My group created an Integrated marketing strategy plan for Nike athletic shoes, based on the data collected from Nike 10K report, Statista, IBISWorld, and etc. in 2018. This slides include but not limited to industry analysis, market analysis, competition analysis, business analysis, recommendations for 2019.
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Marketing Strategy Plan_Nike athletic shoes_2019
1. USA,
SOAR WITH NIKE
2019 Marketing Strategy Plan
Instructed by Dr. Badame
M.S. in Marketing Class 2019
Livia Li, Xue Zhao, Jason Klug, Tiffany Luke, Fan Yang
12.05.2018
2. Table of Content
2
Description of the Topic 3
External Environment 4
Market Analysis 15
Ethics Analysis 27
Business Unit 33
Corporate Objectives 51
Business Unite Objectives and Strategies 52
Product/Market Objectives Strategies 63
Economic and Risk Analysis 75
Source: Our Group visited Nike popup in LA on 9.29,2018
3. Executive Summary
Company Background
• Founded in 1964 by Phil Knight and Bill
Bowerman
• The company had revenues of $36.4 billion
dollars in FY20181
• #1 athletic brand in the US and
internationally2
• Core competencies include digital marketing,
technology innovation, and branding
• Competitors include Adidas, Under Armour,
Asics, & Lululemon
• Nike is losing market share to its competitors3
Corporate Objectives
• Increase revenue by 10%
• Grow direct sales by 35%
• Increase brand favorability by 30%
3
Recommendations
• Innovate footwear technology
• Provide more first-class customer service
• Create seamless omnichannel experiences
• Improve brand perception
• Increase promotions
Financial Forecast for FY19
(in millions) Net Income Revenue
Best Case $6,355 $46,184
Most Likely $4,772 $43,349
Worst Case $4,218 $43,023
5. Economic
5
y = 0.2166x + 8.6595
R² = 0.7617
$30
$50
$70
$90
$110
$130
$150
$170
$-
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
2015 2016 2017 2018 2019 2020 2021
RevenueinBillionUSD
Athletic Footwear Market Size
Athletic Footwear
Industry Revenue
Nike Footwear Revenue
Shoe Price
GDP/capital
Disposable Income
Linear (Nike Footwear
Revenue)
Source: Statista 2018. Athletic Footwear United States.
• Positive Impact of Disposable
Incomes and Price of Shoes
o Increase in disposable
incomes created opportunity
for industry
o Increase in price of shoes
contributed to the increase
of revenue of industry
• Contribution to Increase in
GDP
o IVA is expected to grow at
an annualized rate of 2%
o GDP/capita is expected to
increase by 3.57%
7. Technical
7
29 31 33 34 34
71 69 67 66 66
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2017 2018 2019 2020 2021
Sales Channels in percent
(Online VS Offline)
Online Offline
Source: Statista 2018. Athletic Footwear United States.
• Tech Impact on
Distribution
o Online sales is
increasing
o Nike Mobile App
o Sales on Amazon
o Nike w/ Social
Media
o Online-Offline
• Tech Impact on
Supply Chain
Source: Nike.com
8. Technical
8
Logistic Tech
• RFID
• Drone Delivery
Transaction Tech
• XML
• EDI
• CRM
• Omnichannel
Manufactory Tech
• 3D Printing
• Material
Development
Experience Tech
• 3D Scanning
• Image Recognition
• VR
• AR
• Omnichannel
9. Demographic
• Athletics footwear industry is
segmented by compound
variables, including gender and
age
o Males
o Females
o Kids (0-15 years old)
• Nike was the most preferred
brand by males over 18 years
old, and gained 26.1% brand
preferences by males whose age
from 35 to 49 and who have the
higher and more steady income
than others
9
Source: MSW-ARS Research/The Brand Strength Monitor. (n.d.). United States: Brand
preferences for men's athletic shoes from October to December 2017, by age. In Statista - The
Statistics Portal.
