Nike Case Study (Building a Global Brand Image)


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Nike Case Study (Building a Global Brand Image)

  1. 1. CASE STUDY OF “NIKE” Resource Person: Prof. Ghulam Ahmad Rana MBA Professional 4th Semester (Section E-9)
  2. 2. Hassan Naseer 3328 Haifa Saleem 3336 Shakeel Aslam 3338 Nabita Ishtiaq 3353 Rana Tassadaq 3316 Wajid Ali 3335
  3. 3. NIKE’S STORY  Begin in 1964 as Blue Ribbon Sports.  Renamed Nike in 1978, after the Greek goddess of victory.  Key people of Nike: Bill Bowerman & Phil Knight.  Headquarters in Beaverton, Oregon , USA.  World’s most competitive sports and fitness company.  Nike employees over 26,000 people.  Current CEO: Mark Parker.
  4. 4. 1. Nike’s brand Image & Source of brand equity in United States. Nike’s image is that of power, dedication, hard work and the desire to succeed. It is an aggressive and performance oriented brand. It has always given full attention and priority to performance and durability. It always sales feelings of comfort and emotions to people. It always provides higher quality to all consumers especially to young people who admire it. The slogans used in its advertising & marketing campaigns are always inspiring & worthy to its brand image.
  5. 5. The main source of brand equity for Nike is the professional athletes and players of international sports. It has always chosen upcoming stars as its brand ambassadors. It is the brand that usually signs top athletes and players of every sport from all over the world to profitable deals so that those signed athletes and players can wear and represent Nike to its fullest in their all respective fields across the world.
  6. 6. 2. Effects of Nike's efforts to become a global corporation on its source of brand image in United States, Europe & Asia. . . Nike is moving forward strongly in the global market. Their newest strategy is putting emphasis on individuality and appealing to each sport and athlete in the U.S , Europe and Asia. The broadening of their SIX categories (Soccer, Basketball, running, men’s training, women’s fitness and sports culture) and the awareness being arisen in many new countries this could actually be a great potential for Nike and their brand. They associated with famous American athletes like Michal Jordan and McEnroe who personifies Nike’s core values of achievement, performance and innovation.
  7. 7. CONT’D European marketing team targeted a single sport at a time to develop the brand in Europe. Nike had to change its sponsorship approach, making soccer a big part of this shift. Nike also had to change its advertising, making it less aggressive and more representative of consumers taste in Europe. It also had to become more involved on a grassroots level with club sports, school teams and local events in Europe. Nike’s approach in Asia was similar with similar results.
  8. 8. 3. Importance of Sponsorships and endorsements to Nike’s business? And effect of becoming an official sponsor for the Olympics on Nike’s relationship with consumers. Sponsorships and endorsements are very vital to Nike’s business. In fact celebrity endorsements are corner stones in Nike’s global brand equity. Nike has built a strong brand image along the years through successful brand associations with legendry athletic heroes across the world. The benefits of these celebrity endorsements and sponsorship programs exceeded the monetary benefits of increasing revenue. Actually it conveyed the brand personality and shaped the Nike’s brand image in the minds of consumers affectively. Michal Jordan, McEnroe, Tiger Woods and Maria Sharapova etc
  9. 9. CONT’D Sponsorship of the Olympics games will start of many opportunities to bring sports events into the mainstream for regional and global markets. It will establish Nike as one of the leading sportswear companies in the world. Not only it will enhance Nike’s brand image among the consumers, but the brand awareness and brand equity will reach its peak.
  10. 10. 4. Nike a target for critics of globalization??? Nike’s response on allegations of unfair global labor practice!!! Nike has been criticized for its operations and for contracting with factories of third world countries like China, India, Vietnam, Pakistan, Mexico and Indonesia etc. Nike’s operations in Vietnam have been criticized for violating the minimum wage and overtime laws in Vietnam as 1996. For the poor working conditions with poor ventilation and exposure to dangerous levels of carcinogens. For child labor in Pakistan. Also for forcing its workers to work 65 hours a week.
