Rachel+Taylor+Writing+Sample+2 Nike+Running

7/27/2019 Rachel+Taylor+Writing+Sample+2 Nike+Running

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Brad BrophyMeredith CoonKhalid Elwanni

Zach GilliganRachel Taylor

M&L 751Autumn 2010


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Table of Contents

Executive Summary.................................................................................................................... 3

Customer Analysis ..................................................................................................................... 4Segments

MotivationsUnmet Needs

Competitor Analysis .................................................................................................................. 7Competitor IdentificationStrategic GroupsMajor CompetitorsCompetitor Strength Grid

Market Analysis ....................................................................................................................... 10

Market IdentificationMarket SizeMarket Profitability Analysis

Cost StructureDistribution SystemMarket Trends and DevelopmentsKey Success Factors

Environmental Analysis........................................................................................................... 15Trends and Potential EventsScenario AnalysisKey Strategic Uncertainties

Internal Analysis...................................................................................................................... 17Performance AnalysisSummary of Past StrategyStrategic ProblemsCharacteristics of Internal OrganizationPortfolio AnalysisAnalysis of Strengths and WeaknessesFinancial Projections Based on Existing Strategy

Strategy Development.............................................................................................................. 21Business ScopeStrategy DescriptionKey Strategy Initiatives

Marketing Plan ........................................................................................................................ 25

Product/Service to be MarketedPricing and FinancialsDistribution Channels and IssuesPromotion for Womens The Girl EffectCampaignPromotion for Mens Stay StrongCampaign

Works Cited ............................................................................................................................. 29

Appendix ....................................................................................................................................32

Nike, Inc. Financial StatementsGroup PowerPoint Presentation


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Executive Summary

Overview

Nike is leading the athletic shoe and apparel industry with $19 billion in sales in 2010 Nike Running has 31% market share of running shoes equaling $731 million Nike is the most valuable brand in athletics

Internal Analysis

Record profit and gross margin in 2010, $8.8 billion and 46.3% respectively Continuing improvement of operations with evaluation and audit tools to improve image

of Nike

Increasing customer voice with Write the Futureonline community Global manufacturing and distribution network with industry leader in marketing Large product portfolio includes shoes, clothing, gear, and accessories

External Analysis

Ages 18-44 represent the largest demographic for running shoes Running shoe choice criteria include comfort, price, style, and performance Competition heavy market (Adidas, Puma, New Balance, Under Armour, etc.) Market has more than doubled: $987 million in 1988 to $2.36 billion in 2009 Innovation driven industry from performance technology to special fabrics

Strategy and Marketing Plan

The Girl Effect Campaigno Percentage of proceeds from Nike Womens Running go to The Girl Effect

Social responsibility program for female rights in Africao Exploit program to increase market share and sales for Nike Womens Running

Gives women ethical choice when purchasingo Mutually benefits business goals and sustainability programo Increase Nike Womens Running advertising during select ads and programs

Stay Strong Campaigno Increase usage of current users by promoting running and leisure activities with

Nike Running

Increases sales and brand loyaltyo Promote through traditional advertising and special PR events/promotions

Running camps, extreme 5ks to promote masculinityo Accessorize Nike Running through key chains and bumper stickers

Relatively inexpensive way to expand Nike brand amongst consumers


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Section 1. Customer Analysis

A. Segments

Age

Market

(respondents who

purchased athleticshoes in 2008)

Usage Comments

1-18 N/A

More likely to purchase athletic shoes forteam sports

25% of all individuals ages 12-19purchased running/jogging shoes in past12 months

Presence of children in householdincreases chances of purchasingathletic shoes

98% of children wear athletic shoes Almost of teenage respondents

are brand loyal and only alternatebetween a few brands

Children ages 9-11 have a greatdeal of say in brand of sneakerspurchased for them

18-24 73%

67% of respondents purchased shoes forthemselves

79% purchased for everyday wear 52% purchased for exercising/working

out

35% purchased for certain sport 12% purchased for commuting 6% purchased for some other reason

Represent key target market 54% run or jog on a regular basis Most likely to try new brands of

sneakers

25-34 69%

Most likely to have purchased athleticshoes for a child, but greater than 50%also purchased for themselves


out


39% run or jog on a regular basis

35-44 70%


out



45-54 58%


out



55-64 47%


out




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Age

Market(respondents who

purchased athleticshoes in 2008)

Usage Comments

65+ 37%


out 4% purchased for certain sport 2% purchased for commuting 7% purchased for some other reason


