ADIDAS

INTRO
One of the top brands in the sports and footwear
market, Adidas has seen its share of ups and downs. The
company started in 1936 and is one of the oldest footwear
brands of the world. However, even though the company has
old origins, its heart is young. Adidas faced stiff competition in
the 1980s from Nike but soon overcame the competition
by targeting youngsters as well as sports oriented people.
Adidas' logo is three stripes, which is used on the company's
clothing and shoe designs as a marketing aid. The branding,
which Adidas bought in 1952 from Finnish sports
company Karhu Sports, became so successful that Dassler
described Adidas as "The three stripes company".The company
was started by Adolf Dassler in his mother's house; he was
joined by his elder brother Rudolf in 1924 under the name
Dassler Brothers Shoe Factory. The brothers split up in 1947
after relations between them had broken down,[16] with Rudolf
forming a new firm that he called Ruda – from Rudolf Dassler,
later rebranded Puma, and Dassler forming a company formally
registered as Adidas AG from Adi Dassler on 18 August 1949
PRODUCT
The Adidas group has 4 main subsidiary’s. The first is its
own brand name – Adidas, which is present in clothes as well
as footwear. The second is Reebok which has overtaken
Adidas and is one of the leading subsidiary’s in the Adidas
group. The 3rd is Rockpot which specializes in outdoor
footwear, apparel’s and accessories and 4th is Taylor made
which is focused on golfing clothes, equipment etc. Out of all
the above subsidiary’s, Reebok is the strongest followed by
Adidas. Adidas has always strived to provide the best of the best
goods and equipment to the athletes through its innovations including
the first shoes designed for ice and the first multi- studded shoes. The
product strategy in the marketing mix of Adidas covers its entire
product line across various sports and types. Adidas also deals with
selling sports bags and sports-wear for people. In 2000’s Adidas was
first in the industry to introduce a new lifestyle segment, focusing on
streetwear inspired by sportswear, in addition to its sport performance
offering. Adidas’ product range includes apparels, running and
lifestyle shoes, soccer shoes and other sport utilities for tennis, golf,
cricket, basketball, lacrosse, volleyball, rugby, gymnastics,
skateboarding, baseball, field hockey and kabaddi. Adidas also
designs and makes watches, sunglasses, caps, socks etc and it also has
deodorants, perfumes, aftershave and lotions. The TaylorMade-
Adidas golf segment includes products for golf, Rockport designs
leather goods and Reebok- CMM caters the hockey segment. Adidas
also a subsidiary in the social networking segment named Runtastic
that creates apps for outdoor and indoor fitness activities. Basically,
Adidas makes apparel and equipment for almost all types of sports.
The aim of Adidas is to give the best footwear to their
customers which has the combination of technology and
design. These products are not need based. In fact, the shoes
are bought by customers to satisfy their wants and desires.
Similarly, the apparel’s are targeted towards comfort during
heavy activity. However, although the main target is sports, the
apparel’s are frequently used as a style statement by
youngsters.

PRICE
Adidas, because of its style, design
and promotions uses skimming prices as well as competitive
pricing. For run of the mill products, Adidas uses competitive
pricingkeeping in mind competitors like Nike, Reebok
and Puma. But for products which are newly introduced in the
market and are uniquely designed, Adidas uses skimming
price. Apparel’s of Adidas constantly use skimming price and
are higher priced due to brand equity of Adidas in the apparel’s
market. The target customer for Adidas is the upper middle
class as well as high end customers. Adidas never
uses penetrative pricingbecause that will affect the brand equity
of Adidas. In fact, the higher price point helps in the price
quality approach and psychologically, customers think that a
higher price will mean better quality as well. Thus, Adidas rarely
drops its prices. The pricing strategy in the marketing mix of Adidas
has focused upon high quality and competitor offering. The main
reason of this is that the products are either customized as per need.
Even if not, the price of Adidas products are already high due to the
high quality of the material used. This is turn, makes the product less
affordable to the customers of developing nations. Import regulations
and duty and tariffs may affect the pricing of different products
because 93% of the production is done in Asia, due to availability of
cheap labour. However, Adidas never compromised with its quality
and standards, and its price is always justified.
PLACE
Adidas has made its products available around the globe through
various distribution channels like franchises, mass merchandise,
speciality stores and online retails (own and other e-commerce
platforms). All these show the extensive global reach in its place and
distribution marketing mix strategy. In the early 1990’s Adidas used
to categorise its sales into 3 categories – Adidas originals (which sold
the old and traditional Adidas designs), Adidas Performance designed
for athletes in different sport segments and Style Essentials which
catered the general public and their lifestyle. Through these methods,
Adidas aims to outreach the customers in every segment and every
country. Its associations with ILO (International Labour Organisation)
and IFC (International Finance Corporation) has provided the
company a scope to perform and lead a sustainable business as
compared to other competitors. Flagship Adidas stores are present all
across the world. With growing internet penetration, Adidas is
looking to tap the online market not only with its website, but with
also other multi-brand ecommerce websites. The major way in
which Adidas is sold is through retail outlets. Adidas has its
own exclusive stores in which the material is provided directly
from the company. On the other hand, many multi brand
showrooms will also have Adidas apparel’s and footwear on
display. These multi brand showrooms get the products from a
distributor. The third and last mode of distribution is online. The
products are sold through online medium via fashion stores lie
myntra.com as well as the online website of Adidas. Thus the
distribution channel of Adidas is as follows:
1) Manufacturing > Adidas outlets > End customer
2) Manufacturing > Distributor > Multi brand showrooms
3) Manufacturing > Online fashion websites / Adidas website >
End customer

