NAME: RAVI M SHAH TOPIC: NIKE ROLL NO: 9 SUBJECT: FASHION MANAGAMENT

INDEX
Sr.No. TOPIC PAGE NO.

1 2 3 4 5 6 7 8 9 10 11 12 13

INTRODUCTION NIKE IN MUMBAI RETAILING VISUAL MERCHANDISING PRODUCTS MARKETING STRATERGY EVOLUTION MARKETING SPONSORSHIP AND BRAND AMBASSADOR BLEED BLUE CAMPAIGN TARGET AUDIENCE INDIAN CRICKETWEAR AND NIKE SWOT ANALYSIS CONCLUSION

INTRODUCTION
Nike Inc. is an American multinational corporation that is engaged in the design, development and worldwide marketing and selling of footwear, apparel, equipment, accessories and services. The company is headquartered near Beaverton, Oregon, in the Portland metropolitan area, and is one of only two Fortune 500 companies headquartered in Oregon. It is one of the world's largest suppliers of athletic shoes and apparel and a major manufacturer of sports equipment, with revenue in excess of US$24.1 billion in its fiscal year 2012 (ending May 31, 2012). As of 2012, it employed more than 44,000 people worldwide. The brand alone is valued at $10.7 billion, making it the most valuable brand among sports businesses. The company was founded on January 25, 1964 as Blue Ribbon Sports by Bill Bowerman and Phil Knight, and officially became Nike, Inc. on May 30, 1978. The company takes its name from Nike, the Greek goddess of victory. Nike markets its products under its own brand, as well as Nike Golf, Nike Pro, Nike+, Air Jordan, Nike Skateboarding, and subsidiaries including Hurley International and Converse. Nike also owned Bauer Hockey (later renamed Nike Bauer) between 1995 and 2008, and previously owned Cole Haan and Umbro. In addition to manufacturing sportswear and equipment, the company operates retail stores under the Niketown name. Nike sponsors many high-profile athletes and sports teams around the world, with the highly recognized trademarks of "Just Do It" and the Swoosh logo. 'If you have a body, you are an athlete' - Bill Bowerman When Nike co-founder Bill Bowerman made this observation many years ago, he was defining how he viewed the endless possibilities for human potential in sports. He set the tone and direction for a young company called Nike, and today those same words inspire a new generation of Nike employees. Their goal is to carry on his legacy of innovative thinking, whether to develop products that help athletes of every level of ability reach their potential, or to create business opportunities that set Nike apart from the competition and provide value for our shareholders.

NIKE PRODUCTS
Nike produces a wide range of sports equipment. Their first products were track running shoes. They currently also make shoes, jerseys, shorts, baselayers etc. for a wide range of sports including track and field, baseball, ice hockey, tennis, association football (soccer), lacrosse, basketball and cricket. Nike Air Max is a line of shoes first released by Nike, Inc. in 1987. The most recent additions to their line are the Nike 6.0, Nike NYX, and Nike SB shoes, designed for skateboarding. Nike has recently introduced cricket shoes, called Air Zoom Yorker, designed to be 30% lighter than their competitors'.In 2008, Nike introduced the Air Jordan XX3, a high-performance basketball shoe designed with the environment in mind. Nike sells an assortment of products, including shoes and apparel for sports activities like association football, basketball, running, combat sports, tennis, American football, athletics, golf and cross training for men, women, and children. Nike also sells shoes for outdoor activities such as tennis, golf, skateboarding, association football, baseball, American football, cycling, volleyball, wrestling, cheerleading, aquatic activities, auto racing and other athletic and recreational uses. Nike is well known and popular in youth culture, chav culture and hip hop culture as they supply urban fashion clothing. Nike recently teamed up with Apple Inc. to produce the Nike+ product which monitors a runner's performance via a radio device in the shoe which links to the iPod nano. While the product generates useful statistics, it has been criticized by researchers who were able to identify users' RFID devices from 60 feet (18 m) away using small, concealable

intelligence motes in a wireless sensor network. In 2004, they launched the SPARQ Training Program/Division.Some of Nike's newest shoes contain Flywire and Lunarlite Foam. These are materials used to reduce the weight of many types of shoes.The 2010 Nike Pro Combat jersey collection will be worn by Miami, Alabama, Boise State, Florida, Ohio State, Oregon State, TCU, Virginia Tech, West Virginia and Pittsburgh. Teams will wear these jerseys in key match ups as well as any time the athletic department deems necessary. Nike has contracted with more than 700 shops around the world and has offices located in 45 countries outside the United States.Most of the factories are located in Asia, including Indonesia, China, Taiwan, India, Thailand, Vietnam, Pakistan, Philippines, and Malaysia. Nike is hesitant to disclose information about the contract companies it works with. However, due to harsh criticism from some organizations like CorpWatch, Nike has disclosed information about its contract factories in its Corporate Governance Report.

