research on the entry into vietnam market of adidas sneaker company and its 3 year plan

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UNIVERSITY OF FINANCE AND MARKETING

RESEARCH ON THE ENTRY INTO VIETNAM MARKET OF ADIDAS SNEAKER COMPANY AND ITS

MINISTRY OF FINANCE

FINAL EXAMINATION INTERNATIONAL MARKETING

3-YEAR PLAN

Group members:

1 Pham Tran Xuan Nhi 2121003395

2 Huynh Phuong Nhu 2121003803 3 Son Thanh Tuyen 2121012126

4 Nguyen Ha Thien An 2121003589 5 Nguyen Thanh Tin 2121000306

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MINISTRY OF FINANCE

UNIVERSITY OF FINANCE AND MARKETING

FINAL EXAMINATION INTERNATIONAL MARKETING

RESEARCH ON THE ENTRY INTO VIETNAM MARKET OF ADIDAS SNEAKER COMPANY AND ITS

3-YEAR PLAN

GROUP MEMBERS:

1 Pham Tran Xuan Nhi 2121003395 2 Nguyen Ha Thien An 2121003589 3 Huynh Phuong Nhu 2121003803 4 Son Thanh Tuyen 2121012126 5 Nguyen Thanh Tin 2121000306

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SOCIALIST REPUBLIC OF VIETNAM Independence — Freedom - Happiness

MINUTES OF ASSESSMENT OF WORK COMPLIANCE

1 Time: 24/08/2023 2 Members present:

ạ Pham Tran Xuan Nhi b Nguyen Ha Thien An c Son Thanh Tuyen d Huynh Phuong Nhu ẹ Nguyen Thanh Tin Member is absent/reason: 0

3 Chairman of the meeting (group leader): Pham Tran Xuan Nhi 4 The evaluation results are agreed upon and summarized as follows:

Ratio of accomplish Name Student ID task Pham Tran Xuan Nhi 2121003395 100% Nguyen Ha Thien An 2121003589 100%

Huynh Phuong Nhu 2121003803 100%

Son Thanh Tuyen 2121012126 100%

Nguyen Thanh Tin 2121000306 100%

Leader Pham Tran Xuan Nhi

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EXECUTIVE SUMMARY

The international marketing topic "Study on the Entry into the Vietnam Market of Adidas Sneaker Company and its 3-Year Plan" is a research paper using secondary data for presentation The objective of the topic is to provide an overview of how Adidas businesses penetrate the Vietnamese market and the Marketing Plan for Adidas in the next 3 years Our team applied secondary data research methods, focusing on information available on websites, newspapers, the internet, and reference sources, and planned marketing strategies for businesses for the next 3 years to carry out this studỵ

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b Partners and suppliers 5.4 IMPLEMENTATION CONTROLS

5.4.1 Implementation

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FIGURE LIST

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CHAPTER 1: OVERALL ANALYSIS

Vietnam is a developing country with an untapped potential market in many aspects In particular, the Vietnamese shoe industry is one of the most promising markets in Southeast Asiạ According to LEFASO, it is estimated that in 2019, footwear consumption in Vietnam will reach about 190 million pairs (an average of 1.9 pairs per person) and continue to increase due to the rapid increase in per capita Income in Vietnam over the past few years Therefore, many enterprises have expanded their production scale, innovated technology and equipment, and strengthened sample design, creating many trendy products that meet the needs of domestic consumers There are also many foreign sports shoe brands investing in the Vietnamese market

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CHAPTER 2: ADIDAS OVERVIEW

2.1 INTRODUCTION TO ADIDAS

Adidas is a famous global brand Adidas has been involved in the Vietnamese gymnastics market for a long timẹ In 1993, Adidas was present in the Vietnamese market, but in 2009, Adidas officially established the Adidas Vietnam companỵ

2.1.1 Vision

"To be the best sports brand in the world" Adidas's vision is to become the world's leading sports brand To beat Nike back to the market, Adidas has invested heavily in the development and innovation of products to deliver better experiences for its customers and achieve its strategic goals In the fierce competition with sportswear manufacturers, Adidas has revived and become a formidable competitor in terms of creativity through its marketing strategies Adidas products will also be the best choices for sports fans in the futurẹ

The purpose of Adidas is that "through sport, we have the power to change ltves", from the way they run the company, the way they work with partners, the way they create products, and the way they interact with consumers It has always strived to push the limits of human possibilities, unite people in sport, and create a more sustainable world

2.1.2 Mission

“All the products that Adidas is providing the best products and the most perfect" With a vision of being the best sports brand in the world, Adidas' mission revolves around providing the best products as well as the best quality to its customers to achieve growth and long-term sustainability through having loyal customers when using the product

2.1.3 Core values

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2.2 SWOT

2.2.1 Strengths

Technology and Digital: More than just one of the world's best sportswear and clothing brands, Adidas has put itself in the position of a fashion company that firmly embraces digital technologỵ They spend up to 90% of their marketing budget on digital and social media campaigns, promoting online sales, aiming to become the first sports brand to use open source code, and inviting athletes and customers to become part of their brand

Skilled Customer Relationship Building: Adidas has successfully created enthusiasm and interest in sportswear on a personal level by using every touchpoint, such as mobile, social, and retail channels, that consumers can interact with to create highly personalized experiences

Strong financial position: With 2,400 stores globally accounting for $4.3 billion, the company is in a strong financial position

Branding by creating a focal point with the community: Celebrity endorsements and sponsorships of major sports organizations such as FIFA, UEFA, the NBA, and the Olympics have increased awareness of Adidas in the market, which also increases its highly targeted customer basẹ

2.2.2 Weaknesses

High prices: High prices due to innovative technology and production methods have made the brand suitable for limited customers, especially in developing countries

