A report on consumer behaviour in nike

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A report on consumer behaviour in nike

A report on consumer behaviour in nike

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  • 1. NikeConsumer Behavior
  • 2. Projectsformba.blogspot.com Published By: Projectsformba.blogspot.comContent 1. A brief history of Nike 2. Segmentation, Positioning and Targeting of Nike 3. Nike’s Research Program 4. Corporate Social Responsibility 5. The Marketing Mix of Nike 6. Nike SWOT Analysis 7. Brand : Nike 8. Product Mix 9. Culture in Organization “Nike”
  • 3. Projectsformba.blogspot.comA Brief History of NikeThe Nike athletic machine began as a small distributing outfit located in the trunkof Phil Knights car. From these rather inauspicious beginnings, Knights brainchildgrew to become the shoe and athletic company that would come to define manyaspects of popular culture and myriad varieties of cool.Nike emanated from two sources: Bill Bowermans quest for lighter, more durableracing shoes for his Oregon runners, and Knights search for a way to make a livingwithout having to give up his love of athletics. Bowerman coached track at theUniversity of Oregon where Phil Knight ran in 1959. Bowermans desire for betterquality running shoes clearly influenced Knight in his search for a marketingstrategy. Between them, the seed of the most influential sporting company grew.The story goes like this: while getting his MBA at Stanford in the early 60s, Knighttook a class with Frank Shallenberger. The semester-long project was to devise asmall business, including a marketing plan. Synthesizing Bowermans attention toquality running shoes and the burgeoning opinion that high-quality/low costproducts could be produced in Japan and shipped to the U.S. for distribution,
  • 4. Projectsformba.blogspot.comKnight found his market niche. Shallenberger thought the idea interesting, butcertainly no business jackpot. Nothing more became of Knights project.Cut to 1963. Phil Knight traveled to Japan on a world-tour, filled withthe wanderlust of young men seeking a way to delay the inevitable call ofprofessional life. Seemingly on a whim, Knight scheduled an interview with aJapanese running shoe manufacturer, Tiger--a subsidiary of the OnitsukaCompany. Presenting himself as the representative of an American distributorinterested in selling Tiger shoes to American runners, Knight told the businessmenof his interest in their product. Blue Ribbon Sports--the name Knight thought ofmoments after being asked who he represented--was born. The Tiger executivesliked what they heard and Knight placed his first order for Tigers soon thereafter.By 1964, Knight had sold $8,000 worth of Tigers and placed an order for more.Coach Bowerman and Knight worked together, but ended up hiring a full-timesalesman, Jeff Johnson. After cresting $1 million in sales and riding the wave ofthe success, Knight et. al. devised the Nike name and trademark Swoosh in 1971.By the late 70s, Blue Ribbon Sports officially became Nike and went from $10million to $270 million in sales. Katz (1994) describes the success via Nikesplacement within the matrix of the fitness revolution: the idea of exercise andgame-playing ceased to be something the average American did for fun, insteadAmericans turned to working out as a cultural signifier of status. Clearly, thecircumstances surrounding the shift are not this simple; it is one of the aims ofthis project to discover other generators of popular attention to health.If Nike didnt start the fitness revolution, Knight says, "We were at least rightthere. And we sure rode it for one hell of a ride" (Katz, 66). The 80s and 90s wouldyield greater and greater profits as Nike began to assume the appearance ofathletic juggernaut, rather than the underdog of old. "Advertising Age" namedNike the 1996 Marketer of the Year, citing the "ubiquitous swoosh...was morerecognized and coveted by consumers than any other sports brand--arguably anybrand" (Jensen, 12/96). That same year Nikes revenues were a staggering $6.74billion. Expecting $8 billion sales in fiscal 1997, Nike has targeted $12 billion insales by the year 2000.Few can question Nikes financial hegemony. But nearly $7 billion in revenuesclearly begs the question, what sells these shoes? It is my assertion that Nikes
  • 5. Projectsformba.blogspot.compower to sell comes from deep-rooted yearnings for cultural inclusiveness andindividual athletic accomplishment. These seemingly paradoxical desires collide inconsumer’s hearts and minds and produce the unyielding zeal for Nike shoes andapparel. Unfortunate effects of this zeal can be found in the rash of Nike apparelkillings in 1991 and the profusion of Nike collectors and WebPages designedaround the companys products. Nike appeals to these disparate elements ofAmericans personalities through an advertising philosophy that is, at once, simpleand sublime. In addition, Nikes practice of top-level athletes promoting theirproducts appeals to countless ages and creeds as a way to identify with andemulate their athletic heroes. These forces work powerfully upon the individualconsumer, but one should not lose sight of the cultural context in which theindividual moves.Segmentation, Targeting and Positioning ofNikeNike has been in the market for a long period now. Thus it has already soughtedout the STP analysis that it would use to promote and sell its products.Market Segments:The market segments that Nike can mainly differentiate are high, medium andlow end customers with varying income levels. Thus, Nike needs to segment onvarious fronts such as economic, demographic, geographical differentiations.Economic segmentation:High, medium and low income levels that can be clubbed with there lifestyles ofhigh, medium and low end customers.
