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NIKE INC.!

RESEARCH!!AND!!ANALYSIS!!

JUNE!15,!2015!

MEGAN!AVERRITT;!MARY!AYYOUB;!MICHAEL!ELLISON;!
!SHANNON!GLOEDE;!GREG!GOERS;!WOOYUL!KIM;!MATT!SWEENEY!
!
MKT5460!|!PERSONAL!SELLING/!SALES!MANAGEMENT!
PROFESSOR:!DAVID!PAUWELS!!

Table!of!Contents!
Executive)Summary)................................................................................................................)3!
Introduction)...........................................................................................................................)3!
Marketing)..............................................................................................................................)3!
Segmentation).........................................................................................................................)4!
Nike)Basketball)...................................................................................................................)5!
Jordan!Brand!...........................................................................................................................!5!
Soccer)................................................................................................................................)12!
Running).............................................................................................................................)14!
Womens)Training)..............................................................................................................)16!
Mens)Training)...................................................................................................................)18!
Cross!Training!........................................................................................................................!19!
Baseball!.................................................................................................................................!19!
Football!.................................................................................................................................!19!
Sportswear)and)Technology)...............................................................................................)20!
Action)Sports).....................................................................................................................)23!
Golf)....................................................................................................................................)24!
Channels)of)Distribution)........................................................................................................)25!
International)Market).........................................................................................................)28!
Bibliography)..........................................................................................................................)30!
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Executive!Summary!
TBD!

Introduction!
What!originally!started!as!a!distributor!for!a!shoe!manufacturer!in!Japan,!Nike!Inc.!has!
grown!to!become!one!of!the!most!well!known!brands!in!the!the!world.!Officially!founded!in!
1964,!Nike!didnt!take!its!name,!inspired!by!the!Greek!goddess!of!victory,!until!1973,!when!
founders!Philip!Knight!and!Bill!Bowman!decided!to!move!away!from!distribution,!to!focus!on!
design!and!manufacturing.!With!an!estimated!valuation!of!$19!Billion!dollars,!in!2014,!Nike!
remains!one!of!the!worlds!most!valuable!athletic_wear!brands.!

Marketing!
Nike!may!be!known!for!their!athletic!shoes,!sports!equipment,!and!cutting!edge!
advancements!in!nearly!every!apparel!category,!but!at!its!core,!Nike!is!definitely!a!marketing_
based!business,!which!uses!high_octane!celebrity!endorsements!and!multi_dimensional!
marketing!campaigns!to!develop!communities!that!advocate!the!brand.!Founder!Philip!Knight!
even!stated:!There!is!no!value!in!making!things!anymore.!The!value!is!added!by!careful!
research,!by!innovation,!and!by!marketing.!
Nikes!Trademark!Swoosh!is!easily!one!of!the!most!recognizable!logos!in!the!world.!A!
simple,!yet!eloquent!brand!statement,!the!Nike!logo!is!the!cornerstone!of!every!marketing!
campaign,!typically!aligned!with!some!form!of!tagline!relevant!to!the!specific!segment!being!
marketed.!Nikes!Just!Do!It!campaign!was!so!successful,!it!was!named!one!of!the!top!advertising!
slogans!of!the!20th!Century,!by!Advertising!Age,!and!further!added!to!the!Smithsonian!National!
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Museum,!for!its!position!in!American!Culture.!When!Nike!sets!out!to!run!an!advertising!
campaign,!they!dont!just!speak!to!who!their!customers!are,!they!speak!to!who!they!admire!to!
be.!From!Bo!Knows,!and!Air!Jordan,!to!Marian!Sharapovas!Pretty,!Nike!is!no!stranger!to!
leveraging!high!profile!athletes!to!establish!those!connections.!
With!so!much!emphasis!placed!on!corporate!branding,!Nike!takes!great!strides!to!
preserve!the!brand!equity!they!have!built!over!the!years.!Nike!understands!that!promotion!to!a!
price!is!a!very!ineffective!way!to!promote!products.!While!it!may!help!drive!sales!for!the!short!
term,!price!based!promotion!does!little!to!preserve!brand!equity!and!ultimately!encourages!
brand!switching.!!

Segmentation!
One!of!the!primary!strategies!Nike!employs,!is!price!protection.!In!effect,!any!and!all!
retailers!who!sell!Nike!Brand!products!are!contractually!obligated!to!maintain!specified!pricing!
in!any!advertisement!of!their!product.!By!violating!this!contract,!retailers!run!the!risk!of!loosing!
access!to!specific!product!categories,!or!they!will!no!longer!be!allowed!to!sell!Nike!in!their!
store.!Joe!Monahan,!former!Vice!President!of!Sales,!Mens!Training,!stated!Nike!invokes!all!their!
employees!to!Protect!the!Swoosh,!a!rally!for!all!employees!to!assume!responsibility!of!Brand!
Protection.!
Nikes!segmentation!strategy!enables!the!brand!to!to!effectively!engage!with!several!
different!consumer!group,!all!under!the!primary!brand!identity.!Each!segment!is!so!carefully!
detailed,!with!layers!that!build!on!one!another,!stable!enough!to!stand!alone,!yet!cohesive!to!all!
be!identified!as!Nike.!Throughout!the!next!few!pages,!we!will!see!how!Nike!applies!

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categorization!theory!to!their!segmentation!strategy,!to!help!develop!communities!strong!
enough!to!warrant!fan!clubs.!

Nike!Basketball!
Jordan'Brand'

Jordan!Brand!is!one!of!Nikes!most!successful!product!lines!and!offers!unique!basketball_

oriented!footwear,!apparel,!and!accessories!branded!with!the!Jumpman!logo!(Annual!Report,!
2014).!NBA!and!Olympic!champion!Michael!Jordan!became!a!Nike!sponsor!in!1984!when!the!
company!was!struggling!to!expand!its!customer!base!and!be!recognized!for!more!than!just!
running!shoes.!The!Air!Jordan!line!features!quality,!high_fashion!basketball!and!athletic!shoes!
that!appeal!to!the!masses!and!was!so!profitable!that!it!became!its!own!brand!in!1997!(AJSHQ).!
Michael!Jordan!supported!Nike!because!they!were!the!first!company!to!ask!for!an!athletes!
input!in!their!design!process.!One!of!the!reasons!Nike!was!able!to!reinvent!themselves!was!
because!Jordan!wore!their!bold!shoes!on!the!basketball!court!to!advertise!them!to!his!fans,!
despite!the!excessive!fines!the!company!paid!on!his!behalf!due!to!violating!NBA!uniform!
regulations!(AJSHQ).!
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As!of!2012,!Jordan!Brand!footwear!dominated!58%!of!the!U.S.!basketball!market,!which!

contributed!to!Nikes!92%!share!(Badenhausen,!2012).!Nikes!basketball!segment!must!
continue!to!invest!heavily!in!designing,!distributing,!and!licensing!both!performance!and!
lifestyle!Jordan!products.!Nikes!2014!Annual!Report!explicitly!states!that!their!12%!footwear!
revenue!growth!between!2013!and!2014!was!fueled!by!increased!demand!for!performance!
products,!including!Nike!and!Brand!Jordan!Basketball!styles.!Jordans!performance!products!