All

Ages59%

Everyday use is most common reason forpurchase of athletic shoes


out


Running shoes are the largestsegment

25% run or jog on a regular basis Convincing consumers to switch

brands is difficult

Almost 50% of respondents had afew brands they alternate between

33% commit to one favorite brand Nike tops list in brand popularity

Gender Market Usage Comments

Male 59%

82% purchased for everyday wear 50% purchased for exercising/working out 30% purchased for a certain sport 14% purchased for commuting 5% purchased for some other reason

23% purchased jogging/runningshoes

64% likely to buy new pair when oldpair wears out

Segment has consistent gains

Female 41%

82% purchased for everyday wear 49% purchased for exercising/working out 13% purchased for a certain sport 10% purchased for commuting 9% purchased for some other reason

27% purchased jogging/runningshoes

53% likely to buy new pair when oldpair wears out Sales have significantly grown and

are catching up to mens market


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B.MotivationsAge Motivations

1-18

Comfort Style/fashion-focused Brand Celebrity endorsements

18-24

Wearing same brand as friends Comfort Fashion with function Performance Celebrity endorsements

25-34

Likely to purchase for child or spouse and themselves (convenient retailing) Comfort Price

35-44

Likely to purchase for child or spouse and themselves (convenient retailing) Comfort Price

45-54 Comfort Price55-64 Wear same sneakers for exercise and leisure (cross-functional)

65+ Comfort Price

All Ages

Comfort Price Style Performance Brand Celebrity Endorsements Latest technology

Gender MotivationsMale Buy new pair when old pair wears out

Purchase for a specific sport Purchase for everyday wear Comfort Sturdier shoes

Female Lightweight shoes Specific shoes for specific activities Fashion and sophistication Shoes for going to and from classes (like yoga) that can be easily slipped off

C. Unmet Needs

Weather-specific running shoes More fashion-forward running shoes for women High-performance foot support running shoes


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Section 2. Competitor Analysis

A. Competitor Identification

Most Directly Competitive: Adidas, New Balance, Asics, Brooks

Less Directly Competitive: Under Armour

B. Strategic Groups

Strategic Group Major Competitors Dollar Share (2007 AthleticFootwear Market)

1. Mainstream Brands fromLarge Consumer Firms

NikeAdidasReebokPuma

31%16%6%7%

2. High-End SpecialtyBrands

AsicsNew BalanceBrooks

5%6%N/A

3. Other Brands SketchersConverseK-SwissOthers (Under Armour, etc.)

5%4%2%18%

Strategic Group Characteristics/Strategies Strengths Weaknesses

1. MainstreamBrands fromLarge ConsumerFirms

-Focus is on large market-Target the averageconsumer athlete-Use of sponsorship(USATF, Olympics, etc)

-Access to capital-Brand name-Consumeraccessibility toproduct-Loyal following(generalized)

-Core competencynot in running shoes-Dependence on thirdparty manufacturing

2. High-EndSpecialty Brands

-Target specialty athletes -Loyal following

(specialized)

-Accessibility to

consumer

3. Other Brands -Everyday footwear -Offered at lowerprice point

-Hold small percentof athletic footwearmarket share-Small amount ofathletic specialization


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C.Major Competitors

DirectCompetitor

Characteristics/Strategies Strengths Weaknesses

Adidas -Geographically diverse-Mass marketing campaigns

-Sponsorship-Endorsement

-Access to capital-Loyal following

-Increasedcapabilities due toother departments

-Core competency notin running shoes

-Dependence on thirdparty manufacturing-Underperformance ofReebok

NewBalance

-Way of living brand image*-Positions itself as a moremature brand

-Sponsorship ofmajor events (SusanG. Komen Race forthe Cure, Lace up forthe Cure, etc)

-Lack of celebrityendorsements-Made in theUSA(increased cost)-No current presence inLFA** market

Puma -The fashionable alternative-Sport lifestyle company-Celebrity lines

-Ability to tap intothe new, morefashionable customerbase-Marketing towomen

-Innovation follower-Lack of market share-Financially limitedcompared to Nike,Adidas, etc.

