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How Adidas and Puma were born
Steve McGookin, Forbes
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June 13, 2006

The small Bavarian town of Herzogenaurach, near Nuremburg, is most famous in Germany as the home of the Dassler brothers. Were it not for an extreme case of sibling rivalry, it could have been the home to a sports uber-brand.

Adolf ("Adi") and his brother, Rudolf, started making sports shoes in the 1920s. After a falling out during World War II--the exact nature of which remains as mysterious as it was bitter--the brothers went their separate ways; Adi founding Adidas, and Rudolf establishing Puma in the late 1940s.

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The competitiveness between the companies was as intense as the antagonism between the brothers. Germany's 1954 World Cup victory helped establish Adidas as the foremost national sports brand, even though Puma was also building a reputation for innovation.

While the original rivalry remains strong, the rise of external competitors, most notably Nike in the US, has meant a certain arm's length rapprochement has emerged between the corporate cultures. Locals joke that it has now even become acceptable for employees of the two companies to date--almost.

Both brothers died in the 1970s. They are buried at opposite ends of the town's cemetery. Their companies and their descendants carried on the corporate feud, reaching out into sports other than athletics and soccer in search of high-profile endorsement deals; Adidas famously signing boxing great Muhammad Ali, while Puma scored notable success with tennis stars Boris Becker and Martina Navratilova.

In the US, although Nike had tied up the top two athlete endorsements in Michael Jordan and Tiger Woods, Adidas currently has deals with both the NBA and the New York Yankees. Puma had Serena Williams (until she moved to Nike) and has a personal deal with Yankee outfielder Johnny Damon. Earlier this year, the "leaping cat" signed its first woman professional golfer, Erica Blasberg.

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But it is Puma's long-standing relationship with Pel�, the greatest-ever soccer player and timeless icon for the sport, which has carried over into this year's advertising effort, aimed at connecting the stars of the present with fans' nostalgia for the game's storied history.

Both German companies are spending extensively on marketing during the World Cup. Puma's impressive profit margins show the company is skillful at getting the most out of its money.

Adidas is the tournament's "official" sportswear supplier, but 12 of the 32 teams in this year's finals will be wearing Puma--including all five qualifiers from Africa, a potential growth market, especially as the 2010 World Cup will be held in South Africa. Eight teams are wearing Nike and six Adidas. Adidas suffered the worst of the three in having teams it sponsors fail to qualify, with both Nigeria and Greece unexpectedly not advancing to the finals.

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In the tournament's first "battle of the brands" between Adidas and Puma, Adidas-clad Argentina came out on top, beating the Ivory Coast 2-1 in an exciting game on Saturday night.

Adidas, meanwhile, is providing all the match balls, the design of which has already been criticized by goalkeepers. If that leads to more spectacular goals--like the one Torsten Frings scored for the hosts in the opening game--then most of the huge global TV audience probably won't mind too much.

But for the marketing teams at opposite ends of a small German town (to say nothing of some interested observers in Beaverton, Ore.), the focus will be on the logo on the shirts worn by the team that lifts the trophy--watched by more than one billion people--on the evening of Sunday, July 9.

Author's note: Dutch writer Barbara Smit recounts a fascinating history of the rivalry in Pitch Invasion--Adidas, Puma and the Making of Modern Sport . Allen Lane, a Penguin imprint, published a paperback edition in May. Drei Streifen Gegen Puma (Three Stripes Versus Puma )--was the title of the original German edition, published in 2005.

Steve McGookin is a journalist at the Financial Times in London

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