  • 6. Projectsformba.blogspot.comDemographic segmentation:The company can segment the market into age, gender and class segments.Geographical segmentation:The company can segment the market into segments of north, west, east andsouth.Target Market:The company needs to target the market as per the brand image and equity indifferent markets. Thus, the company has targeted the market of high-end, highincome level between the age of 16-55 with a pan India location. Thus the marketsegment it is targeting is quite essential to differentiate itself from its competitorsi.e. Reebok, Puma, Fila and local brands like Bata.Positioning:The brand Nike has positioned itself in the minds of the consumer as a high-endproduct which is quite costly but gives the value for money with its service,quality and designs.All this analysis provides Nike with the customer satisfaction and thus loyalty thatit needs to achieve high volumes and profitability.
  • 7. Projectsformba.blogspot.comNike’s Research ProgramNike has been in the Research & Development in the market for quite a long time.The research that it has been carrying out relates to the earlier STP analysis whichallows Nike to create a market for its products.Also Nike has a history of constantly innovating new products and attain the first-in-the-market advantage and charge a premium price. Nike spends a lot out of itsrevenue into R & D of new products and designs to constantly stay ahead of thecompetition.Nike conducts both qualitative and quantitative research for gathering vitalinformation for its products and new launches. The qualitative research refers tothe consumer purchasing behavior like why, how, what do they decide on thebasis of Nike’s image as well as products. The quantitative research deals withwhat are the results of the company i.e. revenue against cost and other financialanalysis.Nike indulges into research analysis of consumer markets as well as competitor’sanalysis and thus understanding the consumer behavior and their buying pattern.Nike does extensive research in the attitudes and tastes and preferences andtheir changing pattern by having questionnaires filled up by its customers onlineas well as personally. It also indulges into personal interviews with its valued-
  • 8. Projectsformba.blogspot.comcustomers to make some necessary changes that they might require. This is howthe company came to be recognized as a high valued by its customers and thusattain maximum loyalty. Also the company came up with the idea ofcustomization of their products online through this type of research itself whichhas yielded high results.Nike products undergo a rigorous testing process that covers a huge variety oftesting surfaces (regular basketball hardwood, soccer turf, a running track, andendless outdoor testing on various terrain), and takes into account four majorfactors, geography, gender, age, and skill level as well as profession. All of thiscombined with the results of about a dozen other tests are use to develop new,user-friendly products like the Nike Shox, Nike Air, and other Nike basketball andrunning shoes. This is mainly because Nike needs to constantly be aware of thechanges in the consumer buying behavior which can only be done through variousresearches. Nike also utilizes information from various other research analysts likehttp://www.sneakerhead.com/nike-research.html.
  • 9. Projectsformba.blogspot.comCorporate Social Responsibility undertaken byNikeNike has been in the market for over 5 decades now and has understood theimportance of maintaining the environment through corporate socialresponsibility.The firm has been in news for last decade for its innovativeness to develop suchfacilities that are waste free and use renewable sources of energy.A statement by Sarah Savern, director of corporate responsibility horizons, NikeInc. states “We have a target to be climate neutral in Nike owned facilities andbusiness travel by 2011.By 2015, we aim to be climate neutral in all Nike Inc.facilities. A 17% reduction in footwear waste by 2011. A 30% reduction inpackaging and point-of-purchase waste.”As per the current CEO Mark Parker, “We see corporate responsibility as acatalyst for growth and innovation.” Also, “We are challenging our assumptions,evolving our perspective and building a new approach.”
