BRAND DOSSIER

Nike Shoes Inc.

Prepared By –

Sunayana DattaROmit Acharji

Rohit GuptaAbhinaba Sen

INDEX

Sr Number Topic Page number1 HISTORY AND HERITAGE 32 EVOLUTION OF THE BRAND 53 INITIAL POSITIONING AND SUBSEQUENT

REPOSITIONING9

4 ADVERTISING, SALES PROMOTION AND SEGMENTATION STRATEGY FOLLOWED BY THE BRAND

10

5 SEGMENTATION STRATEGY 146 ANALYSIS OF PRODUCT 157 SWOT ANALYSIS 188 NIKE’S STRATEGY 20

10 P’S OF MARKETTING 2111 DISTRIBUTUION STRATEGY 2512 HYPOTHESIS 2713 QUESTIONARE 2814 ANALYSIS 29

HISTORY AND HERITAGE

1950-1959: WHEN NIKE BREATHED ITS FIRST BREATH

Today we all know Nike as the world’s leading sports brand, but it did not start like this. It was due to two visionary men who pioneered a revolution in athletic footwear that redefined the industry.

Bill Bowerman a nationally respected track and field coach at the University of Oregon, he was constantly seeking new ways to give his athletes a competitive advantage. He always used to experiment with different innovations in running shoes. But the established shoemakers during that period ignored his ideas. So he started cobbling shoes for his runners.

Phil Knight was a talented middle-distance runner from Portland, he joined Oregon in the year 1955. He was coached by Bill Bowerman. After graduating from Oregon he did his MBA in finance from Stanford University, where he had a vision to build a business where quality running shoes would be made in Japan and sold in America and that would compete with more established German brands. As he thought that German made shoes during those times were very expensive. Moreover, they thought that the German shoes weren’t really designed with the unique needs of distance runners in mind.

Knight’s work at Stanford had shown him that athletic shoes could be sourced from factories in Asia at costs that were low enough to compete favorably with the dominant German competitors. But the question was how to design a shoe that would meet distance runner’s needs. The answer was found in Bowerman’s kitchen, where with his wife’s waffle iron and some latex, he created the waffle sole, which together with a lightweight nylon upper, would revolutionize the running shoe. So they made a call to Onitsuka Co. in Kobe, Japan, manufacturer of Tiger shoes and persuaded them to make shoes as per their design.

1960 - 1969: FOUNDED ON A HANDSHAKE

Both Knight and Bowerman contributed $500 to start a new company, Blue Ribbon Sports that would import Bowerman-designed shoes made by Onitsuka Tiger. They placed their first order of 300 pairs of shoes in January 1964. In the first year they managed

to sale about 1300 pairs of running shoes, generating a $8000 in revenues. To manage the growing requirements of the company they needed another employee. Enter Jeff Johnson, whom Knight had met at Stanford. A runner himself, in 1965 Johnson became the first full-time employee of Blue Ribbon Sports and quickly became an invaluable utility man for the start-up company.

Johnson created the first product brochures, print ads and marketing materials, and even shot the photographs for the company’s catalogues. By 1969, the business had grown to 20 employees and a handful of retail outlets.

1970 - 1979: THE BIRTH OF THE NIKE BRAND AND COMPANY

During this time the relationship between BRS and Onitsuka was falling apart. Knight and Bowerman were ready to make the shift from being a footwear distributor to a manufacturer and designer of their own brand of athletic shoes.

They selected a brand mark which is famously known as the “Swoosh,” it was created by graphic design student at Portland State University named Carolyn Davidson. The new Nike line of footwear debuted in 1972, in time for

the U.S. Track & Field Trials, which were held in Eugene, Ore. n the 1972 Olympic marathon that soon followed, four of the top seven finishers wore Nike shoes.

By 1974, after ten years of effort, the Nike shoe with the waffle sole had become America’s best-selling training shoe. With a new name, a new logo and a new design innovation BRS needed an athlete to promote and endorse and lift the new Nike line. That is when they found a young man named - Steve Prefontaine. He was an athlete at Oregon’s. He had never lost any race at his home track over the one-mile distance, and quickly gained national exposure because of cover stories on magazines like Sports Illustrated and his fourth-place finish in 1972 in the 5,000m in Munich. He became a powerful ambassador for BRS and Nike.

Nike was on the map at last, and in 1978 Blue Ribbon Sports changed its name to Nike.

EVOLUTION OF THE BRAND

1980 - 1989: A DECADE OF TRANSITION

In 1979 the first line of clothing and the Nike Air shoe cushioning device was launched. By the start of 1980s Nike's combination of groundbreaking design and savvy and aggressive marketing had allowed it to surpass the German athletic shoe company Adidas AG, formerly the leader in U.S. sales. By the end of 1980, Nike became a publicly traded company, also by the end of this year Nike had 50% of the market share in the United States athletic shoe market.

During 1980’s the company turned its attention towards the international market and in 1981 Nike International, Ltd was created. It went into Asian, European, Latin American and African market. In 1982 it had outfitted Aston Villa. In 1982 it had More than 200 types of shoes and during this time it diversified from only shoes to different items of clothing. In the next consecutive two years Nike had experienced heavy losses as the jogging industry was going down and there was a huge boom in the aerobics industry which the company had miscalculated. So the company had to bring back its founder Knight to take the post of the President. In 1985 it signed up then-rookie basketball player Michael Jordan to endorse a new version of its Air shoe and it was named as ‘Air Jordan.’ The shoe was very successful and the revenues hit over $100 million in the first year.

In 1986 Nike announced further diversification into number of new products which included casual apparel for women, a less expensive line of athletic shoes called Street Socks, golf shoes, and tennis gear marketed under the name ‘Wimbledon.’ In 1987 Nike had designed a major marketing campaign to launch a new product which would differentiate it from the rest of the brands. The product was Nike Air Max. The campaign was supported by a memorable TV ad whose soundtrack was the original Beatles’ recording of ‘Revolution.’ In 1988 Nike aired its famous add ‘Just Do It.’ The add was focused on an athletic enthusiastic generation and challenged them to achieve their own goals.

