Nike
LeBron X
Marketing Plan
Business. 103
Bruce, Section. 022
By: Nicolas Alves
Table of Contents
Executive Summary…………………………………………………………..………………Pg.3
Current Marketing Situation………………………………………………………………...Pg.4
Five Year Financial Overview………………………………..………………………………Pg. 5
Product Review………………………………………………………………………………..Pg.7
Competitive Review…………………………………………………………………………...Pg.7
Channels and Logistics Review……………………………………………………………....Pg.9
SWOT Analysis………………………………………………………………………………..Pg.10
Objectives and Issues……………………………………………………………………...…..Pg.12
Market Strategy…………………………………………………………………………….....Pg.13
Product Strategy………………………………………………………………………...…….Pg.13
Pricing Strategy…………………………………………………………………………...…..Pg.14
Distribution Strategy……………………………………………………………………..…..Pg.14
Marketing Communication Strategy………………………………………………...……...Pg.15
Market Research……………………………………………………………………….……..Pg.16
Action Program…………………………………………………………………………..…...Pg.17
Budgets………………………………………………………………………………………..Pg.19
Controls…………………………………………………………………………………….…Pg.19
References………………………………………………………………………………….....Pg.21
Tables........................................................................................................................................Pg.22
LeBron X
Page 2
Executive Summary
Nikes launch of the LeBron X marks the tenth signature shoe in the LeBron serious. This shoe is not only
special because its LeBron’s tenth shoe with Nike but also because the shoe follows one of LeBron’s greatest years.
The LeBron X came at a time when LeBron had just won the NBA Championship, was awarded MVP of the league
and won a gold medal for the US in basketball. I chose to do my project on this particular shoe because all of the
technology and innovation Nike put into this shoe. Along with the fact that I am a loyal customer to the Nike brand.
The LeBron X was the first basketball shoe to use full length visible air in the sole and used Nikes Hyperfuse
technology to create an extremely durable shoe. The LeBron X was and still is the most expensive basketball shoe to
hit the market and is another reason I was motivated to research this shoe for my project. Overall, the LeBron X was
a shoe to achieve a lot of firsts within the brand and the industry.
The LeBron X sold around 1.5 million pairs and brought in $300 million in sales according to Forbes
magazine. With the LeBron X Nike was able for the first time to step out of the performance field and create casual
shoes that still had some basketball inspiration. The success of the LeBron extension line showed that Nike has a
chance to create successful shoes that are outside of the athletic industry, but rather in the causal every day wear
industry. The fact that Nike was able to achieve all of this in just a little over one year is surprising to say the least.
Even with Nikes competition all offering lower priced products, Nike is able to maintain its position as the footwear
industry leader as well as be the ideal model for a truly successful brand.
LeBron X
Page 3
Current Marketing Situation
Nike is currently the number one shoe and apparel company. Nike is focused in the design, development
and worldwide marketing and selling of athletic footwear, apparel, equipment, accessories and services. “Nike
Brand focuses its business on offerings in seven categories: running, basketball, football, soccer, men's training,
women's training, Nike Sportswear, and action sports” (Jakab 2014). Nike’s wholly-owned subsidiaries include
Converse Incorporated, which designs, distributes and licenses athletic and casual footwear, apparel and accessories
under the Converse® trademark. Other brands include Hurley International LLC, which designs and distributes a
line of action sports and youth lifestyle apparel and accessories under the Hurley® trademark. Lastly, Nike also
owns the Jordan brand, an important part of Nikes over all profits. The company is currently operated by its CEO
Mark Parker and Chairman Philip Knight who founded Nike in 1972.
In 2003 Nike signed a seven year endorsement deal with LeBron James for $93 million (Badenhausen
2013). This all came before he even played his first NBA game. He was only 18 years old at the time and was
entering the NBA right out of high school. Most recently, in 2010 Nike extended LeBron’s contract for another
seven years with an estimated yearly deal of $15 million, according to Forbes journalist Kurt Badenhausen. Nike
took a huge risk with this endorsement but knew it would pay off in the end and it has. Ever since this deal was
signed LeBron has increased Nikes sales. Last year alone LeBron brought in $300 million in sales off of his
signature shoe the LeBron X. The basketball shoe industry has always been a popular marketing going all the way
back to when Nike released the first pair of Air Jordan’s. In recent times the popularity of basketball shoes has
grown tremendously and is now evident with the amount of people who casually were the performance sneaker as
well as those whom collect them. This trend has also extended from being mostly males to now females and young
children.
Nike has taken advantage of the fact that consumers are now wearing these shoes for casual wear by
creating line extensions of their most popular shoes. This line extension takes the style and designs of Nikes
basketball shoes and applies it to an everyday casual shoe. Nike has created an opportunity to not only dominate the
athletic footwear market but also the casual market. Within the basketball market Nike currently only really has one
main competitor Adidas who has not been much of a threat to Nike sales or growth. However, Nike does not slow
down and continues to release innovative products to increase the competitive gap it has in the market with Adidas.
