Another important factor in economy is the maturing market in athletic shoes. There is also a growing adverse demographic change in the marketplace brought about by the sweatshop expose that Nike has not overcome yet. Effects to Nike’s growth are also affected not only by domestic economy but also by the international economy. The continued weak Euro and Asian recession could potentially hurt Nikes international sales and growth. Nike’s extreme sports product line is seen as inferior quality compared to competitors and is hurting sales and brand image. CUSTOMERS
In 1998, Americans spent $38 billion to buy over 1. 1 billion pairs of shoes. Sporting Goods Manufacturers Association revealed that athletic footwear makes up almost 35% of all footwear purchases. The existing domestic industry focus is on casual and comfortable shoes. Demand is up for the “brown shoe” casual footwear with a comfortable and rugged design. This is because of the increasing number of workplaces allowing casual dress codes. Multinational customers account for a large part of Nike’s sales. In 1995, Nike’s international operations accounted for 36. 6 of its total revenues. The company believes that demands from international markets will increase in future. Nike must cater to a large portion of the new generation that demands the latest trends and styles. Nike should take into account the changing US demographics due to the rising proportion of Hispanics, Asians, and African Americans. These groups have different preferences that Nike should be able to satisfy. Nike should identify the next generation of loyal customers and provide for their needs. COMPETITION
Competition is very fierce due to the number of companies competing for sales. Lots of money goes to marketing and promotions using various channels to reach the young demographic group of consumers who spend the most money on Nike’s products. Growth is slowing down in the athletic footwear industry. But new markets are emerging with high growth rates. These markets include extreme sports market and the corporate merchandise market. Nike’s global market share was an impressive 30. 4% in 1998. The closest competitor, Adidas, held 15. 5% of the market share while Reebok held 11. 2%.
The remaining competitors, including Fila, Timberland, Asics, Converse, and New Balance, among others, each hold approximately 3-5% of the remaining market share. MARKETING ASPECTS OBJECTIVES Nikebiz. com stated that Nike’s mission statement is “Through the adoption of business practices Nike is committed to securing intergenerational quality of life, restoring environment and increasing value for our customers, shareholders and business partners. ” Nike shows passion for their company, products, and athletes. They are determined to provide consumers with comfort and assurance.
They also find ways to innovate and create. They adhere to their five brand principles namely: inspire, innovate, focus, connect, and care. Another Nike’s objective is “to be the world’s leading sports and Fitness Company. ” Nike’s mission statement is similar to a vision statement and is potentially a weakness. The mission identifies the sports and fitness industry business they are in, it does not specify as to what products and services they provide. The mission statement does not mention distribution channels and customers.
However, it portrays management’s beliefs and the desire to be number one and remain in the leading position in sports and fitness shoe and apparel industry. STRATEGIES Corporate Strategies. The past two decades saw a change in economy from “standardized” to flexible”. Having a strict corporate organization used to be the rule, now it is common to have a flexible organization that uses subcontracting. The main reason Nike succeeded in competing in the footwear industry for a long time is because they remain flexible in an unpredictable market by subcontracting overseas in countries with low labor-cost.
Another reason for Nike’s strength in competition is their product differentiation. Aside from athletic shoes, Nike’s product line now offers a broad range of clothing, equipment and accessories. TACTICS Nike’s distinctive tactics are found in the area of marketing, specifically in consumer brand awareness and brand power. Nike’s catch phrases like, “Just Do It,” and symbols like the Nike “Swoosh,” are reminders of the Nike empire. This tactic is effective because it could not be easily replicated and it offers value or benefit to consumers.
Nike is becoming a part of American and world culture, the brand power becomes more difficult to replicate. The trademark and a slogan serves as the company’s fingerprints. Nike is able to capitalize the unique identity due because of its financial strength. Nike reaches millions of consumers through large-scale marketing campaigns. The public benefits from the strength of Nike’s image when they make a purchase. Consumers often associate Nike image with quality products. By associating star athletes and motivational slogans like, “Just Do It,” consumers identify their purchases with the prospect of achieving greatness.
This image they create forms a tactic that competing companies can not easily duplicate by simply improving their products. PRODUCT Nike sells a huge variety of products, including shoes for running, basketball, cross training, Women and children. All of which are currently its top-selling product categories. Nike also sells shoes for outdoor activities such as tennis, golf, soccer, baseball, football, bicycling, volleyball, wrestling, cheerleading, aquatic activities, auto racing and other athletic and recreational uses.
Nike began selling active sports apparel in 1979 as well as athletic bags and accessory items. The company sells a line of performance equipment under the Nike brand name, such as sport balls, timepieces, eyewear, skates, bats and other equipment. They also sell a line of dress and casual footwear and accessories for men, women and children under the brand name Cole Haan. The company markets headwear under the brand name Sports Specialties, through Nike Team Sports, Inc. They also sell small amounts of various plastic products to other manufacturers through Nike IHM, Inc.