NIKE IN MUMBAI
The details of the various Nike Outlets in Mumbai are as below: Linking Road Shop No. 1 & 2, Poonam Building, Linking Road,Khar (W) Mumbai - 400052. Atria Mall 204,205 Atria Mall, AB Road, Worli, Mumbai 400018 Phoenix Unit No. 4, Skyzone, Phoenix Mills, Lower Parel, Mumbai 400013 Colaba Merwan Mansion, Opposite Colaba Police Station, Shahid Bhagat Singh Marg, Mumbai 400001 Infinity Mall Shop NO., 118, Infinity Mall, Andheri link Road, Next to Fame Adlabs, Andheri (w), Mumbai

RETAILING
Retailing: all the activities directly related the sales of goods and services to the ultimate consumer for personal, non-business use. Nike is the largest manufacturer in athletic footwear and apparel worldwide. Nike sells its products in over 180 stores countries worldwide through its company owned retail stores Nike town and internet sites, as well as through retailers like foot locker and dicks sporting goods. Nike divides its sales into four regions across the globe, the United States, Europe, Middle East and Africa, Asia Pacific, Central and South America. With Nike just specializing in the development and sale of athletic footwear, apparel and equipment, it keeps them focused on bringing new products to their retailers to help keep them at the position there in.

In sport, every day is an opportunity to show what youre made of what drives

you, what youre committed to. All new Nike Factory Stores represent Nikes commitment to serving the needs of athletes-and of the planet as well.

Designed to optimize energy efficiency, and incorporating recycled and reclaimed materials wherever possible, they have been registered with the US Green Building Council and have been designated to anticipate LEED certification standards. More importantly, its an example of how innovation can lead not only to better performance, but to a better world. A visit to the Khar Nike outlet helped understand the functioning of the retail chains and management better. All Nike outlets in Mumbai are under the name of SSIPL Retail Limited. The Nike outlet at Khar, Mumbai is a spacious one with proper use of its space, and helps a customer in choosing their desired products better. There is a wide range of products like Shoes, Sportswear, shorts, water bottles, and other sports accessories. The store manager and the other sales executives are well trained such that the customers are at utmost convenience.

VISUAL MERCHANDISING
Visual merchandising is the activity and profession of developing the floor plans and threedimensional displays in order to maximise sales. Both goods or services can be displayed to highlight their features and benefits. The purpose of such visual merchandising is to attract, engage, and motivate the customer towards making a purchase. Visual merchandising commonly occurs in retail spaces such as retail stores and trade shows. Visual merchandising plays a very important factor for brands like Nike as the customer buys what he sees and if it pleases the eye. They have the best of their shoes and apparels on display. They have horizontal racks on a wall from top to bottom which showcases their shoes, and the best ones are usually kept at an eye distance to attract the customer more.

NIKE MARKETING STRATEGY EVOLUTION.

Nikes marketing strategy rested entirely upon a brand image which is favourable and has evolved into a great multinational enterprise over time. The favourable brand image has been kept afloat due to the strong association with the Nikes logo which is quite distinctive and the slogan Just Do It which has been used in advertisement for quite some time. The company has been known to invest heavily in advertisements and brand promotion.

Market Segmentation Most of the consumers of Nikes products are mainly sportsmen. This is so because of the utility that comes with the products. An athlete is more likely to go a sports shoe designed and marketed by Nike more than a person who detests sporting and exercises. Nike targets these consumers by agreements between Nike and athletic teams, colleges athletic teams1 etc for product sponsorship and eventual promotion to the members of these teams. In this way, Nike is able to reach a wide number of consumers and consumers who are more likely to buy. Even though others are likely to buy the products, Nike pays specific emphatic targeting to the athlete more than any group of individuals even though it also targets the youth who have embraced the hip hop culture .

Targeting strategies Nike lays a number of strategies to target their immediate consumers; athletes and other sportsmen. The targeting strategies include among others the sponsorship of products by professional athletic teams, celebrity athletes and college athletic teams. This strategy is specifically successful because of its ability to reach a large number of athletes. If the athletic team manager prescribes a specific type of track shoes made by Nike, the trainees have no option other than to buy them. The teams can as well buy the track shoes in bulky and supply them to the team members. The second strategy that Nike applies is the designing of product destination. It does this by associating success with the product. For example, when a celebrity
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athlete sponsors a specific brand of athletic shoes, the brand will be associated with success. This psychological effect is reinforced with advertisements that affirm this position.

