Ch. 14 - Marketing Channels and Retailing

Nike Inc. products mostly deal with a selective distribution system of retailing. By choosing this system of retailing, Nike is screening dealers and retailers of their products and is eliminating all but a few in any single. They in lesser terms are making their products available to the few consumers in a given target market.Nike Inc. makes a majority of its money selling its products to retailers for them to sell in stores and online. Given this, it is highly unlikely that you are able to find Nike brand products in every retail location, but it is more likely that you as the consumer are able to find it in selected stores, websites and locations. To start, a consumer would probably go directly to a Nike store or the Nike website to purchase a Nike brand product, being that it is the store that is operated by Nike itself. Besides the Nike Inc. controlled outlets of retail, you are more likely to be able to find Nike brand products in stores such as Modell's, Foot Locker, Champs and other small and big sporting good stores/websites that sell athletic wear and shoes, but you are also able to find Nike brand products in department stores as well like Macy's, Sears and JCPenney, who carry a limited amount of Nike brand shoes and apparel. To add to that availability of these Nike products, all of the Nike products are sold at fixed prices, so as a consumer you will be paying the same price for the product as you would in any of the other retail outlets listed above.

Niketown NYC's interior design for the World Basketball Festival

Like any other athletic apparel and shoe producer, Nike's products sell mainly because of the vast innovation and use of form utility on the product, but also get a helping hand with the way the products are displayed in the retail stores too. As far as the form utility of the actual product, Nike's sneakers being environmentally designed and having numerous colorways and designs available makes it desirable and would make a customer want to purchase it. Its products appearance make their products very desirable to buy. Nike's "iD" process available online plays into form utility as well as it allows these customers to design their own shoes with the colors and factors they want as I stated in my previous blog post. Before Nike had launched, all running shoes were almost the same in weight and color and design, but once Nike came out with an innovated and improved running shoe, the rest was history, as Nike's shoes offer unique colorways, lighter body and quicker feel, and technologically advanced aspects to the sneaker, but also produce the sneakers with environmentally sound processes which is a huge plus. Nike being able to produce the best possible shoes with the best possible materials while keeping the environment unharmed is one of the biggest factors in their form utility. Nike knew what it wanted to do with its products and had ideas such as lighter and environmentally sound and just production processes, and put it all in place to create the Nike shoes they are known well for. The in store environment and design plays another huge role as when you enter stores that sell Nike products, the display they have of the products is top notch and really appeals to customers. In Niketown NYC, the store is broken into different rooms for different sports, and the walls and everything around it are designed with photos and art that help aide the atmosphere presented in that given part of the store. The use of manikins and other related display tools Nike stores are able to present a very distinct and well presented image of Nike clothing and shoes. Niketown NYC and my experience with shopping in there have always done a good job with the interior design of the store in terms of the form utility. Not only with that, but the Nike store retailers know their stuff well. Whenever I am shopping for a Nike product in these retailers, they are very much educated in the products and offer the customer top notch opinionated and informative stuff on a product or aspect of the Nike product I am looking to buy. I would characterize most of these retailers of Nike products as go getters, as they are always very attentive in stores and very knowledgeable and frenziedly to customers shopping Nike products, and truly resemble the Nike Inc. name proudly and to the highest standard of performance just as their apparel and sneakers are held to.

Ch. 6- Consumer Decision Making

A lot of factors weigh in as to why a consumer would want to buy a Nike product. As Nike co-founder Bill Bowerman once said, "If you have a body, you are an athlete." Bowerman here made a very big statement in targeting athletes everywhere to sell his products to, and made the Nike product more appealing to a greater consumer base by just that statement. Nike Inc is the most successful and top selling athletic brand in the entire world, and truthfully and clearly stands above the rest of its stiff competition in the athletic apparel and footwear market in the world. Like any other product, consumers of Nike products are faced with the same elements such as cultural, societal and individual needs and factors, but despite that are heavily effected on external information and stimuli such as the ever changing innovations of Nike products and Market controlled and non market controlled information sources. Nike Inc mission stresses heavily the idea and motive of innovation to its consumers, as Nike itself started with Bill Bowerman ripping apart running shoes of his era and finding ways to make them lighter and quicker. Innovation is the sole engine behind Nike's vastly successful approach, and is the largest reason as to how consumers stay attracted and interested in their priduct, as innovation in Nike is always occuring, and makes its brand unique among the rest.

