MBA 3 - 1312
RETAIL ASSIGNMENT – NIKE STORE
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TABLE OF CONTENTS
1. INTRODUCTION 2
2. COMPANY PORTFOLIO 2
3. OVERVIEW OF THE VALUE CHAIN 3
4. MARKETING MIX 4
5. MARKETING STRATEGY 5
6. MARKET SEGMENTATION 5
7. TARGETING STRATEGY 5
8. PRICING STRATEGY 6
9. DISTRIBUTION STRATEGY 6
10.COMMUNICATION AND PROMOTIONAL STRATEGY 7
11.STORE LAYOUT STRATEGY 7
12.MERCHANDISE MIX 9
13.CORPORATE SOCIAL RESPONSIBILITY 10
15.RETURN ON INVESTED CAPITAL 12
16.REVENUE PERFORMANCE 12
17.PLAN FOR GROWTH 13
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As the world’s leading Equipment Company, NIKE, is dedicated to inspiring every athlete to
reach peak performance. Nike co-founder Bill Bowerman saw endless possibilities for human
potential embodied through sport. His philosophy still guides their mission today: “To bring
inspiration and innovation to every athlete in the world.
Through their commitment to innovation and design, they are continually challenging
themselves, and their customers, to reach that next level of achievement.
They strive for:
Innovation to serve the athlete
Innovation to grow the company
Innovation to inspire the world
NIKE, Inc. includes seven distinct brands, each with a powerful connection to its customers:
NIKE Brand designs, develops and sells high-quality athletic performance gear and sport-
inspired casual products, including footwear, apparel, equipment and accessories
Cole Haan designs, markets and distributes luxury shoes, handbags, accessories and
Converse designs, markets and distributes athletic footwear, apparel and accessories
Hurley International LLC designs, markets and distributes action sports and youth lifestyle
footwear, apparel and accessories
Umbro designs, distributes and licenses athletic and casual footwear, apparel and
equipment, primarily for the sport of football.
Nike Golf, designs and markets golf equipment, apparel, balls, footwear, bags and
Jordan Brand designs and markets premium footwear, apparel and accessories inspired by
the dynamic legacy, vision and direct involvement of Michael Jordan
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Cole Haan, Converse, Inc., Hurley International, LLC and Umbro International Limited are wholly
owned subsidiaries of NIKE, Inc. These Affiliate businesses, as they call them, play a significant
role in their future growth plans.
Overview of the Nike, Inc. Value Chain
Their business has many dimensions. Every product and partner, every decision, every gateway,
every stage from concept to reclamation adds to a near-infinite ecosystem of cause and effect.
To offer as much clarity into this ecosystem as possible, have a look at their seven fundamental
stages: Plan, Design, Make, Move, Sell, Use, and Reuse.
Plan - At the core of the business is a plan – opportunities, resources and values. It’s who
they are. What they believe. And how they get things done.
Design - Form. Function. Superior performance. Minimal impact. While their designers
always strive to create products that are faster, lighter and stronger, they also pay close
attention to smarter.
Make - Ideas don’t become reality by magic. For a global business, it requires people,
materials, tools, knowledge, skill and a whole lot of coordination. They contract with more
than 900 factories globally to make products from their designs.
Move – They ship products wherever and whenever they are needed, to get to thousands
of partners and millions of consumers around the world. Airplanes, boats, trucks and trains
are the tools their transport providers use to overcome the obstacle of distance every day.
Sell - Nike operates more than 750 retail stores around the world across all their brands.
Beyond selling products, each location strives to be a rewarding experience for its
consumers and an asset to its community. The stores are in leased space. While NIKE and
their Affiliate brands sell primarily through retail partners not owned by the company, their
focus is on the impact of the selling they do in their own stores.
Use - Once you bring home your new shoes, shirt or shorts, a different footprint starts to
take shape. This one belongs to you.
Reuse - Finding innovative ways to reuse their products – creating running tracks, sport
courts and even new shoes and clothing helps minimize their impact on the environment.
Good becomes better over time. And so do NIKE.
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They believe these stages provide the best way to track, measure and report where they have
influence, compared to where they have control, and how the decisions they make have
impacts in terms of energy and climate, labor, chemistry, water, waste and community.
