BRAND DOSSIER
Nike Shoes Inc.
Prepared By –
Sunayana Datta
ROmit Acharji
Rohit Gupta
Abhinaba Sen
INDEX
Sr Number / Topic / Page number1 / HISTORY AND HERITAGE / 3
2 / EVOLUTION OF THE BRAND / 5
3 / INITIAL POSITIONING AND SUBSEQUENT REPOSITIONING / 9
4 / ADVERTISING, SALES PROMOTION AND SEGMENTATION STRATEGY FOLLOWED BY THE BRAND / 10
5 / SEGMENTATION STRATEGY / 14
6 / ANALYSIS OF PRODUCT / 15
7 / SWOT ANALYSIS / 18
8 / NIKE’S STRATEGY / 20
10 / P’S OF MARKETTING / 21
11 / DISTRIBUTUION STRATEGY / 25
12 / HYPOTHESIS / 27
13 / QUESTIONARE / 28
14 / ANALYSIS / 29
HISTORY AND HERITAGE
1950-1959: WHEN NIKE BREATHED ITS FIRST BREATH
Today we all know Nike as the world’s leading sports brand, but it did not start like this. It was due to two visionary men who pioneered a revolution in athletic footwear that redefined the industry.
Bill Bowerman a nationally respected track and field coach at the University of Oregon, he was constantly seeking new ways to give his athletes a competitive advantage. He always used to experimentwith different innovations in running shoes. But the established shoemakers during that period ignored his ideas. So he started cobbling shoes for his runners.
Phil Knight was a talented middle-distance runner from Portland, he joined Oregon in the year 1955. He was coached by Bill Bowerman. After graduating from Oregon he did his MBA in finance from Stanford University, where he had a vision to build a business where quality running shoes would be made in Japan and sold in America and that would compete with more established German brands. As he thought that German made shoes during those times were very expensive. Moreover, they thought that the German shoes weren’t really designed with the unique needs of distance runners in mind.
Knight’s work at Stanford had shown him that athletic shoes could be sourced from factories in Asia at costs that were low enough to compete favorably with the dominant German competitors. But the question was how to design a shoe that would meet distance runner’s needs. The answer was found in Bowerman’s kitchen, where with his wife’s waffle iron and some latex, he created the waffle sole, which together with a lightweight nylon upper, would revolutionize the running shoe. So they made a call to Onitsuka Co. in Kobe, Japan, manufacturer of Tiger shoes and persuaded them to make shoes as per their design.
1960 - 1969: FOUNDED ON A HANDSHAKE
Both Knight and Bowerman contributed $500 to start a new company, Blue Ribbon Sports that would import Bowerman-designed shoes made by Onitsuka Tiger. They placed their first order of 300 pairs of shoes in January 1964. In the first year they managed to sale about 1300 pairs of running shoes, generating a $8000 in revenues. To manage the growing requirements of the company they needed another employee. Enter Jeff Johnson, whom Knight had met at Stanford. A runner himself,in1965 Johnson became the first full-time employee of Blue Ribbon Sports and quickly became an invaluable utility man for the start-up company.
Johnson created the first product brochures, print ads and marketing materials, and even shot the photographs for the company’s catalogues. By 1969, the business had grown to 20 employees and a handful of retail outlets.
1970 - 1979: THE BIRTH OF THE NIKE BRAND AND COMPANY
During this time the relationship between BRS and Onitsuka was falling apart. Knight and Bowerman were ready to make the shift from being a footwear distributor to a manufacturer and designer of their own brand of athletic shoes.
They selected a brand mark which is famously known as the “Swoosh,” it was created by 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. n the 1972 Olympic marathon that soon followed, four of the top seven finishers wore Nike shoes.
By 1974, after ten years of effort, the Nike shoe with the waffle sole had become America’s best-selling training shoe. With a new name, a new logo and a new design innovation BRS needed an athlete to promote and endorse and lift the new Nike line. That is when they found a young man named - Steve Prefontaine. He was an athlete at Oregon’s. He had never lost any race at his home track over the one-mile distance, and quickly gained national exposure because of cover stories on magazines like Sports Illustrated and his fourth-place finish in 1972 in the 5,000m in Munich. Hebecame a powerful ambassador for BRS and Nike.
Nike was on the map at last, and in 1978 Blue Ribbon Sports changed its name to Nike.
EVOLUTION OF THE BRAND
1980 - 1989: A DECADE OF TRANSITION
In 1979 the first line of clothing and the Nike Air shoe cushioning device was launched. By the start of 1980s Nike's combination of groundbreaking design and savvy and aggressive marketing had allowed it to surpass the German athletic shoe company Adidas AG, formerly the leader in U.S. sales. By the end of 1980, Nike became a publicly traded company, also by the end of this year Nike had 50% of the market share in the United States athletic shoe market.
