FAKULTI KEUSAHAWANAN DAN PERNIAGAAN FUNDAMENTALS OF MARKETING (AFT 1053) TASK 1

GROUP ASSIGNMENT NIKE MARKETING PLAN LECTURE NAME DUE DATE : AHMAD SYAKIR BIN JUNOH@ISMAIL : 11 MARCH 2012

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NAME ALEXSON ANAK ALI AHAMAD IQBAL BIN KAMARUZZAMAN

PROGRAMME SAH1_1 SAB1_1

MATRIC NO A11A019 A11A009

EXECUTIVE SUMMARY (Nike Inc. 1999)

NIKE HISTORY
Bill Bowerman and Phil Knight founded Nike Inc. as Blue Ribbon Sports in 1962. The partners began their relationship at the University of Oregon where Bowerman was Knights track and field coach. While attending Stanford University, Knight wrote a paper about breaking the German dominance of the U.S. athletic shoe industry with low-priced Japanese shoes. Knight visited Japan and engineered an agreement with the Onitsuka Tiger company, a manufacturer of quality athletic shoes, to be their sole distributor in the United States.

 In 1962, Knight received the first shipment of 200 pairs of Tiger shoes to his parents garage in Oregon. The shoes were bought by Blue Ribbon Sports (BRS), the name of the partnership between Knight and Bowerman that they formed with only $1,000 in capital. In 1966, Bowerman, who had previously designed shoes for his university athletes, worked with Tiger to design the Cortez running shoe. The shoe was a worldwide success for the Onitsuka Tiger Company and was sold at the first BRS store. In 1971, BRS, with creditor support, started manufacturing their own line of shoes. Later that year, the first BRS shoe was introduced. The shoe was a soccer shoe that bore the Nike brand name, referring to the Greek Goddess of Victory, and the Swoosh trademark.

 1972 marked the breakup of the BRS/Tiger relationship. BRS soon changed its name to Nike, Inc. and debuted itself at the 1972 Olympic trials. In 1973, Steve Prefontaine was the first prominent track star to wear Nike shoes. The late 70s and early 80s also saw John McEnroe, Carl Lewis, and Joan Benoit sporting Nike shoes. Nike popularity grew so much that in 1979 they claimed 50% of the U.S. running market. A year later with 2,700 employees, Nike went public selling 2 million shares on the New York Stock Exchange. The 1980s were marked by the signing of Michael Jordan as a product spokesperson, revenues in excess of $1 billion, the formation of Nike International Ltd., and the "Just Do It" campaign.

 In 1990, Nike surpassed the $2 billion mark in consolidated revenue with 5,300 employees worldwide. In addition,they opened the Nike World Campus in Beaverton, Oregon. In 1991, Nike pushed revenues to $3 billion, up from $2 billion the prior year International revenues fueled a great portion of this growth with an 80% increase in 1991 from the prior year. In 1992 international revenues topped $1 billion for the first time and accounted for over one-third of our total revenues. At the end of the 90s, Nikes goal, as stated in our company web site, is to become a truly global brand.

CURRENT MARKETING SITUATION

1.MARKET DESCRIPTION

 Student (consumer market) -Perform many teenager design. -Express style and individuality. Professional (consumer market) - Athlete can make choose many quality of the product. -Sponsorship. Entrepreneur (business market) -Easy to booker the new product from nike supplier.

2.PRODUCT REVIEW

Products
Nike primary product focus is athletic footwear designed for specific-sport and/or leisure use(s). Nike also sell athletic apparel carrying the same trademarks and brand names as many of they footwear lines. Nike sell a line of performance equipment under the Nike brand name that includes sport balls, timepieces, eyewear, skates, bats, and other equipment designed for sports activities. In addition,nike utilize the following wholly-owned subsidiaries to sell additional sports-related merchandise and raw materials: Cole Haan Holdings Inc., Nike Team Sports, Inc., Nike IHM, Inc., and Bauer Nike Hockey Inc.

 Nike most popular product categories include the following:

3.COMPETITIVE REVIEW

 Reebok in terms of their products, is not entirely different from Nike. Adidas and Puma also are top competitor in market .

Top Competitor Analysis -Distinctive Competency - Marketing (Consumer Loyalty) *Reebok has managed to hold the loyalty of a large portion of the industrys female consumers market.
Competitor Key Weakness (Advertising/Promotion) -The leading cause of Reeboks recent tumbles stemmed from problems relating to poor marketing. Reeboks shortcoming in the area of marketing is their key weakness.

STRENGTHS, WEAKNESSES, OPPORTUNITIES, AND TREAT ANALYSIS.

STRENGTHS
A very competitive organization. It has no factories. It is a famous for its development and research which is depicted in their wide range of new products with new designs. Its swoosh logo make it recognizable in all over the world. It promises to provide the high quality products at reasonable prices. Its products are globally available in all leading marketing places of World.