Finally, Nike targets the consumers who are likely to develop product intimacy; those who care more about the utility and quality of the product than the price. In this way, the pricing is not affected too much in a bid to accommodate a large number of consumers. However, price has also been factored in Nikes marketing strategies as shall be seen later in this paper.

Pricing Strategies As stated in the foregoing section, Nike targets the consumers who embrace product intimacy and thus care less about the product. This has enables Nike to set relatively higher prices than its competitors. This is a strategy that calls for higher pricing points so as to push the perceived product value. It has been established that consumers who consider a product to be of high quality are likely to pay the high price more often and consistently. Once consumers develop product intimacy, they come to associate their person with the product

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and will pay whatever price quoted on the product provided it has the Nike logo on it. Another very important thing to note is the fact that Nike uses the vertical integration pricing strategy in which they take ownership of the participants at channel levels that differ and they also engage in multifarious channel level operations both in a bid to control costs and thus influence pricing function.

Distribution Strategies Distribution strategies embraced by an organization can either give them an edge in market or make them lag behind the winners in the market. The more efficient the product distribution is the more sales and thus more profits. The delivery of the right product and at the right time to the consumer not only effects utility but also leads to high degree of consumer satisfaction and loyalty. Nike distributes its products on level basis. The high priced premium products are given to certain distributors while leaving the low priced to be sold at highly discounted prices at mega retail stores such as Wal-Mart. Whereas Reebok embraced a limited distribution strategy Nike ventured more into a global3 market capitalization.

Promotional and Communication Strategies Apart from Nike selling quality products which have lead to a high degree of customer loyalty, the promotional strategies that the company employs are simply superb. Nike has contracted a number of professional and celebrity athletes which have managed to draw a considerable attention to their products. Some of the sportsmen signed by Nike include soccer stars such as Ronaldinho, Ronaldo and Roberto Carlos, Basketballers such as Jermaine O'Neal and Lebron James2, triathlete Lance Armstrong and golf superstar Tiger Woods. This has
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created a relatively high degree of Nike products awareness. Besides the signing of celebrity sportsmen to promote their products, Nike has also employed a great deal of advertisements through the mass media. Nike employs a selective- demand advertisement focused on the high priced shoes used for traditional sports.

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NIKE MARKETING
Nike's marketing strategy is an important component of the company's success. Nike is positioned as a premium-brand, selling well-designed and expensive products. Nike lures customers with a marketing strategy centeringaround a brand image which is attained by distinctive logo and the advertising slogan: "Just do it". Nike promotes its products by sponsorship agreements with celebrity athletes, professional teams and college athletic teams. However, Nike's marketing mix contains many elements besides promotion. These are summarised below. Advertising In 1982, Nike aired its first national television ads, created by newly formed ad agency Wieden+Kennedy, during the New York Marathon. This was the beginning of a successful partnership between Nike and W+K that remains intact today. The Cannes Advertising Festival has named Nike its Advertiser of the Year on two separate occasions, the first and only company to receive that honor twice (1994, 2003). Nike also has earned the Emmy Award for best commercial twice since the award was first created in the 1990s. The first was for "The Morning After," a satirical look at what a runner might face on the morning of January 1, 2000 if every dire prediction about Y2K came to fruition. The second Emmy for advertising earned by Nike was for a 2002 spot called "Move," which featured a series of famous and everyday athletes in a stream of athletic pursuits. In addition to garnering awards, Nike advertising has generated its fair share of controversy: Beatles song Nike was the focus of criticism for its use of the Beatles song "Revolution" in a 1987 commercial, against the wishes of Apple Records, the Beatles' recording company. Nike paid US$250,000 to Capitol Records Inc., which held the North American licensing rights to the Beatles' recordings, for the right to use the Beatles' rendition for a year. Apple sued Nike Inc., Capitol Records Inc., EMI Records Inc. and Wieden+Kennedy advertising agency for $15 million. Capitol-EMI countered by saying the lawsuit was 'groundless' because Capitol had licensed the use of
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"Revolution" with the "active support and encouragement of Yoko Ono Lennon, a shareholder and director of Apple." According to a November 9, 1989 article in the Los Angeles Daily News, "a tangle of lawsuits between the Beatles and their American and British record companies has been settled." One condition of the out-of-court settlement was that terms of the agreement would be kept secret. The settlement was reached among the three parties involved: George Harrison, Paul McCartney, Ringo Starr; Yoko Ono; and Apple, EMI and Capitol Records. A spokesman for Yoko Ono noted, "It's such a confusing myriad of issues that even people who have been close to the principals have a difficult time grasping it. Attorneys on both sides of the Atlantic have probably put their children through college on this." Nike discontinued airing ads featuring "Revolution" in March 1988. Yoko Ono later gave permission to Nike to use John Lennon's "Instant Karma" in another advertisement. Minor Threat advertisement In late June 2005, Nike received criticism from Ian MacKaye, owner of Dischord Records, guitarist/vocalist for Fugazi&The Evens, and front-man of defunct punk band Minor Threat, for appropriating imagery and text from Minor Threat's 1981 self-titled album's cover art in a flyer promoting Nike Skateboarding's 2005 East Coast demo tour. On June 27, Nike Skateboarding's website issued an apology to Dischord, Minor Threat, and fans of both and announced that they tried to remove and dispose of all flyers. They state that the people who designed it were skateboarders and Minor Threat fans themselves who created the advertisement out of respect and appreciation for the band. The dispute was eventually settled out of court between Nike & Minor Threat. The exact details of the settlement have never been disclosed. Chinese-themed advertisement In 2004, an ad about LeBron James beating cartoon martial arts masters and slaying a Chinese dragon in martial arts offended Chinese authorities, who called the ad blasphemous and insulting to national dignity and the dragon. The advertisement was later banned in China. In early 2007 the ad was reinstated in China for unknown reasons.
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Nikes strategy was to create dominant presence in media. Nike created media presence in several trend setting United States cities. TV ads linking Nike to a city were used, but real drivers were huge oversized billboards and murals on buildings that blanketed cities with messages featuring key Nike-sponsored athletes, not products. The company focuses its marketing on celebrity endorsement, i.e. athletes in basketball, golf, soccer, and tennis. Lately, Nike has also began to sponsor big sporting events so as to create huge awareness and brand following. In 2008, Nike spent significant amount on advertising in the Beijing 2008 Olympics and the Football Championship. After the recent Tiger Woods scandal Nike plans on revisiting it celebrity endorsement strategy. It can be noted that the swoosh logo is one of the most famous in the world due to these huge advertising efforts.

