MARKETING

MANAGEMENT
Interim Project Report on

Group 11
Arjit Saxena (15136)
Harshith Gowda (15148)
Nadia Fernandes (15160)
Seera Prathyusha (15172)
Vasuki Jayaram Srivatsa (15184)

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CONTENTS

INDUSTRY INTRODUCTION ................................................................................................................. 1

Brief analysis of the Athletic- Shoe industry ............................................................................... 1
Indian Footwear Industry .................................................................................................................. 1
NIKE ............................................................................................................................................................ 2
MARKETING MIX OF NIKE .................................................................................................................... 3
Product ................................................................................................................................................... 3
Price ........................................................................................................................................................ 3
Promotion .............................................................................................................................................. 3
Place........................................................................................................................................................ 3
SEGMENTATION, TARGETING AND POSITIONING OF NIKE .................................................... 4
Segmentation and Targeting ........................................................................................................... 4
Market segmentation...................................................................................................................... 4
Economic Segmentation ............................................................................................................... 4
Demographic segmentation ......................................................................................................... 4
Geographic segmentation ............................................................................................................ 5
Benefit segmentation ..................................................................................................................... 5
Positioning ............................................................................................................................................. 5
SWOT ANALYSIS ..................................................................................................................................... 6
Competitors’ Analysis ............................................................................................................................ 7
ADIDAS ................................................................................................................................................... 7
REEBOK ................................................................................................................................................. 7
PUMA....................................................................................................................................................... 8
NIKE’S ANSOFF MODEL........................................................................................................................ 8
Market penetration strategy ............................................................................................................ 8
Market development strategy .......................................................................................................... 9
Geographical expansion to India ................................................................................................ 9
NIKE Product development strategy ............................................................................................. 9
REFERENCES ......................................................................................................................................... 11
References .................................................................................................................................................. 11

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INDUSTRY INTRODUCTION

Brief analysis of the Athletic- Shoe industry

Sport is an integral part of modern contemporary society and has always
been associated with discipline, dedication and perfection; and hence a
sportsman has always been respected. A sportsman/professional/amateur
needs quality gear specific to his or her game to be able to compete
better. A good pair of sport shoes are one of those important gear that
contribute to good overall athletic performance.
Athletic footwear comprises manufacturers and marketers of athletic
footwear, apparel, and sports equipment who sell to end consumers all
over the world. These shoes are designed for sports and other forms of
physical workout such as training, walking, running, jogging, and
aerobics. It includes walking and running shoes, basketball shoes, fitness
shoes, and so on. Increased interest in athletic sports, surging demand
for innovative footwear, increased awareness of healthy lifestyles, and
increase in seasonal sales with sports events are the factors contributing
to the growth of the Athletic Footwear market.

Indian Footwear Industry

India ranks 2nd in the footwear industry next to China, accounting for
13% of global footwear production of 16 billion pairs, with most of its
production in the Men’s segment. Indian footwear industry is worth INR
160 Billion, and the export growth rate is 18 %. Major production
centers in India are Chennai, Ranjpet and Ambur.
India produces 2065 million pairs of different footwear, out of which
115 million pairs are exported. Here are the broad categories of the
footwear market- Leather footwear is 909 million, Leather shoes upper
is 100 and Non-leather shoes are 1056 pairs.

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NIKE

NIKE, Inc. (NIKE) was incorporated on January 25, 1964 in Beaverton,

Oregon USA. The company is engaged in design, development,
marketing and selling of athletic footwear, equipment, accessories and
services. NIKE operates worldwide, employing approximately 44000
people at the end of 2012. NIKE’s 2014 revenue was $27,799 million.
The company’s Chairman is Phil Knight and Mark Parker is the
President and CEO.
NIKE’s first products were track running shoes which came under the
name NIKE Air Max, followed recently by the NIKE 6.0, NIKE Nyx
and the NIKE SB’s skateboarding shoes. Recently, NIKE launched
special cricket shoes for bowlers and batsmen called the NIKE Air
Zoom Yorker and the Air zoom Opener, but its best-selling line remains
the legendary Air Jordan basketball shoes named after Michael Jordan.
Air Jordan still contributes to more than 30% of NIKE shoe sales.