Nike Inc. 1999 Board of Directors

Jill K. Conway

Visiting Scholar, Massachusetts Institute of Technology, Boston, MA

Ralph D. DeNunzio

President, Harbor Point Associates, Inc., New York City, NY

Richard K. Donahue

Vice Chairman of the Board, Lowell, Massachusetts Delbert J. Hayes, Newberg, OR

Douglas G. Houser

Assistant Secretary, Nike, Inc., Partner Bullivant, Houser, Bailey, Pendergrass & Hoffman Attorneys, Portland, OR Secretary, Nike, Inc., Partner Jaqua & Wheatley, P.C. Attorneys, Eugene, OR

John E. Jaqua

Philip H. Knight
Charles W. Robinson Michael Spence John R. Thompson, Jr. William J. Bowerman

Chairman of the Board and Chief Executive Officer, Nike, Inc., Beaverton, OR
President, Robinson & Associates, Santa Fe, NM Dean, Graduate School of Business, Stanford University, Palo Alto, CA Former Head Coach, Georgetown University, Washington, D.C. Director Emeritus

WEAKNESS
Less diversity in the sport products. The company does not have its own retailers therefore retailers are price sensitive. All sizes are not present in every design of shoes.

OPPORTUNITIES
The athletic footwear and apparel industries will benefit from the currently strong economic backdrop in the United States. Spending is high and is expected to result in sales growth industry-wide. Athletic shoes and apparel have become a staple in wardrobes worldwide. This is due to both the increasing numbers of people exercising and the trend towards casual apparel. Competition is fierce at all levels in within the industry, especially among the leaders. This creates a sense of security for the companies that have been able to create a niche. Cost cutting due to restructuring of operations will give many companies the chance to price products more competitively. One area in the industry that is ever changing is research and development. The strong departments will surely capitalize on the trends of tomorrow if their efforts are successful. Increasing financial recovery in overseas markets proves to be an area of expansion for the athletic footwear and apparel industry. E-tailing, or customer-designed internet merchandise, is threatening the traditional distribution channels, thus eliminating the "middle-man" distributors and allowing for increasing profitability

THREATS
The industry has reached a level of maturity. While style and technology in athletic apparel and footwear has reached a leveling-off point, the important aspect now is for companies to differentiate their lines. Inflation is looming over the U.S. economy, which may spark a cutback in consumer spending. Consumers are becoming savvier and may lean towards discounted items. In terms of market saturation, many of the key manufacturers in this industry have been around for many years. Consumers may be scanning the market for new and different footwear and apparel products.

MARKETING MIX

 Products i. Nikes foremost focus is athletic footwear and apparels designed for sports every day usage with the brand name. ii. The production facilities are located close to the raw material to have low labor prices. iii. New product offerings under the name of brand include sport balls, timepieces, eyewear, skates, bats, and other equipment designed for sports activities. iv. The most famous product categories of Nike includes:

 Price i. The company has designed its prising structure in a way to make it competitive to other shoe sellers. ii. The prices of the products are variable depending on the type and the size for example a comfortable and good pair of shoes would cost from 70 to 150 dollars.

 Place i. Nike has its individual strores and also avaible at major malls and departmental stores selling all over the globe. ii. They have more than 20,000 retailers in United States and also in other 200 countries. iii. The companies also sell its products through individuals, auxiliaries and licensees. iv. The company has its production units, customer services and operational units in all over the World.

 Promotion i. The company has used electronic media (commrcials, official website of Nike and newspapers) to promote their brand. ii. Many well known athletes have also worked for the advertisement of brand like Brazilian Soccer Team ( especially Ronaldo) iii. They sponsor events (e.g. Hoop It Up) for the marketing of brand. iv. The Brands swoosh logo and image played an important role in its advertisement.

OBJECTIVE

 Long-Term Corporate Objectives The following are Nike Inc.'s 5-Year long-term corporate objectives:
Continue our improvement in stockholders' return on equity to achieve a 20.0% return in 2004. This would be an increase of almost 6.5% from 1999. Increase earnings per share to $2.70 per diluted share by 2004 in an overall effort to bolster the long-term resilience of our stock's value. This would surpass our 1997 record high.

Short-Term Corporate Objectives The following are Nike Inc.'s short-term corporate objectives for fiscal year 2000:
Increase net income to $550 million by the end of fiscal year 2000 in order to reach our long-term goals of improved return on equity and higher EPS. This 22% increase from 1999 is realistic in light of combined 1st & 2nd Quarter income already 32% higher compared to the same time last year. Recover the market price of our stock from its 52-week low of $26.50 per share on February 8, 2000, to a value that approximates its 52week average of $50 per share.

 Issues i. Many competitor has same prices as their product ii. The buying behavior of consumer.(reaction) iii. Economic problem.

MARKETING STRATEGY

EXAMPLE BROADCAST MEDIA

 Positioning
-Nike is the one of the worlds greatest brand in the eye of the consumer. -Nike product are considered to be high quality, unique convinient. -Nike has innovative culture.

 Product Strategy i. Use all modern design ii. Brand image(swooh logo corporate) iii. Packaging (interesting box) iv. Colour

 Pricing Strategy i. Use a little bit of psychological pricing.

BUDGETS

Sales and Income Trends