Adidas Taking Reebok Back to its Performance Roots
By George Anderson
Adidas-Solomon chairman and CEO Herbert Hainer said Reebok made its reputation as a performance brand and, now that his company has acquired the business, he intends to bring it back to its roots.
Speaking via satellite to attendees at the World Shoe Association forum, Mr. Hainer said Reebok was the company that first introduced the pump system to athletic shoes and rumors that it was going to turn the brand into an entry level offering were baseless.
Rob Langstaff, president of Adidas-Solomon’s U.S. operations, believes having an internal competition going on between the Reebok and Adidas brands will ultimately make both stronger.
“It is like two children in the home, where one is very good at playing soccer and the other is very good at playing basketball and football,” he said. “They share the same infrastructure and cheer each other, but compete at the same time.”
Mr. Hainer believes owning Reebok will help his company gain ground with consumers in the urban market as well as football, basketball, hockey, aerobics and classics.
Technology and innovation would continue to drive athletic shoe sales in 2006, said Mr. Hainer.
Adidas recently launched its smart shoe with a computer chip in the sole that allows the shoe to change the cushioning level in real time based on the wearer’s weight, running surface and pace. The shoe’s sole becomes softer or firmer depending on the conditions present.
According to Hainer, Adidas has already sold 100,000 pairs of the $250 shoes.
Moderator’s Comment: What do you think of Adidas-Solomon’s announced plan for Reebok? How does the company balance the needs of the various competing
performance brands under its ownership? –
George Anderson – Moderator
If the owner keeps the Reebok and Adidas brands’ positioning separate, things will be fine. The increased market share, if the owner leverages it properly, may reduce ad expenses (since the media buys will be larger, the price should fall) and give the company greater leverage with retailers to get shelf space and prompt payment.
Adidas launches a $250 shoe featuring an intuitive computer chip implant. Long-discounted Reebok is being positioned as the “performance” brand (did anyone see the pump as more than a novelty/a true performance feature)? Uh, okay.
Both Brands will do just fine, as long as each has its own strategic direction and, importantly, noted product positioning with a USP.
There has been and still are many companies with multi brand businesses that do very well against the leading competitor.
Nike will be Nike; and Adidas has found a mass marketing niche that will continue to separate itself from Nike and Reebok.
Reebok can build on its past innovation in performance products, and fast forward to today’s version with success.
M. Jordan is gone, and Nike must continue to out smart its competitors through marketing, and capitalizing on its expansion program internationally. As all leading brands do, it will monitor Adidas closely, and Reebok. Hmmm
Maintaining separate brands broadens the company’s competitive stance. Using an appropriate sports analogy, it’s like a football lineman broadening his stance for more power, to command more real estate, and to be able to change direction more quickly. (BTW, “The Pump” enabled Reebok to manage inventory better, since they didn’t have to create narrow sizes and needed fewer medium widths.)
Herbert Hainer and his brain trust have done a great job of position the company’s products into powerful performance brands. Both Adidas and Taylor Made Golf have lead the way with products for athletes who want to achieve the highest levels of performance. There’s no reason to believe he and his people won’t do the same with Reebok and the brands under that banner as well.
Yes, it is an excellent business decision to keep Adidas and Reebok as a separate entity. This will allow both to compete for market share especially in the various sporting world where both have different agendas. To take it to higher ground, they need to understand what the consumer is looking for.
Today, with globalization and with the internet accessibility, consumers have more choices but they want it now. Can that be delivered?
Yes, packaging your products and services are important. There needs to be more R&D to done by Product Managers before launching the products into the marketplace. I am a great fan of Reebok and Adidas products.