 "Rebooting Reebok")
It takes a lot of effort to build a brand, almost nothing to destroy it and everything to bring it back from the brink. Reebok India Company, part of global German sports apparels and accessories brand Adidas AG is learning this the hard way as a new team at the helm puts together a strategy for the brand that has weathered a few rough seasons in the country.
From being a footwear brand, Reebok is being repositioned as a fitness and sports category player in India. The company is aiming for the top spot as it believes that it does not have any major competition in this space. The repositioning, underway for the past year, is reflected in the choice of Kangana Ranaut and John Abraham as brand ambassadors - both appeal to a young audience and are known for their obsession with fitness.
The fitness market in India is growing and Reebok sees it is a natural fit. The company said that it has been growing at the rate of 10-20 percent in the different fitness verticals such as running, yoga and training shoes such as Crossfit among others. And depending on the fitness discipline, the company has set out different target growth rates for the brand.
Getting back on track
Reebok's image and coffers took major beating in May 2012, when an alleged fraud by its former management in India was discovered and the company took a hit worth Rs 870 crore. The company is eager to bury the past. "We have increased control on the measures that we have put in place as an organisation. We had an internal audit conducted by our headquarters and our Dubai office. We did a risk assessment and we are working with the findings of these studies to make things even tighter. From a brand and business point of view, we are ensuring that Reebok clearly articulates its brand message by working with the right partners, getting our stock levels right and increasing customer interaction," says Silvia Tallon, senior marketing director, Reebok India.
One of the lessons that the company seems to have taken to heart is that it is important to create an open channel of communication between the brand and its many stakeholders. A company must be able to convey what a brand means and stands to all partners. It is not enough to speak with customers alone, but just as important to keep talking with the people building the brand. "When we speak of Reebok's brand values, authenticity, passion and honesty are key. We need to be true to those values," Tallon adds.
The company says that it has understood the value of setting up enough checks and balances and having the right kind of people running operations. "Without these, you open yourself up to huge risk. What we saw was that a few people can tilt the apple cart," says Tallon.
Puting fitness first
Experts believe that what has helped in reviving Reebok is the residual brand equity it had earned earlier. "Reebok was always firmly planted as a fitness brand and it was fairly strong and articulated in that position. Unlike Adidas which is a more masculine brand, Reebok appealed to women as well. What the company has done is used the residual equity and amplified it, that is the main reason behind the revival of the brand," said Samit Sinha, founder and managing partner at Alchemist Brand Consulting.
For Reebok, therefore, Ranaut as brand ambassador was a natural choice. While Adidas operates in the sportswear segment, Reebok owns the fitness segment. Reebok has a pan-India presence with over 238 Reebok stores across 114 Indian cities and online presence with shop4reebok.com. It plans to expand at a steady pace of around 10 stores per year. While Tallon said that the focus would be metro cities, she added that tier-II towns would also be on the company's radar. Targeting the youth who might have lost the connect with Reebok seems to be on top of the company's mind.
The brand plans to focus on innovation through products in the running, training and studio category. Reebok plans to be the more targeted brand concentrating on fitness categories such as 'Crossfit' and has got into mixed martial arts (MMA) with a tie up with American fighting promotion company Ultimate Fighting Championship (UFC) and is looking to generate Rs 380 crore in revenues by end of this year. The brand has tied up with the Ministry of AYUSH as well.
"We also hosted a fitness master class with celebrated fitness icon John Abraham and organised yoga sessions across the country in collaboration with the government on International Day of Yoga," said Tallon.
While Reebok plans to open fully owned stores in India, Tallon said it is a long term plan as in the short run it plans to focus on penetrating deeper into the market. For this the company will focus on deepening its retail presence as well using a variety of promotional initiatives that help spread the word beyond the metros.
"With marketing initiatives and product innovations being undertaken in this direction, Reebok is well positioned to drive growth in the country. We are also scaling up our business and are heavily focusing on e-commerce. While we have our own channel for e-tail, strategic tie-ups with leading e-commerce players such as Jabong and Myntra are further accelerating our growth," Tallon said. In the coming months, the brand hopes that it will be able to step up the pace in India without getting its feet in a twist.
