nike shoe inc
TRANSCRIPT
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Subject: - Research Method in Business
Topic: - NIKE SHOES INC...
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Serial
Contents
1 Introduction to topic
2 Introduction to company/ product
3 Objective
4 Features
5 Process
6 Study on the company
7 Historical background
8 Present status
9 Questionnaire
10 Statistics
11 Hypothesis
12 Conclusions and Suggestions
13 Recommendations
14 Bibliography
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Introduction
Nike, Inc is a major publicly traded sportswearand equipment supplier based in the United States. The company
is headquartered near Beaverton, Oregon, which is part of
the Portland metropolitan area. It is the world's leading supplier
ofathletic shoes and apparel and a major manufacturer ofsports
equipment with revenue in excess of $18.6 billion USD in its fiscal
year 2008 (ending May 31, 2008). As of 2008, it employed more
than 30,000 people worldwide. Nike and Precision Castparts are
the only Fortune 500 companies headquartered in the state ofOregon.
The company was founded on January 25, 1964
as Blue Ribbon Sports by Bill Bowerman and Philip Knight, and
officially became Nike, Inc. in 1978. The company takes its name
from Nike , the Greek goddess of victory. Nike markets its
products under its own brand as well as Nike Golf, Nike
Pro, Nike+,Air Jordan, Nike Skateboarding and subsidiaries
including Cole Haan, Hurley International, Umbro and Converse.Nike also owned Bauer Hockey (later renamed Nike Bauer)
between 1995 and 2008. In addition to manufacturing sportswear
and equipment, the company operates retail stores under the
Niketown name. Nike sponsors many high profile athletes and
sports teams around the world, with the highly recognized
trademarks of "Just do it" and the Swoosh logo.
In sport, visual acuity and protection can mean the
difference between winning and losing. Light conditions have a
dramatic effect on how the human eye perceives and,
subsequently how the body reacts and performs -- in the sun
glinting over the upper deck, shallow contrast on a putting green,
or quickly adjusting from shadows to light on a tennis court or
mountain bike single track.
http://en.wikipedia.org/wiki/Public_companyhttp://en.wikipedia.org/wiki/Beaverton,_Oregonhttp://en.wikipedia.org/wiki/Oregonhttp://en.wikipedia.org/wiki/Portland_metropolitan_areahttp://en.wikipedia.org/wiki/Athletic_shoehttp://en.wikipedia.org/wiki/Clothinghttp://en.wikipedia.org/wiki/Sports_equipmenthttp://en.wikipedia.org/wiki/Sports_equipmenthttp://en.wikipedia.org/wiki/Precision_Castparts_Corp.http://en.wikipedia.org/wiki/Fortune_500http://en.wikipedia.org/wiki/Bill_Bowermanhttp://en.wikipedia.org/wiki/Philip_Knighthttp://en.wikipedia.org/wiki/Nike_(mythology)http://en.wikipedia.org/wiki/Nike%2Bhttp://en.wikipedia.org/wiki/Air_Jordanhttp://en.wikipedia.org/wiki/Nike_Skateboardinghttp://en.wikipedia.org/wiki/Cole_Haanhttp://en.wikipedia.org/wiki/Hurley_Internationalhttp://en.wikipedia.org/wiki/Umbrohttp://en.wikipedia.org/wiki/Converse_(shoe_company)http://en.wikipedia.org/wiki/Nike_Bauerhttp://en.wikipedia.org/wiki/Swooshhttp://en.wikipedia.org/wiki/Public_companyhttp://en.wikipedia.org/wiki/Beaverton,_Oregonhttp://en.wikipedia.org/wiki/Oregonhttp://en.wikipedia.org/wiki/Portland_metropolitan_areahttp://en.wikipedia.org/wiki/Athletic_shoehttp://en.wikipedia.org/wiki/Clothinghttp://en.wikipedia.org/wiki/Sports_equipmenthttp://en.wikipedia.org/wiki/Sports_equipmenthttp://en.wikipedia.org/wiki/Precision_Castparts_Corp.http://en.wikipedia.org/wiki/Fortune_500http://en.wikipedia.org/wiki/Bill_Bowermanhttp://en.wikipedia.org/wiki/Philip_Knighthttp://en.wikipedia.org/wiki/Nike_(mythology)http://en.wikipedia.org/wiki/Nike%2Bhttp://en.wikipedia.org/wiki/Air_Jordanhttp://en.wikipedia.org/wiki/Nike_Skateboardinghttp://en.wikipedia.org/wiki/Cole_Haanhttp://en.wikipedia.org/wiki/Hurley_Internationalhttp://en.wikipedia.org/wiki/Umbrohttp://en.wikipedia.org/wiki/Converse_(shoe_company)http://en.wikipedia.org/wiki/Nike_Bauerhttp://en.wikipedia.org/wiki/Swoosh -
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Nike knows that in athletic competition, even small
advantages are critical to performance.
Introduction to the Product
Nike produces a wide range of sports equipment. Their first
products were track running shoes. They currently also make
shoes, jerseys, shorts, baselayers etc. for a wide range of sports
including track & field, baseball, ice hockey, tennis, Association
football, lacrosse, basketball and cricket. Nike Air Max is a line ofshoes first released by Nike, Inc. in 1987. The most recent
additions to their line are the Nike 6.0, Nike NYX, and Nike
SB shoes, designed for skateboarding. Nike has recently
introduced cricket shoes, called Air Zoom Yorker, designed to be
30% lighter than their competitors'. In 2008, Nike introduced the
Air Jordan XX3, a high performance basketball shoe designed with
the environment in mind.
Nike sells an assortment of products, including shoesand apparel for sports activities like association
football, basketball, running, combat sports, tennis, American
football,athletics, golfand cross training for men, women, and
children. Nike also sells shoes for outdoor activities such as
tennis, golf, skateboarding, association
football, baseball,American
football, cycling, volleyball, wrestling, cheerleading, aquatic
activities, auto racing and other athletic and recreational uses.
