NIKE INDIA marketing report

NIKE INDIA MARKETING REPORT LECTURER AND SUPERVISOR MS MAI QUYNH ANH THE VNUK INSTITUTE FOR RESEARCH AND EXECUTIVE EDUCATION THE UNIVERSITY OF DANANG Nike India focus on the marketing plan............................................................................................................................................................................................................................

MARKETING REPORT

LECTURER & SUPERVISOR: MS MAI QUYNH ANH

THE VNUK INSTITUTE FOR RESEARCH AND EXECUTIVE EDUCATION

TTHE UNIVERSITY OF DANANG

Ngo Hoang Yen Bui Thien Phuoc Tran Thi Tra My Huynh Thi My Co Luong Minh Thang

Le Nguyen Quynh Nhu

OUR TEAM

International Marketing

Module

Academic Year 2021 - 2022

VNUK Institute for

Research and Executive

Education, the University

of Danang

Tables of Contents

Introduction / 05

Company History Vision and mission statement

Domestic Environment / 07

Controllable elements Uncontrollable elements

NIKE in India

This report is all about to show a part of the Marketing plan for

Nike’s products; with reference to the scope of the

international marketing task, the report shows how both controllable and uncontrollable factors affect Nike offering new

products in the market.

Phil Knight and Bill Bowerman

Nike is one of the biggest brands in sportswear in the world From elementary school students

to professional athletes, no one could deny the attractiveness of Nike between any brands inthe market Nike was founded by University of Oregon track athlete Phil Knight and his coachBill Bowerman in January 1964 as "Blue Ribbon Sports" (Ahmed et al., 2016) According toNike Inc, The company initially operated as a distributor for Japanese shoe maker OnitsukaTiger, which met Knight's Automobile and officially became Nike, Inc on May 30, 1971 Sinceentering the sports market to provide products to customers, Nike has gradually grown up,surpassed over competitors as well as stuck in the customer's mind, as a result of itsrelentless efforts and continuous development over the years Therefore, implicitly affirmingthe brand position through the quality of the product

‘To bring inspiration and innovation to every athlete in the world’

‘The Nike goal is to carry on his legacy of innovative thinking, whether to develop products that help athletes of every level of ability to reach their potential, or to create business opportunities that set Nike apart from the competition and provide value for our shareholders.’

Mission

Nike guides the thinking of management through its mission and vision as a source ofinspiration In other words, deliver the message in clear, concise, and precise language whilealso gaining buy-in and support across the business Therefore, increasing the efficiency ofemployees' work productivity via a clear goal determination right from the start In otherwords, Nike Corporation irrefutably has created wealth for its owners and shareholders, but itsrhetoric of social responsibility—itself‐presentation of the corporation as a now global citizen

—constitutes a more dubious claim (Stabile, 2000) Moreover, the company announced thepurpose of the company with a specific business strategy, they invest in building a brand-newmarket and celebrity Developing products that must be high quality by using innovativetechnology and being stable in front of the competition in the market

Nike has been aware and always focused on product development and innovation strategies Increasing reliability in quality, bringing satisfaction to customers from marketing campaigns or customer care services are meticulously cared for

According to Cateora, Gilly, and Graham (2010), the domestic environment uncontrollables includehome-country elements that can have a direct effect on the success of a foreign venture: political

and legal forces, economic climate, and competition

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The inner-circle represents the controllablevariables Those variables that a marketingmanager or a company can easily control to suitthe demand of the business They include

"Marketing Mix" and research activities.Controllable factors can be changed over thelong term and often in the short term to adjust tomodifying market conditions, consumer tastes, orcorporate goals (Philip et al 2010, p.12)

