Made in Germany: The Adidas Brand Story
Two most unlikely bedfellows conspired to create one of the world’s most powerful brands; actually number 71 according to Interbrand. The first strange bedfellow is the creation of a German named Adolf and the second is a phenomenon called hip-hop. The former, who doesn’t exactly have the world’s most favourite personal brand name, is Adolf Dassler, the son of a cobbler and founder of Adidas. Adolf spelt his name Adolph to avoid the stigma of the “better” known Adolf Hitler who was eleven years his senior and hadn’t exactly endeared himself to the world. The latter is a creation of America’s black minority, descendants of slaves; gagged, bound and shipped to work in cotton plantations of what was then the new world.
BusinessWeek credits Adidas’ success to the liaison with hip-hop queen, Missy Elliot. Adidas, who have always been pioneers, began their courtship with the hip-hop genre back in the days of Run DMC who were the first hip-hop group to be featured regularly on MTV. Run DMC always wore the trademark Adidas three stripes. Believe me, I would wear anything for the amount of cash the Germans were splashing on the hip hop group! The official Adidas website currently has rapper 50 cent on the home page! Trust the Germans to be quick off the mark. The Adidas’ brand seems to always know the right horse to back and it must have come as no shock to them when hip-hop won its first ever Album of the Year Grammy award this year, thanks to Outkast. Adidas’ association with the “black folks CNN”, as Ebony magazine puts it seems to have paid off. An interesting and ironical fact from Ebony magazine’s June 2005 edition is that two out of every 10 records sold in America is hip-hop, with eighty percent of the buyers being white!
Such is the story behind the Adidas brand as we know it today. It would however be a disservice to the brand not to trace its history further back to its humble beginnings around 1918 when brothers Adolf and Rudolf Dassler were in partnership before splitting to form Adidas and Puma respectively in 1948.
The Adidas story is full of firsts. Allow me run you through how this brand has evolved over the years. Jesse Owens was wearing a pair of Dassler's shoes when he won a bagful of gold medals in the bad Adolf’s backyard and in the process broke 12 world records during the 1936 Berlin Olympics. In 1920, at the age of 20, Adolph Dassler had invented spiked shoes for track and field. He was such a prolific inventor that upon his death, he had over 700 patents to his name! In 1954, during what is famously referred to as ‘the miracle of Bern”, Germany beat Hungary in the world cup final wearing Adidas soccer boots which featured removable studs for the first time ever. It has been argued in some circles that German had an unfair advantage over the Hungarians but as we all know, history is not very keen on such details and doesn’t have a penchant for being fair to the vanquished. Talking of the world cup, 1963 saw the first Adidas ball; the Adidas ball has remained the official ball used in every word cup ever since.
The Adidas brand learnt the power of endorsement and association very early. It was no wonder that both Muhammad Ali and Joe Frazier wore Adidas boxing shoes in their "Fight of the Century" in 1971. The year 1972 saw the launch of the trefoil logo which represented the linking the three continental plates. The brand had truly gone global and was pulling no stops about it. The passing on of Adi in 1978 saw the beginning of the end for the Dassler family which culminated with Frenchman Bernard Tapie buying 80% of the business in 1990.
As the Adidas brand launched yet another logo in 1996, it was arrogant enough to proclaim, “we knew then, we know now”. During the Atlanta Olympics of the same year, Adidas supplied 21 of the 26 sports with equipment! No other brand was that dominant in the sporting arena.
By 1997 the Adidas brand was big on endorsements and had Kobe Bryant, Anna Kournikova and Englishman, David Beckham in its camp. It is ironic that an English Icon of the stature of David Beckham should adorn and endorse a German product especially with the footballing history between the perennial English underachievers and the German achievers. In the same year Adidas bought Salomon AG, a producer of winter sports Olympics to form the Adidas-Salomon group. The brand was well on its way to becoming the world’s supreme sporting goods concern. When the Adidas brand landed a world cup sponsorship deal in 1998, it was the first sporting goods world cup sponsor in the history of the illustrious tournament. This was a marriage of two great brands, the World Cup and Adidas.
It is interesting that a brand so entrenched in the sports fraternity also has strong links with fashion. Such is the strength and depth of the brand that it appeals to both the traditional sports fraternity while also making a fashion statement. The Adidas website currently has an “Adidas Fall/Winter collection” on show! Who would think that a strong German brand with the national brand’s association with precision and implied boredom would have a ‘hip’ image as well?
It is against this rich brand heritage that I am left wondering what the hullabaloo about the recent Adidas-Reebok merger is all about in branding terms. According to Sporting Goods Intelligence, a Glen Mills Pa., research firm, the merged firm with No.2 Adidas and No.3 Reebok would have a global market share of 25 percent, narrowing the gap on No.1 Nike, which has a 33.2 percent share. It is no secret that Nike is number one because it is a great consistent brand. Adidas and Reebok plan to maintain separate brands and their current roster of products that include athletic shoes, apparel and sports equipment. That is well and good and very wise too. Brands are built in the hearts and minds of consumers and not in boardrooms. A new “large” brand would be a full-fledged disaster! Brands cannot grow through mergers of separate brands that are as different as our oranges and bananas.
According to industry analysts, more buyouts are in the near horizon. Umbro, the maker of England’s football strip is already bracing itself for a possible 300 million pound takeover bid from Mike Ashley of Sports World International according to The Independent. “This is an industry that’s consolidating at a very rapid clip, and we think you’re going to see a lot more of this happening”, said John Shanley, an analyst with Susquehanna Financial. New Balance Chief Executive, James S. Davis agrees and so do I. What I do not agree with however is that brands can grow through leveraging their financial muscle. Brands will grow through basic good brand development involving the creation of a better connection with the consumers. Brands will grow by creating warmer relationships, knowing the consumer better and responding to his or her every need. The fact that the Adidas and Reebok brands are now benefiting the same pockets is an issue for the shareholders to celebrate. I shall be very interested to see how this development actually grows the two separate brands.
