4p’s of Nike

INTRODUCTION:

Nike Inc. is a major publicly traded sportswear and equipment supplier based in the United

States. The company is headquartered near Beaverton, Oregon, which is part of the Portland

metropolitan area. It is the world's leading supplier of athletic shoes and apparel and a major

manufacturer of sports equipment with revenue in excess of $18.6 billion USD in its fiscal year 2008

(ending May 31, 2008). As of 2008, it employed more than 30,000 people worldwide. Nike and

Precision Castparts are the only Fortune 500 companies headquartered in the state of Oregon,

according to The Oregonian.

The company was founded on January 25, 1964 as Blue Ribbon Sports by Bill Bowerman and Philip

Knight, and officially became Nike, Inc. in 1978. The company takes its name from Nike (Greek

Νίκη pronounced [níːkɛː]), the Greek goddess of victory. Nike markets its products under its own

brand as well as Nike Golf, Nike Pro, Nike+, Air Jordan, Nike Skateboarding and subsidiaries

including Cole Haan, Hurley International, Umbro, and Converse. Nike also owned Bauer Hockey

(later renamed Nike Bauer) between 1995 and 2008.In addition to manufacturing sportswear and

equipment, the company operates retail stores under the Nike town name. Nike sponsors many high

1

profile athletes and sports teams around the world, with the highly recognized trademarks of "Just do

it" and the Swoosh logo.

Following table is showing basic information’s about Nike:

Type Public (NYSE: NKE)

Founded 24 January 1968

Headquarters Near Beaverton, Oregon, United States

Area servedWorldwide

Key peoplePhilip H. Knight(Chairman)

Mark Parker(CEO) & (President)

IndustryDesigning and Manufacturing: Sportswear

Sports equipment

Productsshoes, Apparel, equipment, Accessories

Employees30,200 (2008)

2

BACKGROUNDS:

Nike, originally known as Blue Ribbon Sports, was founded by University of Oregon track

athlete Philip Knight and his coach Bill Bowerman in January 1964. The company initially operated

as a distributor for Japanese shoe maker Onitsuka Tiger, making most sales at track meets out of

Knight's automobile.

The company's profits grew quickly, and in 1966, BRS opened its first retail store, located on

Pico Boulevard in Santa Monica, California. By 1971, the relationship between BRS and Onitsuka

Tiger was nearing an end. BRS prepared to launch its own line of footwear, which would bear the

newly designed Swoosh by Carolyn Davidson. The Swoosh was first used by Nike in June 1971, and

was registered with the U.S. Patent and Trademark Office on January 22, 1974.Today the Onitsuka

Tiger brand is owned by one of Nike's competitors, ASICS.

The first shoe to carry this design that was sold to the public was a soccer shoe named

"Nike,” which was released in the summer of 1971. In February 1972, BRS introduced its first line of

Nike shoes, with the name Nike derived from the Greek goddess of victory. In 1978, BRS, Inc.

officially renamed itself to Nike, Inc. Beginning with Ilie Nastase; the first professional athlete to

sign with BRS/Nike, the sponsorship of athletes became a key marketing tool for the rapidly growing

company.

The company's first self-designed product was based on Bowerman's "waffle" design. After

the University of Oregon resurfaced the track at Hayward Field, Bowerman began experimenting

with different potential outsoles that would grip the new urethane track more effectively. His efforts

were rewarded one Sunday morning when he poured liquid urethane into his wife's waffle iron.

Bowerman developed and refined the so-called 'waffle' sole which would evolve into the now-iconic

Waffle Trainer in 1974.

By 1980, Nike had reached a 50% market share in the United States athletic shoe market, and

the company went public in December of that year. Its growth was due largely to 'word-of-foot'

3

advertising (to quote a Nike print ad from the late 1970s), rather than television ads. Nike's first

national television commercials ran in October 1982 during the broadcast of the New York

Marathon. The ads were created by Portland-based advertising agency Wieden+Kennedy, which had

formed several months earlier in April 1982.