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MARKETING MIX OF NIKE

Product
NIKE India offers shoes for many sports. Some of them are-
Cricket (NIKE Lunar Dominate, NIKE Lunar Accelerate, NIKE
Domain, NIKE Potential)
Football (Mercurial, Hyper venom, Magista)
Running (NIKE Free, NIKE Zoom Air, NIKE Lunarlon, NIKE Max
Air)
NIKE India also offers Sports-inspired Shoes.
NIKE entered into Indian market in mid- 1990’s through a licensing
arrangement with Siera Industrial Enterprise Private Limited (SIEPL).

Price
NIKE follows a Value-Based pricing strategy and Price leadership
strategy as it provides high quality products and has the best technology.

Promotion
NIKE spends approximately 12% of its revenue on marketing every year
which includes Advertisement, Brand endorsement fees that it pays to
sports leagues such as Spanish soccer team F.C. Barcelona and
Individuals such as Ronaldo, Renaldo, and Roberto Carlos, Lebron
James and Tiger Woods.

Place
NIKE has 19 manufacturing factories in India, and 6 of them for
footwear. 31.8% of its manufacturing profile is of the footwear segment.
NIKE distributes its products through the following major channels:
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  Selling products to Wholesalers,
 Direct-To-Customer (DTC) sales, which consists of inline and
factory outlets and its e-commerce website, (Nike)
 Sales through global brand divisions.

SEGMENTATION, TARGETING AND POSITIONING OF

NIKE

Segmentation and Targeting

NIKE has been in the market for a long period now. Thus, it has already
sought out the STP analysis that it would use to promote and sell its
products.

Market segmentation
NIKE needs to segment on various fronts such as economic,
demographic and geographical differentiations.

Economic Segmentation
High, Medium and Low income level that can be clubbed with the
lifestyles of High, Medium and Low end customers.

Demographic segmentation
The Company can segment markets into Age, Gender and Class
segments.
Age: 15 to 35
Income Levels: > 15000
Social Class: Upper Middle/Lower Upper/Upper Class

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Customer Profile: Athletes/Gym Regulars/Sport Enthusiasts

Geographic segmentation
Urban and Semi-Urban cities.

Benefit segmentation
The NIKE Mission: To bring inspiration and innovation to every athlete
in the world.

Positioning
The brand NIKE has positioned itself in the minds of consumers as a
high-end brand which is quite costly but gives value for the money spent
with its service, quality and design. All this analysis provides NIKE with
the customer satisfaction and loyalty that it needs to achieve high
volumes in terms of units and profitability.
Highly differentiated products (based on its style and design).

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SWOT ANALYSIS
Strengths
 Dominant market
position built on strong
brand portfolio,
 Focus on R & D
activities,
 Developing products by
following sustainable
methods,
 Multi-channel
approach,
 Great celebrity
spokespersons like
Mahesh Bhupathi.
Opportunities
 Growing global
footwear market,
 Growing online retail
channel,
 Expansion into sports
sunglasses and
jewellery line,
 Women’s demand for
athletic footwear and
accessories is
increasing.
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Weakness
 Dependence on
independent contract
manufacturers,
 Profits are largely
dependent on footwear
products while other
branded products are
not as strong,
 Lack of stores catering
to the active females.
Threats
 Intense competition,
 Increase in counterfeit
products,
 Low price competition
pressures created by
retailers.
Competitors’ Analysis

Many companies that vie to capture the purchases of consumers across

the nation in the market of athletic shoes. However, NIKE dominates a
majority of the market share for athletic shoes. It has a few clear-cut
competitors in the market for athletic shoes.
ADIDAS
Adidas stands as NIKE’s top competitor. It has the marketing power to
expand its brand and positive brand standing within the industry.
Although Adidas is currently not able to outcompete NIKE in terms of
sales and market share, it has been outperforming NIKE and gaining
market share since 2006 while NIKE has been losing market share since
1998. Adidas is also still the second biggest competitor to NIKE
competing for market share and has plans in the pipeline that it is trying
to implement in order to grow. One of them is heavy sponsorship of
football tournaments all over the globe since football has the highest fan
support with more than 2billion people who follow it, with Basketball
behind it with 1.2 billion followers. Adidas' wholesale division gets
adidas and Reebok products to retailers while the retail group runs its
own 2,445 Reebok and adidas shops.
Major developments in Q2 2015:
• Robust momentum at Adidas continues with currency-neutral sales
up 8%
• Group sales increase 5% on a currency-neutral basis,
notwithstanding challenging World Cup comparison
• Net income from continuing operations up 2% to € 146 million