LeBron X
Page 4
Financial Overview
Report Date
May 2013 May 2012
Scale
Thousand
May 2011 May 2010
Thousand Thousand
Thousand Thousand
Revenue
25,313,000
23,331,000 20,117,000
Profit
11,034,000
10,471,000
9,508,000
Profit Margin
43.6%
41.5%
52.7%
Growth Rate
8.5%
16%
Stock Price
61.66
54.09
May 2009
18,324,000
18,528,000
8,800,400
8,604,400
52%
54%
9.8%
-1.1%
-0.05%
42.23
35.59
29.63
Within the last five years Nike’s revenue has increased at a small but steady pace, with the largest increase
being between 2011 and 2012. This increase is mostly likely due to the sponsorship deals Nike released during that
time period with the Olympics and becoming the official sponsor of the NFL. This in turn gave Nike more
opportunities to be seen by global markets which then created more sales for the company increasing their overall
revenue (Jakab 2014). Jakab also talks about how “In 2009 and 2010 the growth rate for Nike was negative but can
be attributed to the financial crisis that was taking place at that time.” This crisis decreased Nikes revenue which
then caused the growth rate to be negative. By 2011 Nike was back on track and had a substantial increase in the
growth rate going from -1.1% in 2010 to 9.8% in 2011.
Profits increased by 1,793,000 from 2010 to 2011 and can be said to be from sales during the 2010 World
Cup, the U.S. Open of Surfing and the release of new running innovations such as the Lunar technology also gave
Nike more sales. Nike also made adjustments to its previous contracts with retailors. “Nike has recently established
retail presences by opening more than 100 premium category destinations, like the Field House with Dick’s Sporting
Goods, House of Hoops with Foot Locker, and the Running Lab with Finish Line” (McBride 2007). Nike also built
upon their direct to customer experience by opening nine Nike stores in the U.S. and Europe. Lastly, in 2011 Nike
opened a new logistics center in China. This growth continued into 2012 but slowed down in 2013.
Nikes growth rate went from 16 percent in 2012 to 8.5 percent in 2013; the cause of this drop was because
the increase in revenue for 2012 to 2013 was not as large as the increase in revenue from 2011 to 2012. Nike still
had a steady increase in revenue. Nikes revenue did not see such a large growth compared to years past because
towards the end of 2012 Nike sold Cole Hann and Umbro, two companies Nike was receiving revenue from in years
past. Over the last five years Nike stock has basically doubled from 29.63 a share in 2009 to 61.66 a share in 2013.
LeBron X
Page 5
Marketing Description (Refer to Table 1)
The athletic footwear industry is an industry full of competitors, high profile endorsers and constant battles
between companies to create the next best technologically advanced shoe. The athletic footwear industry is
segmented by different sports for example: basketball, football, soccer and running. There is also segmentation
within those willing to pay higher prices for high quality athletic footwear and those who are not. Nike has been able
to reach both a majority of the market through its connections with large retail stores and also by releasing brand
exclusives. This segmentation groups consumers into categories making it easy to see what products each group
needs. Because of this market segmentation Nike for example, is able to gear their marketing to a specific group in
the market who are interested in basketball. Nike is also able to do research on these groups and find out what the
consumer wants. With this research Nike can create products consumers truly want instead of creating products that
Nike believes consumers want.
After dividing the market into segments Nike is able to target specific groups. With the creation of the
LeBron X Nike has been able to attract not only athletes but also consumers who just like sneakers overall. Nike has
been able to reach several segments of the market. With the LeBron X Nike has been able to provide a segment of
the market with high end products that are innovative in technology and material. The LeBron X is targeted towards
consumers who are looking for a high top basketball shoe. But also consumers who would like to have the most
innovative materials and technologies available to them. Nike has been able to also grab three segments of the
market for basketball shoes by creating three identical LeBron X shoes. The only difference between the shoes is
that one offers Nike+ technology and higher quality materials while the other two do not have this technology.
Through the creation of these three identical shoes Nike is able to grab the segment of the market that wants to
purchase the product but does not care about the actual athletic performance of the shoe, but Nike can also grab
another segment of the market that does care about the athletic performance and is willing to pay a little more. The
consumer has many options to choose from when considering the LeBron X, meaning consumers have a significant
sense of buyer power. Nike has positioned itself as a leader in the athletic footwear market. Consumers may be
drawn to a certain footwear company based on the materials used in the product or the professional athlete who
endorses that product. For example, people may be drawn towards Nike because Michel Jordan wore Nikes and he
is the greatest basketball player in history, or maybe a consumer’s current favorite basketball is sponsored by Nike.
There is a belief that if this product is so great that professional athletes wear it, I myself, the consumer can purchase
LeBron X
Page 6
these shoes and be like the professionals. The Nike LeBron X is an example of this consumer behavior. The LeBron
X satisfies the consumer’s wants by providing them with the same shoe LeBron himself prefers to play in, but also
satisfies the consumers need for a high performance basketball shoe and is a shoe that can handle any level of
basketball, all the way up to the professional level. Still consumers make decisions on what others are wearing and
what looks cool. This is how Nike has been able to distinguish themselves from the competitor, by offering shoes
with interesting packaging, but also a psychological connection, offering a story behind each shoe that a consumer
can relate with. Nike has created a strong base of loyal customers from young children to adults.
