BRAND DOSSIER
Nike Shoes Inc.
Prepared By –
Sunayana Datta
ROmit Acharji
Rohit Gupta
Abhinaba Sen
INDEX
Sr No
1
Topics
Pg No
HISTORY AND HERITAGE
3
3
3
4
-1950-1959: WHEN NIKE BREATHED ITS FIRST BREATH
-1960 - 1969: FOUNDED ON A HANDSHAKE
-1970 - 1979: THE BIRTH OF THE NIKE BRAND AND COMPANY
EVOLUTION OF THE BRAND
2
-1980 - 1989: A DECADE OF TRANSITION
-1990 - 1999: NIKE EXTENDS ITS REACH
-2000 - PRESENT: LEADING A NEW GENERATION
INITIAL POSITIONING AND SUBSEQUENT REPOSITIONING
3
4
-POSITIONING
-SUBSEQUENT REPOSITIONING
9
9
10
ADVERTISING, SALES PROMOTION AND SEGMENTATION STRATEGY
FOLLOWED BY THE BRAND
10
-ADVERTISING
-SALES PROMOTION
-SEGMENTATION STRATEGY
11
13
14
Analysis of product
14
14
18
5
-PRODUCT ANALYSIS
- SWOT ANALYSIS
6
GENERIC COMPETITION
NIKE STRATEGY
7
5
5
6
7
-ENTRY STRATEGY
-NIKE'S P'S OF MARLETING
-COMPETITION
-HOW NIKE IS BETTER THAN ITS COMPETITION?
DISTRIBUTION STRATEGY
19
20
20
21
22
23
8
-MARKETING STRATEGY
-GLOBAL SOURCING
24
25
25
9
SUMMARY REGARDING FUTURE DIRECTIONS OF THE BRAND
26
10
REFERNCE
27
HISTORY AND HERITAGE
1950-1959: WHEN NIKE BREATHED ITS FIRST BREATH
Today we all know Nike as the world’s leading sports brand, but it did not start like this. It was
due to two visionary men who pioneered a revolution in athletic footwear that redefined the
industry.
Bill Bowerman a nationally respected track and field coach at the University of Oregon, he was
constantly seeking new ways to give his athletes a competitive advantage. He always used to
experiment with different innovations in running shoes. But the established shoemakers during
that period ignored his ideas. So he started cobbling shoes for his runners.
Phil Knight was a talented middle-distance runner from Portland, he joined Oregon in the year
1955. He was coached by Bill Bowerman. After graduating from Oregon he did his MBA in
finance from Stanford University, where he had a vision to build a business where quality
running shoes would be made in Japan and sold in America and that would compete with more
established German brands. As he thought that German made shoes during those times were
very expensive. Moreover, they thought that the German shoes weren’t really designed with
the unique needs of distance runners in mind.
Knight’s work at Stanford had shown him that athletic shoes could be sourced from factories in
Asia at costs that were low enough to compete favorably with the dominant German
competitors. But the question was how to design a shoe that would meet distance runner’s
needs. The answer was found in Bowerman’s kitchen, where with his wife’s waffle iron and
some latex, he created the waffle sole, which together with a lightweight nylon upper, would
revolutionize the running shoe. So they made a call to Onitsuka Co. in Kobe, Japan,
manufacturer of Tiger shoes and persuaded them to make shoes as per their design.
1960 - 1969: FOUNDED ON A HANDSHAKE
Both Knight and Bowerman contributed $500 to start
a new company, Blue Ribbon Sports that would
import Bowerman-designed shoes made by Onitsuka
Tiger. They placed their first order of 300 pairs of
shoes in January 1964. In the first year they managed
to sale about 1300 pairs of running shoes, generating
a $8000 in revenues. To manage the growing
requirements of the company they needed another
employee. Enter Jeff Johnson, whom Knight had met at Stanford. A runner himself, in 1965
Johnson became the first full-time employee of Blue Ribbon Sports and quickly became an
invaluable utility man for the start-up company.
Johnson created the first product brochures, print ads and marketing materials, and even shot
the photographs for the company’s catalogues. By 1969, the business had grown to 20
employees and a handful of retail outlets.
1970 - 1979: THE BIRTH OF THE NIKE BRAND AND COMPANY
During this time the relationship between BRS and
Onitsuka was falling apart. Knight and Bowerman were
ready to make the shift from being a footwear distributor
to a manufacturer and designer of their own brand of
athletic shoes.
They selected a brand mark which is famously known as
the “Swoosh,” it was created by graphic design student at
Portland State University named Carolyn Davidson. The
new Nike line of footwear debuted in 1972, in time for
the U.S. Track & Field Trials, which were held in Eugene, Ore. n the 1972 Olympic marathon that
soon followed, four of the top seven finishers wore Nike shoes.
By 1974, after ten years of effort, the Nike shoe with the waffle sole had become America’s
best-selling training shoe. With a new name, a new logo and a new design innovation BRS
needed an athlete to promote and endorse and lift the new Nike line. That is when they found
a young man named - Steve Prefontaine. He was an athlete at Oregon’s. He had never lost any
race at his home track over the one-mile distance, and quickly gained national exposure
because of cover stories on magazines like Sports Illustrated and his fourth-place finish in 1972
in the 5,000m in Munich. He became a powerful ambassador for BRS and Nike.
