Table of Contents

1. Introduction ..................................................................................................... 2
2. Finance………………………………………………………………
……
3. Products………………………………………………………………
……
4. Segmentation, Targeting and Positioning........................................... 2
Segmentation ........................................................................................................................ 2
Demographic ................................................................................................................................... 3
Psychographic ................................................................................................................................. 4
Behavioral ....................................................................................................................................... 4
Geographic ...................................................................................................................................... 4
Socioeconomic ................................................................................................................................ 5
Benefits............................................................................................................................................ 5
Targeting .............................................................................................................................. 5
Positioning ....................................................................................................................................... 6
5. Main factors that can affect the buying decisions of the target
customers for Nike’s products ...............................................................................6
Psychological factors....................................................................................................................... 6
Social factors ................................................................................................................................... 6
Cultural factors ............................................................................................................................... 7
Personal factors .................................................................................................................... 7
6. Marketing Mix of Nike .................................................................................... 7
7. SWOT Analysis of Nike .................................................................................. 8
INTRODUCTION
Nike is an American multinational corporation that is engaged in the design, development,
manufacturing, and worldwide marketing and sales of footwear, apparel, equipment,
accessories, and services. The company is headquartered near Beaverton, Oregon, in
the Portland metropolitan area. It is the world's largest supplier of athletic shoes and apparel and
a major manufacturer of sports equipment, with revenue in excess of US$24.1 billion in its fiscal
year 2012 (ending May 31, 2012). As of 2012, it employed more than 44,000 people worldwide.
In 2014 the brand alone was valued at $19 billion, making it the most valuable brand among
sports businesses. As of 2017, the Nike brand is valued at $29.6 billion. Nike ranked No. 89 in
the 2018 Fortune 500 list of the largest United States corporations by total revenue.

Finance
Nike bought back $8 billion of Nike's class B stock in four years after the current $5 billion
buyback program was completed in the second quarter of fiscal year 2013. Up to September
2012, Nike Inc. has bought back $10 billion of stock.
Nike was made a member of the Dow Jones Industrial Average in 2013, when it replaced Alcoa.
On December 19, 2013, Nike's quarterly profit rose due to a 13 percent increase in global orders
for merchandise since April of that year. Future orders of shoes or clothes for delivery between
December and April, rose to $10.4 billion. Nike shares (NKE) rose 0.6 percent to $78.75 in
extended trading.
In November 2015, Nike announced it would initiate a $12 billion share buyback, as well as a
two-for-one stock split, with shares to begin trading at the decreased price on December 24.
The split will be the seventh in company history.
In June 2018, Nike announced it would initiate a $15 billion share buyback over four years, to
begin in 2019 upon completion of the previous buyback program.
For the fiscal year 2018, Nike reported earnings of US$1.933 billion, with an annual revenue of
US$36.397 billion, an increase of 6.0% over the previous fiscal cycle. Nike's shares traded at
over $72 per share, and its market capitalization was valued at over US$114.5 billion in October
2018.