1990 - 1999: NIKE EXTENDS ITS REACH

During this time Nike opened Niketown in Portland, a store for selling full range of Nike products. During this period Nike saw potential in its women’s shoe and sports apparel division. Sales of Nike women's apparel lines Fitness Essentials, Elite Aerobics, Physical Elements, and All condition gear increased by 25 percent in both 1990 and 1991 and jumped by 68 percent in 1992. In July 1992 Nike opened its second Niketown retail store in Chicago. In 1994 Nike acquired Canstar Sports Inc., the leading maker of skates and hockey equipment in the world and renamed it as Bauer Nike Hockey Inc.

Nike’s big break came in 1994 when the Nike sponsored Brazilian team won the football world Cup. The victory transformed Nike’s image from a sneaker company to a brand that

represented emotions and identification. They eventually made their way into English football with their first kit deal (uniform/apparel) with powerhouse club Arsenal. Nike also signed the US men’s and women’s national soccer teams, as well as many of national teams around the world. In 1995 Nike signed its next big superstar spokesperson, Tiger Woods for a reported $5 million per year. Competitors laughed at the deal until he won the 1997 masters by a record of 12 strokes and then went onto win a

number of tournaments. In 1997 Nike started making Ice hockey equipment signing popular NHL players.

It also took number of other new initiatives during this phase. Having initially missed out on the trend toward extreme sports (such as skateboarding, mountain biking, and snowboarding), Nike attempted to rectify this mistake by establishing a unit called ACG&mdashâ, ‘all-conditions gear' in 1998. Two years later, the company created a new division called Techlab to market a line of sports-technology accessories, such as a digital audio player, a high-altitude wrist compass, and a portable heart-rate monitor. Both of these initiatives were aimed at capturing sales from the emerging youth Generation. In 1999 it started selling its shoes online via

company website. In September Nike announced that it would buy about ten percent of Fogdog Inc., which ran a sporting goods e-commerce site, in exchange for granting Fogdog the exclusive online rights to sell the full Nike line.

In the 1990’s Nike faced many protests and boycotts over regarding the treatment of workers at the factory in Asia that employed nearly 400,000 people and that made the bulk of Nike shoes and much of its apparel. The charges included abuse of workers, poor working conditions, low wages, and use of child labor. The protesters included church groups, students at universities that had apparel and footwear contracts with Nike, and socially conscious investment funds. So Nike finally addressed the problems and changed the workforce in the factories of Asia, there was an increase in the minimum age that can be employed and a tightening of the quality standards.

: LEADING A NEW GENERATION

Nike started the new millennium with a new footwear cushioning system called Nike Shox, which debuted in Sydney in 2000. The development of the shoe took more than 15 years of dedication and research. The result was a cushioning and stability system.

In 2007 Nike acquired Umbro, a British maker of soccer related footwear, apparel and equipment. The acquisition helped boost Nike’s presence in soccer as the company

became the sole supplier of uniforms to over 100 professional soccer teams around the world. In 2008 Nike focused more on the international markets, especially China, during the 2008

Summer Olympics in Beijing. Although Nike’s rival, Adidas, was the official sponsor of the Olympic Games, Nike had special permission from the International Olympic Committee to run Nike ads featuring Olympic athletes during the games. In addition, Nike sponsored several teams and athletes including most of the Chinese teams and 11 of the 12 high profile players on the United States men’s basketball teams. That year sales in Asian region grew 15% to $3.3 billion and Nike’s international division grew to 53% of company’s revenue. Some believed Nike’s marketing strategy during the Olympics was more effective than Adidas’s Olympic sponsorship. In 2009 it had launched a new program at nikegolf.com where fans of Tiger Woods can ask him questions and they could also hear Tiger talk about golf. The session was part of a nationwide Nike Golf consumer experience day, which included equipment demos, long drive contests and in store specials.

In tennis, Nike had aligned with Maria Sharapova, Rodger Federer and Rafael Nadal to push its line of tennis clothing and gear. Some called the famous 2008 Wimbledon match between Rodger Federer and Rafael Nadal where both were dressed in Nike kit from head to toe – a five hour Nike commercial valued at $10.6 million.

Nike had teamed up with the 7 time Tour de France champion Lance Armstrong not only to sell Nike products but also help Armstrong’s Livestrong campaign. Nike designed, manufactured and sold over 70million yellow Livestrong bracelets, earning $80million for the Lance Armstrong foundation. It also featured Armstrong’s message of survival.

To promote the line of basketball shoes and apparel, it continued to feature basketball superstars such as Kobe Bryant and Lebron James. It also formed a partnership with Foot Locker to create a new chain of stores, House of Hoops by Foot Locker, which offers only basketball products by Nike brands such as Jordan and Converse.

Recently, Nike’s the lead in the running category has grown to 60% market share due to its exclusive partnership with Apple. Nike+ (plus) technology includes a sensor that runners put into their running shoes and a receiver, which fits into an iPod, iTouch or iPhone. When the athlete goes for a run or hits the gym, the receiver captures his or her mileage, calories burned and pace and is stored until the information is downloaded. Nike+ is now considered the world’s largest running club.

In 2008-2009, Nike+ hosted the Human Race 10K, the largest and the only global virtual race in the world. The event, designed to celebrate running drew 780,000 participants in 2008, in the next year the participation was even more.

Nike has long had a reputation for responsible environmental practices. According to Clean Air-Cool Planet (a New England-based environmental organization), Nike ranks in the top three companies (out of 56 surveyed) in a report of climate-friendly companies. As an example, Nike launched a campaign to coincide with Earth Day 2008. It featured a commercial with NBA basketball star Steve Nash wearing Nike's Trash Talk Shoe, which was constructed from pieces of leather and synthetic leather waste from factory floors. The Trash Talk Shoe sole was made from ground-up rubber from a shoe recycling program. However, only 5,000 pairs where ever produced for sale. Another project Nike began long before the Green craze in 1993- is labeled: Reuse-A-Shoe program. The program aims to help the environment and the community by collecting old athletic shoes of any make in order to reprocess and recycle them. The material that is collected is then used to manufacture sports surfaces such as basketball courts, running tracks, and playgrounds.

