Professional Documents
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DISSERTATION REPORT
On
Submitted By
Ankit Bhagat
A0102208020 MBA (M & S) Class of 2010
Submitted to
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DECLARATION
I, Ankit Bhagat student of Masters of Business Administration from Amity Business School, Amity University Uttar Pradesh hereby declare that I have completed Dissertation on MARKETING STRATEGIES OF ADIDAS as part of the course requirement. I further declare that the information presented in this project is true and original to the best of my knowledge.
Date:
Place:Noida
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CERTIFICATE
I, Dr. Sanjeev Bansal hereby certify that Ankit Bhagat student of Masters of Business Administration at Amity Business School, Amity University Uttar Pradesh has completed dissertation on MARKETING STRATEGIES OF ADIDAS, under my guidance.
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ACKNOWLEDGEMENT
I would like to render my heartfelt thanks to Amity Business School, Amity University for providing me with this wonderful opportunity to work on this project; which I am sure will add to my pool of knowledge. I would also like to thank our ADG, Dr. Sanjay Srivastava for helping and guiding me at all stages of this project. Also, I would like to thank my faculty guide Dr. Sanjeev Bansal for his unwavering help and support throughout this project.
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Table of Contents
DECLARATION I CERTIFICATE II ACKNOWLEDGEMENT III
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Marketing Strategies Of Adidas Moisture-wicking, antimicrobial ortholite sockliner ............................................................34 ............................................................34 GLOBAL MARKET SHARES OF VARIOUS BRANDS IN ATHELETIC FOOTWEAR ............................................................................................................................................................. 35
AIM/OBJECTIVES OF THE MARKET STUDY ...........................................................37 ...........................................................37 RESEARCH METHODOLOGY ..........................................................................................38 ..........................................................................................38
INTRODUCTION: .......................................................................................................................... 38 RESEARCH DESIGN: ................................................................................................................. 38 DESCRIPTIVE RESEARCH STUDIES: ..................................................................................38 ..................................................................................38 DATA COLLECTION METHOD: ............................................................................................ 38 RESEARCH INSTRUMENTS: .................................................................................................... 39 QUESTIONNAIRE DESIGN ....................................................................................................... 39 SAMPLING: ..................................................................................................................................... 39 SAMPLEING PLAN: ..................................................................................................................... 39 SAMPLE DESIGN: ........................................................................................................................ 39 CLUSTER SAMPLING: ............................................................................................................... 39 SAMPLING SIZE: .......................................................................................................................... 40 DATA ANALYSIS .......................................................................................................................... 42 1. Which of the following in your opinion potrays itself as the best before consumers? ............................................................................................................................................................. 42
6. WHO AMONG THESE DO YOU FEEL IS THE PERFECT CHOICE FOR THE BRAND AMBASSADOR OF ADIDAS ? ................................................................47 ................................................................47 8. ARE YOU AWARE ABOUT THE ONLINE SHOPPING FACILITY PROVIDED BY ADIDAS ? ...................................................................................................49 ...................................................................................................49 ANNEXURE.............................................................................................................................. 58 ANNEXURE..............................................................................................................................58
QUESTIONNAIRE ......................................................................................................................... 58 1. Which of the following in your opinion potrays itself as the best before consumers? ............................................................................................................................................................. 58
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6. WHO AMONG THESE DO YOU FEEL IS THE PERFECT CHOICE FOR THE BRAND AMBASSADOR OF ADIDAS? .........................................................59 .........................................................59 A)SACHIN TENDULKAR ....................................................................................................59 ....................................................................................................59 B)RICKY PONTING ..............................................................................................................59 ..............................................................................................................59 C)DAVID BECKHAM ...........................................................................................................59 ...........................................................................................................59 D)SANIA MIRZA.................................................................................................................... 59 MIRZA....................................................................................................................59 E)ZINDINE ZIDANE.......................................................................................................... 59 ZIDANE..........................................................................................................59 8. ARE YOU AWARE ABOUT THE ONLINE SHOPPING FACILITY PROVIDED BY ADIDAS? ....................................................................................................59 ....................................................................................................59 A)YES......................................................................................................................................... 59 A)YES.........................................................................................................................................59 B)NO........................................................................................................................................... 59 B)NO...........................................................................................................................................59 9. WHICH OF THE FOLLOWING INDUCES YOU THE MOST TO OPT FOR ADIDAS?................................................................................................................................... 59 ADIDAS?...................................................................................................................................59 A)DISCOUNT OFFERS ........................................................................................................59 ........................................................................................................59 B)SPONSORSHIPS FOR EVENTS ....................................................................................59 ....................................................................................59 C)ADVERTISEMENTS......................................................................................................... 59 C)ADVERTISEMENTS.........................................................................................................59 D)ONLINE SHOPPING @ SHOPADIDAS ......................................................................59 ......................................................................59 E)BRAND.................................................................................................................................. 59 E)BRAND..................................................................................................................................59 BIBLIOGRAPHY.................................................................................................................... 61 BIBLIOGRAPHY....................................................................................................................61
