Minkyung KimXiangyi Liang

Syafiqah Lutfiah

Tay Yu SiangYixin Meng

Table of Contents

1. Executive Summary

2. Introduction

3. Current Marketing Situation

3.1 Market Analysis

3.2 Competitor Analysis

3.3 Consumer Segmentation & Targeting

4. SWOT Analysis

5. Objectives and Issues

6. Marketing Strategy

7. Implementation

Appendix 1

References

1.Executive Summary

Adidas is preparing to diversify into the cosmetics market by launching a brand new product, the

Adidas Sports foundation within the Korean market, for the young sporty consumers. The

product sets itself apart from the other products in the market by being the first sports-focused

cosmetics product. We are targeting the young and fashionable consumers who are engaged in a

sporty lifestyle, while seizing the opportunity as indicated by the rise in demand for cosmetics as

well as the promotion of an active lifestyle by the government.

The primary objective is to achieve a unit sales volume of 100 million, and aim to break even by

the end of the year. The goal in the second year would be to quadruple our sales volume and

establish ourselves as the pioneer and leader of the sports cosmetics market, which would

prepare ourselves if rival firms start launching similar products to ours.

An aggressive marketing campaign through the creation of hype for the new product would be

spearheaded by our leading sports athletes and celebrities.

2.Introduction

Adidas is a sporting apparel giant, evident from the fact that we are the largest

manufacturer in Europe and our three stripes logo being synonymous with sporting excellence

throughout the world. We will be offering a new product range for the Korean market – sports

cosmetics. The Adidas’ brand strives to help our consumers perform at their best, and our new

product launch would be in line with this mission as it aims to help them perform at their best

while looking at their optimal best. At Adidas, we want to help our athletes “perform better, play

better, feel better” and by allowing them to look good while playing sports, they will naturally

feel better, which can be influential in their performance. Our sports cosmetics, focusing on skin

coverage will be both perspiration and water- resistant to ensure that your skin stay protected

throughout your exercise. It is specially designed for the active consumers. We will create the

value for our consumers to go outdoors and have fun, while protecting their skin from harmful

UV rays as well as substantial coverage for them to look good. Our product will use ingredients

that would not clog your pores as you sweat, therefore providing cooling benefits even when

consumers of the product engage in intense activities. There is a current lack of sports-focused

cosmetic products within the market, yet with the new Adidas Sports foundation, you will never

have to sacrifice your workout to look presentable.

3.Current Market Situation

3.1 Market Analysis:

Currently, based on secondary data research, the global cosmetics market is expected to

reach a staggering $390.07 billion by 2020 (Rajput, 2016). This is due to the increasing emphasis

on grooming, especially when male counterparts are becoming more aware about the need to

take care of their skin. The cosmetics market would definitely continue to increase in Korea

especially as disposable income of the working population rises coupled with the massive

influence of celebrity endorsement (Refer to Data 1 under Appendix 1 to see the factors

impacting world cosmetic markets). Within the global cosmetic market, skincare is the highest

revenue generating segment. And through further categorisation, sun and facial care holds the

majority of market share for skin care products at 75% (Refer to Data 2 under Appendix 1).

Hence, based on the trends, there is a high growth potential for us to look into and capitalise on

this opportunity of rising cosmetics demands.

However, there are already many established players in the markets, with local cosmetics

brands such as Innisfree, The Face Shop as well as foreign brands such as L’Oreal and Revlon.

This would be Adidas’ first foray into the cosmetics market and consumers might be averse to

getting out from their comfort zone of established cosmetics brand. Despite this possible barrier

to entry, the Adidas branding is a draw for consumers because of our success with our sporting

goods. Hence, to gain market share in this dynamic environment, Adidas will have to target

consumers, specifically the ones who embrace a sporty lifestyle, by promoting the sports

cosmetics as an ideal companion along with our sporting goods.

