MKT2006 BRAND MANAGEMENT

Assignment 1

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 NIKE, INC.

Lecturer Name : Dr Srinivasan Uma Rani

Module Leader : Maher Daboul

Student Name : Drushti Jain

Student number : 18402537

Word count : 2178

Course : Bachelors of Arts (Hons.) & Business studies

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Contents

1. EXECUTIVE SUMMARY .......................................................................................................4

2. HISTORY AND BACKGROUND .............................................................................................4
3. BRAND INVENTORY ............................................................................................................5

3.1 Brand positioning 5

3.1.1 Nike’s Target Market..................................................................................................................... 6
3.1.2 Brand Elements ............................................................................................................................. 6
3.1.3 Brand Mantra ................................................................................................................................ 7
3.1.4 Points of Parity and Points of Differentiation ............................................................................... 8

3.2 Visual Identity 9

3.3 Marketing Mix 10

3.4 Financial Performance 11

4. BRAND EXPLORATORY..............................................................................................................12

4.1 Steep Analysis 12

4.2 Keller’s Customer Based Equity Model 14

5. BRAND ANALYSIS......................................................................................................................15

5.1 Product market analysis 15

5.2 Competitive Analysis 15

5.3 SWOT Analysis 16

6. RECOMMENDATIONS...............................................................................................................17
8. APPENDIX .................................................................................................................................19

Brand Plan 19
REFERENCES ................................................................................................................................20

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 1. Executive Summary

This report evaluates brand audit of company ‘Nike, Inc.’– a leading athletic footwear

apparel. It includes a comprehensive study on brand inventory and exploratory components

involving brand elements, point of parities and of disparities, marketing mix in terms of its 4p’s,

STEEP analysis and CBBE model. This report also evaluates brand analysis of Nike, Inc.

comprising of competitional and SWOT analysis. Finally, it is concluded with strategic and tactical

recommendations involving my perspective and a brand-plan summary appendix.

2. History and Background

Nike is the global leader, marketer and retailer of athletic apparel, footwear and accessories.

It is an American multinational company founded in 1964 by athlete- Phil Knight and his coach

Bill Bowerman from University of Oregon. The business was initially named as Blue-Ribbon

Sports which in 1978 was renamed as Nike, Inc (Britannica, 2018). It originally functioned as a

distributor for Japanese shoe manufacturer with 1200$ in its bank, which now is present across the

globe- operating in over 180 countries, with net income of US$3 billion+ (Reilly, 2014). The name

Nike was chosen from Greek mythology which is named after a goddess of victory. Nike, Inc.

plans, creates, designs and markets sports footwear, equipment, accessory and apparels products

for women, men and children. Also, with its highly familiar tagline “Just do it” and logo “Swoosh”

- a curved check mark is recognized throughout the world (Bloomberg, 2018).

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 3. Brand Inventory

3.1 Brand positioning

Nike is one of the leading brands across the globe and has an effective position in the mindset

of the consumers. It is a premium product with unique designs (Haque, 2015). Nike’s statement

for positioning is “For serious athletes, Nike gives confidence that provides perfect shoe for every

sport”. The company taps into the emotions of consumers by addressing them as athletes and

positions itself as a brand serving- energetic and enthusiastic people belonging to all age groups

who wants to live athletics lifestyle (Shadat, 2015).

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3.1.1 Nike’s Target Market

Nike targets professional athlete, men customers, women customers

and also young athletes, (Panagiotopoulou, 2018). Moreover, the Women’s

segment is on a pace than the Men’s segment. To ensure forthcoming

growth, young participants form a huge part of their target market, especially

in sports like basketball, running and soccer(Soni, 2014).

It also evaluates its target market based on size reachability, measurability and behavioral

variables (Matthew Shank, 2014). Nike mainly targets the loyal customers who emotionally

connects to the product and are likely to develop intimacy towards the product. (Ramai, 2011).

3.1.2 Brand Elements

Nike outperforms across the globe in terms of elements. They

consider elements like brand slogans, packaging, logos and

associations with athletes and celebrities. They associate

famous sports persons to market and represent its brand. For

example, Michael Jordan for basketball, Federer for tennis,

Ronaldo for soccer and many more who has their own brand in

different sector and product line representing the brand.

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 Nike’s slogan- ‘Just Do It’, communicates that sports is for

every person and it’s just that they have to start doing it. One

more slogan of Nike is “if you have a body, you are an athlete”,

which explains that every person can be an athlete and the

brand is built for every individual(Wordpress, 2013).

In terms of packaging, it ensures that their brand uses

sustainable and unique packaging for its products. It uses

recyclable cardboards and other materials which further can be

recycled, thus making it environmentally friendly. (Tapes,

2016).

3.1.3 Brand Mantra

Brand mantra is brand’s personal space or aura and is not an advertisement or tagline. It is

a short word encapsulated for brand position and acts as a guide for the company to make

decisions. The company has a brand mantra of three-words: “Authentic Athletic Performance”.

It emphasizes on preserving authenticity, which is an emotional modifier and includes components

like integrity and purity. Secondly, products and activities served by Nike are associated on athletic

terms and not for leisure. Finally, every Nike product focuses on meeting the demands of each and

every individual giving its 100% performance. (Wordpress, 2013).