REEBOK
Reebok is a subsidiary of Adidas that also owns a decent portion of the
market. While much of Reebok’s income is from apparel and cleat sales,
its athletic shoes own about 2.58 percent of the market for athletic. It is,
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however, is aggressively moving to increase its market share this year.
Reebok has also upped its social media efforts to cater to the
interactivity consumers gravitate towards. In Q2 of 2015, Reebok’s sales
grew by 6%.

PUMA
PUMA is one of the world's leading athletic shoe companies, along
with NIKE and adidas. While shoes are PUMA's heritage, apparel
accounts for a growing portion of sales. It has been expanding its athletic
apparel styles to include men's golf, sailing, motorsports, and denim
items. PUMA also operates its own retail stores and controls
product distribution in many countries.
Worldwide brand sales by PUMA during the financial year 2014 rose,
currency-adjusted, by 3.3 % to approximately € 3.2 billion.

NIKE’S ANSOFF MODEL

Market penetration strategy

NIKE is a well-established brand and so it can attract customers of the
competitors’ brand or get the current customers to purchase more
through advertising and promotional activities.
To attract customers from other competitors’ brands, it sponsored the
Indian cricket team for five years by beating arch-rivals Reebok and
Adidas. It paid INR 196 crore (INR 1.96 billion) to the Board of Control
for Cricket in India for that privilege. NIKE's logo appeared in
connection with the Indian sports team for Cricket. This helped them
create a brand image in India and attract customers to buy its products.
The company found that it was necessary to connect emotionally with
customers so as to get more market share.

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Market development strategy

Geographical expansion to India

NIKE being a well-established brand and a global player in sports,
fitness, shoes, and other accessories, decided to enter into India in the
mid-1990s through a licensing arrangement with Siera Industrial
Enterprise Private Limited (SIEPL). NIKE positioned its products in the
premium niche segment. It also moved focus from cricket to basketball
and tennis. When it found performance was as expected, the company
moved on from complete imports of its products to localization. This
also helped in pricing their shoes more affordably. Company owned and
franchise operated showrooms were opened. In the year 2004, once the
company had achieved sufficient stronghold in the Indian market and
had some insights on how to operate in India, it did not renew the
agreement with Siera and became a subsidiary.

NIKE Product development strategy

NIKE has always tried to satisfy its customers with new products
through innovation. It has come up with Product quality improvement
and Product reformulation to attract customers.
Some of its products include:
NIKE with Apple: The package consists of a pair of special running
NIKE+ shoes, an iPod nano and NIKE+ iPod sport kit. The kit consists
of a sensor which is place inside the shoe and a receiver in an iPod nano
connector. As a person runs, the iPod tells the distance, pace and calories
burned via voice feedback that adjusts music.
Design your own shoes: NIKE allows its customers to design their
shoes from a catalogue of predefined designs. Customers can choose
colors and mascots to create shoes which shows their personality.

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NIKE self-lacing automatic shoes: NIKE is also coming with new
automatic self-lacing sneakers. The automatic self-lacing system
provides a set of straps that can be automatically closed and opened.

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REFERENCES

References
(n.d.). Retrieved from http://iimabooks.com/strategies_for_growth_gtge.pdf

(n.d.). Retrieved from http://search.rediff.com/money/2006/nov/14spec1.htm

(n.d.). Retrieved from http://www.slideshare.net/divya-mishra/nike-competitive-advantages

(n.d.). Retrieved from http://www2.warwick.ac.uk/alumni/services/eportfolios/bsqjfb/nike.pdf

(n.d.). Retrieved from www.nike.com/in/en_gb/

(n.d.). Retrieved from http://about.puma.com/damfiles/default/investor-relations/financial-

reports/en/2015/Consolidated-Financial-Statements_2014_E-
cfcd0e68795ab178fcb7663862cff855.pdf

(n.d.). Retrieved from http://www.adidas-group.com/en/

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