Global

Marketing
Report on NIKE

Hina Hanif
(M.COM FINAL)
Roll number # 13

To Sir Haider Iqbal

P#1: Initial entry assignment DATE: 12- December- 2020

P#2: local market expansion date: 12 January 2021.

 How Was Nike Founded?
The story of Nike begins with the story of Blue Ribbon Sports back in 1964. Around that time,
Phil Knight had just gone through University of Oregon followed by a stint at Stanford for his
MBA, leaving him with two crucial experiences that set the trajectory of his future.

At University of Oregon, he ran for the school's track and field team, putting him into contact
with their coach, Bill Bowerman. Aside from an intensely competitive ethos, Bowerman
displayed a fascination with optimizing his runners' shoes, constantly tinkering with different
models after learning from a local cobbler.

According to Nike, Knight was the first student to try one of Bowerman's shoes. Seeing him as a
safely-unimportant runner to test his shoes on, Bowerman offered to take one of his shoes and fix
them up with his custom design. Knight accepted the offer, and, supposedly, the shoes worked so
well that his teammate Otis Davis took them and ended up using them to win gold in the 400-
meter dash in the 1960 Olympics. Otis Davis insists to this day that Bowerman made the shoes
for him.

After the University of Oregon, Knight went through Stanford's MBA program, during which he
wrote a paper theorizing that the production of running shoes should move from its current
center in Germany to Japan, where labor was cheaper.

Knight got the chance to put this theory to the test with a trip to Japan shortly after his 1962
graduation. He struck a deal with a group of Japanese businessmen to export the country's
popular Tiger shoes into the U.S.

Coach Bowerman, who long believed that German shoes, though the best on the market, weren't
anything too special to be replicated or even improved on, supported Knight's venture, entering
into a 50-50 business deal for ownership of their new company, Blue Ribbon Sports, established
in Eugene, Oregon, on Jan. 25, 1964.
 History of Nike

After founding Blue Ribbon Sports, Knight tested the waters for his imported shoes, initially
selling them out of his car when he came back to the States. It quickly became clear that a
demand existed for these cheaper but still high-quality alternatives to the Adidas (ADDYY) and
Pumas (PUMSY) that dominated the market.

In 1965, the ever-inventive Bowerman proposed a new shoe design to the Tiger shoe company,
one that sought to provide the right support for runners with a cushioned innersole, soft sponge
rubber in the forefoot and top of the heel, hard sponge rubber in the middle of the heel, and a
firm rubber outsole.

This design would turn out to be both a major success and source of conflict between Blue
Ribbon and its Japanese supplier. Dubbed the Tiger Cortez, the shoe dropped in 1967 and
became an instant hit for its comfortable, sturdy, and stylish design.
Around the time of its success, though, relations soured between Blue Ribbon and Tiger. Knight
claims that the Japanese company was seeking a way out of its exclusivity deal with Blue Ribbon
and sought to sink the company. Tiger claims to have discovered Blue Ribbon Sports selling
their own version of the Tiger Cortez under a new line of shoes they called "Nike."

Either way, the two formally split in 1971 with a lawsuit from Tiger following. A judge
eventually settled that both companies could sell their own versions of the model, leading to the
only sneaker to become a best-selling model for two different shoe companies as the Nike Cortez
and the Tiger Corsair (now sold by Tiger's modern incarnation, Asics).

Following the split with Tiger, Blue Ribbon Sports fully rebranded itself as Nike. Phil Knight
initially wanted to call the company "Dimension 6," but Jeff Johnson, thankfully, got the
inspiration for Nike after seeing the Greek goddess of victory's name in a dream. Before this
though, the new brand needed its own logo.

They reached out to a design student at the nearby Portland State University, Carolyn Davis, to
provide sketches. Phil Knight reluctantly settled on a swoosh design, reportedly saying, "Well, I
don't love it, but maybe it will grow on me." Davis charged $2/hour and received a total of $35
for the logo. In 1983 Phil Knight, apparently having come around to the logo, held a party for
Davidson and awarded her 500 shares of stock, speculated to be worth roughly $1 million today.

