Marketing Management Tropic: Assignment on Marketing plan on Nike shoes Supervised By Jannatul Mawa Nupur Assistant Professor of Marketing Submitted To: Department of Business Administration Northern University Bangladesh Submitted By: Section- A Sl No Name ID 01 S.M. Al-Shahriar BBA 120304790
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Marketing Management
Tropic: Assignment on Marketing plan on Nike shoes
Supervised ByJannatul Mawa Nupur
Assistant Professor of Marketing
Submitted To:Department of Business Administration
Northern University Bangladesh
Submitted By:Section- A
Submission Date: 07-04-2014
Sl No Name ID01 S.M. Al-Shahriar BBA 120304790
Executive Summary
Nike is the most renowned supplier of athletic shoes and apparels. NIKE, Inc. was incorporated in 1968 under
the laws of the state of Oregon. The brand can be found everywhere, examples of its major target areas are:
USA, Europe, Asia Pacific and the Americas.
Our principal business activity is the design, development and worldwide marketing and selling of athletic
footwear, apparel, equipment, accessories and services. NIKE is the largest seller of athletic footwear and
athletic apparel in the world. We sell our products to retail accounts, through NIKE-owned retail stores and
internet websites (which we refer to as our “Direct to Consumer” operations) and through a mix of independent
distributors and licensees, in virtually all countries around the world. Virtually all of our products are
manufactured by independent contractors. Virtually all footwear and apparel products are produced outside the
United States, while equipment products are produced both in the United States and abroad.
The business has obtained a huge position in the market of these places thanks to the innovative and attractive
design, quality production of the product and wise marketing strategies.
[Table 1.0] Sales Forecast
Sales 2014 2015 2016
Recreational $911480 $1197754 $1375530
Competitive $145836 $191640 $220084
Total sales $1057316 $1389394 $1595614
Direct cost of sales 2014 2015 2016
Recreational $164066 $215596 $247596
Competitive $26250 $34496 $39616
Subtotal Cost of Sales $190316 $250092 $287210
2.0 Situation Analysis
The marketing environment for NIKE represents overwhelming opportunities. It also contains some challenges
that the firm believes it can meet successfully. It’s products have been well recived, and marketing will be key
to the development of band and product awarness as well as growth of the customer base. Nike has built some
impressive strength while looking forward to new opportunities. Its dedicated founders, the growing number of
brand-loyal customers, and sound financial management place the company in a good position to grow.
However, building strong relationships with consumers, retailers, and suppliers should help thwart competitors.
2.1 Market Summary
NIKE is a consumer products company, the relative popularity of various sports and fitness activities and
changing design trends affect the demand for our products. We must, therefore, respond to trends and shifts in
consumer preferences by adjusting the mix of existing product offerings, developing new products, styles and
categories, and influencing sports and fitness preferences through extensive marketing.
NIKE has good information about the market. This information is helpful to better understand who is served,
what their specific needs are, and how Nike can better communicate with them.
NIKE brand operations based on our internal geographic organization. Each NIKE Brand geography operates
predominantly in one industry: the design, development, marketing and selling of athletic footwear, apparel,
equipment, accessories, and services. Our reportable operating segments for the NIKE Brand are: North
America, Western Europe, Central & Eastern Europe, Greater China, Japan, and Emerging Markets. Our NIKE
Brand Direct to Consumer operations are managed within each geographic segment.
Target Market
Recreational
Fitness
Athletes
Sports
Students,
[Table2.1] Target Market
Target Market Forecast
Potential
Customers
Growth 2014 2015 2016 2017 CAGR
Recreational
Fitness
Athletes
Sports
Students,
Total
10%
15%
10%
6%
4%
10.48%
42113500
15686000
852500
5257600
4513600
68423200
46324850
18038900
937750
5573056
4694144
75568700
50957336
20744736
1031526
5907440
4881910
83522948
56053070
23856446
1134678
6261886
5077186
92383266
10.00%
15.00%
10.00%
6.00%
4.00%
10.48%
2.1.1 Market Demographics
Profile for the typical NIKE customer consists of the following geographic, demographic, and behavior factors.
