Marketing Strategy of Nike shoes

Nike, the largest seller of athletic footwear and athletic apparel in the world with subsidiaries in over 200 countries across the world, has attempted to keep itself on the cutting edge of technology. Nike has been launching new technically advanced shoe models from time to time, backed by innovative advertisements, celebrity endorsements, successful associations (college teams) and event sponsorships. When it faced a crisis in the late 1990s, Nike decided to strengthen its management, overhaul its information systems, and streamline supply chain management. Since then, Nike has been achieving rapid growth by using aggressive marketing tactics. Nike implemented a number of marketing strategies to sell its products. One of the most important consideration is its marketing mix, better known as the 4Ps. Nike is a global sports shoe giant company. It is the largest seller of athletic footwear in the world, holding the lion share of 33% of the global market. The company has production facilities in Asia, sales facilities in almost 200 countries, and customer service and other operational units worldwide. The marketing mix or the 4 Ps of Marketing are Product, Price, Place (distribution) and Promotion. Nike's 4Ps are the following: 1. Product Nike offers a wide range of shoe, apparel and equipment products, all of which are currently its top-selling product categories. Nike started

selling sports apparel, athletic bags and accessory items in 1979. Their brand Cole Haan carries a line of dress and casual footwear and accessories for men, women and children. They also market head gear under the brand name Sports Specialties, through Nike Team Sports, Inc. They sell small amounts of plastic products to other manufacturers through Nike IHM, Inc. Bauer Nike Hockey Inc. manufactures and distribute ice skates, skate blades, inroller skates, protective gear, hockey sticks and hockey jerseys and accessories. 2. Price Nikes pricing is designed to be competitive to the other fashion shoe retailers. The pricing is based on the basis of premium segment as target customers. Nike as a brand commands high premiums. Nikes pricing strategy makes use of vertical integration in pricing wherein they own participants at differing channel levels or take part in more than one channel level operations. This can control costs and influence product pricing. 3. Place Nike shoes are carried by multi-brand stores and the exclusive Nike stores across the globe. Nike sells its product to about 20,000 retail accounts in the U.S. and in almost 200 countries around the world. In the international markets, Nike sells its products through independent distributors, licensees and subsidiaries. Independent distributors need not adapt to local pressures because the 4Ps of marketing are managed by distributors. 4. Promotion Promotion is largely dependent on finding accessible store locations. It also avails of targeted advertising in the newspaper and creating

strategic alliances. Nike has a number of famous athletes that serve as brand ambassadors such as the Brazilian Soccer Team (especially Ronaldino, Renaldo, and Roberto Carlos), Lebron James and Jermane ONeal for basketball, Lance Armstrong for cycling, and Tiger Woods for Golf. Nike also sponsors events such as Hoop It Up and The Golden West Invitational. Nikes brand images, the Nike name and the trademark swoosh, make it one of the most recognizable brands in the world. Nikes brand power is one reason for its high revenues. Nikes quality products, loyal customer base and its great marketing techniques all contribute to make the shoe empire a huge success

Nike, Adidas readjust marketing strategy Leading sportswear makers are readjusting the marketing strategies of their brands in China with two of the top sellers moving into lowertier cities in order to be more competitive. Nike Inc, the best-selling global sports brand, which is expecting record sales growth in China this year, claimed in May that it would double the business in China in the next five years. To achieve this objective, Nike will work with retail partners beyond Beijing and Shanghai into other smaller cities throughout China. Chinese market was Nike's fastest growing and the brand's largest market outside the United States. A similar drive is also being undertaken by Adidas AG, another major overseas sportswear brand in China. Managing Director Christophe

Bezu said the company's strategy was to maintain its strong position and spread its influence throughout new areas of the country. But Nike claims that it is not introducing low-priced product strategy. According to UBS Securities, sports shoes priced between 170 and 250 yuan (between $25 and 36.8) are best sellers in China's second- and third-tier cities. Currently, most Nike sports shoes cost between 500 and 1,500 yuan in China. They sell to mid- to high-end consumers in large cities. For an ordinary white-collar employee in Beijing, one pair of Nike shoes costing 1,500 yuan would account for nearly half of his monthly wages. Many of the products that were launched and incubated in their domestic facilities are now being built in Asia, and for about 20 of the cost. They became the world"tms number 1 and number 2 athletic show manufacturers respectively. Nike and Reebok both decided that, in order to reduce the pressure, to adopt policies governing their contractors overseas. Reebok did spend the necessary money and time to train and audit the facilities. My former employer has plants around the globe, and quite a large number in Asia. t overseas partners as a way to be more adaptive to pricing fluctuations, and supply chain changes. The manufacturing base has shifted within Asia from South Korea, to China, Indonesia, the Philippines, etc. They initially tried to avoid these issues by playing dumb - but the human rights groups would not fall for this. Both Nike and Reebok experienced significant growth during the 1980"tms. Both documents were meant with skepticism. Once Asia started to open up the production that was in Mexico begun to transfer to Asia, and the Mexican workers started to feel the pain that we had felt a decade earlier. Due to this both Nike and Reebok

began fielding numerous questions and allegations about unfair labor practices. Marketing Strategies Nike's marketing strategy is an important component of the company's success. Nike is positioned as a premium-brand, selling well-designed and expensive products. Nike lures customers with a marketing strategy centering on a brand image which is attained by distinctive logo and the advertising slogan: "Just do it" Nike promotes its products by sponsorship agreements with celebrity athletes, professional teams and college athletic teams. However, Nike's marketing mix contains many elements besides promotion. These are summarised below.

