INDEX

1. Mission Statement At Nike

2. An Introduction To Nike

3. Nike’s overall Market Involvement

4. HISTORY OF NIKE

5. Nike’s Marketing Strategies In Major Nations Of The World.

 NIKE’s marketing strategy in United States Of America.

 NIKE’s Strategy In China

 NIKE’s Marketing Strategy In India

 NEW STRATEGY FOR INDIA

6. Marketing Mix

7. Place

 Headquarters

 Manufacturing

8. Promotion
 Nike And The Indian Cricket Team

9. Pricing

10. NIKE’s SWOT ANALYSIS

 STRENGTHS

 WEAKNESSES

 OPPORTUNITIES.

 THREATS
 11. Recommendations for Nike

Mission Statement At Nike

Nike’s mission statement is, “Through the adoption of

business practices Nike is committed to securing
intergenerational quality of life, restoring the
environment, and increasing value for our customers,
shareholders, and business partner s.” However,
according to Acaria.com, it is, “To maximize profits to
shareholders through products and services that enrich
people's lives.
An Introduction To Nike
NIKE, is 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.

However, the company still faces many challenges in the wake of changing
fashion trends, the falling sale of its higher- priced shoes, and increasing
competition. The case discusses the evolution of Nike's marketing strategy and
the company's various initiatives to strengthen its competitive position in a
changing environment.

For the year ended 31st May 2004, Nike, a leader in the global sports shoes
industry announced a vastly improved performance, earning almost $1 billion
on sales of $12.3 billion. Earnings had increased by 27% while orders
worldwide went up by 10.7%. Nike's return on invested capital was 22%, up
from 14% four years ago. Having completed a $1 billion share repurchase, Nike
had plans to buy back shares worth $1.5 billion over the next four years.

Nike had faced a crisis in the late 1990s. Many analysts felt this was because its
creativity had not been backed by operational discipline. Nike had operated on
instinct, often guessing how many pairs of shoes to produce and hoping it
could offload them in the market. In the past few years, Nike had tried to
balance creativity with a strong business focus. Nike had overhauled its
information systems to get the right number of shoes to the market more
quickly. The company had also streamlined logistics and strengthened its
management team. It focused on more efficient management of its portfolio of
brands -- Cole Haan dress shoes, Converse retro-style sneakers, Hurley
International skateboard gear, and Bauer in-line and hockey skates.
As 2004 drew to a close, Nike realized it could not underestimate powerful
competitors such as adidas. When founder Phil Knight resigned on 18th
November 2004, it marked the beginning of a new era at Nike under the
leadership of William D. Perez. Perez had earlier been president and chief
executive of S.C. Johnson & Son.

Nike's athletic footwear products were worn for both casual or leisure
purposes. Running, basketball, children's, cross-training and women's shoes
were Nike's top-selling product categories.

Nike also offered shoes designed for outdoor activities like tennis, golf, soccer,
baseball, football, bicycling, volleyball, wrestling, aquatic activities, hiking, and
other athletic and recreational uses. Nike sold sports apparel, athletically
inspired lifestyle apparel, as well as athletic bags and accessory items.

Nike’s overall Market Involvement

Nike was involved in the design, development and worldwide marketing of

high quality footwear, apparel, equipment, and accessory products. The largest
seller of athletic footwear and athletic apparel in the world, Nike offered its
products through approximately 18,000 retailers in the US and various
independent distributors, licensees and subsidiaries in nearly 200 countries
around the world. Independent contractors manufactured most of Nike's
products. Footwear products were mostly produced outside the US, while
apparel and equipment were made both in the US and abroad.

Nike often marketed footwear, apparel and accessories in "collections" of

similar design or for specific purposes.

Nike also marketed apparel with licensed college and professional team and
league logos. Nike sold sports balls, timepieces, eyewear, skates, bats, gloves,
and other equipment designed for sports activities, swimwear, cycling apparel,
maternity exercise wear, children's clothing, school supplies, timepieces, and
electronic media devices.
Nike also sold various plastic products to other manufacturers through its
wholly owned subsidiary, NIKE IHM, Inc. and plastic injected and metal
products to other manufacturers through its wholly-owned subsidiary, BAUER
Italia S p A.

Nike sold a line of dress and casual footwear, apparel and accessories for men
and women under the brand names Cole Haan®, CH, Gseries by, Cole Haan,
and Bragano through its wholly-owned subsidiary, Cole Haan Holdings. Nike's
wholly-owned subsidiary, Bauer NIKE Hockey Inc., offered ice skates, skate
blades, in-line roller skates, protective gear, hockey sticks, and hockey jerseys,
licensed apparel and accessories under the Bauer® and NIKE® brand names.
Bauer also offered various products for street and roller hockey. Another
wholly-owned subsidiary Hurley International offered a line of action sports
apparel (for surfing, skateboarding, and snowboarding) and youth lifestyle
apparel and footwear under the Hurley brand name. Sticks, and hockey
jerseys, licensed apparel and accessories under the Bauer and NIKE brand
names. Bauer also offered various products for street and roller hockey.
Another wholly-owned subsidiary Hurley International offered a line of action
sports apparel (for surfing, skateboarding, and snowboarding) and youth
lifestyle apparel and footwear under the Hurley brand name.

HISTORY OF NIKE
1950’s
Before there was the Swoosh, before there was Nike, there were two visionary
men who pioneered a revolution in athletic footwear that redefined the
industry.