Together, Nike and Wieden+Kennedy have created many indelible print and television ads

and the agency continues to be Nike's primary today. It was agency co-founder Dan Wieden who

coined the now-famous slogan "Just Do It" for a 1988 Nike ad campaign, which was chosen by

Advertising Age as one of the top five ad slogans of the 20th century, and the campaign has been

enshrined in the Smithsonian Institution San Franciscan Walt Stack was featured in Nike's first "Just

Do It" advertisement that debuted on July 1, 1988.The "Just Do It" trademark was filed by Nike, Inc.

on October 3, 1989 with the description attributed to sports clothing, on which the mark was to be

affixed.

Throughout the 1980s, Nike expanded its product line to include many other sports and

regions throughout the world.

Nike is a global sports shoe giant company. It is the largest seller of athletic footwear in the

world, holding the lion share of 33% of the global market. The company has production facilities in

Asia, sales facilities in almost 200 countries, and customer service and other operational units

worldwide.

The marketing mix or the 4 Ps of Marketing are Product, Price, Place (distribution), and

Promotion. Nike's 4Ps are the following:

PRODUCTS:

Nike produces a wide range of sports equipment. Their first products were track running

shoes. They currently also make shoes, jerseys, shorts, baselayers etc. for a wide range of sports

including track & field, baseball, ice hockey, tennis, Association football, lacrosse, basketball

and cricket. Nike Air Max is a line of shoes first released by Nike, Inc. in 1987. The most recent

additions to their line are the Nike 6.0, Nike NYX, and Nike SB shoes, designed for

skateboarding. Nike has recently introduced cricket shoes, called Air Zoom Yorker, designed to

4

be 30% lighter than their competitors. In 2008, Nike introduced the Air Jordan XX3, a high

performance basketball shoe designed with the environment in mind.

Nike sells an assortment of products, including shoes and apparel for sports activities like

association football, basketball, running, combat sports, tennis, American football, athletics, golf

and cross training for men, women, and children. Nike also sells shoes for outdoor activities such

as tennis, golf, skateboarding, association football, baseball, American football, cycling,

volleyball, wrestling, cheerleading, aquatic activities, auto racing, and other athletic and

recreational uses. Nike is well known and popular in youth culture, chav culture and hip hop

culture as they supply urban fashion clothing. Nike recently teamed up with Apple Inc. to

produce the Nike+ product which monitors a runner's performance via a radio device in the shoe

which links to the iPod nano. While the product generates useful statistics, it has been criticized

by researchers who were able to identify users' RFID devices from 60 feet (18 m) away using

small, concealable intelligence motes in a wireless sensor network.

In 2004, they launched the SPARQ Training Program/Division.

Some of Nike's newest shoes contain Flywire and Lunarlite Foam. These are materials

used to reduce the weight of many types of shoes. They also sell small amounts of plastic

products to other manufacturers through Nike IHM Inc. Bauer Nike Hockey Inc. manufactures

and distribute ice skates, skate blades, in-roller skates, protective gear, hockey sticks and hockey

jerseys and accessories.

PRICE:

The type of good that will be marketed is going to affect the price of a product. Nike uses

vertical integration in pricing wherein they own participants at differing channel levels or

engage in more than one channel level operations. This is also an attempt to control costs and

influence pricing practices. Nike’s pricing is designed to be competitive to the other fashion

shoe retailers. The pricing is based on the basis of premium segment as target customers.

Nike as a brand commands high premiums. Nike’s pricing strategy makes use of vertical

integration in pricing wherein they own participants at differing channel levels or take part in

more than one channel level operations. This can control costs and influence product pricing.

5

PLACE:

Nike shoes are carried by multi-brand stores and the exclusive Nike stores across the globe.

Nike sells its product to about 20,000 retail accounts in the U.S. and in almost 200 countries

around the world. In the international markets, Nike sells its products through independent

distributors, licensees, and subsidiaries. Independent distributors need not adapt to local

pressures because the 4Ps of marketing are managed by distributors. Nike has contracted with

more than 700 shops around the world and has offices located in 45 countries outside the United

States. Most of the factories are located in Asia, including Indonesia, China, Taiwan, India, Thailand,

Vietnam, Pakistan, Philippines, and Malaysia. Nike is hesitant to disclose information about the

contract companies it works with. However, due to harsh criticism from some organizations like

CorpWatch, Nike has disclosed information about its contract factories in its Corporate Governance

Report.