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  • 12. Projectsformba.blogspot.comThe Marketing Mix Adopted By NikeNike has been developing its marketing mix consisting of the four P’s i.e. product,price, place and promotion. Thus Nike has soughted out the mix that will besthelp it achieve its goals of maximum profitability.Product:Nike takes into consideration various aspects of its products as it is in a product orconsumer market. Thus it needs to have extensive range of products to withstandits competition.Nike provides features, designs, various brands, packaging along with some extrafeatures like warranties and after sales service. This all aspects can be included inthe product analysis.Nike has various products as well as brands that cater to different marketsegments which varies according to requirement of particular segments as well asindividuals. Also they offer customized designs of their products whereincustomer designs their product as per their requirements.Eg: Nike provides customization of their shoe range on their site Nike.com.Nike also offers a one year warranty for their products. Also they provide anoption for replacement in all their products if any defects or problems occur afterpurchase which is a part of after sales service.Nike has been designing world class shoes for over 5 decades. Yet it has atendency of changing the designs and patterns after a particular period orquantity. It also has a range of classic Nike shoes which are available all the time.Nike also provides packaging with collaboration with other brands.Eg. Selling i-pods with their jogging shoes range.
  • 13. Projectsformba.blogspot.comPrice:Nike has a high-end consumer market with high disposable income asking forbetter service and satisfaction as there target market. Thus their pricing strategyis to provide value at high cost with maximum profitability. Thus they have highmargins but this can be justifiable due to its advertising and research costs.Nike also provides with discounts during various festive seasons on its productslike Diwali in India. This is also a part of its pricing decisions.Place:Nike is a multi-national organization. Thus it needs to develop a wide range ofdistribution channel which can support its retail business. Thus Nike has some ofthe following distribution outlets:Retail: Nike sells through its retail stores, brand outlets, exclusive showrooms aswell as hyper markets in metropolitan areas.Online shopping: Nike also provides with online shopping facility for its variousproducts and services.Distributors: Nike has a wide coverage of its distributors across the globe tosupport its retail outlets.Factory outlets: Nike also sells its merchandise through factory outlets that sellsome of its products at a discounted rate.Promotion:Nike is extensively involved in Promotion and advertising. Nike uses advertising,sales promotion, advertisement campaigns, public relations and publicity andsales offers to build awareness and brand image and loyalty.Nike endorses various celebrities such as athletes, football players, cricketers,tennis etc.
  • 14. Projectsformba.blogspot.comEg. Roger Federer, Tiger Woods, Ronaldinho, Ronaldo.Nike also endorses various teams as well as clubs such as Barcelona Football Club.It places its products in various movies and shows using product placement.Nike also sponsors various events such as tour de France, FIFA World Cup, DelhiMarathon and various others.Nike promotes its products also utilizing other products brand equity such aspromoting its range of shoes alongwith I-pod.The “Just-do-it” campaign of Nike has been since nearly 3 decades and has gotthem worldwide fame.Nike also advertises by using various celebs in their advertisements to increasebrand loyalty while utilizing the brand image of such celebs.Nike has also gone to the extent of sponsoring a stadium called “the AllianceArena”, which is by far the biggest football ground in the whole world.Thus Nike can be viewed as an organization that utilizes advertisementsextensively for promotions which can be viewed from its advertisement budget ofapproximately US $ 150 million.Nike SWOT AnalysisSTRENGTHS:Contracts with Universities: Nike has contracts with universities nationwide tosupply apparel for athletes. These university sponsorships are beneficial to Nikebecause they give the company the right to sell merchandise with these schools’logos, tap into the market of collegiate sports apparel, and form relationshipswith young consumers.