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 Source: Pinterest, Andi Olayon.

3.1.4 Points of Parity and Points of Differentiation

Points of Parity (POP)

Nike have similar features like its competitors. Its competitors include Adidas, Reebok,

Puma, Asics, Under Armour and many more, functioning in the same market. They all have

common feature like endorsement with other associations and famed celebrities (Diarra, 2014).

For example, Nike has Nike+ products in association with Apple Inc. which allows athletes

to track their calories burned, heart rate and distance covered. Similarly, Adidas have the mi Coach

Pacer and Under Armour have devices such as Fitbit to measure. Also, brands have many different

representatives representing their brand in the sporting world (Asarian Reza, 2014).

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Points of Differentiation (POD)

Nike has some unique features that distinguish it from its competitors. As per (Daniel,

2013), Nike’s product is present in almost every diverse field of sports like soccer, running, and

basketball whereas Asics- its competitor, only focuses on running shoes which limits their target

market. In addition, the brand has introduced NikeID, which gives customers opportunity

to customize the product. For example, customers can change the overlay and color of the

‘swoosh’ (Asarian Reza, 2014).

3.2 Visual Identity

Nike’s brand logo is the most recognizable logos across the globe and was called after

“Winged Goddess of Victory”. Its brand identity represents swiftness, agility and athleticism and

was recognized through its strong positioning. Swoosh’s endorsement with legends like Michael

Jordon gives Nike a unique strategic benefit compared to other athlete brands (Flynn, 2015).

Source: Pinterest, C.Y. Wong.

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3.3 Marketing Mix

Product:
Nike focuses on serving excellent quality and wide range of products to public in large.

Besides this, Nike has designed an innovative platform for its customers which allows them to

customize and design the features of their products according to their requirements.

Price:

Nike adopts and sets price on the basis of value according to its customers. It targets loyal

customers and develops a strong connection and product intimacy with them and associates them

with the price(Gregory, 2018).

Place:

Nike distributes its wide range of products through various channels like:

1. Retailers

2. Exclusive offline stores

3. Ecommerce stores

Most products are sold through Nike’s retail outlet. They also have factories and manufacturing

units throughout the globe to narrow down the logistics costs and for efficient distribution. Apart

from this, they also have set online platforms like amazon and flipkart for convenient sales

(Gregory, 2018).

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Promotion:

Nike is usually known for its marketing strategies and super strong branding. It depends on the

effective promotion through activities like:

1. Personal selling

2. Direct marketing

3. Advertisement

4. Sales promotions (Tiwari, 2017).

3.4 Financial Performance

To reflect on organizations day to day performance and progress it is very important to

measure its financial position consistently (Ranjan, 2016).

Source: Statista, 2018.

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This grid represents Nike's worldwide net revenue from 2005 to 2018. In 2018, its worldwide

revenue summed up to 1.93 billion U.S. dollars (Greenfield, 2018). Over previous five years its

income has raised to 24$ billion from 16$ billion (Forbes, 2018).

4. BRAND EXPLORATORY

4.1 Steep Analysis

Social

“It’s all about people!” – Nike delivers an interactive platform to its customers by

connecting with them physically and also through social media. Feedback and comments from

customers also play a significant role in building and improving a brand. Further, Nike has evolved

a modern online platform created by the members interacting on diverse social media channels to

strengthen the connection between users and the brand (Lobensommer, 2017).

Technological
From being connected to customers on ecommerce platforms to customizing products for

them by Nikeid, Nike has always been advanced in technology for building their brand. Through

technology they also get to know data and information about the customers, market and their

competitors (Bush, 2016).

Economic
Nike sells its product in over 190 countries across the world. They have good ‘deep

pocket’ funds, through which they can chase small developing markets and can make more sales.

However, the swift rise of developing markets affects the company due to increase in land and

labour cost (Farooq, 2018).

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Environment

Nike publicized its brand with a brave goal: They promised to increase the productivity

twice by halving the organization’s ecological impression (Parker, 2016). Nike uses the most

recycled cardboard and polyester compared to any other business in the industry. 75 percent of its

shoes and apparel are made up of recycled materials (Inc., 2018).

Source: Nike Sustainability Financial year 2016-17 report.

Political
Political factors act as a support system and decides the survivability of an organization.

Nike’s native place- United States has always come out with amazing policies like low rate of

interest and good tax structure which is so much valuable for an organization to boost its growth

(Paypervids, 2017).

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4.2 Keller’s Customer Based Equity Model

Source: Skema Business School, Nike vs. Under Armour, 2014.

Nike is the winner in sports shoe apparel serving customers with high quality
Salience
products.

Performance Nike has a steady performance and impressive growth.

Nike is considered as a high status, cool designed product in the eyes of the
Imagery
consumers.

Consumers are satisfied and shows reliability towards the brand because of
Judgements
good quality, design and innovative products.

Nike inspires consumers emotionally by giving them faith -that all they have
Feelings
to do is “Just do it”.

Nike proposes unique selling proposition strategy like customization to its

Resonance
customers.