Revenue Net income Total Assets Price per Share

Year Employees
in mil. USD$ in mil. USD$ in mil. USD$ in USD$

2005 13,740 1,212 8,794 8.75

2006 14,955 1,392 9,870 9.01

2007 16,326 1,492 10,688 12.14

2008 18,627 1,883 12,443 13.05

 2009 19,176 1,487 13,250 12.14

2010 19,014 1,907 14,419 16.80

2011 20,117 2,133 14,998 19.82

2012 23,331 2,211 15,465 23.39

2013 25,313 2,472 17,545 30.50 48,000

2014 27,799 2,693 18,594 38.56 56,500

2015 30,601 3,273 21,597 53.18 62,600

2016 32,376 3,760 21,379 54.80 70,700

2017 34,350 4,240 23,259 54.99 74,400

2018 36,397 1,933 22,536 72.63 73,100

Products
Sports equipment
Nike produces a wide range of sports equipment. Their first products were track running shoes.
They currently also make shoes, jerseys, shorts, cleats, baselayers etc. for a wide range of sports,
including track and field, baseball, ice hockey, tennis, association football (soccer), lacrosse,
basketball, and cricket. Nike Air Max is a line of shoes first released by Nike, Inc. in 1987.
Additional product lines were introduced later, such as Air Huarache, which debuted in 1992.
The most recent additions to their line are the Nike 6.0, Nike NYX, and Nike SB shoes, designed
for skateboarding. Nike has recently introduced cricket shoes called Air Zoom Yorker, designed
to be 30% lighter than their competitors'. In 2008, Nike introduced the Air Jordan XX3, a high-
performance basketball shoe designed with the environment in mind.
Nike sells an assortment of products, including shoes and apparel for sports activities like
association football, basketball, running, combat sports, tennis, American football, athletics,
golf, and cross training for men, women, and children. Nike also sells shoes for outdoor
activities such as tennis, golf, skateboarding, association football, baseball, American football,
cycling, volleyball, wrestling, cheerleading, aquatic activities, auto racing, and other athletic
and recreational uses. Nike recently teamed up with Apple Inc. to produce the Nike+ product
that monitors a runner's performance via a radio device in the shoe that links to the iPod nano.
While the product generates useful statistics, it has been criticized by researchers who were able
to identify users' RFID devices from 60 feet (18 m) away using small, concealable
intelligence motes in a wireless sensor network.
In 2004, Nike launched the SPARQ Training Program/Division. Some of Nike's newest shoes
contain Flywire and Lunarlite Foam to reduce weight. The Air Zoom Vomero running shoe,
introduced in 2006 and currently in its 11th generation, featured a combination of
groundbreaking innovations including a full-length air cushioned sole, an external heel counter,
a crashpad in the heel for shock absorption, and Fit Frame technology for a stable fit.
Street fashions
The Nike brand, with its distinct V-shaped logo, quickly became regarded as a status symbol in
modern urban fashion and hip-hop fashion due to its association with success in sport.
Beginning in the 1980s, various items of Nike clothing became staples of mainstream
American youth fashion, especially tracksuits, shell suits, baseball caps, Air Jordans, Air Force
1's, and Air Max running shoes with thick, air cushioned rubber soles and contrasting blue,
yellow, green, white, or red trim. Limited edition sneakers and prototypes with a regional early
release were known as Quickstrikes, and became highly desirable items for teenage members of
the sneakerhead subculture.
By the 1990s and 2000s, American and European teenagers associated with
the preppy or popular clique began combining these sneakers, leggings, sweatpants, crop
tops, and tracksuits with regular casual chic street clothes such as jeans, skirts, leg warmers,
slouch socks, and bomber jackets. Particularly popular were the unisex spandex Nike
Tempo compression shorts worn for cycling and running, which had a mesh lining,
waterproofing, and, later in the 2000s, a zip pocket for a Walkman or MP3 player. From the late
2000s into the 2010s, Nike Elite basketball socks began to be worn as everyday clothes by hip-
hop fans and young children. Originally plain white or black, these socks had special shock
absorbing cushioning in the sole plus a moisture wicking upper weave. Later, Nike Elite socks
became available in bright colors inspired by throwback basketball uniforms, often with
contrasting bold abstract designs, images of celebrities, and freehand digital print to capitalise
upon the emerging nostalgia for 1990s fashion.
In 2015, a new self-lacing shoe was introduced. Called the Nike Mag, which are replicas of the
shoes featured in Back to the Future Part II, it had a preliminary limited release, only available
by auction with all proceeds going to the Michael J. Fox Foundation. This was done again in
2016.
Nike have introduced a premium line, focused more on streetwear than sports wear called
NikeLab
In March 2017, Nike announced its launch of a plus-size clothing line, which will feature new
sizes 1X through 3X on more than 200 products. Another significant development at this time
was the Chuck Taylor All-Star Modern, an update of the classic basketball sneaker that
incorporated the circular knit upper and cushioned foam sole of Nike's Air Jordans.

Segmentation, Targeting and Positioning

The perception of mass marketing and behave all customers the same way, has led to the
comprehension of the unique needs of consumer groups, that has to be segmented for greatest
sales opportunities. In particular, all sports fans differentiate. For instance, a sports company,
such Nike, could not market the extreme sports equipment to elder people. As Michael Porter
(1998) mentions, “You can’t be all things to all people”, explaining that firms, which specialize
in meeting needs of consumers, tends to be more effective. However, if the first marketing
choice is market segmentation, how does Nike group consumers based on common needs?

Segmentation

In the customary way, there are six interactive bases for market segmentation, which are
demographic variables, psychographic profile, behavioral style, geographic variables,
socioeconomic variables and benefits sought. While Nike has a general targeted segment “all
athletes”, nevertheless precisely defines various market segments.