10. Demographic
10
Age
range
Share of
revenue
Disposable
income
Activeness Attributes
0-15
16.4%
- - Supported by parents
16-25 Low Less Active
Have more available leisure time to spend
on sports and recreation
26-29 Middle Active Have young children who live at home
and limited levels of consumer leisure
time
30-44
57.3%
Steady Active
45-54 Steady Less Active -
over 55 26.3% Reduced Inactive
Have entered retirement, limited ability
to splurge on brand-name industry goods,
and less capable of physical activity.
Source: IBISWorld Industry Report. Athletic Shoe Stores in the US.
55.38%
51.35%
45.18%
0%
10%
20%
30%
40%
50%
60%
High
Income
Medium
Income
Low
Income
ShareofRespondents
Share of Americans who
owned Nike products in
2018, by income
Current consumer demographic attributes
Source: Statista Survey. (n.d.). Share of Americans who
owned Nike brand apparel, accessories, and footwear in
2018, by income. In Statista - The Statistics Portal. Retrieved
September 23, 2018.
• Consumer aged 30-54 are the largest market with
comparatively steady income
• For Nike, the income distribution was an household
income over US $ 125,000
11. Demographic
11
Source: IBISWorld Industry Report. Athletic Shoe Stores in the US.
• The West currently accounts for
37.2% establishments, the most
among all the regions
• Nike’s distribution of density
o Urban cities
o Semi-urban cities
• Nike’s Consumer Profile
o Weekend runner
o Style shopper
o Dedicated sneakerhead
12. Regulatory and Established Laws
12
Source: Nike FY16/17 Sustainable Business Report
• Consumer Product Safety
• Labor Law
• Infringement of Patents –
Counterfeit issue
• Truck Safety
• Unfair Competition
• Business Law
13. Regulatory and Established Laws
13
Source: YouTube
• Counterfeit Issue
o The whole fashion industry,
including footwear
industry, lost $98 billion in
2017
o Counterfeit potentially
arouse consumer concern
in Nike authentic products
o Nike fought back by
claiming on the official
website about solution to
counterfeits
14. Political
14
Source: Justin Merriman/Getty Images
• Tax Plan
o Contributing to
the increase of
the wages and
lower the
income tax rate
by 7.5% and
corporate tax
rate by 32.5%
o Driving up
consumer
confidence and
business
confidence
• President Trump’s
Latest Tariff
o Triggering
unnecessary and
costly trade war,
doing harm to
the American
economy
o Nike potentially
losing
partnership with
foreign suppliers
16. Market Segment
Based on Product Type
- Aerobic & gym
- Trekking & hiking
- Running & walking
- Sports
Based on
Distribution Channel
- sports and athletic
good stores
- shoe stores
- specialty apparels
store
- online stores
Based on
Users
- Men
- Women
- Kids
Based on Region
- North America
- Europe
- Asia Pacific
- Middle East & North
Africa
- Rest of the world
Global Athletic Footwear Market Segment Variables
Nike use different apps to reach out to three
segments: weekend runner, style shopper, and
dedicated sneakerhead.
17. The US Athletic Footwear Industry is Worth $19.6 Billion as of 201741
17
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
2015 2016 2017 2018 2019 2020 2021
GrowthRate
RevenueinBillionUS$
Athletic Footwear USA Market Size in USD
(2015-2021)
Footwear Athletic Footwear Growth Rate (F) Growth Rate (AF)
29 31 33 34 34
71 69 67 66 66
0%
20%
40%
60%
80%
100%
2017 2018 2019 2020 2021
Sales Channels in percent
(Online VS Offline)
Online Offline
• In the Footwear market, 34% of
total revenue will be generated
through online sales by 2021.
Revenue in the Athletic Footwear
segment amounts to $ 16.143 million
in 2018, and the market is expected
to grow annually by 7.8%.
Source: Statista 2018. Athletic Footwear United States.
Source: Statista 2018. Athletic Footwear United States.