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should!be!advertised!toward!young!athletes,!while!the!lifestyle!footwear!and!apparel!can!be!
marketed!to!a!wider!array!of!consumer!segments.!
Nike!divested!of!their!Umbro!and!Cole!Haan!segments!in!2013!to!focus!their!resources!
on!growing!product!lines!like!Jordan,!and!should!consider!moving!away!from!other!unprofitable!
markets!and!industries!(Annual!Report,!2014).!Jordan!Brand!appeals!to!those!who!want!to!play!
basketball!like!Michael!Jordan!as!well!as!fashion_conscious!adolescents!and!adults!looking!to!
make!a!statement.!In!order!to!maintain!their!revenue!growths,!Nike!should!continue!to!
incorporate!the!design!suggestions!of!their!top!sponsors.!Athletes!like!Jordan,!Carmelo!
Anthony,!Chris!Paul,!and!Blake!Griffin!have!the!potential!to!initiate!new!trends!better!than!if!
Nike!were!to!release!products!without!their!endorsements!(Badenhausen,!2012).!Continuously!
releasing!celebrity_sponsored!Jordan!products!and!establishing!new!partnerships!with!athletes,!
coaches,!and!basketball!teams!around!the!world!will!be!a!major!factor!in!Nikes!long_term!
profitability.! !
As!illustrated!with!the!Jordan!Brand,!Nikes!basketball!sponsorships!can!be!just!as!
important!as!the!products!themselves.!Nikes!top!endorsers!are!LeBron!James,!Kobe!Bryant,!
and!Kevin!Durant!(Badenhausen,!2012).!In!addition!to!individual!sponsorships,!Nike!has!
developed!professional!relationships!with!numerous!NBA!coaches,!collegiate!teams,!and!
international!basketball!organizations.!These!partnerships!benefit!Nike!because!athletes!will!be!
exclusively!equipped!with!Nike_brand!footwear!and!apparel,!which!increases!the!recognition!
and!credibility!of!their!performance!products!(Annual!Report,!2014).!
For!the!upcoming!year,!Nike!should!renew!their!existing!contracts!with!active,!well_
respected!NBA!athletes!if!the!fees!are!within!budget,!and!actively!seek!out!sponsorships!with!
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upcoming!basketball!stars.!Many!Nike!customers!are!image_conscious,!so!is!it!important!to!
identify!influential!athletes!and!incorporate!their!suggestions!into!the!product!development!
phase.!Nike!should!also!consider!diversifying!their!sponsorships!to!include!minorities.!There!are!
currently!50!female!basketball!players!in!the!Nike!Family!that!represent!the!12!WNBA!teams!
(Nike!Women,!2015).!They!should!develop!more!programs!to!encourage!female!adolescents,!
impoverished!youth,!and!individuals!with!various!sexual!orientations!to!pursue!basketball!as!a!
career!or!pastime.!Nike!is!the!industry!leader,!but!endorsing!minorities!would!increase!their!
support!within!niche!markets.!!
Nikes!basketball!segment!has!also!succeeded!in!bringing!global!awareness!to!their!
brand.!Nike!has!been!the!official!sponsor!of!the!Chinese!Basketball!Association!since!its!creation!
in!1995!and!exclusively!equips!more!than!300!million!participants!(Nike!Fosters,!2015).!This!
partnership!extends!to!more!than!just!footwear!and!apparel;!Nike!provides!the!players!with!
training!programs!and!clinics!coached!by!prominent!athletes!including!Michael!Jordan,!LeBron!
James,!and!Kobe!Bryant!(Nike!Fosters,!2015).!Nike!should!evaluate!the!popularity!of!their!
current!athletes!in!different!regions!of!the!world.!Kobe!Bryant!is!extremely!influential!in!China.!
He!was!one!of!the!most!popular!stars!at!the!2008!Beijing!Olympics!and!sells!twice!as!many!
shoes!in!China!as!he!does!in!the!U.S.!(Badenhausen,!2012).!If!a!particular!celebrity!has!a!strong!
following!in!a!foreign!nation,!they!should!coach!a!series!of!clinics!there!and!have!a!larger!role!in!
the!product!development!for!that!region.!Sponsorships!should!be!diversified!based!on!
international!markets,!but!they!should!also!be!able!to!unite!under!the!Nike!brand.!One!of!the!
most!important!events!Nike!should!continue!to!sponsor,!despite!the!costs,!is!the!Olympic!
Games!because!it!allows!their!basketball!line!to!be!recognized!on!a!global!scale.!!!

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Nike!appeals!to!many!customer!segments.!Celebrities!wear!Nike!and!Jordan!Brand!

products!because!of!endorsements!but!also!because!of!the!performance!quality!of!the!
footwear!and!apparel.!A!large!number!of!individuals!also!purchase!Nikes!products!because!
they!want!to!enhance!their!athletic!performance,!reduce!injury,!and!maximize!comfort!(Annual!
Report,!2014).!This!is!why!Nike!should!continue!to!invest!heavily!in!research!and!development.!
They!market!product!intelligence!and!have!trademarked!numerous!innovations!that!keep!them!
ahead!of!their!competition.!Nike!controls!92%!of!the!basketball!footwear!market!in!America!
and!must!develop!performance_enhancing!products!to!maintain!and!increase!their!success!
(Badehausen,!2012).!
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Many!people!wear!Nike!apparel!and!footwear!for!comfort!and!leisure!rather!than!

performance.!They!are!still!attracted!to!the!basketball!style,!but!choose!to!wear!it!as!part!of!
their!lifestyle.!Nike!should!still!offer!innovative!designs!to!suit!their!daily!needs,!but!also!
conduct!market!research!to!identify!exactly!why!they!are!interested!in!particular!product!lines.!
Some!people!may!be!brand_conscious!and!collect!limited!edition!Jordan!shoes.!Others!may!
seek!out!particular!styles!that!reflect!their!individual!personalities,!or!perhaps!they!are!only!
interested!because!of!celebrity!endorsements.!Nike!is!a!global!brand,!and!every!demographic!
group!and!international!market!will!have!unique!reasons!for!purchasing!their!products.!
Continuous!segmentation!and!intensive!research!is!a!necessity!in!this!highly!competitive!
industry.!
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Nike!must!also!identify!growing!niche!markets!that!have!unmet!needs.!While!their!

sponsorships!tend!to!focus!more!on!men,!Nike!is!also!aware!of!the!women!who!are!interested!
in!basketball.!They!have!launched!several!campaigns!over!the!last!few!decades!to!encourage!
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men!and!women!to!support!female!athletes,!and!they!market!apparel!designed!by!and!for!
women!(Nike!Women,!2015).!While!these!initiatives!support!gender!equality!within!the!
industry,!women!still!have!far!fewer!options!than!men!when!it!comes!to!both!performance!and!
lifestyle!products.!Nikes!2014!Annual!Report!shows!recent!increases!in!Men!and!Youth!
sales,!but!there!have!been!no!notable!increases!among!Women.!This!is!an!enormous!segment!
that!should!be!avidly!targeted!by!Nike!and!Jordan!Brand.!
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Nikes!company_wide!adolescent!and!youth!sales!have!been!significantly!increasing!

