Assignment

Introduction to Business

Diploma i

Nike – Marketing STRATEGY

Nike, the largest seller of athletic footwear and athletic apparel in the world with subsidiaries in
over 200 countries across the world, has attempted to keep itself on the cutting edge of
technology. Nike has been launching new technically advanced shoe models from time to time,
backed by innovative advertisements, celebrity endorsements, successful associations (college
teams) and event sponsorships.
When it faced a crisis in the late 1990s, Nike decided to strengthen its management, overhaul its
information systems, and streamline supply chain management. Since then, Nike has been
achieving rapid growth by using aggressive marketing tactics

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

Product Development

Nike had attempted to keep itself on the cutting edge of technology. The company's broad game
plan was to launch new technically advanced shoe models from time to time. In 1964, it
launched the lightweight shoe with reduced weight but better performance.
Nike developed the waffle shoe in 1975. High traction and lightweight characterized this model.
Nike's Air sole model, which appeared in the market in 1979, incorporated an air cushioning
system that lessened the impact of heels on pavements and minimized the possibility of injury...

Advertising & Promotion

Nike positioned its products as high performance shoes designed with high technology features.
Nike athletic shoes were targeted at men and women aged between 18 and 34 years. Till 1976,
except for the routine purchase of space in running publications, Nike's advertising was largely
in the form of cooperative arrangements with retailers who inserted ads in local newspapers...
The Road Ahead

By September 2004, Nike's Soccer sales were nearly $1 billion, or 25% of the global market. For
the first time, Nike's share of the soccer shoe market in Europe (35%), exceeded that of adidas
(31%).

Nike had achieved rapid growth in part by using the aggressive marketing tactics that made it big
in the US.
Nike paid the prestigious Manchester United club an unprecedented $450 million over 14 years
to run its merchandising and uniform operations...

The 1980s
In the early 1980s, Nike replaced adidas as the leading athletic shoe company in the
American market. When Nike went public, Knight became one of the richest men in the
world. But in the mid-1980s, after five years of rapid growth at an annual rate of 44%, Nike
failed to anticipate the emerging market for aerobic shoes, having concentrated its efforts on
casual shoes...

Recent History
In the 1990s, Nike made more acquisitions including Tetra Plastic Inc., (1991) and Sports
Specialties Inc (1993). Tetra manufactured plastic film used in the manufacture of Nike's Air-
sole cushioning components. Sports Specialties distributed licensed headwear...
 Questions (Each Question carry 3 Marks)

Q.1 Briefly summarise the product development at Nike.

Nike a US based Footwear Company involved in designing and develop a high quality of products.

The strategy of the company is to use of technology in making modern type shoes. For this they

take initiative in 1964 and produce a low weight but high quality shoe. The next model of shoe

was in 1975 when they launch waffle shoe which had good grip in running and improve speed.

More ever in 1979, Company introduced a new model Nike’s Air Sole in the market using Max

Air technology which give great benefits to Sports man.

Q.2 Discuss the various promotion methods adopted by Nike to promote the product?

Nike promotional strategies are clear, mostly Nike use emotional marketing collaboration with
sports celebrities. The numerous forms of promotional methods are:

 Celebrities
 professional athletes
 College athletes.
 Internet marketing
 Email marketing

Q.3 Suggest any two online Advertising methods to Nike to promote the products.

Mostly Nike products related to human’s lifestyle, they grab the human’s emotions and their

healthy life. Apart from this I suggested that Nike should market the product through the

following two online advertisements.

 Visual ads on third party websites i.e. Google display network.

 Video ads on YouTube/Google, Twitter, Facebook etc.

Q.4 Explain the challenges faced by Nike?

Nike have faced several challenges over the past years. One of the most challenge was expensive

endorsements through celebrities. They paid millions to the endorsers per year.

The second most challenge to Nike is increased competition which Nike faced from rivals Like

Adidas and Under Armour.

Nike also faced ‘Supply chain Challenges’ over the past years, the delayed inventory supply has

drop Nike’s revenue due to some external issues.

Q.5 Discuss the plan of Nike to launch new technology in future.

Nike knocks the comfort trend with the launch of new technology in future. Nike will obtain the

manufacturer of polyurethane film used in Nike's Air-Sole cushioning components and operate it

as a subsidiary. The company also prepared the Tensile-Air Cushioning technology which is used

in several Cole Haan Shoes, a Nike subsidiary which markets women’s and men’s dress and casual

shoes.