  11. 11. CONT’D In response to growing global criticism, Nike responded by. . . .  Increasing the minimum age of footwear factory workers to 18 years, and minimum age for all other light-manufacturing workers to 16 years. Expending education programs for workers in all Nike’s footwear factories. Comprehensive changes in its corporate labor policy. New ventilation systems have been installed. 60-hour work week has been enforced. Has assured an average salary well above national salary average.
  12. 12. CONT’D Announced the implementation of new global labor standers.  Become a charter member of the fair labor associations. “From all these Nike’s efforts in the area of labor and environmental or health standards show that company is serious and much concerned about doing the right things and is truly conscious about these issues.”
  13. 13. 5. Nike’s acquisitions? & Brands Nike should try to acquire next? Nike’s acquisitions and brands being controlled by Nike are as follow. . . Cole Haan: Based in Maine, sells dress and casual footwear and accessories for men and women under the brand name of Cle Haan, g Series and Bragano. Nike Bauer Hockey: Based in New Hampshire, manufactures and distributes hockey ice skates, apparel and equipment, as well as equipment for in-line skating, street and roller hockey.
  14. 14. CONT’D Hurley International: Based in California, designs and distributes a line of action sports apparel for surfing, skateboarding and snowboarding, youth lifestyle apparel and footwear. Converse: Based in Massachusetts, design and distributes athletic and casual footwear, apparel and accessories.
  15. 15. CONT’D Yes these acquisitions make sense for Nike because it had many goals behind these acquisitions because. . . They were searching for Brand diversity. Ways providing additional avenues for growth. Segmenting this business by customers. Opportunities to address the low end through distribution at retailers. As Nike is looking to target Chinese market for increasing its monetary benefits and brand equity so “Nike should try to acquire Chinese brand Li-Ning next”.
  16. 16. 6. Importance of Fashion to Nike? & In China Fashion OR Performance??? With added exposure Nike challenged to respond to market demand for fashionable athletic footwear and apparel. In this quest Nike will succeed if they keep quality and performance at the core of their business. Now no one can deny the importance of fashion as it is the integral part of Nike’s production. In this regard they opened the first Nike Goddess store to sell fashionable sportswear for women only in the year 2001.
  17. 17. CONT’D While entering into Chinese market Nike has to focus on fashion along with performance, as it is performance oriented company, because now fashion has become more important for any brand to capture the new markets. Although Chinese are not fashion oriented people but now some analyst believe that the new middle class in China has began to follow western culture which is enrich with fashion.
  18. 18. 7. Nike’s strategies to defend its position Vs Adidas & Rebook a joint force??? Nike should keep differentiating its products from Rebook and Adidas. They should maintain their reputation as an innovator and should preserve Nike’s brand equity domestically and perhaps most importantly globally. Nike can protect their market share among female consumers within the industry by targeting some of their promotions to female consumers.  In terms of product differentiation, Nike is leading the market so it should keep this differentiation alive. Also it should also differentiate its services to compete with its competitors i.e. Adidas & Rebook.  Apparel and equipment customization.
  19. 19. CONT’D Nike should think about latest trends and styles and should keep introducing fashionable shoe. Low price range can also boost up its sales and market share among its competitors. In Asian countries Nike should work with reasonable price because here in Asian countries demand is very elastic. It should be more responsive towards society to show its concern for society and this will be a point of differentiation.
  20. 20. CONT’D Nike should devote vast resources on R&D of its product to compete with this joint force. It should sponsor cricket teams and cricketers of countries like Pakistan, India, Bangladesh, Sri Lanka, Australia and other cricket playing nations to grab the market share in this sector.
  21. 21. Recommendations Nike must gain a more positive global image, especially regarding labor laws. Nike has to be sufficient regarding its own stores because it is lacking in this regard. Expansion into sports sunglasses and jewellery items can also be a good move for Nike. It should engage more in community centred activities such as charity programmes, fitness programmes for children to boost up corporate social responsibility.
  22. 22. CONT’D Going deeply into e-commerce can increase sales due to high internet users. Nike should Strengthen distribution in regions where it is currently losing sales. It must gain strong presence in China which is a vast market for any brand. Targeting Asian pop culture such as Pop singers, Bollywood etc can also enhance its brand equity.