Bill Bowerman was a nationally respected track and field coach at the
University of Oregon, who was constantly seeking ways to give his athletes a
competitive advantage. He experimented with different track surfaces, re-
hydration drinks and – most importantly – innovations in running shoes. But
the established footwear manufacturers of the 1950s ignored the ideas he
tried to offer them, so Bowerman began cobbling shoes for his runners.
Phil Knight was a talented middle-distance runner from Portland, who enrolled
at Oregon in the fall of 1955 and competed for Bowerman’s track program.
Upon graduating from Oregon, Knight earned his MBA in finance from Stanford
University, where he wrote a paper that proposed quality running shoes could
be manufactured in Japan that would compete with more established German
brands. But his letters to manufacturers in Japan and Asia went unanswered,
so Knight took a chance.

He made a cold-call on the Onitsuka Co. in Kobe, Japan, and persuaded the
manufacturer of Tiger shoes to make Knight a distributor of Tiger running
shoes in the United States. When the first set of sample shoes arrived, Knight
sent several pairs to Bowerman, hoping to make a sale. Instead, Bowerman
stunned Knight by offering to become his partner, and to provide his footwear
design ideas to Tiger.

1960’s
They shook hands to form Blue Ribbon Sports, pledged $500 each and placed
their first order of 300 pairs of shoes in January 1964. Knight sold the shoes out
of the trunk of his green Plymouth Valiant, while Bowerman began ripping
apart Tiger shoes to see how he could make them lighter and better, and
enlisted his University of Oregon runners to wear-test his creations. In essence,
the foundation for what would become Nike had been established.

But Bowerman and Knight each had full-time jobs - Bowerman at Oregon and
Knight at a Portland accounting firm - so they needed someone to manage the
growing requirements of Blue Ribbon Sports. Enter Jeff Johnson, whom Knight
had met at Stanford. A runner himself, Johnson became the first full-time
employee of Blue Ribbon Sports in 1965, and quickly became an invaluable
utility man for the start-up company.

1970’s
He created the first product brochures, print ads and marketing materials, and
even shot the photographs for the company’s catalogues. Johnson 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.
Around this same time, the relationship between BRS and Onitsuka was falling
apart. Knight and Bowerman were ready to make the jump from being a
footwear distributor to designing and manufacturing their own brand of
athletic shoes.

They selected a brand mark today known internationally as the “Swoosh,”

which was created by a 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.

One particular pair of shoes made a very different impression – literally – on

the dozen or so runners who tried them. They featured a new innovation that
Bowerman drew from his wife’s waffle iron – an outsole that had waffle-type
nubs for traction but were lighter than traditional training shoes.

With a new logo, a new name and a new design innovation, what BRS now
needed was an athlete to endorse and elevate the new Nike line. Fittingly for
the company founded by Oregonians, they found such a young man from the
small coastal town of Coos Bay, Ore. His name: Steve Prefontaine.

Prefontaine electrified the packed stands of Oregon’s Hayward Field during his
college career from 1969 to 1973. He never lost any race at his home track
over the one-mile distance, and quickly gained national exposure thanks to
cover stories on magazines like Sports Illustrated and his fourth-place finish in
1972 in the 5,000m in Munich.

His tragic death at age 24 in 1975 cut short what many believed would have
been an unparalleled career in track – at the time of his death, he held
American records in seven distances from 2,000m to 10,000m. But
Prefontaine’s fiery spirit lives on within Nike; Knight has often said that Pre is
the “soul of Nike.”

1980’s
Nike entered the 1980s on a roll, thanks to the successful launch of Nike Air
technology in the Tailwind running shoe in 1979. By the end of 1980, Nike
completed its IPO and became a publicly traded company. This began a period
of transition, where several of Nike’s early pioneers decided to move on to
other pursuits. Even Phil Knight stepped down as president for more than a
year in 1983-1984, although he remained the chairman of the board and CEO.

By the mid-1980s, Nike had slipped from its position as the industry leader, in
part because the company had badly miscalculated on the aerobics boom,
giving upstart competitors an almost completely open field to develop the
business. Fortunately, the debut of a new signature shoe for an NBA rookie by
the name of Michael Jordan in 1985 helped bolster Nike’s bottom line.

In 1987, Nike readied a major product and marketing campaign designed to

regain the industry lead and differentiate Nike from its competitors. The focal
point was the 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.’

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 athlete named Bo
Jackson, who espoused the benefits of a new cross-training shoe.

In 1989, Nike’s cross-training business exploded, thanks in part to the

incredibly popular “Bo Knows” ad campaign. By the end of the decade, Nike
had regained its position as the industry leader, the first and only time a
company in the athletic footwear/apparel industry has accomplished such a
feat. Nike has never relinquished that position again.

1990’s
Buoyed by a series of successful product launches and marketing campaigns,
Nike entered the 1990s by christening its beautiful world headquarters in
suburban Portland, Oregon. In November of 1990, Portland became the first
home to a new retail-as-theatre experience called Niketown, which would earn
numerous architectural design and retail awards and spawn more than a dozen
other Niketown locations around the USA and internationally.

While Nike had designed footwear and apparel for golf and soccer for a
number of years, the mid-1990s signaled a deepening commitment to truly
excel in these sports. 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.
Nike also began investing in the sport of cycling, including a promising young cyclist who appeared to
be on his way to success until he was diagnosed with cancer. He lost most of his sponsors, but Nike
elected to stay with him. In 1999, Lance Armstrong’s incredible comeback resulted in the first of
what would be seven consecutive Tour de France titles.