Today Nike dominates the athletic footwear market with a 31% market share globally and 50% market share in US. Swooshes abound on almost everything from wristwatches to skateboards to swimming caps. The firm’s long term strategy focuses on basketball, running, football, women’s fitness, men’s training and sports culture. As a result of its successful expansion across geographic markets and product categories, Nike is the top athletic apparel and footwear manufacturer in the world. Though it took a few decades for the company to evolve, Nike Inc. has become a formidable name among sports apparel and global brands in general.

INITIAL POSITIONING AND

SUBSEQUENT REPOSITIONING

POSITIONING

During the early phase, the company promoted its brand by associating it with the names of many famous athletes, establishing itself as a premium brand. The brand, at its inception got promoted by Steve Prefontaine, who was an athlete at Oregon’s and never lost a single race of over one mile distance. In 1985, Nike signed up Michael Jordan. Apart from this names such as Maria Sharapova and Roger Federer also came to be largely associated with the brand. Thus, the brand was successful in creating an image which focused on power, dedication, hard work, and the desire to succeed. Nike has been able to become a symbol of this simply by the displaying the spokesperson or endorsers doing what they do best. Nike not only always has its

athletes wearing all top Nike gear but also has them sweating, working hard, or reflecting on past events. The brand image that Nike was initially building represents a true American icon that portrays high performance, strength, dedication, perseverance and achievement. They designed and promoted their products as “high performance shoes” that were durable and light weight for runners, and less fashionable.

SUBSEQUENT REPOSITIONING

In terms of repositioning, Nike did not undergo any drastic change as such. It is still positioned as a premium brand that sells expensive products, with a marketing strategy that centers around the brand image provided by the distinctive logo (the swoosh). However, the designing of the shoes are considered much important now as the brand targets for the consumer market as well. Consumer behavior has been changing in a way that they are shifting from sportswear to fashion sportswear. Maintaining itself as a premium brand, Nike is attempting to shape its image as a brand that provides products that are stylish, yet comfortable and not restricted within the boundaries of just sportswear. The distinctive ‘swoosh’ can now be associated with the non-athletes as well, who, apart from comfort and high quality product, stress upon using Nike products as a means of enhancing their style statement.

Advertising, Sales Promotion and Segmentation Strategy followed by the Brand

FROM: TO:

ADVERTISING

In 1965, Jeff Johnson, created the first product brochures, print ads and marketing materials, and even shot the photographs for the company’s catalogues. He established a mail-order system, opened the first BRS retail store (located in Santa Monica, Calif.) and managed shipping/receiving. He also designed several early Nike shoes, and even conjured up the name Nike in 1971. The brand mark today known as “swoosh” was created by a graphic design student at Portland State University named Carolyn Davidson. After the adoption of a new name and a new logo Nike needed an athlete to endorse and elevate the new Nike line

Nike aired its first national television ads, in 1982, created by newly formed ad agency Wieden+Kennedy (W+K), during the broadcast of the New York Marathon. The Cannes Advertising Festival has named Nike its Advertiser of the Year in 1994 and 2003, making it the

first company to receive that honor twice.

Nike also has earned the Emmy Award for best commercial twice since the award was first created in the 1990s. The first was for "The Morning After," a satirical look at what a runner might face on the morning of January 1, 2000 if every dire prediction about the Y2K problem came to fruition. The second was for a 2002 spot called "Move," which featured a series of famous and everyday athletes in a variety of athletic pursuits.

In 1985, Michael Jordan, by endorsing Nike helped to gain back its position in the market which it lost for sometime due to some miscalculations on the aerobics boom.

The major marketing campaign in 1987 to promote ‘Air Max’, the first Nike footwear to feature Nike Air bags that were visible. The campaign was supported by a memorable TV ad whose soundtrack was the original Beatles’ recording of ‘Revolution.’ However, Nike was criticized for using the song against the wishes of Apple Records and had to pay US$250,000 to Capitol Records Inc., which held the North American licensing rights to the recordings, for the right to use the Beatles' rendition for a year.

A year later, Nike built on its momentum from the ‘Revolution’ campaign by launching a broad yet empowering series of ads with the tagline “Just do it.” The series included three ads with a

young two-sport athlete named Bo Jackson, who espoused the benefits of a new cross-training shoe.

In 1994, Nike signed several individual players from what would be the World Cup-winning Brazilian National Team. In 1995, Nike signed the entire team, and began designing the team’s distinctive uniform. Nike also signed the US men’s and women’s national soccer teams, as well as dozens of national teams around the world.

In 1996, Nike Golf landed a vastly talented but as-yet-unproven young golfer named Eldrick “Tiger” Woods for a reported $5 million per year. Competitors laughed and critics howled at Nike’s "folly," until Tiger won the 1997 Masters by a record 12 strokes.

Just as Nike’s products have evolved, so has Nike’s approach to marketing. The 2002 “Secret Tournament” campaign was Nike’s first truly integrated, global marketing effort. Departing from the traditional “big athlete, big ad, big product” formula, Nike created a multi-faceted consumer experience in support of the World Cup.

“Secret Tournament” incorporated advertising, the Internet, public relations, retail and consumer events to create excitement for Nike’s soccer products and athletes in a way no

single ad could ever achieve. This new integrated approach has become the cornerstone for Nike marketing and communications.

At the 6.0 campaign, Nike introduced a new line of T-shirts that include phrases such as "Dope", "Get High" and "Ride Pipe" – sports lingo that is also a double entendre for drug use. Boston Mayor Thomas Menino expressed his objection to

the shirts and strongly pointed out the fact that the country does not need an organization like Nike to appeal to the younger generation by giving credence to the drug issue. A company official however stated that the shirts were meant to pay homage to extreme sports, and that Nike does not condone the illegal use of drugs. Eventually Nike was forced to replace the shirt line.

Today, Nike continues to seek new and innovative ways to develop superior athletic products, and creative methods to communicate directly with its consumers.

SALES PROMOTION

Sales promotion is another means of promoting the brand and thus increasing the sales. The objective is not only to increase the sales in the consumer market but also among the channel partners. Sales promotion can be carried out by means of contests, coupons, freebies, loss leaders, point of purchase displays, premiums, prizes, product samples, and rebates.