  • 15. Projectsformba.blogspot.comAnalyst Confidence in Stock: According to press releases issued by Bloomberg,analysts from Bank of America, CSFB, and Wells Fargo recently called Nike a“buy.” After a lackluster financial year, this news could potentially affect stockprice in a positive way.Michael Jordan Returns to Basketball: Nike received press coverage throughoutJordan’s decision-making process and continues to make press regarding theimpact of Jordan’s return. Nike was able to capitalize on this strength by debutinga new shoe – the Air Jordan XVI – and by making new commercials with Jordanthat will hit the airwaves soon. Michael Jordan is perhaps the most recognizedathlete in the world and markets Air Jordan apparel for Nike.Corporate Responsibility Report: According to the Nike Web site, in October Nikereleased its first Corporate Responsibility Report. The document states thatNike’s focus points, in terms of corporate responsibility, are the environment andlabor. Since these are two areas that cause protests against Nike, it is importantfor Nike to label them as areas to focus on and for Nike to give the public thisinformation.Strict Environmental Standards: According to Bloomberg, Nike has accepted strictenvironmental standards to comply with by 2005. These standards were part ofthe Kyoto treaty that President Bush refused to sign and are supposed to help inthe fight against global warming. Nike has made other efforts to be energyefficient; its office in the Netherlands is the most energy efficient office in thatcountry by 35%. Nike also uses organically grown cotton, promotes the Eco-classprogram with Delta Airlines, and founded N.E.A.T. in 1993 to, as the Nike Web sitemaintains, “Reduce Nike’s impact on the planet.”
  • 16. Projectsformba.blogspot.comReducing Operating Costs: In a report from Business Wire, Nike is takingadvantage of the new cost-cutting methods of electricity management fromPortland General Electric. This method allows Nike to continually get an updateon its energy use and see if there are any problem areas. Nike is utilizingtechnological advance to streamline operations at its facilities, increasingproductivity and cutting costs.Philanthropy: Nike is committed to philanthropic endeavors such as “Reuse aShoe,” “Project Dreams” and “Habitat for Humanity.” These efforts, along withother programs such as the “Shadow” program and the Bower man Foundation,show Nike’s commitment to the community. Nike employees also benefit fromthese philanthropic opportunities. Recently, Nike continued to give back to thecommunity by giving $1 million to the World Trade Center Disaster.The Nike “Swoosh”: One of the biggest strengths of Nike is its brand identificationand corporate identity. The Swoosh resonates in the minds of consumers whorecognize that logo as representing quality, first-rate athletic apparel. The NikeSwoosh is recognizable and identifies all Nike products and sponsoreduniversities.Nike Icons: Nike uses athletic icons and heroes to market its company goods.Examples of Nike icons are: Michael Jordan, Tiger Woods, Mia Hamm, MarionJones, and Lance Armstrong. Not only do these athletes adorn print andtelevision advertisements, but they also appear on the Nike Web site and arecalled “Our Heroes.” This is strength because consumers begin to identify the
  • 17. Projectsformba.blogspot.comathlete with Nike. Nike’s popularity is connected to the popularity of theseathletes.Event Marketing: Nike successfully uses event marketing in the realm of fitness tobring more brand recognition to its name. These sponsorships ensure thatconsumers see the Nike Swoosh in places other than television advertisements,on products, and in stores. Nike sponsors fitness challenges at universities andalso sponsors nationwide athletic tournaments, including some for charity.Niketown: Nike town stores, located in 15 major cities across the world,demonstrate that Nike has become a part of American and world culture. Thesefamous stores represent the true strength of the Nike brand and the popularity ofthe athletes who advertise Nike apparel.WEAKNESSES:Labor Practices: Activist groups and student organizations have made Nike asymbol of labor exploitation. These groups blame Nike for poor conditions in itsthird world factories, under-paying workers, employing children, and ignoring thebasic rights of its workers. Nike is often in conflict with labor unions; mostrecently, Nike bucked heads with a factory workers’ union in Mexico.Accordingly, the public associates Nike with sweatshop labor and accuses it ofsidestepping human rights in order to secure the greatest profit.Advertising: Nike spent over $1 billion on advertising, sports marketing, andpromotional spending in 1999, and, although popular, some of its advertisingstrategies were considered controversial, according to an article titled “Channel
  • 18. Projectsformba.blogspot.comConflict.” Feminist groups accusing Nike of degrading women have attacked Nikecommercials that stress winning above everything else and show womensubmissively. Although the majority of Nike’s commercials are cutting edge andcreative, those very commercials can be weaknesses in Nike’s reputation.Consumer Cost: Nike has been accused of outrageously marking-up prices onmany of its products to cover the costs of advertising and sponsoring. The publicfeels that Nike overcharges its consumers and should lower prices. According toan article from the Graduate School of Business at Stanford University, a shoewhose net factory price is $24.71 is sold retail by Nike for $100.Endorsements: The public questions the amount of money that Nike spends onsponsoring athletes. People do not agree with the multi-million dollar, multi-yearcontracts that Nike extends to athletes such as Tiger Woods, Ken Griffey Jr., andMichael Jordan and are disillusioned with Nike’s preoccupation with theseathletes.Global Community and Outsourcing: Nike’s efforts toward global expansion havebecome a weakness in its reputation. Nike has operated in the Asian region for25 years and uses subcontractors throughout the globe to manufacture itsproducts. Factories in China, Indonesia, Vietnam, Italy, the Philippines, Taiwan,and South Korea produce the majority of Nike goods. Nike has little control overits extended product line because it is such a large company with the majority ofits operations overseas. Additionally, many people in the United States see Nike’soutsourcing as taking away jobs from Americans.