Advertising In 1982, Nike aired its first national television ads, created by newly formed ad agency Wieden+Kennedy, during the New York Marathon. This was the beginning of a successful partnership between Nike and W+K that remains intact today. The Cannes Advertising Festival has named Nike its Advertiser of the Year on two separate occasions, the first and only company to receive that honor twice (1994, 2003).[42] 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 Y2K came to fruition.[43] The second Emmy for advertising earned by Nike was for a 2002 spot called "Move," which featured a series of famous and everyday athletes in a stream of athletic pursuits.[44]

In addition to garnering awards, Nike advertising has generated its fair share of controversy: Beatles song Nike was the focus of criticism for its use of the Beatles song "Revolution" in a 1987 commercial, against the wishes of Apple Records, the Beatles' recording company. Nike paid US$250,000 to Capitol Records Inc., which held the North American licensing rights to the Beatles' recordings, for the right to use the Beatles' rendition for a year. Apple sued Nike Inc., Capitol Records Inc., EMI Records Inc. and Wieden+Kennedy advertising agency for $15 million.[45] Capitol-EMI countered by saying the lawsuit was 'groundless' because Capitol had licensed the use of "Revolution" with the "active support and encouragement of Yoko Ono Lennon, a shareholder and director of Apple." According to a November 9, 1989 article in the Los Angeles Daily News, "a tangle of lawsuits between the Beatles and their American and British record companies has been settled." One condition of the out-of-court settlement was that terms of the agreement would be kept secret. The settlement was reached among the three parties involved: George Harrison, Paul McCartney, Ringo Starr; Yoko Ono; and Apple, EMI and Capitol Records. A spokesman for Yoko Ono noted, "It's such a confusing myriad of issues that even people who have been close to the principals have a difficult time grasping it. Attorneys on both sides of the Atlantic have probably put their children through college on this." Nike discontinued airing ads featuring "Revolution" in March 1988. Yoko Ono later gave permission to Nike to use John Lennon's "Instant Karma" in another advertisement.

Minor Threat advertisement In late June 2005, Nike received criticism from Ian MacKaye, owner of Dischord Records, guitarist/vocalist for Fugazi & The Evens, and front-man of defunct punk band Minor Threat, for appropriating imagery and text from Minor Threat's 1981 self-titled album's cover art in a flyer promoting Nike Skateboarding's 2005 East Coast demo tour. On June 27, Nike Skateboarding's website issued an apology to Dischord, Minor Threat, and fans of both and announced that they tried to remove and dispose of all flyers. They state that the people who designed it were skateboarders and Minor Threat fans themselves who created the advertisement out of respect and appreciation for the band.[46] The dispute was eventually settled out of court between Nike & Minor Threat. The exact details of the settlement have never been disclosed.

Chinese-themed advertisement In 2004, an ad about LeBron James beating cartoon martial arts masters and slaying a Chinese dragon in martial arts offended Chinese authorities, who called the ad blasphemous and insulting to national dignity and to the dragon. The advertisement was later banned in China. In early 2007 the ad was reinstated in China for unknown reasons.

Sponsorship

Nike pays top athletes in many different sports to use their products and promote/advertise their technology and design. Nike's first professional athlete endorser was Romanian tennis player Ilie Nstase, and the company's first track endorser was distance running legend Steve Prefontaine. Prefontaine was the prized pupil of the company's co-founder Bill Bowerman while he coached at the University of Oregon. Today, the Steve Prefontaine Building is named in his honor at Nike's corporate headquarters. Besides Prefontaine, Nike has sponsored many other successful track & field athletes over the years such as Carl Lewis, Jackie Joyner-Kersee and Sebastian Coe. However, it was the signing of basketball player Michael Jordan in 1984, with his subsequent promotion of Nike over the course of his storied career with Spike Lee as Mars Blackmon, that proved to be one of the biggest boosts to Nike's publicity and sales. During the past 20 years especially, Nike has been one of the major clothing/footwear sponsors for leading tennis players. Some of the more successful tennis players currently or formerly sponsored by Nike include: James Blake, Jim Courier, Roger Federer, Lleyton Hewitt, Juan Martn del Potro, Andre Agassi, Rafael Nadal, Pete Sampras, Marion Bartoli, Lindsay Davenport, Daniela Hantuchov, Mary Pierce, Maria Sharapova, Serena Williams. Nike is also the official kit sponsor for the Indian cricket team for 5 years, from 2006 till end of 2010. Nike beat Adidas and Puma by bidding highest (US$43 Million total). Nike also sponsors some of the leading clubs in world football, such as the Indian National Team, France National Team, Brazil National Team, Portugal National Team, Netherlands National Team, US National Team, Malaysia National Team, Manchester United, Arsenal, FC Barcelona, Inter Milan, Juventus, Shakhtar, Dnipro, Porto, Steaua, Red

Star, Boca Juniors, Corinthians, Club Amrica, Aston Villa, Celtic, guila and PSV Eindhoven. Nike will also sponsor Dundee United from summer 2009. Nike sponsors several of the world's top golf players, including Tiger Woods, Trevor Immelman and Paul Casey. Nike also sponsors various minor events including Hoop It Up (high school basketball) and The Golden West Invitational (high school track and field). Nike uses web sites as a promotional tool to cover these events. Nike also has several websites for individual sports, including nikebasketball.com, nikefootball.com, and nikerunning.com.