Asics -Specialize in a few sports(Wrestling, Running)-Advertise in specialty medias(Runners World, Triathlonmagazines, Wrestling

magazines)

-Loyal following inspecialty stores

-Accessibility toproduct-No current presence inLFA market

Brooks -Targets younger market withmobile campaigns

-#1 ranked inspecialty store surveyfor Brand Strength-#1 ranked in BrandCustomer Service

-80% of their shoes aresold at specialtyretailers (accessibility)

UnderArmour

-Change the market needs/wants-More team oriented marketing

strategies

-Reputation as aninnovator

-Not an establishedrunning shoe company

*New Balances marketing strategy is to incorporate their products into day-to-day life to create the atmosphere of

sports is a way of living

**LFA market is Lifestyle Fitness Athletic Shoes


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IndirectCompetitor

Characteristics/Strategies Strengths Weaknesses

UnderArmour

-Create a new product category-Attempting to market trainingshoe as a competitor to running

shoes (athletes should train inthese shoes rather than runningshoes)-More team oriented marketingstrategy

-Hip factor-Reputation as anInnovator

-Increasedcapabilities due toother departments

-Not an establishedrunning shoe company-Strategy has still not

gained major traction

-Under Armour has come out and said that athletes should not train in running shoes. They havebegun to make shoes specifically for athletic training. This strategy, although not a directcompetitor to Nike Running, will indirectly affect the sales of Nike Running.

D. Competitor Strength Grid

Assets and

CompetenciesAdidas

New

BalancePuma Asics Brooks

Under

Armour

FinancialResources

S A S A W A

Innovation S A A A A S

R&D S A A S S S

Loyalty S A A S S ABreadth of

Product LineS A A S S W

NameRecognition

S S S A W S

S= Strong, A= Average, W=Weak


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Section 3. Market Analysis

A.Market Identification: The U.S Running Footwear Industry

B.Market Size

U.S. Sales of Running Footwear

Year 1988 1998 2008 2009

U.S. IndustrySales

$987 million $1.47 billion $2.31 billion $2.36 billion

Emerging Submarkets

Athletic and performance apparel Sporting equipment and accessories (gear) Athletic training programs and technology

Sport specific footwear Womens sport participation Competitive running: marathons, half-marathons, 5k, 10k

Market GrowthFootwear

Average runner purchased 3.2 pairs of running shoes last year (2009)o 3 pairs for the average female runnero 3.4 pairs for the average male runner

60.4% of average runners spends $90 + on their running shoeso 64.4% of female runnerso 56.4% of male runners

Running shoe sales topped $2.36 billion in 2009o Increase from the $987 million generated in 1988

Last running shoes purchased by men: Asics (29.9%), Brooks (14.9%), Nike (13.6%) Last running shoes purchased by women: Asics (29.1%), Nike (15.9%), Brooks (14.1%)

Race Participation

467,000 marathon finishers in 2009o Nearly a 10% increase from 2008

More than 1.1 million half-marathon finishers in 2009o 24% increase from 2008

17 U.S. half-marathons (a record) with 10,000 finishers or more in 2009 40% growth in 5k participants over the past decade (2000-2009)

o The most popular race distance The half-marathon has the largest female percent (57%) of any U.S road distance

o Switched to a female majority in 2005o In 1985, female percent was less than 20% for half-marathons


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Running/Jogging Participation

Gender Distribution in Running Populations- Female%/ Male%

Year 1993 1998 2002 2006 2008

Running/Jogging ShoeUser

All Running EventFinishers

Runners, ran at leastonce/yr

38.4/61.6

28.0/72.0

N/A

43.0/57.0

39.0/61.0

45.7/54.3

44.3/55.7

49.8/50.2

46.0/54.0

52.1/47.9

52.0/48.0

47.8/52.2

53.0/47.0

53.0/47.0

48.0/52.0

U.S Running/Jogging Participation for 2009

Total Participants 08-09Total Runners

Core Participants

Frequent Participants

Run/Jog at leastonce/yr

Run/Jog 50 days/yr

Run/Jog 100+ days/yr

43,892,000

25,559,000

16,446,000

+6.7%

+9.2%

+9.8%

Factors Affecting Sales LevelsPositive Affect

Recessiono A decrease in gym membership due to economy leads to an increase inrunning outdoors

Social Mediao Facebook and Twitter provide a community platform to announce ones

running goal When its out there for everyone to see, it makes one more likely to stick

with ito Races and events broadcast information to recruit race participants

Innovative fabrics Technology Growing popularity of running/jogging

Negative Affect

Increasing footwear choiceso Alternate brands and styles

Increase in participation for other sports Increase in costs (materials, manufacturing, etc)


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C.Market Profitability Analysis

Barriers to Entry

Brand awareness Customer loyalty Budget for advertising and marketing campaigns Technology Retailer relationships Specialty brands Access to suppliers and contractors Technology