Nike Inc., located at Pokran Road, Thane West, is neither a super market nor a hyper market. It
is manly a factory outlet that houses all Nike products and sells it directly to the customers or
the public as a whole.
Nike is one of the pioneers in marketing and the marketing mix of Nike is one of the
strongest. Depending mainly on pull strategy, it has established its hold in face of major
competitors like adidas and reebok.
Nike offers a wide range of shoe, apparel and equipment products, all of which are currently its
top-selling product categories. Nike started selling sports apparel, athletic bags and accessory
items in 1979. Their brand Cole Haan carries a line of dress and casual footwear and accessories
for men, women and children.
They also market head gear under the brand name Sports Specialties, through Nike Team
manufactures and distributes ice skates, skate blades, in-roller skates, protective gear, hockey
sticks and hockey jerseys and accessories.
Nike’s pricing is designed to be competitive to the other fashion Shoe retailer. The pricing is
based on the basis of premium segment as target customers. Nike as a brand commands high
premiums. Nike’s pricing strategy makes use of vertical integration in pricing wherein they own
participants at differing channel levels or take part in more than one channel level operations.
This can control costs and influence product pricing.
Nike shoes are carried by multi-brand stores and the exclusive Nike stores across the globe.
Nike sells its product to about 20,000 retail accounts in the U.S. and in almost 200 countries
around the world. In the international markets, Nike sells its products through independent
distributors, licensees and subsidiaries. The company has production facilities in Asia and
customer service and other operational units worldwide.
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Promotion is largely dependent on finding accessible store locations. It also avails of targeted
advertising in the newspaper and creating strategic alliances. Nike has a number of famous
athletes that serve as brand ambassadors such as the Brazilian Soccer Team (especially
Ronaldo, Renaldo, and Roberto Carlos), Lebron James and Jermane O’Neal for basketball, Lance
Armstrong for cycling, and Tiger Woods for Golf.
Nike also sponsors events such as Hoop It Up and The Golden West Invitational. Nike’s brand
images, the Nike name and the trademark swoosh; make it one of the most recognizable
brands in the world. Nike’s brand power is one reason for its high revenues. Nike’s quality
products, loyal customer base and its great marketing techniques all contribute to make the
shoe empire a huge success. Indian soccer team captain Baichung Bhutia is the new brand
ambassador of Nike.
MARKETING STRATEGY OF NIKE:
It rested mainly upon a product image which is favorable and allowed it to develop into one of
the best multinational companies after a while. Nike’s favorable product icon has been kept
optimistic because of the strong relation with the company logo that is quite distinct and
unique as well as the product slogan that has been utilized in commercials for a long period.
The marketing strategy of Nike invests in commercials and product promotions.
Sportsmen are the majority consumers and this is because of the usefulness that goes along
with the items. Nike focused on these customers by means of agreements between the
company and sports team, college athletic for product support and sponsorship as well as
eventual endorsement to the team members.
Through this NIKE is capable to reach an extensive number of consumers and clients who are
likely to purchase.
Nike Company’s lays a lot of strategies to target their immediate users, athletes and all
sportsmen. These targeting techniques include product sponsorship by professional and well
known athletic team, college sports team as well as celebrity athletes.
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This marketing strategy of Nike is particularly successful as of its capability to reach many
athletes. Once the sports team manager lays down a particular kind of track shoes
manufactured by Nike, the learners have no choice other than to purchase them as well as
sports team can purchase the track shoes in a large number and deliver them to the members
of the team.
Another marketing strategy of Nike is the styling of product objective or purpose. Company
does this through associating triumph with the apparel. For instance, when a superstar athlete
sponsors a particular brand of sports shoes, the shoes will be related with victory. It has
psychological effect to the viewers and this is reinforced with promotional which affirm this
At last, Nike targets the users who could build up product intimacy, consumers who are after
the quality and utility of the items than the cost. Through this, the costing is not pretentious too
much in propose to accommodate a lot of consumers.
Nike focused on the users who embrace product understanding and closeness and thus heed
less regarding the product. This allows the Company to set quite higher cost than its rivalry. This
is a marketing strategy of Nike which calls for superior pricing points in order to push the
supposed value of the product.
