sbm s2 - nike case study - global branding
TRANSCRIPT
Hemanth
Shashank
Shekhar
Vineeth
Vinu
NIKE – Curriculum Vitae
Name Nike
Founded as Blue Ribbon Sports
Nationality American
Age 44* (as of 2006)
Products Athletic Shoes, Apparels,
Sports Equipment &
Accessories
Specialization Athletic Footwear
NIKE in US 1962 Introduced as Blue Ribbon Sports
1967 Marathon- First Running shoe
1968 Cortez & Boston
1973 Prefontaine – 1st athlete to endorse Nike
1974 Waffle Trainer
1978 Officially named as Nike,Inc
NIKE in US
1980 No.1 athletic shoe company
1985 Signed Michael Jordon
1987 Revolution in motion- Beatles
1988 Just do it Campaign
1993 265 NBA players, 275 NFL players & 290
baseball players endorsed Nike
1994 US Soccer Team – Both Men &
Women
Nike - Challenges in USCurrent Strategy:
• Major Focus on Running & Performance based Shoes
• Unaddressed categories such as fitness & aerobics
• Positioned as a ‘masculine’ brand
Consequence:
• Reebok introduced ‘style’, ‘fashion’, ‘comfort’ & ‘for
women’ shoe line and stole market lead
New Strategy:
• Retain focus on performance, more attention to
basketball due to its rising popularity
• Change in marketing strategy – Marketing formula
related to shoes, colors, clothes, logos, etc.
• Mass market television advertising
NIKE in Europe1980 Strategic decision to expand Globally
1981 Signed John McEnroe
1987 Realized considerable revenues &
Started gaining foothold
1988 Focus on Repurchasing License rights
1989 1st Centralized Print Campaign – Nike Air
1989 Gospel Campaign
NIKE in Europe
1990 Regained 90% control over dist. channels
1991 Revenues 6 times to that of 1987 figure;
Second only to Adidas
1992 Focus on Barcelona Olympics
1993 Change in Marketing Strategy;
Launch of Just do it Campaign
1994 Wall Ad; Team Brazil
1997 Team Nigeria and Italy
Nike - Challenges in EUROPE
Challenges:
• Marketing & advertising rights controlled by local
distributors
• Distributors not motivated about selling Nike
Consequence:
• Inability to control growth of its brand
New Strategy:
• Restricted its product line to high end shoes
• Focused on brand building
• Increased control of advertising & product
strategies
• Repurchasing licensing rights from its licensed
distributors
The Euro Image
• Brand intimidating and aggressive
• Consumers viewed company as arrogant• Consumers’ perception of Nike as expensive, aggressive
American Brand
NIKE Elsewhere
1992 Japan – First Asian Country to embrace Nike products
1997 Market Leader in Japan; Expanded to other Asian
countries, S. America, Africa and the Middle East
1998 Entered Chinese Market; Advertisements with Local
Athletes as Heroes
2004 Sales in China rose to 300 million USD
2008 Market Leader in China
NIKE – The Asian Challenge
Recession : Impacts• Excess Inventory with the distributors - more than 2 million units
• Fall in stock prices
• Reported first earnings decrease in 13 years
Strategies • Reduction in employee base by 7 percent
• Advertising budget reduced by 100 million USD
• Dropped low profile endorsers & sponsorships
NIKE – Labor Controversy
• Unsafe working conditions in Nike’s Vietnam
factories
• Workers forced to work for 65 hours per week
• Wages less than 10 USD per week
• No incentives for extra working hours
Nike’s Measures:
• Comprehensive changes in corporate labor
policy
• Corporate Responsibility Division (CRD)
• Charter member of Fair Labor Association
Damage Control Mechanism
• Create focus groups to assess Nike’s labor practices
• Make changes to improve Nike’s current labor conditions
• Create an anonymous system to protect whistleblowers
• Specify and inform employees of their rights and
responsibilities under the Nike code of conduct
• Provide employees with time and money to enroll in
Nike’s educational programs
• Ensure surprise visits are a surprise
• Distribute a video news release promoting Nike’s efforts
in the global community
Evaluation
• Repeat surveys at six month intervals to
gauge public perception
• Revisit with focus groups to record their
opinions of improvements
• Appointed FLA approved PWC to conduct
annual audits
• Led to a mixed response
Swoosh Logo - Evolution
• Logo developed in a hurry; yet became
one of the most recognized logos
• Accusation: Overuse of swoosh• Reaction: Withdrawing the symbol
temporarily from the new brand – Nike Alpha - and then reintroducing it in a milder form.
Acquisitions
1988 – Luxury shoe, handbag and accessory maker
1995 – World leader in hockey equipment & skates
2002 – Board sport apparel and footwear for teens
Acquisitions
2003 – Basketball shoes - Retro look of consumers
2004 – Low end athletic apparel
2007 – Soccer & casual footware, apparel and
equipment
2012 – ??
