A PROJECT REPORT ON Sales & Distribution Channel of

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF MBA PROGRAM (2010-2012)

SUBMITTED TO: Dr. RANJAN UPADHYAYA FACULTY - WISDOM

SUBMITTED BY: DEEPA JAISWAL Roll No.:7943

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TABLE OF CONTENTS
S. no. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Introduction History Vision & Mission NIKE‟S presence in India Products offered by Nike SWOT Analysis Marketing Mix Marketing Strategy Corporate Social Responsibility Value Chain System Sustainable Supply Chain NIKE– Channel conflict case analysis NIKE in news References TOPIC Acknowledgement Page No. 3 4 5 11 12 17 21 23 25 26 29 36 38 42 43

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ACKNOWLEDGEMENT
I am very thankful to all those who have enabled me to successfully complete my project on “Sales and Distribution of Nike Incorporation”. I would like to express my sincere gratitude to Dr. Ranjan Upadhyaya – Senior Faculty (WISDOM) Banasthali Vidyapeeth, Banasthali without whose support and encouragement I would not have achieved what I have today.

Deepa Jaiswal (7943) M.B.A.-III Semester WISDOM Banasthali Vidyapeeth

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INTRODUCTION
Nike, Inc. is a major publicly traded sportswear and equipment supplier based in the United States. The company is headquartered near Beaverton, Oregon, which is part of the Portland metropolitan area. It is the world's leading supplier of athletic shoes and apparel and a major manufacturer of sports equipment, with revenue in excess of US$18.6 billion in its fiscal year 2008 (ending May 31, 2008). As of May 2010, it employed more than 34,400 people worldwide. Nike and Precision Castparts are the only Fortune 500 companies headquartered in the state of Oregon, according to The Oregonian. The company was founded on January 25, 1964 as Blue Ribbon Sports by Bill Bowerman and Philip Knight, and officially became Nike, Inc. on May 30, 1978. The company takes its name from Nike, the Greek goddess of victory. Nike markets its products under its own brand, as well as Nike Golf, Nike Pro, Nike+, Air Jordan, Nike Skateboarding, and subsidiaries including Cole Haan, Hurley International, Umbro and Converse. Nike also owned Bauer Hockey (later renamed Nike Bauer) between 1995 and 2008. In addition to manufacturing sportswear and equipment, the company operates retail stores under the Niketown name. Nike sponsors many high profile athletes and sports teams around the world, with the highly recognized trademarks of "Just do it" and the Swoosh logo.

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Shallenberger thought the idea interesting. Caroline Davidson was a student at Portland State University in advertising. From these rather inauspicious beginnings. The story goes like this: while getting his MBA at Stanford in the early '60s. Knight's brainchild grew to become the shoe and athletic company that would come to define many aspects of popular culture and myriad varieties of 'cool. (from Nike Consumer Affairs packet. Knight took a class with Frank Shallenberger. She handed him the SWOOSH. She sat at the side of Zeus.. Nothing more became of Knight's project. In spring of 1972. She met Phil Knight while he was teaching accounting classes and she started doing some freelance work for his company. "When we go to battle and win. A Greek would say. Between them. including a marketing plan. Knight found his market niche.. A mystical presence. but certainly no business jackpot.. more durable racing shoes for his Oregon runners. the seed of the most influential sporting company grew. Bowerman's desire for better quality running shoes clearly influenced Knight in his search for a marketing strategy. Bowerman coached track at the University of Oregon where Phil Knight ran in 1959.. for distribution. Phil Knight asked Caroline to design a logo that could be placed on the side of a shoe. 1996) A brief history of Nike The Nike athletic machine began as a small distributing outfit located in the trunk of Phil Knight's car. and Knight's search for a way to make a living without having to give up his love of athletics. 5 . we say it is NIKE. pronounced NI-KEY.HISTORY Nike's Heritage NIKE.' Nike emanated from two sources: Bill Bowerman's quest for lighter. 1996) The Swoosh The SWOOSH logo is a graphic design created by Caroline Davidson in 1971.the rest is history! (from Nike Consumer Affairs packet. NIKE presided over history's earliest battlefields." Synonymous with honored conquest.S. symbolizing victorious encounters. is the winged goddess of victory according to Greek mythology. Synthesizing Bowerman's attention to quality running shoes and the burgeoning opinion that high-quality/low cost products could be produced in Japan and shipped to the U.00. the ruler of the Olympic pantheon. It represents the wing of the Greek Goddess NIKE. in Olympus. The NIKE 'swoosh' embodies the spirit of the winged goddess who inspired the most courageous and chivalrous warriors at the dawn of civilization. the first shoe with the NIKE SWOOSH was introduced. The semester-long project was to devise a small business. NIKE is the twentieth century footwear that lifts the world's greatest athletes to new levels of mastery and achievement. he handed her $35.

Knight told the businessmen of his interest in their product.000 worth of Tigers and placed an order for more. Few can question Nike's financial hegemony. but ended up hiring a full-time salesman. "Advertising Age" named Nike the 1996 Marketer of the Year. the circumstances surrounding the shift are not this simple. 12/96). Knight says. Knight scheduled an interview with a Japanese running shoe manufacturer.was more recognized and coveted by consumers than any other sports brand--arguably any brand" (Jensen. 66). Clearly.74 billion. But nearly $7 billion in revenues clearly begs the question. Blue Ribbon Sports--the name Knight thought of moments after being asked who he represented--was born. Tiger--a subsidiary of the Onitsuka Company. What sells these shoes? It is my assertion that Nike's power to sell comes from deep-rooted yearnings for cultural inclusiveness and individual athletic accomplishment. simple and sublime. These seemingly paradoxical desires collide in consumer‟s hearts and minds and produce the unyielding zeal for Nike shoes and apparel. By the late '70s. After cresting $1 million in sales and riding the wave of the success. devised the Nike name and trademark Swoosh in 1971. If Nike didn't start the fitness revolution. "We were at least right there. it is one of the aims of this project to discover other generators of popular attention to health. Jeff Johnson.' instead Americans turned to working out as a cultural signifier of status. Katz (1994) describes the success via Nike's placement within the matrix of the fitness revolution: 'the idea of exercise and game-playing ceased to be something the average American did for fun. And we sure rode it for one hell of a ride" (Katz.. These forces work powerfully upon the individual consumer. Nike's practice of top-level athletes promoting their products appeals to countless ages and creeds as a way to identify with and emulate their athletic heroes.Cut to 1963. 6 . Phil Knight traveled to Japan on a world-tour. Blue Ribbon Sports officially became Nike and went from $10 million to $270 million in sales. citing the "ubiquitous swoosh. Presenting himself as the representative of an American distributor interested in selling Tiger shoes to American runners. In addition. Knight et. al. That same year Nike's revenues were a staggering $6. Nike has targeted $12 billion in sales by the year 2000. at once. By 1964. rather than the underdog of old. Unfortunate effects of this zeal can be found in the rash of Nike apparel killings in 1991 and the profusion of Nike collectors and webpages designed around the company's products. Seemingly on a whim. but one should not lose sight of the cultural context in which the individual moves. filled with the wanderlust of young men seeking a way to delay the inevitable call of professional life. The Tiger executives liked what they heard and Knight placed his first order for Tigers soon thereafter. Nike appeals to these disparate elements of Americans' personalities through an advertising philosophy that is. Coach Bowerman and Knight worked together. Knight had sold $8. The 80s and 90s would yield greater and greater profits as Nike began to assume the appearance of athletic juggernaut. Expecting $8 billion sales in fiscal 1997..