Web Sites .......................................................................................................................................... 61 Magazines ......................................................................................................................................... 61 Newspapers ....................................................................................................................................... 61 Books:................................................................................................................................................ Books:................................................................................................................................................ 61
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INTRODUCTION
In the small German village of Herzogenaurach the world began its love affair with Adidas (Rynos Company History). In 1920, Adolf Adi Dassler brought to life those three little stripes. With his brother, Rudolph, Dassler manufactured his first sports shoe, made for training, after realizing the need for performance athletic shoes. In1948, the Dassler brothers separated to form their own two separate companies. Dassler formed Adidas and his brother formed Puma, both headquarters in Herzogenaurach. The Adidas mission has changed little since founder Adi Dassler began making sports shoes in the 1920s: to be the best sports brand in the world. The history of Adidas is one of consistently meeting the evolving needs of the athlete. Focusing more on function and less on fashion, Adidas strives to provide athletes with shoes that can make a noticeable difference in their performance. Meeting athlete needs is what makes Adidas the best. Adidas America has continued to build on this history. In February of 1993, Adidas acquired Sports Inc., a US-based sports marketing company founded by former Nike executives Rob Strasser and Peter Moore. Sports Inc. had been working
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in conjunction with Adidas USA on the design, development, and marketing of the Adidas Equipment line. This line helped rejuvenate and reposition the Adidas brand in the United States by creating an exclusive line focused on fulfilling the functional needs of the athlete and by utilizing the best materials and athlete input in the tradition of Adi Dassler. It offered moisture management, thermal insulation, weather protection, ease of movement, and safety, helping the athlete to perform more efficiently. After the successful creation and launch of Adidas America
General Information
For over 80 years Adidas has been part of the India of sports on every level, delivering state-ofthe-art sports footwear, apparel and accessories. Today, with total net sales of 6.1 billion and net income of 208 million, Adidas - Salomon is a global leader in the sporting goods industry and offers the broadest portfolio of products. Adidas-Salomon products are available in virtually every country of the world. Their strategy is simple: continuously strengthen our brands and products to improve our competitive position and financial performance. The company's share of the world market for sporting goods is estimated at around 15 percent. Activities of the company and its approximately 100 subsidiaries are directed from AdidasSalomon AG's headquarters in Herzogenaurach, Germany. Also located in Herzogenaurach are the strategic business units for Running, Soccer and Tennis as well as the Research and Development Center. Additional key corporate units are based in Portland, Oregon in the USA, the domicile of Adidas America Inc. and home to the strategic business units Basketball, Adventure and Alternative Sports. The strategic business unit Golf is based in California. The
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business unit Winter Sports is in Annecy, France. The company also operates design studios and development departments at other locations around the world, corresponding to the related business activity. Adidas-Salomon AG has approximately 13,400 employees worldwide.
The Company
Adidas entered the Indian market in 1996 by setting up a 100% subsidiary of Adidas AG called Adidas India Ltd. and announced its joint venture with Magnum International Trading Company Ltd. on October 1, 1996. The new joint venture Adidas India Ltd. was incorporated with an initial investment of Rs. 8000 million with Adidas India Ltd. holding 80% of the equity and Magnum holding the balance 20%. This investment was raised to Rs 475 million with the equity structure remaining the same. Currently, the total investment stands at Rs. 500 Million with the equity structure changing to 91.4% by Adidas and 8.6% by magnum.
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bags, caps, socks, wrist and headbands. Adidas Markets its products in India through a combination of mega exclusive stores (area of 1000 sq. feet and above), exclusive stores, multibrand stores and distributors. At present, Adidas is available in 75 exclusive outlets out of which 34 are company owned with 8 new Company owned stores planned for 2006 and in 450 multi-brand outlets in India.
forms Adidas-a combination of his nickname, Adi, and the first three letters of his last name a lowercase a is adopted to further distinguish Adidas. He commences production with 47 employees. Rudolph forms Puma, with its headquarters located across town from Adidas in Herzogenaurach.
1949- Adidas adopts the trademark three-stripes. 1955-The first license is given to a factory in India to manufacture Adidas shoes. 1972 -Adidas introduces the Trefoil logo. 1984-Kathe Dassler dies, leaving the company to Horst, the Dasslers first-born . 1987-Horst dies at the age of 51.
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1987-Ron More is brought in from Adidas Canada to run operations and a new facility is
acquired in Warren, New Jersey.
1990-Bernard Taupie purchases 80% of Adidas stock. 1993-A group of investors led by Robert Louis-Dreyfus, former head of the British advertising group
Saatchi & Saatchi P.L.C., acquires control of Adidas. Adidas America is formed in February; Rob Strasser is appointed CEO and Peterr Moore becomes Worldwide Creative Director. Rob Strasser dies on October 30. Peter Moore is named CEO of Adidas America n November 9, while maintaining his role as Worldwide Creative Director.
1994-Adidas
moves from eighth to third position in Indian Footwear Industry Rankings. Indian
1995-Adidas goes public on the stock exchange in Frankrurt. 1997-Performance Logo becomes the worldwide Adidas logo.The acquisition of Salomon
broadens the Adidas product range to include Taylor Made for golf products and Mavic for cycle components. Adidas achieves record sales and passes the 1 billion dollar mark in gross sales in the India.
2000-Adidas proudly celebrates the 100th birthday of our founder, Adi Dassler
2005.-Sale of Salomon The Salomon Group (including Salomon, Mavic, Bonfire, Clich and ArcTeryx) is being sold to Amer Sports in October 2005. The new Adidas Group is focusing even more on its core strength in the athletic footwear and apparel market as well as the growing golf category. The legal name of the company will change to Adidas AG in May/June 2006.
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LITERATURE REVIEW
Brands
Brands were originally developed as labels of ownership: name, term, design, symbol. However, in present world it is what they do for the people that matters much more, how they project and engage them, how they define their aspiration and enable them to do more. Powerful brands can determine success in competitive and financial markets, and undoubtedly become the organization's most valuable assets. Kotler April 2, 1993, labeled Marlboro Friday, is described by Klein (2000) as the death day of the brand. On that day, Phillip Morris declared that there will be a 20 per cent price cut of Marlboro cigarettes in order to compete with cheaper price cigarettes. At the time, Marlboro cigarettes were known to be notorious for their heavy advertising campaigns, and nuanced brand image. On that day, the prices of many branded companies Wall street stocks fell: Heinz, Coca Cola, Quaker Oats, PepsiCo; seemingly the signal of the beginning 'brand blindness'(Klein 13).