since!2012,!and!the!company!attributes!this!in!part!to!the!expanded!footwear!and!apparel!
selection!for!this!age!group!(Annual!Report,!2014).!Nikes!2014!Annual!Report!states!that!the!
companys!increased!footwear!revenue!is!due!almost!exclusively!to!the!success!of!the!
basketball!segment.!Nike!should!conduct!additional!research!to!determine!whether!they!are!
more!interested!in!the!footwear!for!performance!or!leisure,!if!they!prefer!Nike!or!Jordan!Brand,!
and!whether!endorsements!influence!their!purchasing!patterns.!Young!children!are!part!of!this!
Youth!segment!and!have!a!wide!selection!of!apparel!and!footwear!to!choose!from,!such!as!
Kevin!Durants!KD7!Frozens!(Chillin,!2015).!These!shoes!are!part!of!Nikes!Summer!Time!Fun!
Pack!collection.!They!are!designed!exclusively!for!kids,!but!do!not!lack!any!of!the!innovative!
technology!that!come!standard!with!adult!sizes!(Chillin,!2015).!Nike!should!determine!in!the!
next!year!if!these!purchases!are!influenced!more!by!the!child!or!their!parents.!If!the!child!is!the!
primary!decision_maker,!Nike!should!consider!expanding!their!sponsorships!to!include!more!
characters!that!children!find!appealing.!If!the!adult!makes!the!decision!to!purchase!Nike!or!
Jordan,!the!company!should!develop!unique!marketing!tactics!to!bring!the!family!together!

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when!they!shop.!This!may!be!done!by!advertising!customizable!family!footwear!or!apparel!
packages.!
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Nike!has!also!been!supporting!the!LGBT!community!in!recent!years.!In!2011!they!helped!

found!the!LGBT!Sports!Coalition,!and!launched!the!#BETRUE!product!line!of!shoes,!apparel,!and!
equipment!in!June!2015!(#BETRUE,!2015).!Communities!around!the!world!are!embracing!
individuals!with!different!sexual!orientations,!and!Nike!is!especially!committed!to!ensuring!that!
all!people!are!treated!equally.!Tim!Hershey,!Vice!President!of!Global!Merchandising!and!
Executive!Advisor!to!Nikes!LGBT!Employee!Network,!said!Nike!is!deeply!committed!to!
diversity,!inclusion,!and!unleashing!the!potential!of!all!athletes!(#BETRUE,!2015).!Nike!is!a!
pioneer!in!this!community,!but!must!incorporate!their!needs!into!the!brand!as!a!whole!rather!
than!isolating!them!as!a!niche!market.!It!must!also!be!taken!into!consideration!for!every!
consumer!segment!that!needs!and!expectations!vary!across!cultures!and!locations,!and!it!is!
critical!that!Nike!recognizes!these!differences.!
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Nikes!global!market!is!segmented!into!six!divisions:!North!America,!Western!Europe,!

Central!and!Eastern!Europe,!Greater!China,!Japan,!and!Emerging!Markets.!The!company!
experienced!positive!revenue!growth!in!every!market!except!Japan!between!fiscal!years!2013!
and!2014.!Growth!is!determined!by!footwear,!apparel,!and!equipment!sales!across!Nikes!
product!categories.!Basketball!shoes!and!Jordan!Brand!contributed!to!the!companys!most!
recent!revenue!growth,!as!well!as!its!success!between!2012!and!2013.!Basketball!apparel!sales!
grew!in!several!markets!between!2012!and!2013,!but!did!not!have!a!major!impact!on!last!years!
sales!(Annual!Report,!2014).!Unless!Nike!makes!significant!improvements!to!the!apparel!line,!
sales!efforts!should!continue!to!be!focused!on!performance!footwear.!Footwear!should!be!
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marketed!primarily!toward!young!athletes.!Youth!footwear!revenue!increased!11%!between!
2012!and!2013,!and!16%!between!2013!and!2014.!Nikes!2014!Annual!Report!attributes!this!
growth!to!the!expanded!footwear!and!apparel!selection!for!this!age!group!within!the!
basketball!division.!Men!should!also!be!targeted!because!their!sales!grew!9%!between!2012!
and!2013,!as!well!as!from!2013!to!2014!(Annual!Report,!2014).!If!Nike!enhances!their!apparel!
marketing!strategies!and!customizes!their!advertisements!to!target!more!segments!like!
women,!the!companys!global!revenue!will!increase!more!than!it!already!has!in!the!past!three!
years.!
!

Nikes!basketball!line!has!been!successful!in!Western!Europe,!Central!and!Eastern!

Europe,!North!America,!and!Greater!China,!but!is!not!experiencing!revenue!growth!in!Japan!or!
Emerging!Markets!(Annual!Report,!2014).!Nike!should!use!their!Japanese!and!Emerging!
Markets!sales!budgets!to!conduct!market!research!and!determine!what!basketball!products!
these!consumers!are!interested!in!instead!of!selling!their!existing!lines!at!this!time.!They!should!
continue!marketing!their!footwear!to!Western!Europe,!Central!and!Eastern!Europe,!and!North!
America!because!they!have!had!the!highest!growth!rate!over!the!past!three!years.!Basketball!
apparel!sales!have!been!inconsistent!across!the!markets,!but!were!more!successful!between!
2012!and!2013!than!they!were!between!2013!and!2014.!Central!European!customers!bought!
the!most!apparel!in!the!last!year,!so!Nike!should!continue!to!market!both!footwear!and!clothing!
to!this!segment.!Western!European!and!North!American!consumer!needs!should!be!researched!
more!because!their!apparel!sales!were!higher!two!years!ago!than!they!were!this!past!year!
(Annual!Report,!2014).!Nikes!revenue!will!increase!significantly!if!these!customers!can!be!re_
captured.!

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Greater!China!is!the!final!market!that!Nike!should!continue!advertising!their!basketball!
products!to.!Their!overall!revenue!growth!was!only!5%!between!2013!and!2014,!but!their!losses!
were!offset!explicitly!by!basketball!footwear!and!apparel!sales!(Annual!Report,!2014).!Nike!
sponsors!the!Chinese!Basketball!Association!and!provides!uniforms!to!over!300!million!players!
(Nike!Fosters,!2015).!One!of!Nikes!primary!goals!this!upcoming!year!should!be!marketing!
performance!footwear!to!amateur!Chinese!athletes!and!lifestyle!products!to!the!general!
population.!There!is!extraordinary!sales!potential!in!the!Chinese!marketplace,!and!Nikes!
basketball!division!is!the!only!successful!line!at!this!point!in!time.!

