NIKE ONLINE MEDIA STRATEGY PROPOSAL

By Darnell Alleyne

The Nike Brand

What is Nike? Nike is the leading designer, marketer and distributor of

athletic footwear, apparel, equipment and accessories for a variety of sports and fitness activities in the world.

Challenges The market for sporting goods is intensely competitive in the US and across

geographies. The company competes internationally with a large number of athletic and leisure shoe companies, athletic and leisure apparel companies, sports equipment companies and large companies with diversified lines of athletic and leisure footwear and apparel and equipment. The company faces competition from Adidas and Puma, a German-based sporting goods companies having international presence. Nike faces competition from these companies in athletic footwear, apparel and equipment categories. In the US market, the company also faces competition from regional players like Dick's Sporting Goods and Finish Line. These companies design, manufacture and market athletic footwear.

Declining online retail spending in the US. The US online retail spending declined by 3% in Q4 2008 versus the year ago, the first recorded quarter of negative growth since 2001. The online spending, which was showing increasing trend till Q4 2007, began to de-accelerate in FY2008, culminating in a 3% decline in the final quarter of 2008. The financial market meltdown that began in the fall dramatically reduced consumers' discretionary spending power, resulting in negative online spending growth. Nike has a significant presence in the online retailing in the US, which contributed a significant portion in its total revenue. Apart from its physical retail stores, it also offers its products through its websites. Online retail spending would adversely affect the revenue, which in turn, could erode the top-line growth of the company.

Goals

Nike Mission Statement : “To bring inspiration and innovation to every athlete in the world”

Nike’s goal is to carry on the legacy of innovative thinking, whether that involves developing products that help athletes reach their full potential, or create new business opportunities that set them apart from the competition.

The other principle goal of the company is to create business opportunities that set Nike apart from the competition and provide value for our shareholders.

New Online Media Plan

Nike has a very loyal consumer following, across the board in all aspects of sports and fitness. There needs to be a more consistent way to communicate with the consumers who are not only loyal followers but also attract new consumers.

A new plan needs to be but in place to increase online sales of Nike products and traffic to the Nike websites.

Incorporating more fan interaction and update geared advertising to inform consumers off all the behind the scenes and buzz worthy things the Nike brand is currently unveiling and offering will be a primary focus of this online campaign.

Email and Google

The first thing that I advise for this campaign is retooling the email list service to incorporate more offers and insight to the consumers.

Email is a difficult concept because it can be considered as spam or not useful, by adjusting the emails to include more realistic and call to action offers and information should help combat this.

Google and Google Ad words is also an important tool to use in online media. Making sure that Nike shows up relatively high in search engines and gets numerous hits of keywords like “sports apparel” is a great driver for increasing online traffic and potentially sales. Also using ad words for sponsored spots on Google’s search engine is a great way to attract more hits. Using pay per click method.

Having a good Email and Google Strategy to play off each other is a great base to attract new consumers to the brand.

Social Media Tools

Social Media Tools like Facebook and Twitter have been the booming interest of online users in today’s world, it provides them with information on their favorite people and things.

Nike should capitalize on the opportunity of using these social media tools to increase the fan interaction and dialogue with the consumer.

Creating verified Facebook and Twitter accounts for Nike and the numerous subgroups and sports divisions is a key component in being able to provide consumers with constant streaming information and in return receive critical feedback seamlessly.

Together Facebook and Twitter can target not only new consumers all over the world with fan pages and facebook ads and sponsored tweets, but can also maintain and build the relationship with the loyal consumers in numerous demographics and sports.

Metric Success

The success of this new strategy should be measured in a couple of key ways, first with the declining rates of the online sales, I would like to see a 6 to 7% increase in the online retail spending from consumers, and increase in viewership of the Nike websites and Facebook and Twitter pages.

Also increasing our page rank and relevance on Google and Google Ad words should help gage the success.

Proposed Budget

Nike spends roughly about 12.4% of it’s revenue in advertising costs, which equates to roughly $2.8 billion.

About $500 million is spent in endorsements deals .

The proposed budget to be allocated in this new online media strategy will be roughly $500 million.

Proposed Budget

Timeline

The timeline for this campaign will work in a couple of different movements. The whole campaign will work over the whole calendar year, but the peak times of the campaign will be during the beginning of each key sport season to match each key sport sub group.

A specific Nike Football strategy will be started in July through Fall

A specific Nike Basketball strategy will be started September through June

A specific Nike Baseball strategy will be started March through the summer.

The other sub groups will match up with their respective sport.

The main Nike strategy will work continuously.