INTRODUCTION TO NIKE

• • • • Est. in 1960 in Oregon. Phil Knight and Bowerman - Founder Nike has gone through many changes Started small and now has covered the U.S. and International market

INTRODUCTION contd…
• Nike = Winged Goddess of Victory.

• “Greeks say when we go to battle and win, we say it is NIKE!”

. • Use of tactics such as guerilla warfare. • Persuasion of top athletes. • Endorsement contracts effective.ANALYSIS OF CASE STUDY • Limited resources and unlimited confidence.

• Ignorance of market trends. . • Child labour.ANALYSIS contd…. Timberland – brown shoes. • Not satisfying customer needs. • Failure to recognise aerobics boom. Women -A major customer. • Late in getting onboard with extreme sports.

•Reliable •Intelligent •Successful •Upper class •Charming •Outdoorsy •Tough Tata salt Perk Nike Mercedes Levis 1 . Brand Personality Sincerity Excitement Competence Sophistication Ruggedness •Down – to earth •Honest •Wholesome •Cheerful •Daring •Spirited •Imaginative •Up-to-date.BRAND PERSONALITY  Brand personality Personification.

1” Jumpman logo is one of the most easily recognized symbols throughout the world .Michael Jordan Put Nike on the map – – – – – 1984-1985 Nike saw a decrease in their earnings for the first time ever Influenced them to make their first specialty basketball shoe Since then. Michael and Nike together have generated billions of dollars in revenue “World Sports Hero No.

S. major league baseball. Open. the U.and 60.second TV spots • Aired during college football.Tiger Woods The newest Nike sensation – Estimated that Nike paid him $40 million – More attention than Michael Jordan and Bo Jackson – 3 pg. ad in Wall Street Journal – 30. SportsCenter and Monday Night Football .

• Branding provides consumer information about products and where to find them. .Branding: powerful marketing mechanism used by Nike • Leads to higher and more consistent product quality. • Increases innovation by giving producers an incentive to look for more new features that can be safeguarded by the patent. • Branding results in more product variety and choice for consumers.

Philip Kotler .Brand equity • Brand equity is defined as the positive differential effect that knowing the brand name has on customer response to the product or service.

• Brands vary in power and value and have varying degrees of brand awareness. .Brand equity • Brands represent the consumers’ perceptions and feelings about products and their performance. brand preference and brand loyalty. • The real value of branding is the ability to capture consumer preference and loyalty.

• Large size provides opportunity for more leverage against competition. . • Efficient use of production facilities lowers costs. • Shared distribution channels among varied product lines lower costs.Nike’s Market Expansion Strategies Economies of Scale.

Oregon. Taiwan and South Korea.Global sourcing: the Nike case • Nike has relocated production of its footwear and clothing to 51 countries where its third party production units employ more than 500. Sneakers are then assembled in South Korea and Indonesia from dozens of components supplied by firms in Japan. Indonesia and the United States. Similarly. Nike manages a worldwide virtual company combining internal R&D functions with a low cost manufacturing strategy. From its headquarters in Beaverton. Nike outsources distribution to firms that specialise in logistics services. Taiwan.000 people directly employed by the multinational). South Korea. They control their activity from Oregon and Tennessee and developed jointly by American and Asian technicians in the USA.000 people (as against approximately 14. • .

Brand/Image • Ability to charge premium price by establishing an “image” • Access to new/different markets • Premium product placement in retail leading to higher sales • Image and celebrity endorsements create hopes/dreams/emotional attachment to product .

Innovation • Innovation may be difficult for competitors to imitate. • Difficult for competitors to compete with rate of innovation/production. . • Ability to capture market for different attitudes/values across cultures with product variety. • Strong emphasis on R&D leads to continuous improvement in products.

. • Increased company growth potential.Geographical Outreach • Ability to reinforce brand and create loyalty across cultures leading to a broad customer base. • Cross-subsidization of weaker markets.

Product Diversification • New products introduced by Nike will be more readily accepted by customers due to strong brand image .

Other strategies adopted by Nike • • • • Sponsorship for sporting events Advertisements. Rebates and Discounts. . Conducting fashion shows.

.PRODUCT MIX Product Mix A product mix is the set of all products and items that a particular seller offers for sale to buyers also known as product assortment. • Product Width It refers to how many product lines the company carries.

PRODUCT Mix contd…. • Product line A product line is a group of products that are closely related because they perform similar functions • Product length It refers to the total number of items in its product mix • Product depth It refers to how many products are offered of each product line. .

Club Gear Club Jerseys like Man U.PRODUCT Mix for Nike • • • • • • • • • • • • • • • • • • • Footwear Studs for Striker Mid fielders Defenders Apparel Headwear Tops/Polo Jersey Jackets Shorts Shocks Equipment Ball Bags Watches National Team Gear Jersey for Brazil. etc. etc . Real Madrid. England.

. • Pricing.Competitive advantage against regional brands. • Unaware of utility or use. basketball are not so recognised as cricket. • Shoes are not recommended by coaches in India.Bata charges around Rs 400 for a pair of shoes whereas for nike it is Rs 1600. • Sports culture –In India sports like soccer.

Porter’s Five Forces Model of Competition Threat of New Entrants HIGH Bargaining Power of Suppliers Rivalry Among Competitors Bargaining Power of Buyers LOW HIGH HIGH HIGH Threat of Substitute Products .

FUNCTION AND FASHION • Now. . you are an athlete. • In 1960’s Nike entered the market with function due to which they Failed in early times. Nike concentrates on two aspects function and fashion. • Nike believes if you have a body.

JUST DO IT .

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