Product Review
Nike’s tenth model from the LeBron James serious of shoes better known as- The LeBron X Nike+
version- offers the following features at the retail price of $180:
Upper




Hyperfuse construction on the upper of the shoe is a composite of lightweight synthetic materials and mesh
that are fused together to create a nearly seamless, one-piece upper that is lightweight, breathable,
supportive and durable
Flywire technology
Mesh tongue and a full inner sleeve
Asymmetrical collar is cut higher on the medial side for support and lower on the lateral side for enhanced
flexibility and comfort
Midsole
 Full length visible Nike Zoom air unit for maximum cushioning under the entire foot
 Lightweight phylon midsole ultra-lightweight cushioning
Outsole


Solid rubber outsole provides traction for a variety of surfaces
Modified herringbone pattern enhances traction
Competitive Review (Refer to Table 2)

Adidas is and always has been Nike’s number one competitor. Adidas has been in business since 1929
originating in Germany and only making soccer boots, according to the Adidas official website. Soccer has
always been Adidas main focuses throughout the years but the company has branched out into all sports
markets. The Adidas Company also owns Reebok, Rockport, and Taylor made. All company’s related to
the athletic gear industry. In 2012 Adidas made up 5.2 percent of the basketball footwear industry (Siemers
2012). Adidas has created its own types of technology to incorporate into their basketball shoes. For
example, technologies like Adizero, Crazyquick and Crazyfast. During the same time frame as the LeBron
LeBron X
Page 7
X Adidas released the Adidas D Rose 3 which retailed at $160. Derrick Rose had $25 million in sales off of
his signature shoe (Siemers 2012). The placement of Adidas signature
shoe was well planned out. You could find the shoe not only on the
Adidas online store but at all major athletic shoe stores like Footlocker,
Footaction, Dicks Sporting Goods and Sports Authority. Adidas
released several commercials in support of Derrick Rose’s signature
shoe release and even created a new campaign titled “All in for D Rose.” As well as launching a short
internet film serious that followed Derrick Rose around during his journey to returning to the NBA after a
serious injury. The main difference between the LeBron X and Adidas’ D Rose 3 is price and distribution.
The D Rose 3 is priced $20 less and can be found in many more retail locations compared to LeBron X.
The D Rose 3 also has technology inputted into the shoe that enables it to be connected to an app and used
to track the consumer’s activity. The $20 difference between the shoes can be justified by the patented air
bag technology found in the LeBron X and the unique Flywire lock down system provided in the LeBron
X.

Under Armor was founded in 1996 and started simply as a company that created athletic apparel through
the creation of new materials that kept you dry and wicked
away moister (Martinez 2012). Today Under Armor has
expanded into all areas of the athletic gear industry
including basketball footwear. During 2012 Under Armor
Basketball offered the Spine Bionic which retailed at $110.
The product placement of Under Armor is similar to all
other competitors in the industry. Under Armor can be found online as well as at large retail stores like
Footlocker, Footaction, Dicks Sporting Goods and Sports Authority. In 2012 Under Armor held .34 percent
of the basketball footwear industry (Martinez 2012). Under Armors promotion for their basketball line is
different than their competitors in that the company does not have any signature athletes with their own
shoes but rather athletes that they sponsor like Brandon Jennings and DeAndre Jordan. In an effort to
spread promotion of the Under Armor basketball line players who were sponsored by Under Armor did
meet and greats in different Footlocker locations around the nation. The LeBron X is $70 more than the
LeBron X
Page 8
closest Under Armor shoe that can be considered as a competitor. The Under Armor Spine Bionic does not
offer any type of technology like that of its competitors but makes up for it by its low price tag. I feel that
this shoe is Nikes biggest competitor because of the price but also the fact that Under Armor is an up and
coming brand that has in recent time been receiving more respect and loyalty from consumers as well as
investors. For now Nike can get away with charging $180 based off of brand loyalty. But I believe in the
next few years Under Armor will be able to do the same or at least be able to take more consumers away
from Nike based off of the brands price differences.

Reebok started in 1890 by a shoemaker named J.W. Foster. In 2006 Adidas acquired Reebok. Reebok is
the oldest competitor of Nike but is also the least threatening considering they only make up 1.84 percent of
the basketball market. In 2012 Reebok released the Reebok Wall Season 2: Zig Encore which was retailed
at $115. Similar to Adidas basketball Reebok basketball products could be found on their online store as
well as in large athletic retailers like Footlocker, Footaction, Dicks
Sporting Goods and Sports Authority. Reebok promoted their
basketball line by giving NBA player John Wall his own signature
shoe. They created a small ad campaign of commercials
showcasing John Wall’s upbringing. There is a $65 price
difference between the LeBron X and the Zig Encore, but the
competition in pricing has almost no effect on Nike sales. This in
part is due to the fact that Reebok is a dying brand that most people
see as the brand of their grandfather. The price for the Zig Encore in my opinion is actually overpriced and
could potentially become competition for Nike if Reebok lowered the price.