Nike + graphic

Nike innovates its products by using technology and personalization as key factors in effecting the consumers behavior when they are contemplating and deciding whether or not to purchase their products. Nike uses the Nike + technology in their sneakers, which is able to track vital information and play music for you throughout your workout. It is started with an electronic chip, almost SIM card like technology that is made by Apple that you insert into the slot provided in the insole of the sneaker that syncs with your iPod and is able to track your miles traveled and your distance, and even has a voice over command such as a Nav systems in most cars do. Originally Nike was only using this Nike + technology with running sneakers but it has now expanded into their basketball sneakers, such as the Kobe 8 System Elite + basketball sneakers which I as a consumer of Nike happen to own.

Along with the technology, the personalization of sneakers that Nike makes available to consumers is a huge plus to their decision making, as Nike allows you to take the shoe you want, and put in any colorway you want and design the show from top to bottom. This allows you as the consumer the freedom to be the designer of your own signature shoe, and even have them displayed for sale on the Nike website. Nike calls this the Nike iD process, where you as the consumer are able to design the shoe top to bottom from the lace color to the bottom soles and small details like paint drop design in the mid soles, with the colors of your choice for a reasonable $180 per pair. You the consumer are in control of the very critical design process of the given sneaker. Nike makes this available with almost every new basketball shoe that it releases, currently you are able to "iD" the new Kevin Durant sneakers along with the new LeBron James sneakers too.

Nike iD layout

Nike is able to advertise its products through many channels. For the market controlled sources, Nike is able to promote and advertise through elements such as numerous television commercials, print ads, billboards, and social media sites. In the sneaker market especially, the non-market controlled information sources seem to hold the most important in the ability for not only Nike but any sneaker brand to sell to and effect its consumers decisions successfully. Today we have factors such as YouTube, various blogs and review websites and sneaker news sites that help make a sneaker appealing to a consumer and effect their decision to purchase. You have thousands of YouTube accounts dedicated to purchasing and reviewing every single aspect of  Nike and other sneakers on the market where they are posting the reviews for very large audiences to see. The sneaker news and review websites such as Sneaker Files, Sneaker News and Kicks on Fire are very important, as they offer again a vary of different sneaker brands and the information and early photos of these soon to be released and existing shoes for consumers to see and look at before buying. The information from other consumers of sneakers like themselves help convince a consumer to purchase a sneaker, I myself as a consumer went out and saw and read reviews and blogs from these various sources on the Nike Kobe 8 sneakers I purchased before buying them to see how others who had purchased them thought they performed and such. As a consumer of Nike shoes, my expierience with the non-market controlled info sources really made an impact on my purchasing the Nike shoes I had looked at and read up on through the help of these various sources. I feel as if these factors of the blogs and YouTube and websites really help push and drive the purchase decision of the consumer. Above I have  provided the video review that I watched on YouTube to help make the decision for me to purchase the Nike shoes I did.

Ch. 5 - Developing a Global Vision Nike Inc.

Globally, the signature Nike "swoosh" is known by all people in all countries, and once seen, these people are quick to know and realize who's logo this is that they are seeing. The Nike "swoosh" logo alone is a huge reason and motive as to how Nike Inc. is able to further develop themselves further globally. Nike Inc. began its global development strongly in part through global events such as the Olympics and the World Cup. Nike has done this by designing the uniforms for World Cup contenders such as Brazil , and even were able to sign some Brazilian soccer players to apparel deals with the company. Nike was able to reveal the Nike Shox brand to the world in Sydney, Australia in 2000, the same year in which that summer's Olympics was to be hosted in Sydney. Nike's biggest, most truly integrated global development came in the form of a "Secret Tournament" in 2002. This correlated again with the World Cup, and through this  "Secret Tournament" Nike was able to give consumers what was called, a multi-faced experience in support of that years World Cup. Nike in the past has had successful global developments and they continue to do so today, by placing factories and stores, and promoting in different countries all over the world.

