25 ARALIK 2018

NIKE'S BRILLIANT MARKETING

STRATEGY IN THE US

NIKE HYPER ADAPT 2.0

Written by
Hamit Kaya
Mirriam Manyando
Ilaydan Doganay
Ahmet Musab Imir
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Table of Content

Table of Content....................................................................................................................................
1. Introduction...............................................................................................................................
1.1. The Nike Company-Overview ..........................................................................................
1.1.1. Current Status................................................................................................................
1.1.2. Mission & Vision Statement..........................................................................................
2. Nike’s Product Development......................................................................................................
3. Consumer Behavior.....................................................................................................................
4. Competition................................................................................................................................
5. Segmentation..............................................................................................................................
6. Promotion Strategies..................................................................................................................
7. Distribution Channels..................................................................................................................
8. Key considerations.....................................................................................................................
8.1. The culture ........................................................................................................................
8.2. National image....................................................................................................................
6. Conclusion..................................................................................................................................
7. References..................................................................................................................................
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1. Introduction

1.1.The Nike Company-Overview

Nike, originally know as Blue Ribbon Sports (RBS) is an American multinational corporation
that is engaged in the design, development, manufacturing, and worldwide marketing and
sales of footwear, apparel, equipment, accessories, and service founded in 1964 by Phil
Knight and Bill Bowerman. The company takes its name from Nike, the Greek goddess of
victory, and adopted the well-known logo, called the “Swoosh”, first used by Nike in 1971.
Its brand alone is valued at nearly $28 billion. Nike’s success has been the result of the
constant innovation and timely investments that have resulted in Nike making profits worth
hundreds of million dollars every year.
Nike produces a wide range of sports equipments such as running shoes, sportswear, football,
basketball, tennis, golf, etc. Now Nike follows the global fashion trends and is well known
and popular in the youth culture and hip hop culture to supply some fashion products. Nike
recently teams up with Apple Company to produce the Nike+ products which can monitor a
runner’s performance through a radio in the shoe that can link to the iPods. Besides that, Nike
also became one of the top of three companies that is climate-friendly, which builds a better
image to its customers. 
Nike’s achieves their market goals through their excellent marketing strategies. Nike believes
the “pyramid influence” that the preferences of a small percentage of top athletes influence
the product and brand choice. So Nike has contracted with many athletes’ spokesperson,
professional teams and college athletic teams to advertise and promote their products to
customers. Nike seriously pays attention on the technology production, design and selling
such as e-commerce, high-tech running shoes, Nike+ with Apple, etc and it usually
outsources its products from most of the factories which are located in Asia such as China,
Indonesia and India.

1.1.1. Current status

 Compared worldwide, most revenue is generated in the United States which accounts
for $83,782 million in 2018.

 In 2018, Nike's global revenue amounted to about 36.4 billion U.S. dollars of which
in North American, Nike’s revenue amounted to about 14.86 billion U.S. dollars.

 Nike's North American revenue in the footwear sector amounted to about 9.32 billion
U.S. dollars in 2018.

  In 2018, Nike operated a total of 1.182 retail stores throughout the entire world of
which Nike operated 29 Hurley stores in the United States.
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 NIKE Brand sales to wholesale customers increased 2 percent while NIKE Direct
revenues grew 12 percent to $10.4 billion. This was driven by a 25 percent increase in
digital commerce sales, the addition of new stores and 4 percent growth in
comparable store sales.

 In 2018, Nike's advertising and promotion costs worldwide amounted to about 3.58
billion U.S. dollars.

 The company invested 1.46 billion U.S. dollars in advertising in the United States in
2017. To compare, its revenue in North America amounted to 15.22 billion U.S.
dollars that year. Footwear sales accounted for roughly 62 percent of the revenue,
apparel for another 32 percent and the remaining part can be attributed to equipment
sales.
1.1.2 Mission and vision statement

Mission Statement
Nike’s mission is “to bring inspiration and innovation to every athlete in the world.” based on
Nike founder Bill Bowerman’s statement, “If you have a body, you are an athlete.” 
Vision Statement
Nike’s vision is “to remain the most authentic, connected, and distinctive brand” by carrying
on its legacy of innovative thinking, whether to develop products that help athletes of every
level of ability to reach their potential, or to create business opportunities that set Nike apart
from the competition and provide value for their shareholders.