18. Revenue growth
• 11.8% in 2017
• Growing rate slows down
• Revenue in the Athletic Footwear segment amounts to
US$16,143m in 2018
Volume growth
• 9.4% in 2017
• Growing at a slower rate in projecting years till 2021
• Volume is expected to amount to 393.19 million pairs
by 2021
Growth Rate
Source: Statista 2018. Athletic Footwear United States.
19. Nike+ Expansion: Nike has launched a collection of Nike
mobile apps that collects users’ real-time data while
integrating Nike into users’ fitness lives.
Custom Retail Experience: Certain flagship stores provide a
unique experience by immersing customers into a digital
world and automating some former human functions.
Leading Mass Customization: Nike partnered with supply
chain innovator, Flex, to enhance manufacturing efficiency
at producing not only regular shoes but also one-of-a-kind
shoes. 42
Next Move: Smart Clothing. Embedding sensors into Nike
apparels and shoes will be a logical step in next-generation
clothing. 19
NIKE focuses on Consumer Experience
20. Major Competitors and Core Strategies
20
Nike Adidas Under Armour Asics Lululemon
Strengths
Digital marketing;
Technology innovation;
Branding & Brand
awareness;
Leading market share;
Athletic endorsement.
Brand legacy &
heritage; Diversified
portfolio;
Strong responsibility
within the sustainability
area
Technical performance;
Serious athletic mindset;
athletic endorsement;
Successful marketing
campaign targeting
women;
Linkage to
groundbreaking women
athlete spokesman;
High sports utility;
Established as a
niche brand in
athletic footwear;
Unique positioning;
Target to niche market;
brand cult; social media
marketing; customer
service and retailing
experience; products
are both fashionable
and functional.
Weaknesses
Infringement to patent;
ethical issues;
93% of production is
outsourced to a third-
party manufacturer44;
Limited product online.
Might lose its positioning
as performance-centric
as the brand starts to
grow and experiment
with athleisure trends.
Low brand
awareness in the
US;
Unfashionable
design;
Cheaper substitutes.
Products cater to a
limited functionality
(primarily yoga); More
sizes per SKU will have
an inventory and design
disadvantage; Niche
brand.
Price Point Medium to high Medium to high Medium Low to medium High
Market Cap $84.5445 (1.00%) $122.9446 (0.24%) $21.0547 (0.24%) $14.9248 (3.48%) $161.2449 (1.43%)
Revenue
FY2017
Nike, Inc: $34.4 Billion50
Nike Brand: $32.2 Billion
$24.46 Billion51 $4,977 Million52 $3524 Million53 $303.38 Million54
21. NIKE Stands Out with Fashion and High Utility
21
Sports Utility
High
Low
Fashionable
Non-
Fashionable
22. • Nike scores highest in
Performance and Product
Variety.
• But it needs to improve on
product availability. Out-of-
Stock issue happens
frequently with Nike’s
trendiest sneakers and Jordan
shoes.
• Lululemon is a strong
competitor even as a small
niche brand now.
0
1
2
3
4
5
Style
Performan
ce
Price
Product
variety
Product
availability
Nike
Adidas
Under Armour
Asics
Lululemon
Multi-Dimensional Perceptual Map
23. US’s withdrawal from TPP will significantly raise
tariffs on athletic shoes
• The Trans-Pacific Partnership would have
reduced tariffs for imported shoes.
• Nike imports 40% of its sneakers from
Vietnam. 59
NIKE Faces Rough Regulatory Issues
FLA Workplace Code of Conduct continues to regulate labor condition in developing
countries.
• The FLA Workplace Code of Conduct defines labor standards to achieve decent and
human working conditions.
• In a 2009 monitoring visit, FLA assessors found that manufacturing workers in Asian
countries for Nike lacked required legal work permits and were significantly
underpaid.60
Lack of regulations in the fashion industry to protect design and technology patent.
