MacClanathan 1 Michael MacClanathan Principles of Advertising Advertising Campaign for Nike

Nike Free Athletic Footwear Product Situation Analysis

Nike was started in 1962 by Bill Bowerman and Phil Knight. The company was originally started as Blue Ribbon Sports but was later changed to the name Nike after the Greek Mythological goddess of victory. Today, Nike is currently one of the top selling companies with a Grosse profit of about $2.14 billion. Thanks to Michael Jordans contribution to Nike through his Air Jordan products, Nike was able to take pride in their production of athletic wear and succeeded their one and only goal, to be the best.

The Product

One of Nikes most successful selling shoes today on the market is the Nike Frees. This product was introduced in 2004 as a new type of shoe that would revolutionize the running world. The shoe was designed as a light weight shoe that would allow natural movement by the foot. Because of the natural bend in the shoe, it allows the muscles in the foot to become stronger because of the reduced constriction when running or doing any other active motions. Revenue for Nike is about 19.014 billion. Full-year income was $740.1 million, or $2.77 per share vs. $668.3 million, or $2.46 per share which has increased since 2002. Nike running shoes alone have rolled in a net income of $246.2 million which is about 92 Cents a share. Domestic Nike footwear sales are $2,309 million currently and rising.

MacClanathan 2 The Market

This Nike product was targeted to athletes and those who work out all around the world. The Nike Frees are useful to anyone playing a sport no matter what sport it is, and it is useful for those who want to get out and exercise every once in a while. There are no direct demographic or Geographic locations as to where this product would best be sold in the United States. Nike has several stores located all around the U.S and their product is just as useful to people no matter what state you live in. The country as of today has a pretty diverse society which allows this product to be appropriately produces everywhere. Relevant Psychographs for this product would be people who are have to strength to work out after a long day at work and athletes who have the drive to make themselves better every day. However, this type of product is more so targeted at male and female athletes ranging from ages 12 to 25 years old. Despite the age, this shoe still is appealing for those who want to overall benefit themselves while working out.

Products Strength, Weakness, Opportunities and Threats One of Nikes biggest strengths as a company is that they promote their products through sponsor agreements with celebrity athletes, professional and colligate teams. With this specific product, the shoe has been advertised on professional football athletes that portray the athlete training for the season to come. Nikes marketing strategy is definitely a positive benefit for the production and consumption of this product.

One small weakness that has given Nike a problem in the past is that Nike factories have been known to produce their products in low income countries paying workers little for a lot of work. People

MacClanathan 3 were somewhat troubled at the fact Nike shoes were not being made in the United States but rather made in Vietnam, China, and Indonesia where the people are paid in low wages and treated poorly. Some of the Opportunities that Nike has with sponsoring athletes is that they can test their product on professional athletes who legally have to wear and support the Nike symbol. This in its own way is an advertisement to those who are fans of this particular athlete.

Just like any other company there are threats out there as well. Other competing companies are trying to make similar products to compete against the Nike Free shoe. For example, Adidas and Asics are both athletic brands that produce running shoes and are in the same boat of trying to get to the top.

Advertising Objectives

The primary objective of this campaign is to enhance brand image. We want the costumer to see this brand of shoe as something more than just a shoe, we want them to see that people who wear this brand are doing more things in life to over all benefit their own well being.

The secondary objective of this campaign is to build consumer demand. We want the consumers to understand the importance of staying healthy and working hard. By doing this the demand for athletic wear will increase for those who want to get out and do something.

The tertiary Objective of this campaign is to establish a reputation platform for launching new brands or product lines. We want to create a reputation of a company that invests and improves the product for the better of the consumer.