Branding Strategy Nikes strategy in this front is to develop a premium brand associated with high quality product that satisfies customer needs. Nikes brand is associated with an aggressive attitude portrayed by, you dont win silver, you lose gold, which clearly suggests that winning is vital. The Nike customer associated the Nike brand with being the American way: Being individual and aggressive like Michael Jordan and John McEnroe. Nike built its brand around sports, attitude and lifestyle. Nike backed this strategy with marketing campaigns like Just do it and with the companies front athletes like Michael Jordan and Tiger Woods.

Selling Strategy Nikes strategy in early 2000s was to develop, flag ship stores, NikeTown shops in bigger cities, first national, and then abroad. Nike was the first company to establish flagship stores and it turned out to be a sensation. There are independent small retail stores that sell Nike products all around the world as well. Also, on seeing the potential of the low price market, Nike took efforts in 2005 to tap in to the low price segment by striking a deal with big retail discount stores like Walmart and rolled out starter shoes at a cheaper price, competing with private label brands. However, to avoid brand dilution, Nike did not use the swoosh logo in these shoes. Currently, Nike has a high quality website and uses it as an online selling channel. NikeId , a part of the website
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allows a customer to customize his own shoes and buy it. The website is available in 14 languages and is different according to the country requirements.

Manufacturing Strategy Nike manufactures all of its footwear from outside United States. Nike has contract suppliers in China, Vietnam, Indonesia and Thailand . These countries accounted for 36%, 36%, 22% and 6% of total NIKE brand footwear respectively. Nike also has manufacturing agreements with independent factories in Argentina, Brazil, India, and Mexico to manufacture footwear for sale primarily within these countries. Primary reason for this is that it is cheaper to manufacture in South East Asia and transport it to USA and Europe, regardless of the transportation and tariff costs involved. Organizational Strategy With over 21,000 employees worldwide, the company was organized into departments by both geographic divisions and product categories, which created overlapping management responsibilities and a fluid leadership structure. For example, a footwear manager in Europe answered to both the Vice President of Footwear and the Vice President of Europe. However, there was no formal communication link between the regional vice presidents (those in the United States, Europe, Asia-Pacific, and Latin America) and the product vice presidents (footwear, apparel, equipment).

Human Resources Management Strategy The sweat shop debacle in late 1990s has led Nike to form a distinctive strategy to provide a good working environment for employees. They have several internal guidelines and compliance standards apart from state laws for ensuring proper working conditions for all workers in its contracted supplier factories. Due to the magnitude of Nike and their number of stores and manufacturing plants throughout the world, Nike has taken the time to recognize the importance of each individual and what they can contribute to the team. For this reason, Nike does not call its employees, employees but rather team members because each part of the team has something to add to the business.
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They have also admitted that they have a very large array of workers and this brings many diverse cultures and points of views together. According to one of its statement, diversity and inclusion is a crucial factor in Nikes diplomacy in their many locations and globally. In identifying the differences they have set apart the opportunities to better understand how their teams will work together and what adversity they may face because of this. In order to strive to reach this mission they have put into action these strategies: Cultivate diversity and inclusion to develop world-class, highperforming teams Ignite change and inspire critical conversations around diversity, inclusion and innovation Create venues and environments for open dialogue, diverse opinions and a multitude of perspectives All of the above will in future venture apply and assist them in working more efficiently and having more satisfied employees for longer periods of time.