2000’s
Nike rang in the new millennium with a new footwear cushioning system called
Nike Shox, which debuted during Sydney in 2000. The development of Nike
Shox culminated more than 15 years of perseverance and dedication, as Nike
designers stuck with their idea until technology could catch up. The result was
a cushioning and stability system worthy of joining Nike Air as the industry’s
gold standard.

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.
Nike’s Marketing Strategies In Major
Nations Of The World.

NIKE’s marketing strategy in United States Of America.

• Nike marketing strategy is to show that buying its shoes makes people
inspired,cool,athletic and part of the world where Michael Jordan and
Tiger Woods play.

• Americans closely follow Lawn Tennis,PGA and Basket ball.So Nike have
signed the celebrities from these sports to endorse the product. Few of
them are Michael Jordan,John Macenro,Andre Agasi,Tiger Woods etc.

• Nike have been attacking the feminine demographic for the past few
years through new advertising and print campaigns, redesigned
Niketown stores and higher visibility at department stores, web site,
magazine and a timelier seasonal approach to women's apparel.

• The women's business effort and introduction of the successful new

"Presto" shoe are allowing Nike a certain amount of indifference to the
economy.

NIKE’s Strategy In China

• Sports simply wasn't a factor in a country where education levels and test
scores dictated success.

• So Nike executives set themselves a potentially quixotic challenge: to

change China's culture. Terry Rhoads, then director of sports marketing
for Nike in China: thought 'We won't get anything they don't play sports.

• He donated equipment to Shanghai's high schools and paid them to

open their basketball courts to the public after hours. He put together
three-on-three tournaments and founded the city's first high school
basketball league, the Nike League, which has spread to 17 cities. At
games, Rhoads blasted the recorded sound of cheering to encourage
straitlaced fans to loosen up, and he arranged for the state-run
television network to broadcast the finals nationally. The Chinese
responded: sales through the 1990s picked up 60% a year. In this way
they were able to hook kids into Nike early and hold them for life.
 NIKE’s Marketing Strategy In India
• Nike started its operation in India in 1996.

• Nike accounts for just 25 per cent of the Rs 375-400 crore branded
sportswear market.

• The biggest hurdle for Nike in India was its entry model and its lack of
aggression. When the global sports majors entered the Indian market in
1995-96, government policy dictated that they had to have a local
partner.

• Nike agreed to an exclusive distribution agreement with a Delhi-based

trading firm Sierra, in early 1996

• Nike lacked in the strategy while Reebok was the first to understand the
ground realities in the Indian market. It was the first to build its
promotions around cricket, not only through endorsements but also
through sponsorships of regional and local cricket associations.

• Nike clearly didn't think the same way. Right from the start it has used
international ads and sports icons for promotions in India as well -- and
that hasn't changed still. Sports in India largely means cricket and
football. A Michael Jordan is irrelevant to the masses.

• Nike's product range has also been a problem. Globally, the brand is a
trendsetter in terms of design and technology. In India, however, Nike
was relatively slow in bringing the latest designs. Nike started importing
more international ranges only after 2000.

• The biggest problem with Nike was that decisions on advertising and
store expansion was taken by the distributor.

• Things are finally changing. Last year, Nike ended its over-dependent
agreement with Sierra and became a 100 per cent subsidiary of the US
parent.
 NEW STRATEGY FOR INDIA
• The product innovations have been incorporated thorough localization
and customization. For example, boots have been specifically designed
to match the hard Indian turf.

• Nike has won a Rs 196.66 crore bid to sponsor the Indian cricket team's
clothes for the next five years.

• As per the deal the members of the Indian team will wear only Nike
items on the field. The Nike logo will feature on the sleeves of the
players' non-leading arm. Nike will also become the official apparel
provider to the Indian team and has got the license to sell Indian team
merchandise like travel gear, head gear, t-shirts, caps, socks, sunglasses
and wristbands across the world.

• NIKE has roped in Baichung Bhutia as their brand ambassador.

• Other sports companies realised the value of adapting to Indian

consumers long ago. What delayed Nike? The operational arrangement
was probably to blame: Nike's entry into India was through a seven-year
licence agreement with Sierra Industrial Enterprises, unlike Reebok, for
instance, which is a fully-owned subsidiary of the American parent.

• In 2004, instead of renewing the franchise, Nike India became a

subsidiary.

• It was an opportunity to start afresh, with greater independence, and Nike

is aware of it. "The Indian market is growing in terms of retail, customer
spends and awareness. It only made sense for us to cash in on these
opportunities as early as possible," says Gangopadhyay.

• The company figures that it is critical to connect emotionally with

customers. And in a cricket-crazy nation like India, you don't need to
think too hard about how to do that. Even rival Reebok agrees.
• Nike is listening. Witness the five-year contract with the BCCI. "We
wanted to first show our loyalty to Team India, to prove our commitment
towards the market and win the confidence of cricket fans," says
Gangopadhyay.

• That was followed by the introduction of Nike's first cricket shoes. The
Air Zoom Yorker was launched this September by pace bowlers S
Sreesanth and New Zealand's Shane Bond , who have also been signed on
brand ambassadors for the product. A shoe for batsmen, the Air Zoom
Opener, followed.

