Nike Brand Analysis 5g6p10

UNIVERSITY OF MUMBAI

PROJECT ON BRAND ANALYSIS OF NIKE AND PUMA

SUBMITTED BY: ROHIT SURESH PANDEY

FOR THE DEGREE OF: BACHELOR IN MASS MEDIA

UNDER THE GUIDANCE OF: PROF. MANJU CHAKRAWATI

VIDYA VIKAS UNIVERSAL COLLEGE MALAD WEST, MUMBAI – 400 064 ACADEMIC YEAR: 2015-2016

BRAND ANALYSIS OF NIKE AND PUMA

CERTIFICATE I, Prof. Manju Chakrawati, hereby certify that Mr.Rohit Suresh Pandey student of Vidya Vikas Universal College, T.Y.B.M.M. (Semester 5) has completed the project on “Brand Analysis of Nike and Puma” in the academic year 2015-2016. The information submitted is true and original to the best of my knowledge.

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ACKNOWLEDGMENT I would like to express my gratitude to all the people who have directly or indirectly assisted me in my project related studies and contributed in the process of making this project.

Firstly, I would like to thank my period guide, Prof. Manju Chakrawati, for her , cooperation and fruitful discussions during my research on the topic“BRAND ANALYSIS OF NIKE AND PUMA” I would also like to thank the staff at Nike and Puma for helping me out with my case study and enriching my experience during this whole process. Lastly, I would like to express my gratitude to my college, for providing me such an interesting topic for my university project and their by ing, and cooperating with me during my project. This has been a tremendous learning and enriching experience for me.

INTRODUCTION BRIEF ANALYSIS OF INDUSTRY Sport is an integral part of modern contemporary society. Sport has always been associatedwith discipline, dedication and perfection and hence sportsmen have always beenrespected, across borders, religions and races. Sportsmen, professional or amateur, needquality gear, specific to their game, to be able to compete better. It is this market that thetwo conglomerates, the subjects of our study, cater to. Both these companies started off asfootwear makers for the modern athlete, their innovative designs and technology creatingwaves. But now these firms have diversified. They compete on the broader platform offootwear, apparel, accessories and equipment. Today they are among the world s topcorporations, with a worldwide presence. Our study will concent rate on the primaryproduct these two firms make Athletic Footwear.We will compare their marketing strategies, their targeting and their marketing mixes. Wewill dissect their segmentation and examine their positioning on the global playing field. Andlastly we ll state our conclusions on the comparative marketing strategies of these firms.The world s athletes play using their products. Let s see how they play the market. INDIAN FOOTWEAR INDUSTRY The Footwear Industry is a significant segment of the Leather Industry in India. India ranks second among the footwear producing countries next to China. India produces more of gents footwear while the world s major production is in ladies footwear. The industry is labour intensive and is concentrated in the small and cottage industry sectors. While leather shoes and uppers are concentrated in large scale units, the sandals and chappals are produced in the household and cottage sector. The major production centres India are Chennai, Ranipet, Ambur in Tamil Nadu, , Mumbai in Maharastra, Kanpur in U.P. , Jalandhar in Punjab, Agra and Delhi. The

following table indicates concentration of units in various parts of the country

“BRAND ANALYSIS OF NIKE”

Contents               

Executive Summary. History of Company. Flagship products, major product lines and recent forays. History of Brand. Evolution of Brand Developing the swoosh Product Profile Nike advertising and emotional branding Building customer loyalty with heroism Nike brand strategy Marketing and ment Competitors Nike Innovations SWOT Analysis Conclusion

EXECUTIVE SUMMARY Nike Inc. was founded in 1962 by Bill Bowerman and Phil Knight as a partnership under the name, Blue Ribbon Sports. Our modest goal then was to distribute low-cost, high-quality Japanese athletic shoes to American consumers in an attempt to break 's domination of the domestic industry. Today in 2000, Nike Inc. not only manufactures and distributes athletic shoes at every marketable price point to a global market, but over 40% of our sales come from athletic apparel, sports equipment, and subsidiary ventures. Nike maintains traditional and non-traditional distribution channels in more than 100 countries targeting its primary market regions: United States, Europe, Asia Pacific, and the Americas (not including the United States). We utilize over 20,000 retailers, Nike factory stores, Nike stores, NikeTowns, Cole Haan stores, and internet-based Web sites to sell our sports and leisure products. We dominate sales in the athletic footwear industry with a 33% global market share. Nike Inc. has been able to attain this premier position through "quality production, innovative products, and aggressive marketing." As a result, for the fiscal year end 1999, Nike's 20,700 employees generated almost $8.8 billion in revenue.

