Principles of Marketing

Marketing Project By
Group 1
Trimester III
FYBBA – C
2009-2012
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Acknowledgment

For this project, we would like to thank our Principles of Marketing Professor, Ms. Manju, for giving
us the chance to research and present this project. We would then like to thank all the people who
helped us gather the relevant data by answering all our questions. Finally, we would like to thank our
group members for being the best workers they could be.
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Table of Contents

Topic Page Number

Executive Summary
Company Overview 4
Competitors 5
Current Marketing Scenario & Practices
Product Width & Depth
Nike Air Max – Product Overview
History & Innovations
Segmenting
Targeting
Positioning
Marketing Mix
Conclusion
Bibliography
Team
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Executive Summary
In this project, we chose to study Nike as a company. The product we chose within the
various Nike product lines is Nike Air Max, its original and most famous line of sports shoes.
In this project, we will first introduce Nike as we consider the following points:

Company History
Competitors
The Modern Marketing Scenario
Product Width
Depth of Product Lines.

We then looked at the various aspects of Nike Air Max, such as:

Product Overview
Innovations
Segmenting
Targeting
Positioning
The Marketing Mix:
 Price
 Product
 Place
 Promotion

We hope that through this project, we can convey how Nike successfully created, delivered
and maintained customer and brand value for Nike Air Max.
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Company Overview
Nike, Inc. (NYSE: NKE) is a major publicly traded sportswear and equipment supplier based
in the United States. The company is headquartered near Beaverton, Oregon, which is part of
the Portland metropolitan area. It is the world's leading supplier of athletic shoes and apparel
and a major manufacturer of sports equipment with revenue in excess of $18.6 billion USD in
its fiscal year 2008 (ending May 31, 2008). As of 2008, it employed more than 30,000 people
worldwide. Nike and Precision Castparts are the only Fortune 500 companies headquartered
in the state of Oregon, according to The Oregonian.

The company was founded on January 25, 1964 as Blue Ribbon Sports by Bill
Bowerman and Philip Knight, and officially became Nike, Inc. in 1978. The company takes
its name from Nike , the Greek goddess of victory. Nike markets its products under its own
brand as well as Nike Golf, Nike Pro, Nike+, Air Jordan, Nike Skateboarding and
subsidiaries including Cole Haan, Hurley International, Umbro and Converse. Nike also
owned Bauer Hockey (later renamed Nike Bauer) between 1995 and 2008.[3] In addition to
manufacturing sportswear and equipment, the company operates retail stores under the
Niketown name. Nike sponsors many high profile athletes and sports teams around the world,
with the highly recognized trademarks of "Just do it" and the Swoosh logo.

By 1980, Nike had reached a 50% market share in the United States athletic shoe market, and
the company went public in December of that year.[8] Its growth was due largely to 'word-of-
foot' advertising (to quote a Nike print ad from the late 1970s), rather than television ads.
Nike's first national television commercials ran in October 1982 during the broadcast of
the New York Marathon. The ads were created by Portland-based advertising
agency Wieden+Kennedy, which had formed several months earlier in April 1982.

The company's profits grew quickly, and in 1966, BRS opened its first retail store, located on
Pico Boulevard in Santa Monica, California. By 1971, the relationship between BRS and
Onitsuka Tiger was nearing an end. BRS prepared to launch its own line of footwear, which
would bear the newly designed Swoosh by Carolyn Davidson.[5] The Swoosh was first used
by Nike in June 1971, and was registered with the U.S. Patent and Trademark Office on
January 22, 1974.[6] Today the Onitsuka Tiger brand is owned by one of Nike's
competitors, ASICS.[7]

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

Together, Nike and Wieden+Kennedy have created many indelible print and television ads
and the agency continues to be Nike's primary today. It was agency co-founder Dan
Wieden who coined the now-famous slogan "Just Do It" for a 1988 Nike ad campaign, which
was chosen by Advertising Age as one of the top five ad slogans of the 20th century, and the
campaign has been enshrined in the Smithsonian Institution.[8] San Franciscan Walt
Stack was featured in Nike's first "Just Do It" advertisement that debuted on July 1,
1988.[9] The "Just Do It" trademark was filed by Nike, Inc. on October 3, 1989 with the
description attributed to sports clothing, on which the mark was to be affixed.[10]

