Adidas Pricing Strategy

Pricing decisions are among the most crucial decisions that company’s make. It is important for a company to make highly informed decisions on the prices of commodities and services in order to make business sense in the market (Kienzler & Kowalkowski, 2017). The prices determined by a company should reflect the prices that buyers can afford, and easily help to push the company’s objectives. Pricing strategies involve the measures that a company takes to determine the base prices of its products, the discount rates, and the commissions that can be offered. The strategies also involve the activities taken to develop pricing objectives and policies. Pricing strategies are among the most secretly performed activities in a company.

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Adidas is a Germany-based multi-international corporation that deals in luxury items such as footwear and apparel. The company is a leader in the market and directly competes with such companies as Nike and Puma. The company markets itself as the best in luxury footwear. The company’s main marketing strategy is through the use of successful and football clubs, as well as using famous sports personalities as the ambassadors of the company’s products. As the biggest manufacturer of sportswear in Europe, the company is associated with many big clubs in Europe such as Chelsea, Manchester United, and Newcastle.

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Pricing Strategy

The company uses a number of price strategies that serve the best interests of the business. The employed pricing strategies also help the company to adequately adapt to a diverse and competitive business environment. The company consistently employs a premium pricing strategy. Based on the company’s continuous innovations and production of high-end products, the company appeals to wealthy clients and those that have a taste for luxury goods. One of the main strategies that the company uses in this regard is price skimming. Price skimming helps the company to price its products very highly. Another pricing strategy that the company uses is competitive pricing. This is based on comparison with the prices that its competitors such as Nike and Puma offer on similar products.

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Evaluation of Pricing Strategy

The pricing strategies adopted by the company have been at the center of the company’s success for many years. Price skimming is a type of price strategy where a company initially charges the highest price possible for a commodity. Adidas uses this price strategy while launching new and innovative products. It helps to mark the products as very luxurious and attractive (Du & Chen, 2017). As such, many people who can afford them usually rush to buy the products as soon as they are released into the market. Another component of price skimming is that the company initially seeks to satisfy the needs of those who do not care about the high price. Once their demand is satisfied, the company lowers the price in order to attract another set of customers who are price-sensitive. Competitive pricing is another strategy that the company uses. This approach mainly helps the company to directly compete with Puma and Nike (Gupta et al., 2020). As such, the company ensures that it can effectively compete in the market.

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Conclusion

Pricing strategies are at the center of the success of many companies. Adidas uses pricing strategies that help it to position itself in the market competitively. Price skimming ensures that the company can sell at the highest price possible initially, and then lower the prices later to meet the needs of price-sensitive customers. Competitive pricing allows the company to have competitive prices for its products in order to remain competitive in the market. This approach has made it possible to be one of the biggest companies in the world.

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