Soccer!
As!the!worlds!most!popular!sport,!soccer!is!another!division!Nike!has!and!will!continue!
to!excel!in.!In!the!2014!fiscal!year,!Nike!sold!$2.3!billion!in!soccer!shoes!and!apparel!alone!
(Harwell!2015).!Nike!made!its!debut!in!soccer!in!1996,!when!they!signed!a!ten!year!$200!million!
sponsorship!contract!with!Brazils!football!federation.!Since,!soccer!remains!to!be!Nikes!most!
international!brand!segment.!Brazil!accounts!for!the!third!largest!market!for!Nike,!after!the!U.S!
and!China.!Global!soccer!provides!the!largest!long!term!growth!opportunities!for!the!Nike!
brand.!International!expansion!will!be!the!firms!primary!long!run!growth!engine.!(Swinand,!
2015.)!
In!2012,!Nike!became!sole!supplier!of!jerseys!to!every!single!team!operating!in!the!
National!Football!League,!generating!$500!million!in!revenue!each!year.!Nike!is!also!the!official!
supplier!of!balls!to!all!three!major!domestic!European!football!leagues,!which!has!initiated!4_6%!
annual!increase!in!equipment!sales!revenue!(Swinand,!2015).!Most!significantly,!Nikes!96!
sponsorship!deal!with!Brazil!has!proven!very!successful!in!recent!sales!growth!for!the!soccer!
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division,!as!it!helped!transform!Nike!from!a!brand!mostly!known!for!running!and!basketball!
shoes!into!a!global!sports!giant!(Harwell,!2015).!In!2014!Brazil!held!the!FIFA!World!Cup,!which!
increased!share!in!the!domestic!European!football!leagues,!while!Nike!was!leading!sponsor.!
Moving!into!2016,!Brazil!will!hold!the!Olympics!which!will!also!exploit!and!generate!advertising!
and!publicity!for!Nike!as!the!official!sponsor!of!the!Brazilian!national!team.!(Swinand,!2015).!!
Nikes!contract!as!Brazils!outfitting!sponsor!lasts!through!2018.!The!consistent!increase!in!
market!share!through!soccer!and!among!the!Brazilian!and!Chinese!markets!are!the!key!to!
corporate!growth!for!Nike!(Swinand,!2015).!
Nike!has!also!shown!dominance!in!product!innovation!and!design!within!their!soccer!
division.!Their!newest!soccer!footwear!releases,!the!Nike!Magista!and!Nike!Hyper!Venom,!are!
both!sock!lightweight!designs!which!will!overhaul!the!design!of!future!soccer!shoes!(Swinand,!
2015).!!
Alongside!sponsoring!national!teams,!leagues,!and!events,!the!Nike!soccer!division!is!
signed!with!professional!athletes!such!as!Cristiano!Ronaldo.!Through!athlete!sponsorships!Nike!
is!boosting!brand!image!and!excelling!in!global!marketing.!!
Apart!from!the!current!and!foreseen!revenue!successes!for!Nike!soccer,!the!division!has!
recently!been!caught!in!some!bad!publicity!which!could!negatively!affect!the!2016!sales!
forecast.!In!2015,!Brazils!soccer!federation!is!facing!an!investigation!regarding!whether!
sponsorship!deals!were!used!to!funnel!money!to!officials!and!exert!undue!influence!on!the!
sport.!When!Nike!secured!the!contract!with!Brazil!the!corporation!negotiated!through!a!
middleman!marketing!agent!representing!the!Brazilian!soccer!federation.!The!middleman!
investigation!is!probing!at!whether!Nikes!revenue!was!used!in!the!money!funneling.!Given!Nike!
!

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is!sponsoring!Brazils!soccer!team!through!2018,!the!brand!faces!buyers!perception!danger.!
This!may!cause!scrutiny!as!Nike!is!affiliated!with!the!FIFA!probe,!which!could!negatively!affect!
2016!sales!revenue!(Harwell,!2015).!Most!recently!however,!Nike!has!faced!little!immediate!
backlash!from!the!investigation.!Stock!has!fallen!only!1%!since!the!FIFA!probe!initiated.!
Although!Nike!has!not!been!officially!named!involved!in!the!probe,!analysts!expect!it!would!
have!minimal!impact!on!the!Nike!brand!and!the!companys!$88!billion!in!stock!(Harwell,!2015).!!

Running!
Nike!is!number!one!in!the!sports!industry!in!footwear!and!athletic!equipment.!In!the!
fiscal!year!of!2014,!Nikes!annual!sales!in!just!Footwear!alone!were!reported!at!$16,208!
million!dollars,!which!is!their!highest!revenue!band.!They!had!an!eleven!percent!increase!from!
2013.!!The!Running!Shoes!was!in!the!top!two!for!highest!revenue!segments!reporting!at!
$4,623!million!dollars.!That!was!an!eight_percent!increase!from!2013.!Nike!holds!a!big!market!
with!footwear,!and!they!are!not!stopping!anytime!soon.!
!

Nike!has!many!different!brands!that!they!affiliate!with!their!footwear!such!as!Jordans,!

Converse,!and!Hurley.!Those!are!just!three!different!brands!that!have!various!categories!and!
styles!of!shoes!within!them.!!Nike!alone!supports!many!different!styles!within!running!shoes!for!
men!and!women.!They!are!currently!advancing!in!their!technology!built!into!their!shoes!to!help!
create!comfort,!speed,!balance,!and!style.!A!list!of!examples!are!listed!below:!
! Nike!Zoom!

! Nike!Flywire!

! Nike!Air!Max/Air!

! Nike!Lunarion! !

! Nike!Flyknit!

! Nike!Free!

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Each!of!these!brands!has!a!certain!activity!they!are!best!for.!On!Nikes!website!they!
break!it!down!into!five!different!categories!that!they!are!best!for.!!
! BarefootP)Like)Ride)

Lightweight!and!flexible!

! Neutral)Ride)

Superior!cushioning!for!a!smooth!ride!

! Stability)

Increased!support,!excellent!cushioning!

! Trail)

Low_profile!cushioning!and!traction!

! Racing)

Designed!to!compete!at!high!speeds!

This!allows!Nike!to!reach!out!a!much!larger!segment!for!supporting!so!many!different!
activities!for!many!different!individuals.!Nike!works!on!building!a!technology!that!will!help!an!
individual!perform!the!task!that!is!at!need!to!the!best!of!their!ability.!
Nike!sponsors!several!of!sports!teams,!individuals,!and!sporting!events.!Some!of!the!
sponsors!include!basketball,!and!football!clubs,!national!teams!and!players,!boxing,!tennis,!
rugby,!mixed!martial!arts,!handball!and!cricket.!They!create!brand!awareness!around!these!
events,!investing!into!their!uniforms,!signage,!and!getting!out!in!the!communities.!!
Nike!holds!more!market!share!in!shoes!than!any!other!athletic!company!or!
manufacturer.!Nike!consistently!is!coming!out!with!a!new!shoe,!brand,!or!style!for!their!
customers.!They!target!babies,!children,!teens,!and!adults!whether!you!are!a!women!or!man.!
To!them!they!want!to!make!sure!you!have!the!best!on!your!feet!to!complete!the!task!at!the!
moment.!They!segment!out!to!many!different!athletes!such!as!baseball,!basketball,!boxing,!
cricket,!football,!golf,!handball,!mixed!martial!arts,!rugby,!and!tennis.!Nike!does!not!stop!to!only!
target!to!athletes!but!individuals!who!do!yoga,!and!work!out.!!

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!