• Besides, the BCCI deal allows Nike to launch official cricket

merchandise such as replica team T-shirts and jerseys, kit bags and
backpacks. That's not just a huge branding opportunity, it's a potential
money-spinner: retail consultants estimate the licensed merchandise
business could bring in more than $20 million in the first year itself.

• Nike is also thinking ahead and taking its commitment to cricket to the
grassroots level. In December 2005, it tied up with coaching schools like
the BCCI's National Cricket Academy.

• The academies will work with Nike to understand the product

requirements of the players. It's a win-win situation for both the company
and the academies. While Nike creates brand awareness and has a shot at
creating loyalists at a young, impressionable age, the academies' need for
equipment such as shoes and training gear is looked after by the
company.

• "This is good move by Nike to promote products at a serious level and to

build brand awareness through its commitment to develop sports in
India," says Harminder Sahni, chief operating officer, Technopak
Advisors.

• There's nothing original about the focus on cricket, but elsewhere Nike is
stamping out fresh ground. Players like Reebok and Puma are looking at
extending the sports product line as a lifestyle brand for the 17-35 years
age group. While Reebok is looking at increasing its exclusive women's
 stores from the existing three to 10 by next year, 70 per cent of the
merchandise in Puma stores is lifestyle-, and not sport-related.

• When Nike talks of young customers, it means young. Across the world,
its core audience is between 12 and17 years, and it sees no reason why
India should be any different.

• "We want to inspire youth to become serious about sports that interest
them," says Gangopadhyay. The cricket ad, for instance, is clearly
targeted at this group.

• The ad showcases some of India's finest cricket moments in recent times:

Virendra Sehwag becoming the first Indian to score 300 runs in a test
match and the dramatic win for India in the Natwest series in 2002. You
won't find any memories of the Prudential Cup win of the 1980s in this
supersized, 300-second commercial: the target group isn't likely to relate
with an event that's not just historical, it's history.

• Children today don't just play the game, they also understand how serious
it is. That is why instead of showing cricketers, they decided to show
moments that highlight the achievements of cricketers.
• The sponsorships of the cricket academies and the ad isn't the only child-
friendly tactic Nike is adopting. It has also launched its cricket shoes and
the replica gear in small sizes. That's a good move, say retail consultants.
"Targeting kids will help Nike build the brand and create a long-term
effect by addressing customers' needs at an early age," says Sahni.

• There's some doubt, though, on whether cricket is the best sport to

communicate the brand's values to a young, discerning audience.

• Brands like Nike are clearly focused on the upper segment of consumers.
I'm not sure whether cricket is any longer such a popular sport with that
group. Young consumers in the upper strata are more likely to be tuned
into events like the NBA or Premier League Football.
Marketing Mix
Nike’s 4Ps comprised of the following approaches to pricing, distribution, advertising and
promotion, and customer service:

Product
Nike sells a huge variety of products, including shoes for running, basketball,
cross training, women and children. All of which are currently its top-selling
product categories. Nike also sells shoes for outdoor activities such as tennis,
golf, soccer, baseball, football, bicycling, volleyball, wrestling, cheerleading,
aquatic activities, auto racing and other athletic and recreational uses. Nike
began selling active sports apparel in 1979 as well as athletic bags and
accessory items. The company sells a line of
performance equipment under the Nike
brand name, such as sport balls, timepieces,
eyewear, skates, bats and other equipment.
They also sell a line of dress and casual
footwear and accessories for men, women
and children under the brand name Cole
Haan. The company markets headwear
under the brand name Sports Specialties,
through Nike Team Sports, Inc. They also sell
small amounts of various plastic products to
other manufacturers through Nike IHM,
Inc.Bauer Nike Hockey Inc. manufactures and distributes ice skates, skate
blades, in-roller skates, protective gear, hockey sticks and hockey jerseys and
accessories under the Bauer and Nike brand names.Pricing StrategiesNike uses
vertical integration in pricing wherein they own participants at differing
channel levels or engage in more than one channel level operations. This is also
an attempt to control costs and influence pricing practices.
Nike produces a wide range of sports equipment. Their first products were
track running shoes. They currently also make shoes, jerseys, shorts,
baselayers etc. for a wide range of sports including track & field, baseball, ice
hockey, tennis, Association football, lacrosse, basketball and cricket. Nike Air
Max is a line of shoes first released by Nike, Inc. in 1987. The most recent
additions to their line are the Nike 6.0, Nike NYX, and Nike SB shoes, designed
for skateboarding. Nike has recently introduced cricket shoes, called Air Zoom
Yorker, designed to be 30% lighter than their competitors'. In 2008, Nike
introduced the Air Jordan XX3, a high performance basketball shoe designed
with the environment in mind.

Nike sells an assortment of products, including shoes and apparel for sports
activities like association football. basketball, running, combat sports, tennis,
American football, athletics, golf and cross training for men, women, and
children. Nike also sells shoes for outdoor activities such as tennis, golf,
skateboarding, association football, baseball,
American football, cycling, volleyball, wrestling,
cheerleading, aquatic activities, auto racing and
other athletic and recreational uses. Nike is
well known and popular in youth culture, chav
culture and hip hop culture as they supply
urban fashion clothing. Nike recently teamed
up with Apple Inc. to produce the Nike+
product which monitors a runner's performance via a radio device in the shoe
which links to the iPod nano. While the product generates useful statistics, it
has been criticized by researchers who were able to identify
users' RFID devices from 60 feet (18 m) away using small,
concealable intelligence motes in a wireless sensor network.In
2004, they launched the SPARQ Training
Program/Division.Some of Nike's newest shoes contain
Flywire and Lunarlite Foam.
These are materials used to
reduce the weight of many types of shoes.

