'Nike Brand equity Essay\r'

'Nike spate was incorporated in 1968. In their thirty-quartette year history, Nike has primarily been in the line of imageing, work uping, and merchandiseplaceing athletic footwear, attire, equipment and accessories, а conduct of companies go start on a limb when it comes to championship determination or focal stratum strategies with Nike stool. Nike is а powerful corporation. Nike Corporation is a well managed family in а striking application, the gild has a absolute disfigurement go for, and they argon effectively capturing the appreciate shaped from their savings. Modern superior ways to trade pret destination merchandises be signifi fag endt in straightaway’s App argonl companies, both to be efficient and to be able to make hi-tech results. Nike is qualified upon high engineering in their effort to run ahead of their competitors and create increases. These technologies argon found indoors computers, utilize to create, anatom y and develop the products and machines that actually make the fit outs.\r\nBesides these principal(prenominal) fields of technology such a large corporation in each case usages a lot of diverse technology such as judge contrast of instructions on computers, intranet in spite of appearance the headquarters and non to draw a blank Web page technology for their web page. They construct а extremely developed Web site used for marketing and gross sales purposes. (Carty 2001 34-47)Nike primarily competes in the footwear industry, a subset of the consumer cyclical sector. The major competitors of Nike argon Reebok and Adidas, nevertheless any smart set that sells athletic and leisure footwear, uniform, or sports equipment could be considered а contestant too. Competition within the footwear industry can be truly watertight and change quickly due to rapidly changing client preferences and technology. With an active industry such as Nike, it can be challenging to s ustain a competitive receipts.\r\nNike positi championd itself in an industry where atomic number 18 fill no substitute products. Runners, walkers, basketball players, football players, and virtually e real person that moves by foot require footwear. Since people be beginning to become much(prenominal) concerned with their health, active lifestyles are becoming more joint. plastered rivalry still exists between Nike, Adidas and Reebok, provided the competitive environs does not introduce a holy terror to the industry’s feasibility. Within the value chain in the footwear industry, in that location are only certain areas where profits can be extracted. Nike is keenly aware that this fact, in that respectfore contract quantity up portions of the business that they do not want to be as intimately involved.\r\nAccording to Bigelow (1997) Nike took on the naked as a jaybird manner aggressively and imposed a management outline that targeted on building its bra nd name, specialisation of its product, intense marketing and creating new markets and exploiting its potential. (Miller 2002 311-31)Market positionNike is an industry loss leader in developing innovative new products. whizz of the powers of Nike Corporation is its brand name knowledge, because Nike has been around so long, the brand is а recognized and respected both internationally and locally. Nike has effectively marketed their products and in sum understands the importance of а shade product. They are continually improving their brake shoes by means of and through new technologies that are developed by their search teams. Nike’s important sustainable competitive advantage is their intangible assets, such as brand image and organizational culture. Everybody knows that Nike Corporation is а competitive family.\r\nStrength of Nike is their brand commitment, Nike has consistently produced forest products that appeal to its consumers, and Nike carries a a mple arrangement of products with а large amount of options for personal preference. Strong international presence is an advantage for Nike Corporation, in the U.S sales continue to slack off or the scrimping continues to worsen, they bring their international investment that consistently turns into a profit. Nike is the number one footwear manufacturer in terms of international rivalry in the market; with the distri barelyion centres. Research and growth organization of Nike is one of the company strength, which has the ability to keep the company’s pipeline full in pioneering new products. The companies withal have manufacturing contracts with manufacturers in countries that do not have as many requirements for conditions of work milieu and others that addition be. Also because of the process is push concentrated, the manufacturing takes place where labour is cheap. Nike is trying to increase their international presence.\r\nOn-line shop is an important factor in the presence of Nike Corporation; the company believes it is vital to run on-line(a) operation. (Peters 2005 3-6)Nike despite popular belief the very unspoiled amour about(predicate) them is that the company is aware of their social responsibility, and donated cardinal of property in and products to polar philanthropic organizations. In addition to their contributions they have in addition developed а labour practices department, which stick outs close attention to а labour practice of third military personnel countries in which it produces. Even though they are charitable organization they have not forgotten to be environmentally aware, with the introduction of а environmental concern present consumers that they have a heart. Because of the Nike growth they are an opportune position in the market. This can alike be attributed to their market share leadership, wide product selection, and stronger name recognition. (Peters 2005 3-6)Brand loyaltyBrand faithfu lness is the major success of any company and Nike has managed faithfulness with the customers now for а long.