Nike!has!many!different!running!shoes!that!serve!different!purposes!for!various!

activities.!Their!pricing!strategy!varies!on!where!their!products!are!sold!and!how!recent!they!
are.!A!new!pair!of!Jordans!would!not!be!carried!at!Wal_Mart,!only!their!less!quality!type!of!
shoes!would!be.!The!customer!willingness!to!purchase!their!shoes!compared!to!any!other!
brands!are!high,!regardless!of!their!price.!Nike!sells!a!premium!product,!and!this!is!supported!
by!the!advanced!technology!they!use!to!help!accommodate!each!activity!with!a!shoe!that!is!
personalized!with!that!activity.!

Womens!Training!
Womens!Training!segment!is!one!of!Nikes!largest!growing!segments!within!the!
company.!Nike!has!a!goal!of!over!$36!billion!in!annual!revenue!to!meet!by!the!end!of!2017!in!its!
womens!business.!In!2013,!the!company!assigned!executive!Amy!Montagne,!as!the!head!of!its!
womens!business.!In!Nikes!annual!reports,!they!grew!the!womens!business!by!roughly!
twelve_percent,!which!took!out!the!companys!overall!nine_percent!growth.!Nike!realizes!this!
segment!is!one!of!its!growth!opportunities!and!wants!it!to!represent!over!twenty_percent!of!its!
overall!revenue!by!2017.!Which!is!faster!than!the!goal!for!the!overall!companys!growth!
Nike!is!not!the!only!company!in!the!industry!to!have!womens!training!as!one!of!its!
growth!opportunities.!Womens!training!is!looked!at!one!of!the!important!moneymakers!for!a!
number!of!athletic!brands!such!as!Under!Armour,!Adidas,!and!Lululemon.!Nike!is!not!afraid!to!
take!these!companies!one!on!one!to!capture!this!market.!Lululemon!specializes!in!yoga!pants,!
and!tights,!which!makes!it!harder!for!Nikes!Legend!Tights!to!compete!with!a!brand!that!is!
targeted!towards!women!only.!Nike!has!been!working!with!different!bids!to!capture!a!good!
amount!of!yoga!and!training!market.!
!

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Nike!has!sponsored!many!teams,!and!individuals!throughout!their!years.!They!have!had!
roughly!about!twelve!big!sponsors!such!as!Kobe,!Tiger!Woods,!and!many!others.!Sadly,!they!
have!only!had!one!large!women!sponsor,!Maria!Sharapova.!Her!net!worth!is!roughly!about!
$195!million!dollars!as!a!Russian!Superstar!tennis!player.!This!is!an!area!of!opportunity!for!Nike!
itself,!if!they!are!trying!to!capture!a!larger!women!market.!
Coming!from!the!segment!Womens!Training!Nike!is!targeting!women!in!general.!They!
want!to!target!women!who!want!to!be!fashionable!in!their!clothing!and!shoes,!but!also!the!
ones!whom!play!sports!too.!Nike!is!currently!working!with!different!women!teams!around!the!
world!to!help!build!that!women!awareness.!Nike!has!always!been!known!as!a!company!that!has!
been!associated!with!some!type!of!sports!teams.!These!sport!teams!have!to!be!chosen!very!
carefully!to!help!target!the!women!they!want!their!company!to!be!associated!with.!!
The!idea!around!the!womens!training!business!should!be!the!same!as!the!mens!
segment.!Associating!their!brand!with!many!different!sports,!and!women!to!help!promote!their!
brand.!Lululemon!is!very!successful!with!targeting!women!with!different!applications!and!yoga!
centers!for!their!pants!and!having!their!targets!being!aware!of!their!brand.!Nike!really!needs!to!
focus!on!their!brand!awareness!and!the!different!products!they!carry!for!women!alone.!They!
can!do!something!similar!to!Luluemon!by!targeting!running!for!women!within!applications,!
gyms,!and!retailers.!!
The!pricing!strategy!for!Womens!training!is!an!area!of!improvement!and!testing!
segment!Nikes!pricing!strategy!around!their!womens!training!segment!can!be!difficult.!They!
do!not!want!to!discount!their!products!just!to!gain!a!share!in!the!market.!Nike!has!always!been!
about!quality!and!their!products!being!able!to!help!their!customers!with!their!various!activities.!
!

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While!Nike!fights!a!spot!with!Lululemon,!and!Under!Armour!for!womens!apparel!and!footwear,!
they!must!have!their!products!competitively!priced.!Nikes!margins!are!considerably!low!
compared!to!Lulu!and!Armour!as!they!struggle!in!this!segments!pricing,!and!marketing!strategy.!
They!are!still!trying!to!be!profitable!and!grow!as!a!company!with!their!products!such!as!yoga!
pants,!footwear,!apparel,!and!technology!pieces.!!

Mens!Training!
Fairly!broad!in!scope,!the!Mens!training!segment,!encompasses!products!from!Athletic!
Training,!Baseball,!and!American!Football.!While!Mens!Training!isnt!Nikes!largest!product!
segment,!aggressive!growth!in!2013!helped!push!revenue!from!$2,072!Million!dollars!in!2012,!
to!$2,479!Million!dollars,!by!the!end!of!2014,!contributing!2%!growth!in!revenue!for!the!apparel!
segment!in!the!third!quarter!of!fiscal!2015.!!
Much!of!the!growth!realized!in!the!Mens!training!segment,!is!credited!to!increased!
average!selling!price!per!unit!and!price!increases!in!the!first!three!quarters!of!2015.!Paired!with!
increased!consumer!confidence!in!the!marketplace,!Nike!has!been!able!to!capitalize!on!
consumers!willingness!to!spend!money!on!higher!priced!premium!items!in!their!Direct!to!
Consumer!channels.!
!

Nikes!focus!on!innovation!is!prevalent!in!the!Mens!training!segment,!with!several!

innovation!hitting!the!market!in!2015.!When!Nike!seeks!to!develop!new!products,!they!do!so!
with!the!intention!of!disrupting!the!market;!changing!the!game!and!how!its!played.!By!
anticipating!the!evolution!of!their!products,!they!can!stay!ahead!of!the!needs!of!their!
customers!and!continuously!release!new,!exciting!products!into!the!market!every!year.!

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Cross'Training'

For!those!who!like!to!set!themselves!apart!from!everyone!else!at!the!gym,!or!on!the!

road,!Nike!has!released!their!new!Free!Trainer!5.0.!More!parallel!to!a!pair!of!Chinese!figure!
cuffs,!the!intertwined!bands!adapt!to!the!foots!movement!when!pressure!is!applied!for!a!
glove_like!fit.!
Customers!will!have!the!option!to!customize!through!Nikeid,!allowing!them!to!mix!and!
match!band!colors,!and!the!option!to!add!a!name!and!number!to!the!top!tongue,!for!a!look!
thats!as!unique!as!the!person!wearing!them.!
Baseball'

While!Nike!doesnt!take!front!and!center!in!baseball,!the!way!they!do!for!other!

professional!sports,!like!football!and!basketball,!they!still!have!many!athlete!endorsements,!
many!of!whom!could!be!seen!sporting!their!Nike!Vapor!Spectrum!series!of!products!since!the!
2014!season.!!!
One!of!the!highlights!of!the!Vapor!series,!is!the!Vapor!360!fielding!glove,!continuing!the!
evolution!of!the!baseball!glove,!to!be!more!lightweight!and!zero!break!in!time!required.!Im!
sure!we!can!expect!to!see!more!players!sporting!this!exciting!new!product!as!the!2015!season!
progresses.!
Football'

Nike!has!extended!their!contract!with!the!NFL,!to!be!the!official!on_field!jersey,!

throughout!2019.!Now!considered!to!be!one!of!Nikes!most!valued!marketing!assets,!as!it!
prevents!Under!Armour!from!entry!in!one!of!the!most!viewed!sports!on!television.!