Nike Store in Harajuku

Nike Inc. has factories, headquarters and stores located in many countries all over Europe, Asia, and Africa, including: France, Italy, Germany and South Africa. In Nike Inc. EMEA HQ (Europe, Middle East and Africa), this HQ accounts for more than 1,000 employees, 68 different nationalities and covers 75 different countries in this region of the HQ, located just 16 miles away from Amsterdam in the town of Hilversum. In Japan, one of Nike Inc. more powerful and successful global brand countries, The HQ Nike Japan, was founded in 1981 in Tokyo, and since its arrival in the country has been consistently supported and is considered Japan's leading global sports brand. Japan is very crucial and important to Nike's global plans, as it accounts for over 500 employees, and runs and operates 9 retail stores and 16 factory outlet stores across Japan. Most recently opening a flagship store in Harajuku, one of Japan's most fashion frenzied areas. It even earned the award for the METI (Ministry for Economy, Trade, and Industry) award at the Ministry's 53rd annual Japan Magazine Advertisement Awards.

Kobe Bryant greeting fans in China

While Nike has great success in their current Japanese and European and Middle Eastern markets, Nike is still working on today their approach to globally expand themselves successfully in the region of China. Although Nike is still considered China's leading brand of sportswear, Nike is facing very stiff competition from Chinese companies Li-Ning and Anta which I had mentioned in my previous post. But I now have learned that Nike is losing younger Chinese athletes to its main competitor, Adidas through their NEO brand products which have targeted these young Chinese athletes that are seeking to spend less money on these goods. As recent as September of 2013, Nike reported very good numbers in sales but only was it in China where the sales dropped, despite Nike selling $574 million worth of its goods in China. In order to make themselves more globally known and desired in China, Nike through its Nike Basketball apparel and shoe lines, have sent basketball superstar Kobe Bryant out on tour of China, and even have sent over Kevin Durant and LeBron James as well to help capture and spread the Nike brand in the country. The main man for this to work though is Kobe Bryant, who over the years has been more than admired and adored by his Chinese fans and had even considered playing in China during the NBA lockout of 2011. Kobe Bryant's name and presence in the Chinese community given his popularity there is very crucial to the companies success in China, given that he is the most recent Nike superstar to go on tour of China on their behalf. Kobe Bryant and Nike have teamed together in China and have released signature Kobe "China" inspired sneakers, and this past summer held workouts and coached young Chinese basketball players during his visit, and even had a commercial recently released of him coaching these Chinese athletes, which is displayed below.

Overall, Nike and its global branches are very unique in the fact that all the products sold in the USA are the same ones of same value in that country of choice, and that Nike is successfully able to keep in line their code of ethics and devotion to preserving and protecting the environment when developing the best product possible in all of these countries. Nike truly expresses its dominance worldwide in the success they have to show in numbers and sales and growth in these countries, while more importantly being able to play by the rules of the game and getting things done their way. It goes to show how much a brand like Nike is respected and treated across the world when things like that continue to progress in foreign markets and business structures within their company.

Ch. 4 - The Marketing Environment Nike Inc.