Nike is well known and popular in youth culture, chav culture
and hip hop culture as they supply urban fashion clothing. Nike
recently teamed up with Apple Inc. to produce the Nike+ product
which monitors a runner's performance via a radio device in the
shoe which links to the iPod nano. While the product generates
http://en.wikipedia.org/wiki/Baselayershttp://en.wikipedia.org/wiki/Track_%26_fieldhttp://en.wikipedia.org/wiki/Baseballhttp://en.wikipedia.org/wiki/Ice_hockeyhttp://en.wikipedia.org/wiki/Tennishttp://en.wikipedia.org/wiki/Association_footballhttp://en.wikipedia.org/wiki/Association_footballhttp://en.wikipedia.org/wiki/Lacrossehttp://en.wikipedia.org/wiki/Basketballhttp://en.wikipedia.org/wiki/Crickethttp://en.wikipedia.org/wiki/Nike_Air_Maxhttp://en.wikipedia.org/wiki/Nike_SBhttp://en.wikipedia.org/wiki/Nike_SBhttp://en.wikipedia.org/wiki/Skateboardinghttp://en.wikipedia.org/wiki/Apparelhttp://en.wikipedia.org/wiki/Football_(soccer)http://en.wikipedia.org/wiki/Football_(soccer)http://en.wikipedia.org/wiki/Basketballhttp://en.wikipedia.org/wiki/Runninghttp://en.wikipedia.org/wiki/Combat_sportshttp://en.wikipedia.org/wiki/Tennishttp://en.wikipedia.org/wiki/American_footballhttp://en.wikipedia.org/wiki/American_footballhttp://en.wikipedia.org/wiki/Athletics_(track_and_field)http://en.wikipedia.org/wiki/Golfhttp://en.wikipedia.org/wiki/Cross_traininghttp://en.wikipedia.org/wiki/Skateboardinghttp://en.wikipedia.org/wiki/Association_footballhttp://en.wikipedia.org/wiki/Association_footballhttp://en.wikipedia.org/wiki/Baseballhttp://en.wikipedia.org/wiki/American_footballhttp://en.wikipedia.org/wiki/American_footballhttp://en.wikipedia.org/wiki/Cyclinghttp://en.wikipedia.org/wiki/Volleyballhttp://en.wikipedia.org/wiki/Wrestlinghttp://en.wikipedia.org/wiki/Cheerleadinghttp://en.wikipedia.org/wiki/Youth_culturehttp://en.wikipedia.org/wiki/Chavhttp://en.wikipedia.org/wiki/Hip_hop_culturehttp://en.wikipedia.org/wiki/Urban_fashionhttp://en.wikipedia.org/wiki/Apple_Inc.http://en.wikipedia.org/wiki/Nike%2BiPodhttp://en.wikipedia.org/wiki/IPod_nanohttp://en.wikipedia.org/wiki/Baselayershttp://en.wikipedia.org/wiki/Track_%26_fieldhttp://en.wikipedia.org/wiki/Baseballhttp://en.wikipedia.org/wiki/Ice_hockeyhttp://en.wikipedia.org/wiki/Tennishttp://en.wikipedia.org/wiki/Association_footballhttp://en.wikipedia.org/wiki/Association_footballhttp://en.wikipedia.org/wiki/Lacrossehttp://en.wikipedia.org/wiki/Basketballhttp://en.wikipedia.org/wiki/Crickethttp://en.wikipedia.org/wiki/Nike_Air_Maxhttp://en.wikipedia.org/wiki/Nike_SBhttp://en.wikipedia.org/wiki/Nike_SBhttp://en.wikipedia.org/wiki/Skateboardinghttp://en.wikipedia.org/wiki/Apparelhttp://en.wikipedia.org/wiki/Football_(soccer)http://en.wikipedia.org/wiki/Football_(soccer)http://en.wikipedia.org/wiki/Basketballhttp://en.wikipedia.org/wiki/Runninghttp://en.wikipedia.org/wiki/Combat_sportshttp://en.wikipedia.org/wiki/Tennishttp://en.wikipedia.org/wiki/American_footballhttp://en.wikipedia.org/wiki/American_footballhttp://en.wikipedia.org/wiki/Athletics_(track_and_field)http://en.wikipedia.org/wiki/Golfhttp://en.wikipedia.org/wiki/Cross_traininghttp://en.wikipedia.org/wiki/Skateboardinghttp://en.wikipedia.org/wiki/Association_footballhttp://en.wikipedia.org/wiki/Association_footballhttp://en.wikipedia.org/wiki/Baseballhttp://en.wikipedia.org/wiki/American_footballhttp://en.wikipedia.org/wiki/American_footballhttp://en.wikipedia.org/wiki/Cyclinghttp://en.wikipedia.org/wiki/Volleyballhttp://en.wikipedia.org/wiki/Wrestlinghttp://en.wikipedia.org/wiki/Cheerleadinghttp://en.wikipedia.org/wiki/Youth_culturehttp://en.wikipedia.org/wiki/Chavhttp://en.wikipedia.org/wiki/Hip_hop_culturehttp://en.wikipedia.org/wiki/Urban_fashionhttp://en.wikipedia.org/wiki/Apple_Inc.http://en.wikipedia.org/wiki/Nike%2BiPodhttp://en.wikipedia.org/wiki/IPod_nano -
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useful statistics, it has been criticized by researchers who were
able to identify users' RFID devices from 60 feet (18 m) away
using small, concealable intelligence motes in a wireless sensor
network.
In 2004, they launched the SPARQ Training Program/Division.
Some of Nike's newest shoes contain Flywire and Lunarlite Foam.
These are materials used to reduce the weight of many types of
shoes.
Objectives
Brand loyalty
To study the tastes, preferences, and buying behavior of
consumers footwear
To recommend strategies to Nike to increase sales in India Are consumers aware of the stars endorsing the products?
http://en.wikipedia.org/wiki/RFIDhttp://en.wikipedia.org/wiki/Crossbow_Technologyhttp://en.wikipedia.org/wiki/Wireless_sensor_networkhttp://en.wikipedia.org/wiki/Wireless_sensor_networkhttp://en.wikipedia.org/wiki/Nike_SPARQhttp://en.wikipedia.org/wiki/Nike_Flywirehttp://en.wikipedia.org/wiki/RFIDhttp://en.wikipedia.org/wiki/Crossbow_Technologyhttp://en.wikipedia.org/wiki/Wireless_sensor_networkhttp://en.wikipedia.org/wiki/Wireless_sensor_networkhttp://en.wikipedia.org/wiki/Nike_SPARQhttp://en.wikipedia.org/wiki/Nike_Flywire -
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Features
Apart from delivering a pair of comfortable sports shoes Nikealso provides a number of value-added features with
its products. The features that are a part of every Nike sports
shoe are as follows.
