Niké, Inc.: Product Line and Brand Positioning

Abstract

            Niké, Inc. uses a brand marketing mix that is as multicultural and diverse as all the people in the planet.  They make sure that there is a product for the type of gender, design, activity, color, and price for every type of customer, and are basically centered on the youth of the middle and lower classes, which they encourage by offering prices that are discounted or even below $25.    They try to make it as convenient as possible, with the help of technology, famous personalities, as well as attractive advertising and endorsement.  With 25,000 retailers across the globe, and a website that reaches all parts of the globe, Niké attempts to focus on individuality, while being diverse and multicultural at the same time.

Niké, Inc.: Product Line and Brand Positioning

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            Niké, Inc. was founded in 1972 by co-founder Bill Bowerman and Philip Bowerman in the industry of sportswear and sports equipment (Niké, Inc., 2008).  With its headquarters stated at Beaverton, Oregon, its main products range from athletic shoes to apparel, to other sports equipments and other accessories.  It employs more than 30,000 employees worldwide, has revenue of approximately US$17.92 billion, and with a net income of about US$1.492 billion (Niké, Inc., 2008).  It is recognized as “the world’s leading supplier of athletic shoes, apparel and sports equipment” (Niké, Inc., 2008).  It started in 1964 as Blue Ribbon Sports, and officially became Niké, Inc. by 1978 (Niké, Inc., 2008).

            This paper revolves around the product line and brand positioning of Niké, Inc., reflecting over their product, price, distribution, and promotion strategy implemented by the company.  In the end portion, we include a recommendation based on the present characteristics and strategies implemented by the company.

Main Body

Product & Price

            There are a variety of items that Niké manufactures, such as athletic shoes, apparel, and sports equipment.  It mainly offers shoes for men, women and children, which may be used in various sports activities like running, basketball, cross training, soccer, tennis, golf, baseball, football, volleyball, bicycling, and even for aquatic activities like scuba diving.

The Niké store at <www.nike.com> displays products that are divided according to gender, product type, sport, color, and price.  The gender category displays products that are for women, for girls, for men, and for boys.  Product type, on the other hand, is divided into footwear, equipment, apparel, and accessories.  The sport category displays action sports (e.g., basketball, golf, soccer, swim), and even include an outdoor, walking, and training sub-categories.  Examples of colors that are being displayed are black, brown, green, khaki, pink, red, blue, etc.  Prices range from $200 and below, $150 and below, $125 and below, $100 and below, $75 and below, $50 and below, $25 and below, and the clearance category, where discounted products are being displayed (Niké.com, 2008).  This makes it more convenient for buyers to choose from an array of product type, color, sport, design, and even prices.

It appears that the prices that are being displayed reflect a target audience that is centered on the middle and lower classes of the society.  There is no specific age, gender, or sport (or activity) that is being targeted in the website.  It is evident that Niké has been targeting a more diverse and global type of customers, as it reflects activities that are not centered on the sports-minded people anymore, but on anyone who would be walking, running, or even dancing.[1]  They are trying to target as many customers as possible.

Distribution

            Products of Niké are being distributed to as much as 25,000 retailers across the globe, in outlets and ‘Niketown stores’ that are allocated in about 160 countries worldwide (Niké, Inc., 2008).  The company is enjoying its manufacturing and distribution under a ‘global’ level, where global demand for brand name shoes of the athletes has been on growth (Porter, Harris, & Yeung, 2002, p.5).  However, as implied by Jeff Porter, Mark Harris, and Gavin Yeung (2002) in their research paper, Niké’s customer benefits remain to be under the regional level.  As the authors imposed: “Though there is global demand for products in Niké’s competitive industry, customers view the product differently and therefore derived benefits based on age, maturity and cultural standards or outlooks” (Porter, Harris, & Yeung, 2002, p.5).  For example, in U.S.A., customers would usually go for “performance characteristics, their association with a popular U.S. sport, and the endorsement from the pre-eminent start of that sport” (Porter, Harris, & Yeung, 2002, p.5).  In Europe, however, customers would rather go for the product’s identification and technical aspects, their cultural relationship to the product, and the ongoing trend of the season.

            There are international markets where Niké sells its products by means of independent distributors, licensees, and subsidiaries, with about 700 manufacturing shops and offices scattered in about 45 countries around the world, such as Indonesia, China, Taiwan, India, Thailand, Vietnam, and Malaysia (Niké, Inc., 2008).  For this, their global focus should include the competitive issues of the marketing industry, including the gray markets as well as the black markets.[2]  These two elements of arbitrage highly influence the distribution processes of global companies like Niké.

Brand positioning

            Nike’s marketing strategy revolves around the use of brand images (i.e., sports athletes) that would attract customers to buying the company’s products.  As a premium brand and selling, well-designed, popular company, Niké requires a good marketing strategy in order to build profits.  Its marketing strategy can be witnessed in its advertising logo: Just do it.  It uses famous celebrity athletes that, as much as possible, carry the corporate culture with a manner that is ‘cocky, proud, and gutsy’.  Celebrities like LeBron James, Steve Nash, and Kobe Bryant are perfect images for this new generation culture that Niké emphasizes.