Nike has contracted with more than 700

shops around the world and has offices
located in 45 countries outside the United States. Most of the factories are
located in Asia, including Indonesia, China, Taiwan, India, Thailand, Vietnam,
Pakistan, Philippines, and Malaysia. Nike is hesitant to disclose information
about the contract companies it works with. However, due to harsh criticism
from some organizations like CorpWatch, Nike has disclosed information about
its contract factories in its Corporate Governance Report.

The product range of Nike comprise of shoes, sports wear, watches etc. Its
product history began with long distance running shoes in 1963. (Past 17 years:
Air Jordan basketball shoes). Wide range of shoes, apparel and equipment. For
example:

Þ Nike Oregon Digital Super Watch

Þ Nike Presto Cee Digital Medium Watch

Þ Nike Presto Cee Digital Small Watch

Þ Nike Ron Analog Watch

Þ Nike Triax 10 Regular Watch

Þ Nike Triax Armored II Analog Super Watch

Þ Nike Women's Imara Fit Digital Watch

Place
Nike shoes are
distributed to
Multi Brand store
front and the
exclusive Nike
stores across
countries. While
this necessitates
a second trip for
the customer to
come and pick up
the shoes, it
allows Nike to
offer a much
wider selection than any of the competition. Distribution channels and policy.
Should additional channels be added, Why? Nike sells its product to about
20,000 retail accounts in the U.S. and in approximately 110 countries around
the world. Nike sells its products in international markets through independent
distributors, licensees and subsidiaries. Independent distributors has little or
no pressure for local adaptation because the 4Ps of marketing are managed by
distributors. Previous it is observed that nike as other company were selling
footware through channel partners. We usually purchase shoes from shop
when it is need. However looking growth of India retail industry, they try to
reach 'n' no. of consumers to know their needs betters, and develop their
product accordingly. At the same time they can increase their prospect and
real customer by making them FEEL.
Nike currently enjoys a 47% market share of the domestic footwear industry,
with sales of $3.77 billion. Nike has been manufacturing throughout the Asian
region for over twenty-five years, and there are over 500,000 people today
directly engaged in the production of their products. They utilize an
outsourcing strategy, using only subcontractors throughout the globe. Their
majority of their output today is produced in factories in China, Indonesia, and
Vietnam, but they also have factories in Italy, the Philippines, Taiwan, and
South Korea. These factories are 100% owned by subcontractors, with the
majority of their output consisting solely of Nike products. However, Nike does
employ teams of four expatriates per each of the big three countries (China,
Indonesia, Vietnam), that focus on both quality of product and quality of
working conditions, visiting the factories weekly. They also developed their
code of conduct in 1992 and have implemented it across the globe, as its goal
is to set the standard for subcontractors to follow if they wish to do business
with Nike. However, due to a manufacturing network of this magnitude, they
have faced numerous violations involving factory conditions and human rights
issues, which have been widely publicized. They have responded to these
issues through the Andrew Young report, the Dartmouth Study, and Ernst &
Young’s continual monitoring, but are still approximately two years away from
completely addressing these problems throughout the globe.

Headquarters
Nike's world headquarters are surrounded by the city of Beaverton, but are
within unincorporated Washington County. The city attempted to forcible
annex Nike's headquarters, which led to a lawsuit by Nike, and lobbying by the
company that ultimately ended in Oregon Senate Bill 887 of 2005. Under that
bill's terms, Beaverton is specifically barred from forcibly annexing the land
that Nike and Columbia Sportswear occupy in unincorporated Washington
County for 35 years, while Electro Scientific Industries and Tektronix get that
same protection for 30 years.

Manufacturing
Nike has contracted with more than 700 shops around the world and has
offices located in 45 countries outside the United States. Most of the factories
are located in Asia,
including Indonesia,
China, Taiwan, India,
Thailand, Vietnam,
Pakistan,
Philippines, and
Malaysia.[23] Nike is
hesitant to disclose
information about
the contract
companies it works with. However, due to harsh criticism from some
organizations like CorpWatch, Nike has disclosed information about its
contract factories in its Corporate Governance Report.
Promotion
Location, targeted advertising in the newspaper and strategic alliances serves
as the foundation of Nike advertising and promotion effort. The athletes and
other famous sports personalities are always taken as brand ambassadors.
They form the prime building blocks of their portion strategy. Nike has been
one of the top retail industries for quite along time. This is because they sell
quality products, customer loyalty, but most of all, its great marketing
techniques. 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 to create a great deal
of attention to their products. Nike has signed the top athletes in many
different sports such as the Brazilian Soccer Team (especially Ronaldino,
Renaldo, and Roberto Carlos), Lebron James and Jermane O'Neal for
basketball, Lance Armstrong for cycling, and Tiger Woods for Golf. Sponsoring
of events is another great promotional technique for Nike. It brings attention
Nike's products. Web sites are a great promotional tool as they cover these
events. Such events include Hoop It Up and The Golden West Invitational. Nike
also personalizes websites. They
make the websites exclusively
for a sport such as
www.nikebasketball.com ,
nikefootball.com , and
www.nikegolf.com.