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SPONSORSHIP AND BRAND AMBASSADORS

Nike pays top athletes in many different sports to use their products and promote/advertise their technology and design. Nike's first professional athlete endorser was Romanian tennis player IlieNstase, and the company's first track endorser was distance running legend Steve Prefontaine. Prefontaine was the prized pupil of the company's cofounder Bill Bowerman while he coached at the University of Oregon. Today, the Steve Prefontaine Building is named in his honor at Nike's corporate headquarters. Besides Prefontaine, Nike has sponsored many other successful track & field athletes over the years such as Carl Lewis, Jackie Joyner-Kersee and Sebastian Coe. However, it was the signing of basketball player Michael Jordan in 1984, with his subsequent promotion of Nike over the course of his storied career with Spike Lee as Mars Blackmon, that proved to be one of the biggest boosts to Nike's publicity and sales. During the past 20 years especially, Nike has been one of the major clothing/footwear sponsors for leading tennis players. Some of the more successful tennis players currently or formerly sponsored by Nike include: James Blake, Jim Courier, Roger Federer, Lleyton Hewitt, Juan Martn del Potro, Andre Agassi, Rafael Nadal, Pete Sampras, Marion Bartoli, Lindsay Davenport, Daniela Hantuchov, Mary Pierce, Maria Sharapova, Serena Williams.RafaelNadal is currently sponsored by Nike, Inc.

Nike is also the official kit sponsor for the Indian cricket team for 5 years, from 2006 till end of 2010. Nike beat Adidas and Puma by bidding highest (US$43 Million total).

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Nike also sponsors some of the leading clubs in world football, such as the Brazil National Team, Portugal National Team, Netherlands National Team, US National Team, Manchester United, Arsenal, FC Barcelona, Inter Milan, Juventus, Shakhtar, Dnipro, Porto, Steaua, Red Star, Boca Juniors, Corinthians, Club Amrica, Aston Villa, Celtic, guila and PSV Eindhoven. Nike will also sponsor Dundee United from summer 2009. Nike sponsors several of the world's top golf players, including Tiger Woods, Trevor Immelman and Paul Casey. Nike also sponsors various minor events including Hoop It Up (high school basketball) and The Golden West Invitational (high school track and field). Nike uses web sites as a promotional tool to cover these events. Nike also has several websites for individual sports, including nikebasketball.com, nikefootball.com, and nikerunning.com.

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BLEED BLUE
Cricket in India is more than a sport, it's a way of life with a religious following. So with the 2011 cricket world cup being played there, the whole Indian nation is frenzied with anticipation. How then could we create a campaign that would ride on this fevering spirit to allow all cricket crazy fans to show they stand firmly behind the men in blue? Bleed Blue, a digital campaign that integrated facebook, youtube and mobile enabling all cricket fanatic Indians to show solidarity and passion for the game they love. Blue was pivotal in our campaign as it is the color of the Nike Indian cricket jersey and the color of the nation. Digitally, users were able to generate their own unique handprint through facebook connect, either by mobile or visiting nikecricket.in. Information from the users' facebook page, including photos, wall posts and other sharable information was used to generate a unique handprint that will register as the user's support for the national team. On our site, users were offered interactive product experiences where they were able to explore the new Nike Cricket kit in full 360 degrees, view videos of new gear and even brush up on their knowledge of Indian cricket history. Not only did the campaign grab the attention of millions of cricket loving fans, but also reached outstanding numbers using only the power of social media, earned media and by being part of the conversations of the nation. Our facebook
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fanpage gathered over 900 thousand followers with currently more than 9 million handprints generated. Proving that together with Nike, millions proudly bleed blue.

NIKE'S TARGET AUDIENCE

Unlike its competitors, Nike spreads itself to numerous different audiences in various ways. It's a marketing concept and strategy created from a unique sophisticated knowledge and understanding of how people respond to images of lifestyle. Whereas numerous companies manufacture goods for an existing market, Nike tries equally to create the image first and then respond to the market that emerges.