Acquisitions
As of November 2008, Nike, Inc. owns four key subsidiaries: Cole Haan, Hurley
International, Converse Inc. and Umbro.
Nike's first acquisition was the upscale footwear company Cole Haan in 1988.
In February 2002, Nike bought surf apparel company Hurley International from
founder Bob Hurley.
In July 2003, Nike paid US$305 million to acquire Converse Inc., makers of the
iconic Chuck Taylor All Stars.
On March 3, 2008, Nike acquired sports apparel supplier Umbro, known as the
manufacturers of the England national football team's kits, in a deal said to be
worth £285 million (aboutUS$600 million).
Other subsidiaries previously owned and subsequently sold by Nike include Bauer
Hockey and Starter.
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Competitor - ADIDAS
Adidas AG is a Germany-based sports apparel manufacturer and parent company of the
Adidas Group, which consists of the Reebok sportswear company, TaylorMade-Adidas golf
company, and Rockport. Besides sports footwear, the company also produces other products
such as bags, shirts, watches, eyewear and other sports and clothing related goods. The
company is the largest sportswear manufacturer in Europe and the second biggest sportswear
manufacturer in the world, after its U.S. rival Nike.[3]

The company's clothing and shoe designs typically feature three parallel bars, and the same
motif is incorporated into Adidas's current official logo. The "Three Stripes" were bought
from the Finnish sport company Karhu Sports in the 1950s. The company revenue for 2009
was listed at €10.38 billion and the 2008 figure at €10.80 billion.

Adidas currently manufactures several running shoes, including the adiStar Control 5, the
adiStar Ride (the replacement for the adiStar Cushion 6), the Supernova Sequence (the
replacement for the Supernova Control 10), and the Supernova Cushion 7 (which will soon
be replaced by the Supernova Glide), among others. In addition, their performance apparel is
widely used by runners. Adidas also uses kangaroo leather to make their more expensive
shoes.

One of the main focuses of Adidas is football kit and associated equipment. Adidas also
provides apparel and equipment for all teams in Major League Soccer. Adidas remain a major
company in the supply of team kits for international football teams. Current examples include
Scotland, Spain, Russia, France, Germany, Greece, Romania, Argentina, Mexico, South
Africa, Japan and Ukraine.
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Modern Marketing Scenario

We will have a look at the current marketing scenario with the help of SWOT
analysis. Here we will individually address the Strengths, Weakness, Opportunity
and Threats of Nike.

STRENGTHS
Nike has several strengths that enabled them to be one of the largest and one of the most
famous brands in the athletic footwear industry in the world. The first strength is the
product’s strong brand recognition. Almost all people know the brand Nike and its logo, and
usually even without the brand name the customer can still recognize the brand by looking at
the check ü or “swoosh” logo. The second strength could definitely be contributed by its
distribution. In the U.S. alone, there are around 18,000 retail accounts and outside the U.S.
there are around 30,000 international retail outlets that sell Nike products. Nike also operates
a “futures” program, wherein retailers can order up to six months in advance. They sell there
products through independent distributors in 200 countries around the world. The next
strength could be attributed to its research and development. They have a team which
observes athletes in order to provide them with the latest technologies in footwear and
apparel. Since Nike contracts with foreign manufacturers to produce their shoes, the company
does not really require a huge investment in machines and equipments, which is a strength
because they have fewer expenses. Having a broad range of products also contribute to
Nike’s success, because it gives the consumers a chance to choose what they want. They have
Nike performance focusing on athletes, Nike active which includes “gym to street” wear, and
Nike Fusion stylish clothing made of high performance fabrics etc… With regards with the
company itself, they have good marketing. Nike has online stores where people can buy or
browse for new designs etc…They market their product as high-performance products
designed with high-technology features. Lastly, strength is their strong management style and
culture. Their founder created a strong culture based on loyalty and camaraderie, he trusts
these employees to “Just Do It”. They continue to follow their founder’s philosophy which is
Play by the rules, but be ferocious…It’s all right to be Goliath, but always act like David.

