Nike { Just Do It BUSN323: Intro to Marketing Management Professor Al Prentice June 6, 2013 Glenice Booker-Butler, Kim Brannen, Jeremy Dunst Introduction  Brief History    Opportunity    Executive Summary Current Market Situation SWOT Analysis Objectives Marketing Strategy   Action Programing Conclusion Company History  Nike Inc., headquartered near Beaverton, Oregon was founded in 1962 by Bill Bowerman and Phil Knight as a partnership under the name, Blue Ribbon Sports.  Goal and vision was to break Germany's domination of the domestic industry by distribution of low-cost, high-quality Japanese athletic shoes to American consumers.  Nike retains traditional and non-traditional distribution channels globally targeting market regions: United States, Europe, Asian Pacific.  Nike operates over 20,000 retailers, Nike factory stores, Nike stores, NikeTowns, Cole Haan stores, and internet-based Web sites to sell sports and athletic products and employs more than 44,000 people worldwide.  Nike understands consumer needs and uses R&D to design premium athletic products and exhibits a strong strength in market share, brand image and recognition. Executive Summary  Today in 2013, Nike Inc. not only manufactures and distributes athletic shoes at every marketable price point to a global market, but over 40% of our sales come from athletic apparel, sports equipment, and subsidiary ventures.  Nike is a worldwide powerhouse in the athletic shoe and apparel industry  2013 Revenues continuing operations up 9 percent to $6.2 billion, up 10 percent excluding currency changes. Diluted earnings per share from continuing operations up 20 percent to $0.73 Current Marketing Situation Nike is currently the world’s largest supplier of athletic footwear, owning 50% of its 20 billion on the market.  Target Audience : Nike has products that appeal to people of all age groups. Today, Nike relies on their brand image and reputation to capture customers and the market share.  Position: Provides Nike with the customer satisfaction and thus loyalty that it needs to achieve high volumes and profitability.  Nike Products: Focus is on athletic footwear designed for specific sport and/or leisure use and sport balls, timepieces, eyewear, skates, bats, and other equipment designed for sports activities under Nike brand  Innovative Activities In product development and creation:. creating new products, commercialization and selling them to consumers.  Major Competitors Nike largest competitor is Adidas which, after the acquisition of Reebok, has become the closest competitor in terms of revenues and market share followed by Converse, New Balance and others. Opportunity Analysis  STRENGTHS Global recognition and loyalty of the Nike Brand  Professional Athletic Team/Athlete Endorsement  Lean Business  Innovation  Nike+Fuelband   WEAKNESSES Footwear Centric  Fallen “Hero” Athletes  Thin margins  “Nike cuts ties with Livestrong” Opportunity Analysis cont..  OPPORTUNITIES Environmentally Conscious  Global Expansion   THREATS Competition by Adidas/Reebok, Puma and Under Armour  Reputation of Child Labor Issues  Price Sensitivity in Retail Sector  Objectives  Product Available to all demographics and global markets   Effective Distribution Retail Partnerships  Expansion of Fashion Sporting Apparel  Resource Conscious Activities Lead to Niche Marketing   “Green” Initiatives Online ordering portal for customized products Objectives cont…  Results of Objectives  Projected sales increase of 10-15% annual over next 10 Years  Profitability Increases due to:  Factory efficiencies  Resource consumption reduction  Projected Nike Brand Value increasing to $15.6 billion from its current value of $10.8 billion Marketing Strategy  Product Strategy       Continued Diversification All sporting apparel and equipment (Reebok) New resource-sensitive products New technologies Customized solutions Pricing Strategy  High-end pricing models     Quality New technologies Customized solutions Skim – new products Equipment Manufacturing Total 25,400 Apparel Manufacturing 85,700 Footwear Manufacturing 948,400 CO2 Emissions Business Travel 43,100 Facilities 76,100 Inbound Logistics 355,800 Business Travel Facilities Inbound Logistics Footwear Manufacturing Apparel Manufacturing Marketing Strategy (cont.)  Distribution Strategy   Widely distributed standard models Exclusive products at partnered retail chains    Online    Improved partner relations New product launch “Buzz” Customized solutions New technologies Promotion Strategy     Continue past successes Fresh look at celebrity endorsements Push green operational & corporate policies Utilize familiar avenues  Wide     TV Radio Magazine Narrow  Narrowly targeted online advertisements Action Programs  Factory Consolidation and Renovation    Implement sustainability initiatives (6 Pillars) to help:      Cost efficiencies throughout entire value chain Must preemptively work with communities of exiting factories Conserve water Increase energy efficiency Reduce its carbon footprint Allow the reuse and recycling of its products Costs     Employee Education - $2.7 million annually Factory consolidation and renovation - $500-$650 million Annual marketing budget - $700 million Cost-neutral after period of ten years   Efficient operations Resource consumption reduction Action Programs (cont.) Six Pillars Conclusion  The Promise a Sustainable Economy        Employee Education Nike’s Marketing Efforts Adherence to Marketing Plan Nike Must Deliver    Planet People Profit Products desired Quality deserved SUSTAINABLE Questions? References            Apple.com (n.d.). Apple Press Info. Nike and Apple Team Up to Launch Nike+iPod. Retrieved May 30 2013 from: http://www.apple.com/pr/library/2006/05/23Nike-and-Apple-Team-Upto-Launch-Nike-iPod.html Bloomberg.com (n.d.). NIKE, Inc. Introduces 2015 Global Growth Strategy. Retrieved May 30 2013 from: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=arTUo0aLabtQ Clis, S. (2011). Why Nike is so Popular, Retrieved 30 May 2013, from http://www.articlesfactory.com/articles/business/why-nike-is-so-popular.html Hartley, R. F. (2001). Marketing Mistakes and Successes, (11th Ed.). John Wiley and Sons. Iacobucci, Dawn (2012), MM3, (3rd Ed.). South-Western Cengage. Julie, C. (2012). Nike (NKE): Just Do It – Sell, Retrieved 30 May 2013, from Nike (NKE): Just Do It – Sell Nike, Inc. (n. d.). Corporate Responsibility Report: Strategy, Retrieved 29 May 2013, from http://www.nikebiz.com/crreport/content/strategy/2-1-1-corporate-responsibility-strategyoverview.php?cat=cr-strategy Oxbridgewriters.com. (2013). Strategic Marketing Analysis of Nike, Retrieved 30 May 2013, from http://www.oxbridgewriters.com/essays/marketing/strategic-marketing-analysis-ofnike.php Schactman, B. (2013). Is Under Armour Ready to Take Nike Head On? Retrieved 1 June 2013, from http://www.cnbc.com/id/100463830 YCharts. (2013). Revenue (Chart), Retrieved 30 May 2013, from http://static.cdnseekingalpha.com/uploads/2013/5/7/942866-13679668222149339-Doug-McHugh_origin.png Zerbe, L. (2013). Green Athletes, Retrieved 30 May 2013, from http://www.rodale.com/greenathletes