High Performance Sports Shoes: Nike has patented the Air
system and has made it into a regular feature in most of its
models. Many models feature an air pocket in the shoe that
reduces the weight of the shoe and reduces pressure on theheels. Besides the overall design and compactness of the shoes
have made it a favorite of many professional athletes around
the world.
Comfort: Nike shoes are renowned all over the world for the
comfort they provide. Well padded and cushioned, they provide
a tremendous level of comfort to the wearer and reduce thestrain to his feet while playing.
Lightweight: This attribute is in line with the two described
above. A lightweight shoe provides greater mobility and eases
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the pressure on the feet of the wearer.
Durability: People purchasing a pair of shoes at such a high
price often feel that they have made an investment. Theywould obviously want to see their shoes last a long time. To
prove this point we draw the example of the authors of
this marketing plan. All of us own a pair of Nikes and have
been wearing them for well over two years a symbol of the
durability of Nike shoes.
Style: Nikes designs are considered to be the most stylish inthe industry and beat all others as far as looks are concerned.
Attractively packaged, it is a delight to bring a pair home. Add
to this the Swoosh the most recognizable symbol in sports
and you have a product that would give the user a definite
sense of pride.
Nike shoes also come with a guarantee card that
enables the owner to return it in case of manufacturing defects.However, owing to the fact that the company implements strict
quality control measures, coming across a defective pair in a
store are a rarity. The most recent additions to their line are
the Nike 6.0 and Nike SB shoes, designed for skateboarding.
Nike has recently introduced cricket shoes, called Air Zoom
Yorker, designed to be 30% lighter than their competitors'. Nike
positions its products in such a way as to try to appeal to a
"youthful....materialistic crowd. It is positioned as apremium performance brand.
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Process
TYPE OF RESEARCH DONE: -
Descriptive research
Descriptive research includes Surveys and fact-finding enquiries
of different kinds. The main characteristic of this method is that
the researcher has no control over the variables; he can only
report what has happened or what is happening
DATA SOURCES
There are two types of data.
Source of primary data for the present study is collected through
questionnaire and answered by consumers of Nike shoes. The
secondary data is collected from journals, books and through
Internet search.
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PRIMARY DATA
The data that is collected first hand by someone specifically for
the purpose of facilitating the study is known as primary data. So
in this research the data is collected from respondents through
questionnaire.
SECONDARY DATA
For the company information I had used secondary data like
brochures, web site of the company etc.
The Method used by me is Survey Method as the research done is
Descriptive Research.
RESEARCH INSTRUMENTS
Selected instrument for Data Collection for Survey is
Questionnaire.
QUESTIONNAIRE DESIGN FORMULATION
Under this method, list of questions pertaining to the survey are
prepared for marketing staff of consumers of Nike shoes.
Questionnaire has structured type questions as well as
unstructured type questions. Structured objective type questions
are prepared for the respondents with fixed response categories.
Some of the questions are of multiple-choice type. The questionshave more than one alternative.
Questionnaire: - A questionnaire consists of a set of questions
presented to respondent for their answers. It can be Closed Ended
or Open Ended
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EXTENT:-
Where the survey should be carried out?
I have covered entire residential area of Vashi city for the survey
SAMPLING FRAME:-
The source from which the sample is drawn
SAMPLING TECHNIQUE: -
How should the respondent be chosen?
In the Project sampling is done on basis of Probability sampling.
Among the probability sampling design the sampling design
chosen is stratified random sampling.Because in this survey I had stratified the sample in different age
group, different gender and different profession
SAMPLE SIZE
Consumers of shoes, 50 nos
STEPS FOLLOWED IN COMPLETING THE STUDY
(i) Libraries
(ii) Internet sites containing information on Nike shoes
& marketing are browsed.
(iii) Sample survey was conducted.
(iv) Data was thoroughly checked for error.
DATA PROCESSING METHODOLOGY(i) Once the primary data have been collected, they are (I) edited
inspected, corrected and modified.
(ii) Tabulation bring similar data together and totaling them in
meaningful categories.
Questionnaires are edited both in the field and later in home.
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Field editing took place just often the interview. Generally editing
is required for open type of questions. Brief notes or symbols are
frequently used during the interview to initially record the
interviewers response since it was not desirable to interrupt the
flow with lengthy note taking. Then immediately after theinterview, brief notes are respondent. The responses are
thoroughly checked in home for incorrect, inconsequential or
contradictions categories are developed only often the replies has
been reviewed. This review provided a feel for the pattern of
answers and thus determine what categories best represent the
answers.
The collected data are placed into an order. Percentages ofrespondents answered similarly are calculated and placed in a
table. Then this is interpreted. This involved drawing conclusion
from the gathered data. Interpretation changes the new
information immerging from the analysis into information that is
pertinent or relevant to the study.
CONCLUSION WAS DRAWN BASED ON THE SURVEY FINDINGSFinally recommendation was made to improve the sales strategy
of Nike shoes to increase the sales volume in ladies segment.
SAMPLE DESIGN
THE BASIS OF SAMPLING: -
Consumers of Nike shoes are chosen randomly, so that unbiased,
representative sample may be obtained.
LIMITATIONS OF RESEARCH
The geographical area was very much limited to residential area
& so the results are not particularly reflection of the current
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behavior.
BIASES AND NON-COOPERATION OF THE RESPONDENTS.
The collected data are placed into an order. Percentages ofrespondents answered similarly are calculated and placed in
a table. Then this is interpreted. This involved drawing
conclusion from the gathered data. Interpretation changes
the new information immerging from the analysis into
information that is pertinent or relevant to the study.
Due to limited time period and constrained working hours for
most of the respondents, the answers at times were vagueenough to be ignored.
Most of the people in India take their Nike Shoes in the
period preceding March & so the response to initial contacts
were not all encouraging and that has been the primary
reason in the inability to quantify the results large enough so
as to deduce any relevant outcomes
Study on the company
Bill Bowerman said this couple of decades ago. The guy was right.
