Presented by:(Group 4)Raunaq Oberoi (71)Saket Kumar Singh (74)Poonam (60)Sakshi Sidana (76)

Nike:Building a Global Brand

Began as a two person enterprise in OREGON and with time became the largest footwear and apparel company in the world.

Surpassed Adidas and withstood challenges from Reebok .

Successfully expanded in Europe and other international markets

Although the company remained successful , it

continued to face challenges as well as allegations .

The START Founded by Phil Knight , who grew up in Oregon a

place known for its deep passion for athletics 1962 – The BLUE RIBBON SPORTS. CONCEPT- “to provide high quality running shoes

designed especially for the athletes by the athletes. 1963 ,December received his first shipment of 200

Tiger shoes from Japan 1964, asked BILL BOWERMAN , his coach at UOO to

join him @ Blue Ribbon Sports . Bowerman had a knack for designing running shoes

for the track team – both joined hands and Blue Ribbon partnership was formed, both contributed $ 500 each.

Continued… In the first year 13,000 Tiger shoes were sold .

Following this by 1965, sales rose upto 20,000. By 1971, the company had reached $1 million in

sales and Knight decided to venture out on his own. To manufacture his own line of shoes Knight rewired

a new name. He wanted the new name to be ‘DIMENSION SIX’ but

his employees felt it was too long a name . Just days before the product was to go out to the

distributors, JEFF JOHNSON , company’s 3rd employee suggested the name ‘NIKE’ (winged greek goddess).

Q 1) Nike’s brand image and source of brand equity in the United States.

marketing campaigns.

Nike is –

selling a feeling; an emotion.

An aggressive and performance oriented brand.

Has always given priority to performance and durability along with fashion.

Always provides higher quality with high price.

Uses slogans in advertising and marketing campaigns

Source of brand equity Professional athletes and players of international

sports.

Upcoming stars as its brand ambassador.

signs top athletes of every sport from across the world to lucrative deals

athletes wear and represent Nike in various events

2.How have Nike’s efforts to become a global corporation affected its source of brand image in the United States, Europe, and Asia?

Their newest strategy is putting emphasis on individuality and appealing to each sport and athlete in the United States, Europe, and Asia.

unstable mix of local and global standardization. European marketing team attacked a single sport at

a time to develop the brand in Europe. Separate promotional campaigns were conducted in

different countries Nike made several errors in judgement with regard

to several advertising campaigns Build an image of aggressive, expensive American

brand.

3. Are sponsorships and endorsements vital to Nike’s business? For instance, what effect would Nike becoming an official sponsor for the Olympics have on the company’s relationship with consumer? Nike depends seriously on its endorsements and

sponsorships to market it-self It paid top athletes in many different sports to use

their products and promote/advertise their technology and design.

Nike’s first athlete endorser was a Romanian tennis player and the first track endorser was distance running legend Steve.

In 1985 Michael Jordan came to the company. Introduced the ‘Air Jordan’ shoe. It sold over $100 million of Air Jordans in the first year and sales just took off.

Soon Nike understood the importance of cricket in India and became the official kit sponsor of Indian cricket team. It paid Rs 196 crore (Rs 1.96 billion) to the Board of Control for Cricket in India for the privilege.

Looking at other popular sports in India, soon they became partners with the All India Football Federation in March 2006 and signed India’s leading football star Bhaichung Bhutia.

It also sponsors some of the leading clubs in world football, such as Manchester United, Asenal, FC Barcelona, Inter Milan, Red Star

Nike sponsors several of the world’s top golf players including Tiger Woods and Paul Casey.

All these endorsements and sponsorships established a presence in the market and gained popularity which helped Nike develop the brand.

4.Why did Nike become a target for critics of globalization? Do you think Nike’s response to allegations of unfair global labor practices was appropriate or effective? Is Nike truly concerned about these issues?

• Contract with factories in China, Vietnam, Indonesia and Mexico.

• Violated minimum wages and overtime laws in vietnam.

• poor working conditions and exploitation of cheap overseas labor employed in the free trade zones.

• Use of child labor in Cambodia and Pakistan.• Workers were forced to work for 65 hours a week.• Health and safety problems in Vietnam.

Critics of Globalization targeted Nike because of

Nike’s measures to defend the allegations were effective to some extent but not entirely-

Formulated a code of conduct for its suppliers.

Increased the minimum age of footwear factory workers to 18 and all other workers (in apparel, equipment) to 16.

OSHA standards for indoor air quality.

Nike created several new departments (e.g., Labor Practices (1996), Nike Environmental Action Team (NEAT).

Nike has pushed its suppliers to obey standards through increased monitoring and inspection efforts.

Nike has been active in founding and/or supporting an array of different international and non-profit organizations.

Nike concerns:-

Continued…….. Training in Nike’s Code of Conduct, Labor Practices, Cross

Cultural Awareness, and in the company’s (SHAPE) program.

Introduction of reward system for leveraging its efforts towards these serious issues.

Introduction of Grading system for suppliers. Started education programes. 60 hrs work week have been enforced.

5. Evaluate Nikes acquisitions and the brands now under its control. Do these acquisitions make sense for Nike? What if

any, brands should Nike try to acquire next?

• Current Nike Mergers• Converse• Cole Haan• Hurley International LLC• NIKE Golf• Umbro Ltd• Exeter Brands Group LLC• Nike Bauer Hockey

Continued……..• Alliances

• 2003 Nike Grind• 2006 Nike + iPod• 2006 Center of Excellence • 2008 House of Hoops• 2009 BICEP

Yes, these acquisitions make sense for Nike because it had many goals behind these acquisitions.

• Brand diversity• Ways providing additional avenues for growth• Segmenting this business by customer• Opportunity to address the low end through

distribution at retailers.

Nike should try to acquire the Chinese brand ‘Li-Ning’ next

if it is possible.

6. How is “fashion” to Nike? Are they a performance apparel company or a fashion company? What is more important for Nike when they enter a new market like china? Fashion or performance

Nike is predominantly performance oriented

fashion is an integral part

Nike goddess boutique

Focused on real woman

Customized product

Advertisements stress on performance mainly

Nike’s entrance in China

Concentrate 50-50 on fashion and performance

New middle class seeks “western culture”

Market high end and low end products

Quality as well as style

Endorse with most popular sports which are table tennis, badminton and athletics.

7. Should Nike do anything different to defend its position now that Adidas and Reebok have joint forces?

Innovation kitchen

Maintain brand equity

Focus both on fashion and performance

Introduce low end products also in emerging markets

Continue its endorsements and sponsorships

Improve brand image

To defend Nike’s position it should:

Advertisements specifically for female consumers

Service differentiation.

Product Differentiation.

Unique shoe technology and innovation.

Distinctive Competency - Marketing (Consumer Loyalty).

Think about latest trends and style

Introduce fashionable quality shoes.

Low price range.

Be agile and nimble.

Be more socially responsive to show concern for the society.

Recommendations

Gain a more positive global image, especially regarding

labor laws.

Pull back the extreme spending on endorsements.

Better management of their fashion shoe sector.

Gain a stronger presence in China.

Penetrate in other emerging economies.

Thank You