In addition to using advertising, public relations, and personal selling, marketing managers can use sales promotion to increase the effectiveness or their promotional efforts. But personal selling is also a key factor to Nike's success in the retailing world. Personal selling is a purchase situation involving a personal, paid for communication between people in an attempt to influence each other.

Nike undergoes sales promotion by means of TV commercials, social media, magazine adds, and they use the athletes who represents them.

It is not often that Nike retail stores or website offers discounts on its products. Although Nike is not known for offering discounts on sales, it still occupies a position among the top manufacturers of sportswear by a land slide due to the quality of products they offer and that draw the customers towards them. Discounts on the products are mainly carried out at other retailers like Models, Footlocker, Finishline, and outlets such as Woodbury Commons.

As for personal selling Nike really depend on all their employees and sales associates and all those with whom they sign the endorsement deals . Nike only wants the best for their stores. It make sure that the selling agents in all the retail stores are equipped with enough knowledge regarding the brand. Not only that, they need to be updated on all the information of the products to be provided to the customers and must be able to answer all their queries. Another example of personal selling for Nike would be the deal they did with the NFL. Starting from the

beginning of this NFL season and years to come, Nike will be the manufacturers of all the NFL uniforms.

SEGMENTATION STRATEGY

Most of the consumers of Nike’s products are mainly sportsmen. This is so because of the utility that comes with the products. An athlete is more likely to go a sports shoe designed and marketed by Nike more than a person who detests sporting and exercises. Nike targets these consumers by agreements between Nike and athletic teams, college’s athletic teams, etc for product sponsorship and eventual promotion to the members of these teams. In this way, Nike is able to reach out to a wide number of consumers who are more likely to buy. Even though others are likely to buy the products, Nike pays specific emphatic targeting to the athlete more than any group of individuals even though it also targets the youth who have embraced the hip hop culture.

Nike lays a number of strategies to target their immediate consumers; athletes and other sportsmen. The targeting strategies include among others the sponsorship of products by professional athletic teams, celebrity athletes and college athletic teams. This strategy is specifically successful because of its ability to reach a large number of athletes. If the athletic team manager prescribes a specific type of track shoes made by Nike, the trainees have no option other than to buy them. The teams can as well buy the track shoes in bulky and supply them to the team members.

The second strategy that Nike applies is the designing of product destination. It does this by associating success with the product. For example, when a celebrity athlete sponsors a specific brand of athletic shoes, the brand will be associated with success. This psychological effect is reinforced with advertisements that affirm this position.

Finally, Nike targets the consumers who are likely to develop product intimacy; those who care more about the utility and quality of the product than the price. In this way, the pricing is not affected too much in a bid to accommodate a large number of consumers. However, price has also been factored in Nike’s marketing strategies as shall be seen later in this paper.

ANALYSIS OF PRODUCTNike Shoes has a total of 14 types of shoes and they are as follows –

Air Force 1 – Nike Air Force was created by designer Bruce Kilgore. This was the first basketball shoe to use the Nike Air technology.

This shoe is offered in low, mid and high top. The mid cap comes connected with a Velcro securable strap, where as in high cap the Velcro strap is movable and removable. The most commonly sold Air force is in solid white and black. There are many newer versions of Air Force

shoes in the market today.

Air Jordan - It is a brand of shoes which were first released for public consumption in 1985

after Michael Jordan himself wore them as a rookie in 1984, with new designs released annually thereafter. After its introduction it has evolved from original basketball shoes to models of different uses, including training and casual shoes. The Air Jordan line of shoes has since its inception has undergone many changes and improvements.

Nike Air Max – It was released in 1987. The Nike Air Max shoe uses a large air cushioning unit at the heel which is visible from the side of the midsole in most models. Different types of Air Max cushioning include "Air Max2" which does not have the "holes" in the cushioning unit and is of high pressure, "Tube Air" which is visible in several small circles on the midsole of the shoe, "Total Air" which is basically just another word for full Air Max cushioning, "Tuned Air," which is a system of individual pods supposedly "tuned" to different areas of the foot.

Air Zoom Vomero - It is a neutral running shoe. It features full length Zoom Air, an external heel counter, a crash pad in the heel for shock absorption and Fit Frame technology for a stable fit.

Chuck Taylor All Stars - Also known as Converses are canvas and rubber shoes. Its aim was to capture the basketball market. Throughout the years the shoe has made a shift from athletic sportswear to casual footwear

Nike Considered – It is a sustainable line of shoes produced by Nike. It utilizes materials found

primarily within 320 km of the Nike factory which reduces the energy used for transportation. The manufacturing process reduces solvent use by more than 80% compared with Nike’s typical products. The leather comes from a tannery that recycles wastewater to ensure toxins are kept out of the environment, and it is colored using vegetable-based dyes. The shoe's outer sole includes rubber made from recycled factory rubber waste. Considered is part of a larger effort Nike has been undertaking for several years to

reduce waste, eliminate toxic substances.

Dunk – It was introduced in 1985. It was initially designed for basketball players from Universities and colleges. But during the year the Dunk has transformed from a basic basketball shoe into a subcultural icon and an inspiration for fashion. This became popular among the skaters due to the stability and lower profile sole which improved grounding performance.

Nike Free – It was introduced in 2004. It is a shoe that allows the muscles in the foot to gain strength by providing less constriction, runners are advised to gradually break into the shoe rather than immediately running long distances as to prevent muscle cramps and other discomforts. There is a numbering system in this shoe. The numbering system indicates the cushioning of the shoe and follows a scale ranging from 0 (barefoot) to 10 (normal running shoe), i.e. Free 3.0 being the least and Free 7.0 being the most cushioned model so far.

Mercurial Vapor – It is a football boot. It is known for being light weight. Because of this, the Because of this, the boot is favored by many players for whom speed is a very important part of their game, notably wingers or strikers. The boot is available in two versions the Soft ground or the Firm ground. The soft ground version’s sole plate is fitted with six NikeSnap removable studs, the firm ground has seven moulded blades.

