Marketing of Nike in IndiaINTRODUCTION The company taken into study is Nike and the scope of study is the marketing of Nike in India. Nike is the largest seller of athletic footwear, apparel and equipment in the world with subsidiaries in over 200 countries across the world. Nike appeals to customers with a marketing strategy centered on a brand image that is attained by distinctive logo and the advertising slogan "Just do it". Nike's logo, the 'swoosh' is thought to be one of the best logos ever designed and has had a high level of recall value. Nike's operations in India began in 1996 when the athletic footwear market was dominated by Reebok and Adidas. SITUATIONAL ANALYSIS POLITICAL FACTORS The government of India had highlighted on the development of local apparel production and the dominance of local brands within the national market to develop the Indian apparel industry. This policy marked the increased resistance towards the entry of foreign brands into the country. Rules stated that the operation of foreign brands within the country required an agreement with a Indian partner where the latter holds majority of the company's share. The late 1990s has marked the linearization of the Indian economy and restrictions towards international fashion brands have been removed. The favorable government policy has opened the doors for Nike India to establish independent and fully owned subsidiaries to increase its presence in the market. ECONOMIC FACTORS Worldwide operations of Nike have been affect by the Asian economic crisis. Nike footwear and clothing production is concentrated in Asia. The increase in material and labor costs has added to the fall in revenue. Indian economy has been one of the best performers in the world in recent years. The annual growth rate of 9.6% and 9.2% in 2006 and 2007 have been impressive and added the purchasing power of middle-income group in the country. However, growth has been vulnerable during the recession. As a result, growth projections for 2009 have been revised down to 6.5%. SOCIAL FACTORS The younger generations quest for involvement and professionalism in sports have determined the success of marketing campaigns. People are more fitness conscious. Consequently, exercise and fitness clubs are gaining reputation. The resulting surge for quality sports apparel and equipment has increased prospects for development. Upscale of labor and factory conditions in production facilities at manufacturing units and the sponsoring of social events has increased the 'Social Responsibility' image of the company. TECHNOLOGICAL FACTORS Reebok and Adidas as well as lifestyle brands like Puma. India is the only market where Reebok has sprinted ahead of Nike and Adidas. Nike has expanded operations by acquiring international brands like Coverse and Starer that have created novel trends with the younger generation. has crossed the fields of fame through a myriad collection of products. Mainstream of Nike's profits are earned outside the United States. Advantages of economies of innovation. COMPETITOR ANALYSIS Competition is very fierce due to the number of multi-national and Indian companies competing for sales. Supremacy in innovation. followed by Adidas (20%) and Nike ( 15%). WEAKNESS Globally. design. segmentation and differentiation have depended heavily on the effective use of management information systems. Nike India leverages technological advantage from its leadership status and strong international presence. Allocation of funds for marketing of Nike in India is significantly low when compared to its international advertising budget. The Indian market represents a complex structure where sportswear brands like Nike. US Polo and Indian Terrain are fighting it out in the sports lifestyle segment. Increase in marketing expenditure is required to penetrate a market that is already dominated by global giants Reebok and Adidas. As Nike's Production is outsourced minimum investment in production infrastructure and manufacturing workers has enabled the company to allocate surplus funds for research and design. they alter the representation of a socially responsible organization. Nike leverages its strong global presence and its position as the largest athletic footwear and apparel supplier in the world.Quality of product owes in large part to the use of valuable information technology and its application in production and distribution function. The costs of transportation are minimum as production facilities are located close to the market. Brand awareness among Indian youth is increasing and delay in introducing the latest fashion trends in the Indian market has affected the market share of Nike. Production of Nike footwear and apparel is concentrated in the Asian continent with India as a premium production hub. Nike boasts of the largest portfolio of sports ambassadors to boost