It defines how he viewed the world, and it defines how Nike
pursues its destiny. Ours is a language of sports, a universally
understood lexicon of passion and competition. A lot has
happened at Nike in the 30 years since we entered the industry,
most of it good, some of it downright embarrassing. But through it
all, we remain totally focused on creating performance
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opportunities for everyone who would benefit, and offering
empowering messages for everyone who would listen.
We feel lucky to have a genuine, altruistic reason to be: the
service of human potential. That's the great benefit of sports, andwe're glad to be in the middle of it.
What started with a handshake between two running geeks in
sleepy Eugene, Oregon, are now the world's most competitive
sports and Fitness Company. The World Headquarters is in
Beaverton, Oregon. The Pacific Northwest is Nike's hometown, but
like so many ambitious souls, we have expanded our horizons to
every corner of the world. Nike employs around 23,000 people,
and every one of them is significant to our mission of bringing
inspiration and innovation to every athlete in the world.
Along the way Nike joined up with some great partner companies
that help extend our reach within and beyond sports.
Cole Haan offers casual luxury footwear and accessories out of
New York City and Yarmouth, Maine.
Bauer Nike Hockey, based in Montreal, Quebec, is the world's
leading manufacturer of hockey equipment and a wholly owned
subsidiary of Nike, Inc.
Nike partnered with Hurley International, a premium teen lifestyle
brand founded by 20-year industry veteran Bob Hurley based in
Costa Mesa, California.
In 2003, Nike completed the acquisition of Converse, the globally
recognized footwear brand with nearly a century of sports
heritage, and home of the perennially popular Chuck Taylor All-
Star and Jack Purcell footwear.
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Exeter Brands Group: In August 2004, Nike created the Exeter
Brands Group, a wholly owned subsidiary, dedicated to building
athletic footwear and apparel brands for the value retail channel.
This portfolio of brands includes the Official Starter Properties LLCand Official Starter LLC which are the sole owners and licensors of
the Starter, Team Starter and Asphalt brand names as well as
master licensee of the Shaq and Dunkman brands, a line of
athletic apparel, footwear and accessoryproducts for the value
retail channel.
Separate business units within the Nike brand include The
Jordan/Jumpman 23 brand and Nike Golf.
As small as we feel, the Nike family is a fairly vast enterprise. We
operate on six continents. Our suppliers, shippers, retailers and
service providers employ close to 1 million people. The diversity
inherent in such size is helping Nike evolve its role as a global
company. We see a bigger picture today than when we started,
one that includes building sustainable business with sound labor
practices. We retain the zeal of youth yet act on ourresponsibilities as a global corporate citizen.
If you have a body, you are an athlete. And as long
as there are athletes, there will be Nike.
HISTORICAL BACKGROUND
It began in 1964 with a casual agreement and a handshake
between University of Oregon track coach Bill Bowerman and Phil
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Knight, a middle-distance runner. The pair formed Blue Ribbon
Sports and began importing Japanese brand Onitsuka Tiger
running shoes, known today as ASICs, for sale in the U.S.
In 1967, Knight and Bowerman made the handshake deal formaland incorporated as BRS Inc. Jeff Johnson signed on in 1965 as the
company's first full-time salesperson and opened Blue Ribbon
Sports' first retail outlet the following year. In 1971, Johnson made
an incalculable contribution to the company: One night, he
dreamed of Nike, the Greek goddess of victory, and suggested the
name to his bosses. The company used the moniker for its first
footwear product to feature the "Swoosh" mark -- a soccer cleat
called the Nike, whose name beat out Knight's suggestion thatthey call it the Dimension 6.
The Swoosh trademark was created by a graphic-design student
from Portland State University named Carolyn Davidson. She got
$35 for her creation.
Expanding the Nike Brand
Looking to expand the line, Bowerman began experimenting with
the concept of athletic shoes with rubber spikes. By pouring a
liquid rubber compound into his wife's waffle iron, Bowerman
created an innovative running-shoe sole. The company unveiled
Nike "Moon Shoes" featuring the Waffle sole for athletes
competing at the U.S. Olympic Trials in Eugene, Ore., in 1972. A
succession of shoes, many based on the waffle outsole, followed.
Some of the most famous are the Waffle Racer, Air Force One and
Air Max 97.
When tees featuring a lower-case "nike" script logo designed by
Davidson hitstores that year, folks unfamiliar with the name
asked, "Who's Mike?" when they spotted the shirts.
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Elite Sponsors: Athletes in Nike Shoes
A growing number of elite athletes competed in Nike footwear.
Runner Mark Covert was the first athlete to wear Nike shoes
across a finish line. Nike shoes got their first endorsement by aprofessional athlete when Romanian tennis personality Ilie
Nastase signed on to wear Nikes on the court.
In 1977, former aerospace engineer Frank Rudy teamed with Nike
to create the first Air-Sole units -- durable bags filled with
pressurized gas that compressed under impact, then sprang back.
The result was Nike Air cushioning, which hit stores in 1979.
In 1980, Nike went public.
The year 1984 saw the signing of basketball megastar Michael
Jordan to an endorsement contract, followed by the 1985 release
of his signature shoe, the Air Jordan. Originally, the NBA banned
this new shoe because it didn't match the league's dress code,
but the ban simply served to give the design a higher profile and
extensive publicity.
Nike revenues topped $1 billion for the first time in 1986. The
rest, as they say, is history.
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Superstar Follow-Up
Nike followed up on its footwear fame by dressing athletes from
head to toe, introducing apparel collections for tennis and
basketball, which were popularized respectively by superstarsJohn McEnroe and Michael Jordan. In 1988, Nike's "Just Do It"
slogan was introduced, and it remains one of the most
recognizable and successful commercial taglines. In 1990, the
first NikeTown store opened in Portland, Ore. The company signed
golfing phenom Tiger Woods in 1996.
In 1999, Bill Bowerman, Nike's co-founder, died at age 88. The
company bought bankrupt rival Converse for $305 million in2003. In 2004, Phil Knight stepped down as CEO and president of
Nike, but he continues as chairman. Headquartered in Beaverton,
Ore., Nike remains one of the largest and most successful
companies operating today.
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Present status
Nike India has said that its Faridabad and Mokamehghat units are
being taken over by Fashion Shoe Private Ltd and BDCL
Enterprises Pvt Ltd, respectively. The company is also enabling
the buy back provision in its Articles of association to enable buy
back of shares.