Bauer Nike Hockey Inc. manufactures and distributes ice skates, skate blades, in-roller skates, protective gear, hockey sticks and hockey jerseys and accessories under the Bauer and Nike brand names Pricing Strategies Nike uses vertical integration in pricing wherein they own participants at differing channel levels or engage in more than one channel level operations. This is also an attempt to control costs and influence pricing practices. PLACE Distribution channels and policy. Should additional channels be added, why? Nike sells its product to about 20,000 retail accounts in the U.
S. and in approximately 110 countries around the world. Nike sells its products in international markets through independent distributors, licensees and subsidiaries. Independent distributors has little or no pressure for local adaptation because the 4Ps of marketing are managed by distributors. PROMOTION Nike has been one of the top retail industries for quite along time. This is because they sell quality products, customer loyalty, but most of all, its great marketing techniques. Nike has a number of famous athletes to create a great deal of attention to their products.
Nike has signed the top athletes in many different sports such as the Brazilian Soccer Team (especially Ronaldino, Renaldo, and Roberto Carlos), Lebron James and Jermane O’Neal for basketball, Lance Armstrong for cycling, and Tiger Woods for Golf. Sponsoring of events is another great promotional technique for Nike. It brings attention Nike’s products. Web sites are a great promotional tool as they cover these events. Such events include Hoop It Up and The Golden West Invitational. Nike also personalizes websites. They make the websites exclusively for a sport such as nikebasketball. om , nikefootball. com , and nikegolf. com Marketing strategy: Nike’s marketing strategy is an important component of the company’s success. Nike is positioned as a premium-brand, selling well-designed and expensive products. Nike lures customers with a marketing strategy centering around a brand image which is attained by distinctive logo and the advertising slogan: “Just do it”.  Nike promotes its products by sponsorship agreements with celebrity athletes, professional teams and college athletic teams. However, Nike’s marketing mix contains many elements besides promotion.
These are summarised below. Advertising From 1972 to 1982, Nike relied almost exclusively on print advertising in highly vertical publications including Track and Field News. Most of the early advertising was focused on a new shoe release, essentially outlining the benefits of the running, basketball or tennis shoe. In 1976, the company hired its first outside ad agency, John Brown and Partners, who created what many consider Nike’s first ‘brand advertising’ in 1977. A print ad with the tagline “There is no finish line” featured a lone runner on a rural road and became an instant classic.
The success of this simple ad inspired Nike to create a poster version that launched the company’s poster business. In 1982, Nike aired its first national television ads, created by newly formed ad agency Wieden+Kennedy, during the New York Marathon. This would mark the beginning of a remarkably successful partnership between Nike and W+K that remains intact today. The Cannes Advertising Festival has named Nike its ‘advertiser of the year’ on two separate occasions, the first and only company to receive that honor twice (1994, 2003). 36] Nike also has earned the Emmy Award for best commercial twice since the award was first created in the 1990s. The first was for “The Morning After,” a satirical look at what a runner might face on the morning of January 1, 2000 if every dire prediction about Y2K came to fruition.  The second Emmy for advertising earned by Nike was for a 2002 spot called “Move,” which featured a series of famous and everyday athletes in a stream of athletic pursuits. 
In addition to garnering awards, Nike advertising has generated its fair share of Controversy. RANDOM: The short version of this is: Nike makes itself pop up everywhere, so that it’s well known. It associates with people that most of it’s consumers want to emulate (such as michael jordan, in the 1990’s) and creates products that will appeal to as wide of an audience as possible while using those celebrities it’s consumers want as bait (eg, michael jordan and the Air Jordan shoe line).
This is just the marketing side: The business as a whole creates fast, easy assembly methods that allow it to use cheap labor in southeast asia and elsewhere to get cheap products (around 10 dollars) and sell them at extremely high prices (about 150 dollars). With nike, most of what you’re buying is image. Nike, Inc. is a marketer of sports apparel and athletic shoes. The American manufacturer, through its marketing strategy which rests on a favourable brand image, has evolved into a large multinational enterprise In keeping with the brand image is its association with the distinctive logo and its advertising slogan, “Just do it. ” In order to maintain and sustain this image, the company makes huge investments in advertising and brand promotion. Its promotional activities include agreements for product sponsorship with professional athletic teams, celebrity athletes, and numerous college athletic teams. Nike is involved in the production of goods for a wide variety of sports, competing with every sports fashion brand in existence.
Because of the absence of any single brand that rivals the products of Nike, the company has no direct competitors, with the exception of German company Adidas. This has helped popularize the brand worldwide in all areas of sport and sports fashion. When Nike first began as Blue Ribbon Sports they only sold one product (running shoes) and because of this they had to make the target audience large. However, because of the wide-range of products that Nike sells they now have different target-audiences for each product. For young people, Nike sponsors popular athletes that their customers want to emulate.