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Nike

Nike. Just Do It. BUSN323: Intro to Marketing Management Professor Al Prentice June 6, 2013 Glenice Booker-Butler, Kim Brannen , Jeremy Dunst. Brief History Executive Summary Current Market Situation Opportunity SWOT Analysis Objectives Marketing Strategy Action Programing

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Nike

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  1. Nike Just Do It BUSN323: Intro to Marketing Management Professor Al Prentice June 6, 2013 Glenice Booker-Butler, Kim Brannen, Jeremy Dunst

  2. Brief History • Executive Summary • Current Market Situation • Opportunity • SWOT Analysis • Objectives • Marketing Strategy • Action Programing • Conclusion Introduction

  3. 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. Company History

  4. 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 Executive Summary

  5. 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. Current Marketing Situation

  6. 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 Opportunity Analysis “Nike cuts ties with Livestrong”

  7. OPPORTUNITIES • Environmentally Conscious • Global Expansion • THREATS • Competition by Adidas/Reebok, Puma and Under Armour • Reputation of Child Labor Issues • Price Sensitivity in Retail Sector Opportunity Analysis cont..

  8. 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

  9. 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

  10. 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 Marketing Strategy

  11. Distribution Strategy • Widely distributed standard models • Exclusive products at partnered retail chains • Improved partner relations • New product launch “Buzz” • Online • 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 Marketing Strategy (cont.)

  12. Factory Consolidation and Renovation • Cost efficiencies throughout entire value chain • Must preemptively work with communities of exiting factories • Implement sustainability initiatives (6 Pillars) to help: • 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

  13. Six Pillars Action Programs (cont.)

  14. The Promise a Sustainable Economy • Planet • People • Profit • Employee Education • Nike’s Marketing Efforts • Adherence to Marketing Plan • Nike Must Deliver • Products desired • Quality deserved • SUSTAINABLE Conclusion

  15. Questions?

  16. 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-Up-to-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-strategy-overview.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-of-nike.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.cdn-seekingalpha.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/green-athletes References

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