Potential Entrants

The footwear industry is already very competitive, probability of new entrants is low Brands that are already competing in the footwear industry could further expand by

introducing specialized running shoeso Reeboko Sketcherso K-Swisso Puma

o Aviao Filao L.A Gearo Under Armour

Threats of Substitutes

Barefoot running- Vibram Five Finger Shoes Shift of popularity to other activities and sports

Bargaining Power of Suppliers

Suppliers in the footwear industry have limited bargaining power They rely on footwear companies to purchase their raw materials and generate

revenueo Natural and synthetic fabricso Plastic compoundso Metal hardware

Footwear companies are large enough to put pressure on suppliers for low priceso They can find alternate suppliers in less developed countries

China, Vietnam, Indonesia, ThailandBargaining Power of Customers

Consumers have some bargaining power over footwear companieso Can easily switch to alternate brand for better style, better price, more

convenience, better qualityo Brand loyalty can result in limited bargaining power for consumers

Retail customers have limited bargaining power over footwear companieso One retailers sales account for only a small percent of a footwear companys

overall sales


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D. Cost Structure

Lower Cost Structure

Discount stores, superstores, and warehouse clubs Older models, styles, and colors Standard features Materials of lesser quality Cheaper suppliers, contractors, and labor Lower fixed and variable costs

Higher Cost Structure

Shoe stores and sporting goods stores Specialized performance technology Innovative fabrics Higher quality materials Reputable brand name More costly suppliers, contractors, and labor Higher fixed and variable costs

E.Distribution System

U.S Sales (in Millions) of Athletic Shoes by Retail Channel

2002 2003 2004 2005 2006 2007

Shoe Stores 9,111 9,328 9,532 9,722 9,898 10,059

Sporting Goods Stores 2,555 2,732 2,920 3,118 3,326 3,546

Discount Stores, Superstores,Warehouse clubs 1,708 1,782 1,859 1,935 2,007 2,072

Clothing Stores 1,204 1,226 1,249 1,273 1,298 1,323

Department Stores 740 667 595 528 467 413

Internet and Other 1,027 1,072 1,125 1,188 1,263 1,351

Observations/Major Trends

Shoe stores bring in the most sales of athletic shoes Athletic shoes sold at department stores are on the decline Sporting goods stores had the largest increase in sales from 2002 to 2007 ($991

million)

Shoe stores and sporting goods stores generally sell more specialized/sport specificshoes

o Superior performance technologyo Higher quality materialso Innovative fabrics

Shoe stores and sporting goods stores often sell shoes at a higher price than discountstores, superstores, and warehouse clubs


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F.Market Trends and Developments

Performance technologyo iPod capability, extreme comfort

Innovative fabricso Smell eliminating, sweat resistant, etc.

Continuous introduction of new models and styles Niche marketing towards specific sports and activities

G.Key Success Factors

Present

Brand recognition Shoe quality Access to major retail channels Relationship with suppliers and contractors Introduction of innovative and stylish shoes Breadth of product line Marketing and advertising campaigns Awareness and recommendation by specialists Specialization for specific sports and activities

Future

Ability to forecast and capture consumer trends Innovative fabrics High performance technology


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Section 4. Environmental Analysis

A. Trends and Potential EventsSource Description Strategic Implication Time Frame Importance

Technological - IT marketinginformation systems

-Innovative fabrics

-Computerized trackingof running

-Engage in comprehensivemarketing strategies toboost sales

-Focus on the performancefeatures of the innovativefabrics (sweat resistance,odor eliminating, etc)

-Continuously introducenew ways consumers cantrack their running data

Since mid-1990s

Current

High

High

High

Regulatory -US policies andgovernment withgeneral macroeconomicstability, low interestrates, stable currencyconditions, andinternationalcompetitiveness of thetax system

-Develop shoes at a lowcost and then pass on thesavings to the consumer-Import Duties:

-Shoes $6.5020%-Footwear covering the

ankle (men)8.5%-Footwear covering theankle (women)10%

High

Economic -Recession

-Economic crisis inmanufacturing andsupplier countries

-Weakening of the USDollar

-Endorse running as a stressreliever and way to relax

-Support higher footwearprices by focusing on highquality

-Sell footwear at manyprice points

Low

Low

Med.

Cultural -Increasing desire to

maintain a healthylifestyle

-Growth of gym andfitness centermembership

-Promote running/jogging

as an exercise anyone cando

-Endorse running/joggingas a total body workout

Med.