"A tiger hunts best when he's hungry. becomes the best-selling training shoe in the country. 1981 7 . becomes Tiger's best-selling shoe. The match is a natural. the company Knight and Bowerman form to distribute Tiger shoes in the United States. Phil Knight. made to Bowerman's specifications. 1979  The Tailwind® shoe introduces NIKE-AIR® cushioning to the world. a "safe house" for world-class athletes to train for Olympic competition. 1978  John McEnroe signs his first endorsement contract with NIKE. embodies the competitive spirit of the new NIKE brand. 1977  NIKE establishes Athletics West. 1974  The Waffle Trainer® featuring Bowerman's unique Waffle® outsole. who never loses a race in four years at the U of O. begins a relationship with Bowerman that will change sports and fitness. 1968  The Cortez.1957   Bill Bowerman is quietly building a track-and-field empire at the University of Oregon in Eugene. 1965  Jeff Johnson becomes the first full-time employee of Blue Ribbon Sports." -Bill Bowerman 1973  Steve Prefontaine. a middle-distance runner on the U of O track team.

The Air Max® shoe gives the world its first view of NIKE-AIR® cushioning. 1989  Andre Agassi explodes onto the tennis scene with an aggressive look and style of play. 1992 8 . cross-training. "The commitment is to be a global company . Mike Powell shatters a 23-year-old record with a long jump of 29' 4 ½". 1988   Bo Jackson emerges as the world's greatest athlete." -Richard K. 1983  Promotion reaches new heights (and sizes) with billboards. the Footbridge® stability device. Alberto Salazar wears NIKE shoes on his way to a new world record in the New York City Marathon. 1985  A young NBA Rookie of the Year signs with NIKE. one ethic around the world.one management. The Women's Print Campaign earns unanimous critical and popular praise for its realism. 1991    Huarache Fit technology changes the rules about footwear design. one value. Visible excellence. Donahue Just Do It becomes a call to action for a generation of fitness enthusiasts. The Air Stab® shoe reveals a new technology. part of the Olympic Cities Campaign. 1987   The Air Trainer High® defines a new fitness phenomenon. one theme. 1984  Joan Benoit wins the first women's Olympic Marathon in Los Angeles. AIR JORDAN® is born.

. In an Olympics marked by surprise.in the U. Cal Ripken. Long-time NIKE athlete Lynn Jennings becomes the first athlete to win three consecutive World Cross-Country Championships. NIKE-AIR technology goes a step further in 1993 offering 30 percent more cushioning than ever before and an unprecedented view of the Air-Sole® unit. An exclusive agreement between NIKE and The Athletics Congress puts every USA Track & Field team in NIKE competition gear for the rest of the century. fabrics. He corrals more than 50 major league records before injury ends the 27-year career of Nolan Ryan at age 46. German tennis star Michael Stich joins the Nike ranks. Open finals. Quincy Watts accelerates out of the pack to take the gold medal in the 400 meters. Mark Allen wins his sixth Ironman Triathlon. 1994    NIKE launches P. Jr.a call to action for everyone to help kids get and stay active.S.131. 1993     First visible in the Air Max® running shoe in 1987. a third MVP title. Jerry Rice becomes the all-time leader in reception yardage. and his seventh consecutive scoring title before retiring.     NIKE assumes the lead in apparel technology with NIKE F.T.." -Phil Knight 1995         Pete repeats at Wimbledon. "We make sure the product is the same functionally whether it's for Michael Jordan or Joe American Public. Hideo "The Tornado" Nomo is named Rookie of the Year. NIKE's Reuse-A-Shoe breaks ground by recycling old athletic shoes into material for resurfacing sports courts.Y. The Air Deschutz® sandal is the best-selling shoe in the company.A. Nike sponsors the USA Women's Basketball Team.L. breaks Lou Gehrig's record for consecutive games at 2. built for comfort and protection during high-intensity outdoor workouts. Michael Jordan leads the Chicago Bulls to three straight NBA championships.Participate in the Lives of America's Youth . . leading NIKE Outdoor on its path to category dominance. 9 . Six NIKE athletes help win the Olympic gold medal in basketball. She follows the feat with an Olympic medal. Monica Seles is back.I. Romario is one of 10 flamboyant soccer players representing Brazil and NIKE in winning the 1994 World Cup.

70.000 fans see Jorge Campos lead the Los Angeles Galaxy to victory in its MLS debut. Kenya runs away with the World Cross-Country Championships. Nike Golf hooks up with Nick Price. Damon Stoudamire is named Rookie of the Year.1996          Nike signs nine of the top ten NFL draft picks. Uta Pippig redefines courage at the Boston Marathon. Picabo Street wins the World Cup Downhill. Dallas does it again. The Nike skate debuts at the NHL All-Star Game. Michael Campbell and Tommy Tolles. Evolution of Nike Logo 10 .

Nike operates with a minimum of hierarchy. there is a lot of collaboration and consensus decision-making. In the last two years.” Unleashing potential through sport. Despite its size. Commonly held values are imperative in such a matrix organization.” VISION “Innovate for better world. 11 .” Three core values of the company are honesty. Nike will provide products.MISSION “To bring inspiration and innovation to every athlete in the world. As a result. These investments will be used to give excluded youth around the world the chance to play because as access to sport can enhance their lives. NIKE is expected to invest another $315 million. This is all will be the NIKE “Let Me Play commitment. resurface playing fields. Nike has invested $100 million worldwide in community-based sports initiatives. competitiveness. By 2011. and teamwork. support community-based programs. and help young people create their own communities.

marketing director. By paying Rs. We aim to connect emotionally with our customers. it tied up with coaching schools like the BCCI's National Cricket Academy. 12 ." We want to look at what drives the passion for cricket in India. 3.NIKE’S PRESENCE IN INDIA NIKE has been present in India from 1996 and headquartered in Bengaluru. The principle consumption centres namely the metros are also a potential target market.196 Crores (Rs. Nike is targeting young people in India. Now NIKE became official kit sponsor for BCCI Indian Cricket Team. Signed on India's leading football star Bhaichung Bhutia Entered into a deal with Bhupathi Tennis Academy The target market of NIKE is the urban youth with the brand proposition „competition to Lifestyle‟. 4.1. The first "Just Do It" cricket ad also made its appearance during the Champions Trophy. NIKE wrested the rights to become the kit sponsor upto 2011. Partnership with the All India Football Federation in March 2006.6 Bn) to BCCI. Paying attention to other popular games in India. 5. Nike India." . NIKE understood the importance of cricket and in December 2005. 2. India is a cricket crazy nation.Sanjay Gang opadhyay. Target Market: 1.