  • 19. Projectsformba.blogspot.comOPPORTUNITIES:Wide Range of Products: Nike not only has the ability to succeed in the basketballshoe market, but in virtually every other athletic market from golf apparel towomen’s workout gear. This diversity of products presents Nike with a greatopportunity – to build up strength in all of its product lines and also to be flexiblewhen the market shifts, making demand in some areas higher than others.Winter Olympics: This year’s Winter Olympics, in Salt Lake City, Utah, will provideexcellent opportunities for Nike to advertise. The Winter Olympics will also bringpublicity if Nike-sponsored athletes are competing in events, displaying the NikeSwoosh all over the world. Nike has been a major contributor to many of the pastOlympics as well. In Sydney, for instance, Nike designed over 2000 athletes’uniforms in 25 Olympic sports.Foreign Market: While Nike has become a major part of American culture, thereis international strength in the Nike brand. According to one Nike press release,worldwide orders for Nike products are up 6%. This is an opportunity because itmeans Nike can expand globally and depend less on the American market for itssuccesses or failures.NIKEgoddess Opened in Newport Beach, California: This marks Nike’s expansioninto the women’s apparel market. Because women wear athletic apparel formore than just working out, this is an opportunity for Nike to jump into themainstream clothing market.
  • 20. Projectsformba.blogspot.comHype of Advertising: Nike’s advertisements make waves. People enjoy them andwait for new ones. Nike’s newest advertising campaign is “Enjoy the Weather,”which features athletes conquering weather conditions to perform their sport.The hype of Nike advertising brings with it the opportunity to reach the publicthrough the promotion of Nike’s newest advertising endeavor.Expansion into Outdoors Clothing: The expansion into outdoor clothing is anopportunity for Nike because this will allow Nike to become more of a part of theapparel market. The fitness, innovation, and technology clothing line keeps inNike’s tradition of providing superior products.Web site: Nike’s massive Web site will prove to be an opportunity for Nikeconsumers to get up-to-date news coverage and to buy into the online purchasingmarket. It is one of the most comprehensive and interactive sites on the Internet.Nike should be able to capitalize on its Web site and emphasize those issues thatNike publics would not otherwise be exposed to by other media.THREATS:Las Americas: Nike is funding part of the first-ever privately funded U.S.-Mexicoport of entry into the United States. Nike’s involvement in this project could openthem to public criticism concerning immigrant labor. Additionally, in the wake ofthe events of September 11, Americans are wearier of foreigners and moreconcerned with homeland security. The bridge might threaten Nike’s reputation.University Campus Groups: Student groups are gaining strength and becoming alarger presence on university campuses across America. For example, an articlestated that the University of Connecticut decided to allow students with protestsigns to attend athletic events only after the school was approached by a student
  • 21. Projectsformba.blogspot.comorganization requesting this measure. If Nike cannot reconcile its differences withstudent groups, it will face more and more threats to its reputation as thesegroups gain more and more of a following on campuses.Competition: According to various Web sites, Nike competes with Converse, Fila,Adidas, New Balance, and Reebok. Nike currently dominates the market, butthese companies pose a potential threat to its reputation. If Nike cannot stay onestep ahead of these companies in terms of product design and customersatisfaction the corporation could flounder. Reebok, for instance, has alreadytaken over Nike’s contracts with the WNBA and the NFL.Industry Trends: In the past, Nike has been unable to keep up with changes in theindustry. According to a report concerning Nike’s weaknesses, the corporationwas one of the last athletic footwear companies to move into e-commerce andwas late recognizing other trends in the market. Nike can ill afford to be viewed asa complacent company and cannot let this threaten its reputation.Manufacturing Network and Global Economy: Nike Inc. is the parent company ofnumerous subsidiaries and is imbedded in an intricate global manufacturingnetwork. Additionally, Nike relies heavily on the global economy to succeed.What is more, the corporation grew so fast that it developed organizationaldilemmas, causing Phil Knight to admit in a news release “four years ago, we(Nike) had outgrown our ability to manage the business.” If Nike and its publicscannot understand the intricacies in Nike’s corporate system, they might losefaith in the organization.Management: Since its conception in 1964, Phil Knight has held close control ofthe company and “ruled with a mix of closely allied senior managers,” according
