multinational company. They will
introduce their product in the international market. Their central organization will be in
Bangladesh but their branches will be established in different countries.
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a. Personnel Needs:
Personnel needs of this venture are;
Expansion of the business.
Lengthening the product life cycle.
Self-actualization needs.
b. Size of the Business:
As they want to operate their business internationally, obviously the size of the business will be
large. Here the managers of the company mention the amount of capital, number of employees,
and other parameters of their business to estimate the size of the business.
Pay off line
The pay off line for Adidas Helmet is “Your Safety Is Our Responsibility”.
6. Competitive review
If there are few competitors in the market, there is favorable market for the company. But if there
are no competitors, there may be no market for the products. Adidas has several competitors in
the market. These are Nike, Gucci, puma, Lacoste, Reebok, and Converse. Among them Nike
and Puma are the main competitors of Adidas. Here we will analyze the main competitors of
Adidas Nike and Puma.
a) Nike:
Nike is teamed up with apple Inc. The marketing strategy Nike is an important component of its
success. Nike sales its products to more than 20,000 retailers, in the USA, including its own
outlets and “Nike town” stores, and in approximately 140 countries in the world. Nike use the
slogans “just do it” and “joga bonito” in its promotional activities.
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The market share structure is as follows:
Comp. Brand Adidas Nike Puma Lacoste
Brand
Position
1st 2nd 3rd 4th
Pricing Tk. 4500per ctn
(6pcs)
Tk. 5300per ctn
(6pcs)
Tk. 4700per ctn
(6pcs)
Tk. 4120per ctn
(6pcs)
Unit Cost 750 835 785 66o
Packing Master ctn
=6pcs
Master ctn
=6pcs
Master ctn
=6pcs
Master ctn
=6pcs
Distribution Distributor, Company
vehicle support
Distributor, and his
vehicle
Distributor,
Company
vehicle support
Distributor, and his
vehicle
Advertising 1. Electronic media
2. Billboard
3. Poster
1. Press Media
2. Electronic
Media
1. Billboard
2. Press
media
1. Electronic Media
2. Billboard
Table: Market share structure
b) Puma:
Puma is the third largest sportswear manufacturer in the world. The business strategy of Puma
leads to establish its brand status as a global company. Puma is a leading supplier in the motor
sport footwear market.
For getting the information about the competitors we use the following sources;
Trade association
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Customers
Industry journals
Marketing representatives
Figure: Statistical Review of Competitors
Adidas43.16%
Nike27.37%
Puma17.89%
Lacoste11.58%
Competitors Analysis
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7. Channels and logistics review
The location of the production house and corporate office are given bellow;
Production House Address Corporate Office Address
Fazlul Kader Road, 4000 Chittagong
Bangladesh.
Phone Number: 007182
1053 ShekhMujib Road, Agrabad, 4100 Chittagong
, Bangladesh.
Dhaka 1205
Phone Number: 007183
Table: The location of the business
They will operate the
business in fourteen
cricket world cup playing
countries. These are
Bangladesh, India, Sri
Lanka, Pakistan, West
Indies, Afghanistan,
Australia, England, South
Africa, New Zealand,
Ireland, Scotland, UAE
and Zimbabwe. In the capital
city of every country they will operate a branch of their business. Besides they will concentrate
on the important cities of every country and the cricket clubs of these countries. Thus they will
operate almost forty five branches all over the world. Some of the branches are Hagley Oval,
Melbourne, Adelaide Oval, Brisbane, Saxton Oval, Delhi, Kolkata, Mumbai city, Chennai city,
Karachi, Colombo, Cape Town, and London. They will arrange their products in the branches in
such a way that the consumer will find their wanted product easily.
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8. SWOT Analysis
SWOT is the combination of 4 key words, which constitutes the internal and external issues of a
company. The 4 key words are,
S=Strength; W=Weakness; O=Opportunity; T=Threat.
Strength:
Quick establishment of brands like Nike, Puma.
Quality of the products.
Availability of products through mass distribution around the country.
High quality machineries and manufacturing system of Adidas.
Unique promotional activities.
Superb stylish in color and design.
Wider product range
Strong local presence
Favorable brand image
Comprehensive knowledge of the total market and client
Good quality and top quality of products.
All raw materials are imported from foreign countries (Thailand & Malyasia).
Using advance high-tech technology
Because of long term experience, customers reliability and loyalty
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Weakness:
Less experience in the helmet market in terms of understanding in timely proper
customer need.
Some improper promotional activities.