WEAKNESSES
Nike’s main weakness is their lack of focus on one main product. This is because of Nike’s
commitment on having diversified products for athletes, meaning having too many different
products available to sell to their customers. Due to this, they tend to have divided attention
on each product line. Although having many different products might be advantageous
(increased sales, additional market penetration, fall back in case one product fails), Nike
should also consider the time & resources spent in maintaining each product.
Another weakness that we could identify, although not as great as the first, would be Nike’s
pricing strategy. Compared to their competitors, Nike’s products tend to be more expensive
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than those of their competitors. But this may be due to their products reputation, being made
from the highest quality materials, extensively researched and developed and tested by
extraordinary athletes around the world.

OPPORTUNITIES
One of the opportunities that we quickly saw is the company’s efforts in penetrating the
market. Nike is currently focusing on Generation Y market (age category) and women
(gender category). Due to the strong increase in demand for clothing & footwear for leisure
activities by Generation Y representing a large sum (of about 60 million people) of potential
consumers, Nike addresses this by acquiring Converse, increasing its offering in the currently
popular retro and classic shoes.
Besides from acquiring Converse to address the issue on Generation Y, Nike has begun
marketing towards women more aggressively by creating Nike Goddess stores and
introducing women’s yoga shoes in an attempt to appeal to health conscious women.
Lately, buyers have become more brand conscious giving Nike an edge over their
competitors. Nike’s name and logo present high consumer awareness that the company does
not need to include their name on each product that they produce. The “swoosh” logo is all
that is needed. Also, some legal/regulatory issues provide many opportunities not only for
Nike, but for international operations because of easier access to different countries.

THREATS
As said in the article, Footlocker has decided to lessen the purchases of Nike shoes because
they want to sell low priced shoes and Nike shoes are quite high priced. This poses as a threat
to Nike because Footlocker accounts for 10.9% of Nike’s revenue. They lost millions of
dollars because of this and if not addressed right away might cost them further loss of
revenue.
Future occurrence of terrorism and disease also is a threat to Nike because it is something that
they cannot control. An example is the September 11 attacks which slowed down the
economy. It affected not only the shoe manufacturing industry but the whole country and the
whole world as well. Diseases like SARS also threatened Nike’s sales as shoes were coming
from Asia where SARS was reported to have come from. Likewise, the economic and
political condition of the countries manufacturing Nike shoes also is something that they have
no hold of which poses as a threat to Nike because shipments of products may be delayed
which would cause loss of sales and revenue.
Because Nike has a strong brand name, controversies affect the company in a negative way.
Some Nike followers may be turned off by controversies about Nike not being ethical, which
may or may not be true. This causes loss of sales for the company.
High level competition of Nike with Reebok and Adidas also is a threat to the company as all
of these companies have almost the same product line and target the same market. This is
why strategies are very important for Nike.
Limited exports of Nike products due to legal restrictions also pose as a threat to Nike as the
supply of the products internationally is limited as well. They cannot sell to other countries as
much as they would want to because of the limitation set by the government which decreases
their potential for more sales and revenue
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Product Width & Depth

Nike produces a wide range of sports equipment. Their first products were track running
shoes. They currently also make shoes, jerseys, shorts, base layers and so on for a wide range
of sports including track & field, athletics, aquatics, baseball, ice hockey, tennis, Association
football, lacrosse, basketball and cricket. Nike Air Max is a line of shoes first released by
Nike, Inc. in 1987. The most recent additions to their line are the Nike 6.0, Nike NYX,
and Nike SB shoes, designed for skateboarding. Nike has recently introduced cricket shoes,
called Air Zoom Yorker, designed to be 30% lighter than their competitors'.[16] In 2008, Nike
introduced the Air Jordan XX3, a high performance basketball shoe designed with the
environment in mind.

Nike sells an assortment of products, including shoes and apparel for sports activities
like association football, basketball, running, karate, taekwondo, judo, 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, sport culture and hip hop culture as they supply urban
fashion clothing. Nike recently teamed up with Apple Inc. to produce the Nike+ product
which monitors a runner's performance via a radio device in the shoe which links to the iPod
nano. While the product generates useful statistics, it has been criticized by researchers who
were able to identify users' RFID devices from 60 feet (18 m) away using small, concealable
intelligence motes in a wireless sensor network.

Some of Nike's newest shoes contain Flywire and Lunarlite Foam. These are materials used
to reduce the weight of many types of shoes.
More recently, the paid $ 43 Million to beat competitor Adidas/Reebok to become the official
apparel sponsor to the Indian Cricket Team from 2007 to 2012.