\r\n there are both(prenominal) factors which played important role for Nike brand loyalty are:The Social Factors -The age structure of nation affects the lifestyle of sports. There would be higher chances of а get trainer shoes in the market, if the age separates were junior. The catchments area of ground level and income-structure as trainers are relatively dear(predicate) to purchase. Sports have become a widespread spare-time activity for the pursuit of physical health development. It is why а jackpot market for training shoes products to serve the new-found past-time subsequently World War One. It has become а global consumer product even they were perceived as a spring chicken fashion item worn by scoot stars and famous athletics. The low wage labour is also a social issue in Vietnam. The technical Factors †This forms the physical environm ent as а availability of equipments affects the business organization. Their products and technologies must be up-to-date in aver to research new innovative marketing strategy. The design of а training shoe is acknowledge being authoritative to its commercial success.\r\nThe shoe’s style and technology are virtually likely to yield purchasers. For example, Nike’s 1977 introduction of its Air sole, which contained pockets of pressurized inert gas, established an industry benchmark. They have â€Å"Design to Fit soles” for а every mortal foot. They make money with digital technology taking advantage of new technologies and their potential to cut costs (Moore’s Law). (Carr 1998 10)Economic Factors †Analyzing their pricing strategy for а lower class population, the number of potential manufacturing countries and cost of labour, purchasing quantities, discipline about customer demand, competitors, competitor strategies, shopping patter ns and the economic environment has attend Nike to analyze today’s world. The training shoe manufacturing has shifted their financial investment from mho Korea and Taiwan, now considered to be higher-cost production locations, to lower-cost ones such as Inthroughsia, Thailand and China. The trend has been for trainer companies to continue to use the analogous Korean and Taiwanese manufacturers, who have set up and manage production plants in the new geographic locations. They are also able to profit from proficient trade and tariff agreements, wherever they exist. (Bigelow 2006 87-90)\r\nPolitical Factors †such as capitalism and democracy of the state influence their organization. For example, the labour in third world countries causes а rebuke once against Nike. But since they have been exposed, Nike has been trying to fix this tremendous problem they created. They have been sending people to call forth the standards and have had routine checks on their pl ants all all over the globe for а crack down on infant labour. A short time ago, the CEO of Nike, Phil Knight, was quoted as saying, â€Å"Nike has zero tolerance for under-age labour.” So, it is good to know they are at least trying to clean up the mess they have made. Recently, Nike has been do an attempt to help the environment. They have done many things like building an environmentally safe factory in europium and used their own sustainable manufacturing agreement. This system â€Å"strives to use а minimum amount of resources, at 100% might with zero waste.” Also Nike created the Air to Earth Program. It is а program that is designed to make learning about the environment safe and entertaining for children. They have also interpreted into considerations of the regulations and legislation for future likely developments.\r\nThe inter-relations and interdependency activities of the environment affected the Nike organizations. Their business affects th e economic, technology, political and social factors (STEP) which these four factors affect their businesses as well. For Nike to make а profit, they must claim high margins whilst expanding sales. These can only be done with a more selective distribution system that maintains margin. (Carr 1998 10)Brand awarenessBuyers in the athletic footwear industry taste a salient deal of power. Consumers have shown again and again that they forget simply wait until prices elapse а level they feel is reasonable before fashioning a purchase. Nearly 40% of all shoe purchases are made through discount stores. Also, consumers are able to make informed decisions about a purchase through utilization of net profit websites.\r\nThe talk terms power of retailers is also а problem for footwear manufacturers. In recent years, retailers have begun to hold fewer inventories, forcing manufacturers to pay for increased inventory levels on their end. Manufacturers must also make sure that reta ilers are selling the product in accordance with the desired image of the shoe. Nike has recently experienced a disagreement with their largest retailer theme Locker due to pricing disagreements. As а result, find fault Locker significantly reduced its high end purchases from Nike and Nike decided to shift their high end product sales elsewhere. (Mokhiber, Weissman, 1997, 9)Brand associationWhilst looking at the antithetical trends and styles of present day athletic footwear, we can further our research within the product and look at the different customer groups that our three companies focus their attention towards.\r\nWe are primarily looking at the three different companies and the rules of style that whitethorn apply to a specialized customer group for this product. In nearly cases, the customer group that they are centre on may greatly impact the demand for the product because of different influences whether it is there income level, influence of childhood, or even there changing preference of а particular proposition product. Footwear is class within many different categories, which makes the research of particular athletic footwear more difficult. For example, we are focusing on the companies of Nike, Adidas, and Reebok, and all of these companies make numerous styles of shoe lines. They range from golf cleat to soccer cleats to cross-country shoes. So when trying to determine the main customer groups, each line of shoes is basically depressed down within the group that the specific product is directed towards. So when looking at the different types of customer groups within the athletic footwear industry, some of the key customer demographic trend are modest up into different generations of tastes in style. (Teremenko 2003 207-249)\r\nThe industry of footwear can be broken up into three main customer groups, which are the vitiate Boomers, extension X, and times Y. These customer groups do not have much in common except for their love of shoes and the different tastes in the new fashion trends of footwear. These three generations are broken down as follows: Baby Boomers are from ages 35-53, Generation Y are consumers from 4-21, and Generation X is consumers from 22-32. As we develop ideas about the main customer groups within the footwear industry we can conclude that the Baby Boomers account for 31% of the population, which is equal to about 81 million consumers. Generation Y is the second largest group that accounts for 28% of the population which represents about 75 million consumers. The smallest customer group is Generation X, they comprise about 17% of the population, which equals about 46 million consumers. sedate information from many consumer surveys rates Nike high among the consumers of Generation Y and X. Nike has become more appealing among younger consumers and has shifted away from the Generation of the Baby Boomers. (Teremenko 2003 207-249)Proprietary assetsIn pecuniary 2005, NIKE met thei r financial goals.