24. Comfort of Athletics Shoes Weights Most
• When asked about the criteria
for purchasing,
o 92%63 of respondents takes
Fit/Comfort in to consideration
o Price is also a major buying
influencer, ranked at the third
place among all the criteria
• Nike’s response in terms of
buying influencers
o Nike leverages high-tech and
advantage in R&D to create the
NIKE Zoom technology64
24Source: Statista 2018.
Major criteria when purchasing athletics shoes
25. Men Shop with Purpose, Women Shop to Treat
Themselves
• When asked about the reasons
to purchase,
o 63%65 of males pointed out the
need to replace for an old pair
o 46%66 of females focused more
on treating themselves by
purchasing new shoes
• Nike’s response to address
consumer needs
o Nike provides various of
product lines tailoring for
different needs by gender
25Source: Lightspeed/Mintel
Reasons to Purchase New Shoes
26. More Customers Prefer to Purchase Online
• When asked about the
channels for purchasing,
o 31%67 of respondents prefer
purchasing online
o Athletic footwear store and
sporting goods store takes
up 7% and 6% of the share
respectively
• Nike’s response in terms of
purchasing channels
o Partnership with Amazon
o Focus on in-store consumer
experience and omnichannel
experience
26
Source: Statista 2018.
31
7
6
322222
43
Most Popular Channel for Buying Running Shoes US 2016
Online
Athletic Footwear store (Foot Locker, Athlete`s
Foot, Finish Line, etc)
Sporting Goods Store (Sport`s Authority, Dicks,
Big 5, etc)
Outlet Store
Mail Order
Outdoor Sports Store (REI, EMS, etc)
Department Store (JC Penney`s, Sears, Macy`s,
Kohl's, etc)
Race Expo
Shoe Store (DSW, Payless, Famous Footwear,
etc)
Other
28. Nike’s Corporate Social Responsibility (CSR)
Nike’s Corporate Social Responsibility has three main focuses:
• Minimize Environmental Impact
• Transform Manufacturing
• Unleash Human Potential
Nike’s corporate social responsibility is focused on tackling issues from all parts of the
company’s value chain.
28
Source: Nike FY16/17 Sustainable Business Report
29. Minimize Environmental Impact
29
Nike is focused on reducing their environmental footprint in 6 key areas:
Product Material Energy
Water Waste Chemistry
30. Transform Manufacturing
30
Nike is focused on creating stricter manufacturing standards in three key areas
to ensure more responsibly made products:
Sustainable Sourcing Engaged Workforce Partnerships to
Accelerate Change
31. Unleash Human Potential
31
Nike has several initiatives in place to enforce their values and create a fair
environment in two areas:
Internal - Employees External – Community Impact
34. Core Competencies
Strength Weakness
•Dominance in the American
territory
•Strong innovative power
•Digital efforts
•Branding
•Premium in-store experience
•International strength
•Highly relies on footwear business
•Bad labor practices and work
conditions
•Influenced by trade policies on
both a national and international
scales
•Brand dilemma
34
35. Dominance in the American Territory
35
Owned retail stores 1,142 as of the end of fiscal 201779；
Nike spent $3.3 billion in marketing in 2017, compared with Adidas’ $2.0 billion
and Under Armour’s $48080；
Source: Rachel Hyland/IBISWorld Industry Report. Source: Morningstar Equity Analyst Report.