2. Nike’s product development

The company has shared some details on a new design of its HyperAdapt shoes for 2019,
which have been given a fresh look and a much friendlier price tag. Numerous iterations of
Nike's self-lacing sneakers have emerged over the years. After an initial run of 1,500 Mag
sneakers were auctioned off for the Michael J. Fox Foundation for Parkinson's Research,
Nike went on to introduce the first pair called "power laces" in 2015. The power laces
sneaker respond to a system that reacts to the wearer's motion and innovatively adjusts the
tightness on the fly. This technology then found its way into the Nike HyperAdapt 1.0
sneakers in 2016, which are regular sneakers that retailed for a non-regular price of US$720.
The brand new HyperAdapt sneakers aren't the product of a dramatic redesign, though the
lacing mechanism now goes by the name of E.A.R.L., or Electric Adaptable Reaction Lacing.
Like the earlier versions, this technology is said to electronically adjust the shoe's fit,
tweaking the lacing to fit the contours of the foot on the fly. EA.R.L. is activated
automatically as soon as the wearer slides their foot into the sneaker, with a sensor built into
the shoe responding to the presence of a heel and setting off a string of lights built into the
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back of the shoe. These blue lights will continue flashing as long E.A.R.L. searches for the
perfect fit. The newest version of Nike's self-lacing sneakers appear to be aimed a little closer
toward the mass market in contrast with the early examples of Nike's self-lacing sneakers that
were conceived with collectors and enthusiasts in mind. Nike will launch a second generation
of the hi-tech sneakers at a much more affordable $350 price point. Nike confirmed the news
in its most recent earnings call during which its Executive Vice President said that the
sneakers would launch in spring of the New Year, and designed to be used on the basketball
court. Nike said it’s “just one better fit solution amongst many” that the company will be
rolling out throughout the year.

3. Consumer behavior

victory, freedom, change, adapt are some of the words that Nike uses in its Slogans and
headlines and such words give customers the sense to Just Do It. Young athletes are the
target market of Nike right now. With its brand, it has the powerful position of influence with
young people by launching the digital platform for engaging the consumers to join it so that it
may make better relationship with consumers. Famous athletes from all around the world are
participating in advertisements for Nike Shoes; some examples are Tiger Woods, Cristiano
Ronaldo, and LeBron James. Each athlete gives customers the feeling that they are the best in
their fields, so you can also do it, you can wear the same shoes with the basketball player you
admire. Nike Shoes also create the perception that if anybody can do it, you can also do it, so
pushes customers to buy shoes and start the change.
Nike Shoes is already a well-known brand through the world, with effective advertisements
and word of mouth, since customers tend to share their positive views with their friends and
family. After buying Nike Shoes, consumers learn about the brand, and experience the quality
and see themselves that they got what they expected. However, the public feels that Nike
over charges its consumers and make its profits.

4. Competition

After years of riding high on the aspirations of urban youth for the footwear choices of
Michael Jordan and Lebron James, NIKE has hit the wall, at least in the U.S. A new survey
by Piper Jaffray on U.S. teen brand preferences finds NIKE losing ground with its core base,
while Vans and Supreme in street wear and Adidas, Puma and New Balance in sports
performance are gaining momentum. Despite holding some of the largest partnership deals in
world sports, Nike does not spend as much as Adidas or Puma on partnerships as a
percentage of overall revenue. Nike’s expenditures on partnerships have remained relatively
stable because they have not changed their strategy. Adidas has seen a slight uptick in this
category as they have worked towards forming partnerships with pop-culture icons such as
Kanye West in a largely successful bid to increase their media presence. After spending a
significant amount on partnerships and marketing in the early part of the decade, Under
Armour has looked to decrease their expenditures. Puma spends a high percentage of
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revenues on partnerships, largely due to their relatively low overall revenue when compared
with the other three category competitors.
In response, NIKE plans to continue working its affinity with the NBA, as it reports its
partnership “is now in full force,” with more performance-based sneakers, such as the
KYRIE 3 and Jordan brand, and an expansion of new basketball-themed apparel offerings,
like the Thermal Flex Showtime jacket. Trevor Edwards, president of NIKE Brand, in
company’s earnings conference call said they are ultimately confident that with this complete
offense, they will fuel the game of basketball globally. As it works to regain its old magic on
the court, NIKE is also innovating in the running shoe segment with premium priced Air
VaporMax and targeting the growing women’s sportswear category with more stylish
offerings.
5. Segmentation
Market Segmentation
Nike is unique in the fact that they have a very general targeted demographic segment –their
stated target market is “all athletes”. However, this does not mean Nike does not use market
segmenting to more precisely define various market segments.