\r\nThe revenues grew 12% to 13.7Billion, net income grew 28% to 1.2 billion and NIKE delivered thin earnings per share of $4.48, а 28% increase versus fiscal 2004. The gross margin percentage increase 44.5%. The sound reflection on invested capital has improved and free cash flow from operations has increased. They continue to return cash to shareholders through dividends and share repurchases. Cash provided by operations was $1.6 billion in 2005 compared to $1.5 billion in 2004. There has been an improvement in cash management of accounts receivables and time of inventory receipts and vendor payments. (Teremenko 2003 207-249)Perceptions of qualityOpportunities include that Nike is not а fashion brand; their main selling point is the quality of their manufacturing. However true this is, people†particularly youthâ€are greatly concerned with fashion. Whilst the sneakers are made well, and help you run faster, jump higher, and so on, they have to loo k good. This is an important opportunity since styles leave alone change faster than the sneakers will wear out, thereof forcing consumers to purchase more sneakers. Also, since Nike is as far into the apparel industry as its footwear market competitors, it has great opportunity to expand on this into accessories (ex: sunglasses). The road is make as to where Nike can bring their apparel ideas. Lastly, since Nike is a global company, there are many areas they can expand into.\r\nChina is a newer market for them and there is opportunity to establish the same brand recognition there, and in similar countries, as they have in the U.S. overall Nike remain itself high in quality compare to Reebok and other competitors. And it seems to be continued in future after seeing the fresh and strong marketing approaches by Nike. Nike has loyal customer market with brand aware customers, which will drive Nike on a successful future. (Anonymous 2006, 30-31)ThreatsCompetition is always a threat t o a competitive company both domestically and internationally. The rivalry is very fierce with many companies competing for sales. a lot of money is spent on marketing and promotions through diverse channels in order to confabulation to the young demographic group of consumers who spend the most money on their products. Development has also slowed in the athletic footwear industry, however new markets are emerging with high growth rates.\r\nNike currently dominates the market, but Nike competitors pose a potential risk to the company’s reputation If Nike cannot stay one step ahead of their competitors in terms of product design and customer satisfaction the corporation could flounder. Another threat is the maturing market in athletic shoes. There is also rising adverse demographic change in the marketplace relating to brand image and promotions that Nike is unable to overcome. (Egan 1999 66-70)ConclusionMarketing on-line or E-commerce is really an opportunity for every comp any, if of course they will do it correctly. Consumers are using the Internet more and more to purchase their goods and service.\r\nIn stipulations of the Nike Corporation’s Information Technology sentry go, the company or let’s say in any business organization, their IT is always at risks for the reason that some bad element had their own bad elements and are always trying to get some very sensitive and important information to suit their silk hat interests. The company should invest for the company’s safety measures in terms of their information technology. Several company not only the Nike Corporation should be contribute an attention to these issues. The problem might be very costly for it needs some money to develop its security, but the results of it would be very promising and thus very helpful.\r\nOn the other hand, their marketing mix, complaint statements as the company’s marketing strategies are extremely important because this will propel the company because customers would be informed that Nike is serious in making innovations not only on their products, but also on their service. This will create a good impression not only on the customers or consumers, but also on the sports apparel market. This will result to a successful marketing strategy employed by Nike. (Enderle et all 2000, 11-19)\r\nReferences\r\nAnonymous, â€Å"Adidas stands its ground on Salomon merges: 2006, Corporate Finance, 30-31.\r\nBigelow, B. The human lives behind the labels: 2006, the global sweatshop,\r\nNike, and the run away to the bottom. Phi Delta Kappan, Vol. 92, 87-90.\r\nCarr, Robert. SGB: Sporting Goods air: 1998, Vol. 31 Issue 8, p10, 1/2p.\r\nCarty, capital of Seychelles. â€Å"The Internet and Grassroots Politics: 2001, Nike, the Athletic uniform Industry and the Anti-sweatshop Campaign”, George Mason University pp. 34-47Dworkin, A. â€Å"Nike prepares to step into e-commerce with science of online firm: 1999, The Oreg onianEgan, T. â€Å"The swoon of the swoosh: 1999, New York times Magazine. pp. 66-70Enderle, Kim, Dan Hirsch, Lisa Micka, Brian Saving, Sheetal Shah, and Tatiana Szerwinski (2000). Strategic Analysis of Nike, Inc. ISS 395, De Paul University. Chicago Illinois, 11-19.\r\nMiller, K. â€Å"A Framework for Integrated Risk Management in International business enterprise”: 2002, ledger of International Business Studies, 23(2), 311-331Mokhiber, Russell; Weissman, Robert. Multinational Monitor: 1997, Vol. 18 Issue 12, p9, 10p, 5bw.\r\nPeters, J. â€Å"Business policy in action: 2005, Management Decision, p. 3Teremenko, Victoria Dizik. DePaul Business & Commercial Law Journal: Fall2003, Vol. 2 Issue 1, p207-249, 43p.\r\n'