its marketing campaign. Controversies regarding the allegations of having inhuman sweatshops in overseas factories have trimmed down brand image. Nike has been relatively slow in bringing the latest designs. Although sweatshops can be seen as an advantage for production and cost. SWOT ANALYSIS STRENGTHS Nike as a brand. In India. Reebok owns 40% of the market share. Nike is a trendsetter in terms of design and technology. . however. Nike India benefits from the economies inherent in design. research and development has laid the foundation for the company to emerge as the market leader in the industry. development and worldwide marketing of the Nike brand. OPPORTUNITIES Athletic shoes and apparel have become a staple in wardrobes worldwide as a result of increasing fitness and fashion quotient among both men and women. Nike has become synonymous with sports celebrities like Michel Jordan and Tiger Woods. Nike in India operates in a partnership with Sports Station India Private Limited. rising income levels. Such an exposure could result in manufacturing or selling at a loss. India's huge population base. Large youth population and increased brand awareness among younger generation allows Nike to leverage its international brand status and market effectively. changing lifestyle and consumer preferences has boosted the growth of sportswear industry. rapidly growing economy. International operations are exposed to fluctuations in exchange rates.Fully owned retail establishments of Nike has been an integral part of Nike's distribution worldwide. The emergence of e-retailing and customer designed internet merchandise has resulted in elimination of middle men in the distribution chain. The retail market for sports apparel and footwear is highly competitive. Nike does not control the distribution network. Purchase and sale of goods are contracted in different currencies that are not stable over long periods. The market trend is witnessed by increasing cost of production inputs and labor costs supplemented by a highly price sensitive customer base. THREATS A part of manufacturing components are sourced from foreign countries. Our belief in performance-oriented shoes backed by high value advertising has enabled us to stay ahead in the race for leadership in the sportswear industry. MARKETING STRATEGY AND ITS IMPACT ON SALES GROWTH The marketing strategy of Nike in the Indian market can be analyzed by dividing the timeline of Nike's existence in India into two distinct components • • Embracing International Endorsements Manipulating customized Indian Promotions EMBRACING INTERNATIONAL ENDROSEMENTS Nike has earned international reputation through its strong brand endorsements worldwide. Nike is increasingly been perceived as a fashion brand and the trend for fashion merchandise creates opportunities to develop increased variety of sports and fashion accessories that tend to be associated with higher profits. Over the years. Reebok and Adidas dominate a lion's share of the Indian market. Increasing inflation in the Indian Economy may spark a cut in customer spending. This association proscribes the establishment of Nike's own retail outlet in India. Our marketing in India hasn't had a head start despite our advantaged brand awareness enjoyed in the market even . The acquiring of Reebok by Adidas will earn the Adidas group significant competitive advantages worldwide. International operation enhances scope to utilize global marketing events to support the brand locally. The same year Nike aired its first Cricket Advertisement during the World Champions Trophy cricket tournament. Indian sportswear market had been characterized by unprecedented complexity and market dominance by Adidas and Reebok that had entered the market prior to Nike. A marketing strategy to be successful in India had to design promotions pitched around cricket. and its commitment to the market. Nike launched its Cricketing arm and introduced its first cricket shoes . Though this gave the impression of a cost saving system that completely wiped out advertisement developmental costs. Even Adidas changed its advertising approach by signing Indian tennis star Leander Paes and Cricket icons Sachin Tendulkar and Virender Shewag. The deal was a huge branding opportunity and sale of licensed merchandise during 2005 earned $20 million. Reebok. During this phase. The marketing strategy aimed at capturing the Indian market by airing Nike's portfolio of athlete endorsements. football and tennis dominated sports in India.before the establishment of Nike stores in the country. The same year Nike wrestled its rights to become the official kit sponsor for the Indian cricket team for the next 5 years. The sales figures for the year were an illustration of the effectiveness of the cricket-based promotions. which were the centre of attraction in Europe and