HISTORY OF COMPANY Bill Bowerman and Philip Knight started the company we know today as Nike in 1962. It was originally known as Blue Ribbon Sports. Bowerman was Knights track and field coach at the University of Oregon. Philip Knight went on to study at Stanford where he published a paperon ending the German domination in the athletic footwear industry. He travelled to Japanand entered into an agreement with the Onitsuka Tiger Company and became their soledistributor in the US. Bowerman and Knight received their first shipment of 200 shoes andsold them at local meets to make a good profit. Bowerman, who had earlier designed shoesfor his athletes, ed hands with Tiger to make the famous Tiger Cortez shoes, whichbecame worldwide bestsellers and launched the business. In 1971, Knight and Bowermanbegan to make their own shoes under the brand name of Nike, named after the Greekgoddess of victory and bearing the Nike swoosh, which is one of the company s biggeststrengths today. In 1972, Blue Ribbon Sports parted ways with Onitsuka Tiger and becameNike Inc.Today Nike is the world leader in athletic footwear, with market shares exceeding the othermajor players by significant margins. The Swoosh and Just Do It slogan are huge brandidentities. Nike is a truly global player and seen as a model for innovation driven growth.

Indian Operations Nike has been present in India for over a decade through its seven year license agreementwith Sierra enterprises, which didn t help much in the bigger scheme of things as Reebokand Adidas came to the country with fully owned subsidiaries. This explains why the globalmarket leader is still lagging behind in India. In 2004, instead of renewing it’s french ise, it became a subsidiary and started operating with more freedom and capital. The result wasthat the market share rose and Nike became a force to contend with in the Indian market.Probably the biggest sign of the change in guard was the heavy investment in Cricket byNike, culminating in its bagging of the Indian cricket team s jersey rights, worth Rs 200Crores. Nike then launched its special range of cricket shoes and sponsored the

Indianfootball team as well. Though Nike has entered the market in earnest very late, the worldno.1 will stop at nothing to gain lost momentum in the Indian subcontinent.

FLAGSHIP PRODUCTS, MAJOR PRODUCT LINES AND RECENT FORAYS 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 skateboarding shoes. Recently, Nike launched special cricket shoes for bowlers and batsmen called the Nike Air ZoomYorker and the Air Zoom Opener. But its bestselling line still remains the legendary AirJordan basketball shoes, named after Michael Jordan. Air Jordan still contributes more than30% of Nike s shoe sales.Like Adidas, Nike too entered the sports apparel and eq uipment market and makes jerseysand specialist apparel for various sports. Recently Nike teamed up with Apple to launch theNike+ range, which can monitor a runner s performance through a radio device linked toApple s ipod.But Nike s most recent product is the one making waves across the sports world. Called theLunar Glide, Nike is using Flywire (A thread developed by Nike, composed of Vectran, aliquid crystal polymer) and Lunarlite Foam to make the world s lightest shoes. using the slogan. Actually, it is Rocket Science; it reiterates Nike s commitment totechnology.

HISTORY OF BRAND Nike positions itself as the market leader of sports footwear and uses the greatest athletesand the record of their achievements in advertising. The swoosh logo was developed byCarolyn Davidson in 1971. Together with the ‘Just Do It’ slogan, the Swoosh logo perfectly expresses the brand and its philosophy. It expresses a high ambition and a will for victory, which is a part of Nike s brand image and corporate culture. It was only 36 years ago that we had a world without Nike, and in that period Nike has gonefrom the brash newcomer, to the number one mass-market leader. The Nike story begins with the meeting of its co-founders at the University of Oregon. It was here that middle-distance-running business student Phil Knight fell under the tutelage of the college athleticscoach, Bill Bowerman. Nike would go on to grow out of the fusion of Bawermans sportinginnovation and Knights marketing know -how.Even at a very early stage it seemed that Knight had a far-reaching goal, to break the long-established brand nomination of the U.S. marketed by the then main player, Adidas.In order to achieve this aim, legend has it that Knight and Bowerman each put in $550 tocement their partnership, and decided to call their new company Blue Ribbon Sports (BRS).BRS was basically the American distributor of Onitsuka training shoes.In 1965, after a period of selling Onitsuka shoes from the back of their van at athletic meets,the company grew.The company went from strength to strength, but after heated disagreements between BRSand Onitsuka, the new boss at BRS decided to split from Tiger in 1971 and create their owncompany manufacturing their own shoes. It is said that Jeff Johnson came with the idea

