Presented by: (Group 4) Raunaq Oberoi (71) Saket Kumar Singh (74) Poonam (60) Sakshi Sidana (76)

Nike: Building a Global Brand

Began as a two person enterprise in OREGON and with time became the largest footwear and apparel company in the world. Surpassed Adidas and withstood challenges from Reebok . Successfully expanded in Europe and other international markets Although the company remained successful , it continued to face challenges as well as allegations .

The START
Founded by Phil Knight , who grew up in Oregon a place known for its deep passion for athletics 1962 The BLUE RIBBON SPORTS. CONCEPT- to provide high quality running shoes designed especially for the athletes by the athletes. 1963 ,December received his first shipment of 200 Tiger shoes from Japan 1964, asked BILL BOWERMAN , his coach at UOO to join him @ Blue Ribbon Sports . Bowerman had a knack for designing running shoes for the track team both joined hands and Blue Ribbon partnership was formed, both contributed $ 500 each.

Continued
In the first year 13,000 Tiger shoes were sold . Following this by 1965, sales rose upto 20,000. By 1971, the company had reached $1 million in sales and Knight decided to venture out on his own. To manufacture his own line of shoes Knight rewired a new name. He wanted the new name to be DIMENSION SIX but his employees felt it was too long a name . Just days before the product was to go out to the distributors, JEFF JOHNSON , companys 3rd employee suggested the name NIKE (winged greek goddess).

Q 1) Nikes brand image and source of brand equity in the United States.
 Nike is marketing campaigns. selling a feeling; an emotion. An aggressive and performance oriented brand. Has always given priority to performance and durability along with fashion. Always provides higher quality with high price. Uses slogans in advertising and marketing campaigns

Source of brand equity

Professional athletes and players of international sports. Upcoming stars as its brand ambassador. signs top athletes of every sport from across the world to lucrative deals athletes wear and represent Nike in various events

2.How have Nikes efforts to become a global corporation affected its source of brand image in the United States, Europe, and Asia?
Their newest strategy is putting emphasis on individuality and appealing to each sport and athlete in the United States, Europe, and Asia. unstable mix of local and global standardization. European marketing team attacked a single sport at a time to develop the brand in Europe. Separate promotional campaigns were conducted in different countries Nike made several errors in judgement with regard to several advertising campaigns Build an image of aggressive, expensive American brand.

3. Are sponsorships and endorsements vital to Nikes business? For instance, what effect would Nike becoming an official sponsor for the Olympics have on the companys relationship with consumer?
Nike depends seriously on its endorsements and sponsorships to market it-self It paid top athletes in many different sports to use their products and promote/advertise their technology and design. Nikes first athlete endorser was a Romanian tennis player and the first track endorser was distance running legend Steve. In 1985 Michael Jordan came to the company. Introduced the Air Jordan shoe. It sold over $100 million of Air Jordans in the first year and sales just took off.

Soon Nike understood the importance of cricket in India and became the official kit sponsor of Indian cricket team. It paid Rs 196 crore (Rs 1.96 billion) to the Board of Control for Cricket in India for the privilege.

Looking at other popular sports in India, soon they became partners with the All India Football Federation in March 2006 and signed Indias leading football star Bhaichung Bhutia. It also sponsors some of the leading clubs in world football, such as Manchester United, Asenal, FC Barcelona, Inter Milan, Red Star Nike sponsors several of the worlds top golf players including Tiger Woods and Paul Casey. All these endorsements and sponsorships established a presence in the market and gained popularity which helped Nike develop the brand.

4.Why did Nike become a target for critics of globalization? Do you think Nikes response to allegations of unfair global labor practices was appropriate or effective? Is Nike truly concerned about these issues?

Contract with factories in China, Vietnam, Indonesia and Mexico. Violated minimum wages and overtime laws in vietnam. poor working conditions and exploitation of cheap overseas labor employed in the free trade zones. Use of child labor in Cambodia and Pakistan. Workers were forced to work for 65 hours a week. Health and safety problems in Vietnam.

Nikes measures to defend the allegations were effective to some extent but not entirely Formulated a code of conduct for its suppliers.  Increased the minimum age of footwear factory workers to 18 and all other workers (in apparel, equipment) to 16.  OSHA standards for indoor air quality.  Nike created several new departments (e.g., Labor Practices (1996), Nike Environmental Action Team (NEAT).  Nike has pushed its suppliers to obey standards through increased monitoring and inspection efforts.  Nike has been active in founding and/or supporting an array of different international and non-profit organizations.

Continued

..

 Training in Nikes Code of Conduct, Labor Practices, Cross Cultural Awareness, and in the companys (SHAPE) program.  Introduction of reward system for leveraging its efforts towards these serious issues.  Introduction of Grading system for suppliers.

 Started education programes.  60 hrs work week have been enforced.

5. Evaluate Nikes acquisitions and the brands now under its control. Do these acquisitions make sense for Nike? What if any, brands should Nike try to acquire next?

Current Nike Mergers Converse Cole Haan Hurley International LLC NIKE Golf Umbro Ltd Exeter Brands Group LLC Nike Bauer Hockey

Continued
Alliances 2003 2006 2006 2008 2009

..

Nike Grind Nike + iPod Center of Excellence House of Hoops BICEP

Yes, these acquisitions make sense for Nike because it had many goals behind these acquisitions.
Brand diversity Ways providing additional avenues for growth Segmenting this business by customer Opportunity to address the low end through distribution at retailers.

 Nike should try to acquire the Chinese brand Li-Ning next if it is possible.

6. How is fashion to Nike? Are they a performance apparel company or a fashion company? What is more important for Nike when they enter a new market like china? Fashion or performance
Nike is predominantly performance oriented fashion is an integral part Nike goddess boutique Focused on real woman Customized product Advertisements stress on performance mainly

Nikes entrance in China

Concentrate 50-50 on fashion and performance New middle class seeks western culture Market high end and low end products Quality as well as style Endorse with most popular sports which are table tennis, badminton and athletics.

7. Should Nike do anything different to defend its position now that Adidas and Reebok have joint forces?

Innovation kitchen Maintain brand equity Focus both on fashion and performance

Introduce low end products also in emerging markets Continue its endorsements and sponsorships Improve brand image

To defend Nikes position it should:

Advertisements specifically for female consumers Service differentiation. Product Differentiation. Unique shoe technology and innovation. Distinctive Competency - Marketing (Consumer Loyalty). Think about latest trends and style Introduce fashionable quality shoes.

Low price range. Be agile and nimble. Be more socially responsive to show concern for the society.

Recommendations
Gain a more positive global image, especially regarding labor laws. Pull back the extreme spending on endorsements. Better management of their fashion shoe sector. Gain a stronger presence in China. Penetrate in other emerging economies.

Thank You