Nike was on the map at last, and in 1978 Blue Ribbon Sports changed its name to Nike.
EVOLUTION OF THE BRAND
1980 - 1989: A DECADE OF TRANSITION
In 1979 the first line of clothing and the Nike Air shoe cushioning device was launched. By the
start of 1980s Nike's combination of groundbreaking design and savvy and aggressive marketing
had allowed it to surpass the German athletic shoe company Adidas AG, formerly the leader in
U.S. sales. By the end of 1980, Nike became a publicly traded company, also by the end of this
year Nike had 50% of the market share in the United States athletic shoe market.
During 1980’s the company turned its attention towards the international market and in 1981
Nike International, Ltd was created. It went into Asian, European, Latin American and African
market. In 1982 it had outfitted Aston Villa. In 1982 it had More than 200 types of shoes and
during this time it diversified from only shoes to different items of clothing. In the next
consecutive two years Nike had experienced heavy losses as the jogging industry was going
down and there was a huge boom in the aerobics industry which the company had
miscalculated. So the company had to bring back its founder Knight to take the post of the
President. In 1985 it signed up then-rookie basketball player Michael Jordan to endorse a new
version of its Air shoe and it was named as ‘Air Jordan.’ The shoe was very successful and the
revenues hit over $100 million in the first year.
In 1986 Nike announced further diversification into number of new products which included
casual apparel for women, a less expensive line of athletic shoes called Street Socks, golf shoes,
and tennis gear marketed under the name ‘Wimbledon.’ In 1987 Nike had designed a major
marketing campaign to launch a new product which would differentiate it from the rest of the
brands. The product was Nike Air Max. The campaign was supported by a memorable TV ad
whose soundtrack was the original Beatles’ recording of ‘Revolution.’ In 1988 Nike aired its
famous add ‘Just Do It.’ The add was focused on an athletic enthusiastic generation and
challenged them to achieve their own goals.
1990 - 1999: NIKE EXTENDS ITS
REACH
During this time Nike opened
Niketown in Portland, a store for
selling full range of Nike products.
During this period Nike saw potential
in its women’s shoe and sports apparel
division. Sales of Nike women's apparel
lines Fitness Essentials, Elite Aerobics,
Physical Elements, and All condition
gear increased by 25 percent in both
1990 and 1991 and jumped by 68
percent in 1992. In July 1992 Nike
opened its second Niketown retail
store in Chicago. In 1994 Nike acquired
Canstar Sports Inc., the leading maker of skates and hockey equipment in the world and
renamed it as Bauer Nike Hockey Inc.
Nike’s big break came in 1994 when the Nike sponsored Brazilian team won the football world
Cup. The victory transformed Nike’s image from a sneaker company to a brand that
represented emotions and identification. They eventually made their way into English football
with their first kit deal (uniform/apparel) with powerhouse club Arsenal. Nike also signed the
US men’s and women’s national soccer teams, as well as many of national teams around the
world. In 1995 Nike signed its next big superstar spokesperson, Tiger Woods for a reported $5
million per year. Competitors laughed at the deal until he won the 1997 masters by a record of
12 strokes and then went onto win a number of tournaments. In 1997 Nike started making Ice
hockey equipment signing popular NHL players.
It also took number of other new initiatives during this phase. Having initially missed out on the
trend toward extreme sports (such as skateboarding, mountain biking, and snowboarding), Nike
attempted to rectify this mistake by establishing a unit called ACG&mdashâ, ‘all-conditions
gear' in 1998. Two years later, the company created a new division called Techlab to market a
line of sports-technology accessories, such as a digital audio player, a high-altitude wrist
compass, and a portable heart-rate monitor. Both of these initiatives were aimed at capturing
sales from the emerging youth Generation. In 1999 it started selling its shoes online via
company website. In September Nike announced that it would buy about ten percent of Fogdog
Inc., which ran a sporting goods e-commerce site, in exchange for granting Fogdog the exclusive
online rights to sell the full Nike line.
In the 1990’s Nike faced many protests and boycotts over regarding the treatment of workers
at the factory in Asia that employed nearly 400,000 people and that made the bulk of Nike
shoes and much of its apparel. The charges included abuse of workers, poor working
conditions, low wages, and use of child labor. The protesters included church groups, students
at universities that had apparel and footwear contracts with Nike, and socially conscious
investment funds. So Nike finally addressed the problems and changed the workforce in the
factories of Asia, there was an increase in the minimum age that can be employed and a
tightening of the quality standards.
2000 - PRESENT: LEADING A NEW GENERATION
Nike started the new
millennium with a new
footwear cushioning
system called Nike Shox,
which debuted in Sydney in
2000. The development of
the shoe took more than 15
years of dedication and
research. The result was a
cushioning and stability
system.
In 2007 Nike acquired
Umbro, a British maker of
soccer related footwear,
apparel and equipment.
The acquisition helped
boost Nike’s presence in
soccer as the company
became the sole supplier of uniforms to over 100 professional soccer teams around the world.