PRODUCT LINES OF NIKE

1. Shoes
2. Shox
3. Socks
4. Clothing
5. Kids Clothing
6. Sunglasses
7. Bags
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PRODUCT DEPTH OF CHOSEN LINE

In the chosen product line – SHOES, there are the following subtypes:

1. Air Max – Our Product

2. Running Shoes
3. Basketball Shoes
4. Skate Shoes
5. Sneakers
6. Tennis Shoes
7. Soccer Shoes
8. Dunks
9. Jordan Shoes
10. Kids Shoes
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Nike Air Max

Nike Air Max is a line of shoes first released by Nike, Inc. in 1987. Since its introduction,
Nike has frequently introduced new and updated models in the same product line.

The Nike Air Max shoe uses a large air cushioning unit at the heel which is visible from the
side of the midsole in most models. Different types of Air Max cushioning include "Air
Max2" which does not have the "holes" in the cushioning unit and is of high pressure, "Tube
Air" which is visible in several small circles on the midsole of the shoe, "Total Air" which is
basically just another word for full Air Max cushioning, "Tuned Air," which is a system of
individual pods supposedly "tuned" to different areas of the foot. Air in the early 1990s which
was visible through the bottom of the shoe (although smaller portions of Air units are visible
through the bottom of many Air Max models) and another type of Air cushioning is the low
profile and very responsive "Zoom Air."

The shoe has aged well since its introduction. The shoe is popular among underground and
known groups.

In the last few years with the internet gaining more popularity among the youth, AirMax has
gone into a new phase. Websites and shops have been set up to sell custom AirMaxes. This
often involves painting the AirMax to give it a unique color.
Due to its cushion, the shoe is a popular clothing item in Hip Hop Culture and among gabber
music fans.
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History & Innovations

Over the ages, the Nike Air Max series has undergone a series of innovations and changes,
each aimed primarily at boosting demands and creating value for the consumers. Since 1987,
the major models of Nike Air Max are:

 Air Max I - 1987

 Air Max II (commonly known as Air Max Light) - 1989
 Air Max III (commonly known as Air Max 90) - 1990
 Air Max IV (commonly known as Air Max BW or Air Max Classic) - 1991
 Air Max 180 - 1991
 Air Max ST - 1992
 Air Max 270 (commonly known as Air Max 93) - 1993
 Air Max 2 Charles Barkley 34 (commonly known as Air Max CB 34) - 1994
 Air Total Max (commonly known as Air Max 95) - 1995
 Air Max 96 - 1996
 Air Max 97 - 1997
 Air Max 98 - 1998
 Air Max 98 II
 Air Max 99 - 1999
 Air Max Deluxe
 Air Max 2000 - 2000
 Air Max Plus (commonly known as Air Max TN)
 Air Max Ltd - 2002
 Air Max 2003
 Air Max 2004
 Air Max 360 - 2006
 Air Max 360 II - 2007
 Air Max Elite
 Air Max 2009

The 1993 model was the first to have the fully visible heel Air unit that was visible in the
back as well as on the sides, and the 1995 model was the first to feature visible forefoot Air.
The 1997 model was the first to include a full length Air bag. There is also new 2008 edition
of the Air Max 180.
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Segmenting & Targeting

Segmenting and Targeting is defined as the process by which companies divide consumers
into various homogenous segments in order to effectively create value for the target
segments.

Some of the reasons for segmenting include:

Creates homogenous sub units.
Helps to concentrate budgets and marketing strategies.
Helps to understand and identify opportunities in the segment.
Helps in branding, positioning and differentiating product as it depends on the
targeted segment.

The market can be segmented by companies in various ways, according to various factors
such as:
Demographic Factors:
o Age
o Sex
o Stage in Family Life Cycle
o Income
Psychographic Factors:
o Lifestyle
o Attitude
o Personality
o Value System
o Self Concept
Geographic Factors:
o Rural/Urban
o Climatic Conditions
o Country/Region
Behavioural Segmentation:
o Decision Roles –
 Initiator
 Influencer
 Decider
 Payer
 User
o Behavioural Variable –
 User Status – Graph from ppt.
 Benefits
 Usage Rate
 Purchase Occasions
 Attitude towards Product
o Loyalty Status –
 Hard Core
 Split Loyals
 Shifting Loyals
 Switchers
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Segmenting & Targeting – Nike Air Max

When it comes to segmenting, Nike Air Max has effectively identified the markets that will
optimize their profits by continued purchasing. They identified their primary clientele as the
sports people with an upper-middle/high income level. When identifying their target
market, they decided to go for a market specialization strategy, which is expressed as below:

The diagram above is representative of Nike Air Max as they have a large product depth
within the line of Nike Shoes. The product dominates the demand in the target market as it
has very few competitors at that level; and also because customer satisfaction and brand
loyalty are high.