Geographics
Nike’s geographic market consists of major markets throughout the globe. Until 2009 Nike’s geographical
markets consisted of United States, Asia-Pacific, Americas and an area comprising of Europe, Middle East and
Africa. However Nike announced its plan to reorganize its global business in order to bring goods closer to the
markets and in turn consumers as well as to reduce management overlap. Following this plan Nike then decided
to develop its market share in North America, Western Europe, Eastern/Central Europe, Greater China, Japan
It also markets products designed for kids, as well as for other athletic and recreational uses, such as baseball,
cricket, golf, lacrosse, outdoor activities, football (American), tennis, volleyball, walking and wrestling. NIKE's
athletic footwear products are designed primarily for specific athletic use.
2.5 Key to Success
Nike one of the top listed shoe company in the current world begun their business in 1962. The company
focused on high-quality running shoes designed especially for the athletes. They have been able to establish a
huge customer market all over the world through their quality products and strong marketing concepts.
The key factor for Nike is that we have been able to create strong brand preferences among the customers. Nike
created their brand image into consumers mind. The company’s commitments to designing innovative footwear
for serious athletes help it build a cult following among consumers.
Another important reason for Nike’s success is that we read the consumers mind perfectly. Nike does not sell
“Nike air max” shoes, it sold a way of life, which is key to its success. This flag is the incentive for the people,
and the philosophy behind the energy and determination, is that everyone concerned, whether you are not
athletes. Nike uses a motivational type of language to inspire consumers.
2.6 Critical Issues
As a start-up business, Nike is still in the early stages. The critical issues are for Nike to:
*Establish it’s self as the premier Shoe Company.
*Pursue controlled growth that dictates that payroll expenses will never exceed the revenue base. This will help
protect against recessions.
*Constantly monitor customer satisfaction, ensuring that the growth strategy will never compromise service and
satisfaction levels.
3.0 Marketing Strategy
The marketing strategy of Nike rested completely upon a product image which is favorable and allowed it to
develop into one of the best multinational companies after a while.
Nike’s favorable product icon has been kept optimistic because of the strong relation with the company logo
that is quite distinct and unique as well as the product slogan that has been utilized in commercials for a long
period of time. The marketing strategy of Nike invests a lot in commercials and product promotion.
3.1 Mission
Nike’s mission statement is “To bring inspiration and innovation to every athlete* in the world.”
The legendary University of Oregon track and field coach and Nike co-founder Bill Bowerman said, “If you
have a body, you are an athlete.”
Bowerman was a teacher who showed athletes the secrets to achievement. Nike invites you to experience our
innovative and inspiring products.
3.2 Marketing Objectives
Nike’s marketing objective is to employ a range of marketing communication tactics that can cater to the
organization’s target market, who have different nationalities, genders, cultures, and ages.
Nike continuously aims to apply marketing tactics that are appropriate with the people who reside in these
continents or nations.
Nike applies an effective marketing communication and at the same time still relatively manages to be cost-
effective in terms of its marketing programs.
3.3 Financial Objectives
*Use Financial Resources Wisely
*Increase Revenue Growth Rate
*Build Accurate Financial Models
*Set Numerical Productivity Targets
*Include All Marketing Costs
*Create Realistic Financial Projections
3.4 Target Markets
With a wide line of products covering many different sports, Nike’s Target market has a very large range. The
company aims to meet the needs of people of all ages in the varying categories, and sticks by it’s mission
statement, “To bring inspiration and innovation to every athlete in the world. If you have a body, you are an
athlete.”
3.5 Positioning
For Nike to be the world's leading seller of athletic footwear, they must have a pretty good position in the
market of shoes. Over half of Nike's sales are made through their shoe products, especially their athletic
footwear. They have shoes for practically every activity from aquatics to auto racing. As a company with such
versatility, it is no wonder that they are dominating the industry worldwide. It is kind of hard for consumers to
avoid Nike products when shopping for athletic shoes. They are a household name and everyone knows the
famous Nike symbol, the swoosh. Nike holds a strong position in this market because it always seems to be
ahead in the technology and style of their shoes when compared to competitors. Nike's prices are also
competitive as well. They have the high-end, high-tech shoes that people are looking to pay a little more money
for and then they have shoes such as Converse which start at $44.99. Nike provides obtainable products for
people on multiple levels of income so virtually anyone can get their hands on a Nike product. All this together
is what allows Nike to be in the firm and stable position they have in the athletic shoe market and will continue
to do so as long as they continue to do what they are doing as a company.