Concepts
A brand which is commonly known in the marketplace acquires brand recognition. When brand recognition builds up to a level where a brand celebrates with a critical mass of positive sentiment in the marketplace, it is said to have achieved brand franchise. The identification of a brand without the name of the company being present is one of the goal of brand recognition. For example, Disney has been very successful at branding with their distinct particular script font (originally created for Walt Disney's "signature" logo),
Building a Brand
With appropriate senior management commitment, building a relevant and powerful brand for any consumer-focused company, including a bank, is a reasonable goal. The overall objective is to change customer behavior, improve business economics, gain competitive advantage and provide a clear mandate for employees. But this objective means that branding a company and its products must be more business science than marketing art. Based on extensive study and work with clients, BoozAllen believes there are four components to successfully branding a company. These steps blueprint the process of developing a concise message or promise that an institution wants to communicate to its customers, and for executing a strategy that delivers on that promise.
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The first step in building a branded business is to understand the role of the brand in that particular business, including the leverage it can provide across markets and product categories. A brand can provide information and communicate efficiently, qualify a product or service, or establish differentiation. A truly powerful brand can do all three if necessary. To decide what role brands should play, it is important to take a dispassionate look at the current status of the organization and product/service offeringhow they are perceived by customers, competitors and employees. In addition, the institution has to understand what these distinct constituencies need to know and believe about the brand. Secondly, brand builders must choose brand architecture consistent with the chosen role, the institutions products, services and market landscape. There are three types of brand architectures: a single brandone brand that covers the entire product range; tiered brands, with a parent brand supported by sub-brands for each product line; or multiple brands, with each product carrying its own brand distinct from the parent. Sony, Home Depot and Visa are examples of a single brand architecture. The third step in branding a business and developing a brand strategy is to position the brand to effectively communicate the value proposition. Critical here is clarity, consistency and relevance. Volvo (safety), Nike (limitless performance) and Wal-Mart (good deals) are examples of companies that have clear brand positions. The clarity is achieved through the consistent use of all marketing levers (e.g. price, product design, image and channel selection) to drive home a single message. In the fourth step, a company must develop the programs needed to deliver the brand and the brand promise. This happens through programs or services that convey the brand message to the target audience. Nikes support of grassroots athletic events and Visas Olympic sponsorship illustrate the type of programs needed to creatively deploy brands. Nike helps amateur athletes perform, while Visa demonstrates its global reach.
Competitive advantage
Competitive advantage (CA) is a position that a firm occupies in its competitive landscape. Michael Porter says that a competitive advantage, whether sustainable or not, exists when an organization makes economic rents, that is, their earnings exceed their costs (including cost of capital). That shows that normal competitive forces and pressures are not able to drive down the firm's earnings to the point where they cover all costs and just provide minimum sufficient additional return to keep capital invested. Most kinds of competitive advantages cannot be
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maintained for any length of time because the call of economic rents drives competitors to duplicate the competitive advantage held by any one firm.Analysis of the factors of profitability is the subject of numerous theories of strategy including the five forces model pioneered by Michael Porter of the Harvard Business School. In 2006, Jaynie L. Smith authored Creating Competitive Advantage (Doubleday). This book outlines how companies fail to understand their own existing competitive advantages and use them in sales/marketing. She provides a framework for how companies can evaluate their own operations and develop competitive advantage/competitive positioning statements to better hone their sales/marketing messages. Competitive advantage statements help distinguish companies by highlighting what they offer to the customer using tangible terms and concepts. The next step is to test those CA statements through independent market research. This allows a company to understand their customers' hierarchy of buying criteria in an objective indepenedent context. From there, companies can tailor their CA statements to speak directly to the buying interests of the customer.
for sportswear companies to duke it out for representation and thus market share. Adidass rapid growth in Asia, where revenue rose by 15 percent to US$ 878M last year, may be further propelled in Japan and Korea when those two nations host the World Cup this year an event which is expected to garner 2.5M spectators and one billion TV viewers worldwide. However, the key to revitalized success seems to lie in the considerable endorsement deals adidas has developed with world class athletes. Recent sports figures representing adidas dont only score high marks in their game they also score high in their celebrity quotient. British football star David Beckhams relationship with adidas has no doubt lent itself well to the brands visibility in the UK. Recently dubbed "Captain of England," Beckham led his team to victory in the 2000 FIFA World Cup. It doesnt hurt that hes married to a highly visible, exSpice girl and is often seen in the tabloids sporting the adidas logo. With Europe as adidass largest market, exposure like this reflects in the numbers; sales grew seven percent to US$ 2.7 billion, last year. Stateside, Kobe Bryant is another example of a winning adidas endorsee. The LA Laker and youngest NBA all-star player is an athlete with substantial celebrity leverage. This translates directly into sales, young men who idolize Bryant want to play basketball like he does, and thus will want to wear what he wears. The equally compelling Russian born, American-bred tennis star Anna Kournikova also meets these criteria. Shes a young, brilliant professional athlete whose celebrity extends well beyond the world of tennis like Bryant and Beckham shes captured the publics interest in mainstream newspapers, magazines and tabloids. Reinvention was key, not only for the adidass marketing strategy, but also for its product line. On its website, adidas acknowledges that "The markets and industry in which we compete are transforming rapidly, paced by the evolution or revolution in how 'sports' are defined. Team sports such as soccer and basketball will always be a fundamental part of sporting competition. Today, however, eclectic, individual, 'no-rules' sports such as snowboarding, inline skating and surfing have grown into significant categories. Activities such as golf, hiking and mountain biking, which used to be seen as lifestyle and leisure activities, are now part of mainstream sports." Increased product offerings in these categories have undoubtedly contributed to a better score for the brand. To keep up with the competition, adidas generates close to 60 new foot-friendly designs each year. The adidas credo is to regard shoes as feet, resulting in a product with superior fit and
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performance capabilities. Tactics have been revised in getting these products out for consumption. As a result, products have been repositioned in higher-end and sports specialty stores. As their main competitor has sprinkled flagship NikeTown stores throughout the US, Europe and Australia, adidas has also embarked on a foray into retail. The first adidas-Solomon megastore launched in Paris last year to capitalize on the brand awareness in that market; France scored victories in both the 1998 World Cup and 2000 European Cup football championships. Word on the street is the brand hopes to eventually roll out this concept to more cities in Europe and North America. Adidas continues to prove itself as a brand built to last through a game plan of reinvention. With the recent acquisition of a lifetime partnership with Orlando Magic's Tracy McGrady (basketball) and its heavy involvement with 2002 World Cup, it continues to strike savvy deals that capitalize on the star power of young athletes and increase its visibility in the marketplace. It appears that team adidas has honed its strategy to become a revitalized contender in todays competitive sporting goods market and is now duly recognized as the sneaker of yesterday and today1
http://www.brandchannel.com/features_profile.asp?pr_id=71
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sneaker, total North American sales have dropped 16% in the first nine months of 2003. With Nike controlling 41% of the U.S. footwear market, Adidas execs will need to believe their own advertising.
