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!”
 ANALYSIS OF CASE STUDY
• Limited resources and unlimited
confidence.
• Persuasion of top athletes.
• Endorsement contracts effective.
• Use of tactics such as guerilla warfare.
 ANALYSIS contd….
• Failure to recognise aerobics boom.
Women -A major customer.
• Ignorance of market trends.
Timberland – brown shoes.
• Not satisfying customer needs.
• Child labour.
• Late in getting onboard with extreme sports.
 BRAND PERSONALITY

 Brand personality Personification.

Brand Personality

Sincerity Excitement Competence Sophistication Ruggedness

•Daring •Reliable •Upper class •Outdoorsy

•Down – to earth
•Spirited •Intelligent •Charming •Tough
•Honest
•Imaginative •Successful
•Wholesome
•Up-to-date.
•Cheerful

Tata salt Perk Nike Mercedes Levis

1
 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. 1”
– Jumpman logo is one of the most easily recognized
symbols throughout the world
 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- and 60- second TV spots
• Aired during college football, major league
baseball, the U.S. Open, SportsCenter and
Monday Night Football
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.
• Branding provides consumer information about
products and where to find them.
 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.

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

Economies of Scale.
• Shared distribution channels among varied
product lines lower costs.
• Large size provides opportunity for more
leverage against competition.
• Efficient use of production facilities lowers
costs.
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 500,000 people (as against
approximately 14,000 people directly employed by the
multinational).
• From its headquarters in Beaverton, Oregon, Nike manages
a worldwide virtual company combining internal R&D
functions with a low cost manufacturing strategy. They
control their activity from Oregon and Tennessee and
developed jointly by American and Asian technicians in
the USA, Taiwan and South Korea. Sneakers are then
assembled in South Korea and Indonesia from dozens of
components supplied by firms in Japan, South Korea,
Taiwan, Indonesia and the United States. Similarly, Nike
outsources distribution to firms that specialise in logistics
services.
 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.
 Geographical
Outreach
• Ability to reinforce brand and create loyalty
across cultures leading to a broad customer
base.
• Increased company growth potential.
• 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.
 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, England, etc.
• Club Gear
• Club Jerseys like Man U, Real Madrid, etc
 Competitive advantage against
regional brands.
• Pricing- Bata charges around Rs 400 for a
pair of shoes whereas for nike it is Rs 1600.
• Unaware of utility or use.
• Shoes are not recommended by coaches in
India.
• Sports culture –In India sports like soccer,
basketball are not so recognised as cricket.
 Porter’s Five Forces Model of Competition
Threat of
New
Entrants

HIGH

Bargaining Rivalry Among Bargaining

Power of LOW Competitors HIGH Power of
Suppliers HIGH Buyers

HIGH

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