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!

With!licensing!rights,!Nike!will!certainly!capitalize!on!NFL!Jersey!Sales!for!the!

foreseeable!future.!!With!three!tiers!of!to!choose!from,!fans!will!be!able!to!find!their!favorite!
players!jersey!in!almost!every!price!point.!The!Low_end!jersey!will!remain!a!respectively!
affordable!$100,!with!two!premier!levels,!for!those!looking!for!a!jersey!that!more!closely!
resembles!that!of!the!jersey!worn!on!the!field.!The!"Limited"!jersey,!available!for!$150,!will!
feature!tackle_twill!numbering!and!lettering,!giving!a!more!authentic!look!and!feel.!At!the!
top_of_the_line,!Nike!will!offer!their!"Elite"!jersey,!with!a!retail!price!of!$295,!this!jersey!will!be!
the!closest!fit!and!feel!to!the!real!thing.!!
!

Aside!from!advancements!with!the!NFL,!all!four!teams!competing!for!the!first!ever,!

College!Football!National!Championship,!!Alabama,!Florida!State,!Ohio!State!and!Oregon,!are!
sponsored!by!Nike.!Given!the!reputation!of!some!of!the!most!highly!regarded!football!programs!
in!the!NCAA,!their!partnership!really!drives!home!that!Nike!is!made!for!winning!teams.!
!

Continuing!their!commitment!to!innovation,!Nike!will!release!their!new!Pro!Combat!

Base!Layer,!designed!to!absorb!impact!in!highly!hit!areas,!and!add!protection!to!areas!currently!
not!well!protected.!Nike!expects!these!pads!to!become!standard!equipment,!from!pee_wee!to!
the!pros,!as!mandates!for!stronger!padding!is!adopted!across!the!industry.!

Sportswear!and!Technology!
Activewear!is!a!fast!growing!industry,!and!Nike!has!placed!themselves!on!the!top.!!The!
NPD!group,!a!marketing!research!firm,!found!that!the!activewear!industry!has!been!growing!
seven!to!ten!percent!annually!over!the!past!three!years,!while!apparel!overall!has!remained!
stagnant.!(NPD!group)!!The!activewear!sector!is!led!by!Nikes!Dri_FIT!line!of!featherweight!fabric!

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which!is!both!functional!and!fashionable.!!Nike!is!heavily!targeting!women!with!their!new!
activewear!because!the!womens!market!is!growing!much!faster!than!the!mens.!
Nike!has!chosen!to!use!sponsorships!in!a!new!way!with!activewear.!!Karlie!Kloss,!a!
model!and!former!ballet!dancer,!has!signed!up!to!work!with!Nike.!!She!has!been!chosen!to!lead!
the!womens!side!of!activewear,!while!the!mens!side!is!still!dominated!by!sports!stars.!!Nike!
has!begun!to!pair!activewear!with!sports!stars!shoe!lines.!!Overall,!Nike!has!chosen!to!avoid!
new!high!profile!sponsors!in!order!to!keep!marketing!costs!low.!
As!with!most!of!Nikes!other!products,!activewear!is!directed!towards!an!athletic!
market,!but!fashion!has!become!very!important!for!their!customer!segment.!!Nike!has!made!it!
obvious!that!they!are!targeting!the!young!athletic!crowd!by!their!advertising.!!Almost!every!
model!in!the!activewear!section!of!Nike.com!is!an!in_shape!teenager!or!young!adult.!!The!
developing!womens!activewear!market!has!grabbed!Nikes!attention.!!In!the!coming!years,!
Nike!plans!to!market!themselves!to!young!women!since!they!already!have!a!strong!grasp!on!the!
mens!side.!!!
The!sales!outlook!for!Nikes!activewear!segment!is!very!exciting.!!From!2013!to!2014,!
Nike!saw!a!six!percent!increase!in!their!activewear!segment.!(Nike!10k)!!These!results!are!to!be!
expected!due!to!the!constant!growth!of!the!activewear!market!overall.!!Nike!can!expect!to!see!
sales!continue!to!grow!at!six!to!ten!percent!for!the!foreseeable!future.!!Yahoo!Finance!reports!
that,!Nike!was!the!market!leader!for!activewear!overallincluding!both!men!and!women
with!a!13%!share!of!the!market.!!Under!Armour,!which!overtook!Adidas!last!year,!is!the!number!
two!US!sportswear!company.!!(Yahoo!Finance)!The!results!are!exciting!for!Nike,!as!they!have!

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proven!that!they!continue!to!lead!emerging!markets.!!Activewear!could!soon!become!a!corner!
stone!for!Nikes!product!line.!!
Nikes!technology!sector!is!another!emerging!market!that!could!be!very!promising!for!
Nike.!!This!new!market!pairs!them!up!with!new!competition,!which!is!led!by!Apple.!!Nike!
worked!with!Apple!in!years!past,!but!Apple!has!developed!their!own!products!in!the!athletic!
technology!market.!!The!Apple!Smartwatch!has!become!a!direct!competitor!of!the!new!NIKE+!
Fuelband!and!Sportwatch.!!Smart!watches!have!become!the!new!trend,!which!has!bought!many!
competitors!into!the!market!place,!but!many!have!already!begun!to!fade!away.!!Expect!to!see!
Nike!and!Apple!become!the!main!competition.!!
!

Since!2006,!Nike!has!developed!a!mobile!exercising!software!and!app!called!Nike+.!!

Nike+!is!a!subscription!service!that!can!track!almost!any!type!of!excising!and!give!the!user!
reports!on!their!progress.!!In!order!to!compete!with!Apple,!Nike!has!partnered!with!many!large!
technology!companies.!!Adam!Roth,!VP!of!Nike!Global!Running!Brand!Marketing!said,!!
Together!with!best_in_class!partners!like!Garmin,!TomTom,!Wahoo!Fitness!and!Netpulse,!we!
can!now!deliver!these!experiences!to!even!more!runners,!regardless!of!where!they!run!or!the!
device!they!prefer!to!run!with!These!partnerships!are!all!about!the!runner!!giving!him!or!her!
even!more!ways!to!access!the!rewarding!benefits!of!being!a!Nike+!Running!member.!(Nike)!!
These!deals!allow!Nike!to!provide!service!to!a!much!bigger!market,!which!will!increase!sales.!!
!

Nike!has!adopted!a!very!broad!target!market!for!their!technology!sector.!!Because!you!

can!track!running,!biking,!walking,!water!sports,!and!many!other!activities,!almost!anyone!has!a!
use!for!their!technology!and!watch.!!Their!main!customer!segment!is!young!adults,!which!will!
open!the!door!for!sales!to!other!segments.!While!Apple!is!targeting!a!more!luxury!market!with!
!