Firm

Characteristics

Controllable elements

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Nike is the market leader in the sportswear industry,with sales of sports shoes accounting for most of theirrevenue It provides a variety of items, includingcustomized shoes for a range of sports Productdevelopment is Nike's intensive growth strategy(Smithson, 2019) Changes in its product mixaccompanied the development of Nike Inc It involvesthe launch of new products to increase its sales Forexample, the company seeks to research and develop

in order to develop new products and improve existingstuff Nike emphasizes product innovation throughinnovative shoe and apparel designs using technology

to improve product quality and differentiate itself fromcompetitors Nike has not only adapted to a changingmarket by designing and selling iPod nano-connectedsmart products, as well as providing a mix of Apple Incand Nike products to measure athlete performance, but

it also allows customers to design and customizeproduct features according to their needs henceallowing them to appeal to a wider audience (Gregory,2017)

Differentiate of product

Product

Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need (Kotler, 2015).

A pricing strategy is a model for determining

the most appropriate price for a product or

service It assists a company in pricing that

optimizes profits and shareholder value while

considering consumer and market needs

(Business Jargon) Therefore, price is one of

the key controllable factors that every firm

must consider carefully in their domestic

industry Because the competition among

current companies is more intensive in this

industry, businesses are constantly looking

for new competitive advantages to set

themselves distinctly Nike's pricing method,

which is mainly based on the concept of

value-based pricing, has played an essential

role in facilitating Nike to become one of the

largest shoe businesses in the world Nike is

focused on bringing the best customer value

at the right price This strategy determines

the maximum price that consumers are willing

to pay for the company's products, such as

sportswear, sports shoes, and equipment It

ensures maximum retention of the buyer's

surplus.

The distribution network is vital since it helps the company cut costs whilealso controlling expenditures and the ultimate price they charge for theirproducts It relates closely to some factors such as including transportation,logistics, and supply chain management However, they will have a lot ofcontrol over prices if a company can find a place where they can build up andmanage their distribution network Nike uses three channels to sell a widerange of products to consumers:

Retail storesNike Online StoreNiketown retail outlets (company-owned)Retailers are the most important places where their products are sold In the

US, Nike has more than 200,000 retailers Nike exclusive stores are prevalent

in most cities and suburbs throughout the country to meet the requirements ofgeographically specific consumers

Channel of distribution

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Nike is a brand famous for its strong brandingand marketing strategy The promotionalstrategy in Nike's marketing mix is extremelycomprehensive, and aggressive The Nikecompany logo and swoosh image plays animportant role in corporate advertising Thecompany relies heavily on advertisements,especially those involving popular celebrities,such as professional athletes and sportsteams For example, Nike also took theopportunity to promote its brand by sponsoringmarathons, international events such as theNBA basketball championship.

The domestic political or legal forces are uncontrollable

elements that determine what laws and regulations of a home

country impact its marketers on doing business in international

markets (PESTEL Analysis, 2016) In this part, we are going to

analyze a specific element which is how US citizens and

lawmakers demand Nike improve its working conditions in

international markets

Everything started in 1991 when American labor activist Jeffrey

Ballinger published a report on Nike's factory practices in

Indonesia, exposing the ugly truth of low wages, child labor, and

appalling working conditions akin to a sweatshop – a factory or

workshop where employees work long hours for low pay in

hazardous working conditions Later it was discovered that Nike

sweatshops were popular in most of Nike’s developing Asian

markets, including India, where labor regulations are frequently

disregarded Nike was accused of turning a blind eye to this

situation in order to keep the costs as low as possible and

maximize profits (New Idea, 2019)

These discoveries have since then caused a major outrage within the US public Nike boycotts and Nike chants have become the backbone of the anti-Nike campaign, which employed hundreds ofthousands of consumers Sales of the company's sportswear have plummeted as a result of theunfavorable publicity, which contrasts with the company's sleek looks and 'Just Do It' slogan (TheGuardian, 2001) In addition, the protests also put pressure on US lawmakers to act Many states hadbegun passing new laws that required retailers and manufacturers with global revenues of more than

anti-$100 million, which included Nike, to publicly disclose how they were addressing poor workingconditions in their global manufacturing networks In 2014, the US House of Representatives proposedthe Federal Business Supply Chain Transparency on Human Trafficking and Slavery Bill By this law,Nike was required to file annual reports to disclose what measures, if any, they have taken to identifyand address conditions of forced labor, slavery, human trafficking, and child labor within their supplychains, whether in the US or abroad (The Fashion Law, 2019) As a result, since the early 2000s, Nikehas actively tried to resolve its sweatshop problem in order to reclaim its brand reputation in bothdomestic and international markets