 Demographics segmentation:

Although with apparel and sports the market can be broad, for the most part Nike primarily
targets consumers who are between the ages of 15-55. The company caters to both men and
women athletes equally, and is placing an increasing focus on teens to build long-term brand
loyalty. Given the high-price of the company’s products, it does use the income and
education as targeting variables even though it does not target consumers based on race,
ethnicity, religion or social class.

 Psychographics and behavioral segmentation:

Nike also uses psychographic segmentation to target individuals with specific lifestyles and
personalities. To use this variable effectively Nike must target individuals who enjoy sports.
So regarding this Nike segments its market which includes:
• Sports or athletic oriented
• Active lifestyle (interest in fitness and exercise for recreation)

 Geographic segmentation:

In the United States, Nike focuses on American football and baseball, creates and deploys
many advertisements and marketing campaigns about football and baseball products using
athlete’s specific to those sports. Nike’s largest markets are North America followed by
Western Europe and China. In these geographies Nike’s marketing efforts are largely focused
on urban areas with high market densities.
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6. Promotion Strategies of Nike

The success of a brand can be understood by its adaptation to the changing economic, socio-
cultural and technological conditions. Today, companies that cannot keep up with this change
are disappearing. Nowadays, consumers prefer to use internet and social media in order to
reach a variety at the same time. Important results of this are that the companies that do not
use websites effectively now have a numerical decrease. However, only the website is not
enough to showcase a product. Brands that perceive the increase of Internet and social media
usage as an opportunity and understand how important digital marketing is, try to capture the
marketing opportunities of the digital world by adapting their marketing strategies to the
digital world. One of the best examples of this is the legendary brand Nike. One of the most
important examples when it comes to success in communicating with consumers through
effective digital marketing strategies: Nike! Nike has left its rivals behind with the social
competitions and events that it carries out. Nike, which is one of the biggest sportswear
brands in the world, has reached a wide audience with its digital campaigns. It launched a
campaign with the slogan “Take Action “. Reaching the consumer; Nike, which uses
traditional and digital methods together and in a regular manner, is moving towards effective
results with this campaign. Nike has increased the total marketing budget in spite of
decreasing this budget over the last 5 years, while it has significantly allocated budget for
television and print ads. How this happened is that the most important reason for this is that
Nike is now more concerned with digital marketing. Nike communicates with consumers
through social media, in the area where consumers spend most of their time using interactive
items with new marketing strategy. With interactive applications, it wants to be near more
consumers by trying to reach a larger audience. In addition, today, advertising and social
responsibility projects in the 'I'm in there' message that the brand that last year, the amount of
profit is explained.
The marketing strategy, led by Mark Parker, CEO of Nike, has changed dramatically and
focused on digital marketing. The effect of this change on the company is as follows;
· TV ads and printed material expenditures have decreased by 40%.
· In 2011, the marketing budget broke its historic record and reached $ 2.4 billion.
· Spent more than $ 800 million on traditional advertising media.
· Wiedden + Kennedy and other agencies were used separately for marketing and advertising
campaigns.
· In 2010, the company opened its Digital Sports Department.
Nike has been strongly influenced by Steve Jobs. CEO Mark Parker says the following
sentence is very clear. All the rules of the game have changed with “Nike +”. In 2006, Nike +
was developed on mobile demands from customers. Thanks to this project, which was
implemented in partnership with Apple, it was also an opportunity to examine customer
behaviour. There are more than 160 million active runners at nikeplus.com. In 2011, Nike +
Full band was released. As for applications that combine traditional advertising channels with
digital, Nike shows Twitter posts on more than 30 billboards on billboards. Nike also attracts
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attention with its high-dose motivational marketing communication. “Just Do It”, the basic
discourse of Nike, is used actively when most of us are involved in our daily lives, because
this discourse has a meaning that is so strong that we no longer want to express our present
sense in our own language. The most significant change observed in Nike is; now we do not
see internationally successful athletes as inaccessible icons. By suggesting the relationships
of these athletes with the brand, the period of influencing the consumer also gradually ends.
Other international sports brands are aggressively competitive, while Nike; has begun to
make a communication that touches the consumer and fun with the latest campaigns. In the
last commercial, she continues to use the sports icons she uses for marketing communication
in a way that makes her relatively inconvenient.
Some Nike Ad Campaigns

 The Change

Nike's recurring worldwide campaign, The Change (Luck), gave young people the
opportunity to be in the Nike Academy for a year. The campaign was first launched in 2010,
including nikefootball.com; Announced for 6 months on Facebook, Twitter and YouTube.
Participants opened more than 17,000 Facebook pages with 5.5 million fans in total. In
addition, there were 2000 user-generated videos and 28 million players posted 3.4 million
YouTube views during the campaign. The winning players had the chance to play against the
teams of the Premier League and other big clubs for 1 year at Nike Academy.