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their!watches,!Nike!wants!to!attract!athletes.!!The!Sportwatch!is!all!about!functionality,!and!in!
that!regard,!they!have!surpassed!Apple!greatly.!
!

Sales!for!Nike+!and!the!Nike!Sportwatch!are!both!very!difficult!to!predict!right!now.!!

Nike!has!not!released!any!sale!figures!on!the!Sportwatch,!but!the!Fuelband!was!a!flop!due!to!
the!fast!changes!in!technology!that!made!it!outdated.!!Nikes!new!agreements!with!other!
companies!have!given!Nike!a!much!better!chance!to!succeed!in!the!technology!market.!!Nike!
CEO!Mark!Parker!said!in!a!call!with!investors,!the!Nike+!Training!Club!app!for!women!as!one!
reason!for!the!faster!growth.!The!app!has!been!downloaded!17!million!times.!!(CNN!Money)!
Nike!has!been!very!quiet!about!their!technology!sector!to!avoid!extra!competition!with!Apple!
and!other!companies.!!Expect!to!see!Nike!reveal!gains!in!the!technology!sector,!but!nothing!
overwhelming.!!

Action!Sports!
The!Nike!action!sports!division!is!comprised!of!Nike!SB,!Nike!6.0,!Nike!Snow,!and!
subsidiary!brand!Hurley!International!LLC.!Within!these!brands,!Nike!focuses!on!skateboarding,!
snowboarding/skiing,!BMX,!and!surfing.!!Nike!SB!was!launched!in!just!2001,!in!2002!Nike!
purchased!Hurley!International!LLC,!by!2005!Nike!6.0!was!released!and!Nike!Snow!was!
launched!in!2007!(Brettman!2011).!!Integrating!into!the!action!sports!seen!less!than!two!
decades!ago,!it!was!recently!the!fastest!growing!category!within!the!Nike!brand.!While!
dominating!mainstream!sports,!Nike!began!expanding!focus!toward!action!sports!in!pursuing!a!
global!marketing!campaign!called!The!Chosen!in!2011!in!order!to!grow!brand!awareness!and!
sales!in!their!action!sports!division.!!Through!the!campaign,!Nike!anticipated!action!sport!
business!to!more!than!double!by!year!2015.!(Brettman,!2011).!!The!campaign!intended!on!
!

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primarily!pursuing!action!sport!footwear,!as!footwear!represented!more!than!half!of!Nikes!$19!
billion!in!sales!the!2010!fiscal!year!(Brettman!2011).!!
The!Chosen!marketing!campaign!did!result!in!significant!growth!in!their!entrance!to!a!
new!market,!but!in!recent!years!Nike!action!sports!has!seen!a!decline!in!participation!and!
consumption!of!goods!(Downey,!2015).!Making!way!into!action!sports,!Nike!used!its!significant!
capital,!as!well!as!celebrity!athlete!sponsorships!(including!Eric!Koston!and!Paul!Rodriguez!on!
their!skateboarding!team)!in!order!to!create!growth!within!the!new!target!market.!The!brand!
also!remained!active!in!sponsoring!events!such!as!the!U.S!open!to!keep!relevant!among!their!
competition.!Entrance!into!the!small,!competitive!market!proved!to!be!extremely!challenging.!
Although!Nike!excels!in!advertising,!branding,!and!sponsorship,!entrance!also!necessitates!a!
sort!of!cultural!rewriting!of!perceptions!of!large!companies!like!Nike!(Downey,!2015).!In!
rewriting!this!perception,!Nike!experienced!difficulty!in!moving!away!from!their!corporate!
profit!driven!image.!The!corporations!lack!of!experience!and!cultural!age!in!the!world!of!action!
sports!has!affected!both!their!entrance!and!success!into!the!new!division.!(Downey,!2015).!
Newly!incorporating!action!sports!into!their!brand,!Nike!is!still!facing!challenges!
excelling!in!all!areas!of!the!division.!!Focusing!on!2016!sales!revenue,!they!will!need!to!focus!on!
development!and!expansion!in!action!sports!to!prevent!stagnation.!Nike!will!also!need!to!focus!
on!differentiating!each!segment!in!their!action!sports!division!(Downey!2015).!

Golf!
Nike!Golf,!like!many!other!sports!Nike!Inc.!sponsors!has!seen!great!success.!With!Golf,!
Nike!has!revolutionized!and!marketed!not!only!its!sponsored!players!but!the!game!of!golf!as!a!
whole.!!!Where!Nike!gained!a!competitive!advantage!was!by!signing!golf!athletes!at!either!a!
!

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very!young!age!before!they!were!great!like!Tiger!Woods,!or!having!the!resources!to!sign!the!
current!world!number!one!Rory!McIlroy.!As!well!as!some!of!the!best!LPGA!players!Suzann!
Pettersen!and!Michelle!Wie!No!matter!how!Nike!goes!about!it!in!the!game!of!Golf!the!definitely!
have!an!act!for!sniffing!out!talent.!!Nike!Inc.!Golf!has!marketed!there!products!to!a!younger!
generation!of!golfers!setting!the!tone!for!all!other!companies!in!the!industry!(Adidas,!Under!
Armor,!Titleist)!to!name!a!few.!
From!2012!to!2013!Nike!Golf!grew!a!10%!to!approx.!790!million!which!is!still!middle!of!
the!pack.!Nike!has!also!invested!a!lot!of!resources!to!their!golf!ball!brands!which!a!1.2!billion_
dollar!industry.!Building!a!20,000!sqft!research!and!development!center!dedicated!to!their!golf!
ball!brand.!

Channels!of!Distribution!
With!Nike!being!one!of!the!largest!retailers!in!the!world!its!channels!of!distribution!have!
to!be!reliable!efficient!and!precise.!NIKE!distributes!its!products!through!three!major!channels:!
! Selling!products!to!wholesalers!in!the!US!and!international!markets!
! Direct_to_consumer!sales,!which!include!in!line!and!factory!retail!outlets!and!e_
commerce!sales!!
! Sales!to!global!brand!divisions!
NIKE!has!five!primary!distribution!centers!in!the!US!located!in!Memphis,!Tennessee,!
three!of!which!operate!on!a!leased!basis.!The!company!had!16!distribution!centers!outside!the!
US!at!the!end!of!fiscal!year!2014.!NIKE!moved!900!million!units!through!its!supply!chain!last!
year.!On!the!other!hand,!its!manufacturing!is!a!much!more!complex!network!consisting!of!over!
700!factories!in!42!countries.!Each!product!moves!from!57!distribution!centers!across!a!