Channels and Logistics Review
Nike sells its products through their online store as well as retail stores across the world. Nike also
distributes their products to Nike certified retailers like Footlocker, Footaction, Champs Sports and Dicks Sporting
Goods. This is considered a level one channel of distribution used by Nike. A good example of this level one
distribution strategy comes from McBrides, 2007 article in which he talks about the details of the official contract
Nike has with the Foot Locker retailor. The sale locations of the Nike LeBron X are different than the standard sale
of other Nike basketball shoes. The LeBron X is a higher quality performance basketball shoe meaning only
LeBron X
Page 9
consumers who are willing to pay higher prices will most likely purchase the shoe. Also since the shoe is directly a
signature shoe of one of the greatest current NBA players Nike makes very limited quantities to keep it exclusive
and highly sought after by consumers. For these reasons the shoe is only available for purchase on the official Nike
online store and at select Nike retail stores. The LeBron X is still able to beat other signature shoes because of the
brand loyalty customers have with Nike and the fact that they know they are getting the highest quality basketball
shoe on the market. My one suggestion would be for Nike to eliminate more of the retailors that sell the shoe and
only offer it from Nike stores and Nikes official web store. This gives Nike the ability to sell the shoe at full retail
price instead of at a whole sale price to retailors, giving Nike the opportunity to increase its revenue.
SWOT Analysis (Refer to Table 3)
Strength
The Nike LeBron X has many characteristics that make it better than the competitor. The shoe is crafted
with a variety of materials invented by Nike and only used in Nike Products. The first feature being that the shoe
offers Nike’s patented full length Zoom Air technology. This technology is only found in Nike products and the
LeBron X has a full air unit not just a heel or forefoot unit giving the shoe added support. The LeBron X also has
Hyperfuse material for the upper half of the shoe. “Hyperfuse, is a material created by Nike that mimics the feeling
of leather, but is actually one piece of material fused together and attached to the sole of the shoe (McKeague 2012).
This material gives the customer and Nike the ability to create any type of color they can think of while keeping the
shoe sustainable since no materials are wasted being stitched together. “In recent time Nike has made a considerable
effort into creating shoes that are innovative yet also sustainable” (Fry 2010). The LeBron X also offers a distinct
lacing system that uses Nikes Flywire technology to keep the customers foot locked into place when wearing the
shoe. “The Flywire system helps prevent the foot from sliding around in the shoe, making the consumer less prone
to having an ankle injury” (Lam, Sterzing, Cheung 2012). The last characteristic of the LeBron X that sets it apart is
the consumer’s ability to go online and custom design a pair of LeBron X’s. This gives the consumer the ability to
build a shoe specifically to their liking and even see what it would look like in real time. The LeBron X also has a
loyal following of LeBron supports who purchase all of the LeBron line products.
Weakness
The LeBron X only seems to have one main weakness and that is the retail price of the shoe. At a retail
price of $180 the LeBron X is the most expensive shoe in its category. All of the competitors have lower priced
LeBron X
Page 10
products that can potential take LeBron customers away if they are price sensitive. There are two less serious
weaknesses of the LeBron X. That being the shoe is too big and the number of shoes produced is too little. Not
everyone enjoys playing in a high top basketball shoe and since the LeBron X is a high top sneaker some consumers
are lost because of this tiny feature. Lastly, the LeBron X has been released in exclusive color schemes making
demand for the shoe to go up, but also limiting the number of pairs that are being produced. Because of this
exclusiveness and small production consumers might turn to the competition where they know for sure what they
want will be in stock.
Opportunity
With the success of the LeBron X Nike saw an opportunity to expand the line. Nike decided to have two
line extensions based on the LeBron X. Those two were called the LeBron X EXT and the LeBron X Lifestyle. The
EXT line uses the same model of the original LeBron X but substitute’s performance materials for high quality
materials like denim, swede and cork. The lifestyle version takes a different approach and was completely
redesigned into a street shoe. The sneaker has a few similarities to the original LeBron but focuses more on a shoe
the consumer can wear everyday with any type of clothing. This gives Nike the opportunity to reach customers who
they would have normal lost due to a lack of non-athletic footwear. Nike also has the opportunity to offer customer
customization for these extended products giving the consumer more freedom to design a shoe exactly to their
liking, which can increase the chances of sales. “Over the last few years there has been an increase in the demand for
wearable technology. It first started with the running shoe and has now moved into the basketball market” (Sangani
2012). The recent boost in wearable technology has given the LeBron line an opportunity to input wearable
technology into the shoes and also create ways for the product to sync with current wearable technology offered by
Apple and Nike.
Threats
Nikes biggest threat to the LeBron X is the rising cost of materials and labor around the world. There have
been protests by manufacturing workers which has halted production at some of the manufactures that produce Nike
products. The LeBron X obviously has threats from competitor brands like Adidas and Under Armor, but with that
comes threats of a lack of possible endorsements. “There are a few big name college teams that attract a lot of
attention. Athletic brands are able to endorse these teams with their company’s products and gain a lot of attention”
(DeEourcy 2004). Nike faces a threat of other brands endorsing these big name teams before they do and losing
LeBron X
Page 11
potential recognition by consumers. Lastly, the LeBron X makes most of its sales from being placed into retail
stores. The problem with this is that there is limited space in these retail stores and Nike is forced to compete with
other shoe brands for shelf space to have their product displayed.
Objectives and Issues
First-Year Objective
In the initial year (2012) the LeBron X was able to go further than Nike had ever expected in terms of sales.
According to Forbes magazine online, the LeBron X reached $300 Million in sales alone (Powell 2014). This was a
50% increase from the previous year’s sales of LeBron’s signature shoe. At an average retail price of $180 Nike was
able to sell 1,666,667 pairs of LeBron X’s. The overall sales of the LeBron brand is more than this when you
consider the line extension Nike also offered customers. Now of course this is not the company’s revenue, but it
gives an understanding as to how many pairs were sold and what profits were potentially earned. In 2012 Nike
controlled 80% of the overall basketball footwear industry with around 17% of that belonging to the LeBron X.
