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A REPORT ON LAUNCHING NEW PRODUCT

“NEW FORM OF HELMET”

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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