After coming into existence proper on May 30, 1971, Nike, Inc. continued the success of Blue
Ribbon Sports, helped first by the success of the Tiger Cortez and then by Bowerman's
innovative "Waffle" sole design. While thinking over breakfast on a way to give running shoes
more traction, the coach saw the grooves in the waffle his wife made him and wondered what it
would look inverted. Not one to pass on an idea, Bowerman poured melted urethane into his
waffle iron. Unfortunately, he forgot to add any anti-stick agent onto the iron and it glued shut.
But nevertheless, the idea had taken root, and with the help of another waffle iron and
presumably a good spray, he designed his ideal sole and the iconic "Waffle Trainer" was born.
This shoe was a major success for Nike, the first of many to come as the company maintained a
strong and steady growth through its early days, culminating in its 1980 IPO, which immediately
made Phil Knight a millionaire with shares worth $178 million.

Since then, the company has only continued to grow, helped on in part by a series of clever ad
campaigns, most famously the 1988 "Just Do It" ad campaign (apparently inspired by the last
words of American murderer Gary Gilmore before the firing squad, "Let's do it.")

The company's other greatest asset has been its celebrity endorsements. They struck big signing
athletes like Tiger Woods, Kobe Bryant, and LeBron James in the early stages of their career.

By far the most lucrative endorsement Nike has ever had, both for the company and its sponsor,
has been with Michael Jordan. Spotting potential, Nike tried to swoop in for an endorsement
from Jordan before the start of his first season with the pros in 1984. Despite having never worn
a pair of Nikes before and harboring hope for a deal with Adidas, Jordan ended up signing on
with Nike after a meeting in which they promised the soon-to-be star $500,000 a year for five
years, two die cast Mercedes cars, and shoes customized to his specific requests.

The deal proved a smash hit for Nike, with Jordan quickly rising to super stardom and his shoe
line, Air Jordans, hitting the market to make over $100 million in revenue by the end of 1985.
Air Jordans continue to be a cash cow for Nike. Despite some recent declines in sales, the brand
still nets the company a staggering $2.8 billion in sales for 2018. Jordan continues to make
roughly $100 million a year in Nike royalties alone.
 Timeline of Nike

Phil Knight and Bill Bowerman found Blue Ribbon Sports.

Cutting ties with Onitsuka Tiger (now Asics), Blue Ribbon Sports becomes Nike Inc., using swoosh logo created by

s up with iconic sole pattern for Waffle Trainers after putting rubber into a waffle iron.

Romanian tennis player Ilie Nastase becomes the first athlete to sign an end

ike introduces patented “Air” technology with new Tailwind shoe

Nike completes IPO with a price of 18 cents a share.

ches with ad featuring 80- year-old running icon Walter Stack running across the Golden Gate Bridge.

“Bo Knows" ad campaign drops featuring baseball and football st

First Nike town store opens in Portland, Oregon.

Activist Jeff Ballinger publishes report exposing low wages and poor working conditions among Indonesian Nike facto

NikesignsMichaelJordan,
launching Air Tiger
Nike signs Jordan series.
Woods.

Nike drops ad for new Air Max shoes set to The Beatles' "Revolution," making it the first ad to use the band's mu
 Nike co-founder Bill Bowerman dies at 88.

Inthefaceof widespread
protest,Nikeraises the its workers,

minimum age of
increasesmonitoring,and adoptsU.S.OSHAclean-air

Nike acquires surf-apparel

company Hurley.

Nike signs LeBron James and Kobe Bryant.

NikeacquiresConversefor
$309 million.

nd president of Nike, but retains chairman role as William D. Perez becomes the company's new CEO.

Nike signs Derek Jeter.

 Nikeunveils adcampaign andpolitical
featuringathlete
tivist Colin Kaepernick, garnering a mix of public approval and backlash.

Nike won for Best CEO 2018, Best Company Compensation and Best C

on for Best Company Perks & Benefits and Best Company Compensation.

Nike brand was valued at approximately 34.8 billion U.S. dollars, which was an increase of

Nike becomes official supplier for NFL apparel.