forthe new name, deciding to honour the Greek goddess of victory, and thus Nike was born.It was also at this that the fledgling company had to decide on a logo for the brand, andanother of the legends that the company managed to create for itself was developed.Nike took off virtually instantly in the United States, and within a year company sales wereat almost 2 million pairs. In 1981 Nike decided to take another major step, with the U.K.becoming the companys first wholly owned foreign distributorship.However it was in 1985 that Nike really became a major player. It was in this year that itmanaged to persuade the then little known Chicago Bulls basketball rookie Michael Jordanto endorse his own range of shoes. Even Nike could not have imagined the effect that thissingle act would have on sales. The new Jordan endorsed range transported Nike andtrainers in general to a completely new lever of popularity. It was after the introduction of the Jordan shoes and mass -marketing that went with themthat the trainer wars got underway. Each of the brands, desperate to stay one step aheadof the competition, came up with a continuous stream of developments and inventions oftechnical wizardry. For a while in the late 1980s Reebok actually overtook Nike to becomethe number one player (at least in of sales), but Nike came back strongly with its justdo it slogan in 1988, and regained the top spot in of market sales - a position theyretain to the present day.In 2006, Nike entered the cricket market with a 5-year sponsorship of the Indian cricketteam for US$43m. Nike and Apple released the Nike+iPod sports kit, enabling runners to logand monitor their runs via iTunes and the Nike+ website.In 2008, Nike introduced shoes featuring new Flywire and Lunarlit e Foam materials. Flywireis a new

technology made up of thin wires of vectran fibers, which are 5 times stronger thansteel and never lose strength. Lunar Foam is a material developed by NASA that gives theshoe excellent shock absorption and a great feel with minimal weight.Back in 1971, the newly created Nike Company was ready to hit the market with its shoes, and a logo to represent the brand was urgently needed.Phil Knight turned to an associate from his teaching life and commissioned graphic -designstudent Carolyn Davison to work with his new brand. Knight wanted a design that wouldrepresent movement. Davidson supplied Knight with a few designs one of which was theinitial Swoosh so well known today. Knight was not particular enamoured with any of thesedesigns, but with deadlines to meet the Swoosh was chosenEven though Davidson was initially paid only $35 for her design, the story doesnt end there.In 1983, Knight took Davidson out for lunch and presented her with a diamond -encrustedNike ring, and also an envelope. The envelope contained Nike Stock.Nike has continuously pushed back the boundaries of trainer design, staying focused underPhil Knights guidance, and is going to take some dislodging.

EVOLUTION AS A BRAND It was only 36 years ago that we had a world without Nike, and in that period Nike has gonefrom the brash newcomer, to the number one mass-market leader. The Nike story begins with the meeting of its co-founders at the University of Oregon. It was here that middle-distance-running business student Phil Knight fell under the tutelage of the college athleticscoach, Bill Bowerman. Nike would go on to grow out of the fusion of Bawerman s sportinginnovation and Knights marketing know -how.Even at a very early stage it seemed that Knight had a far-reaching goal, to break the long-established brand nomination of the U.S. marketed by the then main player, Adidas.In order to achieve this aim, legend has it that Knight and Bowerman each put in $550 tocement their partnership, and decided to call their new company Blue Ribbon Sports (BRS).BRS was basically the American distributor of Onitsuka training shoes.In 1965, after a period of selling Onitsuka shoes from the back of their van at athletic meets,the company grew.The company went from strength to strength, but after heated disagreements between BRSand Onitsuka, the new boss at BRS decided to split fr om Tiger in 1971 and create their own company manufacturing their own shoes. It is said that Jeff Johnson came with the idea forthe new name, deciding to honour the Greek goddess of victory, and thus Nike was born.It was also at this that the fledgling company had to decide on a logo for the brand, andanother of the legends that the company managed to create for itself was developed.Nike took off virtually instantly in the United States, and within a year company sales wereat almost 2 million pairs. In 1981 Nike decided to take another major step, with the