Other than on the basis of income, Nike Air Max has further segmented their target market by
gender, by coming out with a series of shoes exclusively for women. This multi-level
segmentation has been effective in maintaining demand by keeping the female clientele
satisfied. This move was later copied by Nike’s competitors.
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Differentiating & Positioning

In marketing, positioning has come to mean the process by which marketers try to create an
image or identity in the minds of their target market for its product, brand, or organization. It
is done by differentiating the product from other similar products available in the
marketplace. It can be done in four ways:

 On the basis of Product – Differentiating on the basis of features/USP.

For example: Polo – The tint with the hole.
 On the basis of Personnel – Differentiating on the basis of services/employees.
For example: Kingfisher, Welcome Group of Hotels.
 On the basis of Channel – Differentiating on the basis of distribution methods
For example: Dell – sells direct through its home website, Amway.
 On the basis of Image – Differentiating on the basis of advertising/public images.
For example: Nike Air Jordan.

Nike is positioned as a premium-brand, selling well-designed and expensive products. By

extension, the Nike Air Max has been positioned in the minds of the consumers as a high-end
shoe brand. Because of this, it allows us to analyse the way it has been differentiated on the
following points:
 Product – It has innovative features such as the Air Heel and the shock absorbers.
 Channel – Nike has its own established showrooms, which are located in various
premier areas. These showrooms are extremely exclusive and well designed
 Image - Nike Air Max is most distinctively differentiated due to the creation of
the speciality set of Air Jordan shoes that was endorsed by Michael Jordan, thus
creating associative value in the minds of the consumer. Creates an image of
‘performance, competition, achievement, & doing your personal best

We shall now see the various Points of Parity and Points of Difference used in positioning
Nike Air Max as a premier product:

Points of Parity
Nike Air Max, being a shoe, has all the basics that a sports shoe requires:
o Durability
o Attractiveness
o High Quality

Points of Difference
Nike Air Max has long been distinguished from other rivals because of the following:
o Air Heels/Shock Absorbers
o Continuous Innovation
o Special Designs for different sports.
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NIKE AIR MAX – The Marketing Mix

A product does not sell itself. In fact, a product will not sell at all if the consumer it is created
for is unaware of its existence and value. For that reason, every product is marketed using the
Marketing Mix. The marketing mix comprises of the 4 Ps, namely Product, Price, Place and
Promotion. The 4 Ps determine the way a product is perceived and received by the customers
and thus determines the demand and subsequently the share of the market that it can grab. We
shall now see how Nike has used the marketing mix to market Nike Air Max.

Product

Place Mix Promotion

Price
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PRODUCT
As is hopefully clear by now, the Nike Air Max is a shoe and thus fits into the Shopping
Goods category of goods. For the product, we shall now consider the various product levels
that it has:
Diagram
Core Benefit: To walk/run.
Basic Product: Shoe
Expected Product: Comfort, Shoe features like
Augmented Product: Customisable
Potential Product:

Nike has been constantly innovating and altering its existing products. It has been making
wise Product Mix Decisions over the years from the time of its inception in 1987. We have
already had a glimpse of the same previously in the “History and Innovations” section.

When we consider the packaging of Nike Air Max, Nike implements a simplistic brown box
with the Nike Swoosh prominently displayed. This has been done to keep the focus on the
product rather than on the packaging.

The label on the right hand side of the box conveys the following information:
 Shoe Size
 Model Number
 Price
 Colour of Model

Product Life Cycle:

Every product goes through various stages in the product life cycle. However, Nike Air is the
anomaly to this law. Nike Air Max, due to its continuous innovation and redesigning of the
shoe has remained at the Peak/Maturity stage since its widespread acceptance in 1990s. The
following diagram shows the product life cycle of Nike.
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What the diagram shows is that demand for the good saw a steady increase till around 1998,
where the decline began. However, due to constant innovations and an aggressive marketing
strategy involving basketball legend Michael Jordan, they managed to recreate their demand
and create celebrity associative value for the customer.
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PRICE
Price is the only element of the marketing mix that produces revenue, all other elements are
cost and thus this is an important factor from the point of view of both the buyer and the
seller. Price is often the major determinant of the buyer’s choice however when it concerns
Nike Air Max shoes the price is not the major determinant as the positioning of the brand is
as a premier brand where features, quality, service and other parameters are dominant in
consumer behavior.

