MKTG 4400 Final Report

Swooshing Beyond Borders: Nike's Global Game Plan MKTG 4400 Final Individual Project Kanish Shah MKTG 4400 A James Gordon Dec 12 2023

Executive Summary This individual report will explore Nike's global plans in great detail, covering market positioning, ongoing marketing campaigns, and major obstacles. The objective is to highlight issues and provide recommendations for improving Nike's worldwide marketing strategy. Some existing issues for Nike today are the fierce competition, supply chain challenges and the popularity of counterfeit items. There are various athletic brands such as Adidas and Reebok who are starting to catch up to Nike, by making themselves known globally. Along with this, the manufacturing process for Nike is lengthy and often unreliable putting them at a disadvantage to their competitors. Finally, the popularity and availability of counterfeit Nike products manufactured overseas is bringing down their revenue and decreasing brand trust. To combat this, Nike needs to focus on product innovation and brand differentiation, in an effort to provide a competitive edge to stay ahead of competition. This includes catering products and advertisements to the area they are being sold or shown in, as it can increase consumer interest. Using innovative technologies and materials can also work to their advantage in this area. Along with this, reshoring can help them be more organized and prevent delays in unexpected situations such as pandemics. Finally, reshoring and educating consumers through verified sources can combat the sale of counterfeit goods, and consumers who spend their money there will be reverted to Nike to buy the original products. In conclusion, Nike can strengthen its market leadership by embracing innovation, rethinking its strategy, and building deeper worldwide customer relationships as it navigates these obstacles. The suggested changes provide Nike with a road map for overcoming present challenges and moving in the direction of a more solid and resilient future in the international market. Company Overview Founded in 1964, Nike is now the world's biggest and best-known sportswear company worldwide. Nike began as a small shoe and t-shirt business and has since expanded to become a global giant. It was founded by Bill Bowerman and Phil Knight, and was first introduced as “Blue Ribbon Sports.” Today, Nike has over 1000 retail stores, and employs over 73,000 people in 170 countries (Smith 2022). Nike's business strategy is built on the development of innovative products and technologies that have fundamentally altered the sports apparel industry. The company's success is partly down to its international marketing, which involves working with well-known celebrity athletes and international sports teams. Nike's social responsibility initiatives and ethical business practices have a significant impact on its business success. On Nike’s website, they state “Our purpose is to move the world forward. We take action by building community, protecting our planet and increasing access to sport. Learn more about our progress in our FY21 Impact Report” (Nike 2021). In addition to outlining their actions in the direction of social responsibility, they also make their impact report available for public viewing. Transparency is important because it fosters confidence

Nike has a vast worldwide supply chain that crosses several nations, which makes sourcing, production, and logistics more difficult. According to an article by Rob Neibauer, products from Asian factories were held up due to shipping delays and port congestion, resulting in longer wait times and even overstock due to increased orders trying to eliminate stock outs (Neibauer 2023). Outsourcing products means there are a lot of stages involved in product procurement, and factors such as political trade restrictions and unexpected disruptions can lead to bottlenecks. One of the biggest setbacks was the Covid 19 pandemic, and this put a pause in many services in the supply chain. Since Nike has so many different suppliers and operations around the world, their manufacturing process slowed down significantly and people saw longer wait times and low stock. Complexity grows when several providers are relied upon in disparate places. Production schedules and product availability can be impacted by problems with logistics, plant closures, or disruptions in the supply of raw materials. It is also difficult to guarantee data accuracy and real-time visibility across the supply chain. It takes constant investment and adaptation to integrate technology for improved demand forecasting, inventory management, and supply chain visibility. In a world like today’s, although having various different components of the supply chain can help be more cost effective, it is not the most efficient way to do business as it can result in big delays, and ultimately drive customers away, rather than bring them in. Key Issue #3 - Counterfeiting The term counterfeiting refers to creating replicas of products without the trademarks or design rights, for a fraction of the price. Many goods in today's world are sold as replicas, which are mostly 1:1 copies of the original, but sold much cheaper than the original. According to the OECD iLibrary, “the volume of international trade in counterfeit products was estimated to be $464 billion in 2019 – 2.5% of total international trade (OECD 2019). The footwear industry has the most counterfeit seizures, and Nike was the leader in footwear during this time. Research indicates that the threat of counterfeit items is growing for Nike every year. This may weaken brand equity and have an impact on the brand's overall perception. Additionally, the market's availability of counterfeit Nike goods reduces the company's ability to generate money, which translates into decreased profitability. Furthermore, such enormous losses have an impact on the economy as a whole, due to the lingering effect of more and more counterfeit goods. Out of all the manufacturers in the world, China leads everyone in producing counterfeit goods, as around 63.2 percent of customs seizures from 2011-2013 were from China, and it makes up for around 8% of China’s GDP (Holistik, 2017). Since consumers have the choice to move to other companies , the replica items have somehow damaged the brand's reputation. Despite Nike's long history of excellent brand positioning, given the abundance of fake items on the market, buyers may decide to switch to products supplied by Nike's competitors if the current trend continues. This is a more serious issue than merely lost sales since customers might not be as devoted to a business because fashion trends shift so quickly. Even for professionals, it may be quite challenging to tell the difference between authentic and counterfeit goods since they are so hard to tell apart. The problem here is people around the world are unaware of the counterfeiting going on, and Nike has not done much to educate them through their strong global marketing channels. Strategic Decisions and Action/Backup Plans