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INDIAN CRICKET AND NIKE

Did you see anything different about the Indian cricket team's uniforms? If you were too busy groaning over the lacklustre performance to notice, let us point it out: there's a little swoosh on the arm and below the right collar. It's small, but it's significant. For the first time, Nike's logo is appearing in connection with an "Indian" sport: cricket. A few months ago, Nike wrested the rights to become the official kit sponsor for the Indian cricket team for the next five years, beating arch-rivals Reebok and Adidas; it paid Rs 196 crore (Rs 1.96 billion) to the Board of Control for Cricket in India for the privilege. The first "Just Do It" cricket ad also made its appearance during the Champions Trophy last month. "We want to look at what drives the passion for cricket in India. We aim to connect emotionally with our customers," declares Sanjay Gangopadhyay, marketing director, Nike India.The swoosh has finally swung, and how. The American sports footwear and apparel giant has had a presence in India for close to a decade, but it's consciously held on to its "international" image. Where Sachin Tendulkar and Dhanraj Pillai were endorsing rivals' products, Nike's ads stuck to Maria Sharapova and Ronaldinho. India didn't really figure in the company's marketing and promotion activities.That's changed now. And it's likely to change the rules of the game of the Rs 1,100-crore (Rs 11 billion)

Indian sports footwear and apparel market.

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All these years, market leadership has eluded Nike in India. This is the only market where Reebok is No. 1 (40 per cent marketshare), followed by Adidas (20 per cent). Nike's 15 per cent share is a distant third (source: Technopak Advisors). Will the change in positioning tilt the balance of power now? Other sports companies realised the value of adapting to Indian consumers long ago. What delayed Nike? The operational arrangement was probably to blame: Nike's entry into India was through a seven-year licence agreement with Sierra Industrial Enterprises, unlike Reebok, for instance, which is a fully-owned subsidiary of the American parent. In 2004, instead of renewing the franchise, Nike India became a subsidiary. It was an opportunity to start afresh, with greater independence, and Nike is aware of it. "The Indian market is growing in terms of retail, customer spends and awareness. It only made sense for us to cash in on these opportunities as early as possible," says Gangopadhyay. In fact, ask Nike executives and they'll tell you the company is "just two years old in India" - as if the previous seven-odd years never existed. The company figures that it is critical to connect emotionally with customers. And in a cricket-crazy nation like India, you don't need to think too hard about how to do that. Even rival Reebok agrees. "You can't be present in India without being associated with cricket," wryly comments Subhinder Singh Prem, managing director, Reebok India. "But to build a successful association, you can't see cricket as a seasonal activity," he warns. Nike is listening. Witness the five-year contract with the BCCI. "We wanted to first show our loyalty to Team India, to prove our commitment towards the market and win the confidence of cricket fans," says Gangopadhyay. That was followed by the introduction of Nike's first cricket shoes. The Air Zoom Yorker was launched this September by pace bowlers S Sreesanth and
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New Zealand's Shane Bond, who have also been signed on brand ambassadors for the product. A shoe for batsmen, the Air Zoom Opener, followed. Besides, the BCCI deal allows Nike to launch official cricket merchandise such as replica team T-shirts and jerseys, kit bags and backpacks. That's not just a huge branding opportunity, it's a potential money-spinner: retail consultants estimate the licensed merchandise business could bring in more than $20 million in the first year itself. Nike is also thinking ahead and taking its commitment to cricket to the grassroots level. In December 2005, it tied up with coaching schools like the BCCI's National Cricket Academy. The academies will work with Nike to understand the product requirements of the players. It's a win-win situation for both the company and the academies. While Nike creates brand awareness and has a shot at creating loyalists at a young, impressionable age, the academies' need for equipment such as shoes and training gear is looked after by the company. "This is good move by Nike to promote products at a serious level and to build brand awareness through its commitment to develop sports in India," says Harminder Sahni, chief operating officer, Technopak Advisors. There's nothing original about the focus on cricket, but elsewhere Nike is stamping out fresh ground. Players like Reebok and Puma are looking at extending the sports product line as a lifestyle brand for the 17-35 years age group. While Reebok is looking at increasing its exclusive women's stores from the existing three to 10 by next year, 70 per cent of the merchandise in Puma stores is lifestyle-, and not sport-related. But when Nike talks of young customers, it means young. Across the world, its core audience is between 12 and17 years, and it sees no reason why India should be any different.