3.6 Strategies
*The mission is to exceed from all leading athletic companies and make it widely available across the globe.
*Maintain the leading position in the market by supplying quality products and innovative designs and attracts
maximum number of customer belonging to all ages and lifestyle.
*Guarantee the availability of all kinds of products at all leading stores and markets.
*To meet the challenging demands of customers.
*Value the labors, stake holders and other communities in the implementation of every strategy and decision.
*Encourage the environment friendly and pollution free development by reducing the emission and waste
minimizing activities with the help of various projects sponsored by WWF and other organizations.
*The company will now focus on providing quality products on low prices to have greater share in the market.
3.7 Marketing Mix
Nike marketing mix is comprised of the following approaches to pricing, distribution of product, advertising
and promotion, placement and customer service.
4 P of marketing mix and their branches*Product
Product verity
Quality
Design
Features
Brand name
Packaging
Sizes
Services
Warranties
Returns
*Price
List price
Discounts
Allowances
Payment period
Credit terms
*Promotion
Sales promotion
Advertising
Sales force
Public relations
Direct marketing
*Place
Channels
Coverage
Assortments
Locations
Inventory
Transport
Product: Thanks to the large number of researches, Nike offers a wide range of athletic footweardesigned for sports and also for every day usage. But the company now produces otherequipment specialized for sport activities such as sport balls and eyewear. The products meet all requirement of all type of customers (old, young, man, women). The production facilities are very close to the raw material to have low labor prices.
Price: The company has designed its pricing structure in a way to be competitive with othershoe sellers like Converse and Adidas. The prices of the products are variable depending on the season (especially springapparel), type and size (for example a good pair of shoes would cost from 70 to 150dollars). Nike offers good quality products at low prices; in fact this was one of its first goals:when the company was born its aim was to break German domination in sports shoeindustry.
Placement: Nike has its individual stores and it is also sold in malls and department stores. They have more than 20,000 retailers in USA and some more in other 200 countries; infact Nike’s mission is to make its product available all over the world. In every country there are not only sellers, but production units and customers services.
Promotion: The company has used mass media (such as TV, Internet, newspapers and magazines)to promote their brand. Many well-known athletes have worked for the advertisement (for example Ronaldo). The business promotes sport events and takes part in some projects (for example theyhelped WWF to reduce pollution). The brand swoosh logo and image play an important role in its advertisement: in fact itmakes the company recognizable all over the globe.
3.8 Marketing Research
Nike is engaged in the design, development and worldwide marketing of footwear, apparel, equipment and
accessory products. It sells its products to approximately 18,000 retail accounts in the United States and through
a mix of independent distributors, licensees and subsidiaries in nearly 200 countries. Nike's athletic footwear
products are designed for specific athletic use, although some of its products are worn for casual or leisure
purposes. The company creates designs for men, women and children. Running, basketball, children's, cross-
training and women's shoes are the Company's top-selling product categories. Nike also markets shoes
designed for outdoor activities, tennis, golf, soccer, baseball, football, bicycling, volleyball, wrestling,
cheerleading, aquatic activities, hiking and other athletic and recreational uses. It sells active sports apparel that
covers most of these categories, athletically inspired lifestyle apparel and others.
4.0 Financials
This section will offer the financial overview of Nike related to marketing activities. Nike will address break-
even analysis, sales forecast, expense forecast, and indicate how these activities link to the marketing strategy.
4.1 Break-even analysis
The break-even analysis indicate that $15520 will be required in monthly sales revenue to reach the break-even
point.
$12000
$8000
$4000
$0
($4000)
($8000)
($12000)
($16000)
$0 $5024 $10050 $15074 $20100 $25124
Monthly break-even point
Break-even Analysis
Break-even point = where line intersects with 0
[TABLE 4.1] Break-even Analysis
Break-even AnalysisMonthly Units Break-even $124Monthly Sales Break-even $15520