 Free Running

In order to promote new running shoes, Nike launched the Nike + social media platform to
launch a social campaign where runners can determine when the two miles are running the
fastest. An original karaoke song was added to add fun and emotion to the competition, and
runners were asked to sing this song as they ran. The selected song “I would run to you” 2
was downloaded by runners using the Shazam mobile app and the campaign was supported
with a 2-minute short film.

 The Chosen

Nike’s first campaign in 2011, followed by success in the following years was repeated.
Concentrating on traditional advertising through social media, Nike released a 90-second
video on social media 3 days ago. Within the scope of the campaign, Nike, skate and
snowboard or people focused on niche sports in different fields were asked to send videos via
social media. The ad from the selected videos is great. The athletes in the video had a feature.
There was an interaction between social media networks and those who tried this. ”The
Choosen”, the athletes with a chosen lifestyle, determined the winners. The campaign is a
successful example of Nike's engagement in social media about niche sports products.

7. Distribution channels
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NIKE distributes its products through three main channels: firstly by selling products to
wholesalers in the US and international markets. Secondly, by direct-to-consumer (or DTC)
sales, which include in line and factory retail outlets and e-commerce sales through
www.nike.com. Lastly, through Sales to global brand divisions.
The size of the sports shoe store in the US is US $ 83,782m. And Nike's market share in the
American market was 17.9 percent. Many buyers who bought Nike products said they
preferred retail sales. The company is attempted to grow the Direct to consumer category to
$8 billion in sales by fiscal year 2017, up from $5.3 billion in fiscal year 2014. That’s an
annual growth rate of 14.7%, compounded.

It is important to build a multi-channel distribution system for many businesses. As a result of

the advances in information and communication technologies, it is known that the
competition limits the competition by adding new channels to the existing known channels by
adapting their strategies to their customers (Schögel et al., 2004: 4).
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Global distribution requires different distribution solutions in different markets around the
world. Accordingly, historical developments, the different dynamics and resources of the
markets, changing market and power balances should be taken into consideration by
enterprises (Specht and Fritz, 2005: 167).
In summary, it can be said that in the management approach, moving towards multichannel
distribution system, realizing the potential, expanding the use of multi-channel distribution
system and expanding the use of multichannel management is very important(Bachem, 2004:
36).
Opportunities and risks offered by Multichannel Management
There will be opportunities and risks associated with implementing multiple distribution
channels around multichannel distribution management. One of the examples that can be
given to the conflict within the channel is the management of the Nike brand, which is one of
the distribution channels, of the Nike Town stores. Chain stores that sell Nike products in
high quantities (eg Footlocker) emphasized that the central management should stop making
concessions (in particular product-specific links) used for in Nike Town “and that the
distribution should be collaborated (Böing et al., 2003).
In addition, marketing activities carried out through different distribution channels are among
the activities aimed at improving the strategic position of enterprises as they will reduce the
dependency on customer groups and intermediaries.
In addition to the opportunities offered by multi-channel distribution strategies, there are also
risk factors to be considered. It will be difficult to organize certain customer or customer
groups with more than one distribution channel (Kleinaltenkamp, 1999: 299). This may result
in disagreements in the distribution channel. If the customer is confronted with the purchase
of the product from different sales branches of the same vendor and through different
distribution channels, this response will draw. Often it is difficult to arrange marketing tools
through different distribution channels. If the consumer takes information about the product
in the online store and then performs the purchase in the traditional retailer store, then he /
she can realize this shopping experience in only the traditional retail stores without creating a
definitive purchase decision in his head and receiving information related to the product from
the internet (Fritz, 2004b: 276). .
Such risks are the result of incomplete coordination of the roles and duties of the distribution
channel (Schögel, 2001: 14). The conflict in the channel is the biggest danger that affects the
success of the multichannel distribution system.
Based on the opportunities and risks offered by the multichannel distribution system, it is
possible to say that achieving high profits by increasing the amount of customers in the
multichannel distribution system or by using the market potential is not a must for success.
Success can be expected by systematic, fact-based and economic progress in the whole
system (Kracklauer et al., 2004: 142).
In multichannel distribution, it is necessary to investigate the distribution of the new
distribution channel in the system as well as the maturity or maturation phases of the same
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product in the life cycle of the distribution channel system. Technical advances, economic
events, changing attitudes of customers, legal and political measures that can be taken are
often the reasons that may affect the duties of the distribution channel.
8. Key considerations
8.1. The culture
America is known for many things; but sports, music and art are the most
important among them. American football, baseball, ice hockey and basketball are
extremely popular in the US as the four main sports branches. However, many other
sports also attract attention. The US has more gold medals and total medals than any
other country in the Olympics. Sports in the college are an important feature of
American culture.
 Advertising campaigns in USA