Nike CTR360 Maestri – It was released in 2009. It was introduced on pitch by Cesc Fabregas. Maestri is an Italian word which means “Master”. It was mainly created for the playing midfielder. The shoe was designed to assist players with receiving and distributing the ball, such as dampening pods on the forefoot, and asymmetrical lacing to increase the amount of contact with the ball. To help with passing the ball there is a rubberized pass pad on the instep along with memory foam to create a more uniform surface. In order to help improve the

player's first touch, Nike developed a new synthetic leather for the boot, called KANGA-LITE. KANGA-LITE is water resistant, similar to other synthetic leathers, but has better ball feel and touch. It is available in five versions, FG – Firm Ground, SG - soft ground, AG - artificial grass, TF - turf and IC - indoor.

Nike Hypervenom –

It is a range of football shoes released in 2013. It is coming under the category of agility. The boot is designed for agile traction and features the All Conditions Control coating for an enhanced performance in both wet and dry conditions and NikeSkin for perfect dribbling and ball control and the boot will be headlined and showcased by Neymar and Mario Balotelli at the 2013 FIFA Confederations Cup.

Shox – It is an array of small hollow columns in the midsoles of the shoe. There are different formations, but Shox are usually four circular columns in a square formation to provide cushioning. There can also be five or six Shox, 25 mm high, though they may vary in height, and triangular and rectangular Shox that Nike says provide better stability. The newer Shox series is compatible with "Nike+ technology." The Nike Shox Saya+ is the most recent Shox with this feature. The new Nike Shox Q'Vida Hi shoe is a new woman's "dance boot" implementation of Shox.

Nike Tiempo –

It is made targeting the soccer players. It is known for its comfort. It is endorsed by players such as Ronaldinho, Jérôme Boateng and Javier Hernández as well as several others. Like many other Nike shoes even this one in available in 4 different soles - FG - firm ground, SG - soft ground, AG - artificial grass and IC - indoor.

Nike Total 90 –

It was introduced in 2000, designed to be used for association football. The Total 90 brand name is derived from the 90 minutes played in a football match. It is now commonly abbreviated by Nike themselves to 'T90'. In 2007 Nike launched a new boot named ‘Nike Total 90 Laser’. Its main feature was the concentric rubber rings (shot-shield) on the top of the boot, which, it was claimed, improved accuracy, swerve and power. It also boasted a "E-Vent" membrane

throughout the boot's upper, which increased breathability, while blocking absorption.

SWOT ANALYSIS

Strengths –

Innovation – Nike Shoes had always improved their products by daily innovations. Brand Name Recognition – It is the number one sports brand in the world. It has evolved

into a huge multinational company over the time. Its logo is also quite distinguishable as well as its slogan.

Strong Distribution Chain – It has a very good distribution chain. The low priced item is sold in all retail outlets whereas the high priced exclusive items are given only to a few distributors.

They have a very strong research and development team that complements innovation. Customer Satisfaction – Customers who buy Nike are normally satisfied with their product.

Weaknesses –

Depends strongly on footwear – If Nike faces any downturn in footwear the whole company may collapse.

There have been labor violations, bad publicity with sweatshops issues and unethical business practice. Nike’s production is done out of the country where the cost of production is less. This is perceived badly in US.

Price Sensitive – This is a strategy that calls for higher pricing points so as to push the perceived product value. Nike always hopes those consumers who consider a product to be of high quality are likely to pay the high price more often.

Opportunities –

Reduce the price so that they can reach out to more market. They can add some items that are not that expensive to make and market them to those communities who cannot afford such expensive items.

Product development offers Nike many opportunities. The brand is fiercely defended by its owners whom truly believe that Nike is not a fashion brand however consumers that wear Nike product do not always buy it to participate in sport. In youth culture especially, Nike is a fashion brand. This creates its own opportunities.

Threats –

Fluctuation in currencies and exchange rates by being a global brand. Huge competition from Adidas, Puma and other brands. International operations and sources of supply are subject to the usual risks of doing

business abroad, such as possible revaluation of currencies, export and import duties, anti-dumping measures, quotas, safeguard measures, trade restrictions, restrictions on the transfer of funds and, in certain parts of the world, political instability and terrorism.

Importing costs, due to international barriers and shipping requirements. Association with disgraced sportspersons such as Tiger Woods and Lance Armstrong.

GENERIC COMPETITION

By generic competition we mean competition among products which are different but satisfy the same need or want or provide the same benefit or utility.

For Nike Shoes its generic competition can be anything that will give the same utility that of shoes like sandals, Slippers, Flip-flops.

But if we only look at the Nike Football shoes then there is no generic competition as people cannot wear sandal and play football, either they will play it barefoot or will wear a pair of football shoes.

NIKE’S STRATEGY

NIKE has evolved from being an importer and distributor of Japanese specialty running shoes to one of the leading designer, distributor and marketer of athletic footwear.

Now it is one of the largest sellers of athletic footwear and apparel in the world with subsidiaries in over 200 countries across the world. It has been launching new technically advanced shoe models from time to time, backed by innovative advertisements, celebrity endorsements, successful associations and event sponsorships.

During the crisis in the late 1990s, NIKE decided to strengthen its management, overhaul its information systems, and streamline its supply chain management. Since, then NIKE has been achieving rapid growth by using aggressive marketing techniques and strategies. However, due to the changing fashion trends, fall in sale of higher-priced shoes and increase in competition, NIKE is still facing many challenges.

ENTRY STRATEGY

NIKE’s business model was developed by Knight. Knight realized that lower-cost, high quality Japanese producers were taking over the US consumer appliance and electronics markets, most leading footwear companies like Adidas were still manufacturing their shoes in higher-cost countries like the US and Germany. So, Knight believed that by outsourcing shoe production to lower-cost Japanese producers, Blue Ribbon Sports could undersell its competitors and break into the market. Hence, they started to import high-tech sport shoes from Onitsuka Tiger of Japan.