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"We want to inspire youth to become serious about sports that interest them," says Gangopadhyay. The cricket ad, for instance, is clearly targeted at this group. The ad showcases some of India's finest cricket moments in recent times: Virendra Sehwag becoming the first Indian to score 300 runs in a test match and the dramatic win for India in the Natwest series in 2002. You won't find any memories of the Prudential Cup win of the 1980s in this supersized, 300-second commercial: the target group isn't likely to relate with an event that's not just historical, it's history. "Children today don't just play the game, they also understand how serious it is. That is why instead of showing cricketers, we decided to show moments that highlight the achievements of cricketers," says Namita Agarwal, creative head, JWT, the agency behind the campaign. The sponsorships of the cricket academies and the ad isn't the only childfriendly tactic Nike is adopting. It has also launched its cricket shoes and the replica gear in small sizes. That's a good move, say retail consultants. "Targeting kids will help Nike build the brand and create a long-term effect by addressing customers' needs at an early age," says Sahni.

There's some doubt, though, on whether cricket is the best sport to communicate the brand's values to a young, discerning audience. "Brands like Nike are clearly focused on the upper segment of consumers. I'm not sure whether cricket is any longer such a popular sport with that group. Young consumers in the upper strata are more likely to be tuned into events like the NBA or Premier League Football," Sahni adds. For its part, Nike isn't taking any chances. The company is also paying attention to other popular sports in the country, such as tennis and football. Of course, it hasn't started any aggressive marketing initiatives for these sports, but the company is determined to tap into the under-15 group here as well. After announcing its partnership with the All India Football Federation in March 2006, Nike gave an opportunity to the Indian leg of under-15 players to participate in the Manchester United Premier Cup, an annual international Nike tournament.
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The winners of this India round were then flown to Bangkok to participate in the South East Asia leg. Further, to inspire its audience the company has signed on India's leading football star Bhaichung Bhutia to endorse its products. Tennis, too, is being given a hand-up. Under Nike's deal with the Bhupathi Tennis Academy, promising players in the under-12 and under-14 categories will get a chance to participate in the Nike Junior Tour's International Masters Championship, played at international venues like Nice, France. Retail analysts agree that Nike's efforts will certainly help it create new space within the Indian sports footwear and apparel market. "It might help Nike change its position since it has taken a different approach from the competition. One, by extending its commitment to emerging sports and two, by involving young talent at an early stage," says Sahni.

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SWOT ANALYSIS OF NIKE

Strengths. Nike is a very competitive organization. Phil Knight (Founder and CEO) is often quoted as saying that 'Business is war without bullets.' Nike has a healthy dislike of is competitors. At the Atlanta Olympics, Reebok went to the expense of sponsoring the games. Nike did not. However Nike sponsored the top athletes and gained valuable coverage. Nike has no factories. It does not tie up cash in buildings and manufacturing workers. This makes a very lean organization. Nike is strong at research and development, as is evidenced by its evolving and innovative product range. They then manufacture wherever they can produce high quality product at the lowest possible price. If prices rise, and products can be made more cheaply elsewhere (to the same or better specification), Nike will move production. Nike is a global brand. It is the number one sports brand in the World. Its famous 'Swoosh' is instantly recognisable, and Phil Knight even has it tattooed on his ankle.

Weaknesses. The organization does have a diversified range of sports products. However, the income of the business is still heavily dependent upon its share of the footwear market. This may leave it vulnerable if for any reason its market share erodes. The retail sector is very price sensitive. Nike does have its own retailer in Nike Town. However, most of its income is derived from selling into retailers. Retailers tend to offer a very similar experience to the consumer. Can you tell one sports retailer from another? So margins tend to get squeezed as retailers try to pass some of the low price competition pressure onto Nike.

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Opportunities. Product development offers Nike many opportunities. The brand is fiercely defended by its owners whom truly believe that Nike is not a fashion brand. However, like it or not, consumers that wear Nike product do not always buy it to participate in sport. Some would argue that in youth culture especially, Nike is a fashion brand. This creates its own opportunities, since product could become unfashionable before it wears out i.e. consumers need to replace shoes. There is also the opportunity to develop products such as sport wear, sunglasses and jewellery. Such high value items do tend to have associated with them, high profits. The business could also be developed internationally, building upon its strong global brand recognition. There are many markets that have the disposable income to spend on high value sports goods. For example, emerging markets such as China and India have a new richer generation of consumers. There are also global marketing events that can be utilised to support the brand such as the World Cup (soccer) and The Olympics. Threats. Nike is exposed to the international nature of trade. It buys and sells in different currencies and so costs and margins are not stable over long periods of time. Such an exposure could mean that Nike may be manufacturing and/or selling at a loss. This is an issue that faces all global brands. The market for sports shoes and garments is very competitive. The model developed by Phil Knight in his Stamford Business School days (high value branded product manufactured at a low cost) is now commonly used and to an extent is no longer a basis for sustainable competitive advantage. Competitors are developing alternative brands to take away Nike's market share. As discussed above in weaknesses, the retail sector is becoming price competitive. This ultimately means that consumers are shopping around for a better deal. So if one store charges a price for a pair of sports shoes, the consumer could go to the store along the street to compare prices for the exactly the same item, and buy the cheaper of the two. Such consumer price sensitivity is a potential external threat to Nike.