The McGraw-Hill Companies, Copyright photo (black & white): family affair: The campaign will feature Ali and his daughter, Laila ~~~~~~~~ By Stanley Holmes Edited By Ira Sager Adidas Leaps from Hot Sneakers to Warm Jackets Section: Innovation & Design
Design The sporting-goods maker aims to climb Alpine heights with a new performance-sports line
Dateline: [Bloomberg)
Adidas has long been one of the world's premier brands in fashion sport shoes. Now the German sporting-goods company plans to begin selling high-end mountaineering jackets next year, muscling in on North Face's turf as outdoor gear grows faster than traditional sporting goods. Adidas is setting a lofty goal for itself, too. It wants to become a leading brand for so-called performance-sports gear by 2015, says Rolf Reinschmidt, head of the global outdoor division. Sales of outdoor gear will rise about 0.7% in Europe this year, outperforming the declining sporting-goods market, according to industry body European Outdoor Group. The fragmented nature of the market makes it attractive for adidas. North Face owner VF leads the $59 billion industry with outdoor-sports sales of $2.74 billion, the association says. "Adidas is still far behind the specialist labels, but it's coming up," says Andreas Bartmann, chief executive of Globetrotter, Europe's largest outdoor-products retailer. Globetrotter, in Hamburg, Germany, will start selling adidas hiking boots next year.
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Revenue Is Up
The new 325-gram Terrex Feather Jacket is designed to protect trekkers at heights of up to 19,685 feet. Like all adidas performance sports gear, the $595 product will initially be available only in Germany and neighboring Austria and Switzerland, along with Russia, China, and Korea. From 2012, the entire line will be available globally. The world's second-largest sporting-goods maker doesn't provide sales figures for its outdoor unit, saying only that the division's revenue rose in the first nine months of 2009 while overall sales fell 3.7%. VF, which is in Greensboro, N.C., reported that North Face's third-quarter revenue increased 10% at constant currency rates, while sales of its Vans label climbed 4% on the same basis. Growth in the industry isn't universal. Columbia Sportswear said in October that third-quarter sales fell 4%, to $434.5 million, and forecast a decline for the year of 8% to 9%. The Portland [Ore.] company had previously predicted a "low-double-digit" drop in annual revenue.
Solo Ascent
Reinschmidt has led adidas' outdoor sports unit since 2007 and has a team of 40 developing high-tech apparel and boots. In Europe, adidas increased its spending on marketing this year by running TV commercials with Alexander and Thomas Huber, brothers who are known for extreme Alpine climbing. The sporting-goods maker also started sponsoring Reinhold Messner, who made the first solo ascent of Mount Everest without bottled oxygen. Adidas Chief Executive Herbert Hainer has said his company would build its outdoor-sports division using its own brand name and without resorting to acquisitions. "Adidas is doing a seriously good job as the company tries to take advantage of the increasing interest for outdoor gear," says Mark Held, secretary general of European Outdoor Group. He expects the industry's growth to continue into next year. "Even in hard times, people continue buying outdoor gear to escape for a while from the seriousness of life." http://www.businessweek.com/innovate/content/dec2009/id2009129 _588770.htm ~~~~~~~~ By Holger Elfes, Dusseldorf, helfes@bloomberg.net
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concept of how those needs should be met. This concept is then presented to
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4.
The development department then works with the design department to create an actual prototype from the selected sketches.
5.
Three separate groups marketing, design and development meet and discuss how to improve the prototype.
6.
Samples are wear-tested to ensure the product meets Adidas standards for performance and durability and which it was designed. stands up to the demands of the sport for
7.
Preview samples are presented to key accounts and consumer focus groups for feedback. Based upon this information, final changes are made.
8.
9.
As A BRAND
At Adidas you have got to be sporty. At Adidas the brand awarding is been taken rather seriously at its headquarters. Adidas wants to bring inline skates into India. What that kind of stuff got to do with Indian market? Yes, it wont really be a hot seller, but it will contribute a lot to Adidas brand image. Thats the Adidas way of doing it image is a critical part of branding strategy the world over.
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The idea of the company is to introduce performance specific sports shoes in the Indian market by building images around the world & at the same time create the need for these shoes at the ground level. Adidas already has heavy weight sportsmen such as Sachin Tendulkar, Leander Paes & Mahesh Bhupathi endorsing the brand in India. They had the image, apart from endorsing the performance element in the brand. Adidas steps out of crease with a clear sports positioning. Adidas will take on arch Nike with almost the same positioning. Its working with promising athletes to give them a taste of its products. Adidas nowadays is capturing an attitude that is sports related. Adidas in fact did go through a limited fashion phase. Adidas says that you are tempted to make quick buck but we would like to stick to the sports brand image because that make us fashionable.