NIKE entered India in the mid-1990s through an exclusive licensing arrangement with Siera Industrial Enterprise Private Limited (SIEPL). NIKE’s marketing objective was to tap the Indian sports-and-fitness shoe market - & million pairs of shoes. Rather than cricket the focus was on basketball and tennis. The performance in India was not far below expectations. This allowed NIKE to change its plan from 100 percent imports to localizing the products, thereby making them more affordable.

However in spite of being the Number 1 Sportswear Company in the world, Reebok swayed away with the lion’s share of the Indian market.

In order to reinforce its flagship brand NIKE introduced Time wear in 2002, with a three-pronged strategy, focusing on width of merchandise, extensive distribution and the development of a distinct positioning.

NIKE’S 4 P’S OF MARKETING

Product

NIKE’s products include shoes, apparels and equipment products like baseball, running, tennis for men, women and children. Since starting business in 1979, NIKE became very popular among the youth due to Urban fashion clothing products. It also sells small amounts of plastic products to other manufacturers.

Shoes are NIKE's flagship product. The company manufactures different shoes for a wide variety of sports, such as basketball, football, golf, soccer, baseball, snowboarding, hockey, tennis and volleyball. NIKE also produces apparel for sports activities, as well as other activities including dance and yoga. It features different collections for its apparel, including Livestrong, NIKE Pro, NIKE Free and SPARQ. In addition, NIKE makes casual clothes for men and women. Aside from shoes, NIKE also sells sports equipment, such as baseball bats, balls, swimming caps, rackets and golf clubs. NIKE also sells gloves and yoga mats, as well as agility cones. Other sports equipment it sells includes weights and sports guards such as knee pads, wrap sleeves and shin guards. The company is also well-known for accessories such as watches, bags and socks, as well as consumer technology such as the NIKE+ supplement for the iPod. NIKE also sells rubber bracelets, training DVDs and athletic belts.

Price

NIKE’s products are high priced for the high quality it offers and being such a well renowned brand. It targets customers who embrace product intimacy and thus care less about the product. This has enabled NIKE to set relatively higher prices than its competitors. This is a strategy that calls for higher pricing points so as to push the perceived product value. Once consumers develop product intimacy, they come to associate their person with the product and will pay whatever price quoted on the product provided it has a NIKE logo. Another important thing to note is the fact that NIKE uses the vertical integration pricing strategy in which they take ownership of the participants at channel levels that differ and they also engage in multifarious channel level operations both in a bid to control costs and thus influence pricing function.

Place

There are 25000 retailers of NIKE in US, and its products are supplied in almost 200 countries of the world. In the international markets, NIKE sells its products through independent distributors. The delivery of the right product and at the right time to the consumer not only effects utility but also leads to high degree of consumer satisfaction and loyalty. NIKE distributes its products on level basis. The high priced premium products are given to certain distributors while leaving the low priced to be sold at highly discounted prices at mega retail stores such as Wal-Mart.

Promotion

NIKE uses a very effective promotional tool in the market. First, NIKE’s logo is very distinctive and highly recognized all over the world. Its company also has advertising in the newspapers and invites a number of famous athletes as its brand ambassadors to make its brand image strong. Some of the sportsmen signed by NIKE include soccer stars such as Ronaldinho, Ronaldo and Roberto Carlos, basket ballers such as Jermaine O’Neal and Lebron James, triathlete Lance Armstrong and golf superstar Tiger Woods. This has created a relatively high degree of NIKE products’ awareness. Besides the signing of celebrity sportsmen to promote their products, NIKE has also employed a great deal of advertisements through the mass media. NIKE employs a selective-demand advertisement focused on the high priced shoes used for traditional sports advertisements through the mass media. NIKE also sponsors some events like Hoop It Up, which makes it one of the most recognizable brands in the world.

COMPETITION

NIKE’s fiercest competitions are from other sports brands, especially ADIDAS and PUMA. Moreover the market in which NIKE operates is one of the most competitive marketplaces. Thus, for a company to survive and succeed in such a market requires a continuous need to develop new products with higher quality than its competitors. NIKE’s competitors like ADIDAS and PUMA are developing alternative brands to take away NIKE’s market share. They compete with NIKE in product design, quality and technology.

HOW NIKE IS BETTER THAN ITS COMPETITION?

NIKE’s focus has always been on customer satisfaction. It invests a huge deal in product research and development in order to offer better sports products to its customers. It has always striven to provide a competitive edge to foster the best performance in its athletes. NIKE’s researchers work on three primary areas: Biomechanics (study of human movements), Physiology (study of the integration of the body’s energy system and responses to the environmental stress) and Sensory or Perception (subjective evaluation of product attributes, usability and durability).

Due to great product quality and product innovation, customer satisfaction and customer retention for NIKE is very high compared to its competitors. The only area where the company faces tough time is in the area of high competitive prices. Competitors like ADIDAS, TIMBERLAND offer products at lower prices compared to NIKE. Hence, the balance scorecard shows that NIKE is a good-neutral in customer satisfaction.

NIKE has an efficient internal operation. This is reflected through its better financial ratios compared to its competitors. Some of the key factors that are associated with it are its distinct marketing capabilities, volume manufacturing capacity, extensive research and development efforts to design premium athletic products for its customers, product differentiation and innovation and distribution capabilities. Efficient distribution capacities and use of IT to control Inventory helps NIKE in maintaining a better inventory turnover ratio. Thus, it can be said that NIKE is doing good in its internal operations.

NIKE is the leader of industry in product differentiation. This helps the company to boost its profit through the sale of different products. Another advantage of producing a number of product lines is the reduction of risk in that i.e. if one product fails there are numerous other products to compensate for its loss.

NIKE designs most of its footwear for athletic purposes. Hence, to diversify its products, a large percentage of their products come from sales of footwear, apparel and accessories for casual and leisure purposes. It diversifies its products in numerous ways. It manufactures sports Shoes for three different segments of people: women, men and children. Secondly, it offers a variety of footwear accessories for sports such as football, cricket, tennis, basketball etc.

NIKE provides its products through stores as well as online, thereby removing the access barrier. Through its excellent distribution system it delivers the products faster, thereby removing the time barrier. NIKE provides high product quality, technologically advanced applications like “NIKE with Apple”. NIKE’s products are high priced, but through more factory outlet stores it is making an effort to lessen the wealth barrier it is facing as a result of high priced products.

