Nike Strategy

Introduction

For this module Session Long Project I picked Nike, Inc as the multinational company to study. Here we will discuss the origin and history of this company and its profile. We will also cover Nike's international activities and how they managed to become today's world's leading supplier of athletic shoes, apparel and sports equipment. We will see how this company managed to expand internationally and control the sportswear arena completely by utilizing marketing strategy centering around brand image which is attained by distinctive logo and the advertising slogan: "Just Do It" and the company promotes its product by sponsorship agreements with celebrity athletes, professional teams and college athletic teams. However, Nike's marketing mix contains many elements besides promotions. These are summarized as: Product, Place, and Promotion/Sponsorship. Now let's see how this company finished FY 07 with a $16.326 billion in revenues and over 30,200 employees worldwide as of Jan 2008.

Discussion

Profile - Nike, Inc (originally known as Blue Ribbon Sports) headquartered in the United States near Beaverton, Oregon, is the world's leading supplier of athletic shoes, apparel and sports equipment. The company took its name from Nike, the Greek goddess of victory. It was founded by University of Oregon track athlete Phil Knight and his coach Bill Bowerman in January 1964. Initially it operated as a distributor for Japanese shoe maker Onitsuka Tiger, making most sales at track meets out of Knight's car. The company first self-designed product

Introduction to International Business & Global Marketing 3

was based on Bowerman's "waffle" design in which the sole was made by pattern of waffle iron. In 1966, Blue Ribbon Sports (BRS) opened its first retail store located on Pico Blvd, in Santa Monica, California. In 1974, with the relationship between BRS and Onitsuka Tiger nearing an end, BRS prepared to launch its own line of footwear which would bear the newly designed Swoosh. The first shoe to carry this design that was sold to the public was a soccer/football cleat named "Nike" in the summer of 1971. In Feb 1972, BRS introduced its first line of Nike shoes, with the name derived from the Greek goddess of victory. In 1978, BRS, Inc officially itself to Nike, Inc. With Ilie Nastase, the first professional athlete to sign with BRS/Nike, the sponsorship of athletes became the key marketing tool for the company. By 1980, Nike reached a 50% market share in the US athletic shoe market, and the company went public in December of that year. Its grow was due to Ð''word of foot' advertising, rather than television ads. Nike's first TV commercials ran in October of 1982 during the New York Marathon broadcast. Dan Wieden co-founder of Weiden & Kennedy advertising agency out of Portland, Oregon was the responsible of coining the now-famous slogan of "Just Do It" for a 1988 Nike ad campaign, which was chosen by Advertising Age as one of the top five slogans of the 20th Century, and the campaign has been enshrined in the Smithsonian Institution. In the 80s, Nike expanded its product line to many other sports as regions throughout the world. On 23 October 2007, it was announced that the sport apparel supplier Umbro, known as the manufacturers of the England national soccer team's kits, had agreed to be bought by Nike.

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Marketing- 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 on a brand image which is attained by distinctive logo and the advertising slogan: "Just Do It". Nike promotes its products by sponsoring agreements with celebrities' athletes, professional teams, and college athletics. Nike's marketing mix contains many elements as summarized below:

Product - Nike produces a wide range of sports equipment. They currently make shoes, jerseys, shorts, base layers etc. for a wide variety of sports including track and field, American football, baseball, basketball, tennis, soccer, lacrosse, tennis, and cricket. The most recent additions were shoes designed for skateboarding. Nike positions its products in such a way as to try to appeal to a youthful materialistic crowd. Nike is well known and popular in Youth culture, Chav Culture and Hip hop culture as they supply urban fashion clothing.

Place - Nike sells its product to more than 25000 retailers in the U.S. and approximately 140 countries around the world. Nike also sells its product at nike.com that allows customers to design shoes and directly delivers them from manufacturer to their house. Nike sells its products in international markets through independent distributors, licensees, and subsidiaries.

Promotion/Sponsorship- Nike is very active at sponsoring big events, clubs and athletes.