In 2008 Nike focused more on the international markets, especially China, during the 2008
Summer Olympics in Beijing. Although Nike’s rival, Adidas, was the official sponsor of the
Olympic Games, Nike had special permission from the International Olympic Committee to run
Nike ads featuring Olympic athletes during the games. In addition, Nike sponsored several
teams and athletes including most of the Chinese teams and 11 of the 12 high profile players on
the United States men’s basketball teams. That year sales in Asian region grew 15% to $3.3
billion and Nike’s international division grew to 53% of company’s revenue. Some believed
Nike’s marketing strategy during the Olympics was more effective than Adidas’s Olympic
sponsorship. In 2009 it had launched a new program at nikegolf.com where fans of Tiger Woods
can ask him questions and they could also hear Tiger talk about golf. The session was part of a
nationwide Nike Golf consumer experience day, which included equipment demos, long drive
contests and in store specials.
In tennis, Nike had aligned with Maria Sharapova, Rodger Federer and Rafael Nadal to push its
line of tennis clothing and gear. Some called the famous 2008 Wimbledon match between
Rodger Federer and Rafael Nadal where both were dressed in Nike kit from head to toe – a five
hour Nike commercial valued at $10.6 million.
Nike had teamed up with the 7 time Tour de France champion Lance Armstrong not only to sell
Nike products but also help Armstrong’s Livestrong campaign. Nike designed, manufactured
and sold over 70million yellow Livestrong bracelets, earning $80million for the Lance Armstrong
foundation. It also featured Armstrong’s message of survival.
To promote the line of basketball shoes and apparel, it continued to feature basketball
superstars such as Kobe Bryant and Lebron James. It also formed a partnership with Foot Locker
to create a new chain of stores, House of Hoops by Foot Locker, which offers only basketball
products by Nike brands such as Jordan and Converse.
Recently, Nike’s the lead in the running category has grown to 60% market share due to its
exclusive partnership with Apple. Nike+ (plus) technology includes a sensor that runners put
into their running shoes and a receiver, which fits into an iPod, iTouch or iPhone. When the
athlete goes for a run or hits the gym, the receiver captures his or her mileage, calories burned
and pace and is stored until the information is downloaded. Nike+ is now considered the
world’s largest running club.
In 2008-2009, Nike+ hosted the Human Race 10K, the largest and the only global virtual race in
the world. The event, designed to celebrate running drew 780,000 participants in 2008, in the
next year the participation was even more.
Nike has long had a reputation for responsible environmental practices. According to Clean AirCool Planet (a New England-based environmental organization), Nike ranks in the top three
companies (out of 56 surveyed) in a report of climate-friendly companies. As an example, Nike
launched a campaign to coincide with Earth Day 2008. It featured a commercial with NBA
basketball star Steve Nash wearing Nike's Trash Talk Shoe, which was constructed from pieces
of leather and synthetic leather waste from factory floors. The Trash Talk Shoe sole was made
from ground-up rubber from a shoe recycling program. However, only 5,000 pairs where ever
produced for sale. Another project Nike began long before the Green craze in 1993- is labeled:
Reuse-A-Shoe program. The program aims to help the environment and the community by
collecting old athletic shoes of any make in order to reprocess and recycle them. The material
that is collected is then used to manufacture sports surfaces such as basketball courts, running
tracks, and playgrounds.
Today Nike dominates the athletic footwear market with a 31% market share globally and 50%
market share in US. Swooshes abound on almost everything from wristwatches to skateboards
to swimming caps. The firm’s long term strategy focuses on basketball, running, football,
women’s fitness, men’s training and sports culture. As a result of its successful expansion across
geographic markets and product categories, Nike is the top athletic apparel and footwear
manufacturer in the world. Though it took a few decades for the company to evolve, Nike Inc.
has become a formidable name among sports
apparel and global brands in general.
INITIAL POSITIONING AND
SUBSEQUENT REPOSITIONING
POSITIONING
During the early phase, the company promoted its brand by associating it with the names of
many famous athletes, establishing itself as a premium brand. The brand, at its inception got
promoted by Steve Prefontaine, who was an athlete at Oregon’s and never lost a single race of
over one mile distance. In 1985, Nike signed up Michael Jordan. Apart from this names such as
Maria Sharapova and Roger Federer also came to be largely associated with the brand. Thus,
the brand was successful in creating an image which focused on power, dedication, hard work,
and the desire to succeed. Nike has been able to become a symbol of this simply by the
displaying the spokesperson or endorsers doing what they do best. Nike not only always has its
athletes wearing all top Nike gear but also has them sweating, working hard, or reflecting on
past events. The brand image that Nike was initially building represents a true American icon
that portrays high performance, strength, dedication, perseverance and achievement. They
designed and promoted their products as “high performance shoes” that were durable and
light weight for runners, and less fashionable.
SUBSEQUENT REPOSITIONING
In terms of repositioning, Nike did not undergo any drastic change as such. It is still positioned
as a premium brand that sells expensive products, with a marketing strategy that centers
around the brand image provided by the distinctive logo (the swoosh). However, the designing
of the shoes are considered much important now as the brand targets for the consumer market
as well. Consumer behavior has been changing in a way that they are shifting from sportswear
to fashion sportswear. Maintaining itself as a premium brand, Nike is attempting to shape its
image as a brand that provides products that are stylish, yet comfortable and not restricted
within the boundaries of just sportswear. The distinctive ‘swoosh’ can now be associated with
the non-athletes as well, who, apart from comfort and high quality product, stress upon using
Nike products as a means of enhancing their style statement.