NIKE has a good control over production costs. Through this they have in a way managed to lower selling and administrative cost as compared to its competitor ADIDAS. IN a nutshell it can be infer red that NIKE is deploying its core competencies or capabilities and resources better than its competition.

DISTRIBUTION STRATEGY

Nike is a highly centralized and focused company which follows some major core concepts such as brand building and supply chain management. Nike’s footwear production takes place in 600+ factories which is spread over 400 countries (as per 2011 list). It follows a low cost manufacturing strategy combined with complicated R&D functions. In Asia, Nike has also followed such strategies and not only increased the sales of footwear but also has raised the bar when it comes to delivering high quality sportswear products in the athletic industry. Nike has 15 contract manufacturers in India in places such as Karnataka, Madhya Pradesh, Uttar Pradesh, Uttarakhand etc.

Below is the distribution diagram that is followed by Nike -

MARKETING STRATEGIES FOLLOWED BY NIKE

Shared marketing strategies among varied products which in turn reduces cost. Efficient line of production helps to reduce cost Large size provides opportunity for more leverage against competition.

GLOBAL SOURCING

Nike’s footwear production is done in 40 different countries where the third party production units employ more than 800000 people.

Nike controls their operations from Oregon and Tennessee and developed jointly by American and Asian technicians in the USA, Taiwan and South Korea. Sneakers are then assembled from dozens of components supplied by firms in South Korea, Malaysia, Indonesia and India etc. Nike outsources to firms that specialize in logistics services.

Nike depends on tight controlling supply chain and getting retailers to commit to orders far in advance.

In India, Nike’s strategy was to increase local manufacturing and be competitive. They also increased the no. of local stores in each of the metro cities and in Bangalore as well. They used to support their local outlets with visual merchandising by projecting their brand statement-“Just Do it”.

In 2002, the distribution network of Nike India had eight distributors, 25 exclusive Nike outlets, 15 multi-brand outlets and 20 speciality doors across major cities. In 2004, instead renewing the franchise with Sierra, after a 7 year license agreement, Nike India became the subsidiary. This was the turning point of Nike in India.

SUMMARY REGARDING FUTURE DIRECTIONS OF THE BRAND

Nike is planning to grow from $19.2 billion to $27 billion by 2015. It will target the emerging global middle class sports lovers, use the digital mode to create better retail experience. It has also plans to grow its affiliate brans like Converse, Cole Haan and Umbro. Nike is a great footwear company but they want to improve their apparel section as well. But the footwear section is not going to take the backseat. It has a strategy to launch the new Nike Air in many colors and upgraded technologies.

Phase 2

HYPOTHESIS-

Hypothesis 1 : Nike is a salient brand than its competitors.

Justification: It has often been seen that Nike is associated with the big sporting legends to promote its product. This attaches importance to the brand name and also creates an image on its consumers that they have the same product and will deliver the same as the legends. Thus the brand uses really strong promotion tools which contribute to the saliency of the brand.

Hypothesis 2 : Nike is the most preferred among sports shoes.

Justification: Nike is the leading sports shoe brand, and distributed across 400 countries in the world. Thus people might prefer it more compared to the other brands.

Hypothesis 3 : Nike is a more male centric brand.

Justification: The brand, being mainly associated with sports and endorsed by athletes it can be thought to be more popular among the male population of the society.

The List of Information Requirements to be Collated from the Research

Hypothesis 1: Nike is a salient brand than its competitors.Here we have to find whether the respondents are more exposed to Nike than its competitors through tools of TOM and Spontaneous recalls.

Hypothesis 2: Nike is the most preferred among sports shoes.If the respondents prefer Nike most among other brands then we can prove the above hypothesis.

Hypothesis 3: Nike is mainly a male centric brandWe need to find out whether people generally associate the brand with male figures i.e. whether they think that Nike is mainly used by the male population of the society or used by both male and female population.

The Instruments of data collection

Questionnaire – This consists of a set of questions presented to the target group from whom survey is to be done. This is most commonly used for collecting primary data. The researchers need to carefully construct the questions and then analyze it after getting the data. The questions are close ended here.

Online -

Face to Face

Questionnaires

Q1. Of the following categories, for which do you use an international brand?

Formal Shirts Jeans Sports shoes Perfume

Q2. What are the brands that come to your mind when asked about branded Sports shoes?(Open ended)

Q3. Which brand of shoes do you own? Adidas

Nike Puma Reebok Others

Q4. Rate these brands starting from 1 to 5 on the following attributes.(1=Strongly Disagree, 2= Disa... : PUMA-Comfortable-Ratings

PUMA ADIDAS NIKE REEBOK

ComfortableWell designedValue for moneyMale centric brand

Q5) Which is the most preferred shoe brand? Rank accordingly, top most being the first rank.

Nike Puma Adidas Reebok

Analysis

Sample Size taken : 64

Age Group: 20 – 30 years

1. Of the following categories, for which do you use an international brand? Perfume Jeans Sports Shoes Formal Shirts

Answer Response Percentage

Perfume 46 72%

Jeans 49 77%

Sports Shoes 52 81%

Formal Shirts 38 59%

As the above table suggests, it can be seen that 81% of the respondents use sports shoes from international brands. This finding does not directly relate to any of the hypotheses, but it helps us to find out whether a greater proportion of the total number of respondents, is aware of international sports shoe brands. Again, it also suggests a significant demand for internationally branded sports shoes among the young population (20-30 years).