When it comes to consumer psychology, Nike is extremely intelligent in their pricing

strategies. They use a clever mix of the following points:

 Price-Quality Relation: By setting the price high, they have created the image in
the minds of the consumer that their product is of a high quality, hence creating a
large demand despite the high price.

 Odd Price Endings: By ending their prices with 5, 7 and 9, they played upon the
psychology of the consumer, thinking that they will be getting a good product for
a relatively lower price.

 Price Cues: Every time a new innovation comes around, Nike Air announces
Special Sales to tell the consumers that their product is being improved upon,
which again creates value for the customer.

When we consider the pricing strategy, we can see the following points very clearly in the
Nike Air Max pricing:

 Selecting The Price: Nike Air Max uses a mixture of profit-maximization pricing,
market-share capturing pricing and product-quality relationship pricing, which
means that their price allows them to maximize profit while keeping the majority
market share.

 Price Sensitivity: Nike Air Max is not price sensitive as there are few available
high quality alternatives and customers exhibit high levels of brand loyalty.\

 Pricing Method & Competitors: Nike Air Max exhibits premium pricing as they
wish to highlight the price-quality relationship of their goods.
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PROMOTION
Most prominently used by Nike to create value for the consumers. Nike ads seldom pitch the
product directly or talk about product attributes but not mention the product by name. Instead,
they opt to market the brand as a whole through Family Marketing, instead of focusing on a
single product.

Advertising Strategy of Nike:

Designed to make a connection to the consumer

Seldom pitch the product directly or talk about product attributes
Sometimes don’t even mention the company’s name, featuring instead only the
swoosh logo
Seek to portray the core values of sport
Collaboration ads with another strong branded product, such as Apple iPod
Employed many athletes as its spokesperson - Among the athletes are Michael Jordan,
LeBron James, Serena Williams, and Tiger Woods.

Nike promotes Nike Air Max using the following methods:

 The Swoosh: The Swoosh placed on the air creates an Image Brand Value for the
consumer. The Swoosh is especially significant to Nike as:
 It represents not only sports, but street culture.
 The Swoosh represents the wings of Nike, the Greek Goddess of
Victory, after whom the company is named.

 Advertising in various global markets:

o United States of America:

 In the USA, Nike optimized its promotion strategies by using
legendary athletes such as Michael Jordan, Pete Sampras and
Serena Williams.
 Started off with Steve Prefontaine in the 60’s wearing Nike running
shoes.
 In early eighties Nike was endorsed by Magic Johnson and Larry
Bird.
 Nike understood the America culture and according advertised and
positioned itself as a premier brand.

o India:
 In India, Nike capitalized on the cricket crazy nation by becoming
the official kit sponsors of the Indian Cricket Team.
 They also signed on Bhaichung Bhutia.
 Entered into a deal with Bhupathi Tennis Academy.
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o Brazil:
 In Brazil, Nike once again capitalized on the craze for football and
focused their marketing by using football stars such as Ronaldo.
 It also sponsored the Brazil national team.
 The national shirt became a Nike promotion focus point.
 With the help of Google, Nike also created a social networking site
for football called joga.com.

 Just do it
It is the famous tag line that is often used by Nike. It represents Nike’s can do
attitude. They continue to lure customers with their catchy taglines and logo.