3.2 Competitor Analysis:

Direct competitors (Manufacturers & their brands): Products that provide coverage with

sunscreen protection

Competitor Product Features Price

M.A.C M.A.C. Cosmetics Studio Waterweight SPF 30

- Natural-looking finish- Exceptionally lightweight texture- Provides broad-spectrum sun protection- Contains added beneficial antioxidant and reparative ingredients.- Fragrance-free

$38

Clinique Even Better Makeup SPF 15

- Reliable broad-spectrum protection- Grapefruit peel extract

$27

- Best for normal to oily skin

Prices are in USD*** Table 1.1

Indirect competitors: Products with anti-uv rays protection but does not provide coverage

Competitor Product Features Price

The Face Shop

Natural Sun Eco Power Long-lasting Sun cream SPF50+

- Contains antioxidant ingredients such as acai berry- Can be used as makeup baseable to protect skin from water, sweat and sebum

$13.50

Laneige Sun Block Supreme SPF50+

- Water and sweat resistant- Great for daily usage and outdoor activities- No whitening effect

$19.96

Prices are in USD*** Table 1.2

3.3 Consumer Segmentation & Targeting:

Targeting of customers would be based on their lifestyle as expressed in their

psychographics. By measuring our consumers based on the major AIO dimensions - activities,

interests and opinions, we would be able to identify the consumers that need our sports cosmetics

most, namely the young, fashionable, sporty consumers. Adidas has a brand personality strongly

associated with “excitement” and this would appeal to our target group.

The target group of customers already possesses a need for the usage of sports cosmetics

which makes it easy for us to encourage them to try our new range of Adidas sports cosmetics.

With the increasing emphasis on grooming, sportsmen feel the need to look good even when they

are participating in their sporting activities. Through the usage of Adidas sports cosmetics, they

are able to upkeep their active lifestyle image and look impeccable.

Due to the personality traits being similar to the image of Adidas- daring, spirited,

imaginative and up-to-date, consumers would be attracted to our sports cosmetics which could

lead to a creation of a community of Adidas Sports cosmetics users. Adidas’ stronghold as a

sporting giant would set itself apart from other cosmetics brand. Hence, through the

capitalisation of its status as a sporting leader, Adidas is able to fit its new range of sports

cosmetics into current attitudes about it. This would encourage the target group of consumers to

try out our sports cosmetics. As the young, fashionable, sporty consumers already possess prior

knowledge of Adidas, they are more willing to use the sports cosmetics.

4.0 SWOT Analysis

Adidas has several powerful strengths which they can capitalise on, but its major weakness

would be the lack of experience in the field of sports cosmetics which can hinder our attempt to

diversify. However, opportunities lies in the demand for cosmetics goods, especially in Korea

and the promotion of an active lifestyle by the government. We face the threat of several other

brands who are already established players in the cosmetics industry. Table 1.2 summarises

Adidas’ main strengths, weaknesses, opportunities and threats.

Strengths

1) Established brand image as a Sporting giant. Adidas has strong brand recognition. There

are also many endorsements of Adidas products from celebrities such as Kanye West to

sporting teams that have achieved success such as Manchester United. Consumers would

be more willing and confident to try out our new sports cosmetics.

2) Innovative product. By using ingredients that are natural, free of preservatives and

artificial colourings, our sports cosmetics would not clog your pores even as you perspire.

It is water and sweat resistant.

3) Eco-friendly. We are against animal testing and our products would not contain

ingredients from animal origins.

4) Pricing. As Adidas has market power, we are able to price our product competitively

with that of other cosmetics firm.

Weaknesses

1) Lack of experience in cosmetics field. This is Adidas first foray into the cosmetics

industry, hence there is a lack of experience. We will address this issue by employing the

world’s leading cosmetics scientists to spearhead the innovation of our new cosmetics

line.

2) Lack of product differentiation. There is already a wide variety of cosmetics brand in the

market selling similar products. Hence the new range of Adidas sports cosmetics might

not be seen as unique. We will address this through aggressive promotion coupled with

celebrity endorsement of our cosmetics lineup. Adidas sports cosmetics would be seen as

complementary good to our already successful range of sporting goods.

Opportunities

1) Increasing demand for cosmetics. Based on secondary data research, the global cosmetics

market is expected to reach a staggering $390.07billion by 2020. This is due to the

increasing emphasis on grooming, especially when male counterparts are becoming more

aware about the need to take care of their skin.

2) Promotion of an active lifestyle by government agencies. As the demographics of

consumers transitions from a sedentary one to one pursuing an active lifestyle, the

consumer market for sports cosmetics would increase.