Due to the excellent brand equity of Adidas, the operating

margins are fairly high thereby keeping the distribution
channel motivated. A happy distribution channelmeans better
promotion for the company.
PROMOTION

Adidas has always endorsed and promoted itself through media.

Adidas marketing mix promotional strategy is to use a 360 branding
strategy covering all aspects of media and communication. Adidas
promotes itself through commercial campaigns on TV, print, online,
billboards etc. In one of its most memorable marketing campaigns,
with David Beckham, Muhammad and Laila Ali, they were shown
facing their own fears and at the end they successfully overcame this.
Adidas markets through various marketing vehicles but the
majority of marketing is concentrated on television and product
placements. The creative team of Adidas is known to pump
adrenaline in their customers through ads which are well made,
very creative and filled with energy. These ads attract the
customers towards the brand by sending the right marketing
message to the customer.

The tagline of Adidas “Impossible is nothing” is in itself a very

powerful statement for the brand.

After television, product placement is the second line of

promotion for Adidas. The popularity of the brand is because it
ties up with the top players across the world such as Lionel
messi, Ronaldinho, Sachin tendulkar and various others.

At the same time, Adidas also sponsors teams and some of the
top teams include Real Madrid, France, Great Britain (in
football), England and South Africa (in cricket) and several
others.

Below the line marketing of Adidas includes some very creative

outdoor campaigns as well as events marketing. Sales
promotions and trade promotions are also regularly offered by
Adidas to their channel partners to promote the sales of the
brand. Adidas is also featured in various game advertisements like
Sony play station, etc. All these techniques make sure that the
legendary Adidas brand remains in everyone’s mind, the brand
awareness is increased and the targeted customers can be retained and
attracted easily.
PEPSICO

INTRO

PepsiCo, Inc. is an American multinational food, snack,

and beverage corporation headquartered in Harrison, New
York, in the hamlet of Purchase. PepsiCo has interests in the
manufacturing, marketing, and distribution of grain-based snack
foods, beverages, and other products. PepsiCo was formed in
1965 with the merger of the Pepsi-Cola Company and Frito-
Lay, Inc. PepsiCo has since expanded from its namesake
product Pepsi to a broader range of food and beverage brands,
the largest of which included an acquisition of Tropicana
Products in 1998 and the Quaker Oats Company in 2001,
which added the Gatorade brand to its portfolio. In 2019
PepsiCo sued four small farmers in India US$142,000 each for
growing a type of potato it says it owns.[3][4] Pepsi said they
would end the suit if the farmers grew potatoes for them.[4] A
number of Farmers' associations are requesting that the
government get involved in the case stating that Pepsi is
attempting to intimidate people.

PRODUCT

Pepsi cold drink is the main product of the company Pepsi Co is the
Carbonated Soft Drinks. Pepsi is the leading product in this field. The
products in the Pepsi marketing mix are mainly carbonated beverages,
along with fruit juices, snacks etc. The other soft drinks apart from
Pepsi are the ones like Mountain Dew & 7up. They have a different
targeted customers. The company has also ventured in the areas of
chips and wafers like Lays, Cheetos and Kurkure which carter to the
various sections of the people. They have stringed up a lot of variety
of products within these products like Diet Pepsi, 7Up Revive to
name among a few. The company has further ventured into the
products like Lipton tea and the Tropicana juices. Pepsi Co are
catering to a wide variety of markets and are making their presence
felt in almost all the kind of food and beverage sectors. Pepsi, unlike
its major competitor Coca cola, has expanded in the breakfast
as well as snacks segment. Coca cola on the other hand is
present only in the beverages section. The advantage of
Pepsi’s snacks segment is that brands like Lays, Kurkure and
Cheetos are in great demand. Quaker oats which is a recent
addition is also increasing in demand. Thus the turnover
resulting from the Food products is helping the bottom line of
the company.