Another significant thing that business must consider if you want to follow the success of the
company is that, the truth that Company utilizes the vertical combination pricing technique in
that they take participants ownerships at channel levels which differ and the Nike company also
engage in diverse channel level functions in a propose to control prices as a result affect pricing
The marketing strategy of Nike embraced by many organizations can either provide them a
market frame or make them insulate the market frontrunner. The more reliable the distribution
of the product is improves the sales and in consequence more profits.
Product delivery at the required time to the users, not just effect usefulness but also results to
high level of customer’s satisfaction as well as loyalty.
Nike Company distributes its items base on the level or number. The high costs premium items
are given to particular distributors while leaving products with low price to be traded at a
discounted price at various retail stores including Wal-Mart.
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COMMUNICATION AND PROMOTIONAL STRATEGY:
Aside from trading quality products that have resulted to a high number of user loyalty, the
promotional and communication utilized by the company are simply outstanding.
Nike has hired many professional and well known celebrity sportsmen that have managed to
make a considerable interest to their items.
Most of the athletes contracted by Nike include soccer superstar Roberto Carlos, Ronaldo and
Ronaldinho, basketball legends and superstars such as Lebron James, Jermaine O’ Neal and
triathlete superstar Lance Armstrong as well as Tiger Woods a big name in the world of golf.
This has developed a fairly high level of Nike items awareness. Aside from dealing or
contracting of celebrity athletes to endorse their products, Nike also used a best deal of ad by
means of mass media. The company uses a selective demand ad targets on the higher cost
shoes utilized for typical sports.
All the marketing strategy by Nike show a competitive marketing management which can allow
the company to top turn out to be market leaders and make the market leader companies
retain their competitive frame market by means of adherence to marketing principles,
marketing plans and carefully planned marketing strategies.
The marketing strategy of Nike is one of the techniques that many business follow to become
successful in the world of business like Nike did.
STORE LAYOUT STRATEGY:
In Greek Mythology, the word “Nike” is associated to the goddess of success, representing
‘honored conquest’ on the battleground. When Bill Bowerman and Phile Knight founded Nike,
they aspired to inspire this myth in every product. Primarily, Nike focused on top quality sports
shoes but then branched out quickly to all kinds of sportswear.
Their objective was not just to aid the world’s finest sportsmen find new degree of
accomplishment, but to morph the normal person into a new place of Nike athleticism.
The founder wanted each client to believe that through purchasing Nike products, they would
obtain success, power and happiness.
Nike stores are consistent with this dream. As a money making business, the branding strategy
of Nike is to persuade its client into buying merchandise.
The style of the Nike Stores uses standard in-store methods so as to improve the chance of
customer’s purchases. While walking into the Nike store, the most enticing element is the
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highly made and symmetrical layout. Every sport is provided its part that is arranged in color
and product type.
It is done to appear like there are small stores in one bigger store. Swimming for instance, had
aqua or water walls the same to what you would see as a real swimming pool. This branding
strategy of Nike makes it easier for people to find the product they needed.
This branding strategy of Nike served three reasons:
1. Through having diverse parts for every sport, Nike produced extra markets for every client. It
facilitated the belief of every customer which they want apparel for each sport they were
participating in. It also made clients disregard that Nike sporting shirts act similar objective as
the yoga shirts. The objective is to make markets in one.
2. To disembodies the prospective client from the store. Through developing a swimming
portion really looks like a swimming pool, company facilitates spending through making space
which appeals to the thoughts. This branding strategy of Nike is also related to the basis Nike
wanted their floors, walls as well as ceilings to be unsuspecting and dark. They want the target
to be on the décor and product that takes the client away the place or store and into a fantasy,
3. The third objectives of this branding strategy of Nike are to make a maze like environment.
This is particularly feature of the bottom floor of this store. Through having various ways, the
client maneuvered in rambling confusion. This strategy forces the client to see the entire
product prior finding the way out.
As a result, Nike utilizes of space, color as well as architectural techniques are made to gain
The Branding strategy of Nike are more complicated that its style tactics. Even both aim is to
mystify the client into buying Nike product, marketing are a more obvious strategy to
interpolate the client.
The person may be incapable to understand the true meaning behind each shoe. The individual
may be unable to know the meanings behind each however they are drawn because they
provide “meaning” and “life” to or else lifeless or meaningless objects.
