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Efinition of Arketing Anagement Heory Efinition of Arketing Anagement Heory Arketing Arket Esearch EAM
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DEFINING MARKETING MANAGEMENT THEORY (2000 – 2010) & THEORY (2011 – 2015) AND NIKE’S
MARKETING-MANAGEMENT -------------------------------------------------------------------------------------------- 5
VISION --------------------------------------------------------------------------------------------------------------------------- 6
MISSION ------------------------------------------------------------------------------------------------------------------------- 7
CORPORATE STRATEGY --------------------------------------------------------------------------------------------------------- 7
1
BRANDING OF NIKE------------------------------------------------------------------------------------------------------------ 29
CONCLUSION ---------------------------------------------------------------------------------------------------------------- 45
REFERENCE------------------------------------------------------------------------------------------------------------------- 46
APPENDIX -------------------------------------------------------------------------------------------------------------------- 48
2
Introduction
Nike, originally known as Blue Ribbon Sports, was founded by University of Oregon
track athlete Philip Knight and his coach Bill Bowerman in January 1964. The
company initially operated as a distributor for Japanese shoe maker Onitsuka Tiger,
making most sales at track meets out of Knight's automobile.
{Mohaimin}
3
4
Defining Marketing Management Theory (2000 – 2010)
& Theory (2011 – 2015) and NIKE’s Marketing-
Management
{Mohaimin}
Marketing
The theme of Nike’s Marketing is to provide best experience for its customers and
this responsibility doesn’t lie only on the shoulder of Marketing Department rather
all the company’s departments work together to serve the customers’ interests. And
by the customers we don’t mean only the external customers, but also the internal
customers i.e. our employees. Thus we always thrive to build and maintain an
5
integrated marketing 4 environment within the organization. However, the core
marketing job is accomplished by six departments- Product Management, Sales,
Distribution, customer services, Sales Training and Market Research.
{Mohaimin}
Vision
Theirvision is to bring innovative products for the customers by manufacturing &
marketing quality at affordable price.
6
Mission
Nike's mission statement is "To bring inspiration and innovation to every athlete
in the world." The legendary University of Oregon track and field coach,
and Nike co-founder, Bill Bowerman said, "If you have a body, you are an athlete."
Corporate Strategy
Nike’s corporate strategies are to conduct transparent business operations within the
legal & social framework with aims to attain the mission reflected by their vision.
{Mohaimin}
7
Nike SWOT Analysis:
S Strengths
•Brand recognition
•High product quality
•Effective marketing strategy
•Capacity of innovation
•Strong distribution chain
•Strong R&D
•Strong customer relationship/satisfaction
O Opportunities
•Overseas manufacturing dependency
•Decreasing US market share
•High product price compared to Adidas
•Currency exposure
•Medium retail presence
W Weakness
•Expansion into emerging markets
•Increased demand in product innovation
•Growing segment of women athlets
•Increase in the number of sports event like Olympic, FIFA
•Develop the fashion brand image
T Threats
•Fierce industry competition
•Revenue relies on consumer’s discretionary income
•Economic rescission
•Fluctuation in the currency
{Shumit}
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PESTEL Analysis
POLITICAL ECONOMICAL SOCIAL
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TECHNOLOGICAL ECOLOGICAL LEGAL
Lean manufacturing because of technological Growing popularity of “green products” Risk of legal violation in terms of human
advances Challenges of tackling climate change rights, environmental issues
Up-to-date technology adoption Waste disposal, recycle and reuse policies adoption Risk of contract manufacturers copying
Speed of technology transfer, and speed of Sustainability philosophy by using natural materials of product (intellectual property rights)
change of product Reduce energy consumption Corporate social responsibility beyond
High rate of technological obsolescence legal obligation
Internet and information technology systems Trade agreements to safeguard for
development business operation
Innovative and technically superior products
Opportunities: Use of IT in marketing
information system
Scientific research in product quality &
innovation
{Shumit}
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Michael Porter’s Five Forces Analysis
Bargaining Power of the Supplier: (Low)
Threat of Internal Rivalry: (High)
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The marketing strategy of Nike
The marketing strategy of Nike rested completely upon a product image which is
favorable and allowed it to develop into one of the best multinational companies after
a while.