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network!of!18,500!accounts!and!140,000!retail!doors.!(investors.nikeinc.com)!Yet!NIKE!owns!no!
factories!for!manufacturing!its!footwear!and!apparel,!which!make!up!88%!of!its!revenues!NIKE!
brand!apparel!and!equipment!products!are!also!shipped!from!its!distribution!center!in!Foothill!
Ranch,!California.!Converse!and!Hurley!products!are!shipped!primarily!from!Ontario,!California.!
(marketrealist.com)!
Instead,!manufacturing!is!outsourced!to!third!parties!because!of!the!cost!advantages!of!
doing!so.!Most!raw!materials!in!NIKEs!supply!chain!are!sourced!in!the!manufacturing!host!
country!by!independent!contractors.!(Nike.com)!One!way!Nike!has!secured!its!future!financial!
growth!is!by!investing!in!Lean!line!production.!This!lean!line!production!allows!Nike!to!cut!back!
on!costly!waste!which!is!both!economically!and!environmentally!friendly.!!By!the!end!of!fiscal!
year!2013,!between!70%!and!76%!of!its!apparel!and!85%!of!its!footwear!products!were!
manufactured!on!lean!lines.!This!delivered!additional!savings!of!$0.15!per!unit!through!
better!labor!productivity!and!lower!waste.!(investors.nikeinc.com)!
NIKEs!apparel!is!manufactured!outside!the!US!by!independent!contract!manufacturers.!
In!fiscal!year!2014,!NIKE!was!supplied!by!430!apparel!factories!operating!in!41!countries.!China,!
Vietnam,!Thailand,!Indonesia,!Sri!Lanka,!Pakistan,!and!Malaysia!accounted!for!most!of!the!
apparel!production.!The!top!five!apparel!contract!manufacturers!together!accounted!for!34%!of!
NIKEs!apparel!production.!Because!of!this!Nike!protects!itself!from!strikes!from!distributers!or!
loss!of!capital!because!of!natural!disasters!(investors.nikeinc.com)!!
Sales!to!wholesalers!are!the!largest!revenue!category.!However,!this!categorys!
contribution!in!the!sales!mix!contracted!from!83.3%!in!fiscal!year!2012!to!79.2%!of!revenues!in!
fiscal!year!2014.!Direct!to!consumer!sales!(DTC),!on!the!other!hand,!increased!from!16.2%!to!
!

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20.3%!over!the!same!period.!(investors.nikeinc.com)!DTC!sales!include!sales!through!company_
owned!retail!outlets!and!e_commerce!sales!through!its!portal,!www.nike.com.!This!is!
significantly!lower!than!the!ratio!of!DTC!revenues!for!NIKEs!rivals!in!the!space.!NIKE!is!focusing!
on!direct!selling!to!the!consumer!with!its!DTC!initiative.!Comparing!NIKEs!distribution!
channels,!direct!sales!to!the!consumer!provide!higher!margins!than!do!sales!to!wholesalers.!In!
fiscal!year!2014,!DTC!revenues!accounted!for!20%!of!total!NIKE!Brand!revenues!as!
compared!to!18%!in!fiscal!year!2013.!On!a!currency!neutral!basis,!DTC!revenues!grew!22%!in!
fiscal!year!2014!and!30%!in!1Q15,!year_over_year.!(investors.nikeinc.com)The!company!is!
attempting!to!grow!the!DTC!category!to!$8!billion!in!sales!by!fiscal!year!2017,!up!from!$5.3!
billion!in!fiscal!year!2014.!Thats!an!annual!growth!rate!of!14.7%,!compounded.!
(investors.nikeinc.com)!
The!NIKE!brand!experience!stores!provide!customers!with!the!full!bricks_and_mortar!
retail!proposition.!Premium!stores!that!offer!the!consumer!the!best!brand!experience,!
experience!stores!include!NIKETOWNs,!the!largest!stores!in!the!fleet.!Each!NIKETOWN!features!
six!or!seven!NIKE!brand!categories,!providing!the!very!best!innovative!product!and!services!
those!categories!have!to!offer.!This!premium!customer!experience!gives!NIKE!higher!pricing!
latitude!on!the!products!offered.!The!second!goal!is!creating!category!experiences.!Along!with!
its!wholesale!partners,!NIKE!aims!to!create!unique!experiences!such!as!the!House!of!Hoops!for!
Basketball!with!Foot!Locker,!Inc.!or!the!NIKE!Track!Club!for!runners!with!Finish!Line!or!the!Field!
House!with!Dicks!Sporting!Goods!Store,!Inc.)!These!product!differentiation!strategies!allow!for!
premium!pricing.!They!also!benefit!NIKEs!wholesale!partners!by!bringing!them!into!the!
limelight.!NIKEs!factory!stores!provide!a!premium!product!to!consumers!shopping!for!value.!

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Due!to!the!value!proposition!involved,!they!tend!to!attract!higher!shopper!volumes.!Online!
sales!made!up!15%!of!total!NIKE!brand!DTC!revenues!in!fiscal!year!2014,!compared!to!12%!in!
fiscal!year!2013.!!The!category!grew!by!42%!in!fiscal!year!2014,!and!was!up!by!70%!year_over_
year!in!1Q15.!(investors.nikeinc.com)!

International!Market!
The!Nike!swoosh!logo!is!one!of!the!most!famous!and!reputable!athletic!sponsors!in!
the!world.!Much!of!Nike's!success!can!be!credited!to!the!brands!worldwide!marketing!campaign!
which!uses!sponsorship!with!celebrities!and!athletes,!professional!sports!teams!and!college!
athletic!teams!to!use!their!products!for!the!promotion!of!their!technology!and!design.!
Nike!is!the!world!leader!in!athletic!wears!and!apparels!and!their!products!sold!nearly!in!
all!countries!around!the!world.!The!revenue!from!the!international!market!is!significant,!in!
2014,!non_US!sales!accounted!for!54%!of!total!revenues.!However,!no!country!is!accounted!
for10%!or!more!of!the!worldwide!net!sales!during!2014.!
Nike!employed!approximately!56,500!employees!worldwide,!including!retail!and!part_
time!employees!and!operated!more!than!536!retail!stores!worldwide!in!2014!excluding!
independent!distributors.!Nike!operated!16!distribution!centers!around!the!world,!they!supply!
their!footwear!products!from!150!factories!located!in!14!different!countries,!also!has!
independent!manufacturing!agreements!with!the!factories!around!the!world.!They!also!supply!
apparels!from!410!factories!located!in!41!countries.!
Nikes!global!market!share!in!footwear!in!2014!is!20.8%!and!at!the!end!of!2015,!it!is!
expected!to!be!grow!to!21.8%.!In!the!companys!report,!theyreported!up!7%!year_over_year!

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growth!due!to!effects!of!stronger!U.S!Dollar!in!the!currency!market.!In!Latin!America,!
economies!have!undergone!in!significant!currency!depreciation!in!recent!years.!In!central!and!
eastern!Europe!and!Japan,!which!are!two!major!segments!that!accounts!for!4.9%!and!2%!of!
total!revenues,!have!experienced!modest!growth,!while!Japans!revenues!have!declined!in!
2014.!Nike!expects!the!market!in!Japan!to!grow!through!2017!because!of!the!Japanese!yen!
recently!cost!lower!compared!to!the!dollar.!Also!the!depreciation!of!the!Russian!ruble!will!also!
lead!to!the!growth!of!revenue!in!the!next!years.!
Nike!has!been!dominated!the!sportswear!market!is!worldwide.!Also!as!a!result!of!
several!economic!incidents!in!international!market!and!due!to!the!stronger!U.S!dollar,!Nike!is!
expected!to!increase!their!revenue!and!also!growth!in!the!market!shares!next!years.!

29!

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