Demographic Geographic
 Age  World region
 Gender  Country
 Ethnic Background  Country region
 Family life cycle  City
Psychographic  Physical Climate
 Lifestyle Socioeconomic
 Personality  Income
 Activities  Education
 Interests  Occupation
 Opinions Benefits
Behavioral  Consumer needs
 Frequency of purchase  Product features desired
 Loyalty of consumers
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Demographic

Demographic segmentation is the most widely used technique from Nike because the
characteristics are easy to identify and measured, are available from many sources, such as the
government population count and are associated to sport attitudes such as attending a game or
watching sports. Based on the demographic segmentation, Nike targets individuals according
to their gender, age and life cycle stage. First and most important to be told is that Nike targets
customers between 11-45 years old, with greater weight to teens in order to build long-term
loyal consumers. For instance, in 2014 before the world Cup, Nike created a promotional
campaign that glorified great football athletes playing football with teenagers inspiring them
to become like their idols.

Age

Children 1-5y Tweens 5-10y Teens 11-18y Adults 18-45

Furthermore, gender is another significant factor that Nike uses to attract its audience. Despite
the fact that its male purchasing audience is higher, recently Nike has invested heavily in
females. Specifically, Nike has developed a strategic approach to targeting Women by
launching a variety of female sports lines where revenues are expected to grow significantly in
the next years.

GENDER

45%

Male; 55%
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It must be stressed that Nike does not segment the marketplace based on ethnic background
including nationality, race and religion in order to group the consumers. Respectively, does not
take into account the life cycle to segment the market.

Psychographic

Nike utilizes psychographic segmentation to target customers based on lifestyle, personality,

activities and interests. Specifically, Nike aims to active individuals who take pleasure in sports,
gym regularly, are athletes and passionate with sports, which tend to be part of their life. Nike does
something exceptional. Associates individuals’ lifestyle with their activities, interests and behavior
creating the unique “feeling” and as a result they buy similar products. Nike applies sports-centric
strategy motivating, inspiring and connecting emotionally all athletes with its products. Nike’s
statement “To bring inspiration and innovation to every athlete in the world” not to mention “Run
with me” encourages all kind of athletes to follow with loyalty the firm with the sense that they
belong to the same family.
Apart from the sports consumers, Nike approaches a crowd that loves fashion. There are categories
of people who are passionate about the brands and buy company’s products just to follow fashion
trends. These individuals are convinced that Nike’s products are not ordinary athletic shoes but a
fashion lifestyle.

Behavioral

On the one hand, Nike focuses on the way its products make consumers feel. Clearly, the company
follows the direction “If you have a body you are an athlete” and “If you are an athlete, Nike’s
products make you feel athletic”. On the other hand, Nike builds customers’ engagement by
providing them unique quality as well as various and innovative products to choose in order them
to purchase more frequently company’s products. Furthermore, Nike gives its consumers the
opportunity to share their experiences with their friends and family including the review products
on the internet, which spread to social networks having a huge effect to purchasing behavior of the
customers.

Geographic

Geographic is simple, yet powerful segmentation basis. Nike segments market based on world and
country region, city and popularity density in different way. In particular, Nike promotes different
campaigns in the United States of America, in Europe, in Asia, in Australia as well as in Africa
because sports differentiate by region, even cities. For instance, all the commercials in the United
States are around football and baseball, while in Europe, advertisements refer to soccer.
Concerning cities segmentation and their fans in New Delhi, the capital of India, Nike promotes
equipment for cricket while in England and Sidney for rugby. Based on Nike’s statistics, largest
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market places are North America as well as Western Europe and China where the company
segments more the market focusing on urban areas with purchase densities. Finally yet importantly,
Nike does not segment the market based on climatic conditions even though the company is
ecologically conscious.

Socioeconomic
Commonly, income, education and occupation are interrelated due to the fact that people with
higher educational level enjoy higher income as well as most respective status. Thus, Nike
segments market in lower, upper middle and upper class, where in the last group, the company
provides sports equipment in limited editions, which could be bought only from individuals with
high income.

Benefits

Benefits segmentation is considered the underlying factor where every purchase satisfies a need.
Nike focuses on “benefits sought” to segment market place. Company’s products strive to meet
elite athletes’ as well as professional and casual performers’ needs. These needs that consumers
looking forward to fulfill through Nike’s products purchases are the quality, the duration, the
comfort, the style, the innovation, the price and the brand awareness. Thus, Nike segments the
market in three core bases concerning benefits, which are the Utility in order consumers to
accomplish high performance, the Style where individuals follow the fashion brand statement and
the Technology bases, which gives customers the opportunity to own innovative shoes such as Air
Max.
Although each type of segment defines groups of customers with similar needs, it is ordinary
implementation in marketing to combine segmentation variables, such as geodemographic
segmentation, for more effective approach in certain circumstances.