The assets and liabilities of both the units will be transferred to
these companies and shares will be offered in the agreed ratio to
the existing shareholders of Nike India Ltd on a record date, whichwill be fixed by the Calcutta High Court.
While retail sales have increased both in value and volume,
wholesale sales have declined due to restriction of supplies as a
means to recover customersoutstanding. General recession and
sluggish market conditions in the industry also have had a direct
impact on lower sales and profitability. Resistance of consumers
to price rises in popular volume products as well as discounts toclear slow-moving stocks and under utilization of production
capacity adversely affected the operational results. The lockout
declared at the Peenya factory on October 1, 2007 due to serious
industrial relation problems and non-compliance with the
tripartite settlement has been withdrawn. The footwear
manufactured in this factory, which was shifted to the companys
other factories and associated manufacturers, will now be
gradually produced within the factory. The commencement ofproduction from this factory will help in re-cooping the minimal
loss being suffered by the company from this lockout.
The management says that it is not averse to outsourcing if it
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worked out cheaper. It is also open to the idea of importing shoes
- mostly from China - if it works out cheaper.
Nike and Reebok India Company have announced an agreement
to foray into retailing partnership for sale of Reebok and Rockport
footwear in Nike outlets. The partnership entails retailing a rangeof sports shoes for walking, running, tennis and training for
personal fitness and sports ranging between Rs 900-2,500.
An attractive valuation compared to its peers is the main trigger
for the scrip. Besides, the companys aggressive focus on retailing
and revamping of business (a division into shoes and apparels) is
also helping sentiment for the scrip. Plans are afoot to start
selling apparel in India made by the joint venture North Star.Theres talk that the company is planning on a voluntary
retirement scheme (VRS) to cut costs.
For the third quarter ended 30 September 2007, Nike India
reduced its losses to Rs 5.68 crore (Rs 8.51 crore) on a 9.2%
increase in net profit to Rs 154.27 crore (Rs 141.26 crore).
Despite reducing its losses for the quarter, Nike India has, over
the last few quarters, been continuously recording weakperformances as a result of an overall slowdown in the industry
due to lower consumer spending. Increasing domestic
competition, particularly from the unorganized sector, has also
been eroding into the companys market share.
The company is finding it difficult to maintain its market share in
a highly price-sensitive Indian market, despite having strong
brand recall.
97% of the companys revenues are from the domestic market
while the remainder is from exports. Nike India is the biggest
player in the Indian shoe market.
Nike Indias major problems include its high cost of production
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and low emphasis on marketing. The company may be able to
address the first problem through outsourcing products. Batas
brand image has been restricted to that of a company that
emphasizes on utilitarian products more than trendy ones.
Customers feel the company is lacking in innovation. Hence, theirpreference has shifted to other local brands.
Nike India has a large marketing network with over 1,500
showrooms, 27 wholesale depots and eight retail distribution
centers across the country.
Besides, there is a network of 300 exclusive wholesalers servicing
25,000 dealers all over the country. However, in spite of this andthe license to sell other brands like Nike, Hush Puppies and Lotto,
Nike has not been able to improve sales consistently. The recent
rise in sales during the third quarter ended September 2006 can
be attributed to the festive season. Recently, it also entered into a
retailing tie-up for Lee Cooper shoes.
Nike India has also been trying to focus on
aggressive marketing of its product. The company has been goingthrough a period of transition for the past one year. With the
expansion of the retail industry in New Delhi and Mumbai, the
company has recently decided to shift its marketing operations to
Delhi in order to provide value shopping for its customers.
However, the manufacturing activity and the registered office will
continue at Kolkata.
Nike India has plans to invest in sophisticated machinery to retainits niche place in manufacturing. The company has put a fresh
focus to its retail business. The company has decided to cleanse
its wholesale operation by building relationships with credit-
worthy buyers.
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It is to the companys credit that it has lately overhauled
its marketing set-up into a four-tier retail structure that will be
stocked with products matching the areas customer profile. A
Nike outlet in an up market place will offer a distinctly different
range of footwear from another in the suburbs.
At the top of the four-tier structure will be international stores
stocking brands like Nike and Reebok. Next will be city stores,
located in up market areas and catering to middle and high-
income groups. The company has identified the brands Power,
North Star, Bubble gummers, Marie Claire and Hush Puppies for
the top end of the market. Third in line will be family stores at
commercial locations displaying basic and mid-range footwear. Atthe bottom will be bazaar stores that will basically aim at driving
volume sales at lower price points.
The management of Nike India is taking major steps in terms of
improving market penetration, focus on stores configuration,
distribution logistics, better industrial relations and overhead
rationalization. Launching of new products always remained at
the center stage of the companys operations.
At the same time, with the opening up of the economy, more and
more goods will be imported from China. This may significantly
affect Nike Indias prospects unless it manages to wean away
customers with a drastic cut in costs. Alternatively, like other
Indian manufacturers, even Nike may consider relocating its
manufacturing bases in China. However, it is not that easy a task
to undertake.
Nike India, the 51% subsidiary of Toronto-based Nike Shoe
Organization, remains the biggest player in the Indian shoe
market, though its share in footfalls has been decreasing over the
years.
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Now in a determined bid to straddle across all product and price
points, Nike India has decided to restructure its 1,300-outlet
strong retail business division along specific customer segments
into Bazaar, Family, and City and Flagship stores.
Nike India has decided to appoint brand managers for each
product group in a newfound aggression to tackle dwindling sales.
Each of these managers assisted by a dedicated team would be
like a brand champion responsible for procurement, production,
advertisement, promotion and re-supply.
Nike India has roped in Ogilvy & Mother for devising its festiveseason advertising, side-stepping JWT, its incumbent agency. The
job involves developing special communication directed towards
the festival season shoppers.
Nike India Ltd (BIL) is Indias largest footwear company selling
over 60 Mn pairs per year in India, USA, UK, Europe, Middle East
and Far East. BIL has a market share of 60% in
leather products and 70% in canvas shoes.