Over the years, Nike Inc. has been known to serve all athletes all over the world, and provide them with the best possible footwear, apparel and other accessories they would be interested in. Nike Inc. naturally targets all athletes, men and women, boys and girls, of all ages, while continuing to successfully be able to offer a multiple amount of products that this athlete would need in their respective field of play. Nike Inc. still successfully applies several of it's marketing strategies while doing this. Their relevancy to both male and female athletes around the world stretches far beyond what most realize, as Nike Inc. successfully is able to obtain and sponsor female athletes along with the male ones they have, including members of the LPGA tour and the USA women's soccer team. CEO Mark Parker said yesterday at their investor conference that the Nike Inc. women's business is now worth $4 billion, and is being projected to be worth $7 billion by 2017. At the same time while being able to successfully use their athletes as a way to apply their strategy in their market environment, Nike Inc. is still able to keep their morals and ethics in place but keep the emphasis on sustainability and keeping themselves environmentally and socially sound. Nike Inc. is able to offer a broad array of products suitable for an athletes lifestyle. Nike Inc. has successfully been able to maintain its powerhouse status in an ever changing market, and adjusting themselves and finding ways to avoid problems and keep themselves the steady and dominant company they have been in the market since its inception by continually catering to and creating and innovating products for the needs of athletes everywhere. Nike by continually finding better ways to improve existing products and making them better, keeps their current markets in tact, and keeps them buying their product.

Nike Inc. World HQ, Based in Beaverton,OR

Nike Inc. is a well known powerhouse in most of the world, but Nike continues to successfully help stimulate innovation and growth in existing markets and audiences such as the ones in North America, Western Europe and Japan. According to current market projections from Nike Inc, Nike Inc. projected their brand to reach over $14 billion in the USA and $6 billion in Western Europe by 2017, as announced at their Investors Conference yesterday, their first in 2 years. As Nike Inc. strives to build on this market in place strength of growth for them, Nike continues to further encourage innovation and growth and expansion of the Nike Brand in newer markets such as China and other parts of Europe.

Statue of Kobe Bryant in Guangzhou, China

Part of this innovation in their new markets was having Basketball superstar Kobe Bryant tour China during the summer to promote Nike Basketball, who faces stiff competition in China from the Li-Ning Company, who have recently launched a new Basketball shoe campaign being headlined by a former Nike Inc. athlete, American basketball superstar Dwyane Wade, and also face competition from the Chinese company Anta, who have just recently announced a new shoe release based on the signature design of American Basketball star Rajon Rondo and had signed superstar Basketball player Kevin Garnett to a 5 year shoe deal this past April. Nike Inc. while continuing to reach abroad to create growth and innovation throughout China have projected for themselves a geographical growth of up to their average double digit rate in China by the year of 2017.

As successful as Nike Inc. is, it did face struggles, like most major powerful companies did during the Recession. According to my research, Nike Inc. stock dropped 40% during the Recession, going from a high of $35.30 to a low of $21.34. While taking a drop like that was very much a hard thing to go through, Nike's stock surprisingly went from "negative to euphoric" as from 2010 on, Nike's stock went up from a high of $46.24(2010) to a high of $60.25(2013). Given the recent rise in success for Nike on the stock market, its no surprise that Nike Inc. is still the leader in the market.

CEO Mark Parker at Nike Inc. Investor's Conference 10/9/13

Yesterday as I had stated previously, Nike had its first Investor's Conference in nearly two years, and discussed their projections for the fiscal years of 2015 and 2017, and presented the media and their investors with very impressive and promising projections and numbers. The projections and numbers that were presented only backup the fact that Nike remains the main powerhouse in the market. Nike projected that the direct to consumer growth would reach $5 billion by 2015 and eclipse over $8 million in 2017, while expecting to deliver $10 billion in incremental revenue by 2017 through women, apparel and e-commerce sales, which alone account for $2 billion in growth alone. Also, they announced that they were expected to have a revenue of $30 billion by 2015, and have a revenue of $36 million by 2017. What makes that projection interesting to me is that in 1983, Nike's revenue was $199 million, and given the projections presented yesterday, Nike Inc. has had an annual growth rate over 35 years of 13.2%, and have seen themselves have 15 consecutive quarters of double digit growth in Running. At the same time, Converse, one of Nike's subsidiaries is projected to be worth $3 billion by 2017. When Nike originally purchased Converse, they paid $300 million for it in 2003, showing how much its grown these past 10 years. A key thing here with these projections is that Nike Inc. long term model of high single digit growth is still in tact and is still very effective. Given this,over the last 3 years, Nike Inc. has grown up to 40% and has seen its website revenue jump up 35%. They've also seen individual businesses, such as the Elite socks grow well, as it is today a reported $100 million business, while their Youth athlete business is worth $3 billion. Nike Inc. truly has mastered and maintained their successful and powerful status on top of their market and their market environment.