Nike’s favorable product icon has been kept optimistic because of the strong relation
with the company logo that is quite distinct and unique as well as the product slogan
that has been utilized in commercials for a long period of time. The marketing
strategy of Nike invests a lot in commercials and product promotion.
Market Segmentation
Sportsmen are the majority consumers of Nike’s products. This is extremely because
of the usefulness that goes along with the items. An athlete or sportspersons is more
possible to choose shoe designed that is marketed by Company more than an
individual who hate sports as well as exercises.
Nike focused on these consumers by means of agreements between the Company and
sports team, college athletic for product support and sponsorship as well as eventual
endorsement to the team members.
Through this, Nike is capable to reach an extensive number of consumers and clients
who are likely to purchase. Even if some are likely to purchase the products,
Company pays particular emphatic concentrating to the sportsmen more than some
number individuals even if it also targets teenagers who have hold the hip hop
customs.
Targeting strategies
Nike Company’s lays a lot of strategies to aim their immediate users, athletes and all
sportsmen. These targeting techniques include product sponsorship by professional
and well known athletic team, college sports team as well as celebrity athletes. This
marketing strategy of Nike is particularly successful as of its capability to reach many
athletes. Once the sports team manager lay down a particular kind of track shoes
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manufactured by Nike, the learner has no choice other than to purchase them as well
as sports team can purchase the track shoes in a large number and deliver them to
the members of the team.
Another marketing strategy of Nike is the styling of product objective or purpose.
Company does this through associating triumph with the apparel. For instance, when
a superstar athlete sponsors a particular brand of sports shoes, the shoes will be
related with victory. It has psychological effect to the viewers and this is reinforced
with promotional which affirm this point.
At last, Nike targets the users who are possible to build up product intimacy,
consumers who are after the quality and utility of the items than the cost. Through
this, the costing is not pretentious too much in propose to accommodate a lot of
consumers.
Pricing Strategies
Since Nike focused on the users who embrace product understanding and closeness
and thus heed less regarding the product. This allows the Company to set quite
higher cost that its rivalry. This is a marketing strategy of Nike which calls for
superior pricing points in order to push the supposed value of the product.
Another significant thing that business must consider if you want to follow the
success of the company is that, the truth that Company utilizes the vertical
combination pricing technique in that they take participants ownerships at channel
levels which differ and the Nike company also engage in diverse channel level
functions in a propose to control prices as a result affect pricing function.
Distribution Strategies
The marketing strategy of Nike embraced by many organizations can either provide
them a market frame or make them insulate the market frontrunner. The more
reliable the distribution of the product is improves the sales and in consequence
more profits.
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Product delivery at the required time to the users not just effect usefulness however
also result to high level of customer’s satisfaction as well as loyalty.
Nike Company distributes its items base on the level or number. The high costs
premium items are given to particular distributors while leaving products with low
priced to be trade at discounted price at various retail stores including Wal-Mart
whereas other company such as Reebok who embraced a restricted distribution
technique Nike Company ventured more into a world market capitalization.
{Mohaimin}
14
Marketing Mix
Product:
Nike offers a wide range of shoe, apparel and equipment products, all of which are
currently its top-selling product categories. Nike started selling sports apparel,
athletic bags and accessory items in 1979. Their brand Cole Haan carries a line of
dress and casual footwear and accessories for men, women and children.
They also market head gear under the brand name Sports Specialties, through Nike
Team manufactures and distributes ice skates, skate blades, in-roller skates,
protective gear, hockey sticks and hockey jerseys and accessories.
Price:
Nike’s pricing is designed to be competitive to the other fashion Shoe retailer. 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.
Place:
Nike shoes are carried by multi-brand stores and the exclusive Nike stores across the
globe. Nike sells its product to about 20,000 retail accounts in the U.S. and in almost
200 countries around the world. In the international markets, Nike sells its products
through independent distributors, licensees and subsidiaries. The company has
production facilities in Asia and customer service and other operational units
worldwide
Promotion:
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Soccer Team (especially Ronaldo, Renaldo, and Roberto Carlos), Lebron James and
Jermane O’Neal for basketball, Lance Armstrong for cycling, and Tiger Woods for
Golf.