Age: 16 to 35 Income level: >Rs. 2. Licensing 2. lower upper and upper class Gender: Male and female 13 .TYPES OF OWNERSHIP: 1. 4. 3. Own Subsidiary MARKET SEGMENTS Geographic segmentation Density: Urban and semi-urban cities Demographic segmentation 1.000 Social class: Upper middle. Franchising 3. 15.

Nike needs to segment on various fronts such as economic. 3. Targeting and Positioning of Nike Nike has been in the market for a long period now. 5.Customer Profile: 1. 2. Thus it has already sought out the STP analysis that it would use to promote and sell its products. medium and low end customers. Thus. Economic segmentation: High. 14 . medium and low end customers with varying income levels. medium and low income levels that can be clubbed with their lifestyles of high. demographic. geographical differentiations. Market Segments: The market segments that Nike can mainly differentiate are high. 4. Athletes Gym regulars Sports enthusiasts Brand freaks Image seekers Segmentation.

According to retail consultancy KSA Technopak. Thus.the biggest in the world -. while Reebok has a 45 per cent share. 15 .55 with a pan India location. Reebok. Fila and local brands like Bata. government policy dictated that they had to have a local partner. When the global sports majors entered the Indian market in 1995-96. Geographical segmentation: The company can segment the market into segments of north. the company has targeted the market of high-end. How did the swoosh lose its sheen? The biggest hurdles for Nike in India were its entry model and its lack of aggression.e. Thus the market segment it is targeting is quite essential to differentiate itself from its competitors i. Adidas has 30 per cent and Nike accounts for just 25 per cent of the Rs 375-400 crore branded sportswear market. And that's despite the huge brand awareness the brand enjoyed in India even before it set up shop here in 1996. Positioning: The brand Nike has positioned itself in the minds of the consumer as a high-end product which is quite costly but gives the value for money with its service. It shot to a 40 per cent share of the US sportswear market -. Sportswear major Nike is way ahead in the race for leadership in sportswear. All this analysis provides Nike with the customer satisfaction and thus loyalty that it needs to achieve high volumes and profitability. Target Market: The company needs to target the market as per the brand image and equity in different markets.Demographic segmentation: The company can segment the market into age. Puma. But the head start hasn't helped the global sports brand in the Indian market so far.which gives it a lead in the global market. high income level between the age of 16. even though Adidas leads in Europe. gender and class segments. east and south in India. west. quality and designs.

only Reebok entered India as a subsidiary with a 20 per cent equity stake by Phoenix.Nike agreed to an exclusive distribution agreement with a Delhi-based trading firm Sierra. Thailand. Financial Information: Revenue: US$19. a distribution and trading firm and Reebok's distribution partner. Pakistan. Adidas signed up a licensing agreement with Bata for retailing at its huge network of stores.87 billion ( FY 2009 ) Net Income: US$1. and Malaysia.200 ( 2008) Nike has contracted with more than 700 shops around the world and has offices located in 45 countries outside the United States. Vietnam. Taiwan. India. Most of the factories are located in Asia. Philippines. China. 16 .2 billion ( FY 2009 ) Operating Income: US$1. including Indonesia. in early 1996.49 billion ( FY 2009 ) Total Equity: US$8.69 billion ( FY 2009 ) Employees: 30.

volleyball. women. cheerleading. aquatic activities. American football. jerseys. cycling. tennis. and Nike SB shoes. American football. Inc. running. golf. and cricket. including shoes and apparel for sports activities like association football. designed to be 30% lighter than their competitors'. etc. lacrosse. baseball. Nike introduced the Air Jordan XX3. skateboarding. Nike recently teamed up with Apple Inc. shorts.0. for a wide range of sports. wrestling. and other athletic and recreational uses. a high-performance basketball shoe designed with the environment in mind. and cross training for men. In 2008. Nike NYX. The most recent additions to their line are the Nike 6. basketball. tennis. auto racing. athletics. and children. Nike has recently introduced cricket shoes called Air Zoom Yorker. it has been criticized by researchers who were able to identify users' RFID devices 17 . association football. including track and field. baselayers. designed for skateboarding. chav culture and hip hop culture for their supplying of urban fashion clothing. Nike is well known and popular in youth culture. ice hockey. combat sports.PRODUCTS OFFERED BY NIKE Nike produces a wide range of sports equipment. Nike Air Max is a line of shoes first released by Nike. to produce the Nike+ product that monitors a runner's performance via a radio device in the shoe that links to the iPod nano. association football (soccer). While the product generates useful statistics. in 1987. basketball. golf. Nike also sells shoes for outdoor activities such as tennis. Their first products were track running shoes. Nike sells an assortment of products. baseball. They currently also make shoes.

In 2004. The product records distance run and calories expended. On July 15. keeps time.from 60 feet (18 m) away using small. and also gives runners new programs online they 18 . the Nike+ Sports Band was released in stores. Some of Nike's newest shoes contain Flywire and Lunarlite Foam to reduce weight. they launched the SPARQ Training Program/Division. 2009. concealable intelligence motes in a wireless sensor network.

Virginia Tech. The 2010 Nike Pro Combat jersey collection will be worn by teams from the following universities: Miami. Ohio State. 19 . Alabama. Texas Christian University. Boise State. Teams will wear these jerseys in key matchups as well as any time the athletic department deems it necessary. and Pittsburgh.could try running. Oregon State. Florida. West Virginia.