  • 22. Projectsformba.blogspot.comto a business report entitled “Channel Conflict.” Nike management has also goneto tremendous lengths to identify with competition and victory. Managementwants to be in complete control; however, this is not always a positive in the eyesof stakeholders and could threaten its reputation.Internet Boom: An Internet search with the phrase “anti-Nike” showed thousandsof links to anti-Nike Web sites appear. With the click of a mouse, anyone withoutany accreditation or legitimacy can post anti-Nike sentiment or have access toanti-Nike material. This has made it easier for activists to express their negativeopinions of Nike and is making it harder for Nike to overcome some of its lessflattering reputations.Lawsuits: Nike has been involved in many lawsuits that also threaten itsreputation. Most recently, the United States Court of Appeals for the SecondCircuit affirmed the dismissal of a case against Nike and St. Johns University by aMr. Keady. According to a report by Vada Manager, Director, Global IssuesManagement, “Mr. Keady had made numerous attempts to discredit Nike’sconsiderable efforts at improving conditions in the factories and communitiesaround the world where our products are made.” Although Nike won the lawsuit,Keady’s efforts, and others like them, to discredit Nike pose a threat to the stridesit has made in the way it does business.
  • 23. Projectsformba.blogspot.comBranding: The essence of the businessMany people view branding as purely a logo or a name; however branding is farmore than this. A brand should capture the true meaning of the business and iscreated jointly by the efforts of business and through consumer’s perceptions.Many of these perceptions will be given to the consumer initially by the business.However, in some situations the perceptions can arise from situations outside thebusiness’s control, for instance through bad press.To explore this idea think about all the attributes you associate with:At a recent workshop the logo provoked the following comments: competition,physical activity, quality, and role model, expensive, slave labor and modern.Some of these attributes will be the Nike brand; others are the result of consumerperceptions created by bad press, quite possibly resulting from ill-thought outmanagement decisions.
  • 24. Projectsformba.blogspot.com Mission Why do you do what you do, beyond the money? Product Vision What do you Were do you plan actually do? to be in the future? Bigger, more We produce beef specialised etc etc Brand Essence Positioning Values How do you want What will you never to be seen? compromise on? Quality, Value for money etc provenance, etc Style How do you interact with our customer? Relaxed, business-
  • 25. Projectsformba.blogspot.comBranding: powerful marketing mechanism used by Nike • Leads to higher and more consistent product quality. • Increases innovation by giving producers an incentive to look for more new features that can be safeguarded by the patent. • Branding results in more product variety and choice for consumers. • Branding provides consumer information about products and where to find them.Brand ImageA strong brand creates a preference to purchase and an inclination tocontinue purchasing (brand loyalty).We most commonly think of branding as something the big guys do withtheir large ad budgets and extravagant television commercials. In recentyears some observers have noted that branding is losing its power. We seemore and more people buying generic prescriptions over the label brands."Would generic be ok with you sir?" But in truth, when you go to buy a newvehicle, dont you consider the brand? Would you buy a $18,000 genericbrand over a $22,000 Ford?As a small business owner what should you do? The concept of branding isan ideal method of forcing you to focus on what it is that you do, what youwant to do, and what you want to become. To create a brand you mustdevelop a set of guidelines for your business and identify how you wantyour business perceived. How do you want to be seen by the public?You might think that your brand image is your logo. Like the Nike logo, orthe Disney logo, or any other famous logo. But in truth your brand image is
  • 26. Projectsformba.blogspot.comevery customer/prospects interaction with your company that creates animpression. Its your companys character. Its a conglomeration ofinteraction and observation by people outside your organization: how yourphone is answered, the quality of customer service, how your trucks look,or even how your web site looks. Its what makes your company uniqueamong the hundreds of competitors.Your brand image should communicate the difference between you and thecompetition— your reason for being. Your brand image should reinforceyour corporate message so that it helps make you stand out in a crowd oflook-a-likes.Brand equity • Brand equity is defined as the positive differential effect that knowing the brand name has on customer response to the product or service. • Brands represent the consumers’ perceptions and feelings about products and their performance. • The real value of branding is the ability to capture consumer preference and loyalty. • Brands vary in power and value and have varying degrees of brand awareness, brand preference and brand loyalty.
