Manoj Kaushik (S11MMMMM00453)Sudip Kumar Das (S11MMMMM00765)Vivek Wamorkar (S11MMMMM00416)SMP-07, NIIT Imperia Bangalore Center

Jul-07-2011

Prepared and Submitted By – Ashish Kasangottuwar (S11MMMMM00405)Paresh Ashara (S11MMMMM00440)Ranjeet Shriwastva (S11MMMMM00452)

Introduction Sportswear is a niche segment of retailing

Retailing of sportswear products in India is growing due to the rise in per capita income, changing lifestyle, and consumer preferences

India has been a manufacturing hub for sports products and the number of brands sourcing from India has tremendously increased after liberalization

RNCOS research paper “Sports Wear Market in India”, anticipates the current size of the Indian sportswear industry to be worth INR365.8 Billion, which is expected to grow at a CAGR of around 33% during 2010-2014

The top sports shoe brands in India are Reebok, NIKE and Adidas

NIKE, the largest seller of athletic footwear and athletic apparel in the world with subsidiaries in over 200 countries across the world, has attempted to keep itself on the cutting edge of technology

Entry StrategyBusiness Model conceptualized leveraging outsourcing from

Japanese manufacturers for low-cost and high marginNIKE brand launched in 1972Entered Indian market in 1995 via licensing route through

Sierra GroupEstablished good distribution network and retail channels Initial days didn’t yield any success due to ignorance of

Indian consumer preferencesNIKE was wasting dollars on promoting its brand through

international sports persons, Reebok roped in top Indian cricket players to endorse its brand

Realizing the importance of localizing its brand, in December 2005, NIKE won the bid to supply official kit to the Indian cricket team

CompetitionConsumer Decision Making - Model

Need recognition Information searchEvaluation of alternativesPurchase decisionPost purchase behavior

Unique Value PropositionNIKE’s unique value proposition has been on the innovative

design, durability and quality Innovation has been a contact mantra of NIKE since its

inceptionNIKE’s 3 Value creating resources - Design/R&D for new

products Marketing – to create

and drive the demand, and

Distribution – to make certain they are getting the latest most innovative products to customers quickly

Unique Value Proposition (Contd.)

Great Value Creator –Concentration of resources, Processes, and People

It grew the depth of these critical expertise and competencies rather than grew the breath of what it did for more diverse customer types

Outstanding job of achieving –maximum profitable growth, high productivity, low cost and the flexibility to respond to a fast changing consumer

taste

Strategic PositioningNIKE is one of most respected brand in footwear industry

throughout the world. It reaches to maximum number of people through strong brand endorsement

4 P’s of Marketing - Product - range of products from sports footwear, apparel, timewear

and equipment

Promotion - Apparel sponsors of Indian Cricket Team since December 2005, Brand Ambassador in Baichung Bhutia for football

Price - positioning itself in terms of design, quality and technology, so commands premium pricing across product categories

Place - started its India business through licensing route initially and soon established itself as a subsidiary of the parent US company in 2005

Strategic Positioning

• Uses Price Leadership Strategy and Value Based Pricing• NIKE spends lot of money to promote its brand as top of the range• Customers buy the product for the NIKE “swoosh” symbol and are

willing to pay high prices regardless of actual value• Psychological pricing strategy for premium shoes (e.g. Air Max) to

convey superior quality• Price range ending with 99 e.g. INR 3999.00

• Segmented pricing strategy for the same product category/brand based on target customer (e.g. Air Max for adults and children) • Price difference could vary by one third

• Used Price skimming to gradually soften/reduce the price after the product has been in the market for some time and new products are launched

Pricing

Channels & Distribution NIKE is a highly centralized and extremely focused company Management concentrated on a few core corporate functions, such as brand

building and supply chain management A dedicated sales force sold NIKE products to retailers or, in a limited number of

countries, to distributors NIKE has relocated production of its footwear and clothing to 600+ contract

factories in 40 countries (as of 2011 list) where its third party production units employ more than 800,000 workers

From its headquarters in Beaverton, Oregon, NIKE manages a worldwide virtual company combining internal R&D functions with a low cost manufacturing strategy

NIKE has 15 contract manufacturers in India (located in Karnataka, Tamil Nadu, Andhra Pradesh, Madhya Pradesh, Uttar Pradesh, Maharashtra, Uttrakhand, and Haryana) that it has outsourced the manufacturing of its footwear and apparel

Market Expansion strategies Shared distribution channels among varied product lines lowering cost Large Size provides opportunity for more leverage against competition Efficient use of production facilities lowers cost

Market CommunicationsMission Statement

“To bring inspiration and innovation to every athlete in the world.”"If you have a body, you are an athlete." - Bill BowermanGoal

To carry on Bill Bowerman’s legacy of innovative thinking, whether to develop products that help athletes of every level of ability reach their potential, or to create business opportunities that set Nike apart from the competition and provide value for our shareholders

Logo The Nike "Swoosh" is designed by Carolyn Davidson in 1971,

represents the wing of the Greek Goddess Slogan

“Just Do It” - campaign seemed to capture the corporate philosophy of grit, determination and passion.

Market CommunicationsAdvertising and Campaigns

Just Do it - “Just Do It” succeeded in that it convinced consumers that wearing Nike for every part of your life was smart (the shoes are designed for comfort) and hip (everyone else is wearing them, you too can belong to this group)

Bleed Blue- Interactive sport marketing campaign, Bleed Blue, to support the 2011 Cricket World Cup in India

Brand Ambassadors – S Sreesanth – Cricket – Air Zoom Yorker – Cricket shoes Baichung Bhutia – football Indian Cricket Team from BCCI – Official Kit Sponsor

United By Blue – campaign post India’s win in the 2011 Cricket World Cup

Tennis – tie up with Bhupathi Tennis Academy for tournament sponsorship

Market CommunicationsAdvertising Conventional / Traditional Media

Besides TV, the traditional kinds included billboards, magazines, newspapers, radio and movie theater commercials. 

Digital / New Generation MediaThe digital kinds included e-mail messages,

Internet banner ads, social networking Web sites, video games and video-sharing Web sites like YouTube.

Nike’s Promotional History1970’s

1980’s

1990’s

2000’s

Global 10 km race series participating in 25 global cities. The idea was to see how many people from around the world

would do a 10,000-meter race, all starting at the same time. Advertised as a perfect opportunity to enjoy all that the world has

to offer as well as keeping fit and healthy while raising money for charity.

Nike + Human Race

Nike + Human Race• Over 800,000 runners logged on• Participants logged about 3,000,000 miles• Created Buzz amongst the media and bloggers• Increased consumer interaction by bring runners

together under the Nike banner• Increased traffic to stores worldwide• Sold more Nike Sport Bands• Sold Human Race gear• Raised money for charity

Nike ID Campaign

Market Communications

Future The consumer goods industry is highly volatile and the sales development

is impacted by the consumer confidence and spending Growing importance of sports to fight obesity Ongoing fusion of Sports and Lifestyle Emerging markets as long-term growth drivers Word of Caution

Beware of Government action in low-wage countries for labor employment (avoid child labor)

Beware of political threats in countries they operate Aging population in western economies could lead to shift in demand from sports

athletics shoes to comfort shoes Technology – leverage for all future marketing strategies Beware of competition commission Price rises of raw materials and supply shortages

Thank You!