Nike Case Study

Eunice Oyewole

MBA 612 – Marketing Strategy

Dr. Herbert Sherman

Case Study - Update

Chapter 22 – Nike: Is It Unassailable Powerhouse Brand?

Nike Update

Nike the world’s leading innovator in athletic footwear, apparel, equipment, and accessories. It has continued to stay in competition for a while now and it’s one of the top competitions in the sports apparel market. As of 2014 its sales is $27.80B and net income is $2.69B; for the past decades its sales and earnings per share has grown 9% and 15% respectively. NIKE has been improving its products by including technology in it.

NIKE’s current CEO is Mark Parker, he was named the CEO in 2006, and he was the successor to Bill Perez, who replaced the co-founder Phil Knight; Knight is currently the chairman of the board. Mark Parker has been with Nike for over 30 years, he started as a footwear designer and product tester. Parker and NIKE keep up with the rapid change in the market by sticking to their core principles. “The commitment to great design and to innovation--that's really at the core to any successful business and it's a prerequisite to realize your great potential as a company." (Parker, 2012)

Parker is a former college track star and competitive marathoner, he brought this competitiveness into NIKE and used it to its advantage, he’s more inclined to listen and reflect. He don’t fit the typical traditional CEO because he still sketch out products after becoming CEO as a form of relaxation and engagement, he also meet with street artist and collect their work in order to develop their understanding of our global culture. He was named “The World’s Most Creative CEO” by Generation Flux. He’s the type of CEO that gets personally involved with the employee and make sure things are being done right.

NIKE’s brand at this point can practically sell itself but the CEO does not just sit on that and collect the profit, NIKE evolve with the technology and it introduced new sets of products that involve technology since we in a world of technology. Some of the products are, NIKE Fuelband, it’s a digital device to track daily activity and also Flyknit which was designed to lighten footwear weight and improve fit.

The growth of NIKE is also from its innovative performance and sportswear products, it started to incorporate technology in its product. Products like NIKE air, Lunar, Shox, Flywire, FREE, Dri-F.I.T, NIKE Fuel, and NIKE +) Nike+ is the result of the partnership Nike have with  Apple, it introduced their partnership in 226 and launch the Nike+ iPod Sport Kit, it’s a wireless system that allows Nike+ footwear to communicate with your iPod to connect you to the ultimate personal running workout experience. All these products have established their own brand connection. NIKE also spends at least $4.9 billion on endorsements, its recent contract was with Rory Mcllroy, a young Irishman ranked as the best golfer in the world for $200 million. It endorses high-profile athletes and teams; it’s also involved in global sporting events like Olympics, European Championships, and NBA Finals.

NIKE, Inc.’s include Converse, Inc. and Hurley International, LLC and its own wholly-owned affiliates are all included in its future growth. NIKE started reporting Converse as a separate segment of NIKE first quarter of 2014; they’ve included Hurley and Nike Golf in the complete financial results for the NIKE Brand.

Just as Nike’s products have evolved, it has also change its marketing strategy; its strategy rest solely on product image and allowing it to develop into one of the best multinational companies after a while. Nike is still strongly using it’s swoosh logo and the phrase “Just do it,” it invest a lot in commercials and product promotion. This is how they get to their target markets, which are athletes. They focus on this because of the usefulness that goes along with the items they sell; it focused on these consumers by means of agreements between the Company and sports team, college athletic for product support. They also use sponsorship as well as eventual endorsement to the team members; through this Nike is capable to reach its massive numbers of consumers and clients who are likely to purchase its products.

Nike’s price strategy is to focus on users who embrace product understand and closeness and therefore heed less regarding the product. This is why Nike is able to set a higher price for its products compare to its competitors. Nike also uses the vertical combination pricing technique, meaning, they take participants ownership at channel level functions which is different, it also engage in diverse channel level functions to control prices as a result affect pricing function.

Its communication and promotional strategy besides trading quality products has given them a high number of user loyalty. Nike has hired many professional and popular celebrity athletes and they’ve managed to make a substantial interest to their items. Aside from the celebrity endorsements that Nike does, it spends a lot of money on advertising by means of mass media. The products that are more expensive are advertised through selective demand because it has a different target compare to the mass media ads. A lot of businesses try to follow NIKE’s marketing strategy in order to become as successful in the world of business like NIKE