The footwear industry in India is highly fragmented and
dominated by the unorganized sector. The industry size is around
Rs 75 Bn and is growing at around 10% annually. It competes with
Indian players such as Liberty Shoes, Phoenix International, Mirza
Tanners, Tatas, Action Shoes and Lakhani Shoes and global
players like Adidas, Reebok and Nike. Accessories and garments
contribute footwear sales account for more than 96% of saleswhile the balance. The turnover break up is as follows
Products Volume (%) Value (%)
Rubber and Canvas 50: 30
Leather 29 :57
Plastic 21: 9
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GROWTH DRIVERS
The company has a very comprehensive distribution network
which comprises its own and franchise stores. It has 1500showrooms, 25 wholesale depots and 8 distribution centers.
POPULAR BRANDS
Nike owns brands like Hush Puppies, Signor, Marie Claire Power,
Sandak, Hawai, Naughty boy and Ambassador. It also distributes
other brands such as Nike and Lotto.
Focus on middle-class and upper class Nike will continue to focus
on middle and upper class customers. It is introducing budgetstores which will help customers to identify with the brand. It is
also increasing focus on rural thrust for volume growth in the
low-priced footwear segment.
RISK AND CONCERN
Lifting of quantitative restriction on import of footwear will lead to
the market being flooded by imports. Labor issues have always
bothered BIL and this resulted in disruption of manufacturingactivities on numerous occasions. Competition is hotting up in the
domestic market due to popular brands such as Gaitonde, Red
Tape, Lotus Bawa and Tatas. These brands are gaining market
share especially in the premium segment and in this segment BIL
has no significant presence.
Latest Results Sales for Q3 FY2000 increased by 5.5% yoy to
Rs1.7bn. profits dropped by 90% yoy to Rs3.8 Mn due to loweroperating margins and higher depreciation and interest.
Depreciation increased by 6.3% yoy to Rs 37 Mn while interest
cost increased by 9.3% yoy to Rs 23.4 Mn.
Operating margins dropped by 3.3% due to increase in input cost.
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The Peenya plant has not commenced operations despite lifting
up of the lock out since July 3, 2007.
VALUATION
BILs long-term success is dependent on the how labour issue istackled and the flexibility, which it can adopt to meet threat of
imports and competition from local footwear companies. Long
term investors with a two-year investment horizon can
accumulate the stock at current levels. It is also increasing focus
on rural thrust for volume growth in the low-priced footwear
segment.
Lifting of quantitative restriction on import of footwear will lead tothe market being flooded by imports.
Labor issues have always bothered BIL and this resulted in
disruption of manufacturing activities on numerous occasions.
Competition is hotting up in the domestic market due to popular
brands such as Gaitonde, Red Tape, Lotus Bawa and Tatas. These
brands are gaining market share especially in the premiumsegment and in this segment BIL has no significant presence.
Sales for Q1 CY2001 decreased marginally by 0.6% yoy to Rs
1590.7 mn. There was a net loss of Rs 30.2 mn as against a profit
of Rs 39.6 mn in the corresponding period of the previous year.
The loss is due to lower operating margins and higher interest.
BILs long-term success is dependent on the labor issue and the
flexibility, which it can adopt to meet threat of imports andcompetition from local footwear companies. Long term investors
with a two-year investment horizon can accumulate the stock at
current levels.
FINANCIAL HIGHLIGHTS
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(In Rs Million) 200012 (12) 199912 (12) 199812 (12) Q1200103
Q1200003
Sales 7,315.70 7,103.90 6,353.20 1590.7 1600.9
% Growth 2.98 11.82 (0.6)
Net Profit 304.60 242.60 166.30 (30.2) 39.6
% Growth 25.56 45.88 (176)
EPS(Rs) 5.90 4.70 3.20 3.08
% Growth 25.53 46.88
Nike understated 9 month losses -
Brief Financials (in Rs. Mn.)Detailed Quarterly
Period ending (months)30-Sep-2007 (9)31-Dec-2006(12)31-Dec-2006 (12)
Net sales 4980.206461.177172.91
Other Income42.1063.6165.21
Total Income5022.306524.777238.12
Cost of goods sold4974.706471.797051.76
As on 30 June 2007, the public, institutions and foreign bodies
held31.23%, 13.91% and 0.16% stake in the company, respectively
4PS OF NIKE
Nikes 4Ps comprised of the following approaches to pricing,
distribution, advertising and promotion, and customer service:
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Pricing: Nikes pricing is designed to be competitive to the other
fashion shoe retailers. The pricing is based on the basis of
premium segment as target customers. Nike as a brand
commands high premium.
Place: Nike shoes are distributed to Multi Brand store front and
the exclusive Nike stores across countries. While this necessitates
a second trip for the customer to come and pick up the shoes, it
allows Nike to offer a much wider selection than any of the
competition.
Promotion: Location, targeted advertising in the newspaper and
strategic alliances serves as the foundation of Nike advertisingand promotion effort. The athletes and other famous sports
personalities are always taken as brand ambassadors. They form
the prime building blocks of their portion strategy.
Product: The product range of Nike comprise of shoes, sports
wear, watches etc. Its product history began with long distance
running shoes in 1963. (Past 17 years: Air Jordan basketball
shoes). Wide range of shoes, apparel and equipment. Forexample:
Nike Oregon Digital Super Watch
Nike Presto Cee Digital Medium Watch
Nike Presto Cee Digital Small Watch
Nike Ron Analog Watch
Nike Triax 10 Regular Watch
Nike Triax Armored II Analog Super Watch
Nike Women's Imara Fit Digital Watch
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QUESTIONNAIRE
1. I buy my own shoes
Very frequently
frequently
sometimes
never
2 .I find buying shoes a pleasurable event.
Very frequently
frequently
sometimes
never
3. I buy costly shoes
Very frequently
frequently
sometimes
never
4. for purchasing shoes, I can travel long distance
Very frequently
frequentlysometimes
never
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5. I buy shoes which are liked by my family
Strongly agree
Agree
Indifferent
Disagree
Strongly disagree
6. I buy shoes which are advertised attractitively
Strongly agree
Agree
Indifferent
Disagree
Strongly disagree
7. I buy shoes which are advertised and endorsed by
celebrity.
8. I like to buy shoes which are imported from Paris or
Italy.
Strongly agree
Agree
Indifferent
Disagree
Strongly disagree
9. I like to buy shoes which are designed in Paris or Italy.
10. I like to buy shoes which are very stylish & of latest
design.
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Strongly agree
Agree
Indifferent
Disagree
Strongly disagree
11. I like to buy shoes which are less expensive but very
stylish & of latest design.