Nike has already taken significant steps into trying to stay ahead of competition and eliminate threats, but it is evident that in today’s world, no strategy can lead to success for a long period, and needs to be adjusted from time to time. When looking at the key issues mentioned above, there are a few strategies which could help Nike take a leap into the right direction. Intense competition is something which is going to only become more of a threat, and consumer preferences are ever changing. One thing Nike is good at, and can become even better at is their global marketing strategy. Nike needs to continue focusing on product innovation by utilizing technological advancement such as artificial intelligence. For example, an idea utilizing AI could be “The Innovation Zone”, where you step onto a smart mat and sensors begin to evaluate your movement patterns, pressure spots, and stride. A holographic AI helper shows up and makes recommendations for customized shoe models based on your training requirements or running style. Components like this can be incorporated into their website to give people a more convenient experience on their website worldwide. Using innovative technologies and materials can also help them excel in the product differentiation area along with expanding product offerings. It is also extremely important to cater information, product offerings and advertisements as per the geographical region they are in, because different cultures react to information differently. An advertisement that works in Canada would not necessarily work in India, and would need to be rethought, for example, “The Land of New Football” is a Nike advertisement that was run in the Netherlands and catered to Nike’s audience in that region. Nike utilizes the 4 p’s being product, price, place and promotion efficiently, as they take into consideration each component when launching products and initiatives around the world. The research component is essential here, and cultural insights and consumer behavior need to be studied in depth to see how products can be more effective in that region. Strategies such as influencer marketing, for example, can vary depending on the influencer. A basketball player would not be as effective in Europe, as they are bigger on soccer and will have more of an impact in that case. If followed correctly and if they maintain change in their practices, they can stay ahead of the game, like they already are. Nike’s supply chain is pretty much all over the place, as there are so many different players around the world involved, and procurement involves a lot of steps. In order to eliminate this problem, Nike could implement a reshoring strategy, which refers to the procedure of relocating the company's manufacturing and production to its home nation from overseas. Although the costs would be higher by producing in the United States or somewhere in North America, it would result in higher volumes due to less delays and consumer trust. The additional cost of producing locally may even balance out to be similar to the cost of all the logistics processes involved in importing products. Nike’s ethical allegations of the mistreatment of labor workers overseas could also be eliminated by this as their production workers would be local and work in safe, ethical environments. Nike's corporate or organizational structure may change as a result of reshoring in order to maximize operational effectiveness for regional or home manufacturing. Given the opportunities and risks in the social and economic spheres, the possible advantages of reshoring outweigh the change.

Appendix A Product ● Footwear ● Athletic apparel ● Sports equipment ● Electronic fitness devices Price ● Value-based pricing, referring to the max price consumers will pay ● Premium pricing through high quality advertising and celebrity endorsements Place ● E-commerce (website) ● Numerous retail stores including outlet stores ● Mobile app Promotion ● Sales promotions ● Advertisements ● Direct marketing through direct communication ● Public relations with high profile individuals

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