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This may leave it vulnerable if for any reason its market share erodes. as is evidenced by its evolving and innovative product range. Nike sells its products throughout US and in more than 180 countries. s There is also the opportunity to develop products such as sport wear. 1 shoemaker. sunglasses and jewellery. In youth culture especially. Its famous „Swoosh‟ is instantly recognizable. Nike factory outlets and Nike Women shops. Nike is strong at research and development. Weaknesses:   The income of the business is still heavily dependent upon its share of the footwear market. and Phil Knight (Founder and CEO) even has it tattooed on his ankle. cheerleading. building upon its strong global brand recognition. tennis and football. They then manufacture wherever they can produce high quality product at the lowest possible price.SWOT ANALYSIS Strengths:      Nike is the world‟s no. This creates its own opportunities. It is the number one sports brand in the World. volleyball. most of its income is derived from selling into retailers. Retailers tend to offer a very similar experience to the consumer. high profit The business could also be developed internationally. Nike is a global brand. Such high value items do tend to have associated with them. There are also global marketing events that can be utilised to support the brand such as the World Cup (soccer) and The Olympics. 21 . Nike operates Nike Town shoe and sportswear stores. It designs and sells shoes for a variety of sports including baseball. The retail sector is very price sensitive. Nike is a fashion brand. Nike uses a “Make to Stock” customer order which provides a fast service to customers from available stock. So margins tend to get squeezed as retailers try to pass some of the low price competition pressure onto Nike. However. 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. Opportunities:    Product development offers Nike many opportunities. golf.

The market for sports shoes and garments is very competitive.Threats:   Nike is exposed to the international nature of trade. It buys and sells in different currencies and so costs and margins are not stable over long periods of time. Competitors are developing alternative brands to take away Nike‟s market share. Such an exposure could mean that Nike may be manufacturing and/or selling at a loss. This is an issue that faces all global brands. 22 .

Nike as a brand commands high premiums. women and children. Place: Nike shoes are carried by multi-brand stores and the exclusive Nike stores across the globe. all of which are currently its top-selling product categories. in-roller skates. Price: Nike‟s pricing is designed to be competitive to the other fashion Shoe retailer. 2.000 retail accounts in the U. protective gear. Nike sells its product to about 20. Product: Nike offers a wide range of shoe. They also market head gear under the brand name Sports Specialties.MARKETING MIX 1. and in almost 200 countries 23 . skate blades. through NikeTeam manufactures and distributes ice skates. 3. apparel and equipment products. Nike‟s 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. Nike started selling sports apparel. Their brand Cole Haan carries a line of dress and casual footwear and accessories for men.S. The pricing is based on the basis of premium segment as target customers. This can control costs and influence product pricing. hockey sticks and hockey jerseys and accessories. athletic bags and accessory items in 1979.

Nike also sponsors events such as Hoop It Up and The Golden West Invitational. and Tiger Woods for Golf. and Roberto Carlos). Lebron James and Jermane O‟Neal for basketball. Nike has a number of famous athletes that serve as brand ambassadors such as the Brazilian Soccer Team (especially Ronaldo. It also avails of targeted advertising in the newspaper and creating strategic alliances. Nike‟s brand images. loyal customer base and its great marketing techniques all contribute to make the shoe empire a huge success.around the world. Nike sells its products through independent distributors. The company has production facilities in Asia and customer service and other operational units worldwide. Lance Armstrong for cycling. Nike‟s brand power is one reason for its high revenues. Promotion: Promotion is largely dependent on finding accessible store locations. licensees and subsidiaries. Renaldo. Indian soccer team captain Baichung Bhutia is the new brand ambassador of Nike. the Nike name and the trademark swoosh. Nike‟s quality products. make it one of the most recognizable brands in the world. 4. 24 . In the international markets.

Marketing strategy Nike promotes its products by sponsorship agreements with celebrity athletes. The first was for "The Morning After. This was the beginning of a successful partnership between Nike and W+K that remains intact today. However. professional teams and college athletic teams. Advertising In 1982. Nike also has earned the Emmy Award for best commercial twice since the award was first created in the 1990s. Nike's marketing mix contains many elements besides promotion." a satirical look at what a runner might face on the morning of January 1. These are summarized below. making it the first and only company to receive that honor twice. Nike aired its first national television ads. 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. 2000 if every dire prediction about the Y2K problem 25 .

The second was for a 2002 spot called "Move.came to fruition. Recognizing the decline of natural resources and the need to move to a low-carbon economy. “By releasing the tool we want others to improve on it and we hope to inspire further collaboration to create global industry standards for a level playing field.” 26 . Vice President of Nike Sustainable Business and Innovation. released its Environmental Apparel Design Tool." which featured a series of famous and everyday athletes in a variety of athletic pursuits. however. Designed and built by Nike over seven years with a six million dollar investment. the release of the tool aims to accelerate collaboration between companies.[41] In addition to garnering awards. CORPORATE SOCIAL RESPONSIBILITY In an effort to further industry sustainability efforts. Nike advertising has generated its fair share of controversy. the tool is a practical way to rate how apparel designs score in reducing waste and increasing the use of environmentally preferred materials while allowing the designers to make real time adjustments. Over the past four years it has proved to be invaluable at Nike and has helped us create products with a higher sustainability standard. “This tool is about making it simple for designers to make the most sustainable choices right at the start of the product creation process.” said Hannah Jones. Nike is committed to open innovation and welcomes others building and improving on this tool. fast-track sustainable innovation and decrease the use of natural resources like oil and water. the software-based Environmental Apparel Design Tool helps designers to make real time choices that decrease the environmental impacts of their work. Based on Nike‟s Considered Design Index. NIKE. encourage widespread industry adoption of sustainable design practices and have more sustainable products available for the consumer. Inc.

html Nike supports different types of programs around the world. He was the co-founder of Nike. including the Bowerman Track Program.com/responsibility/community_programs/let_me_play. It is a worldwide program that provides matching cash grants to community-based. The Bowerman Track Renovation Program was set up in honor of Bowerman's lifetime contributions to the sport of running. It arises out of Michael Jordan's belief that education is the key to build commitment among our youth. and Reuse-AShoe and Nike Grind. Nike also established a Foundation to improve the lives of adolscent girls in the world's developing countries. Jordan Fundamentals.nikebiz. youth-oriented organizations for refurbishing or constructing running tracks. the Jordan Fundamentals Grant Program was found in 1999. Besides. 27 . The program supports public secondary schools that serve economically disadvantaged students and is created to reward impressive teaching and instructional creativity.Source: http://www. The program distributes about $ 200. Let Me Play. Nike School Innovation Fund.000 in matching grants each year.

playground surfaces and more. a $ 9 million. This advanced recycling technology turns Nike Grind materials into everything from basketball and tennis courts to tiles for gym floors. Nike invested $ 100 million worldwide in community-based programs to enhance their lives through the access to sport. In 2007 Nike established the Nike School Innovation Fund. five-year commitment to support major school districts in Portland. During the last two years.Let Me Play is another part of Nike's community programs which provides access to the benefits of sport to all young people. Since the beginning of the Reuse-A-shoe program in 1990 Nike has recycled more than 21 million pairs of worn-out athletic shoes. These shoes and other scrap material left over from the manufacturing of footwear are ground up and purified to become a material the company called Nike Grind. Beaverton and Hillsboro. 28 . USA.