            Niké’s brand image revolves around its distinct quality of being the sole athletic shoes in the world of sports.  As Phil Knight dictated, it is like speaking to athletes in a language that is recognizable only by them—sharing their passion, their sentiments, and their goal as far as sports is concerned (Keller, 1998, p.119).  Athlete Steve Prefontaine in 1973 was the first to wear and endorse the shoe with the swoosh sign.  The basic attitude revolved around ‘the athlete against the establishment’ stance, with an attitude of a middle-class, cocky person that is ruled by pride and by guts.[3]  In the early ‘80s, new sources of brand equity started to enter the scene: those that were usually dominated by women, but focusing on the athletic picture nonetheless.  By the ‘90s, the Niké attitude started to dominate the world of the sports shoe industry, when the ‘Just Do It’ ad campaign started to control the mass, revolving around the theme of self-empowerment, courage, and endurance.  Until now, celebrity athletes and professional teams continue to dominate the brand positioning of Niké; yet the company had tried to include issues with respect to globalization, diversity, human rights, as well as corporate and community responsibility.

Promotion strategy

            Niké usually uses brand images like celebrity athletes and professional teams who endorse their products.  The endorsers include athletes in the game of soccer (e.g., Ronaldinho, Ronaldo, and Roberto Carlos), basketball (e.g., Lebron James, Kobe Bryant), cycling (e.g., Lance Armstrong), golf (e.g., Tiger Woods), and many more.  In 2006, Niké had a partnership with iPod when they featured the Niké+iPod Sport Kit, which is a personal sensing device that is put in the shoes, with a receiver that is attached to the iPod Nanos.[4]  Just this month, however, another promotional strategy that is used is the New Race Experience, wherein one million runners from 25 cities race in one-day running event that are to be held in top cities like LA, New York, London, Paris, Istanbul, Melbourne, Shanghai, and Vancouver (Nikebiz.com, 2008).  There is also the sponsorship of athletic programs in schools and universities, and the sponsorship of events, such as the Hoop It Up and The Golden West Invitational that are both held in schools and universities.  It is evident that what the company basically targets, as a whole, are the youth customers of this century.

Conclusion & Recommendation

            Niké, Inc. uses a brand marketing mix that is as multicultural and diverse as all the people in the planet.  They make sure that there is a product for the type of gender, design, activity, color, and price for every type of customer, and are basically centered on the youth of the middle and lower classes, which they encourage by offering prices that are discounted or even below $25.    They try to make it as convenient as possible, with the help of technology, famous personalities, as well as attractive advertising and endorsement.  With 25,000 retailers across the globe, and a website that reaches all parts of the globe, Niké attempts to focus on individuality, while being diverse and multicultural at the same time.

Elements of its brand marketing mix are consistent with one other, as the basic intention is to catch as many buyers as possible, while reflecting a good and adequate job of serving the needs of a diverse, global world.  The pricing is very convenient to anyone who would want to buy products that are above $200 or for those who would want to buy those that are only about $25.  There are enough appropriate outlets and channels worldwide to endorse customers into buying the products.  However, it would be better if the number of products for boys and girls would be increased, since a better portion of them is under the men and women categories.  Packaging and discounts are also good, especially that competition is heavy with other companies like Reebok, Adidas, and Puma.  When it comes to brand positioning and advertising, however, it would be better if the overall theme of being ‘diverse’ and ‘global’ can be applied, too, on these corresponding aspects.  Because the overall theme is to be global, then advertisements should move away from the usual cocky style and then start to reflect cultures and attitudes that are as diverse as the real cultures of the globe.  It would also be best to prevent promotional projects that entail negative, critical issues like those that are connected to privacy and personal safety.  By implementing these, each of the elements of the brand marketing mix would be more consistent to one another.

References

1. Niké, Inc. (2008). Retrieved May 20, 2008, from the Wikipedia Online Encyclopedia database: http://en.wikipedia.org/wiki/Nike%2C_Inc.
2. Nikebiz.com. (2008, May 1). Nike+human race: the world’s largest one day running event. Retrieved May 20, 2008, from its official database: http://www.nikebiz.com/media/pr/2008/05/01_HumanRace.html.
3. Nike.com. (2008). NikeStore. Retrieved May 20, 2008, from the official database: http://www.nike.com/index.jhtml?l=nikestore&re=US&co=US&la=EN&ref=http%3A//www.nikebiz.com/customer_service/#l=nikestore,grid,_grid,f-10003+49581/so-publishDate0&re=US&co=US&la=EN.
4. Keller, K. (Ed.). (1998). Niké: building a global brand. In Strategic brand management. New York: Prentice Hall, Inc.
5. Porter, J., Harris, M., & Yeung, G. (2002). Niké. Retrieved May 20, 2008, from the Gaven Yeung Homepage, University of California, Los Angeles database: http://www.cs.ucla.edu/~gavin/pub/IntlBusMgmtNike.pdf.
6. Saponas, T.S., Lester, J., Hartung, C., & Kohno, T. (2006). Devices that tell on you: the Niké+iPod Sport Kit. Retrieved May 20, 2008, from the University of Washington, Seattle, Department of Computer Science and Engineering database: http://www.cs.washington.edu/research/systems/nikeipod/tracker-paper.pdf.
7. Niké, Inc. is known in the area of Youth culture, the Hip Hop, and the Chav Culture (Niké, Inc., 2008).
8. Gray markets are those that take form “when price differentials between two countries exist to the level that arbitrage becomes attractive” (Porter, Harris, & Yeung, 2002, p.6); while the black markets are those that take form “when purchases occur in the market where product is available and resold in another areas with little or no supply” (Porter, Harris, & Yeung, 2002, p.6).
9. These are attitudes that speak lines like, I do not care what other people think…or I have a world of my own and I’ll fight ‘til the end.
10. There is, however, controversy here with regards to privacy and personal safety.

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