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. 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. In addition to garnering awards, Nike advertising
has generated its fair share of controversy:

Nike’s focus is still on track and field and for the most part track athletes are
their target market. One of the first individuals to endorse a Nike product was
a man who exemplified their style and way of conducting business, Steve
Prefontaine. Prefontaine was a household name in the late seventies and has
gone down in history as one of the best American track and field athletes ever.
Prefontaine was a friend of Knight and had been coached by Bowerman at the
University of Oregon. Prefontaine embodied what Nike wanted as its
differential advantage of other companies due to his brash attitude, high talent
level, and cavalier mentality. Nike marketed itself as a new and innovative shoe
company that constantly had the athlete’s performance in mind unlike existing
companies who focused on their products appearance and durability. Nike
infested their market with bright colors, new styles, and technology
information pertaining to their products. This is why Steve Prefontaine and
Nike were a tremendous tandem in the early years of Nike’s existence. The
introduction of the AIR JORDAN line helped to create new lines of basketball
shoes, including the AIR FORCE and AIR FLIGHT lines of basketball shoes and
apparel. Also, a new innovative technology was a layer of air cushioning in
their shoes; this was truly a differential factor for Nike when placed in
comparison with other shoe companies. Nike’s sales jumped to over $3 Billion
in total. Nike’s AIR JORDAN shoe was the best selling and most popular
basketball shoe on the market. The AIR JORDAN shoe reached a point in the
mid-nineties when a small picture of Michael Jordan at practice wearing
different shoes sparked a booming inquiry all over Chicago. One store alone
received over 300 phone calls asking if they had the shoes in stock.

The market Nike in which they wanted to target Jordan towards now was the
“athlete of any age.” Nike began to produce sizes from infant on up. Nike
created commercials that glorified Jordan and displayed his humbleness. In the
commercials Jordan did things that young and old people alike always dreamed
of doing. Most of the commercials included Jordan soaring through the air,
seeming to be hung form the sky with the chorus, “If I could be like Mike”
playing in the background. Jordan would then drop out of the sky and dunk the
basketball. In one commercial aimed towards younger children, Jordan played
the Warner Brothers Loony Toons Characters. For an older generation Nike
created a commercial where Jordan is on a dimmed basketball court and a
booming voice comes in and says, “What if my name weren’t in lights? Can you
imagine that? . . I can?” This commercial marketed Jordan as human being and
not the untouchable being that he is sometimes projected to be; this was
aimed to help the average person relate to Jordan.

Nike started its web site in early 1999, but it did

not grown into a usable, interactive web site
until six months later.  Most of the items found
in the brick and mortar stores are also found at
Nike.com, with prices being about the
same.  Since Nike is using multiple channels for
distribution, it does not want to create conflict
by "undercutting their retail partners prices"
(Manning, 1999), but wants to give consumers
alternative channels to obtaining their
products.  The web site can be seen from all over the world, but only in the US
can items be bought.  Nike.com has an alliance with UPS to deliver all their
products to the consumers' doorstep in under three-days.  The biggest problem
with shipping and handling is the cost.  For a $70 pair of shoes, expect to pay
$11-$16 for shipping alone (Manning, 1999).

Nike recently launched has two big campaigns on its web site.  One is dealing
with Mrs. Jones (Marion Jones) and her opinions on real issues involving the
sports business.  These can be captured on the web site, with actual dialogues of
the commercials.  The other involves a series of commercials that actually invite
consumers to interact with their web site.  The viewers see half of the
commercial on television, but the other half can only be viewed through their
web site.

Nike pays top athletes in many different sports to use their products and
promote their technology and design.
Nike's first professional athlete endorser was Romanian tennis player Ilie
Năstase, 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
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 Martín del Potro, Andre Agassi, Rafael
Nadal, Pete Sampras, Marion Bartoli, Lindsay Davenport, Daniela Hantuchová,
Mary Pierce, Maria Sharapova, Serena Williams.
Nike And The Indian Cricket Team

THE Indian cricket team's official kit sponsor is Nike. Nike is also the official kit
sponsor for the Indian cricket team for 5 years, from 2006 till end of 2010.

Its bid was for Rs 196.66 crore. The new contract is for a period of five years
beginning January 1, 2006 to December 31, 2010, and will be carried through

to the next World Cup in 2007.

The others in the fray were Adidas and Reebok who bid Rs 127.5 crore and Rs
119.48 crore respectively.

Winning the official kit sponsorship entitles Nike to get branding on the non-
leading arm of the player's outfit. Offering unprecedented brand exposure at
all matches played by the Indian cricket team, the company feeds off the
popularity of the player, the team and the actual sport itself. The same
company is the official licensee for apparel merchandise for the BCCI. They also
are entitled to retail merchandise at branded outlets and BCCI corners.

.As the official licensee for apparel merchandise of Cricket India, Nike actively
markets replicas of the Indian team kit through its vast distribution network in
India and abroad.
Pricing
Nike’s 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. 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. This can control
costs and influence product pricing.

Nike uses Price Leadership strategy and value based pricing. This is when a
company sets is price based on teh value the consumer places on the product.
Nike has spent a lot of money to promote their brand as top of the range.
Customers buy the product for the Nike symbol and are willing to pay high
prices regardless of the products actual value.
NIKE’s SWOT ANALYSIS

STRENGTHS.
Nike is a very competitive organization. Phil Knight (Founder and CEO) is often quoted as
saying that 'Business is war without bullets.' Nike has a healthy dislike of is competitors. At
the Atlanta Olympics, Reebok went to the expense of sponsoring the games. Nike did not.
However Nike sponsored the top athletes and gained valuable coverage.