Strongly agree
Agree
Indifferent
DisagreeStrongly disagree
12. I Like to buy shoes which are not very stylish but
comfortable
Strongly agree
Agree
Indifferent
Disagree
Strongly disagree
13. I Like to buy shoes which are not stylish but
comfortable and long lasting
Strongly agree
Agree
Indifferent
DisagreeStrongly disagree
14. I Like to buy shoes which are expensive & stylish but
comfortable strongly agree
Agree
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Indifferent
Disagree
Strongly disagree
15. I like to buy Nike shoes which are expensive & stylish
but comfortable
Strongly agree
Agree
Indifferent
Disagree
Strongly disagree
16. I like to buy Nike shoes which are not very stylish but
comfortable
Strongly agree
Agree
Indifferent
Disagree
Strongly disagree
17. I like to buy Nike shoes which are not stylish but
comfortable and long lastingStrongly agree
Agree
Indifferent
Disagree
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Strongly disagree
18. I like to buy Nike shoes which are not very stylish but
comfortable
Strongly agree
Agree
Indifferent
DisagreeStrongly disagree
19. I like to buy Nike shoes which are less expensive but
very stylish & of latest design.
Strongly agree
Agree
Indifferent
DisagreeStrongly disagree
20. I like to buy Nikes hoes which are very stylish & of
latest design.
Strongly agree
Agree Indifferent
Disagree
Strongly disagree
21. I like to buy Tailor made shoes which are very stylish
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& of latest design.
Strongly agree
Agree
Indifferent
Disagree
strongly disagree
22 .I will certainly buy shoes if high quality matching
imitation jewelry given free.
Strongly agree
Agree
IndifferentDisagree
Strongly disagree
23. I will certainly buy shoes if high quality imported
scent given free.
Strongly agree
Agree
IndifferentDisagree
Strongly disagree
24. My expectation is fulfilled by my shoe supplier.
Strongly agree
Agree
Indifferent
Disagree
Strongly disagree
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25. Shoe companies should survey customer preferences.
Strongly agree
Agree
Indifferent
Disagree
Strongly disagree
26. Shoe companies should suggest shoe design using
celebrity.
Strongly agree
Agree
IndifferentDisagree
Strongly disagree
27. I know exactly what I want in my shoes.
Strongly agree
Agree
Indifferent
DisagreeStrongly disagree
28. I dont want to spend too much time on deciding my
shoes.
Strongly agree
Agree
IndifferentDisagree
Strongly disagree
29. Stores display is the best form of advertisement
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Strongly agree
Agree
Indifferent
Disagree
Strongly disagree
30. T.V advertisement is the best form of advertisement
Strongly agreeAgree
Indifferent
Disagree
Strongly disagree
31. Buying customized shoe by internet is very attractive.
Strongly agree
Agree
Indifferent
Disagree
Strongly disagree
32 Buying customized shoe by internet is very attractive.But no spam mail.
Strongly agree
Agree
Indifferent
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Disagree
Strongly disagree
Statistics1. Do you ask for a specific brand by name?
90% people say yes to this. and the remaining 10% say no.
2. Which brand do you generally use?
People in India prefer Nike the most as we can see that 24%
% people prefer Nike sports wear. Then comes Adidas and
Reebok.
3. Has any sports shoes ad (seen on TV/in a magazine) made
an impact on you?
YES NO IF YES, THEN WHY
NIKE 43 57
ADIDAS 63 37
REEBOK 45 55
ACTION 30 70
Most of the people are influenced with Adidass ad, then with
Reebok and then Nike. The most un-influential is that of
action.
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4. What according to you is the relative importance of the
following?
V. Imp Imp. Not so Imp. Doesnt matter
PRICE 50 28 12 10
DURABILITY 55 45 0 0BRAND IMAGE 40 20 15 15
COMFORTABLE 54 36 10 0
LOOKS 40 40 15 5
By this we infer that the consumer wants the shoe to be
durable that is of primary importance for them. Then the
price is also very important for them. The shoe should be
comfortable. Along with that looks and the brand image isalso important.
5. What features of Nike do you like the most?
The most liked feature of Nike is the light weight shoe. Then
it is the enhanced toe support. From here we can infer that
most important aspect for the consumers is the comfort they
get from the shoes.
6. What range do you prefer?
Larger number of people goes in for shoes
that come under the range of Rs. 1500-3500. A s we know
that Nike is a premium brand 27% of the buy shoes that falls
under the range of Rs. 3500-7500 and lesser no. of people
buy shoes ranging in between 3500 and 5500
7. How often you buy Nike?
62% of the consumers buy Nike only once a year. Here we
notice one thing that some dont buy Nike
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8. Are you satisfied buying Nike?
The people who buy Nike are fully satisfied buying it, theirpercentage is 64%. Only 15 % are not satisfied buying it.
9. Do you think Nike serves the purpose of being a good brand,
for Sports wear?
56% of the people agree that Nike serves its purpose for
being a sport brand. Only 27% people dont agree with it
10.Will you prefer Nike launching a new range which can servethe purpose of service class
67% say yes to the idea of launching a new range for the
service class. 36 dont have any idea of this.
Hypothesis
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I wanted to find out which brand of shoes is the most
popular for
consumers in Vashi. I also wanted to know their reasonsfor buying a
certain brand of shoes. My hypothesis stated that the
most
popular shoes for consumers will be the Nike
I found out that the majority of consumers picked "Nike " and
"Adidas" for their most favorite pair of shoes when given a choice
between Puma, Reebok, and New Balance. The majority of
consumers picked their favorite pair of shoes because the shoes
were comfortable. The majority of students disliked Puma
because they were not comfortable.
Therefore, I accepted my hypothesis which stated that "Nike"
would be the most popular shoes.
I wanted to find out whether the consumers are aware of
the stars endorsing the products and do they wear it
because they are wearing it? My hypothesis stated that
they are aware of who are endorsing it and they wear it
because they are wearing it.