Lack of consistency in promotional activities
Competitive price; competitor sourcing product at cheaper price
Less organized distribution
Less compliance to market demand
Opportunity:
As a local company it will get preference from the Bangladeshi people.
The breakeven point
Advantages in sourcing materials
Technological innovations in the Manufacturing or distribution process
A favorable geographical location
Access to skilled employees or inexpensive labor
An effective pricing strategy
Threat:
Unethical practice of the competitors, for example tax violation, to reduce the price of the
product.
Companies like Nike and Puma to be operated as MNCs like Unilever rather than the
licensing owned by the local Bangladeshi company.
More competitors in Sports accessories sector.
Very difficult to maintain the product’s quality.
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9. Mission, Goals and Objectives and Issues
Mission: The mission of the venture is as follows;
The mission is to capture a favorable position in the market with the new
product.
The managers of the company want to create a new brand “Adidas SC”
(safety cricket) that will be widely accepted in the target markets.
They are consumer focused and therefore they continuously improve the
quality, look, feel and image of the products and the organizational
structures to match and exceed consumer expectations and to provide them
with the highest rank.
They are committed to continuously strengthening their brands and
products to improve their competitive position.
Goals: The goals of the venture are as follows;
The managers of the company want to provide the best quality of the
product.
They want to set a competitive price of their product.
Objectives: The objectives of the venture are as follows;
The managers of the company want to control their cost of production.
They want to ensure employee satisfaction.
They want to capture 35% of the market share.
They want to overtake key competitors on product performance.
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10. Marketing Strategy
The marketing strategy that we in this venture is described below;
a) Marketing Mix (4Ps):
Product
Price
Place
Promotion
1. Product Strategy:
By the product they want to satisfy consumers’ needs and wants.The managers of the company
will uphold their brand by constantly upgrading and improving products’ innovative features and
quality to satisfy our customers. They will establish their product as a strong brand for cricket
instruments.
2. Price Strategy:
The managers of the company will set a competitive price of the product. The price of the
product will be a little bit higher than the competitors because they will provide the best quality
products.
3. Place Strategy:
They will concentrate on the place strategy carefully. They will operate their business in fourteen
countries. In the capital city of every country they will operate a branch of their business.
Besides they will concentrate on the important cities of every country and the cricket clubs of
these countries.
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3. Place Strategy:
They will concentrate on the place strategy carefully. They will operate their business in fourteen
countries. In the capital city of every country they will operate a branch of their business.
Besides they will concentrate on the important cities of every country and the cricket clubs of
these countries.
4. Promotion Strategy:
The company wants to be the no. 1 sports brand in the world. The managers of the company will
implement their concept by advertising commonly through the mass media. They will use the
internet in our promotional activities. The company uses the slogan “Impossible is nothing” and
“Adidas is all in” as a tool of promotional strategy.
b) Others:
They use the following marketing strategies in this venture;
Customer’s motivation to buy
Market size and trends
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Distribution channels
Target market strategy
Communication strategy
Sales strategy
13. Budgets
Following is the estimated budget statement for year 2015. Our projected revenue for 2015 is
322000000/= tk. with an average wholesale price 750TK for per helmet. And our projected sales
volume will be 583220000/= tk. And our project costs are given below;
SL No Expenses Amount Total
Sale
Total
Revenue
1 Cost of Land 30000000
2Cost of
franchise1000000
3 Stationary 50000
4 Office expenses 100000
5 Raw Materials 500000
6Employee
salaries50000
7 VAT 60000
8Repair &
maintenance150000
Total 31910000 38012002 6102002
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11. Conclusion
This report is an assigned job as a partial fulfillment of course requirement by honorable Course
teacher of Principles of Marketing. The report indicates how to launch “New Form of Helmet” in
world market. The objective of the business will be to increase the market share by offering the
best quality helmet at a reasonable price that will pave the way to become the market leader. The
managers of the company have every chance to become successful because customers want
quality and protectable helmet and the managers of the company are committed to provide that
standards. Focusing on the protection, we developed a new form of helmet. The managers of the
company strongly believe that the new form of helmet will provide the safety and protection to
the batsman fully. And it will be helpful to avoid any kind of injuries or accidents.
12. References
1. www.adidas-group.com
2. www.biz.yahoo.com
3. www.adidas-group.com /en/ourgroup/history/history.aspx
4. http://www.slideshare.net/OBAIDK/adidas-company-analysis
5. https://www.google.com/search?q=market+share+of+adidas+company
6. https://business-strategy-competition.knoji.com/competitive-advantage-and-adidas marketing