MacClanathan 4 Target Market Report The Nike Corporation has been one of the top sellers for sportswear since the 1980s. Nikes athletic footwear was designed for specific athletic use. One of Nikes top selling athletic shoes today is the Nike Frees. The demand for running shoes today is increasing. More and more people today are finding new ways to exercise and because of this, they look to comfortable footwear that allows them to do so. Also with fitness memberships such as 24 Hour Fitness, LA Fitness or Ballys, people can now go running or workout at any time of the day rain or sunshine. According to an article from the PRWeb that talks about global footwear sales, the demand for athletic footwear has been on the rise, driven by the growing consumers desire for maintaining a healthy and active lifestyle. That being said, age defiantly is a factor in the target market of athletic footwear. According to the Encyclopedia of Major Marketing Campaigns, males under the age of 18 years old account for about a quarter of all athletic shoe sales in the United States today. The demand for the Nike Frees however defers from the primary demand for athletic footwear as a whole. Nike is the number one supplier in athletic footwear in the United States today. Annually, the company sells over 5 million pairs of athletic shoes. By the 1980s, Nike accounted for over 50% of the market share of athletic footwear. Today, with increasing competition, they still account for 47% of the market share of footwear. Along with the high demand for growing consumers desire for maintaining health, the Nike Frees are designed to cause less constriction in the foot over all increasing strength in running ability. The Nike Frees are Nikes best selling athletic footwear today, and account for over 70 percent of all Nike athletic footwear sales.

The target market that will best present a substantial potential for sales of the Nike Frees athletic footwear involves these specific market segmentations. Demographic Segmentation

MacClanathan 5 Age: Ages range from 16 to 18 years old, and from 18 to 21 years old Gender: Males Education: High school Athletes, and College Athletes

Behavioristic Segmentation Benefits Sought: improve training, Dominate in competition Marketing Factor sensitivity: Quality and Service User Status: First time or Regular users will benefit

Psychographic Segmentation Lifestyle: Strivers and achievers who want to improve or better their well being Personality: Those with ambition and want to take on the role of leadership These kinds of people have the primary motivation of achievement and are more so Innovators with high resources and high innovation. Geographic Segmentation Density: Urban and suburban areas

The Most useful segmentation method that successfully identifies the target audience for this product is Psychographic Segmentation. The values, lifestyles, personality, and attitude are what differ this product from any other athletic footwear. This product is for those who are training for competition that involves a great amount of running. Relevant sports include track and field, football, soccer, cross country, and Lacrosse. Another important segmentation method that will target the right audience is Demographic Segmentation. Age is an important factor with this product seeing that consumers at an

MacClanathan 6 older age would not benefit from this shoe. Males ages 16 through 21 would more so benefit from this product, because those are the years that male athletes are more involved in athletic competition. Advertisement Creative Brief Company Name: Nike Co. Product Name: Nike Frees Athletic Footwear Opportunity the ad must Address We must address to the consumer that this product will somehow give them the opportunity to grow physically faster and more powerful when they use the product to train. This should express the idea that by purchasing this product, the consumer will join a long line of leaders and achiever who used this product to be where they are today. If they want to be the best, they need to wear the best. Communication Objectives The primary objective of this campaign is to enhance brand image. We want the costumer to see this brand of shoe as something more than just a shoe, we want them to see that people who wear this brand are doing more things in life to over all benefit their own well being. We want them to see that Nike is a brand of leadership. The secondary objective of this campaign is to build consumer demand. We want the consumers to understand the importance of staying healthy and working hard. By doing this the demand for athletic wear will increase for those who want to get out and do something. The tertiary Objective of this campaign is to establish a reputation platform for launching new brands or product lines. We want to create a reputation of a company that invests and improves the product for the better of the consumer. This ad should send a message to the consumer that this product is one of a kind. It should show the consumer that the product has physically increased training objectives and has caused an up rise in

MacClanathan 7 leadership among those who train with the Nike Frees. This ad needs to express the idea We are faster, we are stronger, we are smarter, we are FREE. Target Audience The target market for the product is directed at young male athletes from ages 16 -21 years old. We also want a sense that the athletes in the add are smart and educated. The target audience are also a mix of high school and college athletes. The attitudes of these athletes are achievers and those who strive to be the best. We want our product to target young athletes who want to get an extensive advantage against the competition.