Nike also sponsors events such as Hoop It Up and The Golden West Invitational.
Nike’s brand images, the Nike name and the trademark swoosh; make it one of the
most recognizable brands in the world. Nike’s brand power is one reason for its high
revenues. Nike’s quality products, loyal customer base and its great marketing
techniques all contribute to make the shoe empire a huge success.
Positioning:
The Positioning statement of Nike is “For serious athletes, Nike gives confidence that
provides the perfect shoe for every sport”. In today’s competitive environment, Nike,
one of the global leaders in sporting goods industry, has established a strong position
for enhancing athletic life style. It’s the number one sports manufacturer in the world
design by Nolan Breitbarth in the 1970s with Phil knight founder of Nike Inc. It is the
leading sporting goods Company in the United States and hundred and ten countries.
However, it has become the passion for everyone to use its brand products that
create the
Nike Just Do It feeling for the competition. The consumer’s perception of brand
influences their buying decision in sports industry, so Nike always has been able to
position to customer’s expectation and athletic fantasy that is endorsed by real
athletes.
Process:
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Nike has adopted the da Vinci Surgical System concept using a copper mannequin
that they call Hal. But instead of a robot that is designed to facilitate complex
surgeries controlled by a surgeon from a console, Hal is built to serve as the human
element in tests that incorporate biomechanics, physiology, perception and athletic
performance into design. One example is the use of its 139 ports that simulate
sweating to check the effectiveness of moisture-wicking materials. Whew! Now that’s
what I call breaking a sweat!
The Nike Sport Research Lab in Beaverton, Oregon is charged with driving product
innovation to “create footwear and apparel solutions that lower an athlete’s body
temperature and reduce his or her energy expenditure, thereby allowing him or her
to train longer and harder.”
Leading edge tools like Hal are one of the key enablers for the Lab, but the other is
old fashioned customer feedback. The Lab is a favorite stop for athletes when they
are visiting Nike’s campus because they are able to be closely involved in the product
development. They have the ability to provide direct feedback on product
performance through testing and data.
Listening to customers and using advanced technology for product testing has
proven to be a winning combination to help Nike scientists not only improve on
existing products but also in create innovative products that the company is known
for.
Physical Evidence:
It is the physical evidence of a business’ presence and establishment. A concept of
this is branding. For example, when you think of sports, the names Nike and Adidas
come to mind. You immediately know exactly what their presence is in the
marketplace, as they are generally market leaders and have established a physical
evidence as well as psychological evidence in their marketing.
They have manipulated their consumer perception so well to the point where their
brands appear first in line when an individual is asked to broadly “name a brand” in
their niche or industry.
{Mohaimin}
17
4C Marketing Mix of NIKE
Customer/Consumer Value
Cost
The price of a product or service is the amount you set for the item/s the
customers/consumers will get from your business. This is from the business’s point
of view.
Shifting to the perspective of your customers/consumers, the price becomes the cost.
It represents the amount your customers/consumers will pay for your product(s) or
service(s). Nike products are of different price range which match the value
expectation of the customer compared to price.
Convenience
These days, people decide in favor of buying based on convenience. Thus, you will
notice that practically all businesses have started to create their online presence. In
addition to online sales, Nike has maintained strategic alliance with vendors
likeamazon, Ali Baba to deliver its product to the end customer with utmost
convenience.
Communication
The final element in marketing mix 4C’s is communication. With this marketing mix,
you do not “promote” your business; rather, you communicate value to your
customers/consumers.
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You give your customers/consumers meaningful content to engage them.
You do not just make your target audience aware of your business; you build rapport
and relationship with them.
