Case Study 2: Developing Nike Free

Course: Brand management Course Code: M 406

Prepared for: Dr. A H M Ehsanul Huda Chowdhury Course Instructor

Prepared by: Nusrat Sharmin Moutusi RQ 38 BBA 17th Batch

Institute of Business Administration University of Dhaka

Date of Submission: 12 April, 2012

Case Study 2: Developing Nike Free

Question 1: Based on the case, briefly summarize the initiatives of Nike? How do think Nike dealt with the issue of enforcing competitive frame of reference?
Nikes core strength is in its endeavor of continual innovation of product design and development. Nike believes in improving the athletic performance of people and it considers everyone to be athletes. It desires to design products which would help athletes to actually improve their athletes performance. As part of their initiative to help athletes, in 2005, Nike introduced Nike Free a , Freelatest addition to the range of Nike footwear, described as a foot-strengthening training tool strengthening tool. Tagged natural technology, Nike Free has been designed to copy barefoot running. By running e barefoot, the foot is strengthened, gaining greater flexibility and range of motion which leads to better performance because the runners are less prone to injuries. Before launching a new product in the market, Nike performs extensive research and development ct work on the product and conducts multiple prototypes testing of the product and only then it markets the final full-proofed product. It followed similar strategies in case of Nike Free. T The initiatives taken by Nike are summarized below.
Figure 1 Initiatives Taken by NIKE

Identifying Consumer Needs

Research & Development

Product Design

Prototype Testing

Positioning

Communication

Identification of Consumer Needs Since its inception, Nike always anticipated the needs of consumers and delivered products that suited those needs. From light waffle soles to Nike Air (durable, light soles with cushioning) to Nike Free-they anticipated what the consumers might want next and delivered even before the they consumers realized their needs themselves. Nike always talks with its clients to find out what could be the next product. And in the process of talking to athletes and coaches, the designers spoke to Vin Lananna, then the track coach at Stanford University, who shared his unusual training method k having athletes run on grass without shoes. According to Lananna, the athletes were stronger, healthier and less injury-prone.. Thus Nike came up with the idea of Nike Free. Research and Development h Nike Innovation Kitchen materialized an idea into reality. When the idea of barefoot shoes came to Nike, it was first taken to the Innovation Kitchen and then to Nike Sports Research Laboratory (NSRL). The barefoot idea led to an extensive biomechanical research project to see exactly what happens when people run barefoot. After analyzing barefoot running of control groups, Nike team 2|Page

Case Study 2: Developing Nike Free realized the mechanism of barefoot running and then came the difficult part, transforming the barefoot mechanism within the capacity of a shoe. Prototype Building Nike tested between materials in order to come up with the perfect combination of materials and design that could closely copy the barefoot technology. In the process of doing so, Nike designed sliced sole that gave the shoe more flexibility and adaptability with the movement of the foot muscle. It also designed a different upper and last for the shoe that most closely imitated the barefoot experience. Prototype Testing Before Nike Free was known to the athletic world or commercially released, Nike undertook extensive independent testing. The control group and the other group consisted of professional runners, athletes as well as regular runners. After 6 months of regular running, the group that used Nike Free showed significant improvement in their performance. This proved that the motto with which Nike designed Nike Free was effective- it was capable of improving the performance of the athletes. The Right Positioning In case of positioning a running shoe that is built on the Barefoot concept and which is supposed to improve the athletic ability of runners, Nike had to position Nike Free very carefully, so that it does not cannibalize its range of other running shoes. This product positioning had to be a balancing act, requiring careful communication and application. It had to be positioned as a complimentary training shoe in addition to Nikes other running shoes, not as a substitute. Selling Efforts At the initial stage, Nike Free was distributed only through running specialty stores and then it was being broadened to general sporting goods stores. Experts of running shoes like coaches and physiotherapists were used as sales personnel in this stage. At the final stage, Nike utilized the tried and true distribution strategy-distributed the shoes in Nike vans throughout the cities of USA, Australia, and Europe, which attracted large amounts of runners. Communicating with the Consumers Television and Media Nike vastly utilized television media with their innovative advertisement ideas and with the presence of idolized celebrities like Maria Sharapova, Thierry Henry, Cristiano Ronaldo and Roger Federer. Their entire concept of professional athletes rediscovering their full potential and breaking the boundaries of their previous selves clearly portrayed the message of Nike Free. Nike also made sure that the advertisements were region specific and hence they used region specific celebrity athletes to promote the product. The concept and wording of the advertisements was

