The paper “ Nike - Identification of the Product, Market and the Brand" is a meaningful example of a case study on marketing. Nike Inc. , headquartered in Beaverton, Oregon, is a manufacturer of athletic footwear. With revenues of $12bn, it is the market leader, with a 47 percent market share of the $35bn footwear industry, facing competition from Reebok, Adidas, Fila, Converse, and New Balance (Business Week, 2004). The two closest competitors to Nike, Reebok, and Adidas merged in 2006, thus providing even greater competition (Landler, 2005). Nike has come a long way from the time that Phil Knight sold sneakers from a car at athlete tracks and later found the company along with Bill Bowerman, Oregon track coach, in 1964.
The growth of the brand has been effected both through the development of a superior product as well as aggressive marketing. Its main brands are Nike Pro, Nike Golf, Nike +, Air Jordan and Team Starter. Its subsidiaries are Baur, Cole Haan, Hurley International and Converse (Wikipedia). Although Nike is branded as sportswear, it is more of a fashion product in the youth segment, and is an icon of American culture, since not all customers of Nike wear it for sports alone.
The brand thrives on its positioning as a high-quality product at low prices, that the company is able to maintain by outsourcing the production facilities to low-cost destinations like China, Indonesia, Vietnam, Italy, the Philippines, Taiwan, and South Korea. The first three countries are the major centers of production (van Dusen). Through the 1980s and 1990s, Nike marketed the brand aggressively, with big-time spending on endorsements and sponsoring events.
For example, the Air Jordan brand of sports shoes, the highest-selling sneaker brand, was endorsed by the basketball superstar, Mike Jordan. The company also spent huge amounts of money on advertising during the Atlanta Olympics in 2004 and will be the official US sponsor for the 2008 Beijing Olympics. The company hit rough times in the late 1990s after it hit sales of $9.8bn and fell subsequently as a result of expanding the product range too wide (Business Week, 2004). Even the top brand, Air Jordan, was carrying dust in the stores.
The company went into a massive restructuring in the early years of the new millennium, with increased spending on research and product development and prudent spending on marketing and advertising. Market segmentationMarket segmentation is very crucial in consumer markets like those of footwear. The Nike brand is essentially a youth consumer brand. Although it is primarily targeted towards the athletes, the brand is looked upon more as youth fashion at reasonable costs. Yet, the segmentation has been along with different types of consumers who have demand for various types of sports shoes.
On the whole, however, price is not a major constraining factor since Nike has a high brand value and customers are ready to pay. The leading customer segment, of course, is that of athletes, for whom the mainline of Nike products are targeted. However, over recent years, Nike has also sold soccer boots that are bought by the leading players of the world as well as the common neighborhood players since Nike boots. The comfortable boots that enhance the performance are expensive but the price is not usually a concern since the top players are well-paid or supported by sponsorships from clubs or the manufacturer.
Even during the 1994 World Cup, Nike’ s sale of soccer boots was a modest $45 million. A decade later, the company’ s soccer shoe sales reached $1 billion, at 25 percent of global sales. In Europe, the main market for soccer sales, Nike’ s share is 35 percent, ahead of Adidas’ 31 percent (Business Week, 2005).