Med


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Source Description Strategic Implication Time Frame Importance

Demographic -Increase in femalerunning/joggingparticipation

-Shift to younger

demographic (18-34)

-Create new trendy designs

-Focus on more

edgy/youthful styles

Since mid-1980s

Current

High

High

Threats -Accusations of poorlabor conditions, i.e.sweatshops

-Shift in popularity toother sports & activities

-Product line expansionby competing brands

-Maintain a strong brandimage and reputation

-Promote running as thepreferred sport and activityof choice

-Continuously introducenew models and styles

Since mid-1980s

High

Med.

High

Opportunities -Growing market forspecialized runningfootwear

-Innovative fabrics

-Performancetechnology

-Keep up with consumertrends with new styles andmodels of high quality

-Introduce high end fabricsfor sweat resistance, odoreliminating, etc.

-Implement the latesttechnology to track runswhile providing comfort

Since mid-1980s

Current

Current

Med-High

High

High

B. Scenario Analysis

Continuously introduce creative, on-trend styles and models utilizing the newestperformance fabric and innovative technologies

Capture the growing popularity in running/jogging by emphasizing it as a total bodyworkout and ultimate stress reliever

C.Key Strategic Uncertainties

Will the popularity in running/jogging continue to grow? Will new subcategories emerge as significant markets? Once the recession ends, will people turn to other sports and activities?


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Section 5. Internal Analysis

A. Performance AnalysisObjective Area Objective Status and Comment

1. Sales -Expand revenue/market share-Increase direct to consumersales

-$19 billion in 2010, down 1%-Increased 12%

2. Profits -Increase shareholder value -$8.8 billion; record profit

3. Quality/Service -Improve quality of operationsfor improved product quality

-Customer Service Mission

-Continue to evolve AuditTools, Code of Conduct, andCode Leadership Standardsfor factories

-To represent the highestservice standard within andbeyond our industry, buildingloyal consumer relationshipsaround the world

4. Cost -Decrease cost to increasegross margin

-46.3% gross margin; record

5. New Products -Considered design,innovative fabrics,

performance technology

-Create products by reducingtoxics/waste and using

environmentally preferredmaterials

6. Customer Satisfaction -Increase customer voice -Created Write the Future,online community forcustomers and experiences

7. People -Develop industry bestemployees-Embrace diversity and rewardimagination

-Management DevelopmentProgram, MarketingDevelopment Program, andInternships

8. Other -Increase environmental andsocial sustainability programs

-The GreenXchange

The Girl EffectLace Up, Save Lives


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B. Summary of Past Strategy

Keeps R&D in developed countries while contracting out manufacturing to developingcountries in Asia and South America

o This strategy allows high gross profit margin Increased its direct to customer sales by creating Niketown, Nike Outlet Stores, and Nike

Store Online

C. Strategic Problems

Problem Possible Action

Reputation of poor labor conditions

Competitors are more well known for beingspecialized in running

Raw materials of poor quality

Provide customers with a look insidemanufacturing plant by becoming transparent

More segmenting into specialized runningfootwear

Seek suppliers with higher quality materials

D. Characteristics of Internal Organization

Component Description- Fit with Current/Proposed Strategy

Environmentally friendly

Corporate responsibility

Innovative

-Named in Top 10 of Newsweeks 2010 Green Rankings

-Named as one of the 100 Best Corporate Citizens for 2010 inCRO Magazine-World headquarters received Waste Managements 2010Innovation and Sustainability Award-Tops Climate Counts list in Corporate Commitment to ClimateRecognized by The Ethisphere Institute as one of the Worlds

Most Ethical Companies for 2010-Named as one of the 100 Best Corporate Citizens for 2010 byCRO Magazine-Named as one of the Best Green Companies for AmericasChildren for 2010-Named as one of the 100 Most Sustainable Corporations in theWorld by Innovest Strategic Value Advisors and CorporateKnights Inc.-Received top score in Design Innovation from Ceres-Named as one of the Worlds Top Sustainable Stocks for 2007-Recognized for its Leadership in Climate Change Solutions by

World Wildlife Fund in 2007

-Named for Apparel & Innovation on Fortunes 2008 MostAdmired Companies-Named to Fast Companys Fast 50 Most Innovative Companieslist-Named I.D Magazines 2007 Best of Consumer Products-Industrial Design Excellence Awards in 2005


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Component Description- Fit with Current/Proposed Strategy

Top Employer

Diversity

Community Sponsorship

-#55 on BusinessWeeks 2007 Top 100 Places to Launch a Careerlist-100 Best Companies to Work For by Fortune Magazine for