Threats

1) Competition with other established brands. As there is already a wide variety of

cosmetics brand to choose from in the market, consumers are already spoilt for choice.

Therefore, Adidas must engage in aggressive promotion so that differentiation can be

seen.

2) Downward pressure on pricing. With the competition available on cosmetics in the

market, prices of cosmetics products are gradually being forced downwards. Even still,

Adidas’ brand recognition would ensure that its product would hold its own against the

competitors.

Strengths Weaknesses

Established brand image as a Sporting giant Lack of experience in the cosmetics field

Innovative product Lack of product differentiation

Eco-friendly

Pricing

Opportunities Threats

Increasing demand for cosmetics Competition with established brand

Promotion of active lifestyle by government Downward pressure on pricing

Table 1.3

5.0 Objectives and Issues

First-year objectives: During Adidas’ initial foray into the cosmetics market, our unit sales

volume aim would be 100 million and break even at the end of the year.

Second-year objectives: We aim to quadruple the sales volume aim of first year at 400 million

and establish Adidas sports cosmetics as a leader in the sports cosmetics market. When

consumers purchase Adidas’ apparels, they would be likely to want to purchase the Adidas

cosmetics as a complement to their other purchase.

Issues:

Responses to our marketing campaigns must be measured so that our marketing budget does not

exceed. However, the budget for the marketing campaign must be substantial enough to generate

hype for the product.

6.0 Marketing Strategy

Product:

Branding: Adidas Sports Foundation SPF 30++

In-depth product description:

Core benefit: Our product will enable active women/men who want to keep their skin coverage

and protected throughout vigorous physical activities, yet look impeccable due to the

foundation’s coverage fuction.

Size: The size of the product will be around 12cm in length and 7cm wide which makes it handy

for the active sportsmen/women to carry around.

Color/Shape: Font colors on the label will be different for the different genders. For females, it

will be in bright red tones, as it symbolises passion. For males, it will be in black hues as it adds

sophistication. The tube design for both genders will be transparent. Transparency allows the

consumer to know when they are running out of the cosmetic, while adding stylishness and

giving the product a sleek appearance. Adidas’ renowned three stripes logo will be displayed on

the package.

Positioning including positioning map:

Clinique

M.A.C

Adidas cosmetic

Low price

High price

High varietyLow variety

Differentiation & Unique selling proposition of the product: With the well-established name of

Adidas, we are positioning the Adidas Sports Foundation as the most eco-friendly, and able to

provide full-coverage throughout vigorous activities without the need to constant reapply and

value-added model for personal usage. It will also be the first sports-focused cosmetic products

that provide both coverage for skin and UV rays protection.

Packaging: Biodegradable packaging i.e bioplastics made from bio-resins would be used. There

is currently an overall increased demand for sustainable packaging and practices. Additionally,

the manufacturing process itself will be more efficient, will further reduce resources used and

also minimise negative impacts of our company on the environment.

Product Strategy: Adidas previously launched a product line focusing on toiletries and

fragrances. The current product line we are trying to launch is based on facial cosmetics, which

is a product line never been introduced by Adidas in an attempt for diversification. Hence,

Adidas will be utilising its world-renowned three-stripes logo display on the package to reinforce

consumer awareness that this new product is a product from Adidas and they can be assured of

its quality.

Pricing

Price (Final price for consumer/intermediary):

Adidas Cosmetic M.A.C Clinique

$30 $33 $27

Pricing strategy:

We would be adopting a value-added pricing strategy for our product. At Adidas, we do not seek

to engage in price wars, instead we embrace innovation as we believe consumers are not

motivated by price, but instead for the value they get for their money. We do not want to cut

prices in order to sell this product. Instead, we will be providing value-added features which

other cosmetics brands are not able to provide, and differentiate ourselves as the pioneering

sports-focused cosmetic product in the market so that we can charge higher price.

Distribution

Distribution Strategy: Our channel strategy would include working hand in hand with prominent

departmental stores such as Lotte Department Stores and Hyundae Department Stores. Adidas’

own stores, especially in the main shopping districts of Myeongdong and Sinchon would be

replenished regularly with the Adidas Sports foundation. It will also be available on our online

retail store at Adidas.kr.co . We want to provide full coverage of our product throughout Korea.