America. Nikes penetration into emerging markets like India and China had to be backed up by high advertising expenditure. its effectiveness was at a low level.AIR ZOOM OPENER. Nike's marketing budget globally was $5 billion (ranging from 11% to 15% of sales annually) whereas the spending in India was significantly lower. A basketball advertisement endorsed by Michel Jordan was besides the point to the masses. Nike carried its international brand image into the Indian market. Nike owned close to 40 stores at the end of 1998.96 billion to the Board of Control for Cricket in India.Indian Football team) and Dhanraj Pillai ( Captain . Besides. This was a period when India didn't really figure in Nike's marketing promotion activities. Advertisements endorsed by international athletes were highly represented football. not only through endorsements but also through sponsorships of regional and local cricket associations. kit bags and backpacks. the contract with BCCI allowed Nike to launch official BCCI cricket merchandise comprising of replica team T-Shirts and jerseys. MANIPULATING CUSTOMIZED INDIAN PROMOTIONS The year 2005 marked the launch of customized Nike promotions for the Indian athlete. The deal bought in fresh momentum to Nike India. whereas Reebok through its aggressive marketing had earned market dominance and invested in nearly 100 retail outlets by that period. Adidas and Reebok enjoyed a lion's share of the Indian market. signing on high profile sportsmen like Mohammad Azharddin (Captain . Nike Cricket was a new wing and the contract showed the fans Nike's loyalty to Team India.Indian Hockey team ).1. beating Adidas and Reebok. However cricket. The rate of increase in sales in the Indian market was measured. Sales for the year increased by .. However.AIR ZOOM YORKER. on the other hand Indianised its ad campaigns right from the start. The privilege was earned by paying Rs. Bhaichung Bhutia ( Captain . Reebok built its promotions around cricket. The marketing department pointed out that it was critical to connect emotionally with the customers. This was followed by the launch of cricket shoes for batsmen . basketball and golf etc.Indian Cricket team ). The signing of India's football star Bhaichung Bhutia to endorse our products had inspired football audience across the country. The success of the Cricket promotions was followed by Nikes foray into cricket accessories and equipment. The Nike plus accelerator that has to be connected to the shoe in order to function with the iPod comes at an additional cost of Rs. RECCOMONDDATIONS THE NIKE PLUS PACKAGE . Addressing the equipment and training gear requirements of academics.11250. The association with the national cricket academy was trailed by similar partnerships with Bhupati Tennis Academy and the All India Football Federation.8500 (GBP 115).10000 when the comparative price of the iPod amounts to only Rs. Nike plus targeted sales can be achieved by offering additional sports kits or iPod compatible packages on purchase of its Lunarglide shoes. Nike plus has been the latest addition to our technologically evolving sportswear collection. Nike India tied up with BCCI's National Cricket Academy in March 2006. In India. the core audience of Nike is between 12 to 17 years.ESTABLISHING A BETTER DEAL Nike has attempted to keep itself on the cutting edge of technology backed by innovative advertisements. Football players under the age of 15 were given the opportunity to participate in the Manchester United Premier Cup and the winners were flown to Bangkok to participate in the South East Asia leg. Youth were the focus of marketing and cricket shoes and replica gear in small sizes were added to the product line. However. Nike Plus was expected to escalate sales as the pioneer in enabling the customer to measure the distance covered and calories burnt on the run outdoors. but they will represent a much better deal for the customer. Nike plus shoes are prices at an ambitious starting price of Rs. GEARING UP THE NEXT GENERATION ATHELETE In 2006. The deal with Bhupati Tennis Academy consented that promising players in the under-12 and under-14 categories will get a chance to participate in the Nike Junior Tour's International Masters Championship.1500 (GBP 20). These additional packages can come at an additional cost. Primarily. Further.40%. Nike plus shoe and accelerators are considerably overpriced at a total of Rs. Across the world. has had an added advantage as the academics work with Nike India's Research and development to understand the product requirements of the players. . with the sale of iPods and iPhones mounting in the country. Nike was pushing hard globally by finalizing the sponsor of the 2008 Olympic games in Beijing. and Nike India directed efforts towards inspiring youth to become serious about sports that interest them. Nike was taking