Brand Personality/ Brand Character The brand experience should be defined as inspirational. As far as the personality of the brand, we dont want it to seem cocky, we want to seem confident. We want to stress the point that we are the best and this is how we get there. The mood and tone of the ad should match the personality of the brand. We want the athletes in the ad to seem confident in what they are doing. We want them to come across as the leaders of their teams. The best players on the field. The message here should be that the best players wear the best shoes. The athletes should literally say We are faster, we are stronger, we are smarter, we are FREE! Benefits to Communicate We want to communicate to the consumer that this product gives the consumer the range of motion that will benefit their training more so than any other running shoe. We also, at the same time, want to communicate the fact that this product exceeds as far as comfort for the athlete, allowing a satisfying work out every time. Another benefit we want the consumer to see is that becoming faster, stronger and smarter; they can become leaders among the rest.

MacClanathan 8 Support for those Benefits While showing athletes perform athletic task such as running, lifting and possibly play a certain sport, we also want to put a large amount of focus on the shoes and how they move with the natural arch of the foot. We want to support the benefit of getting stronger by showing the consumer that it is almost as if they are not wearing shoes at all.

Additional Suggestions One way to set the mood of the advertisement may be to put everything in black and white with a dark background. Then we could make the shoes several different colors so that they not only stand out, but they show the consumer that they can personalize their own shoes to match school colors or whatever they want. This way the shoes will also come across as stylish as well as beneficial in training. Media Objectives Audience Objectives The target market for the product is directed at young male athletes from ages 16 -21 years old. We also want a sense that the athletes in the add are smart and educated. The target audience are also a mix of high school and college athletes. The attitudes of these athletes are achievers and those who strive to be the best. We want our product to target young athletes who want to get an extensive advantage against the competition. Message-distribution Objectives The Total audience size that this product should reach is around 20 million customers.

MacClanathan 9 Since that Nike is a nationwide company and sells Nike products in every state, the desired geographic range of this product will be 3,794,083 square miles which is the whole United States. We want this campaign to run during summer starting sometime in July. This is when athletes are training for the season ahead and is the best time to reach the audience. During the week days, the ad will run in the late afternoon and evening. That is when the audience will most likely be home. The time will be from 4:00 p.m. to 8:00 p.m. The Desired average frequency that we want our audience exposed to the advertisement is around 3 to 4 exposures per audience member. Media Strategy Media used in the campaign A commercial ad for this product would be the most successful on broadcast television, which covers a larger part of the targeted audience. Another form of media that will be used in this campaign would be Magazine ads. The creative objectives can be expressed in a print ad as well as a commercial ad. Media Vehicles ESPN. This would be very successful since we are targeting male athletes in high school and college. Most of our target audience will be able to view this campaign through ESPN. Eastbay Magazine. This magazine is one of the most successful magazines that sell athletic footwear. Athletes from all around the world order their athletic wear from this magazine which is a perfect opportunity to advertise a print ad of our campaign. Size and Length of the ad

MacClanathan 10 For a print ad, it would be a full-page ad. This will make it easier to help maintain the communication objectives to the audience. For a Broadcast television commercial, it will be a 30 second advertisement which will be plenty of time to get the message acrosse. Schedule of Insertion We want the ad to start on the first of July which is when athletes are starting to train and really start paying attention to acquiring athletic wear. The ad will end on September first which is when athletes are back in school and starting athletic events.

Media Vehicle Sports Illustrated magazine

Ad size/length Full-page color Ad

Cost per insertion $238,000

Frequency

Total cost for schedule $1,428,000

Audience size 1,500,000

CPM

$952

ESPN

:30 Spot

$415,000 (estimate)

25

$10,375,000

256,000,000

$40.53

Totals

$11,803,000

257,500,000