Targeting

Target marketing is the next step of segmentation process where the company systematically
chooses the segments that will allow to most effective and efficiently achieve its goals.
Nike evaluates its target market based on size, reachability, measurability and behavioral variables.
In particular, Nike has niche market to serve. The company targets professional athletes and sporty
individuals providing them specialized and innovative products. Furthermore, all products are
reachable, even online, with the unique opportunity Nike’s consumers to create their own custom
designed shoes, which makes the brand more identifiable and remarkable in differentiation to other
footwear companies. It should be noted that Nike also targets the marketplace through
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psychological tactics by sponsoring great athletes with tremendous achievements and victories.
This tactic intimately links company’s products with triumph.
It is for granted that sustainable innovation is the trigger for revolutionizing the way the company
does business and manufactures its sports equipment. For that reason, Nike applies aggressive
marketing strategies in parallel with the marketing mix the company develops in order to make
further known its target consumers company’s products, enchasing its uniqueness and exclusivity.

Positioning

The final step of STP concerning the market decisions is the positioning. Nike has positioned its
brand as the market leader of sports equipment widely, providing high quality and innovative
technology. Furthermore, Nike has convinced its consumers that is an ambitious and victorious
company through the swoosh together with the slogan "Just Do It" as well as through the
promotional activities that connect Nike’s brand with magnificent achievements of prominent
athletes. It must be stressed that Nike over the years has shifted from product focus to attitude.
Nike “speaks” in athletes hearts through unique & momentous feelings, which makes the company
exceptional compared to others. Above all, Nike has established its place in fashion, where
company's products define certain groups' lifestyle.
As it seems, positioning is based on the perception or image that Nike expands and maintains
concerning its sports equipment. With this in mind, the company develops perceptual maps through
marketing research techniques in order to interpret its products position in relation to competition.

Main factors that can affect the buying decisions of the target
customers for Nike’s products
Consumer’s buying behavior goes through various stages before the individual takes the final
decision to purchase the product. Several factors can affect the buying decisions of the target
customers for Nike’s products, which are classified in the following categories such as
psychological, social, cultural and personal factors and will be elaborated below.

Psychological factors

Nike gives its consumers the belief that when they wear its sports equipment, they can achieve
everything without limitations; they can be unbeatable. The company's advertising campaigns and
headlines give a sense of freedom and victory not to mention that the brand itself gives the
motivation, “Just do it”. Nike affects not only beliefs but also attitudes. It could be said with
certainty that Nike invests on customers perception by the incentive “If anybody can do it, you can
do it”. Consumers are persuaded to purchase company’s products and take the change to become
healthy and good looking like Nike’s top athletes.

Social factors
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It is for granted that all Nike’s commercials promote exceptional athletes like Michael Jordan,
Cristiano Ronaldo, Carl Lewis and more using company’s products. In terms of sociology, all
consumers tend to choose products that their idols use and are highly influenced by their status
and lifestyle. Therefore, Nike’s customers are influenced by reference groups, opinion leaders and
family concerning their buying decisions due to their need to fit in based either on the role they
represent or through the social status. For instance, an individual who wears Nike’s limited edition
indicated that he/she belongs to the upper class.

Cultural factors
Culture is an important factor in consumers’ buying decision but at the same time, it is also a very
delicate issue for companies that use it with the aim of influence. Nike segments the marketplace
by location, and then, having researched consumer interests based on cultural attributes, affects
the buying audience through commercials. An illustration of the above written is India’s official
sport. Due to India’s culture, there are more cricket fans than any other sport. Therefore, Nike
through cricket idols affects fans to buy the sports equipment that provides.

Personal factors

Many personal factors affect the buying decision of the consumers, which are the age, the economic
condition, the occupation, the lifestyle, the personality, the quality of the product, the availability,
even the price. Nike influences its consumers through the one of a kind fashion styles and trendy
sports equipment that address to different ages, the comfort that athletes feel wearing company’s
products, the innovation and quality that is proved by product duration as well as the price escalation
where every athlete could buy, wear and feel unique. Finally yet importantly, Nike’s products are
available almost everywhere, even online, where consumers’ could purchase company’s products
instantly.

Marketing Mix of Nike

Nike is one of the pioneers in marketing and the marketing mix of Nike is one of the
strongest. Depending mainly on pull strategy, it has established its hold in face of major
competitors like adidas and reebok. Read on for its product marketing mix.