Second-Year Objective
The LeBron line of shoes changes every year with Nike coming out with a new signature LeBron shoe for
that year. After the huge success of the LeBron X many believed Nike could not create another shoe that would be
as successful. That has been proven otherwise. “The release of the LeBron XI has brought in sales that are 35%
higher than the LeBron X for the same time period” (Powell 2014). With a 35% increase in sales Nike may be able
to double its sales of the new LeBron shoe. This would mean sales would rise to $600 million with the current retail
price being $200 Nike would need to sell 3 million pairs of LeBron XI’s, which is only about 1.3 million more than
the previous year again this is not including the line extension of LeBron footwear that would increase the brands
overall sales.
Issues
The main issue with LeBron X is that a new version comes out every year. This can sometimes lead to
cannibalization of sales. Meaning the sales from one Nike shoe may be eaten by the sales of a different Nike shoe.
This creates the issue of Nike not being able to sell their entire inventory leaving many of the shoes to be sold under
retail. Another issue could be Nikes inability to place the product into consumers’ minds. Nike now has the issue of
trying to find new ways to promote the LeBron signature shoe every year in a way that does not repeat itself.
LeBron X
Page 12
Market Strategy
Nikes marketing strategy for the LeBron X is creating advertisements and themes that customers can relate
to or feel a part of. Nike will also position itself as an innovative leader in the basketball shoe market with the use of
its technology in the LeBron X. Nike will also use the strategy of collaborating with another brand to differentiate
itself. For example, the connection between Apple and Nike to create products that show the consumer how their
workout is going. The LeBron X’s primary segment is Millennials which ranges from 10 to 12 year olds, teens 13 to
18 and young adults 19 to 30. Nike is focusing on those who are athletic, desire high quality shoes, or have an
interest in basketball and LeBron James.
Positioning
For those who enjoy playing basketball at any level will find that the LeBron X is an innovative shoe which
provides full foot support along with an unmatched lock down lacing system. Unlike Adidas or Under Armor who
only provide the customer with a traditional basketball shoe that has not been updated for today’s style of
performance. The product is positioned for those who are not too concerned about price as long as they now they are
buying a durable and trusted product. Nike has been able to position itself as a leader in the athletic industry and is
able to prove it through their patented technologies. Four of the most popular of those technologies can be found in
the LeBron X and gives Nike the ability to position the shoe as the most innovative product in the market. Lastly,
Nike is able to position itself as the trusted brand used by one the NBA’s current greatest players LeBron James.
Nike is also able to positions the LeBron X higher than its competitors because it is the shoe LeBron wore when he
won a gold medal at the Olympics and is also the one he wore when he won the NBA championship. The LeBron X
is paired with the idea of winning basketballs largest events.
Product Strategy
The LeBron X used a strategy of being sold in all major athletic retail stores like Foot Locker, Champs and
Foot Action. As well as online through these retail stores websites and Nikes online web store. Including in Foot
Lockers specialty stores whom Nike has a contract with (McBride 2007). The shoes were also available at Nike
retail stores located around the world. The LeBron X has continued to innovate as consumer demand for the product
grows. New versions of the LeBron X were released to give the consumer a variety of options to choose from. Nikes
world famous brand building and endorsement deals with other professional athletes were used to help inform the
consumer about this new product. Nike uses these endorsements and sponsorships of athletes and college teams to
LeBron X
Page 13
show the consumer that the teams who are winning are doing it while wearing Nike products. This puts the idea in
the consumers mind that Nike products must play some role in the success of these teams and athletes, which in turn
creates a demand for Nike products in hopes of being as good as the professionals. Nike has been able to capitalize
on this type of thinking and increase sales through adverting that makes the consumer feel as if they too are an
amazing athlete. Nike even uses this idea in their mission statement where it says, “If you have a body, you are an
athlete.”
Pricing Strategy
Nike products are known to always be priced higher than the competition, but the idea is the consumer is
getting a better quality product. When in reality a part of the overall cost is for the brand name. The LeBron X uses
this same approach and is priced above any competitor in the market. The LeBron X is priced using a marketskimming approach, where prices are set a little higher to the economic value of the customer. Over a period of time
if those products don’t sell the prices begin to fall. The LeBron X extensions are all priced differently based on the
materials and technology put into the shoe. Nike has given the consumer several options of the LeBron X with price
levels matching the quality of the product. Nike is able to sell the LeBron X at higher price compared to competition
and still be the leading company in the market for three reasons. Fist, the LeBron X does have higher quality
materials and technology built into the shoe compared to the competitor. Secondly, the shoe is released in small
quantities to give it a sense of exclusiveness. Lastly, the shoe has been created to the likings and standards of
LeBron James’s, one of the best NBA players currently playing. Creating a shoe for the biggest player in the NBA
will help in selling the shoe a lot faster than if it did not have a professional athlete endorsement.