For Adidas the product plays an eminent role in the enhancement of their corporate as well as sports image:
ADIDAS SAYS Nothing compromised. The most innovative Adidas products created specifically to help make you a better athlete. For Adidas, product is not just a assortment of few items. But it involvesdeveloping of the right product which can then be put to right place & sold with the right promotion & price.
As studied earlier an Adidas product is the result of the intense thought and creative energy of many different people. If a company sell an automobile, is it selling a certain no. of nuts and bolts, some metal sheet, an engine and four wheels? If a company sell a delivery service, is it selling so much wear and tear on a delivery
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truck and so much operator fatigue? As per Adidas the answer to these question is instead what we are really selling is the satisfaction, use or profit the customer wants. Adidas says that all the customer wants is, that whatever product they purchase should fulfill all their needs and preferences. They dont care how they were made. Further they want that when they order something, the dont really care how much out of the way the driver had to go or where he/she has been. They just want their package. That means for them only the final service matters. As per Adidas the idea of product potential customers satisfactions or benefits is very important. Adidas says that the total product is not just a physical product with its related features, but it includes accessories, installation, instruction on use, the package, perhaps the brand name which fulfills some psychological needs a warranty and confidence that service will be available after the purchase.
2. PRICING:
Adidas is clear, it wants to become the no. one sports brand in India, a choice brand for all brands. So far so good, but how will it tackle a price conscious market like India? Adidas feels that being a high energy business Adidas introduces 600-700 articles every six months enables the brand to remain fresh and bring on an international and Indians the brand from the price stand point. Price, thats the most critical factor in the Indian context. Adidas believes it has to deliver a functional at an affordable price. Its a tough job to maintain the integrity of the performance and still come out with a product a right price point. Globally shoes start at $50. But in India as the perceived need is lower, you have to make the product more affordable. To tackle this, Adidas came out with speed 2000, a product priced at Rs.995 with the help of local and Hong Kong source people. Adidas however feels that its just the matter of time before India coverages the world on this front. It is very difficult to operate on a lower price point and maintain integrity of product, but its been barely 3 years since the sports market has taken off. The original sector is just 20% of the total market and 80% of the volumes comes from sporty shoes. But our market is producing products at a price that is relevant to the consumers.
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Adidas feels that as the volume go up, Adidas will try and work out price points as people graduate with better understanding of quality and price perception. Volumes are bound to go up. Adidas started at the time when India had no strength out in the sports products market in 1989 90. Its then licensing partner Bata, and it had limitations of what it could have put behind the brand. So company took the next best step when the licensing agreement ended to take a bigger share in business. To conclude we can say that Adidas is putting all efforts to bring down the price consciousness in the Indian market. Company is trying to make products, which are easy to afford and still maintain the integrity of their performance. Growth has been phenomenal for Adidas even given the base is small. In 1998 Adidas grew by 25%, 1999 by over 50% and this year Adidas is expecting more than 50% in terms of value in both shoes and apparel, while the industry growth as a best case estimate has been 20-25%.
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B: Physical distribution
As per Adidas nearly half of the costs of marketing is spend upon the physical distribution. To take care of this problem Adidas has appointed marketing managers who decides how the transporting and storing functions should be divided within a channel. Note: Physical distribution can be varied endlessly in a marketing mix and in a channel system.
Trucks
In Adidas, except the export products, trucks are considered to be the best medium for transport. The flexibility of trucks makes them really good for moving small loads for short distances. They can travel on almost any road. According to Adidas they can give extremely fast service. Also trucks causes less breakage in handling.
4. PROMOTION:
Adidas is one of the Indias biggest company of sports that spends nearly $10 million on its sales promotion and advertising in Indian Market. Adidas believe that it just cannot be taken lightly. It is a very important aspect of products life cycle. It is the process which is responsible for the growth or decline in the sale of the product. Adidas thinks that promotion is communicating information about the product between the seller and the buyer to change attitudes and behavior. To handle the companys promotional activities Adidas has employed marketing managers, wherever the Adidas is located. These marketing managers look after process of the promotion of the products of their company. As per Adidas the marketing managers promotion job is to tell the target customers that the right product is available at the right place and at the right time and especially at the right price. Adidas thinks that only taking the product to the customers is not a task of the company. But company takes a very important look about how the product works and this message is communicated to their consumers. Because a wrong message can lead to the end of their products life.
Sales Promotion
Adidas is the most popular amongst its rival for its excellent sales promotional activities. As per Adidas they say that they themselves are responsible for the
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encouragement of the customer to by their products. Adidas believes sales promotion tries to compliment the companys selling efforts.
ADVERTISING
As per Adidas advertising can get results in a promotion blend. Good results are obtained at a cost of course. The amount spent in the Unites States for advertising is growing. Continuously, from World War II to 1980 it went from $1 billion to $50 billion. Adidas also spends nearly $2.9 million on its advertising throughout the world. Adidas in India is spending almost $17 million on advertising.The heavy weight players like Sachin Tendulkar, Leander Paes and Mahesh Bhupathi are already attached with their ad-campaigns.
OTHER STEPS
Adidas, the brand with three stripes, seems to use the elements of high-tension in its ads. Remember the Sachin Tendulkar commercial. How everything is near-frozen, and the shattering glass signifies release. Release of tension. Adidas gives you a chance to but the boundaries in every sphere. Only now, the setting is not the playground or the track or the court, it is the urban landscape with its omnipresent traffic jams, crowded streets and so forth. This way, Adidas becomes a part of life. Anyones life. You dont have to be the high-voltage performer to be a part of the Adidas family. And it goes beyond that Adidas becomes something that makes you better. Not just as an athlete, but as a sports person, a better human being.