Advertising, Sales Promotion and Segmentation Strategy followed by
the Brand
FROM:
TO:
ADVERTISING
In 1965, Jeff Johnson, created the first product brochures, print ads and marketing materials,
and even shot the photographs for the company’s catalogues. He established a mail-order
system, opened the first BRS retail store (located in Santa Monica, Calif.) and managed
shipping/receiving. He also designed several early Nike shoes, and even conjured up the name
Nike in 1971. The brand mark today known as “swoosh” was created by a graphic design
student at Portland State University named Carolyn Davidson. After the adoption of a new
name and a new logo Nike needed an athlete to endorse and elevate the new Nike line
Nike aired its first national television ads, in 1982, created by newly formed ad agency
Wieden+Kennedy (W+K), during the broadcast of the New York Marathon. The Cannes
Advertising Festival has named Nike its Advertiser of the Year in 1994 and 2003, making it the
first company to receive that honor twice.
Nike also has earned the Emmy Award for best commercial twice since the award
was first created in the 1990s. The first was for "The Morning After," a satirical
look at what a runner might face on the morning of January 1, 2000 if every dire
prediction about the Y2K problem came to fruition. The second was for a 2002
spot called "Move," which featured a series of famous and everyday athletes in a
variety of athletic pursuits.
In 1985, Michael Jordan, by endorsing Nike helped to gain back its
position in the market which it lost for sometime due to some
miscalculations on the aerobics boom.
The major marketing campaign in 1987 to promote ‘Air Max’, the first Nike footwear to feature
Nike Air bags that were visible. The campaign was supported by a memorable TV ad whose
soundtrack was the original Beatles’ recording of ‘Revolution.’ However, Nike was criticized for
using the song against the wishes of Apple Records and had to pay US$250,000 to Capitol
Records Inc., which held the North American licensing rights to the recordings, for the right to
use the Beatles' rendition for a year.
A year later, Nike built on its momentum from the ‘Revolution’ campaign by launching a broad
yet empowering series of ads with the tagline “Just do it.” The series included three ads with a
young two-sport
who espoused the
training shoe.
athlete named Bo Jackson,
benefits of a new cross-
In 1994, Nike signed several individual players from what would be the World Cup-winning
Brazilian National Team. In 1995, Nike signed the entire team, and began designing the team’s
distinctive uniform. Nike also signed the US men’s and women’s national soccer teams, as well
as dozens of national teams around the world.
In 1996, Nike Golf landed a vastly talented but as-yet-unproven young golfer named Eldrick
“Tiger” Woods for a reported $5 million per year. Competitors laughed and critics howled at
Nike’s "folly," until Tiger won the 1997 Masters by a record 12 strokes.
Just as Nike’s products have evolved, so has Nike’s approach to marketing. The 2002 “Secret
Tournament” campaign was Nike’s first truly integrated, global marketing effort. Departing
from the traditional “big athlete, big ad, big product” formula, Nike created a multi-faceted
consumer experience in support of the World Cup.
“Secret Tournament” incorporated advertising, the Internet, public relations, retail and
consumer events to create excitement for Nike’s soccer products and athletes in a way no
single ad could ever achieve. This new integrated approach
has become the cornerstone for Nike marketing and
communications.
At the 6.0 campaign, Nike introduced a new line of T-shirts
that include phrases such as "Dope", "Get High" and "Ride
Pipe" – sports lingo that is also a double entendre for drug
use. Boston Mayor Thomas Menino expressed his objection to
the shirts and strongly pointed out the fact that the country does not need an organization like
Nike to appeal to the younger generation by giving credence to the drug issue. A company
official however stated that the shirts were meant to pay homage to extreme sports, and that
Nike does not condone the illegal use of drugs. Eventually Nike was forced to replace the shirt
line.
Today, Nike continues to seek new and innovative ways to develop superior athletic products,
and creative methods to communicate directly with its consumers.
SALES PROMOTION
Sales promotion is another means of promoting the
brand and thus increasing the sales. The objective is not
only to increase the sales in the consumer market but
also among the channel partners. Sales promotion can
be carried out by means of contests, coupons, freebies,
loss leaders, point of purchase displays, premiums,
prizes, product samples, and rebates.
In addition to using advertising, public relations, and personal selling, marketing managers can
use sales promotion to increase the effectiveness or their promotional efforts. But personal
selling is also a key factor to Nike's success in the retailing world. Personal selling is a purchase
situation involving a personal, paid for communication between people in an attempt to
influence each other.
Nike undergoes sales promotion by means of TV commercials, social media, magazine adds,
and they use the athletes who represents them.
It is not often that Nike retail stores or website offers discounts on its products. Although Nike
is not known for offering discounts on sales, it still occupies a position among the top
manufacturers of sportswear by a land slide due to the quality of products they offer and that
draw the customers towards them. Discounts on the products are mainly carried out at other
retailers like Models, Footlocker, Finishline, and outlets such as Woodbury Commons.