Worldwide Nike Factories

6

PROMOTION:

Promotion is largely dependent on finding accessible store locations. It also avails of

targeted advertising in the newspaper and creating strategic alliances. Nike has been one of the

top retail industries for quite a long time. This is because they sell quality products, customer

loyalty, but most of all, its great marketing techniques. Nike has a number of famous athletes to

create a great deal of attention to their products. Nike has signed the top athletes in many

different sports such as the Brazilian Soccer Team (especially Ronaldino, Renaldo, and Roberto

Carlos), Lebron James, and Jermane O'Neal for basketball, Lance Armstrong for cycling, and

Tiger Woods for Golf. Sponsoring of events is another great promotional technique for Nike. It

brings attention Nike's products. Web sites are a great promotional tool as they cover these

events. Such events include Hoop it up and The Golden West Invitational. Nike also personalizes

websites. They make the websites exclusively for a sport such as nikebasketball.com,

nikefootball.com, and nikegolf.com.

Nike is positioned as a premium-brand, selling well-designed and expensive products.

Nike lures customers with a marketing strategy centering on a brand image which is attained by

distinctive logo and the advertising slogan: "Just do it.”

Nike promotes its products by sponsorship agreements with celebrity athletes,

professional teams, and college athletic teams. However, Nike's marketing mix contains many

elements besides promotion. These are summarized below:

Advertising:

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

7

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. The success of this simple ad

inspired Nike to create a poster version that launched the company's poster business. In 1982,

Nike aired its first national television ads, created by newly formed ad agency

Wieden+Kennedy, during the New York Marathon. 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.

In addition to garnering awards, Nike advertising has generated its fair share of

controversy

E-commerce is an opportunity for every company, if they do it correctly. Consumers

are using the Internet more and more to purchase their goods and service. The marketing

mix, mission statements, marketing strategies, and “stickiness” are extremely important is

having a successful Internet marketing strategy. Mark Millman, president of Millman Search

Group Inc. a national retailing consulting recently said, “Everyone is doing it. If you don’t

do it, you’re dead in the water.” The overall ranking of the four athletic shoe companies are

Nike (1), Adidas (2), Reebok (3), and Fila (4). This large difference in the ranking between

the four companies clearly demonstrates Nike's online dominance as the leader in its

industry.

Corporations should and must have a mission statement that will keep them focused and guided

in the right direction. Nike had mission statements that gave the customer some idea of what the

company is all about. By definition, a mission statement is a clear and concise statement that

explains the organization’s reason for being (Ferrell et al., 1998). There are five questions that

help clarify what a good mission statement contains:

Who are we?

Who are our customers and what do they value?

What does our organization stand for?

What makes our organization unique?

8

What impressions does this organization want key publics to have of us?

Nike’s mission statement shows what they stand for and gives the different groups that Nike

entails. Unfortunately, Nike still does not clearly reflect that they are customer-oriented. Having

a strong marketing mix (4 P's) is extremely important for an organization to be successful.

Nike.com had the top ranking when comparing the marketing mix variables. For example, their

advertisements on television and those on their web site, to their strategic alliance partnership

with UPS to deliver their packages, were all strategically designed.

Conclusion :

Marketing mix analysis is a fundamental step towards effective strategy. Where other

analysis are more related to environment and feasibility analysis, the 4 Ps of marketing including the

product itself, pricing, placement and promotion are the four wheels of the vehicle on which the path

of an organization’s marketing  success is actually dependent. Nike’s brand images, the Nike name,

and the trademark swoosh; make it one of the most recognizable brands in the world. Nike’s brand

power is one reason for its high revenues. Nike’s quality products, loyal customer base, and its great

marketing techniques all contribute to make the shoe empire a huge success.

9