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One of the advertisement: The spot featuring Boldon, shows him chasing a thief (whod stolen a TV set when its owner was in the bath) through the dark streets. To help a man (the owner, in a towel) in distress. And he uses all the power that he can, to do what he has to do and what he needs to do. And Adidas helps him perform better, than he would otherwise have been able to. This is perhaps shown in an oblique way when the spot ends at the feet of Boldon and the bather. One is wearing a pair of Adidas shoes while the other is barefoot. Adidas makes you better, goes the base. In short, the other man could have done as well as Boldon. The bather reads any man. Any man who wears Adidas. And Adidas goes beyond athletic performance it becomes everyday life. In stark reality. Though humorously and light, it has a deep meaning.
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Adidas has reached an agreement with ISL Marketing G of Switzerland to become an official sponsor of the 2000 UEFA European Championships. Adidas will have access to the official emblems, mascot and trophy for the design of its own products.. In 1998, the overall Adidas budget for promotion and sponsoring accounted for nearly 15% of turnover. The positioning is being communicated through its global campaign-released worldwide in February 1999 but in India, only in May-as well as through a four-ad print campaign developed locally by RK Swamy/BBDO. Says G Kanan, general manager, marketing, Adidas: We are the only brand with heritage in sports. As a brand, were not an attitude thats fashionable. Were an attitude that is relevant all the time. The campaign also introduces a new brand line for Adidas: Forever Sport. The line sums up the deeply-felt and long-term love affair (it has been involved with sports since 1928) that Adidas has with sport in all of its forms. Interestingly, the new brand line has been introduced almost after a decade, when it was using Earn your stripes as its tag-line. The company dropped it during the late 80s after it found that it wasnt connecting too well with its consumers.
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The Trefoil was adopted as the corporate logo in 1972. It represents the heritage and history of the brand. In 1996, it was decided that the Trefoil would only be used on heritage products. Examples of product featuring the Trefoil logo include the Stan Smith, Road Laver, A-15 warmup, and Classic T-shirt.
Equipment
The Adidas Equipment line was launched in 1991. This line of footwear and apparel represents the most unique and functional of Adidas products. Equipment is the ultimate expression of what is uniquely possible by design when form follows function.
In January 1996, the Three-Stripes brand mark became the worldwide Adidas corporate logo. This logo represents performance and the future of the Adidas brand. This logo is used in all advertising, printed collateral and corporate signage. Since 1949, the Three-Stripes have been an integral part of our brand and product designs. This trademark has become synonymous with Adidas and its dedication to producing high-quality athletic products to help athletes perform better.
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COMPETITIVE ANALYSIS
LIST OF COMPETITIVE BRANDS AND COMPARATIVE ANALYSIS
1. 2. 3. 4. 5. 6. 7.
Present Situation
Adidas is currently ranked third in almost every category in the global athletic shoe industry. However, they rank second only to Nike in terms of sales. The main competitors of Adidas include Nike and Reebok However, other smaller competitors include Fila, Puma and Easy Spirit. Adidas commands only 5% of the athletic shoe business in the India., compared with the 40% for the fearsome Nike, but the rejuvenated Adidas has climbed to within easy reach of Reebok, which has been struggling in the past couple of years. Adidas is also steadily regaining market share lost to other brands such as India. Gear and Fila
The Future
But the battle has only started, and the foreign sports companies are here for the long term. They can sustain losses for years to come in order to gain market share. What they are doing at present, is building up distribution networks to cover every nook and corner of the country and, setting up manufacturing facilities. Only those Indian manufactures which have a strong focus on manufacturing and technological upgradation will survive in the long run, although with a much smaller market share than they have at present. Small companies will be sidelined totally and will exit from the sports market altogether. ADIDAS in INDIA has always been driven by its Value for-money strategy. The company needs to identify critical success factory and work assiduously towards achieving it.
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Features :
Soft pad Supple upper bed Comfort Support Moulded EVA sock liner Moulded Midsole Cushion High abrasion rubber outsole Traction and durability Style and design
This street inspired footwear was designed for young people who want the style of their gear to reflect the attitude of their life. This street inspired footwear was designed for young people who want
the style of their gear to reflect the attitude of their life. This G6 lifestyle footwear provides clean, court inspired designs that mirror distinct style and flavour. Reebok has consented to donate fifty cents of proceeds of each pair sold to charitable causes.
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CATEGORY: SHOE (ADIDAS) Adidas supernova T-MAC 3 Item no. : 3636825 Price : Rs. 4,500.00 Features Comfort Soft and stretchable mesh Foot-hugging inner bootie Optimal cushioning support Full-grain leather upper with stretch mesh adiPRENE + forefoot cushioning Shock-absorbing adiPRENE heel Moisture wicking, antimicrobial ortholite sockliner Non-marking carbon rubber outsole Style and design
This modern classic is the choice of high level professional players all around the world. The supernova T-Mac3 features the highest quality craftsmanship coupled with pure performance. The adiPRENE optimizes grip on soft to very soft natural playing surfaces and excellent feel and fit.
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COMPARISON BETWEEN REEBOK G UNIT CASUAL SHOE MENS, ADIDAS SUPERNOVA T-MAC3 SHOES AND NIKE SHOES Reebok Comfort Support Moulded EVA sockliner Cushion support Supportive pad Moulded midsole Supple upper bed Traction and durability High abrasion rubber outsole Soft and stretchable mesh Foot hugging inner bootie Moisture-wicking, sockliner Carbon rubber outsole Fore foot cushioning Shock absorbing heel Style and design antimicrobial ortholite Adidas Nike
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Who might want to buy your products What age, sex, income occupation etc. are the people I want to sell to. If there are changes taking place and how this might affect what you sell How well your products or services might sell How much demand there is for what you hope to sell What price would people be prepared to pay
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RESEARCH METHODOLOGY
INTRODUCTION:
Research methodology is a way to systematically solve the research problem is to how research is done scientifically. It consists of the different steps that are generally adopted by the researcher to the study his research problem along with logic behind them. necessary to the researcher to develop certain tests. It is
RESEARCH DESIGN:
Research design is a plan to answer whom, when, where, and how the subject under investigation conceived so as to obtain answers to research questions. The type of research design involved in this study is descriptive research studies.