000 shoes. Managing its global supply chain was a core strategic advantage for NIKE and all its operations were geared towards ensuring smooth integration with contract manufacturing. although the company did produce some specialty shoes at considerably lower volumes. NIKE did not try to match supply of any given shoe model with demand. Once a design was perfected. Vietnam. trusting relationships. from initial planning to final product distribution. The partners were willing to invest heavily in capabilities to manufacture new designs or features. Once production was fully on-line. timely shipments of goods that met NIKE‟s high quality standards. It was difficult for NIKE to make money on smaller production runs. they delivered consistent. A typical new NIKE shoe had a market life of 3 to 6 months from introduction to depletion of inventories. A typical NIKE factory produced between 2. NIKE could expect orders to be fulfilled within 90 days.000 and 3. preferring instead to set Conservative production targets and then begins designing the next generation model. but for the most part. Volumes were determined far before shoes arrived at consumer outlets. Korea and China.NIKE VALUE CHAIN Manufacturers / Suppliers Consistent with its original strategy. As a result. The company worked with hundreds of manufacturing partners in order to develop long-term. By 1999. Manufacturing partners did not necessarily provide the cheapest production. a manufacturer would begin the eight-month product cycle process of developing volume production capabilities in all the relevant sizes. Product Lifecycle Getting a new athletic shoe model on a store shelf could take 15 to 18 months. knowing that production levels would be high enough to offset the investment. plus an additional 30 days for shipping by sea freight. requiring careful forecasting from NIKE and its merchants. 29 . it was not possible to adjust production runs to meet unexpected levels of consumer demand. implying a production run of about three months for a line that would sell 200. NIKE outsourced virtually all of its footwear manufacturing to low-cost Asian or South American manufacturers. the primary locations for NIKE production were Indonesia.000 pairs of shoes in a day. NIKE generated all its own new product ideas and managed the design process in-house. Because the product life was so much shorter than the production cycle.

The top ten sporting goods retailers represented a mere 14% of total U. they had been slow to implement sophisticated technology to track purchases and inventory. Even these NIKE-owned stores were seen more as a marketing and brand-building effort than a meaningful source of sales. The retail market for athletic footwear and apparel was extremely fragmented.Retail Sales Channel NIKE utilized a large in-house sales force to sell its products through a number of different types of stores – multi-sport general athletic department stores. leading to frequent stockouts and misallocations of inventories. The company did not have a meaningful catalog or mail-order business and had opened only a handful of its own stores. called NIKE Towns. specialty athletic department store retailers and general-purpose shoe stores. Despite the company's origins selling shoes straight to track runners from the back of Phil Knight's car. NIKE had 30 .S. NIKE had not been very interested in direct-to consumer sales. Because these retailers were so small. sales.

the layout of the store and the merchandise selection made it as much a showcase of NIKE products as a retail store. NIKE operated 53 outlet locations to liquidate overstocked or outdated inventory.500 visitors a day flooded in to see the two-story mural of Michael Jordan and try NIKE shoes out on the miniature basketball court. While a broad range of NIKE footwear and apparel was sold (at full retail price). The NIKE Town stores were not run to be independently profitable. In the late 90s. Direct Sales Channels In 1999. The Portland store was quickly followed by an even more ambitious project in downtown Chicago. quickly became the city‟s largest tourist attraction as 7. There was a sense within NIKE that the NIKE Town stores had not lived up to their full retail potential due to efforts to appease retailers‟ concerns about competing directly with NIKE. NIKE tried to keep inventories to a bare minimum and managed over 5 inventory turns a year. but their fears were eventually allayed as the company‟s intentions became clearer. and an extraordinary brand advertising opportunity. The distribution process was extremely complex. they were a showcase for NIKE‟s newest or most innovative product lines.000 square foot operation located in some of the most expensive real estate in town. and Ralph Lauren. thus avoiding the need to go through a NIKE distribution center at all. NIKE was also able to negotiate favorable contract terms with its retailers. retailers were wary of the concept.S. such as the Michael Jordan paraphernalia sold at the Chicago store. or even to be major selling channels for NIKE products. inventory levels. Initially. The stores also carried hard-to-find products or specialty items not available from typical retailers. In addition to the NIKE Town stores. Another source of sales at NIKE Towns were souvenir items. a 70. NIKE owned and operated 13 NIKE Town superstores. This channel provided the company with a convenient means of disposing excess inventory without giving up too much control of the brand. athletic footwear gave it additional influence with the merchants who carried their products. NIKE invested over $1 billion in several large regional distribution centers to replace its numerous smaller centers. Disney World. a retailer‟s monthly order of 300.000 pairs of shoes could involve over 50 different models being shipped to 100 different locations. an opportunity to strengthen ties with consumers. NIKE‟s 40% market share in U. Instead. and other details that affected the consumer experience. The company encouraged advance planning from its retail partners – nearly 90% of the orders it received from retailers were for future deliveries nine months out. fearing they would lose sales to NIKE Town stores. typically located in extremely high-traffic.suffered in the past from imperfect information concerning retailers' inventory levels and was hopeful that better methods of inventory monitoring would be found. As a result. NIKE also started providing discounts to retailers who managed their own distribution right from the NIKE Factory. NIKE was able to plan manufacturing and distribution far in advance to meet its guaranteed future sales. Prices 31 . upscale shopping neighbourhoods. The first NIKE Town store was opened in Portland in 1990 and was described by its designer as a cross between the Smithsonian. The company distributed most of its own products from its factories to retail stores or retailer distribution centres. including display characteristics. The Chicago store.