U.K.becoming the companys first wholly owned foreign distributorship.However it was in 1985 that Nike really became a major player. It was in this year that itmanaged to persuade the then little known Chicago Bulls basketball rookie Michael Jordanto endorse his own range of shoes. Even Nike could not have imagined the effect that thissingle act would have on sales. The new Jordan endorsed range transported Nike andtrainers in general to a completely new lever of popularity.It was after the introduction of the Jordan shoes and mass -marketing that went with themthat the trainer wars got underway. Each of the brands, desperate to stay one step aheadof the competition, came up with a continu ous stream of developments and inventions oftechnical wizardry. For a while in the late 1980s Reebok actually overtook Nike to becomethe number one player (at least in of sales), but Nike came back strongly with its justdo it slogan in 1988, an d regained the top spot in of market sales - a position theyretain to the present day.In 2006, Nike entered the cricket market with a 5-year sponsorship of the Indian cricketteam for US$43m. Nike and Apple released the Nike+iPod sports kit, enabli ng runners to logand monitor their runs via iTunes and the Nike+ website.In 2008, Nike introduced shoes featuring new Flywire and Lunarlite Foam materials. Flywireis a new technology made up of thin wires of vectran fibers, which are 5 times stronger th ansteel and never lose strength. Lunar Foam is a material developed by NASA that gives theshoe excellent shock absorption and a great feel with minimal weight. Nike has continuously pushed back the boundaries of trainer design, staying focused under Phil Knights guidance, and is going to take some dislodging.

DEVELOPING THE SWOOSH Back in 1971, the newly created Nike Company was ready to hit the market with its shoes, and a logo to represent the brand was urgently needed.Phil Knight turned to an asso ciate from his teaching life and commissioned graphic-design student Carolyn Davison to work with his new brand. Knight wanted a design that wouldrepresent movement. Davidson supplied Knight with a few designs one of which was theinitial Swoosh so well known today. Knight was not particular enamoured with any of thesedesigns, but with deadlines to meet the Swoosh was chosenEven though Davidson was initially paid only $35 for her design, the story doesnt end there.In 1983, Knight took Davidson out for lunch and presented her with a diamond -encrustedNike ring, and also an envelope. The envelope contained Nike Stock.

PRODUCT PROFILE Apart from delivering a pair of comfortable sports shoes Nike also provides a number of value-added features with its products. The features that are a part of every Nike sports shoe are as follows. High Performance Sports Shoes: Nike has patented the Air system and has made it into a regular feature in most of its models. Many models feature an air pocket in the shoe that reduces the weight of the shoe and reduces pressure on the heels. Besides the ov erall design and compactness of the shoes have made it a favorite of many professional athletes around the world. Comfort: Nike shoes are renowned all over the world for the comfort they provide. Well padded andcushioned, they provide a tremendous level of comfort to the wearer and reduce the strainto his feet while playing. Lightweight: This attribute is in line with the two described above. A lightweight shoe provides greatermobility and eases the pressure on the feet of the wearer. Durability: People purchasing a pair of shoes at such a high price often feel that they have made aninvestment. They would obviously want to see their shoes last a long time. To prove thispoint we draw the example of the authors of this marketing plan. All of us own a pair of Nike s and have been wearing them for well over two years a symbol of the durability of Nike shoes.

Style: Nike s designs are considered to be the most stylish in the industry and beat all others as faras looks are concerned. Attractively packaged, it is a delight to bring a pair home. Add to thisthe Swoosh the most recognizable symbol in sports and you have a product that wouldgive the a definite sense of pride.

NIKE ADVERTISING AND EMOTIONAL BRANDING Nike brand strategy is to build a powerful brand – so powerful that it inspires fervent customer loyalty from people literally all over the world. This is because Nike advertising uses the emotional branding technique of archetypes in its advertising – more specifically, the story of the Hero. It’s an age old tale, a tale of a hero pitted against a great foe, and after a great struggle, emerging triumphant. In a way, you could say that Nikes marketing strategy is thousands of years old, and has been inspiring customer loyalty the entire time.

BUILDING CUSTOMER LOYALTY WITH HEROISM Nike advertising isn’t the only group that uses the Hero archetype to inspire customer loyalty. Many other companies use this emotional branding technique to great effect. In most cases, the foe is external. The most common story of the hero is that of a man of humble origins setting out to defeat a great evil – one far more powerful than he – and, against all odds, emerging triumphant. This same pattern could apply to, say, a home security system against a house fire, or an antacid against heartburn. As long as there is a clearly identified enemy and a clearly identified hero, the emotional branding can begin.

NIKE BRAND STRATEGY

Nike advertising takes the common hero story and turns it on its head. Instead of inspiring customer loyalty by singling out an external enemy, it pulls out the stops and focuses on an internal foe – our laziness. Nike advertising knows just how often we battle with our lazy side. Every morning when that alarm goes off and it’s still totally dark outside, the battle begins. When we choose how long to run, the battle continues. This is how Nike marketing uses emotional marketing to inspire customer loyalty. They know that while some people may identify with an external foe, all people identify with an internal one. Nike brand strategy is excellent on this end because not only is the internal foe someone we can all hate, the hero is the viewer! In one way or another, we are all the hero of our own story, and Nike marketing has long since identified that feeling – and used it to inspire timeless customer loyalty

MARKETING AND ADVERTISING NIKE places a significant weight on marketing the company and its products. NIKE aggremively bonds the contracts with highly successful and influential athletes, coaches.teams, and leagues like Michael Jordan. Serena Williams and Tiger Woods to popularize its footwear, apparel and sports accessories.In order to sustain its dominance in the industry and stay competitive stay. NIKE actively responds to trends and changes 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. Its primary areas of marketing remain Net TV and magazines.

