Nike

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Nike

• Global Communications
• China

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Presentation Format

• Nike
• Company History
• Promotional History
• Industry Characteristics
• Company Overview
• Article Summary- Chamber of Fear
• Challenges
• Opportunities
• Article Summary- Nine Gates
• Challenges
• Opportunities
• Marketing Implications
• Follow Up
• Questions

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Company History

• Founded in 1964 by Phil Knight Bill Bowerman
• Changed name to Nike in 1972
• Waffle sole created in 1974
• 1970s running craze spurs Nikes growth
• World Leader in sales of athletic footwear and
  apparel

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Promotional History
1970s
1980s
2000s
1990s
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Industry Conditions

• Retail Niche
• Athletic footwear, apparel, and equipment
• Top 4 firms control approx. 71 of Global Market
• Nike 36, Adidas 20, Puma 7, New Balance 6
• Regional market shares similar to global Market
  data
• United States, Europe, and Asia
• Barriers to Entry
• Economies of Scale
• Strategic Response
• Competitive Advantage

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Nike Overview

• Global Market Leader
• Athletic Footwear 36
• Athletic Apparel 9
• Economies of Scale
• Results in low advertising costs
• In 2007 Nikes net Profit Margin 9.1, compared
  to the Industry at 2.30 and Market 4.7.
• Nikes Revenues have increased from 10.7 billion
  in 2003 to 16.33 billion in 2007

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Article SummaryChamber of Fear

• Nike created an advertising campaign designed
  specifically for the Asian Pacific region.
• The ad featured Lebron James, the NBAs youngest
  superstar at the time, defeating characters from
  Chinese culture on the basketball court.
• The characters represented Temptation, Hype,
  Complacency, and Self-Doubt.
• Chinas state censors initially approved the
  commercial, but banned the ad after protests
  appeared in online chat rooms.

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Lebron James and the Chamber of Fear

• Play Commercial
• http//www.youtube.com/watch?vbPJPe6Kti7gfeature
  related

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Temptation
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Complacency
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Challenges

• Standardization across region
• Knowledge of culture
• Symbolism of cultural traits
• Communication with Consumers
• Message is misunderstood
• Negative Publicity
• Alienating target market

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Opportunities

• Knowledge of Culture
• Learning curve
• Better understanding of market
• Potential Publicity
• Opportunity to respond/fix the problem
• Publicity may go worldwide
• Only bad publicity is no publicity

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Article SummaryNine Gates

• Nike created an outdoor basketball tournament in
  Beijing, China.
• The size of the event involved over 5,300
  teenagers and 1,340 teams.
• Nine teams won the right to represent the gate in
  their neighborhood at the semi-finals.
• The final tournament was held at the Hall of
  Ancestral Worship, in Beijing's Forbidden City.
• They combined pop-culture-meets-ancient turf
  wars as the kids of Beijing stand behind their
  gate.

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Print Ads Nine Gates
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Nine Gates
Play Commercial http//www.youtube.com/watch?vXR
2R5IBDVQU
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Challenges

• Bureaucratic Red Tape
• Used Local Marketing agency-DMG
• Facilitate business relationships- quanxi
• Results hard to measure
• Revenue
• Market Share
• Brand Value

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Opportunities

• Reach target customer
• Hip teenage opinion leaders
• Creating brand relationship
• Potential use of Integrated Communications
• Advertising-Newspaper, TV, and Magazine
  ads-Posters
• Public Relations-Basketball tournament
• Direct Sales
• Sales Promotion

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Marketing Implications

• Standardization vs. Adaptation
• Chamber of Fear Research should have been done
  to Adapt properly to Chinese culture
• Nine Gates In-country marketing company was used
  to facilitate the transition of Nikes
  advertising in China
• Emotional vs. Rational Advertising
• Should almost always use an emotional approach
  when advertising in Asian countries
• Integrated marketing Communications

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Follow-Up

• Nike
• History
• Company Overview
• Article Chamber of Fear
• What went wrong
• What Nike did to fix it
• Article Nine Gates
• In-country marketing team
• Marketing implications
• What could Nike have done to advertise differently

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5 Questions????

• 1. Nikes Battle of the Nine Gates street
  basketball tournament is an example of which
  promotional mix element?
• a) Direct Sales
• b) Publicity
• c) Sales Promotion
• d) Public Relations

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• 2. The Chamber of Fear advertising campaign
  was banned by Chinas government after complaints
  were received. Global newspapers picked up the
  story of Chinas Ban of Nikes Ad. This is an
  example of ________.
• a) Public Relations
• b) Publicity
• c) Advertising
• d) Sales Promotion

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3. Nike operates in a very competitive market.
Brand Loyalty is key in order to sustain or
increase profitability. In order to sustain brand
loyalty, what type of approach is more effective
in delivering your promotional message? a)
Commercial b) Uncertainty c) Rational d)
Emotional
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4. Television commercials were used in both the
Chamber of Fear and the Nine Gates
campaigns. Commercials are sponsored, paid
messages that are communicated in a non-personal
way. Commercials are examples of which element of
the promotional mix? a) Public Relations b)
Advertising c) Sales Promotion d) Direct Sales
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5. Nike uses an integrated marketing model. The
goal of Integrated Marketing Communications is
short term ______ gains, and long term ______ in
brand value. a) Brand equity, Increase b)
Financial, Decrease c) Financial, Increase d)
Market Share, Increase
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Questions or Comments?Happy Valentines Day from
the GMCs