INTERNATIONAL MARKETING PRESENTATION SUCCESS STORY OF “NIKE”

Introduction… Founded : 1972 Founders : William J. “Bill” Bowerman , &, Philip H. Knight HQ : Beaverton, Oregon (USA) Chairman : Philip H. Knight CEO & President : Mark Parker Industry : Sportswear & Sports Equipment Market Cap. : US $ 33.99 Billion (31st Dec., 2008) Revenue : US $ 18.63 Billion (31st Dec., 2008) Employees : 30,200 (31st Dec., 2008)

ORIGINS & History… BRS (Blue Ribbon Sports)    Nike Inc. University of Oregon - Philip Knight & coach Bill Bowerman - January 25, 1964 1966 1971 February 1972 - BRS introduces 1st line of Nike shoes 1978 : BRS  Nike Inc. Ilie Nastase

Areas Of Operation… Worldwide Offices -45 Countries 700 shops (NIKETOWNs) Factories - Indonesia, China, Taiwan, India, Thailand, Vietnam, Pakistan, Philippines & Malaysia

ACQUISITIONS… As of November 2008, owns four key subsidiaries: Cole Haan , Hurley International, Converse Inc. & Umbro 1st acquisition, upscale footwear company - Cole Haan  (1988) February 2002, bought surf apparel company Hurley International July 2003, $305 million to acquire Converse Inc. (makers of the iconic Chuck Taylor All Stars) March 3, 2008 - Umbro  £285 million ($600m) Subsidiaries previously owned & subsequently sold  Bauer Hockey, & Starter

The “SWOOSH” Story… Carolyn Davidson  Graphic Design (Portland University) $ 35    S 4 Billion…!!!

ECONOMIES OF SCALE Shared distribution channels among varied product lines results in lower cost Large size provides opportunity for more leverage against competition Efficient use of production facilities lowers costs

MARKETING STRATEGIES ADOPTED ADVERTISEMENTS: From 1972 to 1982, Nike relied almost exclusively on print advertising in highly vertical publications including Track and Field News. Most of the early advertising was focused on a new shoe release, essentially outlining the benefits of the running, basketball or tennis shoe. In 1976, the company hired its first outside ad agency, John Brown and Partners, who created what many consider Nike's first 'brand advertising' in 1977. A print ad with the tagline "There is no finish line" featured a lone runner on a rural road and became an instant classic. In 1982, Nike aired its first national television ads, created by newly formed ad agency Wieden+Kennedy , during the New York Marathon. This marked the beginning of a remarkably 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

Contd… SPONSORSHIPS: Nike's first professional athlete endorser was Romanian tennis player Ilie Năstase , and the company's first track endorser was distance running legend Steve Prefontaine. Track and field athletes like Carl Lewis , Jackie Joyner-Kersee and Sebastian Coe. They signed Micheal Jordon in 1984- one of the biggest Nike’s sponsorships which boosted its image as well as sales. Sponsoring leading tennis stars like-  James Blake, Jim Courier, Roger Federer, Lleyton Hewitt, Juan Martín del Potro, Andre Agassi, Rafael Nadal , Pete Sampras, Lindsay Davenport, Daniela Hantuchová, Mary Pierce, Maria Sharapova, Serena Williams It also sponsors leading football club like- Arsenal, Manchester United, FC Barcelona, Inte Milan  Juventus, Porto, Steaua, Borussia Dortmund, Red Star,Aston Villa, Celtic and PSV Eindhoven. Nike is also the official kit sponsor for the Indian cricket team  for 5 years, from 2006 to 2010. It was awarded the contract for US$43 Million.

4Ps PRODUCT PLACE PRICE PROMOTION

OUTSOURCING OPERATIONS Nike has been manufacturing throughout the Asian region for over twenty-five years, and there are over 500,000 people today directly engaged in the production of their products. They utilize an outsourcing strategy, using only subcontractors throughout the globe. Their majority of their output today is produced in factories in China, Indonesia, and Vietnam, but they also have factories in Italy, the Philippines, Taiwan, and South Korea. These factories are 100% owned by subcontractors, with the majority of their output consisting solely of Nike products. However, Nike does employ teams of four expatriates per each of the big three countries (China, Indonesia, Vietnam), that focus on both quality of product and quality of working conditions, visiting the factories weekly. They also developed their code of conduct in 1992 and have implemented it across the globe, as its goal is to set the standard for subcontractors to follow if they wish to do business with Nike. However, due to a manufacturing network of this magnitude, they have faced numerous violations involving factory conditions and human rights issues, which have been widely publicized. They have responded to these issues through the Andrew Young report, the Dartmouth Study, and Ernst & Young’s continual monitoring, but are still approximately two years away from completely addressing these problems throughout the globe.

CULTURAL ISSUES Nike had realized the cultural differences in the Asian major China when it faced severe criticism for its Chinese theme ad released in 2004. The ad was 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 ad was later banned in China.

LEGAL ISSUES The Asian-American Free Labor Institute in Indonesia says Nike factory workers file more complaints about wage violations than any other shoe company. In its Vietnam factory an official has been convicted of physically abusing workers and also convicted of sexual-abuse charges. Nike has been accused of violating minimum wage laws in countries such as China, Vietnam, Indonesia. An Indonesian worker makes around $2.46 a day, a Vietnamese $ 1.06 a day, a Chinese $1.75 a day. It is also accused of operating in countries where in is illegal to organize and collectively bargain for better wages and better working condition. During the 1990s, Nike faced criticism for use of child labor in Cambodia and Pakistan in factories it contracted to manufacture soccer balls. Although Nike took action to curb or at least reduce the practice of child labor, they continue to contract their production to companies that operate in areas where inadequate regulation and monitoring make it hard to ensure that child labor is not being used. 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 $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.

RECOMMENDATIONS Nike should use its money efficiently. This could be done by including entertainment and other non-sports venues in their promotions. This is effective because there is a thin line between entertainment sports nowadays. Nike is currently gearing most of their marketing efforts for the sports footwear lines. To increase sales, Nike should go to other avenues such as expanding their line to casual footwear. Nike's main strategy is in its differentiation. Therefore, they need to maintain their position as the leading brand of the athletic footwear technology. Providing cutting edge design through innovation and application of modern technology enable them to come up with new types of shoes and other products, adding to their growing list of product lines. Nike's business is growing more and more reliant on the internet to conduct business. Nike has developed a new technology that will allow their customers to create their own shoes design online. They must take particular care in improving their website to make it more user-friendly. As of the moment, customers often find the too long to download. Nike should also increase their international marketing efforts in order to maximize their product sales. International market is laden with untapped opportunities which Nike should look into. Nike must continue to improve technology in order to remain the leader in athletic shoes. This is their competitive edge in order to prevent any potential threatening entrants. Nike should also conduct survey on their customers after their purchase on-line to know what the consumers really want. Trends and styles often change. This is why we On-line surveys could save Nike a great deal of time. Nike would be able to gather the information real-time and track it into a database instead of taking surveys on the street or sending them out to mailing lists which is time-consuming.