Times Square Billboard

Nike has placed an interactive billboard in Times Square to help people present their own
identity, Nike. Those who wanted to customize the shoes on the screen designed their shoes
by using their smartphone's keypad after dialing the phone number on the screen. Then the
link is sent to those who want to buy the design or download it as wallpaper.
No application or software was needed for the campaign in 2009. Anyone who owns a
Smartphone can participate in the campaign and bring their own style to the big screen. As
seen in the video, some participants were quite excited about this.
Fuel Your Team
Nike has implemented this interactive campaign on its social media platform, which currently
has about 6 million members, Nike +.
Since 2010, Nike has developed a range of training products using its digital platform Nike +
FuelBand. Users then began to collect NikeFuel points, set goals for themselves, or compete
with other users.Nike organized a campaign called Fuel Your Team earlier this year, which
enabled users to earn NikeFuel points for their college basketball team.
8.2. National image
Nike's decision to use Colin Kaepernick as the face of its latest advertising campaign has
some sports fans burning with rage.People upset with the move have started setting fire to
their sneakers and sportswear to protest Nike using Kaepernick to promote the 30th
anniversary of its "Just Do It" advertising campaign.The former San Francisco 49er has not
played in the NFL since the 2016 season. That year, he began kneeling during the National
Anthem to raise awareness about police brutality against African-Americans and other racial
injustices. Dozens of other players began joining Kaepernick, and he has become a symbol of
the dividing lines over race in America. Nike's decision has been heavily criticized by some
customers who posted videos to social media of them burning and cutting up their Nike attire.
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9. Conclusion

Nike has the potential to execute its objectives and can offer new products and expand its
share. Nike has remained and continues to remain at the top in producing and distributing
their sports clothes and equipments. However, Nike should consider the competitive pressure
as it is very heavy and not allow the “sleep at the top”. It should continuously find efficient
marketing strategies to keep their top leaders positions. Besides the difficulties it is facing
when they competing with Adidas. Nike is the leader in sports equipment creating a fortress
in the sports market that is mostly likely difficult to conquer. The company excels because it
is the first that brought innovation to sports shoes through the R & D department. At the same
time, Nike constantly attracts the best athletes from all sports and signs contracts that bring
enormous profitability to the business by associating the products with triumph and victory,
creating the consumers’ the need to acquire the product. It clearly understands that their
success depends on having understood the needs of its consumers as this affects their buying
decisions.. It is strongly felt that this topic should be d researched further in order to help
marketing plans be more productive as well as innovative.

10. References

 A Marketing Case Study on Nike - Miles Media. (2018). Retrieved from

http://milesonmedia.com/a-marketing-case-study-on-nike/
 Market Segmentation of the Nike Company. (2018). Retrieved from
https://www.ukessays.com/essays/marketing/market-segmentation-of-the-nike-
company-marketing-essay.php
 Nike drops the price for its first self-lacing basketball shoes. (2018). Retrieved from
https://newatlas.com/nike-price-self-lacing-basketball-shoe/57787/
 Nike, inc. company report. Retrieved from
https://run.unl.pt/bitstream/10362/36379/1/Borts_2018.pdf
 Nike Segmentation and Targeting. Retrieved from
https://mymission.lamission.edu/userdata/schonfd/docs/Assignments/Nike
%20Segmentation%20and%20Targeting.pdf(2018).
 Nike Inc.’s Mission Statement & Vision Statement (An Analysis) - Panmore Institute.
(2018). Retrieved from http://panmore.com/nike-inc-vision-statement-mission-
statement
 Nike Story - Profile, History, Founder, Founded, CEO | Footwear Manufacturing
Companies | SuccessStory. (2018). Retrieved from
https://successstory.com/companies/nike-inc(2018).
 Yahoo is now part of Oath. (2018). Retrieved from
https://finance.yahoo.com/news/adidas-nearly-doubled-us-sneaker-market-share-
nikes-expense-153106743.html