COMPETITORS The rivalry in the sports wear industry is very high. NIKE competes with numerous athletic and leisure shoe companies worldwide. It faces fierce competition in product offerings, technologia. marketing expenditures, pricing, costs of production, and customer services. The main competitors are Midas, Reebok, Timberland, Woodland, and Puma.

NIKE INNOVATIONS

NIKE with Apple: The NIKE+ package consists of a pair of specially designed NIKE+ running shoes, an iPod nano. and a NIKE + iPod won kit. The kit consists of a sensor that fits into a built•in pocket beneath the insole of the left shot and a receiver that fits into the iPod nano dock connector. As a person runs iPod tells the distance, pace, and calories burned via voice that adjusts music volume as it plays. Design your own shoes: NIKE allows customers to dcsign their own shoes from a catalogue of predefined designs. Customers can choose their own colors and mascots to create shoes which define their personality. It provides Touch screen technology in store allowing customers to design shoes of choice. • Nike self lacing automatic shoes: NIKE is also coming up with the new automatic self lacing meakers. The automatic lacing system provides a set of straps that can be automatically opened and closed to switch between a loosened and tightened position.

CONSUMER ANALYSIS

NIKE, for years, has put forth a tremendous amount of effort in order to preserve a large following of consumers who remain loyal to the brand and what it stands for. The current s of NIKE branded shoes come from a wide variety of demographic backgrounds. Among the many consumers who use NIKE’s athletic shoes, a clear split among male and female consumers exists, with males making up 50.7% sales to the 49.3% of sales from females (Mediamark,2010). Most of the consumers of NIKE products went off to college, with 58.6% of the consumers having either attended college or gone on past a four-year college to graduate school (Mediamark, 2010). Some age segments purchase more shoes then others. The largest purchasers to increase the sales of the brand’s products; consumers age 18-24 make up the market sector that could be receptive to new ads focusing on a casual running experience that would encourage urban runners to buy NIKE shoes. Consumers within the ages of 18 to 24 years old are more likely to try out new athletic shoe brands on a more consistent basis then any other age group (Mintel, 2008). This age group also uses athletic shoes in a fairly consistent manner, exercising more then any other age group. Around 54% of this age group runs or jogs regularly as opposed to much lower numbers in older generations (Mintel, 2008). Additionally, New Balance and Reebok have created more brand loyalty among older consumers (Mintel, 2008). It would be difficult to change the perception of NIKE products to older generations who have already formulated their beliefs about running shoe brands. In

marketing a casual, non-competitiveatmosphere associated with NIKE shoes to urban runners between the ages of 18-24, the products can become top-of-mind to this age group. The age group stands as a mix of emergent consumers. In creating positive associations related to a casual experience with the products, NIKE can make the 18-24 year old consumers brand loyal going into the future and increase the company’s total sales now and in the future.

SWOT ANALYSIS

STRENGTHS  Brand Recognition.  High Product quality.  Effective marketing stratergy.  Capacity of innovation.  Strong distribution chain.  Strong Research and Developement.  Strong customer relationship and satisfaction.

WEAKNESS     

Overseas manufacturing dependency. Decreasing United States Market Share. High product price compared to its competitors. Currency Exposure. Medium Retail Presence.

OPPORTUNITIES    

Expansion into emerging markets. Increased demand in product innovation Growing Segments of women atheletes Increase in the number of sports events like Olympic and FIFA.

THREATS    

Fierce industry competitions Revenue release on consumer discretionary income. Economic Rescissions. Fluctuation in the currency

CONCLUSION

Nike, Inc. is a company rooted in competition. From equipping athletes with the finest sports equipment in the world to continuously improving our own financial performance, Nike dominates its competitors. Phil Knight and Bill Bowerman probably could not have imagined in 1962 to what degree their $500 investments would yield in 2000. They did know that product quality and innovation would help athletes to achieve greater goals. Nike still operates on this philosophy today. It is one that has helped athletes and stakeholders alike to realize athletic and financial greatness. Despite a changing marketplace for athletic footwear, they will continue to expand their product lines and marketing reach to become a more powerful global brand.