2006, 2007, 2008-Best Workplace for Commuters, 2004, 2005, 2006

-Top Company for LGBT workers, 2003-2010

-5K for Kids recognized as Youth Program of the Year 2008-Nike Womens Marathon named Charitable Race of the Year in2006-Portland Trailblazers Heart of theCommunity Award in 2004-National Head Start Association Award in 2004

E.Portfolio AnalysisBCGNike is a Starhigh share, high growth

Nike continues to gain market share in athletic shoe, apparel, equipment marketNike continues to increase revenue and profitCurrent domination in US, Europe with high growth probability in Asia

F.Analysis of Strengths and Weaknesses1. Strengths

a. Vertical IntegrationNike has own operations from manufacturing todistribution, and third party contracts to reduce operational costs

b. Diverse Geographic RevenueUS (34.2%); Europe, Middle East and Africa(30.2%); Asia Pacific (15.5%); Americas (6.2%), allows for better marketexpansion

c. Product PortfolioComplement products with athletic shoes, apparel, andequipment for every sport

2. Weaknessesa. Mature CompanyNike has sizeable pensions and retirement benefits which

grew 30% in 2008 alone

G.Financial Projections Based on Existing Strategy

Future will bring increased revenue and profit with China expansiono China revenue currently at $1.7 billion, Nike leads this market

Nike brand continues to become more valuable and is still the greatest competitiveadvantage for Nike


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Key Financials

$ million 2005 2006 2007 2008 2009

RevenuesNet Income (loss)Total Assets

Total LiabilitiesEmployees

13,739.71,211.68,793.6

3,149.426,000

14,954.91,392.09,869.6

3,584.428,000

16,325.91,491.5

10,688.3

3,662.930,200

18,627.01,883.4

12,442.7

4,617.130,200

19,176.11,486.79,103.0

4,147.032,500

Key Financial Ratios

Ratio 2005 2006 2007 2008 2009

Profit MarginRevenue GrowthAsset GrowthLiabilities GrowthDebt/Asset Ratio

Return of AssetsRevenue per EmployeeProfit per Employee

8.8%12.1%11.4%1.3%

35.8%

14.5%$528,450$46,600

9.3%8.8%

12.2%13.8%36.3%

14.9%$534,104

$49,714

9.1%9.2%8.3%2.2%

34.3%

14.5%$540,593

$49,387

10.1%14.1%16.4%26.1%37.1%

16.3%$616,788$62,364

7.8%2.9%

(26.8%)(10.2%)

45.6%

13.8%$590,034$45,745


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Section 6. Strategy Development

A. Business Scope- Product-Market ServedTarget Market:Men and women of all ages

B. Strategy DescriptionValue Propositions

Brand familiarity Quality Product attribute benefit

Appealing design Superior customer relationships Corporate social programs

Assets and Competencies

Research and design Global sourcing and logistics Superior marketing Financial capability Continuous innovation

Exceptional customer relationships State-of-the-art technology Corporate social programs Brand recognition

Alternative Functional Strategies for Women

Option A:o Strategy:

Attract women to the Nike Running brand by first introducing a line ofwalking shoes, then promote them to Nike Running once they becomemore involved in exercising

oPrimary Goal:

Increase market share of womens Nike Running footwear usage bygrowing with the consumer and establishing brand loyalty

o Possible Outcomes/Benefits: Increase market share Increase sales Builds brand awareness Generate new customers

Option B:o Strategy:

Attract women to the Nike Running brand through an advertisingcampaign that focuses on endorsements by women athletes and womencelebrities

o Primary Goal: Increase sales of womens Nike Running footwear through the building of

the brands high quality reputationo Possible Outcomes/Benefits:

Increase sales Increase market share


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Build brand awareness Energize brand reputation Retain existing customers

Alternative Functional Strategies for Men

Option A:

o Strategy: Attract men to the Nike Running brand by launching an advertising

campaign that promotes NikesLace Up, Save Lives corporate socialprogram

o Primary Goal: Increase sales of mens Nike Running footwear through the building of the

brands corporate social responsibilityo Possible Outcomes/Benefits:

Increase sales Increase market share

Build brand reputation Generate brand awareness

Option B:o Strategy:

Attract men to the Nike Running brand by introducing a line of classicswith the same styles as the first Nike shoes while incorporating the newestperformance technology for running

o Primary Goal: Increase sales of mens Nike Running footwear through appealing designs

and product attributeso Possible Outcomes/Benefits:

Increase sales

Increase market share Retain existing customers Create new customers

C.Key Strategy InitiativesWomensStrategy: The Girl Effect Campaign

Strategy:o Attract women to the Nike Running brand by launching an advertising campaign

that promotes Nikes The Girl Effect corporate social program

Primary Goal:o

Increase market share of womens Nike Running footwear usage through thebuilding of the brands corporate social responsibility