Nike becomes official supplier for NBA apparel.

 Step 2

Phase 1

Year of entry: (1980)

In December, 1980 Nike went public, and offered 2 million stocks. With the revenue generated
by sales they planned to expend particularly in European markets in the United States, plans for a
new headquarters on a large, rural campus were inaugurated, and an East Coast distribution
center in Greenland, New Hampshire, was brought on line.

The company had shifted its overseas production away from Japan at this point, manufacturing
nearly 4-5th of its shoes in South Korea and Taiwan. It established factories in mainland China in
1981.

Mode of entry:

Global

Business definition:

A. Customer benefit:
1. High quality undeniable:

The longevity of footwear is very good. Nike product is known for high quality. The model
is really superior.

2. Boost performance:

With high quality, person’s efficiency will certainly increase. Nike makes a person feel
comfy while doing sporting activities.

3. Boost technology:
 Nike always stands out with the current advancements on each item. Up-to date
collections are always preferable and most function able as wells as qualify able.

4. Boost confidence:

With the quality, comfort, and eye-catching shoe layout, you can appear much more
confident.

B. Segment:

Nike had segmented their customer in 4 categories

 demographic
 geographic
 psychographic
 behavioral segmentation

and segmented from 15-55 age group .three product categories are men product, women product
and kid product this serves better and had a better experience for people in shopping.

1. Geographical:

Nike does have a good sense to glace on the different cultures and different life styles of
people so Nike does have outlets in every country as per their cultural suits.

2. Psychological:

Nike is providing variety of products to their customers’ .people may have different interest
Nike is serving them with different varieties of their brand.

3. Behavioral:

Nike is providing an active life style with comfortable footwear, clothing and useful sports
equipment.

C. Technology:
Nike uses their websites, emails, catalogs, and TV advertisement to introduce the product to
customers.

Nike protects the shoes by putting paper into the shoes to keep the form and then surrounds the
shoe with another piece of paper to protect the outside of the shoe. It labels in any written,
electronic, or graphic communication on the package.

D. Value chain:

This is value chain of brand Nike which includes nine tiers

 A major hotspot is consumer use, due to the washing and drying apparel. Nike research
indicates that Nike’s influence over consumer washing and drying practices is very limited,
with care labels having less leverage over consumers than convenience, habit or other factors
tied to detergent and washing machine used. Nike does have therefore decided to focus their
efforts on the other tiers of the value chain where Nike have better opportunities to mitigate
impacts.
Market scope:

Broad to broad

Because,

Nike is serving equipment but not just footwear and apparel. Its target market is vast and broad
as well.

Ability to leverage:

 Asset:

They have strong control on quality and uniqueness as they believe innovation as well as
varieties.

 Information:

They have information about latest technologies and are adaptive of new technologies. Their
research is strong and information is powerful.

 Brand name:

Nowadays, Nike is also enough with its name as it is re-known of best quality.

Base of competitive advantage:

Differentiation:

There are many features that make Nike shoes different from other brands of shoes. Some of
these features are:

 A pair of Nike makes perfect

flexibility: Elusive flexible and easy to

move

 Nike shoes provide excellent support :

Nike shoes come with a herringbone pattern and a solid rubber, which adds to the comfort
and support of users.

 Nike shoes are lightweight and durable:

Nike shoes are very light

 Nike shoes help prevent foot injuries:

These shoes have features that protect your feet while you are participating in any sport.
Shoes reduce the likelihood of catastrophic foot injuries.

 Innovative:

They are different in design from others and are been different from others. Anyone could
recognize its Nike with far from distance.

Initial mission:

“To bring inspiration and innovation to ever athlete in the world”

1. For customers:

Their first products were track running shoes, tennis, soccer, and wrestling & basketball
shoes.

2. Product:

Nike has more than 500 locations around the world and offices located in 45 countries
outside the United States. Most of the factories are located in Asia, including China, Taiwan,
India, Turkey, Thailand, Vietnam, Pakistan, Philippines, Malaysia, and Korea.