I found out that the majority of the consumers are not aware of
the stars endorsing the products and they dont wear it becausethey are wearing it because they are not be comfortable wearing
it
Therefore, I rejected my hypothesis which stated that the
consumers are aware of the stars endorsing the products and do
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they wear it because they are wearing it
Conclusions and suggestions
The specific brand objective of Nike India would be to build
up its brand reputation, image and equity. A brand is not
simply a collection of products and benefits, but also a
storehouse of value stemming from awareness, loyalty, and
association of quality and brand personality. A brand is a
name, term, sign, symbol or design or a combination of themintended to identify the goods or services of one seller or
group of sellers and to differentiate from those of
competitors. In essence, a brand identifies the seller or
maker. It can convey up to six levels of meaning: Attributes,
Benefits, Values, Culture, Personality and User. If a company
treats a brand only as a name it misses the point. The
branding challenge is to develop a deep set of positive
associations for the brand.
Although these six meanings are noticeable in the Nike
brand in the west and other parts of the world, they are yet
to be cultivated in India. Nike has to ensure that their brand
is built up on these pillars in India.
The secondary brand objective of Nike India would be to
ensure that they match the market share and sales volumesof its competitors. After all, a company is in business to
make profits and stay ahead of its competitors. A company,
product or brand may have a very good reputation and
image, but if it is not profitable, it does serve its purpose. At
the same time sales figures and data can be misleading.
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Hence market share has also to be paid attention to.
Nike despite being one of the most popular brands in the
world has not really caught on in India. Yet, there is reason
to believe that Batas Power and Liberty would be ahead ofNike in terms of popularity. We also notice that Nike is at par
with Reebok. This again does not reflect too well on the
brand, considering that Nike outsells Reebok everywhere
else in the world.
Hence it is reasonable to state that Nikes popularity level in
India could do with a boost. The best way to achieve this
would be some serious brand building. The image of thebrand has to be improved and people must be made aware
of its presence. Thus, the rationale behind choosing
improvement of brand image and reputation as the
companys primary objective is quite clear.
Nikes distinctive competency lies in the area of marketing,
particularity in the area of consumer brand awareness and
brand power. On the global scale this key distinctivecompetency towers over the competitors. As a result, Nikes
market share is number-one in the athletic footwear industry
in most places around the world. Catch phrases like, "Just Do
It," and symbols like the Nike "Swoosh," couple with sports
icons to serve as instant reminders of the Nike Empire. It is
about time that this competency is leveraged on to India.
Two key attributes of a distinctive competency are itsinability to be easily replicated and the value or benefit it
offers to consumers. Few companies have such a
recognizable image and the resources to promote it. This
ultimately translates into added value for consumers. The
public benefits from the strength of Nikes image at the point
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of purchase. For decades, consumers have come to
associate the Nike image with quality products. By
associating star athletes and motivational slogans like, "Just
Do It," with marketing campaigns that emphasize fitness,
competition, and sportsmanship, consumers identify theirpurchases with the prospect of achieving greatness. Younger
consumers especially benefit from this positive influence.
This image is something that competing companies can not
easily duplicate by simply enhancing the physical
characteristics of their products.
Nikes vision is to remain the leader in the industry. The
company will continue to produce the quality products thathave been provided in the past. Most importantly, Nike will
continue to meet the ever-changing needs of the customers,
through product innovation. In the past, the company has
utilized product differentiation as the main competitive
strategy. As Nikes reputation dictates, it will continue to
place emphasis in this area. Nike has built its business on
providingproducts that rise above all others and this has
made it the worldwide success that it is today.
Nike is known for its technologically advanced products and
is the leader in this area. This allows Nikes products to stand
out from the rest. The companys focus also allows it to
maintain a somewhat narrow niche that enables it to
effectively capture the needs and wants of the consumers.
An example of Nikes superior and innovative technology is
its new range of shoes called Air Presto. Termed as thefirst T-shirt for the feet, these shoes can take the shape and
size of the wearers feet. Unlike regular shoes it comes are
sizes like XL, L, M, S and XS. Each of these sizes can
accommodate three conventional foot sizes. Nike will
continue to produce such path-breaking products in the
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future and stay a step ahead of its competitors.
Nike will also focus on making a strong effort in price
leadership. Nikes products in the past have been
concentrated in the higher end of the pricing category. Anentrance will now be made into lower price categories with
these quality products. This will enable Nike to capture an
even greater hold on market share.
Presently, the only form of customer relationship
management activity that Nike has adopted in India is
product warranty. Nike shoes come with a six-monthwarranty. If the shoe is found to be defective or wears out
within six months due to no fault of the wearer, Nike
replaces the product. This is only the first step and more
needs to be dome in this area.
Being a company that always strives towards excellence,
Nike needs to know exactly what its customers think about
their products. A good way of assessing this would be to
have the customer fill in a form at the point of purchase. Theform will ask the customer his / her opinion on the product
as well as the showroom. Suggestions and comments would
be welcome. However, care must be taken to ensure that
these forms are not too cumbersome and do not take up too
much of the customers time. Surveys have indicated that
normally people dont mind filling in forms as long as they
are not too long.
Another good method would be to introduce a system of
customer points. Every time a customer makes a purchase,
he would earn himself a certain number of points, depending
on the price of the product. After he crosses a certain point
level, he would be entitled to a gift from the company or
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choose a product of a certain value from the range. This
would be helpful in building customer loyalty and give them
an incentive to make repeat purchases. A most valued
customer database could be created from her e and various
forms of direct marketing could be directed at them. Thiswould help the company to retain its existing customers.
A third way to improve customer relationship would be to
issue gift coupons and vouchers. People would have the
facility to buy these vouchers and present them to their dear
ones. This would be a good way to reach out towards newer
customers through existing ones.
Recommendations
Department stores are the prime sales
and marketing channel for consumer goods. In addition,
store decorations and product displays should be designed
to create a strong first impression. Seasonal promotion
campaigns, like special discounts and advertisements, couldbe employed. New lines of collections should be introduced
for festivals.
In addition to promotional activities in shopping malls and
department stores, discounts and TV commercials are
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considered effective channels for promotion. It is advisable
to pay attention to the affordability of customers in different
cities, while setting price points for different product
categories.
Regarding colors, black is by far most sought-after with dark
brown in second place.
Bibliography
BOOKS:-
Marketing Management - Philip Kotler
Consumer Behavior, 6th Edition, by Hawkins, Best ad Coney.
WEBSITES:-
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Nikebiz : NIKE, Inc. Official Site, the worlds largest, leading
athletic brand
Nike town:
Business.com: - The Business Search Engine and Business
Directory for Business InformationNikes online store for India
Wikipedia