Subsequently, we will investigate the potential of the Adidas Sports foundation within the

international market. In collaboration with our channel partners, sporting celebrities endorsing

our product will hold fanmeet events where buyers of our product can take a photo with them.

Potential channel conflicts: Prominent department stores may not feel inclined to have regular

promotions for the Adidas Sports foundation, which can lead to it being placed in a less-than

prominent location. We will seek to circumvene this potential conflict by forming good

relationship with them as channel members by supplying them with the latest Adidas sporting

goods which would draw more customers to them, which would make us indispensable to them.

How the product is presented/displayed in the outlet: During the period of product launch, it will

be placed near the entrance where customers can see, for a duration of about two months. After

the euphoria over our new product subsides, we will instead place it near the counter where

customers make payment. The counter is a point-of-purchase and it will be a strategic location

where customers make purchasing decision. When at the counter, a spur of the decision moment

such as a reminder of a beach volleyball event coming up could result in them buying the

product.

Promotion

Communication objectives & key message of communication: We will communicate our primary

goal for this product - which is a perspiration and water resistant skin care product that provides

coverage for your skin and helping our consumers look good while working out.

Adidas is well known for its celebrity endorsements and various advertising through sports teams

and celebrity endorsements. We will use the same tactics for this product, and communicate its

benefits with effective use of online advertisements displayed in YouTube, and major websites

such as Naver and Daum. Moreover, the advertisements will be shown during peak hours of

popular TV shows as our product targets a younger market that is beauty conscious. In addition,

celebrities who endorse Adidas cosmetics will hold fan meet and greet sessions at both our own

retailers as well as at locations of our channel partners. To generate hype for the product, teasers

of sports celebrities using the sports foundation will be posted on YouTube, and a hashtag

#AdidasBeauty will trend online, during the days leading up to the launch of the product.

7.0 Implementation

The Adidas Sports Foundation will be launched during the second half of next year in the month

of June, which is the beginning of summer as more people would want to bask in the outdoor sun

for activities. The following is a summary of the key marketing steps that will occur, from the

period leading up to the launch of the product (2 months before), until 4 months after the product

launch.

April - Hype will be created through mysterious teaser videos of sports celebrities such as

Cristiano Ronaldo being posted on youtube, showing how they apply the product on their skin

before they partake in their sports, while not actually revealing what product is it. Further buzz

would be created through the hashtag #AdidasBeauty.

May - The product is finally revealed, and samples of the product would be given to influential

online bloggers, product reviewers and celebrities. The transport networks in Korea will also

have billboards of the Adidas Sports foundation. Through this campaign, the product would be

further elaborated from how it was developed by the world’s top cosmetic researchers, to the

benefits of using the product. A countdown timer till the day of launch would be posted on the

Adidas online site.

June - In addition to the mass marketing campaign, celebrities will make appearances at Adidas

retailers for the product launch in the shopping districts of Korea such as Myeongdong and

Sinchon. The product would be placed in a section dedicated to Adidas cosmetics in all Adidas

outlet stores and channel partners.

July - Promotions would be given to drive sales and to encourage users of other brands of

cosmetics to switch to using Adidas, by showing them we can provide more value. A sample

bottle of the Adidas Sports foundation would be given to all consumers of any Adidas Originals

purchase.

August - Roadshows for the product would be held during live football and baseball matches

near stadiums. This is to target consumers who are likely to have an active interest in sports.

September - We will roll out a new online campaign, where users of Adidas Sports Foundation

can post online reviews of the product and attractive prizes would be given to selected winners.

This will ensure that there is a community of Adidas Sports Foundation users. In addition, sales

survey to measure customers satisfaction from the product would be collected and the results

would be analysed for future research and development purposes. The Adidas Sports foundation

would be shifted to near the point-of-purchase, at the counter.

Appendix 1

Data 1

Data 2

References:

Adidas,. (2016). Profile. Adidas-group.com. Retrieved 31 July 2016, from http://www.adidas-

group.com/en/group/profile/

Rajput, N. (2016). World Cosmetics Market - Opportunities and Forecasts, 2014 - 2020. Allied

Market Research. Retrieved 18 July 2016, from

https://www.alliedmarketresearch.com/cosmetics-market