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RESEARCH INSTRUMENTS:
Instrument Instrument Design : Questionnaires (personal administered) : close ended Question are used in questionnaires.
QUESTIONNAIRE DESIGN
A well structured questionnaire was used for this study. The types of questions used in the questionnaire were multiple-choice questions. 1. Multiple-choice questions are question, which contain a list of answer and permit the subject to select the best answer.
SAMPLING:
Sampling is the process of selecting a sufficient number of elements from the population, so that a study of sample and an understanding of its properties or characteristics would make it possible for us to generalize such properties or characteristics to the population elements.
SAMPLEING PLAN:
Sampling technique : Cluster sample Sample size : 100 units
SAMPLE DESIGN:
A Sample design is a definite plan for obtaining a sample from given population. It refers to the technique or the procedure the researcher would adopt in selection items for the sample. Sample may as well lay down the number of items to be included in the sample namely, the size of the sample.
CLUSTER SAMPLING:
Cluster sampling method suggests, the samples are selected at different stages. In this method, the population is first divided into different stages. Then from the first stage, a few items are selected at random based on a specific feature or characteristic. From these in the second stage, a few elements are selected at random possessing, he characteristic. From which in the third
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stage a few are selected at random satisfying the characteristic and so on to finally make the necessary selection of samples. All the samples selected at random at different stages will posses the common characteristic or will be homogeneous on some basis Cluster sampling involves arranging elementary items in a population into heterogeneous subgroups that are representative of the overall population. One such group constitutes a sample for study.
SAMPLING SIZE:
The total numbers of respondents are termed as sample size. The sample size for this analysis is 100 respondents.
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DATA ANALYSIS
1. Which of the following in your opinion potrays itself as the best before consumers?
marketingstrategy Cumulative Frequency Valid Adidas Nike Reebok Others Total 40 33 18 9 100 Percent 40.0 33.0 18.0 9.0 100.0 Valid Percent 40.0 33.0 18.0 9.0 100.0 Percent 40.0 73.0 91.0 100.0
InferenceWe can conclude from the above that majority of the people feel that marketing strategies of Adidas are better as compared to its major competitors followed by nike and then there is reebok . other brands include puma , fila , Portland etc
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Inference
When a comparison was made on the basis of footwear , we found that the brands Adidas and nike both attract the people , but Adidas has a slight edge over Adidas.reebok is the 3 rd favorite of the people followed by puma and fila.
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Inference When I surveyed the people on the basis of value for money being provided by Adidas majority of the people were satisfied and agreed that they do get value for money, however 22 % had bad experience with Adidas
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Inference In the above survey most of the people were of opinion that the shop from Adidas because of the comfort provided by the company and also the people were very satisfied with the quality of the products. People generally buy during the discount seasons as price is also an important factor while shopping from the company.
5. If you have to shop for sports wear apart from Adidas which of the following it will be?
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alternative Cumulative Frequency Valid nike reebok fila new balance puma Total 31 22 10 9 28 100 Percent 31.0 22.0 10.0 9.0 28.0 100.0 Valid Percent 31.0 22.0 10.0 9.0 28.0 100.0 Percent 31.0 53.0 63.0 72.0 100.0
Inference We found out that people prefer to shop from nike the most after Adidas followed by puma which is the next best favorite of the people , brands like newbalance ,fila are not so attractive among the customers
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6. Who among these do you feel is the perfect choice for the brand ambassador of Adidas ?
bestbrandambassador Cumulative Frequency Valid sachin tendulkar rickey ponting david beckham sania mirza Zindine Zidane Total 36 22 20 13 9 100 Percent 36.0 22.0 20.0 13.0 9.0 100.0 Valid Percent 36.0 22.0 20.0 13.0 9.0 100.0 Percent 36.0 58.0 78.0 91.0 100.0
Inference Out of the various brand ambassadors of Adidas sachin tendulkar is the favorite among the people followed ricky pointing and david beckham. Zinedine zidane the French footballer and the tennis star are not so popular among the people as the brand ambassadors.
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brandambassador Cumulative Frequency Valid strongly agree agree neutral disagree strongly disagree Total 9 39 21 28 3 100 Percent 9.0 39.0 21.0 28.0 3.0 100.0 Valid Percent 9.0 39.0 21.0 28.0 3.0 100.0 Percent 9.0 48.0 69.0 97.0 100.0
Inference In the above survey we found out the brand ambassador endorsing the product does have a significant impact on the buying decisions of the people.as can be seen from the graph ,39 % people agree that their choice does get effected by the companys brand ambassador
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8. Are you aware about the online shopping facility provided by Adidas ?
awarenessonlineshopping Cumulative Frequency Valid yes no Total 28 72 100 Percent 28.0 72.0 100.0 Valid Percent 28.0 72.0 100.0 Percent 28.0 100.0
Inference When the people were surveyed about the online shopping facility being provided by Adidas we found out that most of the people were not aware about such a facility being provided by Adidas .the survey shows that only 28 % were aware about online shopping being provided
9. Which of the following induces you the most to opt for Adidas ?
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Inference From the above we can see that Adidas as a brand attracts the customers the most . the various discount offers and advertisements also serve as a mean to induce the people to shop from Adidas. The online shopping facility does not attract a lay customer much to shop from Adidas
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Inference From the above we can see that people are of view that Adidas should venture into the other related field like informals. People also feel that it should venture into apprals like formal wear and party wear
11.Which of the following products do you purchase most often from Adidas?