3. Market :

Because Nike creates wide range goods for sports, they have competition from every sport
and brand. After surpassing Adidas in the 1970s, Nike had no direct competitors because
there was no single brand which could compete with Nike’s range of sports and non-sports
oriented gear until Reebok came along in the 1980s. Nike’s other competitor is Puma, the
third largest shoe and sports clothing supplier.

4. Philosophy:

Improve its inventory management, day’s sales outstanding, days payables outstanding and
working capital management further

Provide innovative and technical products that cater to the consumer expectations at all price
points i.e. Connect to the consumer.

Mission at the time of internationalization:

Proposed vision statement:

Continue to bring inspiration to present and future athletes, while maintaining the company’s
standard of quality for its product.

1. Customers:

The early 80s were somewhat subdued in color, where we see a lot browns and tans and
oranges. Blocky shapes were everywhere and dressing like a tennis player was the cool thing
to do.

Velvet was even hotter. For both men and women, the waistline was a little high.

But early 1980s fashion was very similar to the late 1970s. In 1983 there was a slight 1950s-
style throwback, especially in women’s dresses.

By the mid-80s, pop music stars like Cyndi Lauper were ushering in an entirely new style
that many people associate with the 1980s to this day.

2. Product:
 Nike always takes into consideration various aspects of its products as it is in a product or
consumer market. Thus it needs to have extensive range of products to withstand its
competition.

In 1980 the price for

Vtg Retro 80s Reissue Nike Men’s 11M Waffle Trainer Athletic Sneaker Running Shoe

$110.00
$45.25 shipping

They always charge high price but this is justifiable because of its brands various adjectives
and qualities as discussed above.

3. Market:

It is serving worldwide nowadays

4. Philosophy:

Innovation is at the heart of Nike. it focus to be better helps the brand in creating the world’s
most innovative product for customers across the globe.

Designing is their USP

Goal:

The inception of the company Nike was born when was Phil Knight was still a university
student. He already thought that it would be beneficial to the company if it used manufacturing
plants in other countries outside the United States, because the labor costs would be much lower.
He thought that South Korea and Taiwan were viable locations. Those ideas became a reality.
Later, the manufacturing plants were moved to Indonesia and china.

expansion:

Local market
Step 3 Phase 2:

1) Portland city-Oregon (United States of America)

 1990
Nike opened the first Nike town store in downtown Portland, Oregon (U.S). The
store quickly earned numerous retail design and business awards.

 In 1980
Nike issued an initial public offering (IPO)
 In 1982
The Air Force 1 basketball shoe becomes the first Nike court shoe to make use of the Air
technology.
 In 1984
Nike signs Michael Jordan to an endorsement contract and releases the first model of
his signature shoe, the Air Jordan.
Originally, the NBA banned this new shoe, drawing a tremendous amount of
publicity.
 The introduction of the Air Jordan shoe was a key event in Nike’s successful
development.
 in 1987
The Nike Air Max shoe was introduced.
 In 1988
Nike introduces its “Just Do It” slogan.
 In 1989
Nike introduces a new type of footwear designed specifically for cross-training, and
features two-sport athlete Bo Jackson in a series of memorable ads called “Bo
Knows.”

Goal:
World wide
Nike purpose statement
“Our purpose is to unite the world through sport to create a healthy planet, active
communities, and an equal playing field for all.”

Year of entry:
 1990

Mode of entry:
 Outlet, retail store

Business definition:
 Customer benefits:
Nike serves same customer benefits throughout the world that is:
1. High quality
2. Boost performance
3. Using of advance technologies
4. Boosting up, the confidence of its potential users.

 Segment :
As Nike segments their market in 4 categories
  demographic
 geographic
 psychographic
 behavioral segmentation

Nike behaves as per culture where it opens it outlets so coming to US. Nike's targeting
market is active people who enjoy high quality sporting goods, especially footwear. To do so
Nike focuses on creating premium consumer experiences on product innovation, brand
leadership and elevated retail presence.

 Technology:

Air max shoes was introduced in1987 which was advance shoes wear and was manufactured
with brilliant quality time

Nike is always best technology user and is long lasting in quality.