As for personal selling Nike really depend on all their employees and sales associates and all
those with whom they sign the endorsement deals . Nike only wants the best for their stores. It
make sure that the selling agents in all the retail stores are equipped with enough knowledge
regarding the brand. Not only that, they need to be updated on all the information of the
products to be provided to the customers and must be able to answer all their queries. Another
example of personal selling for Nike would be the deal they did with the NFL. Starting from the
beginning of this NFL season and years to come, Nike will be the manufacturers of all the NFL
uniforms.
SEGMENTATION STRATEGY
Most of the consumers of Nike’s products are mainly sportsmen. This is so because of the utility
that comes with the products. An athlete is more likely to go a sports shoe designed and
marketed by Nike more than a person who detests sporting and exercises. Nike targets these
consumers by agreements between Nike and athletic teams, college’s athletic teams, etc for
product sponsorship and eventual promotion to the members of these teams. In this way, Nike
is able to reach out to a wide number of consumers who are more likely to buy. Even though
others are likely to buy the products, Nike pays specific emphatic targeting to the athlete more
than any group of individuals even though it also targets the youth who have embraced the hip
hop culture.
Nike lays a number of strategies to target their immediate consumers; athletes and other
sportsmen. The targeting strategies include among others the sponsorship of products by
professional athletic teams, celebrity athletes and college athletic teams. This strategy is
specifically successful because of its ability to reach a large number of athletes. If the athletic
team manager prescribes a specific type of track shoes made by Nike, the trainees have no
option other than to buy them. The teams can as well buy the track shoes in bulky and supply
them to the team members.
The second strategy that Nike applies is the designing of product destination. It does this by
associating success with the product. For example, when a celebrity athlete sponsors a specific
brand of athletic shoes, the brand will be associated with success. This psychological effect is
reinforced with advertisements that affirm this position.
Finally, Nike targets the consumers who are likely to develop product intimacy; those who care
more about the utility and quality of the product than the price. In this way, the pricing is not
affected too much in a bid to accommodate a large number of consumers. However, price has
also been factored in Nikes marketing strategies as shall be seen later in this paper.
ANALYSIS OF PRODUCT
Nike Shoes has a total of 14 types of shoes and they are as follows –
Air Force 1 – Nike Air Force was created by designer Bruce Kilgore. This was the first
basketball shoe to use the Nike Air technology.
This shoe is offered in low, mid and high top. The mid cap comes connected with a Velcro
securable strap, where as in high cap the Velcro strap is movable and removable. The most
commonly sold Air force is in solid white and black. There are many newer versions of Air Force
shoes in the market today.
Air Jordan - It is a brand of shoes which were first released for public consumption in 1985
after Michael Jordan himself wore them as a rookie in 1984, with
new designs released annually thereafter. After its introduction it
has evolved from original basketball shoes to models of different
uses, including training and casual shoes. The Air Jordan line of
shoes has since its inception has undergone many changes and
improvements.
Nike Air Max – It was released in 1987. The Nike Air Max shoe uses a large air cushioning unit
at the heel which is visible from the side of the midsole in most models. Different types of Air
Max cushioning include "Air Max2" which does not have the "holes" in the cushioning unit and
is of high pressure, "Tube Air" which is visible in several small circles on the midsole of the shoe,
"Total Air" which is basically just another word for full Air Max cushioning, "Tuned Air," which is
a system of individual pods supposedly "tuned" to different areas of the foot.
Air Zoom Vomero - It is a neutral running shoe. It features full length Zoom Air, an external
heel counter, a crash pad in the heel for shock absorption and Fit Frame technology for a stable
fit.
Chuck Taylor All Stars - Also known as Converses are canvas and rubber shoes. Its aim was
to capture the basketball market. Throughout the years the shoe has made a shift from athletic
sportswear to casual footwear
Nike Considered – It is a sustainable line of shoes produced by Nike. It utilizes materials found
primarily within 320 km of the Nike factory which reduces
the energy used for transportation. The manufacturing
process reduces solvent use by more than 80% compared
with Nike’s typical products. The leather comes from a
tannery that recycles wastewater to ensure toxins are kept
out of the environment, and it is colored using vegetablebased dyes. The shoe's outer sole includes rubber made
from recycled factory rubber waste. Considered is part of a
larger effort Nike has been undertaking for several years to
reduce waste, eliminate toxic substances.
Dunk – It was introduced in 1985. It was initially designed for basketball players from
Universities and colleges. But during the year the Dunk has transformed from a basic basketball
shoe into a subcultural icon and an inspiration for fashion. This became popular among the
skaters due to the stability and lower profile sole which improved grounding performance.
Nike Free – It was introduced in 2004. It is a shoe that allows the muscles in the foot to gain
strength by providing less constriction, runners are advised to gradually break into the shoe
rather than immediately running long distances as to prevent muscle cramps and other
discomforts. There is a numbering system in this shoe. The numbering system indicates the
cushioning of the shoe and follows a scale ranging from 0 (barefoot) to 10 (normal running
shoe), i.e. Free 3.0 being the least and Free 7.0 being the most cushioned model so far.
Mercurial Vapor – It is a football boot. It is known for being light weight. Because of this, the
Because of this, the boot is favored by many players for whom speed is a very important part of
their game, notably wingers or strikers. The boot is available in two versions the Soft ground or
the Firm ground. The soft ground version’s sole plate is fitted with six NikeSnap removable
studs, the firm ground has seven moulded blades.