Nike has no factories. It does not tie up cash in buildings and manufacturing workers. This
makes a very lean organization. Nike is strong at research and development, as is evidenced
by its evolving and innovative product range. They then manufacture wherever they can
produce high quality product at the lowest possible price. If prices rise, and products can be
made more cheaply elsewhere (to the same or better specification), Nike will move
production.Nike is a global brand. It is the number one sports brand in the World. Its famous
'Swoosh' is instantly recognisable, and Phil Knight even has it tattooed on his ankle.

One of the greatest things about the NIKE Company is that everyone knows it. You can go anywhere
in the world with the Nike symbol and most people would recognize the brand. Which goes to show
their hardwork in the advertising department? Strength about this company is that they are great at
expanding their product. The company that started out making just sneakers now makes things from
sports equipment to apparel. Nike definatly knows how to expand well into the athletic market. This
company also has strong international presence and sales their product worldwide. They always
have the hottest celebrity athletes promoting their product. Right now they even have Lebron James
and before they had Michael Jordan.

The Following bullets Broadly refer to Nike’s Strengths

 Nike is a globally recognized for being the number one sportswear brand in the
World.

 Nike being a competitive organization has a healthy aversion towards its competitors
i-eduring Atlanta Olympics, Reebok expensed on sponsoring the games; Nike
however sponsored the top athletes and due to this step, it gained valuable coverage.
  Nike has no factories; rather it uses contract factories to get the work done which
makes it quite a lean organization. It has contracts with above 700 shops globally in
about 45 different countries.

 Nike is quite strong regarding its research and development;quite evident regarding its
evolving and innovative product range.

 They manufacture high quality at the lowest possible price,if prices rise due to price
hike then the production process is made cheaper by changing the place of production.

 It belongs to the Fortune 500 companies.

 Nike employs about more than 30.000 people worldwide.

 It has a strong sense of marketing campaign by sponsoring top athletes.

 It uses lunarlite foam and flywire materials in order to make the manufactured shoes
lighter and more controllable.

 No factories - Does not tie up cash in buildings or manufacturing workers, making it a

very lean organization

 Strong R&D (research and development)

 Typically linked to some of the best sports & and athletes in the world

WEAKNESSES.
The organization does have a diversified range of sports products. However, the income of
the business is still heavily dependent upon its share of the footwear market. This may leave
it vulnerable if for any reason its market share erodes.

The retail sector is very price sensitive. Nike does have its own retailer in Nike Town.
However, most of its income is derived from selling into retailers. Retailers tend to offer a
very similar experience to the consumer. Can you tell one sports retailer from another? So
margins tend to get squeezed as retailers try to pass some of the low price competition
pressure onto Nike.

One huge weakness with the NIKE Company is that they fail to see problems in relation to
their labor and factory conditions. For example, in 1996 Nike was exposed for child labor in
Pakistan. This led to lots of bad publicity which hurt the company in sales. Many people
began to boycott their product. Another issue this company has is that it has such a high
price point compared to its competitors, which means that they must then rely more on the
quality of the product, but also rules out many customers because of this. Another problem
is their expanding into different markets. Some of these markets are not so suited for the
company since they started off with sneakers and try making footballs and such. This
expands production cost and may be more trouble than it is worth.

The following Bullets further highlight the points.

• Even though the organization has a diversified range for sportswear, the income of the
business, however, is still heavily dependent upon its share of the footwear market
which leaves it at a quite vulnerable spot if for any reason its market share erodes.

• The retail sector is price sensitive retailers usually tend to offer a very similar
experience to the consumers with another cheaper product, which in return tends to
get squeezed as retailers try to pass some of the low price competition pressure onto
Nike.

• Nike was for quite some time unwilling to disclose any type of information
concerning its partnering companies.

• It was charged with the violation of overtime and minimum wage rates in Vietnam,
1996, that was seen as having poor working conditions, and that it was also charged
for exploiting cheap workforce overseas.

• Nike was also reported to have applied child labor in Pakistan and Cambodia to
produce soccer balls.

• It was positioned as a subject of criticism by anti-globalization groups due to its

unruly and exploited manner that was quite a disaster for its reputation.
OPPORTUNITIES.

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, like it or not,
consumers that wear Nike product do not always buy it to participate in sport. Some would
argue that in youth culture especially, Nike is a fashion brand. This creates its own
opportunities, since product could become unfashionable before it wears out i.e. consumers
need to replace shoes.

There is also the opportunity to develop products such as sport wear, sunglasses and
jewellery. Such high value items do tend to have associated with them, high profits.

The business could also be developed internationally, building upon its strong global brand
recognition. There are many markets that have the disposable income to spend on high
value sports goods. For example, emerging markets such as China and India have a new
richer generation of consumers. There are also global marketing events that can be utilised
to support the brand such as the World Cup (soccer) and The Olympics.

• The brand is sternly defended by its owners who believe that Nike is not a fashion brand,
however, a large number of consumers wear Nike product because they derive a fashion
trend rather than to participate in a sport. It is mostly argued that in youth culture, Nike is a
fashion brand which also creates opportunities for Nike since its products would become
outdated before even the product wears out i.e. consumers will feel the need to replace the
product with a newer trend.