PRICE

Pepsi is in an industry which is dominated by the two biggies –

Coca cola and Pepsi. Thus the pricing of Pepsi is competitive.
In a war between Coca cola and pepsi, neither of the brands
can win if they enter a price war. This is because the cost of
manufacturing and transportation is huge. Thus, these
companies are likely to enter a brand war rather than enter a
price war.

Pepsi is known to give promotional discounts as well as

discounts on bulk buying. For customers, as the container size
rises, the discounts also rise. Thus a 2 litre bottle of Pepsi will
be relatively cheaper per 100ml as compared to a 250 ml pack.
For distributors, the discount is based on the quantity as well as
the payment terms. The better the payment terms or the higher
the quantity, the more is the discount given thereby keeping the
distributor motivated.

However, Pepsi has to lower its price for the top retailers and
bulk buyers. For example – Indian retailers like Big
Bazaar, Reliance fresh, as well as hypercity are bulk buyers.
Similarly fast food chains like Mcdonalds, KFC are also bulk
buyers. These bulk buyers negotiate with the soft drink brands
on the basis of price and sell their products in huge quantities.
Thus, pepsi has to drop prices in these places which affects the
operating margin of the brand. The margins of the company are
better through the distributors and lesser through bulk buyers.
However, the sales of the company are higher to bulk buyers
as compared to distributors.

The Tropicana beverages offered by Pepsi Co are priced a bit high as

they are targeted to the health conscious people. They are promoted in
the same way, showing the health conscious people and the people are
made to relate this drink to the people who work out or the people
who are concerned to with the healthiness of a drink. Lipton is also a
bifurcation of this segment but they are mainly targeted to the niche
customers

PLACE

Pepsi has a huge distribution network in India. It has to be huge

because the brand needs to be present in every nook and
corner of the country to increase its sales. The primary mode of
distribution is through distributors who in turn give it to retailers,
restaurants, and convenience stores. The secondary mode of
distribution is directly through the company to bulk buyers and
major retailers who buy directly from the company.

Thus distribution channel is as follows

1) Company > Distributor > Small retailers / Small buyers > End
customer
2) Company > Bulk buyers > End customer

As cost is saved in the 2nd example, companies are able to

give better margins to Bulk buyers. The major challenge in
distribution is the cost of bottling as well as the cost of
transportation.

Bottling of Pepsi is done at bottling plants. In India, Pepsi has

36 bottling plants out of which 13 are franchisees whereas 23
are company owned. The soft drink once packed is moved to
the company warehouse from where it goes to distributors and
bulk buyers.

Several of pepsi’s soft drink distributors themselves might act

as distributors of Kurkure, Lays and other snacks products as
the distribution is through the same channel. The products are
also sold from the same convenience store. Thus, it makes
sense if the distributor of the soft drink is given the authority to
distribute snacks as well. However, in some cases, the
distributor of soft drink might be separate from that of Snacks.

PROMOTION

Several of pepsi’s soft drink distributors themselves might act

as distributors of Kurkure, Lays and other snacks products as
the distribution is through the same channel. The products are
also sold from the same convenience store. Thus, it makes
sense if the distributor of the soft drink is given the authority to
distribute snacks as well. However, in some cases, the
distributor of soft drink might be separate from that of Snacks.
Mountain dew has a message of “Darr ke age jeet hai” which is
again focused on adventure sports
thereby targeting youngsters. Snacks like Kurkure and
Lays targetdifferent segments. Kurkure is known to target
household snacks and middle aged group whereas Lays
targets youngsters and the party mood. Gatorade targets only
sports as it is a sports drink. And Quaker oats, which is a recent
launch as compared to the other products, targets breakfast
with a bit of masala.

Pepsi uses all the media channels for its promotions. Along
with ATL, pepsi is also present in BTL marketing. Furthermore,
along with traditional media channels, Pepsi also uses trade
promotions and sales promotions at point of purchase.
Discounts and packaging are always being bundled to give the
best combination and value to the customer to increase
purchases as well as the brand equity.

The bottomline is that Pepsi cannot exist without the proper

promotions. This is because Pepsi belongs in the FMCG
market, and in FMCG, you either perform or perish. The FMCG
market is one of the toughest market for businesses. However,
Pepsi is not only surviving, but it is thriving in the FMCG
market.

The promotional strategy in the marketing mix of Pepsi uses all

possible media channels like TV, print, outdoor, online ads etc for a
360 degree branding. Pepsi has sponsored global events like world
cups of football, cricket etc across the world apart from sponsoring
global lifestyle, music etc events. They also have a high and powerful
promotion policy for all the chips they have like Lays and Kurkure.
As a global beverage & snack brand, Pepsi mainly targets the media
to make their presence felt in the market. Lipton is marketed to the
higher end of the customer. The Tropicana brand is also targeted to
the fitness oriented people. The people who are also preferring the
healthy options of drinking also prefer this products. Thus they
promote in a way which attracts the people who are health conscious
and the ones who are interested in having the healthy food.