Nike CTR360 Maestri – It was released in 2009. It was introduced on pitch by Cesc
Fabregas. Maestri is an Italian word which means “Master”. It was mainly created for the
playing midfielder. The shoe was designed to assist players with receiving and distributing the
ball, such as dampening pods on the forefoot, and asymmetrical lacing to increase the amount
of contact with the ball. To help with passing the ball there is a rubberized pass pad on the
instep along with memory foam to create a more uniform surface. In order to help improve the
player's first touch, Nike developed a new synthetic leather for the boot, called KANGA-LITE.
KANGA-LITE is water resistant, similar to other synthetic leathers, but has better ball feel and
touch. It is available in five versions, FG – Firm Ground, SG - soft ground, AG - artificial grass, TF
- turf and IC - indoor.
Nike Hypervenom –
It is a range of football shoes released in 2013. It is coming
under the category of agility. The boot is designed for agile
traction and features the All Conditions Control coating for
an enhanced performance in both wet and dry conditions
and NikeSkin for perfect dribbling and ball control and the
boot will be headlined and showcased by Neymar and Mario
Balotelli at the 2013 FIFA Confederations Cup.
Shox – It is an array of small hollow columns in the midsoles of the shoe. There are different
formations, but Shox are usually four circular columns in a square formation to provide
cushioning. There can also be five or six Shox, 25 mm high, though they may vary in height, and
triangular and rectangular Shox that Nike says provide better stability. The newer Shox series is
compatible with "Nike+ technology." The Nike Shox Saya+ is the most recent Shox with this
feature. The new Nike Shox Q'Vida Hi shoe is a new woman's "dance boot" implementation of
Shox.
Nike Tiempo –
It is made targeting the soccer players. It is known for its
comfort. It is endorsed by players such as Ronaldinho,
Jérôme Boateng and Javier Hernández as well as several
others. Like many other Nike shoes even this one in available
in 4 different soles - FG - firm ground, SG - soft ground, AG artificial grass and IC - indoor.
Nike Total 90 –
It was introduced in 2000, designed to be used for
association football. The Total 90 brand name is
derived from the 90 minutes played in a football
match. It is now commonly abbreviated by Nike
themselves to 'T90'. In 2007 Nike launched a new boot
named ‘Nike Total 90 Laser’. Its main feature was the
concentric rubber rings (shot-shield) on the top of the
boot, which, it was claimed, improved accuracy, swerve
and power. It also boasted a "E-Vent" membrane
throughout the boot's upper, which increased breathability, while blocking absorption.
SWOT ANALYSIS
Strengths –
 Innovation – Nike Shoes had always improved their products by daily innovations.
 Brand Name Recognition – It is the number one sports brand in the world. It has evolved
into a huge multinational company over the time. Its logo is also quite distinguishable as
well as its slogan.
 Strong Distribution Chain – It has a very good distribution chain. The low priced item is
sold in all retail outlets whereas the high priced exclusive items are given only to a few
distributors.
 They have a very strong research and development team that complements innovation.
 Customer Satisfaction – Customers who buy Nike are normally satisfied with their
product.
Weaknesses –
 Depends strongly on footwear – If Nike faces any downturn in footwear the whole
company may collapse.
 There have been labor violations, bad publicity with sweatshops issues and unethical
business practice. Nike’s production is done out of the country where the cost of
production is less. This is perceived badly in US.
 Price Sensitive – This is a strategy that calls for higher pricing points so as to push the
perceived product value. Nike always hopes those consumers who consider a product to
be of high quality are likely to pay the high price more often.
Opportunities –
 Reduce the price so that they can reach out to more market. They can add some items

that are not that expensive to make and market them to those communities who cannot
afford such expensive items.
Product development offers Nike many opportunities. The brand is fiercely defended by
its owners whom truly believe that Nike is not a fashion brand however consumers that
wear Nike product do not always buy it to participate in sport. In youth culture
especially, Nike is a fashion brand. This creates its own opportunities.
Threats –





Fluctuation in currencies and exchange rates by being a global brand.
Huge competition from Adidas, Puma and other brands.
International operations and sources of supply are subject to the usual risks of doing
business abroad, such as possible revaluation of currencies, export and import duties,
anti-dumping measures, quotas, safeguard measures, trade restrictions, restrictions on
the transfer of funds and, in certain parts of the world, political instability and terrorism.
Importing costs, due to international barriers and shipping requirements.
Association with disgraced sportspersons such as Tiger Woods and Lance Armstrong.
GENERIC COMPETITION
By generic competition we mean competition among products which are different but satisfy
the same need or want or provide the same benefit or utility.
For Nike Shoes its generic competition can be anything that will give the same utility that of
shoes like sandals, Slippers, Flip-flops.
But if we only look at the Nike Football shoes then there is no generic competition as people
cannot wear sandal and play football, either they will play it barefoot or will wear a pair of
football shoes.
NIKE’S STRATEGY
NIKE has evolved from being an importer and distributor of Japanese specialty running shoes
to one of the leading designer, distributor and marketer of athletic footwear.
Now it is one of the largest sellers of athletic footwear and apparel in the world with
subsidiaries in over 200 countries across the world. It has been launching new technically
advanced shoe models from time to time, backed by innovative advertisements, celebrity
endorsements, successful associations and event sponsorships.
