Assignment 2


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Assignment 2

  1. 1. Paul Vella Marketing 6000 Dr. Thomas Kohler November 4, 2010 Nike Nike, Inc. is an American multinational manufacturing company. Their core products include footwear and athletic apparel. Nike is well know for its commitment to marketing, which has propelled the company to be one of largest companies in the world with over $19 billion in annual revenues reported in 2010. Nike’s brand portfolio includes Nike, Cole Haan, Converse, Hurley, Nike Golf and Umbro. However, 75% of the growth is expected to come from the Nike brand (Nike’s 2010 Annual Financial Statement). Nike’s market strategy has always been to focused on high profile athlete endorsements as means to promote the Nike brand. Phil Knight, co-founder and Chairman of the Board of Nike said that “when we help athletes reach their potential, that process helps NIKE and consumers reach theirs” (Nike’s 2007 Annual Financial Statement). Co-founder Bill Bowerman shared the similar vision. He viewed the endless possibilities for human potential in sports. This set the tone and direction for a young company. Nike’s goal is to carry Mr. Bowerman’s legacy of innovative thinking, whether to develop products that help athletes of every level of ability to reach their potential or to create business opportunities that set Nike apart from the competition and provide value for our shareholders. Typically, their ads would not focus on the product itself, but rather the athlete themselves and their individual characteristics of grit, determination, spirit, courage and greatness. Few companies in the world have been able to capture the level of brand awareness and distinctiveness of Nike and its Swoosh logo. In 1985, the company signed Michael Jordan to endorse a version of its Air Shoe, otherwise know as “Air Jordans”. This was first elite athlete that Nike aligned itself with. It also marked the beginning of an enduring market campaign that would set Nike apart from its competitors. Over the years, superstar athletes such as Michael Jordan, Bo Jackson, Tiger Woods, Lebron James and Kobe Bryant were also signed by Nike with mega contracts. Despite, the rising athlete endorsement cost and turbulent economic conditions, Nike remains committed to this program. Phil Knight said that “athletes at their best, represent some of our most noble characteristics- passion, commitment, competitive fire, being part of team, the ability to overcome adversity”. (2007 Nike Annual Statement).
  2. 2. Nike most recent campaign features Basketball superstar LeBron James called “The Rise”. According to David Grasso, Vice President of Global Brand Marketing, the campaign celebrating Lebron’s courage to forge his own journey even when other may have disagreed with his decision. “It’s this Just Do It spirit that defines LeBron and Nike as we strive to inspire all young athletes”. (Rovell, 2010) The success of the use of high profile athletes marketing approach has been immeasurable as Nike financials speak for themselves during this 25 year span. In 1985, Nike reported annual revenues of $0.946 million and net income of $0.010 million. The growth and profitability is staggering, as Nike exponentially expanded revenues to over $19.0 billion, resulting in net earnings of $1.9 billion in fye2010 (Nike Annual Financial Statement). My analysis of Nike’s Marketing program is it was a highly successfully. Over the past 25 years management has built the Nike Brand to be one of the strongest in the world. Using the Brand Asset Valuator 5 Pillars analysis, Nike scores high in every category. • Differentiation, Nike product line is well established (swoosh design trademarked in > 150 countries & easily distinguishes product from competitors, even without NIKE name) • Energy, Nike sales have expanded exponentially (<$1MM in 1985 to $19B in 2010) • Relevance, significant global coverage (over 170 countries worldwide), • Esteem, Nike’s significant year-over-year earnings growth is a reflection of how well the brand is regarded & respected • Knowledge, Nike is the largest seller of athletic footwear & athletic apparel in the world, which demonstrates worldwide appeal & intimacy. Nike Brand Asset Valuator (BAV) Results. Nike demonstrates Energized Brand Strength and brand stature. BAV reflects Nike as a Market Leader (Kotler & Keller, 2010) In my opinion Nike’s continued use of high profile athletes to endorse its product has directly contributed to creating significant brand equity and set it apart from rivals such as Adias and Reebok to become a market leader. References: Rovell, D (2010, October 25) LeBron’s Nike Commercial Is Amazing, But Will It Help Sell Shoes. CNBC.Com Nike Inc. 10-K Annual report pursuant to section 13 and 15(d) Filed on 7/20/2010 Filed Period 5/31/2010 Nike Inc. 10-K Annual report pursuant to section 13 and 15(d)
  3. 3. Filed on 7/20/2007 Filed Period 5/31/07 Kolter, Philip, & Keller, Kevin Lane (2010), Marketing Management, 13th edition, Prentice Hall