Why Acquisitions?
• Diverse Brand Portfolio
• Risk Mitigation
• Additional Avenues for growth
• Ability to cater to niche target groups
• Ability to respond to sudden change in trends
• Use already existing capacity and expertise
• Economies of scale
Contribution of Acquisitions
20
NIKE
Nike +Nike 6.0Woman
SportswearGolf
Converse Nike Range Hurley UmbroCole Haan
Brand Portfolio
SnowboardingSkateboarding
SwimTennis Vision
TimingSPARK
NikeBetterWorldLiveStrong
NikeBiz
SoccerFootball
BasketballRunningBaseball
Endorsements - Individual
• 1973 – Steve Prefontine
• 1980 – John McEnroe
• 1985 – Micheal Jordan
• 1994 – Ronaldo
• 1996 – Tiger Woods
• 1998 – Maria Sharapova
• 2002 – Roger Federer
• 2006 – Rafael Nadal
• 2010 – Virat Kohli
• 2011 – Rohit Sharma
Sponsorships - Teams
• 1994 – US Men’s and Women’s
Soccer Teams
• 1994 – Brazilian Men’s Soccer Team
• 1997 – Italian Men’s Soccer Team
• 1998 – Nigerian Men’s Soccer Team
• 2002 – Manchester United
• 2006 – Indian Cricket Team
Branding Tool• Nike’s way: Celebrity Endorsements• Strategy: Identify young budding talent and
sign long term deals• Celebrity Selection Criteria:• Attractiveness – Physical Appearance• Credibility – Expertise in the field• Personality – Aggression, Stylishness
• Building Brand Equity• Attractiveness – Brand Recall• Credibility – Brand Acceptance• Personality Fit – Positive Brand
Associations• Risks• Tiger Woods, 2009• Liu Xiang, 2008 Beijing Olympics
Building Global Brand Equity
• Brand Association: Excellent endorsements
• Brand Loyalty: ‘Honest high quality brand’
• Perceived Quality: Meeting consumer expectations
• Brand Awareness: Simple name & logo;
Attractive tagline
•
Brand Association Map - NIKE
Brand Strength Index
Nike Adidas New Balance Reebok Under Armour0
100
200
300
400
500
600
700
800
Brand Strength Index
*Brand Strength Index is a function of brand
awareness, brand loyalty and consumer’s
intentions to buy the brand in the near future –
As computed by SportsOneSource (2008)
Global Brand Value (2006 – 2011)
1 2 3 4 5 60
2000400060008000
10000120001400016000
NikeAdidas
Nike Adidas Nike Factor
2006 1 7 4.67
2007 1 7 3.74
2008 1 5 2.58
2009 2 5 2.42
2010 1 5 3.86
2011 1 6 4.51
Global Brand Value = Intangible Earnings * Brand
Contribution % * Brand Multiplier – As computed
by MillwardBrown Brandz (2008)
Market Share (1991 – 2010)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 190
5
10
15
20
25
30
35
40
NikeAdidasReebok
Fashion Vs Performance• Brands shall do well to maintain
their core values• Fashion apparel can be designed
but not at the cost of performance
• Nike shall always remain as a performance brand in whatever market they tap; Fashion maybe an additional attribute depending on the needs and perceptions of the target segment
• Nike Goddess stores
Global Strategy Change• Pre 2009 – 4 Regions• US• EMEA• Americas• Asia Paciffic
• Post 2009 – 6 Regions• US• W Europe• E/C Europe• Greater China• Japan • Emerging Markets
• Strategy: Moving the brand closer to the consumer
Global Constants for Nike• EKINs – Passion driven employees• Brand Strength Monitor• Futures• Endorsement Strategy – World renowned
sportsmen in global campaigns such as ‘Just Do It’
• Brand Ambassador selection process• Performance Orientation• Corporate Responsibility Division &
Reports• Sportswear design
Local Variables for Nike• Endorsement Strategy – Local sportsmen
for regional campaigns is acceptable• Overall marketing strategy can be attuned
to what the consumer wants to see / hear in that market – can be direct / peripheral
• Fashion oriented but without compromising on performance – core value shall not be compromised
• Regional Partnerships and Alliances with retailers – like the footlocker in the US
Future Path• Strive to be part of the top 20 global brands• Smartly capture the ‘Final Frontier’ –
Europe • Consolidate position in other markets and
enter all emerging markets• Continue with the process of innovation in
the sports apparel industry• Always be in sync with consumer needs and
tune according to changes in consumer behavior; Keep a watch on competitors in all operating markets
• Acquire but do not make brand extensions out of acquisitions that would not give value back to the core brand
• Ensure brand is free of controversies – a bigger global brand is at stake!
THANKYOU