Possible Outcomes/Benefits:o Increase saleso Increase market shareo Build brand reputationo Generate brand awarenesso Create new customers


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Mens Campaign: Stay Strong Campaign

Strategy:o Attract men to the Nike Running brand through an advertising campaign that

focuses on endorsements by male athletes

Primary Goal:o Increase sales of mens Nike Running footwear through the building of thebrands high quality reputation

Possible Outcomes/Benefits:o Increase saleso Increase market shareo Build brand awarenesso Retain existing customerso Maintain leadership position in running footwear for men

Growth Strategy

Brand energizero Use products, sponsorships, endorsers, promotions and social programs thatsignificantly enhance and energize the Nike Running brand

Energizing through The Girl Effect Campaign

Increase the usage of Nike Running by womeno Expand buyer base

Pull in new customers by persuading them to switch from their currentbrand of running footwear

o Implement comprehensive marketing plan Print ads Digital ads TV spots PR events Merchandise Promotions

Energizing through the Stay Strong Campaign

Increase the usage of Nike Running by existing male customerso Expand loyal customer base

Motivate heavy users to use moreo Implement comprehensive marketing plan

Print ads Digital ads TV spots PR events Promotions


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Investment Level

Growingo Due to the continuous change in the footwear industry, we need to continue to

invest in R&D in order to continue our dominance in the market

Building/Managing Brand Equity Nike must look at their consumers brand loyalty Reward loyal customers with frequent-buyer programs, special unexpected benefits or

premiums

Make customers feel that they are part of the organization, perhaps through customerclubs

Have continuing communication with customers, using direct mail, the Internet, toll-freenumbers, and a solid customer backup organization


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Section 7. Marketing Plan

A. Product/Service to be Marketedo Nike Running Shoeso Charity Sponsorships

The Girl EffectB. Pricing and Financials

o Cost about $15-$75 to make a pair of shoes 50% of retail price

o Retails for about $30-$150o Generate approximately $5.1 million to $2.5 billion in saleso Womens Campaign

Invest $34.55 million in promotional campaigno Mens Campaign

Invest $65.93 million in promotional campaigno Total

Invest $100.84 million in promotions Estimates Advertising to Sales Ratio = $100.84 million/$731 million=13.79%

C.Distribution Channels and IssuesLow Price Point High Price Point

Discount Stores Clothing Stores Sporting Goods Stores

Superstores Department Stores Shoe Stores

Warehouse Clubs E-Commerce Sites

-Older models, styles, & colors -Innovative fabrics-Standard features -Specialized performance

technologyD.Promotion for WomensThe Girl EffectCampaign

Method Description Where Financials Projected

Outcome/Benefit

Print Ads -Create a printcampaign showcasinghow real, everydaywomen benefit fromrunning

-Show women in the USrunning compared towomen in Africarunning to promoteThe Girl Effect

- Shape

-Fitness

-Self

-Prevention

-Womens Health

-6 full page ads inShape ($1,030, 320)(Circulation 1.65million)

-6 full page ads inFitness ($888,000)(Circulation: 1.5million)

-6 full page ads inSelf ($1,044,384)(Circulation: 1.5million)

-Encourage women to r

-Propel women to selecNike Running for theirfootwear

-Generate brandawareness

-Build brands reputatiofor corporate socialresponsibility

-Bring in new customer


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Outcome/Benefit

-6 full page ads inPrevention ($809,400)(Circulation: 2.8million)

-6 full page ads inWomens Health($1,014,870)(Circulation: 1.5million)

Digital Ads -Use banner ads andpop-up ads that showwomen running in theNike Running shoes inthe US and Africa

-Shape

-Fitness

-Self

-Prevention

-Womens Health

-Approx. $1.50 perclick (200,000 clicks)

- Lead consumers to theNike Running website


-Drive online sales

-Build brands reputatiofor corporate socialresponsibility

TV Spots -Show womens runningrights in the UScompared to Africa

-Advertise that apercentage of each shoesale will be given to

The Girl Effect

-Run during populartalk shows andmorning shows

-Oprah

-The Ellen

DeGeneres Show

-The View

-The Today Show

-40 TV ads at approx.$500,000 per spot onpopular women shows($20 million)

-$3 million budget tocreate the ads

(including print ads)

-Make women feel bettabout spending more forunning shoes knowingwill go to a good cause