  • 27. Projectsformba.blogspot.com  Brand personality Personification. Michael Jordan Put Nike on the map – 1984-1985 Nike saw a decrease in their earnings for the first time ever – Influenced them to make their first specialty basketball shoe – Since then, Michael and Nike together have generated billions of dollars in revenue – “World Sports Hero No. 1” – Jumpman logo is one of the most easily recognized symbols throughout the world
  • 28. Projectsformba.blogspot.com Tiger Woods The newest Nike sensation – Estimated that Nike paid him $40 million – More attention than Michael Jordan and Bo Jackson – 3 pg. ad in Wall Street Journal – 30- and 60- second TV spots Aired during college football, major league baseball, the U.S. Open, SportsCenter and Monday Night Football
  • 29. Projectsformba.blogspot.comConsumer Behavior and Managerial Issues Nike.com is by all means a great place to do online shopping but I foundthat it can be just as good for the consumer who wants to do there shoppingoffline. With the many online departments and adjustable features you candecide what you want and then use the store locater to get directions to thenearest retailer. Nike uses secured socket layer technology to ensure you that your creditinformation is secured. Nike also uses cookies as an information gatherer to see what yourpreferences or tendencies may be, which enables them to supply a better serviceto there customers. If you don’t want your information to be used in this formNike also shows you how to deactivate cookies or even how to opt-out ofreceiving e-mails for them.In conclusion the group thought Nike.com was a really well put together web site,while some may find it a little difficult to navigate, it has great customer service tohelp you, and many features to keep there customers happy and searching theresite for long periods of time.
  • 30. Projectsformba.blogspot.comNike: Porter’s Five Forces
  • 31. Projectsformba.blogspot.comProduct Mix A product mix is the set of all products and items that a particular seller offersfor sale to buyers also known as product assortment. • Product Width It refers to how many product lines the company carries. • Product line A product line is a group of products that are closely related because theyperform similar functions • Product length It refers to the total number of items in its product mix • Product depth It refers to how many products are offered of each product line.Product mix of Nike • Footwear • Studs for Striker • Mid fielders • Defenders • Apparel • Headwear
  • 32. Projectsformba.blogspot.com • Tops/Polo • Jersey • Jackets • Shorts • Shocks • Equipment • Ball • Bags • Watches • National Team Gear • Jersey for Brazil, England, etc. • Club Gear • Club Jerseys like Man U, Real Madrid, etcCulture in organization “Nike”A culture of any organization can be viewed as the shared cognitions, values,norms and beliefs. Thus they function as symbols of a society or subgroup. Thusevery organization has its own culture and values on which they perform.Nike is seen as an organization of innovativeness and health conscious and fitnessoriented organization.
  • 33. Projectsformba.blogspot.comNike can also be viewed as an organization promoting hard work and youngtalents which is communicated to the customers through its advertisements alsolike ads of Ronaldinho, Rafael Nadal etc.Nike also has a culture of promoting high achievers so as to keep an image for theorganization itself.Nike’s culture is spread over all its Nike Inc. facilities all over the world. Thus it isculture has been affected by cultures of various countries and influenced by theresubcultures too as it is the same people that for the organization that live in thesociety too.