Han 17080018 Individual Assignment (Global Marketing In Action) – 70%Enterprise Market Expansion I. Introduction: Adidas was originally founded by Adolf Dassler in 1949 in a small town of Germany. Since then, Adidas has thrived from their position to become a key competitor in the field, they are now one of the largest sportswear company in the world with two main global sportswear brands: Reebok and Adidas (Adidas Group, 2019). According to Forbes (2019), Adidas stands at number 61 in Forbes World’s Most Valuable Brands 2019 with the revenue of .
9 Billion in 2019. This market expansion report will focus on analyzing the case of Adidas entering the Chinese market. II. Market Analysis: As a global giant in the sportswear industry aiming to be the best, Adidas Group plans its operation across the world. In 2019, Adidas has planned to reach its distribution network to the Chinese market. According to The World Factbook by Central Intelligence Agency (CIA) in 2019, China’s population is approximately 1.4 billion people ” the most crowded country on earth, making China the largest business market on the globe.
Successfully establishing the distribution network in China can be a great source of benefits for any firm. Therefore, it is a must for a global giant like Adidas to expand its business to China. 1. Market Segmentation:Global market segmentation is defined as the process of identifying specific segments such as country groups or individual consumer groups ” potential customers. These potential customers with homogenous attributes who are likely to exhibit similar responses to company’s marketing mix (Keegan and Green, 2019). In dividing the market into segments, marketers typically look for common needs and interests; similar lifestyles or even demographic trends. By segmenting the customer groups, an enterprise can acquire a better understanding about the customer needs and wants in order to tailor the company marketing campaigns more accurately based upon the customers’ likings (Camillar, 2018). Therefore, Adidas must take a careful look into which potential customer groups ” segments in China that they want to focus on in order to achieve a successful expansion plan. From my perspective, Adidas should use demographic segmentation and psychographic segmentation. Demographic Segmentation: According to Keegan and Green (2017) in Global Marketing, demographic segmentation is based on measurable characteristics such as population, age, gender, Applying on Adidas ” a sportswear company in the clothing industry, Adidas should segment the customers into two groups which are sex and age. This is the method has long been used by different clothing brands, we can easily find at any websites of any apparel brands that they categorized their products into men, women, kids based on age and gender. All of the brands in Adidas portfolio (Adidas: Originals, Performance, Style) also have the products to fit in aforementioned segments. Moreover, China’s population is relatively young with over half of the population (63%) are from 15 to 45 (cia.gov, 2019). In this case, this is the targeted customer group of Adidas since Adidas products focus on teenagers or 20 – 40 which are the group of people looking for a global style statement such as Adidas in order to show off in order to identify their personality (Petro, 2019). Psychographic Segmentation: Psychographic Segmentation is based on social status, value, income and lifestyles of a group of customers (Keegan and Green, 2017). According to a research of Bain & Company conducted by Bruno Lannes (2019), China’s market for luxury goods are experiencing a rapid growth (170 billion RMB ” 20% growth) and now represented 33% of the global luxury market. With the position of number 1 country in the world with the GDP of 9470 thousand of dollars, Chinese are willing to pay more in order to show off their wealth (World Bank, 2019). Furthermore, according to Petro (2019) in Do Millennials Have The Luxury Of Flexing For Sport?, 23% of survey respondents said they are willing to purchase sports brands such as Nike, Adidas, UnderArmour, in order to show off their personalities and wealth. Thus, charging a full retail price won’t be a big of a deal in China. 2. References: 1. Adidas Group. (2019). Adidas – History. [online] Available at: 2. Bain & Company (2019). What’s Powering China’s Market for Luxury Goods?. [online] Bain & Company. Available at: [Accessed 9 Jul. 2019].3. Camiller, M. (2018). Travel Marketing, Tourism Economics and the Airline Product: An Introduction to Theory and Practice. 1st ed. Cham, Switzerland: Springer, pp.69-83.4. Cia.gov. (2019). East Asia/Southeast Asia :: China ” The World Factbook – Central Intelligence Agency. [online] Available at: 5. Petro, G. (2019). Nike, Adidas, Under Armour: Do Millennials Have The Luxury Of Flexing For Sport?. Forbes. [online] Available at: 6. Keegan, W. and Green, M. (2017). Global marketing. 9th ed. Boston [etc.]: Pearson.