-Build brand reputation

-Increase sales

-Establish brand loyalty

-Positive corporateresponsibility


PR Events -Sponsor womens raceswhere a percentage ofthe proceeds will bedonated to The Girl

Effect

-Womensmarathons, half-marathons, 5ks

-Across the UnitedStates

- Sponsor 100women-only 5Ks atapprox. $30,000 perrace ($3 million)

-Get women to participin running

-Build brand reputation

-Establish brand loyalty


-Bring in new customer-Propels sales


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Outcome/Benefit

Merchandise -Select women fashiondesigners to createunique styles andmodels for a premier

footwear line

-Percentage of theproceeds will bedonated to The GirlEffect

-Sporting goodstores

-5 high-end designerrunning shoes($100,000 perdesigner)

-Attract more fashion-conscious women

-Increase revenue from

having a higher pricepoint

-Positive corporateresponsibility reputation


Promotions -Give away bumperstickers that promoteThe Girl Effect witheach Nike Runningpurchase

-Sporting goodstores

-1,000,000 bumperstickers given out forNike Runningpurchases ($264,000)

-Increase brand awaren

-Generate consumer bu

-Positive corporate

responsibility reputation

E. Promotion for MensStay Strong CampaignMethod Description Where Financials Projected

Outcome/Benefit

Print Ads -Creating a printcampaign showcasingour products throughathletes

-Mens Health

-RunnersWorld

-SportsIllustrated

-ESPNMagazine

-3 full page Print Ads inMens Health ($558,000)(Circulation: 1.8 million)

-3 full page Print Ads inRunners World ($232,000)(Circulation: 660,000)

-3 full page Print Ads inSports Illustrated ($960,000)(Circulation: 3.15 million)

-3 full page print ads inESPN Magazine ($648,000)(Circulation: 2 million)

-Increase sales

-Increase market shareof Nike Running shoefor males


-Maintain brand loyaltof existing customers

DigitalAds

-Create games in bannerads to entice individualsto click (offer discountsto winners)

-Mens Health

-RunnersWorld

-SportsIllustrated

-ESPNMagazine

-Approx $1.50 per click(200,000 clicks)

-Drive traffic to NikeRunning through onlingames in banner ads

-Used to keep areminder of NikeRunning in consumersmind

-Provide incentive topurchase Nike runningfootwear


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Outcome/Benefit

TV Spots -Create TV campaignusing endorsers to driveindividuals to stores orNike Running website

-ABC SaturdayNight CollegeFootball

-NBC SundayNight Football

-Superbowl

-ESPN

-20 TV spots on ABCSaturday Night Football($1.35 million per spot)

-10 TV spots on NBCSunday Night Football($1.71 million per spot)

-2 TV spots during theSuperbowl ($4.8 million)

-$3 million to create ads andpay endorsers (includes printads)

-Ads spread over 13 weeks

-Drive traffic to storesonline

-Increase sales

-Increase market share

-Build awareness ofmedia campaign

-Maintain brand loyaltof existing customers

PR Events -Sponsor RunningCamps, Marathons, 5Kruns, Extreme 5Kruns**

-Nike sponsored cooldown lounges for afterthe race[Cool down loungeswill include free snacksand water forparticipants along with

free shoe testing]

-Across theUnited States

-Sponsor running camps in 5Regions (West, Midwest,East Coast, South East, andSouthwest) ($200,000 percamp)

-Sponsor 15 marathonsthroughout the country($300,000 per marathon)

-Sponsor 100 5k runsthroughout the country

($20,000 per race)

-Sponsor 20 Extreme 5Kruns throughout the country($20,000 per race)

-Increase brandawareness throughsponsorship and cooldown lounges afterraces

-Build brand reputatio

-Establish brand loyalt

-Bring in new custome

-Propel sales

Promotions -Give out Nike Runningbumper stickers witheach Nike Runningpurchase

-Give out Nike Runningkey chains to

participants of Nikesponsored events

-Across theUnited States

-1,000,000 bumper stickersgiven out for Nike Runningpurchases ($264,000)

-Give out 500,000 NikeRunning key chains($470,000)

-Increase brandawareness

-Generate consumerbuzz

**Extreme 5K runs are events that include obstacles to test toughness. These obstacles include jumping fire pits, crossing

rivers, crawling under barbed wire, etc.


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Page | 29

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Lussier, Robert N., and David Kimball.Applied Sport Management Skills. N.p.: Thomson Learning,

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Nike Running. Sneaker Files. N.p., n.d. Web. 21 Nov. 2010. .

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