{Nasir}
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Value Chain Model:
• IT system across supply chain • Great financial discipline with low debt
• E-commerce infrastructure • Strong brand, product, marketplace solution, delivery
• Strong financial position & CSR and support
Support Activities
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Inbound
Operations Outbound logistics Marketing& Sales Service
logisitcs
Low production Outsourcing Strong control over High brand Customer care
costs manufacturing and global distribution recognition and Pre-sales & after
Locally purchase assembly channel reputation sales services
most raw materials Design (R&D) Just in time delivery Scale advantage Use of IT to
in bulk Technological Good supplier Price leadership and improve customer
Specialised innovation relation value based pricing service (touch
materials Effective supply Ability of forward strategy screen)
importantion chain management integration First mover Increased customer
Local logistics Heavy investment in Use of strong servers advantage in e- satisfaction
providers R&D to support and commerce in the Customization
Inventory control Quality control manage supply chain industry
and reduced Low and no packing projects Agressive marketing
inventory risk options Celebrety
Focus on product Nike personals to endorsement
design marketing assist factory High allocation on
and product management marketing budget
technology
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The Five 5M’s of Advertising
MISSION
MONEY
After the objective has been decided upon, the next step is to decide upon the budget.
There are several methods for deciding on the advertising budget. The most common
among them is the percentage of sales method. Under this method, a certain
percentage of sales are allotted for advertising expenditure. Though this method is
used widely, there are some problems with this method. The first issue is what
percentage the company should take? Even if a company somehow decides a
percentage figure, this would mean increase in advertising expenditure when sales
are up and less spending when sales are down. This in some ways is quite
paradoxical, because logically the reverse should happen. The company needs to
spend more on advertising when sales are down. But this method uses circular
reasoning and views sales as cause for promotion. In fact, sales are a result of
promotion. Another method suggests that a company should spend as much as its
competitors are spending. This method claims that it would prevent promotional
wars. But then like each individual each company is also different. It may not make
any sense in spending like your competitor because competitor might be on a
different footing.
MESSAGE
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As a common experience, we love some advertisements, while the others just irritate
us. An appealing advertising will win consumers and will consequently induce them
to purchase the product. On the other hand, irritating advertising will create an
adverse effect. This is why many companies hand over this task to advertising
agencies, which has professionals to make impact -making ads. The message that
company wants to convey should be put in a manner that will arouse interest.
Moreover, it should convincingly highlight upon the products USP. What is said is
definitely important but what is more important is how it is said. The tone should be
appealing. Words used should be catchy and retentive. These days both electronic as
well as print media are overflowing with ads. People have no time to read or see
them, and therefore they have to be attractive enough to target audience’s attention.
This is the job of message.
MEDIA
Selecting the proper media vehicle for communicating the message goes a long way
in the success of any kind of advertising2. Each media vehicle has its positive and
negative points with a different reach and impact. Therefore, a company has to be
very clear about its target audience. Choices available are Internet, TV, newspapers,
magazines, direct mails, radio and hoardings. Everyone of this has its advantages and
disadvantages. Companies often go in for a media mix, i.e. they select more than one
of the available choices. Timing is of great significance here. Many industries face
seasonal fluctuations and pass through cycles. Therefore, advertising should be timed
that way to take care of these fluctuations. A limited budget should be prudently
allotted among these media vehicles.
MEASUREMENT
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Nonetheless there are some advanced statistical techniques available that can be
used with the help of computer software’s like SPSS. Thus a systematic and balanced
understanding of these five Ms of advertising will help in designing better advertising
campaigns that create a favorable impact on the target audience.
Nike remains the clear leader in the global sportswear market, and has if anything
strengthened its position in recent years, especially in the global football (soccer)
market, where it had traditionally lagged behind rival Adidas. With general approval
of the sportswear market in general and Nike in particular at an all-time high there
seems little evidence of any likely future downgrade in performance. The only
significant clouds on the horizon could be rising costs of manufacturing or raw
materials, and any extraordinary surge in performance by merging competitors.
Nike is the world's #1 manufacturer and marketer of athletic footwear and apparel.
The group operates a broad collection of separate divisions, and produces footwear
and sportswear for just about every conceivable sport within its main range.
Combined sales for the Nike brand were $28.7bn in the year to May 2015, up 10%.
