Nike Running Under The New Rules
Facing the new market trends and business rules
, marketing is king, Nike had a positive adjustment.The business community there is a quite interesting phenomenon: the decline because of the lack of competitors, or because the opponent's strong and powerful.
Nike is the latter. The merger of Adidas and Reebok did not make it look not only born of confidence, but it stirred up more high morale. Early this year, it raised 2011 revenue to increase to $ 23 billion, and in three years to open 100 new stores worldwide. Took less than two years made no secret of Nike CEO Mark Parker said: "leadership is what we do best."
September 20, Nike announced first-quarter report from another point of view reflects the strength of the sportswear giant. The report shows that Nike quarter net income rose 51 percent to $ 569 million. Nike just last year even without considering the end of the turbulent transfer of power, as well as the foreign aggression from Adidas, this performance can be considered quite good.
If we innovate, we can lead
Does not mean that there is no strong opponents and challenges.
Since the 1980s, Michael Jordan Nike charm of this achievement, "the king of basketball shoes." However, Jordan is now old men. Whether in urban or rural, Jordan sports shoes brand's attractiveness is reduced, although Jordan was launched in early rockets (Air Jordan Retro) live up to expectations, but some of Nike Jordan shoes was introduced to a very high discount to have to sell out.
Nike hopes to identify it as the NBA's hot star Brent James (Le Bron James) to help smooth out their Michael Jordan era. In 2003, Nike announced that the United States in 10 years, Cleveland Cavaliers basketball team (Cleveland Cavaliers) pay $ 90 million to promote basketball shoes. However, although the latest ZoomLeBronIV basketball shoes sold in good shape, but the endorsement of the star, after all, James's style is difficult to look back when Michael Jordan items. Of course, some of them because, with the diversification of forms of entertainment, today's popular NBA and Jordan compared to the times, its appeal has gone down. In addition, Nike's rival low-cost strategy places, must we press on. For example, a discount clothing chain named Steve Bary a basketball shoe sales, selling only $ 14.98 per pair. It is said, launched in August last year after only four months of its sales reached 300 million pairs.
Initiatives of competitors may be able to put aside aside, however, when a new trend is already formed, contrarian business trend even lucky enough to be swallowed will certainly will not suffer, Nike is aware of this.
According to a U.S. market research company said the U.S. low-priced shoes ($ 50) market over the past two years increased by nearly 9%. Cheap sports shoes sales now account for U.S. sales of athletic footwear market, more than half. In addition, the U.S. basketball shoe industry in recent years there have been overall decline - last year's decline to 16%. Nike's revenue in the U.S. market about 30% to 40% by the business to create basketball shoes. Currently in the United States more than $ 100 per pair of basketball shoes, about 95% of Nike shoes. Clearly, these trends can not be ignored Nike. If you do not take effective measures to deal with Nike would be in danger of losing dominance.
In response, Nike has very clear ideas. It hopes to vigorously explore the potential of China and other overseas markets have to reduce dependence on the U.S. market; the other hand, through the adjustment of product lines, increase product innovation and careful expansion of middle and low market and adapt to new trends and new mining opportunities.
At the end of August this year the first quarter of fiscal 2008, Nike's revenue in the U.S. market grew by only 2% in the European market grew by 16 percent, the Asian market grew even faster, reaching 22%.
The speed thanks to Nike in China and India's aggressive market. It is reported that Nike, the quarter's revenue in China grew by about 50%. Currently, the international market, Nike's revenue accounted for 60% of the total profit of 51%. It is anticipated that its sales in China is expected to step onto a $ 1 billion. China will continue to become Nike's second largest after the U.S. market. In addition, Russia, India and Brazil are also high hopes for Nike's overseas markets.
Although Nike ambitious, some analysts still skeptical. They believe that Nike is currently in the U.S. market accounted for a dominant position, to continue to achieve rapid growth is very difficult. Spirit of sport is to challenge the limit, Nike naturally understand this.
Said Mark Parker, Nike is one of the competitive advantage of the breadth and diversity of its business. However, in order to achieve growth targets, after taking office, Mark Parker, Nike brand also had to adjust and product lines.
September 21 Mark Parker said, Nike is considering selling its subsidiary resistant Kebao Er hockey supplies. The subsidiaries are principally engaged in the production and sale of hockey clothing and equipment, ball sports and roller skating facilities. Several other brands such as Nike Golf, Converse, ColeHaan, Exeter and Hurley should also be re-examined. Nike executives said that although such a decision is difficult, but some brands have been with Nike's long-term development plans do not coincide, it is necessary to "ton output capacity."
The face of basketball shoe market (mainly the U.S. market) saturation, Nike product line has expanded to include soccer clothes, running apparel, women's training and fitness clothing. Mark Parker, Nike has been restructuring in the U.S. domestic football, basketball, running, training men, six women's fitness and sports and cultural sectors. Prior to this, Nike's business is divided into footwear, apparel and equipment three categories.
Meanwhile, Nike is also actively developing the low end. Earlier this year, Nike invited Cai Princeton football star Brandi (Brandi Chastain) and Hope Solomon (Hope Solo) and volleyball star Logan Tom (Logan Tom) appearances in New York, released a new brand Tailwind (wind) - a consumer brand for women. Currently there are six styles of the brand, the price ranging from 19.99 to 34.99 U.S. dollars. Previously, Nike, Nike brand for its high prices and focus on sports and away from the low-end consumers. Nike Tailwind given a chance to attract these consumers. In this regard, Mark Parker said: "If we innovate, we can lead."
Marketing power of the machine
Nike factors known to be good at marketing. However, this moment was the face of some may have a significant impact on their future survival of the trend, marketing is king, Nike had to make major adjustments.
Nike executives have publicly expressed the hope that by 2010 the world's dominant supplier of soccer apparel, Adidas and thus a direct challenge to the soccer sportswear market. To this end, Nike was generous in marketing investment. Nike made within 10 years to provide $ 778 million German Football Federation, sponsor the German national soccer team. This move for Adidas in terms, like "Black Tiger dig heart", because Germany is not only the headquarters of Adidas and Adidas is a long time sponsor of the German team.
Nike sponsors the German national team is only part of the marketing change. In fact, Nike innovations in marketing or other high-profile visible. Hidden behind these changes is the destruction of the old business rules and new business rules are constantly being established.
In recent years, the digital revolution, consumers have the right to speak greatly increased. Nike CEO Mark Parker in view, driven by the number of consumers are reshaping the retail industry picture, the power now rests in the hands of consumers.
To this end, Mark Parker, Nike, and other consumer brand companies need to adjust the new market trends. He said: "The consumer's influence has never been so powerful, they have more choice and access to these selected channels, the power has clearly shifted to consumers."
In response, Nike made a "consumer decide" strategy, said its competitive strategy to focus on creating a personalized shopping experience on. To this end, the first Nike product was further subdivided.
September this year, Nike released a special Native American Indians for sport shoes Air NativeN-7. According to Nike that this product is based on the company's Indian foot structure designed on the basis of research, it is wider and taller than the general sports shoes.
In marketing strategy, Nike has been targeted adjustments, such as the further breakdown of the marketing target consumer group. Former Nike executives generally believe that 18 to 22 years of age is the same type of consumer group. Now, Nike gave up the method previously bundled sales and, based on the age and interests of these consumers prefer to be broken down into different markets. In addition, it is also based on the characteristics of the digital revolution, opening up new marketing tool ... ...
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by: ERRIC SU