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 tackles a price conscious market like India? Adidas feels that being high energy business Adidasintroduces 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, that’s the most critical factor in the Indian context. Adidas believes it has to deliver a functional at an affordable price. It’s 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 it’s just the matter of time before India coverage’s the world on this front. It is very difficult to operate on a lower price point and maintain integrity of product, but it’s 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. 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. It’s 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 2002 Adidas grew by 25%, 2003 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%