The business is now structured as eight key segments of running, basketball, football
(soccer), men's training (including American football), women's training, action
sports, general sportswear and golf. It is the clear market leader in running, training
and basketball (the latter mostly under the Jordan brand), all of which reflect its
powerbase in the US, where it now has around 60% share of the branded athletic
footwear market, up from just 36% in 2005. Equivalent wholesale revenues from
running were $4.85bn in fiscal 2015, with $3.72bn from basketball, $2.54bn from
men's training, $2.25bn from football (soccer) and $1.28bn from women's training.
However general sportswear is the brand's biggest category, contributing $6.60bn.
The fastest growing segment in both 2014 and 2015 was basketball, up more than
40% in two years, roughly double or more any other segment.
Traditionally Nike was less all-conquering in other sports, but has caught up very
quickly indeed with its traditional European rival. In soccer, for example, Nike had
traditionally held 2nd place to Adidas, but the Air Zoom Total 90 soccer boot
launched in 2003 was extremely successful in Europe's main football markets, giving
Nike the edge over its rival in soccer footwear for the first time. It continues to hold
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onto the leading position in football footwear in Europe, although Adidas has the
edge in overall apparel and equipment. Soccer alone contributed revenues of around
$1.7bn to Nike in fiscal 2010, compared to just $40m in 1994. In 2008, Nike agreed a
stunning deal to replace Adidas as official sponsor of the French national team from
2011 to 2018, offering a total fee of around E320m. (The shine came off that deal
somewhat because of France's disastrous performance in the 2010 World Cup).
In 2007, Nike attempted unsuccessfully to wrest the contract to sponsor the kit for
German national football team from Adidas (it will try again in 2017), and
subsequently announced a $291m takeover of UK-based sportswear manufacturer
Umbro, best known as the official manufacturer of the England football team's kit.
Umbro retained standalone status within the group as an affiliate brand, generating
sales of $262m in 2012. However the group put that business up for sale during the
year, and a deal was eventually agreed with Iconix Brand Group to acquire the
business for $225m. Nike retains the England football team contract (until 2018).
Football remains one of the brand's key segments, although it was also the only one
to record a decline at constant exchange rates between 2014 and 2015, falling by 2%
from highs encouraged by the build-up to the 2014 World Cup.
German firm PR Marketing estimated that Nike had an overall 36% share of the total
football market in 2012, just behind Adidas at 38%. Globally Nike has around 33%
share of the athletic footwear market. In the US it is more like 48%.
{Nasir}
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Brand & Branding of Nike
Nike invented the concept of brands and brand management. Over the years, Nike
has remained consistently on the cutting edge of marketing, always finding
innovative and exciting ways to reach consumers.
A Brand is a name, term, design, color, symbol or other feature that distinguishes
one seller's product from those of others. Brands are used in business, marketing,
and advertising. Nike is made of many individual brands, each serving customers in
different ways, but all with a focus on making peoples’ lives a little easier.
Nike’s Logo-
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Nike’s Brands
Nike produces a wide range of sports equipment. Their first products were track
running shoes. They currently also make shoes, jerseys, shorts, base layers etc. for a
wide range of sports including track & field, baseball, ice hockey, tennis, Association
football, lacrosse, basketball and cricket. The most recent additions to their line are
the Nike 6.0 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 positions its products
in such a way as to try to appeal to a "youthful.... materialistic crowd". It is positioned
as a premium performance brand. However, it also engineers shoes and apparel for
27
discount stores like Wal-Mart under the Starter brand. Nike sells an assortment of
products, including shoes and a 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 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'R F I D devices from 60 feet (18 m) away
using small, concealable intelligence motes in a wireless sensor network.
{Nasir}
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Branding of Nike
The marketing practice of creating a name, symbol or design that identifies and
differentiates a product from other products is called Branding. The process involved
in creating a unique name and image for a product in the consumers' mind, mainly
through advertising campaigns with a consistent theme. Branding aims to establish a
significant and differentiated presence in the market that attracts and retains loyal
29
customers is branding. An effective brand strategy gives a major edge in increasingly
competitive markets, which we need to do for Nike.