During 1980’s the company turned its attention towards the international market and in 1981 Nike International, Ltd was created. It went into Asian, European, Latin American and African market. In 1982 it had outfitted Aston Villa. In 1982 it had More than 200 types of shoes and during this time it diversified from only shoes to different items of clothing. In the next consecutive two years Nike had experienced heavy losses as the jogging industry was going down and there was a huge boom in the aerobics industry which the company had miscalculated. So the company had to bring back its founder Knight to take the post of the President. In 1985 it signed up then-rookie basketball player Michael Jordan to endorse a new version of its Air shoe and it was named as ‘Air Jordan.’ The shoe was very successful and the revenues hit over $100 million in the first year.
In 1986 Nike announced further diversification into number of new products which included casual apparel for women, a less expensive line of athletic shoes called Street Socks, golf shoes, and tennis gear marketed under the name ‘Wimbledon.’ In 1987 Nike had designed a major marketing campaign to launch a new product which would differentiate it from the rest of the brands. The product was Nike Air Max. The campaign was supported by a memorable TV ad whose soundtrack was the original Beatles’ recording of ‘Revolution.’ In 1988 Nike aired its famous add ‘Just Do It.’ The add was focused on an athletic enthusiastic generation and challenged them to achieve their own goals.
1990 - 1999: NIKE EXTENDS ITS REACH
During this time Nike opened Niketown in Portland, a store for selling full range of Nike products. During this period Nike saw potential in its women’s shoe and sports apparel division. Sales of Nike women's apparel lines Fitness Essentials, Elite Aerobics, Physical Elements, and All condition gear increased by 25 percent in both 1990 and 1991 and jumped by 68 percent in 1992.In July 1992 Nike opened its second Niketown retail store in Chicago. In 1994 Nike acquired Canstar Sports Inc., the leading maker of skates and hockey equipment in the world and renamed it as Bauer Nike Hockey Inc.
Nike’s big break came in 1994 when the Nike sponsored Brazilian team won the football world Cup. The victory transformed Nike’s image from a sneaker company to a brand that represented emotions and identification. They eventually made their way into English football with their first kit deal (uniform/apparel) with powerhouse club Arsenal.Nike also signed the US men’s and women’s national soccer teams, as well as many of national teams around the world. In 1995 Nike signed its next big superstar spokesperson, Tiger Woods for a reported $5 million per year. Competitors laughed at the deal until he won the 1997 masters by a record of 12 strokes and then went onto win a number of tournaments. In 1997 Nike started making Ice hockey equipment signing popular NHL players.
It also took number of other new initiatives during this phase. Having initially missed out on the trend toward extreme sports (such as skateboarding, mountain biking, and snowboarding), Nike attempted to rectify this mistake by establishing a unit called ACG&mdashâ, ‘all-conditions gear' in 1998. Two years later, the company created a new division called Techlab to market a line of sports-technology accessories, such as a digital audio player, a high-altitude wrist compass, and a portable heart-rate monitor. Both of these initiatives were aimed at capturing sales from the emerging youth Generation. In 1999 it started selling its shoes online via company website. In SeptemberNike announced that it would buy about ten percent of Fogdog Inc., which ran a sporting goods e-commerce site, in exchange for granting Fogdog the exclusive online rights to sell the full Nike line.
In the 1990’s Nike faced many protests and boycotts over regarding the treatment of workers at the factory in Asia that employed nearly 400,000 people and that made the bulk of Nike shoes and much of its apparel. The charges included abuse of workers, poor working conditions, low wages, and use of child labor. The protesters included church groups, students at universities that had apparel and footwear contracts with Nike, and socially conscious investment funds. So Nike finally addressed the problems and changed the workforce in the factories of Asia, there was an increase in the minimum age that can be employed and a tightening of the quality standards.
: LEADING A NEW GENERATION
Nike started the new millennium with a new footwear cushioning system called Nike Shox, which debuted in Sydney in 2000. The development of the shoe took more than 15 years of dedication and research.The result was a cushioning and stability system.
In 2007 Nike acquired Umbro, a British maker of soccer related footwear, apparel and equipment. The acquisition helped boost Nike’s presence in soccer as the company became the sole supplier of uniforms to over 100 professional soccer teams around the world. In 2008 Nike focused more on the international markets, especially China, during the 2008 Summer Olympics in Beijing. Although Nike’s rival, Adidas, was the official sponsor of the Olympic Games, Nike had special permission from the International Olympic Committee to run Nike ads featuring Olympic athletes during the games. In addition, Nike sponsored several teams and athletes including most of the Chinese teams and 11 of the 12 high profile players on the United States men’s basketball teams. That year sales in Asian region grew 15% to $3.3 billion and Nike’s international division grew to 53% of company’s revenue. Some believed Nike’s marketing strategy during the Olympics was more effective than Adidas’s Olympic sponsorship. In 2009 it had launched a new program at nikegolf.com where fans of Tiger Woods can ask him questions and they could also hear Tiger talk about golf. The session was part of a nationwide Nike Golf consumer experience day, which included equipment demos, long drive contests and in store specials.