Product in the Marketing mix of Nike

Nike offers a wide range of shoe, apparel and equipment products, all of which are currently its
top-selling product categories. Nike started selling sports apparel, athletic bags and accessory
items in 1979. Their brand Cole Haan carries a line of dress and casual footwear and accessories
for men, women and children.
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They also market head gear under the brand name Sports Specialties, through NikeTeam
manufactures and distributes ice skates, skate blades, in-roller skates, protective gear, hockey
sticks and hockey jerseys and accessories.

Price in the Marketing mix of Nike

Nike’s pricing is designed to be competitive to the other fashion Shoe retailer. The pricing is based
on the basis of premium segment as target customers. Nike as a brand commands high premiums.
Nike’s pricing strategy makes use of vertical integration in pricing wherein they own participants
at differing channel levels or take part in more than one channel level operations. This can control
costs and influence product pricing.

Place in the Marketing mix of Nike

Nike shoes are carried by multi-brand stores and the exclusive Nike stores across the globe. Nike
sells its product to about 20,000 retail accounts in the U.S. and in almost 200 countries around the
world. In the international markets, Nike sells its products through independent distributors,
licensees and subsidiaries. The company has production facilities in Asia and customer service and
other operational units worldwide

Promotions in the Marketing mix of Nike

Promotion is largely dependent on finding accessible store locations. It also avails of targeted
advertising in the newspaper and creating strategic alliances. Nike has a number of famous athletes
that serve as brand ambassadors such as the Brazilian Soccer Team (especially Ronaldo, Renaldo,
and Roberto Carlos), Lebron James and Jermane O’Neal for basketball, Lance Armstrong for
cycling, and Tiger Woods for Golf.
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Nike also sponsors events such as Hoop It Up and The Golden West Invitational. Nike’s brand
image, the Nike name and the trademark swoosh; make it one of the most recognizable brands in
the world. Nike’s brand power is one reason for its high revenues. Nike’s quality products,
loyal customer base and its great marketing techniques all contribute to make the shoe empire a
huge success.

SWOT Analysis of Nike

The SWOT of Nike discusses the strengths, weaknesses, opportunities and threats of the leading

footwear brand – Nike. Nike is one of the top three players in the world for sports shoes. You can

also refer to this article on top Nike competitor’s.

Strengths in the SWOT analysis of Nike

 Nike is the world’s no. 1 shoemaker. It designs and sells shoes for a variety of sports
including baseball, golf, cheerleading, volleyball, tennis and football.
 Nike uses a “Make to Stock” customer order which provides a fast service to customers from
available stock.
 Nike operates Nike Town shoe and sportswear stores, Nike factory outlets and Nike Women
shops. Nike sells its products throughout US and in more than 180 countries.
 Nike is strong at research and development, as is evidenced by its evolving and
innovative product range. They then manufacture wherever they can produce high quality
product at the lowest possible price.
 Nike is a global brand. It is the number one sports brand in the World. Its famous ‘Swoosh’
is instantly recognizable, and Phil Knight (Founder and CEO) even has it tattooed on his
ankle.

Weaknesses in the SWOT analysis of Nike

 The income of the business is still heavily dependent upon its share of the footwear market.
This may leave it vulnerable if for any reason its market share erodes.
 The retail sector is very price sensitive. However, most of its income is derived
from sellinginto retailers. Retailers tend to offer a very similar experience to the consumer.
So margins tend to get squeezed as retailers try to pass some of the low price
competition pressure onto Nike.

Opportunities in the SWOT analysis of Nike

 Product development offers Nike many opportunities. The brand is fiercely defended by its
owners whom truly believe that Nike is not a fashion brand however consumers that wear
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Nike product do not always buy it to participate in sport. In youth culture especially, Nike
is a fashion brand. This creates its own opportunities
 There is also the opportunity to develop products such as sport wear, sunglasses and
jewellery. Such high value items do tend to have associated with them, high profit
 The business could also be developed internationally, building upon its strong global brand
recognition. There are also global marketing events that can be utilised to support the brand
such as the World Cup (soccer) and The Olympics.

Threats in the SWOT analysis of Nike

 Nike is exposed to the international nature of trade. It buys and sells in different currencies
and so costs and margins are not stable over long periods of time. Such an exposure could
mean that Nike may be manufacturing and/or selling at a loss. This is an issue that faces all
global brands.
 The market for sports shoes and garments is very competitive. Competitors are developing
alternative brands to take away Nike’s market share.