Coming towards communication technology, Nike’s outlets are stretched in different countries
these retail stores are the genuine revenue for Nike.

 Value chain:

Logistics been sent to retail shop for consumer use.

Market scope:

 Broad:

The outlets were made for all energetic and athletic races. The serve is broad for sport people
throughout world, city, or nation using it.

Ability to leverage:

 Asset:
They have strong control on quality and uniqueness as they believe innovation as well as
varieties.

 Information:

They have information about latest technologies and are adaptive of new technologies. Their
research is strong and information is powerful.

 Brand name:

Nowadays, Nike is also enough with its name as it is re-known of best quality.

 Advancement in technology:

Nike is re-known for its advance using of technology at first hand

2) New York (United States of America)

Year of entry:

 1996

Nike opens Niketown New York, its signature ‘flagship’ store located in midtown Manhattan.
Mode of entry:

Outlet, retail shop

Business definition:

Country market business definition

Home market business definition
New York
Customer benefits Same
Segment Same
Technology Same
Value chain Different
Logistics are been sent to retail shops and then to end users.

Market scope:

Broad

Ability to leverage:

1. Asset:

Uniqueness of the product

2. Information:

They have information about latest technologies and are adaptive of new technologies. Their
research is strong and information is powerful.

3. Brand name:

Nowadays, Nike is also enough with its name as it is re-known of best quality.
 4. Advancement in technology:

Nike is re-known for its advance using of technology at first hand

References:

Links for Nike:

1st initial entry:

http://www.classic6inch.info/benefits-and-also-disadvantages-of-buying-nike- shoes/#:~:text=
%20Benefits%20%201%20High%20quality%20Undeniable.%20Nike,can%20appear%20 much
%20more%20confident.%20Such...%20More%20

https://www.company-histories.com/NIKE-Inc-Company-History.html

https://nikemarketingproject.weebly.com/product-service- management.html#:~:text=Technology%20is%20used%20to
%20help%20develop%20the%20product,the
%20product%20to%20a%20small%20sample%20of%20people

https://gradesfixer.com/free-essay-examples/market-segmentation-market-target-and-market-positioning-
of-nike- company/#:~:text=Psychographic%20segmentation%20for%20Nike%20is%20that%20they
%20provide,b est%20to%20meet%20the%20needs%20of%20their%20customers.

http://www.classic6inch.info/benefits-and-also-disadvantages-of-buying-nike- shoes/#:~:text=
%20Benefits%20%201%20High%20quality%20Undeniable.%20Nike,can%20appear%20 much
%20more%20confident.%20Such...%20More%20

https://purpose.nike.com/value-chain-stages

http://www.allwhitebackground.com/nike-shoes.html

https://www.ukessays.com/essays/marketing/nike-market-analysis-and-business-overview-marketing-
essay.php

https://images.search.yahoo.com/search/images;_ylt=A2KLfS6vs9RfJDcAPlFXNyoA;_ylu=Y29sbwNiZj
EEcG9zAzEEdnRpZAMEc2VjA3Nj?p=mission+statement+of+nike+in+1980&fr=mcafee#id=6&iurl=htt
ps%3A%2F%2Fregistration-statement.com%2Fwp-content%2Fuploads%2F2017%2F02%2Fmission-
statement-of-nike-nike-final-18-638-cb1387016705.jpg&action=click

https://www.retrowaste.com/1980s/fashion-in-the-1980s/

http://fashiongear.fibre2fashion.com/brand-story/nikeinc/brand-philosophy-values-
inspirations.asp#:~:text=Innovation%20is%20at%20the%20heart%20of%20NIKE%2C%20Inc.%27s,cha
nge%20in%20the%20brands%20approach%20in%20today%27s%20marketplace.

https://www.daytranslations.com/blog/nike-expands-globally/

phase 2:

https://bstrategyhub.com/nike-mission-vision-purpose-core-values/

https://www.kicksonfire.com/history-of-nike/

https://www.fatbuddhastore.com/nike-sneaker-history-i195