In tennis, Nike had aligned with Maria Sharapova, Rodger Federer and Rafael Nadal to push its line of tennis clothing and gear. Some called the famous 2008 Wimbledon match between Rodger Federer and Rafael Nadal where both were dressed in Nike kit from head to toe – a five hour Nike commercial valued at $10.6 million.
Nike had teamed up with the 7 time Tour de France champion Lance Armstrong not only to sell Nike products but also help Armstrong’s Livestrong campaign. Nike designed, manufactured and sold over 70million yellow Livestrong bracelets, earning $80million for the Lance Armstrong foundation. It also featured Armstrong’s message of survival.
To promote the line of basketball shoes and apparel, it continued to feature basketball superstars such as Kobe Bryant and Lebron James. It also formed a partnership with Foot Locker to create a new chain of stores, House of Hoops by Foot Locker, which offers only basketball products by Nike brands such as Jordan and Converse.
Recently, Nike’s the lead in the running category has grown to 60% market share due to its exclusive partnership with Apple. Nike+ (plus) technology includes a sensor that runners put into their running shoes and a receiver, which fits into an iPod, iTouch or iPhone. When the athlete goes for a run or hits the gym, the receiver captures his or her mileage, calories burned and pace and is stored until the information is downloaded. Nike+ is now considered the world’s largest running club.
In 2008-2009, Nike+ hosted the Human Race 10K, the largest and the only global virtual race in the world. The event, designed to celebrate running drew 780,000 participants in 2008, in the next year the participation was even more.
Nike has long had a reputation for responsible environmental practices. According to Clean Air-Cool Planet (a New England-based environmental organization), Nike ranks in the top three companies (out of 56 surveyed) in a report of climate-friendly companies. As an example, Nike launched a campaign to coincide with Earth Day 2008. It featured a commercial with NBA basketball star Steve Nash wearing Nike's Trash Talk Shoe, which was constructed from pieces of leather and synthetic leather waste from factory floors. The Trash Talk Shoe sole was made from ground-up rubber from a shoe recycling program. However, only 5,000 pairs where ever produced for sale.Another project Nike began long before the Green craze in 1993- is labeled: Reuse-A-Shoe program. The program aims to help the environment and the community by collecting old athletic shoes of any make in order to reprocess and recycle them. The material that is collected is then used to manufacture sports surfaces such as basketball courts, running tracks, and playgrounds.
Today Nike dominates the athletic footwear market with a 31% market share globally and 50% market share in US. Swooshes abound on almost everything from wristwatches to skateboards to swimming caps. The firm’s long term strategy focuses on basketball, running, football, women’s fitness, men’s training and sports culture. As a result of its successful expansion across geographic markets and product categories, Nike is the top athletic apparel and footwear manufacturer in the world. Though it took a few decades for the company to evolve, Nike Inc. has become a formidable name among sports apparel and global brands in general.
INITIAL POSITIONING AND SUBSEQUENT REPOSITIONING
POSITIONING
During the early phase, the company promoted its brand by associating it with the names of many famous athletes, establishing itself as a premium brand. The brand, at its inception got promoted by Steve Prefontaine, who was an athlete at Oregon’s and never lost a single race of over one mile distance. In 1985, Nike signed up Michael Jordan. Apart from this names such as Maria Sharapova and Roger Federer also came to be largely associated with the brand. Thus, the brand was successful in creating an image which focused on power, dedication, hard work, and the desire to succeed. Nike has been able to become a symbol of this simply by the displaying the spokesperson or endorsers doing what they do best. Nike not only always has its athletes wearing all top Nike gear but also has them sweating, working hard, or reflecting on past events. The brand image that Nike was initially building represents a true American icon that portrays high performance, strength, dedication, perseverance and achievement. They designed and promoted their products as “high performanceshoes” that were durable and light weight for runners, and less fashionable.
SUBSEQUENT REPOSITIONING
In terms of repositioning, Nike did not undergo any drastic change as such. It is still positioned as a premium brand that sells expensive products, with a marketing strategy that centers around the brand image provided by the distinctive logo (the swoosh). However, the designing of the shoes are considered much important now as the brand targets for the consumer market as well. Consumer behavior has been changing in a way that they are shifting from sportswear to fashion sportswear. Maintaining itself as a premium brand, Nike is attempting to shape its image as a brand that provides products that are stylish, yet comfortable and not restricted within the boundaries of just sportswear. The distinctive ‘swoosh’ can now be associated with the non-athletes as well, who, apart from comfort and high quality product, stress upon using Nike products as a means of enhancing their style statement.
Advertising, Sales Promotion and Segmentation Strategy followed by the Brand
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