Nike Value Chain Companies often use the term “value chain” to refer to the actors
and stages needed to bring their product or service to market and ultimately to its
end of life. At Nike this term is used too, though Nike also find the “chain” metaphor
a bit linear and limiting for something that is actually interconnected in multiple
ways, like an ecosystem or a web. The connections in this chain drive our decision
making. For example, the quality of our planning shapes the choices we make for
manufacturing. Efficient manufacturers create little to no scrap and turn what
remains back into material inputs for new products. Nearly 85 percent of our
footwear manufacturing waste is now diverted from landfill or incineration through
recycling and other efforts. Also, insights we gain in the use phase impact how we
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design our products. Our design decisions, in turn, determine whether a product can
be recycled at the end of its life. Design choices can also eliminate the need for toxics
in the manufacturing process, and our ability to get toxics out of products determines
whether materials can be recycled in a closed loop. Working with the right
manufacturers means better insight and control of quality and in performance for the
environment and their workers. Choosing the right partners for moving our products
around improves our ability to gather and track data on transportation emissions
and to get products where they need to be at the right time. Each choice has financial,
environmental and social impacts that are intertwined and mutually dependent.
These are just a few examples of the interconnections. We invite you to explore
Nike’s value chain through the graphic below and online where you will find
additional detail about impacts and relevant stories. This value chain outlines each
phase, where the greatest impacts occur, and some of the key tools we are using to
increase efficiencies, reduce impacts and improve working conditions throughout the
system. The marketing mix or the 4 Ps of Marketing are Product, Price, Place
(distribution), andPromotion. Nike's 4Ps are the following: PRODUCTS: Nike
produces a wide range of sports equipment. Their first products were track
runningshoes. They currently also make shoes, jerseys, shorts, base layers etc. for a
wide range of sportsincluding track & field, baseball, ice hockey, tennis, Association
football, lacrosse, basketballand cricket. Nike Air Max is a line of shoes first released
by Nike, Inc. in 1987. The most recentadditions to their line are the Nike 6.0,
NikeNYX, and Nike SB shoes, designed for Good {Mohaimin}
31
Box Analysis of Brand Elements of Nike
Brand elements are devices that identify and differentiate the brand. Multiple brand
elements application may strong the brand equity. The outcome of this activity can
be judged by what consumers would think or feel about the product if the brand
element were all they knew.
Memorable Meaningful
Likeability Transferable
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Adaptable Protectable
Memorable
How easily do consumers recall and recognize the brand element, and when at both
purchase and consumption? Short names such as Tide, Crest, and Puffs are
memorable brand elements. (NIKE)
Meaningful
Is the brand element credible? Does it suggest the corresponding category and a
product ingredient or the type of person who might use the brand? (NIKE)
Likable
How aesthetically appealing is the brand element? A recent trend is for playful names
that also offer a readily available URL. (NIKE)
Transferable
Can the brand element introduce new products in the same or different categories?
Does it add to brand equity across geographic boundaries and market segments?
(NIKE)
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Adaptable
Protect able
{Mohaimin}
34
Pyramid" is a useful tool that can help us identify where our customers are on this
journey to loyalty.
A brand is about so much more than just a name, a logo, and a design. A Brand is
established at each and every point of contact, and most companies do not really
follow through on that consistently. So while much effort goes into building a brand
by one part of the company, another may be undermining those efforts. NIKE has a
strong relation with its customers, so it stands in the Bonding stage in brand
dynamics pyramid.
{Mohaimin}
Mass communication
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Advertising Budget & Campaign Cost
Advertising is the best way to communicate to the target customers. There is a real
need to let people know about the brands available in the market. Advertising tells
the world that you are in business.Advertising is for everybody including kids, young
and old. When people see the name of your business over and over again they will
remember. As a famous brand NIKE always considering following for its advertising
campaign:
Advertising frequency
Product substitutability
{Nasir}
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$4,500.00
Paid Advertising Summary
$4,000.00 LEAD
$3,500.00 GENERATION
$3,000.00 SOCIAL
$2,500.00
AFFILIATE
$2,000.00
$1,500.00 DISPLAY &
$1,000.00 RETARGETING
SEARCH
$500.00
$0.00
Budget Actual
{Nasir}
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Sales Promotion & Budget
Sales are the lifeblood of a business. Sales promotion is an important component of
NIKE’S marketing communication strategy. Sales promotion is a marketing activity
that adds to the basic value proposition behind a product for a limited time in order
to stimulate consumer purchasing.
