Adidas Pivots Almost All of Its Marketing Efforts Towards Megacities
Megacities are where most of the consumers live, so it is only common sense to primarily target those areas, right? Well not exactly, it also means most of your competition is there as well. The best marketing strategy usually depends on your location and the nature of your product. in other words, if you would to focus almost all of your efforts on a few big cities, it means you are ready to throw down a gauntlet with all of your rivals. This is exactly what the company Adidas aims to do, so the upcoming year will be really exciting.
Kasper’s big ambition
Chief executive of Adidas, Kasper Rorsted has set himself with a really ambitious goal for the next 3 years. He wants to increase the annual revenue for that period by 10-12%, and also wants 20-22% of annual profit growth.
Plan of execution
In order to meet these desired projections, the company has decided to implement a bold strategy and invest a large portion of its 2.5 billion euros annual marketing fund on six megacities. This idea may seem risky, but it does not necessarily have to be. The cities in question are Shanghai, Paris, London, Tokyo, Los Angeles, and New York. Truth be told a lot of companies have done similar things. Instead of investing in higher customer acquisition or in brand awareness, the companies focused on doubling down the profits from the existing customer base. In other words, if most of the revenue comes from these cities and most of their customers are located there, which is very likely to be the case, the strategy is actually a very valid one.
It gives them an opportunity to create a powerful loyalty program and target it where it is bound to bring the most profitable results. So, they plan to open their biggest stores there and organize very glamorous consumer events, which will definitely attract some wanted publicity. So, if all goes as planned the success they have there will most likely radiate on a global scale.
The reason behind the decision
According to most of the analysts, this seems like the right move, and a way to keep moving forward as a company. Kasper Rorsted is also eager to catch up with their main competitor Nike, and considering how Nike is a larger company and has higher revenue, this might be a necessary move.
Closing this gap in revenue between two companies is definitely an enormous professional challenge for Rorsted. Nike also aims to increase its revenue and Mark Parker made some bold promises to the investors. He said that revenue will go from 34 to 50 billion, which means that annual growth also needs to have some ridiculously big figures.