INTRODUCTION TO NIKE Est. in 1960 in Oregon. Phil Knight and Bowerman - Founder Nike has gone through many changes Started small and now has covered the U.S. and International market

Est. in 1960 in Oregon.

Phil Knight and Bowerman - Founder

Nike has gone through many changes

Started small and now has covered the U.S. and International market

INTRODUCTION contd… Nike = Winged Goddess of Victory. “ Greeks say when we go to battle and win, we say it is NIKE!”

Nike = Winged Goddess of Victory.

“ Greeks say when we go to battle and win, we say it is NIKE!”

ANALYSIS OF CASE STUDY Limited resources and unlimited confidence. Persuasion of top athletes. Endorsement contracts effective. Use of tactics such as guerilla warfare.

Limited resources and unlimited confidence.

Persuasion of top athletes.

Endorsement contracts effective.

Use of tactics such as guerilla warfare.

ANALYSIS contd…. Failure to recognise aerobics boom. Women -A major customer. Ignorance of market trends. Timberland – brown shoes. Not satisfying customer needs. Child labour. Late in getting onboard with extreme sports.

Failure to recognise aerobics boom.

Women -A major customer.

Ignorance of market trends.

Timberland – brown shoes.

Not satisfying customer needs.

Child labour.

Late in getting onboard with extreme sports.

BRAND PERSONALITY Brand personality Personification . 1 Brand Personality Sincerity Excitement Competence Sophistication Ruggedness Daring Spirited Imaginative Up-to-date. Reliable Intelligent Successful Upper class Charming Outdoorsy Tough Perk Nike Mercedes Levis Down – to earth Honest Wholesome Cheerful Tata salt

Brand personality Personification .

Daring

Spirited

Imaginative

Up-to-date.

Reliable

Intelligent

Successful

Upper class

Charming

Outdoorsy

Tough

Down – to earth

Honest

Wholesome

Cheerful

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

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

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

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

Branding: 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.

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 equity Brand equity is defined as the positive differential effect that knowing the brand name has on customer response to the product or service. Philip Kotler

Brand equity is defined as the positive differential effect that knowing the brand name has on customer response to the product or service.

Philip Kotler

Brand equity 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 .

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 .

Nike’s Market Expansion Strategies Economies of Scale . Shared distribution channels among varied product lines lower costs. Large size provides opportunity for more leverage against competition. Efficient use of production facilities lowers costs.

Economies of Scale .

Shared distribution channels among varied product lines lower costs.

Large size provides opportunity for more leverage against competition.

Efficient use of production facilities lowers costs.

Global sourcing: the Nike case Nike has relocated production of its footwear and clothing to 51 countries where its third party production units employ more than 500,000 people (as against approximately 14,000 people directly employed by the multinational). From its headquarters in Beaverton, Oregon, Nike manages a worldwide virtual company combining internal R&D functions with a low cost manufacturing strategy. They control their activity from Oregon and Tennessee and developed jointly by American and Asian technicians in the USA, Taiwan and South Korea. Sneakers are then assembled in South Korea and Indonesia from dozens of components supplied by firms in Japan, South Korea, Taiwan, Indonesia and the United States. Similarly, Nike outsources distribution to firms that specialise in logistics services.

Nike has relocated production of its footwear and clothing to 51 countries where its third party production units employ more than 500,000 people (as against approximately 14,000 people directly employed by the multinational).

From its headquarters in Beaverton, Oregon, Nike manages a worldwide virtual company combining internal R&D functions with a low cost manufacturing strategy. They control their activity from Oregon and Tennessee and developed jointly by American and Asian technicians in the USA, Taiwan and South Korea. Sneakers are then assembled in South Korea and Indonesia from dozens of components supplied by firms in Japan, South Korea, Taiwan, Indonesia and the United States. Similarly, Nike outsources distribution to firms that specialise in logistics services.

Brand/Image Ability to charge premium price by establishing an “image” • Access to new/different markets • Premium product placement in retail leading to higher sales • Image and celebrity endorsements create hopes/dreams/emotional attachment to product

Ability to charge premium price by establishing an “image”

• Access to new/different markets

• Premium product placement in retail leading to higher sales

• Image and celebrity endorsements create hopes/dreams/emotional attachment to product

Innovation Innovation may be difficult for competitors to imitate. Difficult for competitors to compete with rate of innovation/production. Ability to capture market for different attitudes/values across cultures with product variety. Strong emphasis on R&D leads to continuous improvement in products.

Innovation may be difficult for competitors to imitate.

Difficult for competitors to compete with rate of innovation/production.

Ability to capture market for different attitudes/values across cultures with product variety.

Strong emphasis on R&D leads to continuous improvement in products.

Geographical Outreach Ability to reinforce brand and create loyalty across cultures leading to a broad customer base. • Increased company growth potential. • Cross-subsidization of weaker markets.

Ability to reinforce brand and create loyalty across cultures leading to a broad customer base.

• Increased company growth potential.

• Cross-subsidization of weaker markets.

Product Diversification New products introduced by Nike will be more readily accepted by customers due to strong brand image

New products introduced by Nike will be more readily accepted by customers due to strong brand image

Other strategies adopted by Nike Sponsorship for sporting events Advertisements. Rebates and Discounts. Conducting fashion shows.

Sponsorship for sporting events

Advertisements.

Rebates and Discounts.

Conducting fashion shows.

PRODUCT MIX Product Mix A product mix is the set of all products and items that a particular seller offers for sale to buyers also known as product assortment. Product Width It refers to how many product lines the company carries.

Product Mix

A product mix is the set of all products and items that a particular seller offers for sale to buyers also known as product assortment.

Product Width

It refers to how many product lines the company carries.

PRODUCT Mix contd…. Product line A product line is a group of products that are closely related because they perform 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 line

A product line is a group of products that are closely related because they perform 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 for Nike Footwear Studs for Striker Mid fielders Defenders Apparel Headwear 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, etc

Footwear

Studs for Striker

Mid fielders

Defenders

Apparel

Headwear

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, etc

Competitive advantage against regional brands. Pricing- Bata charges around Rs 400 for a pair of shoes whereas for nike it is Rs 1600. Unaware of utility or use. Shoes are not recommended by coaches in India. Sports culture –In India sports like soccer, basketball are not so recognised as cricket.

Pricing- Bata charges around Rs 400 for a pair of shoes whereas for nike it is Rs 1600.

Unaware of utility or use.

Shoes are not recommended by coaches in India.

Sports culture –In India sports like soccer, basketball are not so recognised as cricket.

Threat of Substitute Products Threat of New Entrants Porter’s Five Forces Model of Competition Rivalry Among Competitors Bargaining Power of Buyers Bargaining Power of Suppliers HIGH HIGH HIGH LOW HIGH

FUNCTION AND FASHION Now, Nike concentrates on two aspects function and fashion. In 1960’s Nike entered the market with function due to which they Failed in early times. Nike believes if you have a body, you are an athlete.

Now, Nike concentrates on two aspects function and fashion.

In 1960’s Nike entered the market with function due to which they Failed in early times.

Nike believes if you have a body, you are an athlete.

JUST IT DO