During the crisis in the late 1990s, NIKE decided to strengthen its management, overhaul its
information systems, and streamline its supply chain management. Since, then NIKE has been
achieving rapid growth by using aggressive marketing techniques and strategies. However, due
to the changing fashion trends, fall in sale of higher-priced shoes and increase in competition,
NIKE is still facing many challenges.
ENTRY STRATEGY
NIKE’s business model was developed by Knight. Knight realized that lower-cost, high quality
Japanese producers were taking over the US consumer appliance and electronics markets, most
leading footwear companies like Adidas were still manufacturing their shoes in higher-cost
countries like the US and Germany. So, Knight believed that by outsourcing shoe production to
lower-cost Japanese producers, Blue Ribbon Sports could undersell its competitors and break
into the market. Hence, they started to import high-tech sport shoes from Onitsuka Tiger of
Japan.
NIKE entered India in the mid-1990s through an exclusive licensing arrangement with Siera
Industrial Enterprise Private Limited (SIEPL). NIKE’s marketing objective was to tap the Indian
sports-and-fitness shoe market - & million pairs of shoes. Rather than cricket the focus was on
basketball and tennis. The performance in India was not far below expectations. This allowed
NIKE to change its plan from 100 percent imports to localizing the products, thereby making
them more affordable.
However in spite of being the Number 1 Sportswear Company in the world, Reebok swayed
away with the lion’s share of the Indian market.
In order to reinforce its flagship brand NIKE introduced Time wear in 2002, with a threepronged strategy, focusing on width of merchandise, extensive distribution and the
development of a distinct positioning.
NIKE’S 4 P’S OF MARKETING
 Product
NIKE’s products include shoes, apparels and equipment products like baseball, running, tennis
for men, women and children. Since starting business in 1979, NIKE became very popular
among the youth due to Urban fashion clothing products. It also sells small amounts of plastic
products to other manufacturers.
Shoes are NIKE's flagship product. The company manufactures different shoes for a wide variety
of sports, such as basketball, football, golf, soccer, baseball, snowboarding, hockey, tennis and
volleyball. NIKE also produces apparel for sports activities, as well as other activities including
dance and yoga. It features different collections for its apparel, including Livestrong, NIKE Pro,
NIKE Free and SPARQ. In addition, NIKE makes casual clothes for men and women. Aside from
shoes, NIKE also sells sports equipment, such as baseball bats, balls, swimming caps, rackets
and golf clubs. NIKE also sells gloves and yoga mats, as well as agility cones. Other sports
equipment it sells includes weights and sports guards such as knee pads, wrap sleeves and shin
guards. The company is also well-known for accessories such as watches, bags and socks, as
well as consumer technology such as the NIKE+ supplement for the iPod. NIKE also sells rubber
bracelets, training DVDs and athletic belts.
 Price
NIKE’s products are high priced for the high quality it offers and being such a well renowned
brand. It targets customers who embrace product intimacy and thus care less about the
product. This has enabled NIKE to set relatively higher prices than its competitors. This is a
strategy that calls for higher pricing points so as to push the perceived product value. Once
consumers develop product intimacy, they come to associate their person with the product and
will pay whatever price quoted on the product provided it has a NIKE logo. Another important
thing to note is the fact that NIKE uses the vertical integration pricing strategy in which they
take ownership of the participants at channel levels that differ and they also engage in
multifarious channel level operations both in a bid to control costs and thus influence pricing
function.
 Place
There are 25000 retailers of NIKE in US, and its products are supplied in almost 200 countries of
the world. In the international markets, NIKE sells its products through independent
distributors. The delivery of the right product and at the right time to the consumer not only
effects utility but also leads to high degree of consumer satisfaction and loyalty. NIKE
distributes its products on level basis. The high priced premium products are given to certain
distributors while leaving the low priced to be sold at highly discounted prices at mega retail
stores such as Wal-Mart.
 Promotion
NIKE uses a very effective promotional tool in the market. First, NIKE’s logo is very distinctive
and highly recognized all over the world. Its company also has advertising in the newspapers
and invites a number of famous athletes as its brand ambassadors to make its brand image
strong. Some of the sportsmen signed by NIKE include soccer stars such as Ronaldinho, Ronaldo
and Roberto Carlos, basket ballers such as Jermaine O’Neal and Lebron James, triathlete Lance
Armstrong and golf superstar Tiger Woods. This has created a relatively high degree of NIKE
products’ awareness. Besides the signing of celebrity sportsmen to promote their products,
NIKE has also employed a great deal of advertisements through the mass media. NIKE employs
a selective-demand advertisement focused on the high priced shoes used for traditional sports
advertisements through the mass media. NIKE also sponsors some events like Hoop It Up,
which makes it one of the most recognizable brands in the world.
COMPETITION
NIKE’s fiercest competitions are from other sports brands, especially ADIDAS and PUMA.
Moreover the market in which NIKE operates is one of the most competitive marketplaces.
Thus, for a company to survive and succeed in such a market requires a continuous need to
develop new products with higher quality than its competitors. NIKE’s competitors like ADIDAS
and PUMA are developing alternative brands to take away NIKE’s market share. They compete
with NIKE in product design, quality and technology.