store locators.and quality were both controlled directly to minimize impact on the core brand. According to these deals. took a slightly different approach to the strategy and operation of its e-commerce capabilities. In 1999. Each retailer collaborated with GSI in decisions related to its brand presentation. rather than relying on other liquidation channels. (GSI). The participating retailers simply chose their product lines and pricing strategy and generated web customers. for example. and editorial content on selected athletes or events. By developing a common sporting goods e-commerce infrastructure for its multiple retail partners. such as Foot Locker and Copeland's Sports had established web businesses on their own. to manage not only their websites but also their complete e-commerce operations. shipping. and business development involved with the retailers' internet businesses. they were even more reliant on their traditional retail partners for sales.com also offered in-store returns of on-line purchases. typically offering a full range of products at prices similar to what was charged in their stores. These real-world retailers were able to leverage their existing brands and operational capabilities to offer extensive shopping experiences. processing. signed deals with Global Sports Interactive. virtually all of NIKE‟s major competitors (Adidas. however. order fulfilment. Reebok and New Balance) had established websites with detailed product information. and new start-up companies formed to take advantage of the new opportunities on the internet. an internet start-up with an innovative outsourcing-based business model. easing the burden on the customer. website and ecommerce operations. GSI claimed to lower drastically the costs associated with electronic commerce. NIKE’s Direct Competitors NIKE‟s competitors. THE SPORTING GOODS E-COMMERCE LANDSCAPE The on-line market for sporting goods in 1999 was chaotic. Traditional Retailers Virtually every significant sporting goods retailer had established some type of web presence by late 1999. Each competitor. Converse. Because these competitors were smaller and less powerful than NIKE. but GSI managed the rest of the process. manufacturers focused on selling direct to consumers. the other leading athletic footwear and apparel manufacturers. six of the 20 largest sporting good retailers. A variety of types of competitors were eager to join the internet frenzy – traditional sporting goods retailers.com. Converse 32 . By late 1999. Several retailers. These companies possessed little or no experience selling goods directly to the consumer market and treaded lightly in their initial forays into ecommerce. the internet division of GSI. faced similar dilemmas and problems related to their own e-commerce strategies.000 products from 150 different manufacturers at prices equal to or lower than in-store prices. Complicating matters was the emergence of Global Sports. offered over 14. Inc. GSI handled the design. including The Athlete's Foot and The Sports Authority. Footlocker. Footlocker.

Reebok allowed both on-line only and bricks-and-mortars retailers to offer their full product lines (frequently at discounted prices) on their websites. In addition to the internet retailers. allowing its largest retail partners to sell NIKE products on their websites. and SportsLine. The competitors did not exert as much control over the end retail experience as NIKE did and granted more flexibility to their internet retail partners. Adidas and Reebok each offered limited product lines at full retail prices to their internet customers. NIKE‟s competitors were generally more willing than NIKE to allow retailers to sell their products over the internet. In the summer 33 .com." explained Mary Kate Buckley. severely restricting sale of product online. Adidas was the only major competitor who had taken a similar position to NIKE. the company was extremely hesitant. allowing customers to select any current product and then directing them to the websites of its affiliated retailers (both real-world and internet-only) who carried that product. but not nearly to NIKE‟s level of excluding internet retailers from entire product lines. Pure On-line Start-ups As in many other consumer segments. Each of those companies were making major pushes to convert their website viewers into purchasers. Initially. New Balance adopted a hybrid approach. "We saw a lot of online retailers who were not putting the right emphasis on product presentation. focusing on women's sports or chipshot. many sports media concerns were eager to leverage their viewer base into e-commerce customers. but NIKE moved cautiously. ESPN. NIKE’S INTERNET STRATEGY Other Internet Sellers (Non-NIKE) As new on-line retailers were created and traditional retailers launched their own internet initiatives. selling custom-made golf clubs). "Our bricks-and-mortars partners offer a convenient location where customers can feel the product quality and try products on … we were concerned that over time if everyone is selling the same thing online. provided they maintained the same standards enforced at the stores. but Copeland quickly learned that NIKE's concerns were to be taken seriously. New Balance was slightly more protective of both product offerings and pricing.com (partially owned by CBS) each had avid followings among sports fans due to the content they had been able to leverage from their media conglomerate owners. These internet endeavours included full-range retailers (such as fogdog. worrying that the NIKE brand value would be diluted by careless internet retailers. a division of Walt Disney Corporation. NIKE was bombarded with requests from merchants to sell NIKE products online."1 NIKE‟s traditional retail partners were anxious to expand into on-line sales. Foot Locker and Copeland Sports (through its shopsports. the only difference would be price. sporting goods attracted a number of internet entrepreneurs seeking to take advantage of the new technology to exploit the inefficient cost structure of traditional retailers.com.com) and highly specialized niche players (such as lucy.offered no ecommerce functionality or specific information on acquiring its products on-line.com.com division) each started selling NIKE products.

the company's point had been made to retailers. only to be rebuffed by NIKE.of 1999. Fogdog had repeatedly requested to carry the NIKE product line. Because NIKE handled its own international distribution and managed inventory liquidation through its own outlets. Fogdog‟s pricing policy of respecting manufacturers‟ recommended minimum prices and reputation was attractive to NIKE. Fogdog Deal In September of 1999. and unusual return privileges.com. however. NIKE signed a deal with internet sporting goods retailer Fogdog Sports that allowed Fogdog to sell the entire NIKE product line on its website. Fogdog hired Tim Joyce. Fogdog was given exclusive access (among internet-only sellers) to the NIKE product line for six months in return for warrants to buy up to 12% of Fogdog's shares at a pre-IPO valuation. NIKE needs to support them. such as The Athlete‟s Foot. explaining that "they were not meeting our marketing standards. Michael Rubin. after negotiations with NIKE had begun.com) to sell athletic gear directly to consumers over the internet. Fogdog was able to point to three years of consistently executing its pricing policy. however. Due to its ownership stake. the company saw less of these after-market resales than other manufacturers. This promise was sure to anger some of NIKE‟s most important bricks-and-mortar partners.com 34 . In September of 1999. NIKE no longer had any say over how the products were marketed or priced. and continued to monitor their performance carefully. Fogdog also received other special considerations from NIKE. NIKE had approved ten of its bricks-and-mortar retail partners to sell NIKE products over the internet. Fogdog Sports was founded in early 1998 (originally as SportSite. for at least six months. joint promotions. formerly VP of Global Sales at NIKE. By the end of 1999. Some internet sellers were able to acquire NIKE products from other retailers' overstocks and other unofficial channels. like every other internet retailer. product and sales data sharing." nike. In the end. NIKE agreed not to sell to other virtual retailers including those sites managed by Global Sports. NIKE had an incentive to make the deal work for both sides and agreed to treat Fogdog like any other major account. that all those retailers would be able to deliver acceptable service levels.com shortly thereafter. such as product images for display on the fogdog. and they need to be on the internet in order to survive in the 21st century. the young CEO of GSI. As part of the Fogdog deal. NIKE strictly enforced sales agreements with retailers and actively policed the web for offenders. to be its new president. which relied on NIKE for 40% of their footwear sales. The company was the evolution of a web design and ecommerce company started in 1994 by three graduates of Stanford University. Inc. and information sharing. including preferred prices. In 1998 the company attracted venture capital financing from VenRock Associates and Draper Fisher Jurvetson. Once these goods had passed from the hands of NIKE-authorized retailers. In addition. NIKE stopped selling to shopsports. commented on the channel conflict that NIKE faced: "Our six partners are all among NIKE‟s top 20 accounts." Although NIKE resumed sales to shopsports.com website. The company remained unconvinced.

