Answered: What are the pros, cons, and risks…

Principles Of Marketing

17th Edition

ISBN:9780134492513

Author:Kotler, Philip, Armstrong, Gary (gary M.)

Publisher:Kotler, Philip, Armstrong, Gary (gary M.)

Chapter1: Marketing: Creating Customer Value And Engagement

Section: Chapter Questions

Problem 1.1DQ

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1. What are the pros, cons, and risks associated with
Nike’s core marketing strategy?
2. If you were Adidas, how would you compete with Nike?

Transcribed Image Text:DEFINING MARKETING FOR THE 21ST CENTURY CHAPTER 1 29 Marketing Excellence Europe trom a sneaker company into a brand that repre- sented emotion, allegiance, and identification. It also helped launch Nike into other international markets over the next decade, and by 2003, overseas revenues sur- >>Nike passed U.S. rovenues for the first time. In 2007, Nike acquired Umbro, a British maker of Soccer-related footwear, apparel, and equipment. The ac- quisition heiped boost Nike's presence in soccer as the company became the sole supplier of uniforms to over 100 professional soccer teams around the world. Nike focused its efforts on international markets, es- pecially China, during the 2008 Summer Olympics in Beijing. Although Nike's rival, Adidas, was the official sponsor of the Olympic Games, Nike received special permission from the International Olympic Committee to run Nike ads featuring Olympic athletes during the games. In addition, Nike sponsored several teams and athletes, Nike hit the ground run- including most of the Chinese teams and 11 of the 12 ning in 1962. Origrally known as Blue Riboon Sports, high-profle members on the United States men's basket- the company focused on providing high-quality running bal teams. That year, sales in the Asian region grew shoes designed for athietes by athletes. Founder Philip 15 percent to $3.3 billion and Nike's international divisions Knight beleved high-tech shoes for runners could be manu- grew to 53 percent of the company's revenue. Some be- factured at compettive prices if imported from abroad. Nkes leved Nike's marketing strategy during the Olympics was commitment to designing innovative footwear for serious ath- more effective than Adidas's Olympic sponsorship. In addition to expanding the brand overseas, Nike Nke beleved in a "pyramid of infuence" in which the successfuly entered new athietic tootwear, apparel, and preferences of a small percentage of top athietes infuenoed equipment product categories by using endorsements the product and brand choices of others. From the start its from high-profile athletes and consumer outreach pro- marketing campaigns featured accomplished athletes, grams. The Nike Golf brand, endorsed by Tiger Woods, Runner Steve Prefontaine, the first spokesperson, had an ir- has changed the way professional golfers dress. Tiger's powerful infiuence on the game and his Nike emblazoned in 1985, Nike signed up then-rookie guard Michael style have turned the greens at the majors into "goif's Jordan as a spokesperson. Jordan was still an up-and- fashion runway." In addition, Nike has used the superstar comer, but he personified superior performance. Nike's to hep build its relationship with consumars. In 2009, it bet paid off-the Air Jordan line of basketbal shoes fiew launched a Tiger Web Talkback session at nikegolf.com, off the shelves and revenues hit over $100 million in the where fans couid ask questions and hear Tiger talk about first year alone. As one reporter stated, "Few marketers golf. The session was part of a nationwide Nike Golf con- have so reliably been able to identify and sign athletes sumer experience day, which inciuded equipment demos, letes helped it buid a cult following among U.S. consumers. reverent attitude that matched the company's spirit. who transcend their sports to such great effect." n 1988, Nike aied the frst ads in its $20 millon "Just Do long-drive contests, and in-store specials. in tennis, Nike has aligned with Maria Sharapova, It" ad campagn. The campaign, which utimataly featured 12 Roger Federer, and Rafael Nadal to push its line of tennis TV spots in al, subtly chalenged a generation of athietic en- clothing and gear. Some called the famous 2008 thusiasts to chase their goals. It was a natural manitestation Wimbledon match between Roger Federer and Rafael Nadal-both dressed in swooshes from head to toe-a of Nike's attitude of self-empowerment through sports. As Nike began expanding overseas to Europe, it five-hour Nike commercial valued at $10.6 million. found that its U.S.