2. What are the brands that come to your mind when asked about branded sports shoes? (This is an open ended question)

Chart 1

adidas Nike puma Reebok others0

5

10

15

20

25

30

35

TOM

Adidas Nike puma Reebok Others0

5

10

15

20

25

30

35

40

45

TOM & SPON

This question was framed to find out the “top of the mind” recall of the respondents in the context of branded sports shoes, which is recalling the first sports shoe brand that comes to mind.The derived results plotted against Chart 1 clearly show that Nike was recalled first as an unaided response in majority of the cases(33) i.e. by more than 50% of the respondents, followed by Adidas(16), Puma(7), Reebok(6) and others brands(2).Again, when it comes to taking “top of the mind” and “spontaneous” recall together, Nike still recurs 44 times out of a total of 128 responses, overcoming its competitors by a majority of 34%. However the margin by which the sum total of Nike’s “TOM” and “SPON” recalls exceeds its competitors is much less compared to “TOM” alone. This is because most people have taken the name of “Adidas” rather than “Nike” when it comes to recalling a brand immediately after TOM. The consolidated percentages calculated and summarized in the table below show that Nike comes more often in the minds of the respondents than its competitors.

TOM TOM & SPONAdidas 25% 30%

Nike 52% 34%puma 11% 20%

Reebok 9% 13%

Others 3% 2%

3. Which brand of shoes do you own? Reebok Adidas Puma Nike Others

This question helps us to find out what percentage of the sample actually owns the brand “Nike” and/or the other competitive brands.

Reebok Adidas Nike Puma Others0

5

10

15

20

25

30

Preference

As the chart (above) and table (below) suggests 29 out of 64 i.e. 45% of the total sample owns Puma followed by Nike which is owned by 42% of the sample size. Thus it can be said that majority of the consumers own Puma followed by Nike, Reebok, Adidas and others in succession.

Reebok Adidas Nike Puma Others

Ownership 38% 34% 42% 45% 23%

Number of Puma owners exceed those of Nike by a very small margin and may be considered the most preferred, however ownership does not necessarily mean the first choice of brand. The factor of affordability may suggest something else as pointed out by a latter hypothesis.

4. Rate these brands starting from 1 to 5 on the following attributes.(1=Strongly disagree, 2=Disagree, 3=Neither agree Nor disagree, 4=Agree, 5=Strongly Agree)

PUMA ADIDAS NIKE REEBOK

ComfortableWell designedValue for moneyMale centric brand

The ratings against each of the above attributes would determine which of the brands is the most “comfortable”, “well designed”, “valued for money” and “male centric”.

puma adidas nike reebok0

0.51

1.52

2.53

3.54

4.5

Weighted Average of Attributes across Brands

As it can be seen in the above chart, there is no marked difference in the attributes across brands. Nike, though scores maximum in the attribute of “Design”, does not exceed its competitors by a significant margin. The rest of the attributes are almost neck to neck across the brands. This question also helped to determine that Nike is not perceived as a “male centric” brand. Rather Adidas scores higher than Nike on male centrism.

The pie-charts below show the distribution of ratings on only one attribute i.e. “male centrism”. Though in terms of weighted average scores, Adidas has been found to be the most male centric brand, it cannot be established as one. The brands emerged mostly as neutral ones, since most of the respondents were unsure about them being male centric.

11%

23%

34%

13%

19%

puma

strongly disagreedisagreeNiether agree nor disagreeAgreeStrongly agree

5%

17%

33%

30%

16%

adidas

strongly disagreedisagreeNiether agree nor disagreeAgreeStrongly agree

6%

14%

34%

34%

11%

nike

strongly disagreedisagreeNiether agree nor disagreeAgreeStrongly agree

3%

20%

34%

25%

17%

reebok

strongly disagreedisagreeNiether agree nor disagreeAgreeStrongly agree

35%(majority) of the respondents agreed that Nike is a male centric brand. This result is different from the consolidated weighted average according to which Adidas emerged as the most male centric compared to the other brands.

5. Which is the most preferred shoe brand? Rank accordingly, top most being the first rank. Brands ordered according to the first rank. Nike Puma Adidas Reebok

Reebok Puma Nike Adidas0

5

10

15

20

25

Rank One

Here, the respondents were asked to rank the brands according to their preference. Nike was ranked first by 23(i.e. 36%) of the respondents which is majority of the sample size. Earlier it was seen that Puma is the mostly

owned brand, but here results differ. Nike has been ranked to be the “most preferred”, which may be due to the fact that even though maximum respondents prefer Nike, they cannot afford to buy them the prices being high. Thus they aspire to own the brand.

1 2 3 40%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

10 11 14

29

18 14 9

2323

19 16

6 13

2025

6

Reebok Puma Nike Adidas

The bar graph above shows the weighted score of the preferences. According to the data, Adidas is the least preferred brand being ranked “4” by the majority(29). Again, Adidas is ranked 1st by the majority(23) in terms of preference.

ANALYSIS OF HYPOTHESIS AND INFERENCES DRAWN

1. Nike is a more salient brand than its competitors.

According to the results derived from question no.2 , 33(majority) out of 64 respondents took the name of Nike as their “top of Mind” recall and it again counts for majority of the TOM and SPON recalls(44). Thus it can be said that Nike is more salient a brand than its competitors. Hence, the above hypothesis has been accepted.

2. Nike is most preferred among sports shoes .

Question no. 3 shows us that 45% of the respondents own Puma while 42% own Nike which might indicate that majority prefers Puma. But results are contradicted by question no.5 according to which Nike has been ranked 1 by the majority (36%). This contradiction might be attributed to the fact that though the majority does not own Nike, they prefer the brand most and aspire to own its products. May be the prices of Nike shoes, as they are, too high for them to afford. Thus it can be said that Nike is the most preferred among its competitors, and the above hypothesis is thus accepted.

3. Nike is a male centric brand .

Most of the respondents have not associated Nike with a particular sex. Majority have rated question no.4 as “neither agree nor disagree”, which makes Nike and the other brands as well, neutral. However 35% of the sample has given a rating of 4 (Agree) to Nike on the domain of male centrism which to some extent may suggest that compared to its competitors it is more male centric. Hence, the last hypothesis does not hold true, as Nike cannot be referred to as a “male centric brand”.

Conclusion: Thus after collecting and analyzing the data, Hypotheses 1 and 2 have been found to be accepted, while the last one was rejected.

***********************************

Reference

http://nikeinc.com/pages/history-heritage

http://en.wikipedia.org/wiki/Nike,_Inc.

http://www.fundinguniverse.com/company-histories/nike-inc-history/

http://www.studymode.com/essays/Nike-Brand-Analysis-120970.html