Distribution Strategy
As stated in the Channels and Logistics Review the LeBron X did not take the traditional Nike product
route of being an intensely distributed product. Instead Nike used a selective distribution model to distribute the
LeBron X. This is done so that the shoe keeps its identity of being exclusive, but also the shoe is distributed to select
retailors that Nike knows the target customer is already familiar. The competitor does not do this with their signature
athletes, making the LeBron X seem even more exclusive. Nike distributed the LeBron X through a one level
distribution strategy. Meaning the product went go from the manufacturer to the retailer. Since the LeBron X is an
exclusive product the shoe first went to actual Nike retail stores and then to select registered Nike retailers. A select
LeBron X
Page 14
number of the shoes were also put on the online websites of these retailers along with Nikes official online store.
Instead of doing the typical approach of going from selective distribution to intensive distribution, the LeBron X
extension line becomes even more exclusive than the normal LeBron X. Some of the line extensions are so exclusive
that Nike only distributed the product to consumers. This goes back to the idea of keeping the product very
exclusive, and is a distribution technique that only Nike uses.
Marketing Communication Strategy
The marketing strategy used for the LeBron X is similar to all of Nikes signature athlete’s products. “Nike starts
with a topic that relates to who the athlete is” (Robertson 2005). Next Nike creates an inspiration for every shoe that
comes out in that line. For Example, the LeBron X was inspired by minerals and rocks. The official Nike website
says, “Forged by time, heat and pressure, the diamond is a precious and unbreakable gemstone that provides design
and metaphoric inspiration for the new LeBron X.” In Robertsons, article LeBron James he says “Nike uses the
public relations marketing strategy through its sponsorships of high school, college and professional sports teams.”
Nike also holds many press releases for all of its big products the LeBron X being one of those products. The
LeBron X showed Nikes power in terms of public relations by the type of advertising that was used, but also Nikes
dominance within the market. “Once Nike has created a way to market a product through a story or inspiration the
advertising is created” (Crain 2013). For the LeBron X Nike used three techniques to advertise. Those three were
through online/digital media marketing, event marketing and printed media.

Online/Digital Media Marketing: For the LeBron X Nike released the “Witness” campaign, which was
short for witness greatness, the slogan created by Nike to describe LeBron James. Through this campaign
Nike created several online advertisements and short videos describing the new LeBron X. The whole
campaign focused on LeBron’s greatest achievements. The LeBron X celebrated LeBron’s tenth signature
shoe with Nike along with his second NBA championship, gold medal at the summer Olympics and being
named the NBA’s MVP. Nike created videos celebrating each of LeBron’s achievements and posted them
on Nike’s main website as well as the Nike Basketball YouTube channel. The LeBron X received huge
amounts of media attention when Nike revealed it would be releasing a special pair of LeBron X that would
be retailed at $315. This was and still is the most expensive basketball shoe sold by anyone in the market.
The shoe received attention from almost every online and TV source ranging from ESPN to the Wall Street
LeBron X
Page 15
Journal. The attention Nike received for releasing the most expensive basketball shoe helped to shine light
on the new LeBron X that would be priced lower. Nike was able to do two things here. First they were able
to see how the market would react to raising prices and also they were able to create a lot of free media
attention on the new LeBron shoe they were about to release.

Event Marketing: Before the release of the LeBron X, LeBron James himself took a tour with Nike
around the world to promote his new shoes but also to promote Nike basketball. Nike would set up public
events, for example in China; fans could meet LeBron and have a chance to play basketball with him.
There were media events set up for people to get a glimpse of LeBron and to hear him talk about his
experience of winning a gold medal and the NBA Championship. Nike also created events to highlight their
Nike+ technology. The LeBron X is the first basketball shoe to have this technology built into it and Nike
used this to create public events where consumers could try the new Nike+ technology as well as try on the
LeBron X.

Printed Media: Nike published advertisements for the LeBron X in magazines like Sports Illustrated as
well as ESPN the magazine. A short billboard campaign celebrating LeBron’s NBA Championship and his
new “Witness” Campaign was also created. Nike used point-of-purchase displays for retailors to place in
their stores to attract attention to the product. Through Nike’s successful relationships with its retailers
Nike is able to sell not only the LeBron X in these retail stores but also the whole line of LeBron products.
Nike’s relationships with its retailors are a key example of Nike’s outstanding public relations. Nike has
done this through the growth of a good corporate image and dealing with negative rumors, like those of
how Nike manufacturing workers are treated.
Marketing Research
Nike is constantly conducting marketing research to find new ways to insure they are reaching consumers
wants and needs. Nike first starts by interviewing LeBron James and seeing what he wants to get out of his new
shoe. Nike asks unstructured open questions about LeBron previous experiences with his first shoes and what parts
were truly helpful to his game and which can be removed. Nike creates this personal interview as if they were
talking to any customer; they really try and find out what the people want. For the LeBron X Nike used many of its
traditional research techniques to find out what the consumer was looking for in a high performance basketball shoe.
Nike is known for its product testers. Like most company’s Nike tests its product in a lab under close watch to see
LeBron X
Page 16
where they can improve on design and functionality. But unlike the competitor Nike gives the everyday consumer
the ability to test their products before they hit the market. It starts with consumer filling out an application asking to
test a certain sport related Nike product. For example the consumer would state they want to test basketball shoes or
football cleats. After a few questions about how often that consumer participates in those sports the application is
done and sent to Nike. Nike choose the best consumers application and offers them the chance to test a Nike sample
product as long as they give weekly feedback to Nike about any problems they may have with the product. After
about an eleven week trial period Nike collects all the testers’ information and wear test samples to see where they
can improve the product. This information is how Nikes implements its marketing research into its products. This
feedback comes straight from the consumer and gives Nike the ability to communicate directly with the people who
buy their products. This research technique was used during the creation of the LeBron X. Nike also breaks down its
marketing research by looking at different segments of the market and how their buying habits change over time.