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Conclusion
Rivalry: (Very High) Since the athletic footwear industry in the US is a mature industry, competition is targeted towards attaining market share. Companies need to introduce products at numerous price levels in order to compete and reach all areas of the market. In this sense there are only a few players who are able to compete in all sectors: Nike, Adidas-Reebok, and New Balance. Smaller firms in this industry focus on specific type of shoes hence targeting specialized sub-markets, i.e. Asics on running shoes. Rivalry among the big players is fierce. Since they cannot compete on price they need to differentiate their product through constant innovation. Also, continuous efforts are needed towards strengthening their brands. In order to stay competitive and have presence in all sectors, many mergers and acquisitions, i.e. Adidas and Reebok, are taking place and the market is going towards consolidation. As a result, maintaining a single brand image for companies like Nike becomes really a tough ask. We will discuss rivalry more in details in the Competitor Analysis later on. Threats of New Entrants: (Low) Barriers to entry in the athletic footwear industry are high due to several factors. It is as very capital intensive industry. Even though it would not be difficult for a new company to obtain the raw materials and the labor needed to produce shoes, there is almost no chance for them to gain popularity in such a mature industry with some of the strongest brand names in the world. Brand loyalty is extremely strong and it would be very hard for a new entrant to steal loyal customers from the already existent players. Economies of scale play a huge role as well and the bigger players have an advantage of producing the products at a lower price than compared with newer entrants. As the output is bigger and the fixed costs of factories, machinery, marketing and R&D will be decreased per unit. Both marketing and R&D constitute high costs and since new entrants will not be able to take advantage of the economies of scale they will be less competitive.
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Another barrier is the fact that access to endorsement, which we discussed, is very important in the industry. The bigger players have already established agreements with both teams and athletes. New entrants will not be able to pay hefty sums for such agreements. Similar conditions apply for distribution opportunities and retailers. They want the well-established brands on their shelves that customers want rather than a new unknown brand. The industry itself is in a consolidation phase and only the big ones will survive. The large companies are strategically and constantly acquiring smaller companies. Some of the most popular acquisitions include Reebok by Adidas, Converse by Nike, Saucony by Stride Rite, etc. Small companies are bought before they become a threat to the bigger ones and before they have a chance to gain market share. In other words, it is impossible to grow in this industry because someone will take over your company. Substitutes: (Low) In theory there are a several substitutes of athletic shoes. However, the perceived threat is low since they have unique functions. First, in the sports industry, other types of apparel could also be seen as a substitute, in terms of building image and style. Second, in the same product category, other types of shoes are also substitutes, such as slippers, heels, boots, flip-flops, etc. Even though sneakers are still the most popular type of footwear in the world, there is substantial threat coming from the number of other types of shoes. Lifestyle athletic shoes sales, for instance are growing at the fastest annual rate and Puma is undoubtedly the leader in this segment- with more than 50% sales growth. Buyer Power: (Very High) The buyers for this industry are retailers and end users. The footwear retailers, i.e. Footlocker, Wal-Mart, range in sizes. However, the top 25 retailers account for two-thirds of the sales of athletic footwear- approximately $15 billion in value. New retailers are entering the market, such as big box stores and vendors that open their own stores. The lack of concentration among buyers brings down the margins and gives the power to the vendors. Retailers also have no power in determining the design
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of the product. Therefore the big footwear manufacturers generally dictate the price of their shoes. In order to gain more power buyer companies have started mergingFootlocker -Foot Action, Sport Authority- Gart. This consolidation will transfer some of the power from the big players because in order to be industry leaders they will need these well-recognized retailers as well. Growing margins suggest that buyer power has been increasing. The end user of the industry is also considered a buyer and he has unlimited power. Every company is fighting for the loyalty of the end user through constant innovations and brand management. However, if the user is dissatisfied, he can easily switch the brand to another one. Therefore, overall we consider buyer power to be high.

By catering to the target markets specific needs in fields of sports, fashion, and lifestyle, Nike will be able to widen its consumer base and generate more revenue. This is done by closely monitoring the implementation of the proposed marketing and development strategies. The gap between the marketing work done with the goals expected is minimal . Customer satisfaction with respect to quality and usage is the highest which in turn boosts the morale of the executives working hard with their marketing strategies. Nike has always changed its marketing strategies appropriately by absorbing the global and national changes in any region and hence coming out to meet their individual needs. Thus boosting the faith on the brand NIKE. These all when combined becomes the USP of Nike and holds up its market share globally in proportion.

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