• There are many international regions that still need tapping and there is need for
sportswear and with Nike’s strong global brand recognition, it can initiate in many markets
that have the disposable income to spend on high value sports goods.

• Nike gives a lot of effort on its corporate marketing mainly through the promotion of
corporate brand and sponsorship agreements.
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. 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.

The market for sports shoes and garments is very competitive. The model developed by Phil
Knight in his Stamford Business School days (high value branded product manufactured at a
low cost) is now commonly used and to an extent is no longer a basis for sustainable
competitive advantage. Competitors are developing alternative brands to take away Nike's
market share.

As discussed above in weaknesses, the retail sector is becoming price competitive. This
ultimately means that consumers are shopping around for a better deal. So if one store
charges a price for a pair of sports shoes, the consumer could go to the store along the
street to compare prices for the exactly the same item, and buy the cheaper of the two.
Such consumer price sensitivity is a potential external threat to Nike.

• Nike is exposed to the international nature of trade so it sells its product in different
currencies which destabilizes the costs and margins for profits over long periods of
time. This type of exposure may make Nike to be manufacturing and/or selling at a
loss, although that is not the case for a giant as itself.

• The market for sports shoes and sportswear is quite competitive; the competitors are
constantly developing alternative brands and techniques to take away Nike’s market
share.

• Consumers are constantly shopping around for a better deal that conveys a good
quality and if one store charges a higher price for the products, the consumer would
try to seek a better deal of the same product in the premises that delivers the same
value but cheaper of the two,this type of price sensitivity among the consumers is a
potential threat to Nike.

• The textile industry unpleasantly upsets the atmosphere, and therefore the
organization is constantly struggling to retain its eco-friendly reputation.

• A recession may lead to job shortages in most of Nike’s worldwide branches.

• The organization has experienced many adverse publicity feedbacks due to its
widespread advertising.
• The key threat for Nike is market saturation. If all these other companies gain a small
percentage of the market, Nike will gradually lose its position. Since Nike's products
are manufactured in low wage factories in Far East countries, they are able to
concentrate on marketing image and research and development. Nike needs to
maintain it competitive awareness and continually strive to satisfy its customers wants
and needs.

• There is little room for new companies and product innovation. A problem Nike had
was reports of unethical treatment amongst workers in the factories such as forced
overtime and sexual harassment. This poses an opportunity for Nike because they
have the ability to influence the next generation of Nikes customers.

• The market for athletic products is so full of different companies and brands. These
positive role models helped endorse the brand. This means that their customers are not
athletic as they once were. This allows for cheaper production and expansion in global
economy. This means there is little room for them to expand. This weakness lead
Nike to evaluate the mid- to lower price sneaker market.
Recommendations for Nike
The first recommendation I would have for Nike is to put more effort into
cleaning up its corporate image. With the negative publicity surrounding
the labor controversies in third world countries and the shameful behavior
of some their celebrity endorsers Nike needs to change the public's
perception of it as a massive unfeeling corporate giant. The current stigma
that Nike has acquired based on its foreign production facilities is the first
place to start. More comprehensive control mechanisms need to be
instituted to make sure that the criminal behavior on the part of some of its
supervisors does not occur in the future. Further higher wages and better
working conditions must be instituted and after implementation Nike
should advertise these changes in whatever way possible. From a purely
pragmatic standpoint it won't help if Nike makes the needed changes if no
one else knows about them. 
Another recommendation is that Nike should expand on its PLAY
(participate in the lives of youth), program. This type of community
outreach program develops good will and engenders support from the
buying public. The image that Nike should try and project is one of a
corporation with a conscience. By emphasizing this type of program and
de-emphasizing the celebrity spokesperson method of developing name
recognition Nike will insulate itself from the negative stereotype of just
being concerned with superstar athletes. A further benefit of this strategy
would be that the parents of children would be more likely to purchase
products from a company that doesn't seem self-involved and focussed on
only the bottom line. A large segment of the buying public wants the
products that they purchase to be manufactured by corporations with a
commitment to community and the values that help to enrich the lives of
the youth of the world. 
The overall marketing strategy of Nike is where I would next suggest
change needs to be made. The average consumer is less likely to identify
with the superstar athlete today than in past generations. Professional
sports is filled with athletes that earning many millions of dollars per year
for an activity that most people view as a pastime. The general perception
of a factory worker making 30 thousand dollars a year is that Nike has to
charge higher prices for its products because they are paying so much to
their celebrity endorsers. Many people do not see the need to pay $150 for a
pair of basketball shoes just so their children can wear the same brand as a
professional star. Nike should put more emphasis on marketing to the
average consumer. Emphasis on quality and innovation, concepts that
served Nike well in the past have given way to style and brand appeal.
What Nike needs to do is trim their roster of corporate endorsement
contracts and limit the people they sign to the types of athletes that
exemplify the values and ideals shared by the majority of the consumers
they are trying to reach. Unfortunately for every Tiger Woods Nike also
has ten Latrell Sprewells. 
A greater focus on quality is perhaps most important for Nike's sustained
growth in the future. In general people do not mind paying more for a
product if they are convinced that they are getting quality in return. In
recent years it seems that Nike has just taken the same basic models of
shoes and other products, redesigned the color scheme, and increased the
price. This strategy worked mainly because of the enormous brand loyalty
that Nike enjoyed compared to its competitors. This technique however is
not going to work forever as consumers switch to other athletic shoe
manufacturers offering the type of innovations that made Nike the
dominant name in the business.