For the LeBron X Nike was able to look at how LeBron’s previous shoes did in the market and base their new
campaign off of that research.
Action Program
September: Nike began the process of releasing detailed information on the LeBron X. Nike conducted an
official release event with LeBron James answering different questions from the
media. The event showcased the new LeBron X as well as gave insight into the
back story of how the shoe was created and what aspects of the shoe have
meaning to LeBron himself. The event also had a presentation from LeBron and
the designer of the shoe Jason Petrie. The media and other invited guest of the
event had an opportunity to try on the shoes. Through this event different media
outlets published content about the shoe and were able to spread the word about the official release date in October.
Nike also released its online campaign at this time. The online campaign included an official promotional video
which was released on Nike’s official website and YouTube channel. As well as additional video from the media
event and personal interviews with LeBron James on why he choose the specific features and designs found in the
LeBron X. The official Nike website released product details and features as well as locations that the LeBron X
would be sold at. At the end of the month Nike rolled out a print campaign which was made up of advertisements
LeBron X
Page 17
placed in magazines as well as billboards celebrating LeBron’s recent achievements and the tenth signature model in
the LeBron line of footwear.
October: At the start of the month LeBron took a short three week global campaign trip where he traveled
around the world making short stops to meet with fans and promote the LeBron X. Nike first only released special
additions of the LeBron X. The first being an Olympic inspired model
that came equipped with Nikes most up to date technology and was
priced at $315, the most ever charged for a basketball shoe. This shoe
was only made in a small quantity and was only available for purchase
through Nikes official online store. Nike used this release to obtain
media attention on the new shoe as well as the high price tag. Nike was
able to justify the price through the innovative technology placed within the shoe. At the end of the month LeBron
started the NBA season and was able to debut the new LeBron X for the first time on court.
November: Nike released another campaign that extends on LeBron’s previous campaigns of him being
the king of basketball. Kings are historically known to have large assets of gold and jewels. Nike took this idea and
applied it to a campaign where several shoes based on jewels were released in
limited quantities. These shoes came in exclusive packaging that look like jewelry
boxes. The shoes were priced at $270 for the ones that come with detailed
packages as well as a $180 version that came in a normal Nike box and no added
Nike+ technology. This exclusive line was called the crown jewels pack and
contained shoes inspired by diamonds, jade and ruby. After this release Nike began to release the LeBron X in large
quantities and set a standard price of $180 for the normal version the shoes. Nike released many different color
versions of the shoe to reach the customers’ demands.
December: Nike continued to release normal versions of the LeBron X but for the month of December
released a special Christmas version of the shoe. This version was an exclusive release and was not available in all
the normal retail stores. During this time Nike also released a teaser on its official website for its extended version of
the LeBron X. This version is for use off of the court and is made up of premium materials such as cork, suede and
fine leather. The retail price for this extended line was set at $250.
LeBron X
Page 18
January: Nike released the first shoe in its extended version line of the LeBron X at the begging of the
month. The first shoe in the line was made of cork to symbolize the cork of champagne bottle. This is in recognition
the LeBron’s NBA Championship in which champagne is given to players once they have won the championship.
Nike continued to release extended versions of the shoe throughout the following months.
February: In order to build on customer satisfaction Nike put the LeBron X on Nike ID. This gave the
consumer the ability to customize their very own version of the shoe. Through this customization the consumer can
choose what colors they want as well as personalize the shoe with their name.
March: Nike again placed a teaser on their website for a new version of the LeBron X, this time being a
lifestyle version. The lifestyle version is a shoe to be worn with everyday clothes and did not feature any Nike
technology but simply high quality leather. Nike continued to release different colors of the standard LeBron X as
well as send retailors new point-of-purchase material to hang within the stores.
Budgets
Nike spent around $7 million on marketing and other fixed costs on the LeBron X for one year. After that
Nike focused on advertising its newest model in the LeBron line. With the lowest LeBron X model being price
being at $180, a variable cost of about $40 per unit and a $7 million fixed cost Nike needed to sell 50,000 pairs to
break even.
($180-$40) Q = $7,000,000
140 Q = $7,000,000
Q = 50,000 pairs of shoes
This was not difficult for Nike considering LeBron brought in around $300 million in sales last year. Meaning Nike
made revenues around $226 million based on a fixed cost of $7 million and a variable cost of $40.
Sales = $300 million / Price= $180
1,666,667 pairs sold
$40 (1,666,667) + $7 million = $73,666,680 (total cost)
$300 million - $73,666,680= $226,333,320 (total revenue)
This goes without mentioning these calculations were done by using the cheapest version of the LeBron X. Only a
small quantity of the higher priced versions would need to be sold in order to break even.