 Indirect Marketing: Nike promotes Nike Air Max by using them as the official
footwear for the several sports teams that Nike sponsors, thus once again creating
a value of celebrity endorsement.
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PLACE
Places of selling, distribution channels, locations, inventory, etc make up the 4th P
which is Place. Place determines the accessibility and the convenience of goods a
seller sells. Nike is customer orientated and it makes sure its product is easily
available to its customers. Place may be interpreted to mean the exact location of a
product or it may also refer to type of distribution channel. Distribution channels
include any of the following activities or groups:

 Selling
 Feedback
 Displaying
 Promotion
 Shipping
 Ordering
 Storage

Companies have the option of choosing specialty firms or resellers. Resellers are
those groups that buy products from manufacturers and become owners of the
product. Specialty firms on the other hand refer to all the groups that will be
involved in helping the company sell its wares but will not become owners of the
products. Resellers may include wholesalers, retailers and industrial distributors.
Specialty firms normally come in the form of agents or companies. Some of them
may deal in the area of transportation while others may assist manufacturers in the
storage aspect.

In the process of distribution, marketers need to choose methods that are the most
economically viable. Companies may not necessarily make any money in the
distribution aspect, but if they choose the right method, they may save up a lot of
valuable resources.

The Nike Company has tried to maximize distribution channels in order to increase
sales. It has achieved this through two approaches. The Company sometimes sells
its products directly or it also uses subsidiaries and distributors. When selling its
products directly; the company has created the idea of Nike towns in different parts
of the US in order to bring something unique to the market. It helps the sales force
to directly get feedback and understand customer needs which could be
incorporated in future products or product alterations and variations. Additionally,
the company has also utilized the internet to distribute some of its products. This
can be deemed as a virtual store. Such a strategy was quite feasible in the current
age of technology. Because the company is located all over the world, it also had to
use licensed distributors because it is rather difficult to reach all those parts of the
globe.
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Suggestions
Upon careful analysis of Nike Air Max Shoe’s 4P mix we have focused on developing
strategies that would strengthen Nike in terms of marketing, distribution, and management.

DISTRIBUTION
1. Strengthen distribution in regions where Nike is currently losing sales, these include
footwear in the U.S. Region; and footwear, apparel, and equipment in Americas
region. Along with these, a strategy of penetrating emerging markets in developing
countries (e.g China) is also to be implemented. Easy access to Nike products would
result in higher sales and revenues.
2. Build more specialty stores or consignment with other existing local specialty stores
catering to specific sporting needs like Stoked, Inc. for
skating/wakeboarding/snowboarding, Surfworld Co. for surfing and other water
sports, Golfer’s Choice for golf, etc. Providing for different sports needs increases
Nike’s followers.
3. Give a more aggressive take on online stores and allow consignments with other
existing specialty stores in this industry like www.skateboard.com and www.ccs.com
for skating (Hurley), and www.iloveyoga.com for yoga and other women dominated
activities, etc. Going into e-commerce can increase sales because of increasing
internet users.
MARKETING
1. Develop marketing strategies that would further push its products to its diverse target
market.
 Sponsorship of kid-friendly programs to widen the customer base of the target market
of kids-adolescent like after school programs and summer/winter programs. (Hurley
in summer skateboarding, surfing lessons, and snowboarding lessons in winter,
Impact Golf Technologies in golf lessons, and other such subsidiaries in soccer,
basketball, baseball, and other programs). Target children and youth to make them life
long Nike followers.
 Internet users have continuously increased due to advancements in technology. Nike
has to be more aggressive in advertising through the internet and music videos that
would cater to the target markets of each division especially to the emerging fashion
scene and the rise of more active women.
 Sponsor women empowerment programs to widen the customer base of active women
since Nike is currently concentrating on women.

By catering to the target market’s specific needs in fields of sports, fashion, and lifestyle,
Nike will be able to widen its consumer base and generate more revenue. This is done by
closely monitoring the implementation of the proposed marketing and development strategies.
There have also been management issues in the past, and Nike should strive to face these
issues and prevent the occurrence of such. As a company being socially responsible, a quick
response to emerging issues should also be consistently done.
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Bibliography
http://en.wikipedia.org/wiki/Nike,_Inc.

http://en.wikipedia.org/wiki/Nike_Air_Max

http://seekingalpha.com/article/31899-no-boys-allowed-will-gender-segmentation-be-nike-s-
winning-strategy

http://www.lotsofessays.com/viewpaper/1693765.html

http://www.free-essays-free-essays.com/dbase/2b/bmu293.shtml

http://www.nike.org

http://www.google.com
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The Team
This project was a combined effort of the following students:

Name Roll Number

Ankit Agarwal 121

Devangi Sanghi 127

Ishani Shukla 133

Arpit Jain 139

Prakruti Pujar 145

Rohan Venkatraman 151