new information on future product development. Phil Knight commented to the media that "on-line commerce is a partial return to our original roots of selling products at track meets from the trunks of our cars -. NIKE added profiles on NIKE athletes of all levels. with greatly expanded e-commerce functionality. NIKE made hundreds of its most popular products available for purchase. however. the website was redesigned to provide a store locator and more detailed product information. news and updates on sports events. and detailed product information. Despite the lack of e-commerce and no efforts to drive traffic to the site through advertising expenditures. "I wouldn‟t say we‟re on the bleeding edge of design technology.com site logged 14 million visitors in 1998. In addition." Despite the significant new push into e-commerce. it reflected a typical NIKE approach to brand building. but I will say we‟re on the bruised edge. Nike launched a test to sell its high-end Alpha Project line of footwear and apparel. Many of the web functions were so advanced that some consumers were unable to use them all without downloading various plug-ins. NIKE‟s website strategy evolved substantially." said nike. Over the next twelve months. and innovative new technologies. NIKE re-launched a completely overhauled and redesigned website. with tips and advice from NIKE athletes. including design inspirations and athlete endorsements. There were no e-commerce capabilities on the site.com website was initially launched in August 1996 to provide information and entertaining content to NIKE customers. The June re-launch was the first time the company‟s senior management seemed to understand the revolutionary importance of the internet. At first. NIKE maintained much of its previous website focus on brand-building and inspirational content. the nike. 35 .rekindling the direct relationship between NIKE and its consumers. A plan to sell posters on the NIKE website was considered for nearly a year before being launched during the Christmas 1998 season.com‟s creative director. In June of 1999. Different sports received their own separate pages.The nike. NIKE proceeded with extreme caution on the internet. all at full retail prices. instead. In February of 1999.

and operational logistics. Wal-Mart. Implementing and monitoring sustainable supply chain management programs can help any organization mitigate potential legal and market risks. Supply chain management concerns are not new. manufacturing. customer service. Nike responded to the National Labor Campaign‟s boycott in the 1990s by implementing a supply chain management program. community outreach. Gap. Nike publishes sustainability reports containing some of the most detailed supply chain data of any industry. marketing. Today. such as procurement and supply chain management.Sustainable Supply Chain Sustainable concepts can be incorporated into business management and operations at many levels: firm management principles. 36 . research and development. and many other firms have announced or implemented sustainable supply chain initiatives.

However. a firm should build capacity with its suppliers to meet those standards. Among others. If every company enforced its own supply standards. and reporting assistance will result in better and more reliable supply chain management. 37 . If the program is structured as a floor and not a ceiling.The first step in addressing environmental and social concerns within a supply chain is to conduct a life cycle analysis of the product or service at issue. this could be extended throughout the supply chain through voluntary programs or contractual agreements. suppliers would not be able to comply with the diverse and possibly conflicting requirements. After determining applicable minimum standards. This is not always easy. A company may know its own supplier but not the suppliers of that entity. This is a complicated but rewarding process that can build goodwill with suppliers and customers and provide an additional service to sell to competitors. If an organization has its own responsibility program or code of conduct. company should seriously consider adopting industry or third party standards instead of enforcing their own minimum standards across their supply chain. Providing education as well as implementation. and the inclusion of earlier processes or impacts in lifecycle regulations that are applied to the product or service at issue. vulnerabilities include the risk of consumer boycotts. A company should also decide whether to implement minimum environmental and social responsibility standards across their supply chain. monitoring. the company may even learn from the actions of its suppliers. Determining each resource and process that results in a product or service is the only way to expose potential vulnerabilities. A company should ensure that each supplier at least meets the minimum environmental and social requirements applicable in their location. supply interruption. Companies seeking to reduce potential legal and market liabilities are transforming their own business operations while building capacity in their networks of suppliers to do the same. Nike is currently working towards a universal standard for the apparel industry. The benefit of WalMart‟s recent sustainable product index initiative is its potential to establish a universal minimum standard.

Secondly. Apart from this. Since the company had no prior experience in handling the technicalities of retail management such as remote order fulfilment. In September 1999. their entry into the e-commerce business brought up a lot of operational and organizational issues. through all these newer developments efforts had to be made to not alienate its conventional retailers. NIKE didn‟t give too much importance to direct-to consumer sales and sold its product through various retail sales channels. Hence since the product had a much shorter product life when compared to its production cycle time. supply chain management and sales. Hence for each new model conservative production targets were set and then the designing of the next generation line was worked upon.com also entered the e-commerce arena and made hundreds of its most popular products available for purchase online. these online sites were monitored carefully to ensure that the brand quality and image were maintained. the second was used to liquidate overstocked or outdated inventory. NIKE signed a deal with Fogdog Sports to sell the entire NIKE product line on its website. This consisted mainly of retail outlets or retailer distribution centers. This also made customization or customization option not feasible. Thus managing its global supply chain became of critical importance to the company and all its operation ensured a smooth integration with the contract manufacturers. packaging and shipping. tracking deliveries. The production cycle could take 15-18 months. The first was used to showcase NIKE‟s newest product lines and brand building. with the on-line retail boom. The company outsourced its manufacturing to low cost countries like Indonesia. NIKE retailers started pushing to be allowed to sell these NIKE products on the web. NIKE‟s official website nike. The website still maintained its focus on brand advertising and inspirational context though the ecommerce business options were explored. where as the market life for a NIKE shoe was around 3-6 months.NIKE– CHANNEL CONFLICTS CASE ANALYSIS Situation Analysis: For the past thirty five years NIKE was a company which the management focused on a few core corporate areas namely brand building. Although by the end of the year NIKE had given permission to 10 retailers to sell online. Korea and China. Both were not the major selling channels for NIKE. The deal assured that Fogdog had exclusive access to NIKE products for six months during which period no other virtual retailer could buy them. it was pointless to try match the demand for a model with the supply. Discounts were provided to retailers who managed their distribution from the NIKE factory eliminating bottlenecks at distribution centers. Vietnam. Firstly. for the 38 . Finally. In 1999. This new situation raised a number of strategic concerns. customer service etc. NIKE owned 13 NIKE Town stores and 53 outlet stores in 1999.