LeBron X
Page 19
Controls
Nike was able to stay in close control of overall product quality and quantity to make sure Nike kept a
sense of exclusivity for the LeBron X and was able to control this within the market. Nike will also kept a watch on
customers buy habits and preferences and is how they were able to come up with the idea of an extension and a
lifestyle version. This gave Nike the ability to control the market considering they not only released athletic
footwear but also a casual version. Product quality was controlled through the different price version of the LeBron
X, with the higher quality shoes being priced higher. Brand image was controlled through the stories that each shoe
told. Nike was able to build this image of the product being more than a shoe but a symbol of something else.
Because of all of these actions Nike made, they were able to not only be successful but also maintain control of the
market.
LeBron X
Page 20
References
Badenhausen, K. (2013, May 22). LeBron James Is The NBA's Leading Shoe Salesman. Forbes. Retrieved April 10,
2014, from http://www.forbes.com/sites/kurtbadenhausen/2013/05/22/lebron-james-is-the-nbas-leadingshoe-salesmen/
Badenhausen, K. (2013, February 5). LeBron James Is Right: He Is Underpaid By The Heat And Nike Too. Forbes.
Retrieved May 30, 2014, from http://www.forbes.com/sites/kurtbadenhausen/2013/02/05/lebron-james-isunderpaid-by-the-heat-and-nike/
Crain, R. (2013). Phil Knight on becoming a believer in advertising and forgiving athletes. Advertising Age, 1.
DeEourcy, M. (2004). College Basketball Inside Dish. Sporting News, 62.
Fry, C. C. (2010). Kicking the landfill habit [footwear industry]. Engineering & Technology, 54-56.
Jakab, S. (2014, March 20). Justifying Nike's Share Price Is No Layup. Wall Street Journal (Online). p. 1.
Lam, W., Sterzing, T., & Cheung, J. (2013). Influence of protocol complexity on fit perception of basketball
footwear. Footwear Science, 155-163.
Martinez, J. (2012, December 8). DeAndre Jordan launches the Under Armour Spine Bionic at the House of Hoops
KicksOnFire Retrieved April 11, 2014, from http://www.kicksonfire.com/2012/12/08/deandre-jordanlaunches-the-under-armour-spine-bionic-at-the-house-of-hoops/
McBride, S. (2007, May 23). Foot Locker and Nike Form Their Own Team to Sell Shoes. Wall Street Journal Eastern Edition. p. B10.
McKeague, C. (2012, August 22). Nike's $300 Lebron X Shoe Stirs Controversy. Newsy. Retrieved April 10, 2014,
from http://www.newsy.com/videos/nike-s-300-lebron-x-shoe-stirs-controversy/
Powell, M. (2014, May 28). Sneakernomics: Which Basketball Player Sells The Most Shoes? Forbes. Retrieved
May 30, 2014, from http://www.forbes.com/sites/mattpowell/2014/05/28/sneakernomics-which-basketballplayer-sells-the-most-shoes/
Robertson, O. (2005). LeBron James. Time, 94.
Sangani, K. K. (2012). The cost of running [Footwear industry]. Engineering & Technology, 64-67.
Siemers, E. (2012, November 8). Despite strong gains in basketball, Adidas still has big hill to climb. Portland
Business Journal. Retrieved April 11, 2014, from
http://www.bizjournals.com/portland/blog/threads_and_laces/2012/11/despite-big-gains-in-basketball.html
LeBron X
Page 21
Table 1
Targeted Segment
Professional athletes and
serious players
Customer Need
High quality materials that
can withstand constant
pressure
Corresponding Features/Benefits
Minimal stitching to prevent rips from heavy wear
Padded lining for comfort and durability
Ankle and heel support
Fly wire lacing system to keep you locked in
Full length Air Zoom unit on the sole
Higher cut collar on the medial side
Advanced technology
Offers Nike+ technology that helps the athlete track
things like how high they are jumping or how many
steps they are taking.
Recreational Players
Good quality shoe at an
affordable price.
The LeBron X without Nike+ is an identical version
made affordable. Offers all the same support just
replaces high quality materials with less expensive
material and removes the Nike+ technology.
Fashion oriented basketball
fan
A shoe that still represents
a basketball frame but
uses high quality non
athletic material.
The LeBron X EXT features premium materials like
suede, denim, cork and leather. Also has laser etching.
A high quality casual shoe that feels like a sneaker
Table 2
Competitor
Adidas
Brand
Adidas D Rose 3
Under Armor
Spine Bionic
Features
 Features premium performance, style, design and the new D Rose
logo.
 Synthetic and nubuck leathers to deliver a clean and stylish offcourt look.
 The upper features a diamond cut-out pattern providing a
functional blend of breathability and support.
 Adidas new SPRINTWEB technology which provides support
and comfort and the dynamic ankle lock system.
 Weight 12.5



Reebok
Zig Encore



LeBron X
Features Micro G foam encapsulated within the chassis.
Exposed, breathable mesh upper with synthetic overlays for
structural support.
Weight: 12oz.
Features a synthetic upper, mid-cut ankle, and forefoot flex
grooves.
Ultra Flexible Zigzag technology for the sole
Weight: 12.7oz
Page 22
Table 3
Strength
 Innovative materials
 High profile endorsements
 Trusted Nike branding
 Loyal customers
Weakness
 Retail price ($180)
 Size of the shoe
 Small production quantities
Opportunity
 Line extensions
 Customer Customization
 Fashion trends
 Wearable technology
Threats
 Increase in materials and labor costs
 Number of endorsements
 Retail space
LeBron X
Page 23