IV. Marketing strategy
As a leading athletic brand in the world, much of Nike’s success can be attributed to its shrewd marketing strategy. As reported in its 2009-2010 Annual report, because NIKE is a consumer products company, “the relative popularity of various sports and fitness activities and changing design trends affect the demand for our products”. Therefore, Nike must “respond to trends and shifts in consumer preferences by adjusting the mix of existing product offerings, developing new products, styles and categories, and influencing sports and fitness preferences through aggressive marketing”. In fiscal year of 2009, Nike’s demand creation expense, which consists of advertising and promotion expenses, including costs of endorsement contracts, grossed about $2,351.4 (million dollars). In comparison with fiscal year of 2008, even the company had taken actions to reduce spending across nearly all demand creation related activities, Nike’s demand creation expense increased 3% during fiscal 2009. One of the most visible marketing strategies of Nike is favorable brand image, which is associated with a distinctive logo and the advertising slogan, "Just do it." To help market their products, Nike has successfully developed and is currently deploying a promotional approach in which Nike “contract[s] with prominent and influential athletes, coaches, teams, colleges and sports leagues to endorse our brands and use our products, and they “actively sponsor sporting events and clinics”. For example, Nike has a number of famous athletes that serve as brand ambassadors such as: -Michael Jordan: in 2007, the Jordan brand, now a separate Nike subsidiary with its own building, grossed about $800 million. - Tiger Woods: in 2000, Nike agreed to a multi-year deal with Woods worth a reported $105 million, extending an earlier multi-million dollar deal originated in 1996. Researchers have discovered the Marketing mix 4Ps of Nike as following: * Products: Nike offers a wide range of products, range from shoe, apparel, equipment, and accessories to plastic product such as protective gear, hockey stick. * Price: Nike’s pricing is designed to be globally competitive to other brands. The pricing is based on the basis of premium segment as target customers. As a brand, Nike commands high premiums. * Place: Nike sells its product to about 20,000 retail accounts in the U.S. and in almost 200 countries around the world. * Promotion: Nike has a number of famous athletes that serve as brand ambassadors and Nike “actively sponsor sporting events and clinics”
V. Social responsibility
Nike, as revealed in FY 07-09 CR report, has a long history of engagement in communities around the world, investing in their backyards, key markets and manufacturing communities, which has clearly demonstrated its responsibility and commitment to the society. In FY07-09, Nike has directly invested in community $168.8 million, and set the goal of $315 million of contributions for FY11. However, not only does Nike make financial contributions, but also the company involves contributing expertise and philanthropic activity to the community. Nike has developed two core approaches for community investment strategy, which includes three primary areas of focus: 1) A focus on creating new models to provide young people access to the power of sport (to unleash their confidence, leadership, health, education or employment). * The Nike Foundation (separate nonprofit organization): focuses on adolescent girls in developing world as powerful agents of change in community, capable of unleashing a ripple effect that will change the course of poverty. * Innovating for better world through sport: Nike believes that every young person in the world should have access to sport and have partnered to develop and deliver programming activities. 2) Leverage philanthropy mechanisms that enable our partnerships to scale without limits and create financial...
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