In the case we understand that Nike has an absolute repute of being totally conscious about their quality. But later the business channels partners understood the real motive of the company behind building that type of robust expenditure maker as a promotional mechanism for the sake of increase in growth. Using the data collected from direct sales to use for future market Alternatives To reduce the dependency on the major retailers to some extent. Problem Statement In what way should Mary Kate Buckley promote Nike. How to cope with the six months‟ notice period of the newly agreed upon Fogdog deal. by getting only a retail chain using the product for selling Reduce the marked up price to gain more volumes in the sales To cope up with the six months of notice period. The fear of losing out to the nike website (which is company owned and delivering to the customers directly) is actually making them wary of the situation. As far as the channel partners are concerned prior to the websites Nike was doing one of the best jobs in the markets. From this perspective it can be said that there is chance of channel conflict if the intensions of the company as a whole about the usage of the website as a whole is not clearly stated to the retail outlets.commerce shops they were taking great interest in the quality and the kind of focus that the websites of these companies were giving into their product. some sales may be redirected from other stores to the worse hit stores. As of now though the sentiments of the retailers have been hurt 39 . For developing the distribution channel. The company is trying to utilize the fact that using a direct sales model through the Order procurement trough the websites actually has a much higher rate of profitability though doing away with the retailers was never away an option. Its business through retailers was too strong.first time NIKE was in a position to capture consumer data and analyse the demographics and do relevant market research. To avoid using multiple channels. infrastructures etc. Action Plan From the case we can know that the company does not sell their goods directly to the end users. So we for sure can call these as the marketing channels involved in the product or service being made available to the consumers.com to increase profitability and at the same time not cannibalize the sales of other outlets? Objectives: How to cope up with the new role of playing as the direct marketer as a company. Almost the same type of apprehension is now being created among the retail distribution channels with the e-commerce section of the company. between them stands a host of intermediaries who performs a variety of functions. Using the data collected during the direct sales to improve on understanding the behavior and purchasing habit of the customer and thus sharing the same at a later stage with the retailers for their better stoking of the inventory The website may be used to actually refer the customers to the nearest outlet of the company. the company first has to understand the customer segment that is being targeted and according build on the supply chain backwards. To promote their brand Nike developed the concept of building the Niketown which was first thought to be the killing machine for the retailers of nike shoes because of its far superior location. That‟s why in the beginning of the opening of the e.

Though at an initial stage the company is offering customerization for sales in the long this might not work out well. Since some of the retailers have been hit hard by the company getting into some contracts. But the intensions of the company still lie in the fact of exploring the direct sales procedure to increase in the profitability. chooses to sell through its website (nike. The inherent advantages that the usage of the website have are something like helping in cutting down on the sales price. on addition foraying into altogether totally new horizon of marketing its goods that will actually help the company reduce the dependence on its retailers and also lead to a better understanding of the needs of the consumers because of the detailed interactions that take place when direct sales takes place. to let everyone access the product models irrespective of the geographical locations etc. because it would be too difficult a product to be put in the mainstream. It will surely help to increase the profit considering the fact that the number of internet users are growing and thus such an interface will bring in customers who 40 . like redirecting a part of the sales from the general stores to them by the usage of the websites function of finding the nearest shop. So as of now . for Nike it would be too difficult to make it a standalone tool for increase the sales.com) at a price which is lesser than the marked up price of the retailers then surely the question of cannibalizing of the company‟s product comes into the foray. Inventory level that requires to be maintained will also be lowered since the orders will be placed directly and so the company can order as is required. in a bid to increase its profitability. they need to be alleviated by giving more sops. On other hand the problems the company might feel on along run are that of direct sales of this kind will require a very high standard of standardization. This is again evident from the fact that the company website although having a customer model from the manufacturers in the developing world. Ever of the the channels here has a very definite and distinct role to play. If the company. The other major problem is that of since the direct to customer model would not even have a warehouse of the company‟s own.over the Fogdog deal of not being able to for the next six months any inventories from the company. though the website can be used as an added mean to reach the consumers. After speaking about so many things about the eating up of own‟s share it should also be noted here for a company like Nike which specializes in a footwear touching and feeling the commodity plays a very significant as well as necessary part of business. still it has the option of locate a shop nearest to you icon which will help the customer find the nearest brand outlet. more so considering the product that the company is upto. So though it might be giving out a signal of channels of distribution of goods getting into other‟s territory it is not so. Since the customers are not actually feeling and trying out the apparels so a prescribed model would hav to be the same for all the time it is being manufactured for all the aspects of it. Nike. Thus a very high finesse has to be reached on part of the manufacturer. And it is need less to say that this is so very easy for the company which on direct sales is getting a profit of around an amount which is almost equal to the cost price of it. still an unclear vision over the matter can surely lead into one trying to eat into the piece of pie of the other. it would become increasingly difficult to handle any spike in the demand as there would be no buffer stocks for the same.

As the company gets a hold on the direct sales part which is still not the domain in which it is not comfortable enough . This division might be done on the basis of the exclusivity of the product. then it can expand its core competencies on the field of the delivery and logistics and thus increase on the profit margin from not outsourcing everything also letting the brand keeping the quality standards it would like to be associated with whatever the brand Nike does. 41 . so that the website may work as a replica on a functional mode of the Niketown. Also to promote sales through the website so as to keep getting the consumer feedback the company could go for a model in which certain percentage of the business might be done through the website and the rest through the retailers. the company also needs to increase the number of retail shops across the geographical locations.were probably not so keen enough to visit the shops an also those who could not get the right the product they wanted as this tool will help them to know where it would be available. To keep the growth moving with the increase of website visitors.

2011 (USA) 5) NIKE commitment on Zero Discharge of hazardous chemicals August 19. August 25.NIKE IN NEWS 1) Nike to set up sustainable venture capital arm October 01. 2011 (USA) 6) As an affiliate of NIKE Inc. 2011 (Indonesia) 42 .NIKE September 23. 2011 (USA) 4) NIKE Inc is committed to high standards of consumer and environmental safety for all of our products. 2011 (USA) 3) Nike announces the addition of Howard Taylor as Managing Director and Vice President of the Nike Foundation September 16. Converse takes matters of unfair labor practices very seriously and vigorously supports the protection July 16. 2011 (USA) 2) Worldwide futures orders up 16% .

nikebiz.REFERENCES http://www.com 43 .marketing91.marketing91.com/2007/12/case-analysis-nike-channel-conflicts.html http://en.html http://www.scribd.blogspot.htm http://www.org/wiki/Nike.blogspot.wikipedia.com/responsibility/ http://getinterested-csr._Inc. http://www.rediff.com/money/2006/nov/14spec.virginia.com/news/company-news/Nike/ http://www.fibre2fashion.com/swot-nike/ http://www.edu/~class/am483_97/projects/hincker/nikhist.com/ http://ranodeb.com/marketing-mix-nike/ http://xroads.

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