-style ads were seen as too aggressive. Nke teamed up with seven-time Tour de France cham- Nike realized it had to "authenticate" its brand in Europe, pion Lance Armstrong not only to sel Nike products but also so it focused on soccer (known as tootball outside the tohelp Armstrong's LIVESTRONG campaign. Nike decigned, United States) and became active as a sponsor of youth manufactured, and sold over 70 milion yelow LIVESTRONG leagues, local clubs, and national teams. However, for bracelets, netting $80 million for the Lance Armstrong Nike to build authenticity armong the soccer audience, Foundation. It also featured Armstrongs message of survival, consumers had to see professional athletes using its wilpower, and giving in a series of Nike commercials. To promote its line of basketball shoes and apparel, Nike came in 1994 when the Brazilan team (the only national continues to feature basketball superstars such as Kobe team for which Nike had any real sponsorship) won the Bryant and LoBron James, In addition, it tomed a partner- World Cup. That victory transformed Nike's image in ship with Foot Locker to create a new chain of stores, House product, especially athletes who won, Nike's big break PART 1 UNDERSTANDING MARKETING MANAGEMENT 30 of Hoops by Foot Locker, which affers anly basketbal prod- would distract from its slick high-tech image, so etforts ucts by Nike brands such as Converse and Jordan. Recently, Nike's lead in the running category has grown to 60 percent market share thanks to its exclusive with a 31 percent market share globally and a 50 per- partnership with Apple. Nke+ (Pius) technology includes cent market share in the United States. Swooshes a sensor that runners put into their running shoes and a abound on everything from wristwatches to skateboards receiver, which fits into an iPod, ITouch, or iPhone. When to swimming caps. The firm's long-tem strategy focuses the athlete goes for a run or hits the gym, the recelver on baskatball, running, football, women's fitness, men's captures his or her mileage, calories burned, and pace training, and sports cuiture. As a result of its successful and stores it unti the information is downloaded. Nike+ is expansion across geographic markets and product cat- now considered the world's largest running club. In 2008 and 2009, Nike+ hosted the Human Race manutacturer in the world, with corporate fiscal 2009 10K, the largest and only global virtual race in the world. revenues exceeding $19 bilion. The event, designed to celebrate running, drew 780,000 participants in 2008 and surpassed that number in 2009. Questions To participate, runners register online, gear up with Nike+ technology, and hit the road on race day, running 1. What are the pros, cons, and risks associated with any 10K route they choose at any time during the day. Once the data is downloaded from the Nike+ receiver, 2 Ifyou were Adidas, how would you compete with Nike? each runner's official time is posted and can be com- pared to the times of runners from around the world. Like many companies, Nike is trying to make its com- pany and products more eco-triendly. However, unlike Neweter 17, 200 10 ke artratoni Canpuign" ANoy Agn Donter 2, 2001. p. 24; many companies, Nike does not promote its efforts, One on tuak ant ane Alan. "Growth Duste be Cae," ranae aran Fven Decerber 2000, brand consultant explained, "Nike has always been about E, Jemy aan, TE, What wtaer eah fies Cams tu Nana Han," Ahatny Agn winning. How is Sustanability relevant to Its brand?" Nike executives agree that promoting an eco-triendly message like recycling old shoes into new shoes are kept quiet. Today, Nike dominates the athletic footwear market egores, Nike is the top athletic apparel and footwear Nke's core marketing strategy? Sourc Antn twen ne mStADesyw Snn, uS NA VNTAt.ury2, 2001, a 12; "Cp Mada Eveh r Cy ut, any 12, 2004 z1 lartan LEper me Chargm o Te The Gutatad Cargatite Pat Thre Decac" A, Ommer 20 2. A 3M n Kapan 1a at Le Tiger ui you ing Ane nAe e August 9.20R Rru u and ut em, Me G n, Vry ty she, June 22, 200 Marketing Excellence environment, strong ethics, and a famous founding credo;

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What are the pros, cons, and risks associated with Nike’s core marketing strategy? 2. If you were Adidas, how would you compete with Nike