commitment to sports to the grassroots level. A new cricket ad was targeted exclusively at the youth by showing the moments that highlighted the achievements of cricketers. Nike's new range of Nike Plus compatible Lunarglide model shoes haven't accomplished targeted sales. the association has created brand loyalists at a young age and enhanced brand awareness in the sporting community. AN INDIAN SPONSORSHIP FOR THE WORLD AUDIENCE A football frenzy crowd dominates market for sports goods in western countries. Cricket in India has seen the rise of Indian Premier League in 2008. Football fans in Europe are passionate about the clubs they support and have a high degree of attachment with the brands that sponsor the teams. Nike's GBP 303 million sponsorship deal with Manchester United Football Club and GBP 130 million deal with Arsenal Football club have accounted for 20% of Nike's merchandise sales worldwide.INFORMATION AGE The young Indian generation associates itself as a distinctive trend and has its own aspiration levels. The new generation is more internet-savvy. Nike's foray into IPL sponsorship will increase brand awareness among cricket followers globally. Customer involvements with Niketown showrooms in Europe and America have created long lasting relationships and customers have often stated that Niketown's collections and services as superior to other retailers.Nike's independent retail outlet in the country. and are growing the power of .MORE THAN A RETAIL STORE Nike India's 7-year contract with Sports Station India Private Limited having come to an end in 2004. Running clubs organized in Nike town outlets have turned out into valuable social gathering of Nike users and moreover an additional every day involvement with the brand and its services. Bangalore.2-million web population are under 30 years old. Niketown's can be setup in Tier 1 Metropolitan cities of Mumbai. Reebok. which is a combination of their learning form the West and the evolution of the Indian mindset. The Indian market is growing in terms of retail consumer awareness and spending. The competition between countries has now paved way for competition between football clubs within the same country. and has a much higher aspiration value. ADVERTISING MEDIUM . During the first phase of establishment. Similarly. Snap polls have indicated that every match attracts 18 million audiences worldwide. instant customization of customer designed shoes and fusing of names and chest numbers of customers choice on their jerseys and sweat shirts are not made available in other retail outlets. Chennai. 70 % of India's 18. However the game of football has radically changed since the establishment of English Premier League in 1992. Nike town offers more services than just being the base for retailing Nike products. Nike Town services like individual and group audio visual programs broadcasting the benefits of the Nike technology (Presentations have help in conveying the customer. Nike India can cash in on these opportunities as early as possible by establishing Nike town . Delhi and Kolkata where Nike India has achieved 70% of sales in the country. Nike's Position as the technically advanced brand in the sportswear industry). INDIAN PREMIER LEAGUE . The addition of international players in the league has created a global fan base for the league among cricket lovers. Moreover. The Nike town experience is highly rated by customers. Nike India can increase its collection of merchandise by including replicas of IPL jerseys of teams that have been sponsored by Nike. Nike India is now a subsidiary of Nike Inc. Reebok is leaving no stone unturned and is sponsoring 3 of the 8 IPL teams.NIKE TOWN . Adidas and Puma have already won sponsorship deals with IPL teams. the game of Cricket is evolving and focus has shifted from test matches and one day international tournaments to Twenty Twenty tournaments. blogs in the market as a mechanism for self-expression. Nike India's marketing could also move from sports celebrities to the target audience itself. Consumer products. As this next generation gains momentum.oxbridgewriters. services etc. at least for a short period of time. Read more: http://www.DEVELOPING THE EMOTIONAL CONNECTION In recent years the concept of creating an experience for customers to help them form an emotional connection to a brand has become more specialized. Nike's marketing focus should shift towards Internet advertising and partner the youth in their movement by communicating Nike as a forum for expression and not as a salesfocused giant. the brand. to enhance their involvement with the product and in turn. insurance. EXPERIMENTAL MARKETING . are already tapping the youth with the emergence of a whole new communication and branding strategy focused on experimental marketing.com/essays/marketing/marketing-of-nike-inindia.php#ixzz2NboO0zR9 .