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Nike

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by

Ly Hongoc

on 30 October 2015

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Transcript of Nike

Nike
In Asia Market
Nike Profile
Problem:
Nike's image crisis
Nike was claimed that:
Unsafe working condition
Over working hours: 65 hours/week
Low wages: less than $10/week
Lack of human rights: hire teenage laborers
Was boycotted and had possibility to be sued
Uglify brand image

New ventilation system
Announced the use of chemicals in manufacturing
Reduced to 60 hours/week
New global labor standards for footwear workers (>= 18 years old)
Create Corporate Responsibility Division
Member of Fair Labor Assosiation
Enlisted FLA - approved Price WaterhouseCoopers
Use Defensive strategy in Corporate Social Responsibility (CSR)
Not radical enough -> was accused second time
Published series of detailed reports, annual audits of 500 global factories
Partly trustworthy, practically
"... we focused on making working conditions better and showing that to the world" - Phil Knight.
Defensive strategy -> Proactive strategy (meet all criteria of social responsibility, including discretionary performance)
Hold study tour for students
Reporting/ videos of manufacturing process
Founder:
Phil Knight and Bill Boweman
Initial capital:
$1000
Founded:

In 1961 as Blue Ribbon Sport
In 1971 officially changed to Nike
Headquarter:
Oregon, US
Product:
provide only high quality running shoes for athletes -> footwear, apparel, sport equipment, recreational product.
Name meaning:
Winged Greek Goddess of victory
Logo:
Swoosh - a fat check mark
with total cost $35
Slogan:
"Just Do It"
Top 18 brand in the world
Nike was the leader in apparel industry
Sales and market share mostly stood at the first ranked
Marketing mostly based on sponsorship
In US market
Problem:
Nike's performance
Example case:
problem when enter aerobics market.
Case fact:
Need for running shoes was saturated
Rising trend for aerobic
Reebok was the strongest competitor in aerobics market
Nike had to compete with Reebok
Question for listeners:

Which one would you choose between two pairs of shoes?
Case problem:
ignoring customer preference of styling, only care about the quality.
Nike's actions:
Moving from product orientation to market orientations:
1. Broaden marketing effort (eg: creative marketing campaign)
2. Created new marketing formula
3. Put more attention to basketball a recent rising trend (eg: produce Air Jordan shoes, hired Michael Jordan)
Recommendation:
Actions successful
Air Max Nike $75 millions
Air Jordan $100 millions
EUROPE
ASIA
USA
Suggestions:
Do survey among target customers
Allow customer to participate in process of designing shoes
Corporate with fitness center
Nike's actions:
First time
Second time
Action
Recommendation
Suggestions:
Problem 1
Losing control of marketing and product strategies
Problem 1
Problem 2
Problem 1
Problem 2
Swoosh ubiquity
Nike did not have the right to create centralized advertising
Losing marketing control
Losing product strategies control
Have no products for middle class
Become aggressive
Uglify brand image
Nike actions:
1. Send David Kottkamp to EU operation to repurchase licensing rights
2. Launched the 1st centralized print campaign
3. Introduced its “gospel” campaign

Recommendation:
1. This is a suitable strategy, because of successfully regained distribution control of 90% (meanwhile Adidas and Reebok gain control 65% and 40% respectively)

2. Almost Nike’s actions in the case focused on solving marketing problem but not mentioning any action to solve product strategy problem.
Suggestion:
Problem 2:
http://www.lisdatacenter.org/wps/liswps/580.pdf
The Middle Classes in Europe
Evidence from the LIS Data
Régis Bigot, Patricia Croutte, Jörg Muller and Guillaume Osier
September 2012
Irreverent and rebellious advertising
The fact:
Controversial advertising was popular at that time
Nike did not stand out of this trend
Irreverent and rebellious advertising
They might also create some advertising which are consistent with slogan of
"Just do it"
However, customers did not understand it
Nike's advertising was seen as irreverent and rebellious
For example:
1. Boxer lose his mouthpiece after a punch
Negative effect on brand image
The different between brand identity
2. "Nike vs Evil" at hellish stadium
Nike actions
1. Continued sponsoring for local and national soccer team


2. The violent advertising was tone down considerably
ex: basketball stars play soccer with Euro stars


3. Use expert cultural input
ex: Ronaldo and Tiger Wood
Recommendation:
1. Soccer was the most popular sport with the highest number of viewers in the world
Positive effect on brand image but not radically solve the consequence of violent advertising
2. Could temporarily address the problem






3. Build good brand image in customers mind
Performance
Swoosh ubiquity
Problem 1
Problem 2
Almost of all product line had the same logo
In one model, swoosh appeared in nice position
Nike's logo was seen to represent a modern ill-commercialization of sports
Make brand become aggressive
Uglify brand image
Nike's actions:
Developed Nike Alpha Project, which allow sub-brand of shoes and apparel to claim their own logo
Recognizing the importance of swoosh in company's rise, Nike cancel the first action, create 2 new swooshes:
1. Nike+ running shoes and apparel
2. Nike pro athletic apparel
Recommendation:
The second action was reasonable because the two new swoosh expressed the combination between the traditional design of the old swoosh and the distinctive creation of each product line
Suggestion:
Make the swoosh become a part of design in a suitable and natural way
Content
America
European
Asia
Nike's
performance
Swoosh
ubiquity
Losing control of marketing and product strategies
Irreverent and rebellious advertising
Nike's image crisis
Suggestions:
1. Create a character which represent “just do it” and still can represent friendliness.
2. Using short friendly story or clip and the character is famous athletics
1. Nike should sell more products for middle class in order to increase sales and change the thought that “Nike is an expensive brand” and build good effect on brand image

2. In term of marketing, it needs more commonality and comformability
Full transcript