Political/

Legal Forces

US Lawmakers and Citizens Demand Nike for Basic

Human Rights Treatment, Equal Pay and Standard

Working Condition for its Subsidiaries Overseas

Enhancing worker-management engagement, increasing openness and transparency, monitoringcontract factories, setting industry-leading compliance standards, outlawing child labor, and supportingemployee freedom of association are some of the solutions (Sustain Case, 2016) These admissions andchanges have aided in improving public perception of Nike and recovered the brand profits after thescandal

However, recently, after nearly two decades, Nike was again accused of exploitation in India and otherforeign markets by “treating the sweatshop issue as a public relations inconvenience rather than as aserious human rights matter”, which means the company only did the bare minimum to slip through lawsand please protesters, without actual care for its workers In 2017, the United Students AgainstSweatshops (USAS) held demonstrations in cities such as Boston, Washington D.C to raise awareness

on the recent discovery of workers in Asian countries suffering wage theft, verbal abuse, and excessivehours These events again influenced the US government to consider updating on the human rightsrequirements for Nike This means that this uncontrollable political and legal element still poses a strongpresence today and forces Nike to keep assessing its marketing strategies in foreign markets includingIndia (Business & Human Rights Resource Center, 2017)

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A sweatshop in India

STRUCTURE

Nike, Inc.'s main competitors are Reebok,Puma, and Adidas, claiming to be themost relevant company globally In thisway, they are presenting a very toughcompetition with Nike Corporation Thecompany is devoting a lot of financialresources to its marketing tactics

UNCONTROLLABLE ELEMENTS

Nike is the world's largest sports brand and the pride of the Americans In 1977, under the advice of advertising agency John Brown, the Nike brand was officially born and had been kept ever since By 1980, Nike had a 50% share of the sports shoe market in the US (the company went public in December that year) and continued to expand worldwide in the following decade with impressive business results

The conflict between Reebok and Nike is a story everyone knows, and when Adidas decided to buyReebok, it was time to declare war officially The acquisition of Reebok brought Adidas 28% offReebok's total annual revenue of about $ 11.5 billion in global sales, enough to compete with Nike -the No.1 competitor in the US Even without the Reebok acquisition, it is still seen that the battlebetween Adidas and Nike has never cooled down The purchase of Reebok is Adidas' officialdeclaration of war against Nike Both sides constantly invest in advertising campaigns and million-

dollar contracts to "cover" their names

NIKE - ADIDAS COMPETITIVE STRUCTURE

NIKE - REEBOK

The year 1979 marked the beginning of Nike's peak when the shoe company controlled half of the

US running shoe market (Geraldine, 1992) Nike's success comes from knowing how to seize themoment when both big brands, Adidas and Reebok, completely ignore the sports running shoemarket However, in 1980, Reebok made Nike "strange" when it launched sports products forwomen Meanwhile, Nike only focuses on the men's market segment It is by hitting new marketsegments with the "right people, at the right time" marketing strategies, which are choosing celebs

to represent their brand, that has made Reebok's sales increase rapidly The fledgling warriorsurpassed the most prominent American player at that time - Nike; Reebok used to hold 26% of the

US sports product market share in the 1980s (Salpini, 2021) Although it is only a short success, it isalso what any rookie wishes Reebok's "overtake" dealt a fatal blow that made Nike miserable

However, the Nike team has woken

up and redefined the right direction:

running shoes are not only beautiful,

but they need to be of high quality

In addition to following the original

product direction, Nike also spent

heavily on marketing campaigns and

then reaped great success It

returned to the race track

spectacularly, regaining its position

in the shoe industry

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