Nike’s store layout is done by dividing the store by sport. In each section—basketball, soccer, running,
etc.—customers are surrounded by Nike’s vision of a particular sport and all of the products it sells to
make that vision a reality.
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Nike have different strategies in how they communicate with customers online. For
example, Nike Golf is a fully integrated part of Nike.com. Like the in-store experience, Nike Golf
is a one-stop destination for all things golf. Nike has created a narrative around its golf products
the same way it did in its store layout. Nike isn’t selling you a pair of golf spikes—it’s selling you
Nike’s strategy of developing a distinctive identity for each sport is smart and effective. While
Nike is always the overarching brand, every sport is presented on its own, with its own story.
Nike provides customers with a simpler, more cohesive experience that shines through loud
Nike in itself is a private label and the retail outlet at Thane, i.e. the factory outlet of Nike
houses only Nike products and no other private labels or brands.
To have a broader perspective of the merchandise mix, let’s take a look at all the various
products that Nike has produced till date. Few of their products are –
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All in all, Nike is known to invite one and all to experience their innovative and inspiring
CORPORATE SOCIAL RESPONSIBILITY:
NIKE has always been keen on its image in corporate and social community. NIKE has been
involved in number of eco-friendly and social drives to show its concerns towards the well-
being of the social and individual personality. As a result NIKE has been awarded various
prestigious awards, like;
Top 10 of Newsweek's 2010 Green Rankings
Maplecroft recognized as a leader in climate change
Tops Climate Counts List in Corporate Commitment to Climate
Recognized as One of the World's Most Ethical Companies by The Ethisphere
Named as One of the 100 Best Corporate Citizens for 2010 Corporate
Responsibility Magazine (the new name of CRO Magazine).
Named as One of 100 Most Sustainable Corporations in the World by Innovest
Strategic Value Advisors and Corporate Knights Inc.
Recognized for its Leadership in Climate Change Solutions by World Wildlife Fund
Recognized three times by FORTUNE magazine on its "100 Best Companies To
Work For" list for employee benefits like paid sabbaticals, on-site childcare
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NIKE, Inc. Diluted EPS Performance
Fiscal Years 2007 - 2011 Five-year CAGR 11% *
* 5-Year Compound Annual Grown Rate (CAGR) based on Fiscal Year 2006 diluted EPS
** EPS amounts are not directly comparable as they include non-recurring expenses
and benefits such as imparment and restructuring charges, tax settlements and other
items. To see comparable annual EPS amounts please refer to our prior press releases
and SEC filings.
2007 2008 2009 2010 2011
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NIKE, Inc. Return on Invested Capital
Fiscal Years 2007-2011
NIKE, Inc. Revenue Performance
Fiscal Years 2007-2011 Five-year CAGR 7% *
* 5-Year Compound Annual Growth Rate (CAGR) based on Fiscal Year 2006 Revenue of $14,955
2007 2008 2009 2010 2011
2007 2008 2009 2010 2011
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PLAN FOR GROWTH:
Nike is a growth company. But we want to deliver growth in the right way. We seek growth that
Like many other businesses, Nike faced some significant headwinds in FY10 and FY11. Around
the world, unemployment was high, especially among youth; and governments wrestled with
high debt levels. Rising costs for energy and labor sparked inflationary pressures. In turn, higher
costs for materials, labor and freight were evident in our margins.
While the headwinds we faced were shared across our industry, the competitive advantages we
have are unique to the Nike portfolio. In spite of ongoing macroeconomic challenges, we are
well positioned to leverage our strengths – including scale, operational capabilities and pricing
power – to help mitigate the risks beyond our control and capitalize on opportunities to grow
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NIKE are innovators by nature. They are fixated, obsessed by innovation. NIKE represents a
passionate and an insatiable appetite to go deeper with an athlete within sports and to take
those insights and translate those creatively into innovative concepts and products and stories.
They have incredibly wide peripheral vision, the ability to see and be inspired by things that
happen in sports, but also in film and music and digital technology — everything in youth
culture around the world. They are incredibly curious and incredibly focused as well.
NIKE continually challenge themselves to be better. There’s a lot of pride at NIKE. They believe
in what they do. They are basically a youthful and a premium brand.
Their intentions, influence and results are all really very positive. But that doesn’t mean that
they are always satisfied. They keep striving and taking risks and firmly believe in their tagline –