{Nasir}
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Events & Experiences/Sponsors
Everything matters to touch point with your audience. The connection between
brand and consumer will continue to increase by organizing events. It is helping to
create brand awareness and perceive unforgettable experience. Nike always set
following before organize an event:
{Nasir}
Public relation team works like as the voice of the company. It is maintained by
public relation officers. Public relation has become the most effective way to build a
brand. They maintain strong relationship with companies, government, dealer,
retailer and distributors. They also arrange different kind of training and seminar to
reach their target audience. Nike always organizing PR program which includes
following function:
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Press Release
Product publicity
Corporate communications
Lobbying
Counseling
Nike is committed to creating positive social change around the world. They help
kids get active, so they can have healthier, happier and more successful lives.
Corporate social responsibility very important for a brand. Nike always conducting
various kinds of program which helping people. Below are the reason why it is
important
Corporate benefits
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Marketing Budget & Expenditure
Nike spending huge in marketing. They declared marketing budget 6.2B usd for
2015. Nike’s commitments look to grow even more for 2016. Some large deals agreed
to in the last two years include renewing with the US Olympic Committee through
2020. A 23 year contract extension with USA Track and Field. Renewing its NFL on
field rights and an extension with U.S Soccer.
In the year end May 31, 2015 Nike’s revenue was $30.6 billion and expenses were
$9.8 billion.
Nike typically uses about 1 in 10 if its revenue dollars on endorsement cost.
{Nasir}
Pricing Strategies
One of the major components of the ‘’4P’s’’ of marketing is price. Setting a price point
is one of the biggest decisions a business. Nike always aware of their target market,
cost of goods, competitors pricing as well as many other things when deciding on a
price point.
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Steps in Setting Price
Determine demand
Estimate costs
Nike had originally used a ‘’cost-plus’’ model. In this model you have to calculate cost
of goods and then markeup the products selling price in order to achieve your desired
profit.
Breakeven Analysis
A break even situation of a firm is observed at the point where total revenue equals
total cost. The factors of breakeven analysis are:
1. Total fixed costs: The sum of all costs required to produce the first unit of a
product. This amount does not change with the change in production amount until
new capital is added.
2. Variable unit cost: cost that varies with the production of additional unit
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3. Total variable cost: The product of unit sales expected and variable unit cost
4. Total cost: The sum of the fixed cost and total variable cost of any given level of
production
5. Selling price per unit: The amount of money charged to the customers for each
unit of a product or service.
6. Total revenue: The product of forecasted unit sales and unit price.
= 1,000,000 units
= $ 60,000,000
Which signifies that the company must sale 1,000,000 units to be in a marginal
position and below this amount of sell will incur loss and sell above this amount will
generate profit.
{Nasir}
43
Revenue Total
Sales ($) Cost
Breakeven
Point
60,000,000 Variable
Cost
20,000,000 Fixed
Cost
0
1,000,000 Sales
Volume
44
CONCLUSION
Nike should focus on emergence country like Africa, Asia to generate more revnue.
They should come up with affordable price it will help them to have more consumers.
Innovation, quality, size, color shall have to modify as per market demand.
{Nasir}
45
REFERENCE
• http://moneymatters101.com/wib/advertise.asp
• https://en.wikipedia.org/wiki/Nike,_Inc.
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• http://www.businessinsider.com/adidas-shows-soccer-is-overrated-2014-8
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best-ecommerce-experience
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worldwide/
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_Report_China.pdf
• http://www.nike.com/
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x.html
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Gavin, Advertising Age, 00018899, 10/16/2006, Vol. 77, Fascículo 42, Source:
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Advertising Age. 10/31/2011, Vol. 82 Issue 39, p1-56. 2p,
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Time.com, 10/24/2014, Source: Ebscohost
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Issue 24, p26-26. Source: Ebscohost
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00083100, 2/2/2004, Vol. 77. Source: Ebscohost
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Appendix
48