HOW NIKE IS BETTER THAN ITS COMPETITION?
NIKE’s focus has always been on customer satisfaction. It invests a huge deal in product
research and development in order to offer better sports products to its customers. It has
always striven to provide a competitive edge to foster the best performance in its athletes.
NIKE’s researchers work on three primary areas: Biomechanics (study of human movements),
Physiology (study of the integration of the body’s energy system and responses to the
environmental stress) and Sensory or Perception (subjective evaluation of product attributes,
usability and durability).
Due to great product quality and product innovation, customer satisfaction and customer
retention for NIKE is very high compared to its competitors. The only area where the company
faces tough time is in the area of high competitive prices. Competitors like ADIDAS,
TIMBERLAND offer products at lower prices compared to NIKE. Hence, the balance scorecard
shows that NIKE is a good-neutral in customer satisfaction.
NIKE has an efficient internal operation. This is reflected through its better financial ratios
compared to its competitors. Some of the key factors that are associated with it are its distinct
marketing capabilities, volume manufacturing capacity, extensive research and development
efforts to design premium athletic products for its customers, product differentiation and
innovation and distribution capabilities. Efficient distribution capacities and use of IT to control
Inventory helps NIKE in maintaining a better inventory turnover ratio. Thus, it can be said that
NIKE is doing good in its internal operations.
NIKE is the leader of industry in product differentiation. This helps the company to boost its
profit through the sale of different products. Another advantage of producing a number of
product lines is the reduction of risk in that i.e. if one product fails there are numerous other
products to compensate for its loss.
NIKE designs most of its footwear for athletic purposes. Hence, to diversify its products, a large
percentage of their products come from sales of footwear, apparel and accessories for casual
and leisure purposes. It diversifies its products in numerous ways. It manufactures sports Shoes
for three different segments of people: women, men and children. Secondly, it offers a variety
of footwear accessories for sports such as football, cricket, tennis, basketball etc.
NIKE provides its products through stores as well as online, thereby removing the access
barrier. Through its excellent distribution system it delivers the products faster, thereby
removing the time barrier. NIKE provides high product quality, technologically advanced
applications like “NIKE with Apple”. NIKE’s products are high priced, but through more factory
outlet stores it is making an effort to lessen the wealth barrier it is facing as a result of high
priced products.
NIKE has a good control over production costs. Through this they have in a way managed to
lower selling and administrative cost as compared to its competitor ADIDAS. IN a nutshell it can
be inferred that NIKE is deploying its core competencies or capabilities and resources better
than its competition.
DISTRIBUTION STRATEGY
Nike is a highly centralized and focused company which follows some major core concepts such
as brand building and supply chain management. Nike’s footwear production takes place in
600+ factories which is spread over 400 countries (as per 2011 list). It follows a low cost
manufacturing strategy combined with complicated R&D functions. In Asia, Nike has also
followed such strategies and not only increased the sales of footwear but also has raised the
bar when it comes to delivering high quality sportswear products in the athletic industry. Nike
has 15 contract manufacturers in India in places such as Karnataka, Madhya Pradesh, Uttar
Pradesh, Uttarakhand etc.
Below is the distribution diagram that is followed by Nike -
MARKETING STRATEGIES FOLLOWED BY NIKE
 Shared marketing strategies among varied products which in turn reduces cost.
 Efficient line of production helps to reduce cost
 Large size provides opportunity for more leverage against competition.
GLOBAL SOURCING
Nike’s footwear production is done in 40 different countries where the third party production
units employ more than 800000 people.
Nike controls their operations from Oregon and Tennessee and developed jointly by American
and Asian technicians in the USA, Taiwan and South Korea. Sneakers are then assembled from
dozens of components supplied by firms in South Korea, Malaysia, Indonesia and India etc. Nike
outsources to firms that specialize in logistics services.
Nike depends on tight controlling supply chain and getting retailers to commit to orders far in
advance.
In India, Nike’s strategy was to increase local manufacturing and be competitive. They also
increased the no. of local stores in each of the metro cities and in Bangalore as well. They used
to support their local outlets with visual merchandising by projecting their brand statement“Just Do it”.
In 2002, the distribution network of Nike India had eight distributors, 25 exclusive Nike outlets,
15 multi-brand outlets and 20 speciality doors across major cities. In 2004, instead renewing
the franchise with Sierra, after a 7 year license agreement, Nike India became the subsidiary.
This was the turning point of Nike in India.
SUMMARY REGARDING FUTURE DIRECTIONS OF THE BRAND
Nike is planning to grow from $19.2 billion to $27 billion by 2015. It will target the emerging
global middle class sports lovers, use the digital mode to create better retail experience. It has
also plans to grow its affiliate brans like Converse, Cole Haan and Umbro. Nike is a great
footwear company but they want to improve their apparel section as well. But the footwear
section is not going to take the backseat. It has a strategy to launch the new Nike Air in many
colors and upgraded technologies.
Reference
http://nikeinc.com/pages/history-heritage
http://en.wikipedia.org/wiki/Nike,_Inc.
http://www.fundinguniverse.com/company-histories/nike-inc-history/
http://www.studymode.com/essays/Nike-Brand-Analysis-120970.html