Outsourced manufacturing: Adidas has 93% of its production outsourced to 3rd-party manufacturers (mostly in Asia) to take advantage of low labor costs and easily available resources They are in danger of over-reliance on outsourcing, especially in Asian markets

Limited product line: Adidas, along with the recently purchased Reebok brands by Adidas, have only two brands in their group, although they already have deep assortments within these brands So there is plenty of scope to expand the product linẹ

2.2.3 Opportunities

The Vietnamese market is emerging stronglỵ

Sports footwear continues to be the growth driver of the global footwear market It is forecast that the global footwear market will grow at an average of 3.54% per year in the period 2020-2025 There is a growing demand for fashionable, trendy,

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yet comfortable footwear among all age groups, which is a key factor driving the global footwear industrỵ

Market Development: Entering new markets will be the only way to future success, as advanced economies are already highly competitivẹ

Product Line Expansion: Expanding its product line opens up a host of new opportunities, and it can differentiate itself from its competitors by implementing this

strategỵ

2.2.4 Threats

Fierce competition: Although Adidas is a global brand, it is facing fierce competition from other brands such as Nike, which is the Nọ 1 brand, and Adidas, which is the Nọ 2 brand in the premium segment

Supplier dominance: Since much of its production is outsourced, the supplier has more bargaining power than the companỵ

Government regulation: With 35% of products manufactured in China and 93% of production occurring in Asia, import regulations, duties, and tariffs play a key role in the pricing and success of the companỵ

2.3 MARKETING MIX ạ Product

As for Adidas' marketing strategy for products, this brand has successfully attracted customers and persuaded them to use its products by diversifying products and always focusing on improving product quality by applying advanced and modern technologies

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- Adidas Sport: The product line focuses on sports styles such as football, basketball, golf, track and field, outdoor sports, tennis, and a special group of

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Figure 1: Sneaker products focus on sports stylẹ

Adidas by Stella McCartney aimed at customers who are athletes or consumers who are passionate about sports

- Adidas Street and Originals have street heritage designs with 3-petal and 3-Stripes logos and signature "Adidas" for street style followers

- Adidas Style is divided into three styles: Porsche Design and Sport focuses on elegance and high class and is divided into 3 customer groups (elegant, high-class, dynamic, and unique creative)

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- Springblade technology: good bearing capacity, soft, avoids brittle fracture, and is comfortable in long-term usẹ

- Primeknit technology: high aesthetics and best durabilitỵ

Figure 4: Some sneakers use Primeknit technologỵ

With durable, good products that are sure to adapt to all environmental conditions, are imported from good sources in other countries, are easy to clean, and have a good bearing, Adidas has succeeded in attracting customers, giving owners a competitive advantage over competitors

b Price

Adidas develops different products according to consumer psychologỵ Products must focus on fashion, color, and uniqueness For sports shoe enthusiasts, they must always improve their products, stay ahead of trends, and focus on style while applying advanced technologies

With its style, design, and way of promoting products, Adidas uses the strategy of skimming and competitive pricing at the same timẹ For casual products, Adidas offers a stable price point, focusing on competing with rivals such as Nike, Reebok, and Pumạ As for products that have just been launched on the market or have a unique design, Adidas uses a skimming price strategỵ

Adidas has a strategy of always pricing its products higher than those of its competitors This price gives an incentive for users to want to buy their products rather than those of Nike, Pumạ Because the high price will make consumers think that the product will be of better quality and will contain the highest, most advanced technologies, Adidas has an advantagẹ High prices will bring high value and a longer product life cyclẹ

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c Place

Adidas products are distributed mainly through retail stores Adidas has its own exclusive stores in which the materials are supplied directly from the companỵ On the other hand, many multi-brand showrooms will also display Adidas clothing and shoes These multi-brand showrooms source products from one distributor Adidas also distributes its products onlinẹ The products of the Adidas brand will be sold online through fashion stores as well as the Adidas online websitẹ

d Promotion

Media campaign with USP target: Hitting customer insight: Adidas is always with consumers to understand and help them conquer sport no matter what their level

Advertising on a large scale through Adidas also advertises its products through multi-media channels such as television, radio, and newspapers a 24/7 support system on its website and fanpagẹ

Direct Marketing: Send an email to introduce the program, a press releasẹ

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CHAPTER 3: VIETNAM MARKET ANALYSIS

3.1 VIETNAM MARKET ASSESSMENT

Vietnam is a very potential market, possessing many resources and development opportunities To be able to come to this conclusion, the team reviewed and compared the information about the Vietnamese market in the context of the development of the world and the region, specifically as follows: 3.1.1 Political Vietnam is a country known for its stable political situation and many favorable conditions for FDI enterprises We can see that through figures like: - Our country is one of 10 countries that are completely free of conflicts, especially political conflicts According to the Institute for Economics and Peace (IEP), Vietnam ranks 42/139 (2008) and 48/143 (2009) among countries and territories in the Statistical Table of the Global Peace Index Although Vietnam has dropped six places from 2008 to 2009, it is still highly appreciated for its political stabilitỵ

- According to Fitch Solutions, Vietnam is a country in the group with a high rate of risk and possible return In early April 2020, the Ministry of Finance said that Fitch Ratings (Fitch) has affirmed Vietnam's long-term foreign currency issuer default rating (IDR) at 'BB' with a positive outlook Confirmation and Positive Outlook reflect Vietnam's favorable medium-term growth outlook, strong external liquidity, lower government debt than the average for other countries, and revised credit outlook from "positive" to “stable”

- Vietnam has provided convincing examples of the adaptability of the economy and the degree of political stability amid the escalating epidemic situation Therefore, Vietnam is also a country that has recovered quickly from the global effects of COVID-19

3.1.2 Economic