(Shweta, 2011)

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5. Brand Analysis

5.1 Product market analysis

To create an image in mind of the customers Nike uses product and value- based strategy.

It uses segmentation and psychographic variables to make its service and offerings more

interesting to the target consumers. It also uses various marketing strategies and campaigns to

capture the potential market (Bhasin, 2018).

5.2 Competitive Analysis

There is intense competition in sports industry. Competitive environment of Nike includes-

Adidas, Reebok, Puma, Asics, Fila and many more, operating in the athletic footwear industry (Shaju,

2015) . Adidas and Reebok are the top two Nike competitors. This industry has intense competition in

every aspect of the business, like marketing and pricing strategies,

technology, customer service and product offerings. Nike has still

maintained to manage the position as a chief brand between such

competitive environment (weebly, 2013). It faces a huge

competition in terms of associations and endorsements with famous

athletes. For example, Adidas rules soccer, having association with

famous athletes like David Beckham. Also, Nike faces competitive pressure in the constant fight of

lowering down the prices. Nike products’ price are overall higher than Adidas, thus being a challenge

as customers prefer best and cheap deal (Shaju, 2015).

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5.3 SWOT Analysis

Strength Weakness
1. Nike is a leading global brand for sports.
1. Higher prices compared to its
2. Strong distribution channels. competitors, for example Addidas.
3. Different segments like football, tennis, 2. Unlawful labour policies.
baseball,golf and many more.
3. 'Sweatshop' issues- low rate wages to
4. Strong marketing campaigns and workers in international factories.
endorsement strategies.
5. Continuous innovation and association
with Apple Ipod.

Opportunities Threats
1. Expected China sales to rise with 25-30% 1. Ecnomic recessions and currency
above average annual sales. fluctuations.
2. Growing segmentation of women 2. High and aggressive competitors.
athletes.
3. Maintenance of reputationn and
3. Support to different global market events sustainability.
like FIFA or Olympics.

(McCalla, 2012), (Ahmed, 2016)

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6. Recommendations

Strategic recommendations

 Nike’s pricing has always been high, it should adjust its price to make them available to

more customers without hampering its quality and appearance.

 Nike also have to focus on its points of disparity as it can be easily be adapted by

competitors leading to Nike’s fall down.

 Furthermore, it would be better if it gets engaged more in communal and social activities

like fitness events and charity programs.

 Proper and potential use of ecommerce is also advisable to boost up its sale due to increased

number of internet users.

Tactical recommendations

 Nike should focus on improving its working conditions of overseas labor.

 One of the weakness is unlawful labor policies known as sweatshop- issues as mentioned

earlier in SWOT analysis in this report.

 They also face the allegations of not following proper Corporate Social responsibility

(CSR) which may affect the companies running in the long run.

 Also, more investment in Research and development would help them to come out with

more unique ideas and designs.

 It’s advisable for Nike to examine the impact of their international expansion on customer

loyalty and brand integrity.

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7. Conclusion
Brand Audit is fundamental to the success and sustainability of any organization. This

report of brand audit on Nike helps to understand their core capabilities, brand elements, marketing

mix, SWOT analysis, STEEP analysis, competitive trends, target market and financial

performance.

Nike has dominated the athletic shoe market, due to its massive products, prodigious

marketing techniques and powerful branding. Its strong marketing and analytical strategies lead to

effective brand positioning in the target market. Nike is considered as a premium product and is

perceived as a high-end product. For the foreseeable future, Nike will continue to lead the sports

industry and will be considered as a brand to be copied for its innovation and marketing strategies.

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8. Appendix
Brand Plan
Situation Analysis
Vision:
The brand’s vision is
“to remain the most
authentic, connected, and
distinctive brand.”
 Innovation
 Inspiration and
 All the athletes of the
world.
Strategic Brand Challenges
1. Intense mounting
competition.
2. The apparel industry
is struggling.
3. Controversies over
labor practices in
Asia,
Financial Performance
Quarterly data for 5-31-2018
Gross profit: $15,956,000.
EBIT- $4,325,000
Net profit: $1,933,000.
Over past 5 years revenue has
increased from $16 billion to
$24 billion.
Aim and Objectives
Aim:
Their aim is to cut down the
manufacturing costs,
minimize environmental
footprint and unleash human
potential.
Objective:
Creating future through
sustainable innovation.
Marketing Mix
Product: Wide range of
products with high quality.
Price: Value based pricing
strategy.
Place: Distribution through
three channels- Retailers,
online stores and exclusive
offline stores.
Promotion: Strong branding
and marketing activities like
advertisement, personal
selling, online platforms and
sales promotions.
Implementation Plan
1. Empower target
customers, mainly
women.
2. Leverage the
influence of
technology and social
media.
3. Implementation of
strategies and themes
to shape community.
Recommendations
1. More unique POD’s due
to intense competition.
2. Proper management in
controlling labor issues.
3. Cut down product price to
capture more customers.
4. Fulfilling Corporate
Social Responsibilities
(CSR).
5. Involvement in communal
and charity activities.
6. Investment in Research
and Development.
7. Potential use of
ecommerce.
8. Impact of International
expansion.
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