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Inference From the above we can see that out of the various products being provided by Adidas its sports shoes are the favorite among the people followed by the t-shirts .its other products like track suits , caps and pullovers are being purchased evenly by the customers
12. Do you think Adidas is able to promote itself in a better way as compared to its competitors?
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promotioncomparison Cumulative Frequency Valid strongly agree agree neither agree or disagree disagree strongly disagree Total 9 39 21 28 3 100 Percent 9.0 39.0 21.0 28.0 3.0 100.0 Valid Percent 9.0 39.0 21.0 28.0 3.0 100.0 Percent 9.0 48.0 69.0 97.0 100.0
Inference Most of the people are of view that the marketing strategy of Adidas is good and the company is able to communicate to its various customers effective through its various marketing strategies
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The main strength of Adidas is his Product Quality. The quality and the material uses in Adidas is very good. The company has a good brand image in the market, the publicity and the advertisement is also very good and lastly company hold a healthily market share in the market.
Weakness:
The major weakness in the Adidas is that the manufacturing of the products of Adidas is not done in India itself it is being import hence the cost become high and the margin of profit becomes low thats why company must give a deep thought on manufacturing their products in India. Another major weakness in the company is that it is not catering to all the segments which I have already discuss above, If these two weakness in the company can be eradicated then the company may earn high profit and better market status.
Opportunities:
Adidas does have many products for the urban segment or poor people, but there are hardly any products or we can say that there are no products for this segment. India is more a rural country, in the total population of India major part of population lives in rural area and these people can not afford the costly products of the company like Adidas hence company must target this particular segment they must introduce the shoes and other product according to their demands. and also price is one of the major factor which may influence this type of segment hence company should make their policy accordingly. Company must also consider the rage of products as compare to Nike and Reebok. In my opinion the company must introduce more rage or more variety in the market to compete with their competitors and also the customer have more choices to choice the product from.
Threats:
Adidas does not have strong distribution network as compare to Nike and Reebok in India. Nike has more number of retail outlet then Adidas and Reebok has a unique distribution network, the company Reebok not only uses its outlet for the sale of their product but also use some other shoes company outlet like Bata. In a Bata showroom u can find Reebok shoes and other products. But this is not a case with Adidas hence Reebok has a extra advantage over Adidas.
Conclusions:
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ADIDAS in INDIA has always been driven by its Value-for-money strategy. The company needs to identify critical success factory and work assiduously towards achieving it.
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would give ADIDAS and the other sports companies base to compete with the MNCs and help the Indian companies to reduce the impact of MNCs on the Indian Market in the future. Indian manufacturers will have to react quickly because any delay in reacting to the threat posed by the MNCs would only give the MNCs time to establish themselves in the market. With their expertise and financial capacity they would be nearly impossible to compete with once they get a firm foot hold in the market.
THE FUTURE
But the battle has only started, and the foreign sports companies are here for the long term. They can sustain losses for years to come in order to gain market share. What they are doing at present, is building up distribution networks to cover every nook and corner of the country and, setting up manufacturing facilities. Only those Indian manufactures which have a strong focus on manufacturing and technological upgradation will survive in the long run, although with a much smaller market share than they have at present. Small companies will be side lined totally and will exit from the sports market altogether. ADIDAS in INDIA has always been driven by its Value for-money strategy. The company needs to identify critical success factory and work assiduously towards achieving it.
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ANNEXURE
QUESTIONNAIRE
Dear Sir/maam This is a questionnaire aimed at providing information and understanding the marketing strategies of Adidas. Please provide required information and oblige me.
1. Which of the following in your opinion potrays itself as the best before consumers? a) Adidas b) Nike c) Reebok d) Others 2. According to you, which of the following brand is best in sports wear? a) Nike b) Puma c) Adidas d) Reebok e) Portland f) Fila 3. Do you think Adidas provides its customers value for money ? a) Yes b) No 4. What factor do you keep in mind while shopping from Adidas? a) Advertisement, b) Price c) Design d) Quality e) Comfort
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5. If you have to shop for sports wear apart from Adidas which of the following it will be? a) Nike b) Reebok c) Fila d) New balance e) Puma 6. Who among these do you feel is the perfect choice for the brand ambassador of Adidas? a) Sachin Tendulkar b) Ricky Ponting c) David Beckham d) Sania Mirza e) Zindine Zidane 7. Does the brand ambassador of Adidas effect your decision to opt for it? a) Strongly agree b) Agree c) Neither agree nor disagree d) Disagree e) Strongly disagree 8. Are you aware about the online shopping facility provided by Adidas? a) Yes b) No 9. Which of the following induces you the most to opt for Adidas? a) Discount offers b) Sponsorships for events c) Advertisements d) Online shopping @ ShopAdidas e) Brand
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10. According to you, in which category should Adidas venture into? a) Formal wear b) Informal c) Party wear
11. Which of the following products do you purchase most often from Adidas? a. Shoe b. Caps c. T-shirts d. Pullovers e. Tracksuits 12. Do you think Adidas is able to promote itself in a better way as compared to its competitors? a) Strongly agree b) Agree c) Neither agree nor disagree d) Disagree e) Strongly disagree
Thank you for your time and for sharing your views
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Magazines
A&M Business India India Today Business Today
Newspapers
The Times of India The Hindustan Times The Economic Times
Books:
PHILIP EDITION V.S RAMASWAMY AND S. NAMAKUMARI MARKETING MANAGEMENT, SECOND EDITION. WILLIAM STANTON.J, MICHALL J.ETJEC, BRUCE J.WALKER FUNDAMENTAL OF MANAGEMENT. RAVICHANDRAH.N COMPETITION IN INDIAN INDUSTRY. KOTLER, MARKETING MANAGEMENT, NEW MILLENNIUM
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