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Case Study 2: Developing Nike Free much pondered upon and it had to be strong and impactful to make sure that consumers felt what was communicated to them. Website The use of an interactive website to promote Nike Free took the form of a journey for the consumers which included three phases: Leave your old self behind Go barefoot running in a shoe Reincarnate in this life The site also included examples of fighters like Lance Armstrong and other athletes who shared their stories of rediscovering themselves and leaving their past behind. The site had the purpose of igniting the self belief of the consumers and it was designed in a way designed in a way that guides the journey of a traveler. Staff Product Awareness Having a new and innovative product is one thing, but a company must ensure staff working in sports stores understand the product, its benefits and how it should be used. Nike introduced a flash-animated multi-media learning environment hat worked like a video game to educate its young sales team. The sales team of Nike is relatively young and hence the video game based learning tool. At the end of the game, the learners had to take a quiz which gave them an idea about what questions they might be faced with from the consumers in real life. Enforcing Competitive Frame of Reference In order to enforce Competitive Frame of Reference, a brand has to inform consumers of its membership category first. In order to do so, it has to first categorize itself according to the similarities with other products and then point out differentiating factors. If we consider the Point of Parity, Nike Free was just another pair of running shoes, with not much perceivable difference from its competitors (other brands and Nike brands alike). However, the Point of Difference for Nike Free was that, it was not just another running shoe. It promoted the idea closer to nature" and gave the consumers a belief that they could outperform their previous selves with Nike Free on their sides. This unique positioning put Nike Free as an additional training shoe in the kitbag of runners, which would help them to enhance their athletic abilities. The distinctive and superior benefits promised by Nike were made believable and credible to the consumers with the help of the sales team of Nike, which comprised of running coaches, podiatrists and physiotherapists. The entire campaign became personally relevant when celebrities shared their story of reincarnation from their previous selves. Nikes multifarious initiatives and comprehensive use of different strategies made it possible for it to promote a shoe, Nike Free, based on barefoot concept. Nike perfectly enforced competitive frame of reference by positioning the new brand differently from the competing brands and also 4|Page

Case Study 2: Developing Nike Free from other running shoe brands of Nike. It utilized the point of difference it had, which was the closer to nature concept that promised to enhance the performance of athletes and reduce injuries. The extensive research and development work on the product and the months-long testing of the product made sure that the promised the brand made were merely not promises, they were facts. After the positioning, Nike Free utilized promotional activities and placed itself as a differentiated genre of running shoes from the existing ones. With the help of competitive salespersons and experts promoters, Nike Free delivered the message that Nike Free is not designed to replace athletic performance footwear but to be an important part of training, thus improving performance.

Question 2: Based on the case, do you think that the initiatives taken by Nike to position its Nike Free was enough? If you were given the opportunity to develop strategies for positioning Nike Free, what else would have been recommended by you?
Nike Free was designed on the very idea of helping the athletes benefit from the barefoot training concept with actually running barefoot. The very idea that athletes who trained barefoot were stronger, healthier and less injury-prone was the core concept of Nike Free. Positioning a shoe that relies on barefoot concept is a tricky one. Nike had to position it in a way that consumers would value its offerings and would be willing to try it out and at the same time, they would not think of it as a replacement of other Nike running shoes. In order to achieve this dual goal, Nike positioned Nike Free as an additional training shoe in the kitbag of runners, one that would help the runners with their performance, but is not a replacement of regular sunning shoes. The key strategies taken by Nike were: Distributed initially only through running specialty stores before being broadened to general sporting goods stores placed with key people such as running coaches, podiatrists and physiotherapists with the aim of introducing Nike Free as a new product and training concept before taking it to the broader market Took the shoe directly to runners. Nike drove mobile vans to areas in the USA, Europe, as well as Australia, which attracted large amounts of runners. The mobile vans took the barefoot shoe straight to consumers. This basic tactic engaged consumers on their terms and in their own territory, letting the Nike Free story be told on an individual basis. Nike used vast promotion (Television, cinema and media) to convey the reincarnated concept, using celebrity athletes to portray that they rediscovered themselves after using

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Case Study 2: Developing Nike Free Nike Free. This idea goes with the concept of the product since it promises to make athletes stronger, fitter and less injury-prone They used the interactive website to help the consumers understand the entire development process of the product and discover the underlying promises so that they can better related to the idea of reincarnation or rediscovering their potential Nike trained their sales staff to ensure that none of the customers queries go unanswered. In order to train them, Nike kept in mind that the sales team is young and they need interesting teaching tool and so they were educated via a game-based flash video material. The positioning and strategies to support the position that Nike took was appropriate for Nike Free. It was positioned in a way so that it does not cannibalize other Nike running shoes and it can be differentiated from the rest of the running shoes competing in the market. I think the initiatives taken by Nike to market the Nike Free in accordance with its positioning strategy were sufficient. If I were to develop strategies for Nike Free, I would take similar strategies because these are the ones that best portray the Brand Mantra that Nike beholds. If I were to develop a brand mantra for Nike Free, I would align it with the original brand mantra of Nike, with a simple change in the emotional modifier to appeal to the consumers from an even more emotional perspective. The manta would be: Nike Free: Brand Functions: Performance Descriptive Modifier: Athletic Emotional Modifier: Closer to Nature The performance and success of the brand Nike Free can be measured by conducting a brand audit, which would be my second recommendation. After conducing extensive development and promotional strategies, Nike should be able to measure the impact created in the minds of the consumers through its efforts. Nike should utilize the Brand Inventory (to measure what was done on Nikes part and what were needed to be done) and Brand exploratory (to measure what was expected by the consumers and what was the level of their Awareness, Favorability, Uniqueness of associations after the endeavors of Nike) to evaluate the position of the Brand among the minds of the consumers. If gap between expectation and offering is found, only then Nike should take corrective strategies. Otherwise, the initiatives taken to make the positioning of Nike Free successful were pertinent in promoting and communicating the core values of the brand.

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