Source: nikeinc.com

Ch. 3 - Ethics & Social Responsibility

At Nike Inc. the code of ethics is unique and innovative, just as many of Nike's products are.  The words of co-founder Phil Knight in regards to Nike Inc. idea of ethics is that: "We play hard, we play to win, and we play by the rules of the game." Knight states that no matter how challenging and dynamic Nike may become, their actions and decisions will fit with their shared values among the company. Their code takes very seriously the actions they take and how their employees act in certain situations. Nike states that all employees must resemble the standard set in place for them, which are loyalty, trustworthiness, honesty, fairness an responsibility, and are responsible to present and make the workplace one of non harassment, and respect the diversity that Nike Inc. makes. Nike on its website states a full code of ethics labeled "Inside the Lines" that thoroughly goes through the expectations of Nike Inc. and morals involved in their belief in ethics within the company. "Inside the Lines" has many key points, another in relation to employees at the workplace, protecting their rights as workers and stressing the idea of non harassment, and providing safe and healthy workplaces for their employees. A unique factor to Nike Inc. code of ethics is that they fully expect that the outside business partners and other persons doing business with Nike Inc., are to follow and observe the same standards of ethics that a Nike employee would when doing business for Nike. As I have stated before, Nike is big on its belief in protecting and conserving the environment around it when doing business. Nike states in the code that they are: "committed to minimizing the impact of our business on the environment with methods that are socially responsible, scientifically based and economically sound." Nike as well through this code provides Alertlines to all Nike Inc workplaces around the country and also outside of the US, including:  France, Italy, Germany and South Africa. Nike Inc. by doing this successfully enables their overseas branches to successfully spread and practice and the code of ethics outlined in "Inside the Lines".

Niketown NYC

As a consumer of Nike Inc products myself, whether its clothing, performance wear and mainly sneakers,  I have had nothing but positive experiences and was taken care of and handled well in the stores by a team representative or salesman at Niketown NYC and other retailers. The unique thing to me is that it was not only at Niketown NYC where I had very positive experiences when purchasing a Nike product. As Nike makes a lot of its money off of selling to retailers, I remember how like the product, these retailers handled me with the same regard that Nike Inc. states is appropriate in terms of their code of ethics.To be specific I was at Footlocker. While here, I was not only well informed of the benefits of my Nike product, but was also introduced to new ones I didn't know much about, and was offered Nike brand products along with the sneakers I was purchasing, when in the store they carried many non-Nike brand products that were either of same value and performance or better. I found it very much a great point of interest in my experience purchasing this product because I as the consumer was seeing a retailer who was selling me a Nike product, pushing and encouraging me to purchase the Nike brand product they were presenting me with while they had numerous amounts of the same product  in similar colors and styles manufactured by other companies in store. It shows a prime example of how Nike had successfully maintained their code of ethics beliefs with persons doing business for Nike outside of the company.

Nike Employee Store in Beaverton,OR

Nike Inc. further promotes and encourages growth and opportunity to employees in stores by allowing them to personally inform us on new products ready to launch, sell to us and ultimately compensate personally from dealing with consumers on a first hand basis. Through extensive training, Nike teaches its employees to not only engage a costumer the minute they walk in the store or up to a Nike brand product, but also to answer questions that customers may have about a product or service of Nike, by allowing this, the encourages and motivates a Nike employee in this setting to perform as a Nike employee to their highest ability, within the code of conduct and ethics presented to and instilled in them from their inception as an employee with Nike. Nike even has an exclusive Nike Employee Store in Beaverton, OR, where the store is only available to Nike Inc. employees and their families, where they are offered the same Nike products online and in stores with a 50% discount. Overall, Nike Inc. encouraging and motivating employees through extensive training, continued motivation and allowing the freedom to inform and deal with customers in a personal matter, help spread and keep in line the basis for an employee to act in according to the code established by the company.