39. Product Line
Strength Weakness
•Variety (covering men, women,
kids, different kinds of sports)
•Beautifully-designed
•High-quality (professionalism and
resistant to wearing out)
•Customization
•Concentrated production location
•Focus on footwear
•Lose competition in foreign
markets due to high price
•Reliance on third-party retailers
such as Amazon
•Decrease in profit margin due to
Amazon’s low price business
model
39
41. Customer Base
Strength Weakness
•Broad target audience
•Global presence
•Customer loyalty
•Data collection and analysis
•Preference from athletes
•Star & celebrity effect
•Unbalanced customer base in
terms of gender: male customers
are predominant
•With a focus on young people
who like sports and professional
athletes
•Eroding customer base in
developing countries
41
42. Market Share Positions
Strength Weakness
•No. 1 sports brand globally
•Giant in North America market
•Strong in Chinese market
•Dominant in basketball shoes
industry
•Expanding digital market
•Extremely powerful brand
awareness and equity
•Losing market in casual
sportswear market
•Losing partnerships with
university stores across the US
•More volume of online sales
through 3rd party than through
their own online stores
•Victim of fake products
worldwide especially in
developing countries
42
43. NIKE - NO.1 Sports Brand in Chinese Market
43
Nike’s revenue in Greater China from 2009 to 2018, by segment
(million, USD)
Source: Morningstar Equity Analyst Report Source: Statista
44. Manufacturing
44
For athletic shoes, Nike utilizes
105 third party factories located
in 13 countries
• Nike does not own any
manufacturing factories as part
of a cost-saving measure
• These facilities are located close
to raw material sources to
further save on costs
Source: NIKE
45. Technologies
45
Strength Weakness
•Online portals that fit different
customers’ needs
•Make use of new technologies
to drive sales and create buzz,
ex. location based promotions
•Utilize advances in shoe
technology, ex. foam, to drive
innovation; increase sales
•Decision not to focus on
wearables after taking early lead
•Not an early leader in move to
foam in athletic shoes
•Inconsistency of technology
across different sales channels
46. 46
Technologies
• SNKRS app targeted at loyal fans featuring info and unique buying
opportunities103
Source: NIKE
47. Distribution Systems
Strength Weakness
•Direct sales channels growing
as share of revenue
•Online sales channels
expanding fastest, with owned
channels driving most growth
•Diverse: 3 largest customers
≈21% of total revenue
•Less efficient than competitors:
lower gross profit margin
•Difficult to maintain unified brand
image and pricing across diverse
sales channels
•Global supply chain exposed to
effects of trade war
47
49. Management
Strengths Weakness
•Stable senior
leadership team: most
execs 10+ years with
Nike
•Matrix organization
structure allows for
localization while
maintaining global
standards
•CEO has record of
strong financial
performance:
Revenue up more
than 100% in 12 years
•Harassment and
workplace
discrimination prevalent
in previous years
•Reported pay
discrimination
•77% male senior
leadership
•Opaque political
spending risks negative
impact on company
49
50. Financial Resources
Strengths Weakness
•Growth in all major markets in
FY2018, including 3% in North
America & 21% in Greater China
•Apparel sales growing faster
than footwear sales, increasing
diversification
•Stock up 30%+ in 2018
•Losing market share in largest
market: North America
•Overreliance on footwear: more
than 50% of revenues in FY2018
50
51. 51
Corporate Objectives
• Increase revenue by 10% by 2019
• Grow direct sales by 35% through e-
commerce sales and Nike store sales
• Change perception about Nike’s
brand ethics by increasing brand
favorability by 30%
Source: pinterest.com
53. Level-UP New Customer Journey
Strategic
Recommendations
Customer
Interface
Nike Mission
Statement
To bring inspiration and
innovation to every athlete in the
world.
Direct Retail Sales
Branded
experience
Innovative
technology
First-class in-
store
customer
service team
Seamless
omnichannel
experiences
Direct Online Sales
Improved
e-commerce
experience
First-class
online
customer
service team
53
54. Financial Goals
54
Forecast State of Industry:
• Increase revenue by 10% by 2019
• Grow e-commerce sales to 35%
Objectives:
• New materials and products innovation
• First-class in-store experience and omnichannel
• E-commerce markets
55. Rate of Growth
55
Forecast State of Industry:
• Expected to grow globally by 5.1% by 2025
Objectives:
• Revenue: increase by 43% for 2021 vs. 2016
• Earnings Before Tax: increase by 34% for 2021 vs. 2016
• Net income: increase by 41% for 2021 vs. 2016
56. Market Share
56
Objectives
Increase
market share
by 10% in
athletic
footwear
•Increase marketing efforts towards members
of Generation Z and engage more with current
Generation Z customers through influencer
campaigns and experiential events
•Open more Nike Live concept stores (like Nike
by Melrose) in key locations in popular cities
•Continue to expand product offerings that
have new, innovative features
57. Nike’s Triple 2X Strategic Plan
57
2X Direct 2X Speed 2X Innovation
Objectives
1. Double direct connections with consumers
2. Grow direct sales to 35 percent by 2021
Strategies
1. Create the new Nike Direct organization,
which will unite Nike.com, D2C retail, and
Nike+ digital products
2. Enhance and expand the new loyalty
program
3. Identify 12 key global supercities that will
together deliver an interactive retail
experience with consistency on a global
scale
Objectives
1. Double speed to market and cut product
creation timeline in half
Strategies
1. Make leadership and organization changes.
Streamline and speed up strategic
execution
2. Improve operation of the Express Lane,
which creates, updates and fulfills products
in response to consumer demand
3. Allocate greater resources in categories
with the highest potential to fuel growth
Objectives
1. Double revenue growth generated by
innovation digital platforms
Strategies
1. Lead with more digital platforms such
as Nike+, NTC, SNKRS to scale
innovation faster
2. Edit-to-amplify to give consumers
better choices, reducing styles by 25
percent and offering a deeper
selection of key franchises
3. Create aesthetics spanning both sport
and style
58. 58
Objectives
• Maintain position as #1 athletic footwear brand
• Increase social media following by 15% across all platforms in 2019
Strategies
• Continue to partner with high-profile athletic organizations, athletes,
and large universities
• Partner with social media companies on any first to market tactics and
increase influencer efforts
• Increase membership in the NikePlus loyalty program and doing more
exclusive events and parties for Sneakerheads
• Increase attendance at relevant events
• Creating a formal influencer program
Marketing
59. Manufacturing
59
•OBJECTIVE
• Minimize environmental impact,
with a 10 percent reduction in
the average environmental
footprint per unit by 2020
ENVIRONMENTAL
FOOTPRINT
•OBJECTIVE
•Streamline the procurement
process from selecting to
contracting with the right
suppliers for better goods and
services
PRODUCT
QUALITY
•OBJECTIVE
•Establish a smarter logistics
network that helps with faster
shipments and quicker response
to customer demands
LOGISTIC
EFFICIENCY
Strategies
1) Set target to save 24 Billion liters of water by sourcing cotton more sustainably
2) All Nike factories in North America are required to use 100% renewable
energy by 2020 3) 80% of products should use some recycled material by 2019
Strategies
1) Prioritize suppliers who have shown leadership in CSR and sustainability 2) Set
up the Code of Conduct and Code Leadership, which lay down the minimum
standards that each supplier factories and facilities are required to meet.
Strategies
1) Work with key stakeholders to develop a cross-functional, internal strategy to optimize
the use of air freight, which is Nike’s prioritized option for inbound logistics. 2) Keep
updating and digitalizing the outbound logistics system with latest technologies to better
serve a growing E-commerce sector. 3) Explore regional fulfillment nodes to improve
outbound logistics efficiency.
60. R&D
60
Objectives
• Develop the most high-tech shoes in the market;
• Leverage CRM to gain profit and increase customer satisfaction;
• Provide new service to enlarge market share by 5%;
Strategies
• Inject digital technology into shoes;
• Provide Nike Club Membership;
• Offer shoe material and structure customization;
64. Market Selection
64
PLATINUM
Sneakerheads
GOLD
Style shoppers who
want to be on trend
before, during and
after workouts
IRON
Style shoppers who follow
the latest athleisure trend
LEAD
Active people who are aware but
less enthusiastic about athleisure
trends
ATHLETES ATHLEISURE
PLATINUM
Core Athletes
GOLD
Active Adventurers
Marathon Runners
IRON
Gym Enthusiasts
Regular Runners
LEAD
Active People
Gym Goers
Walkers
•NYC, LA, Tokyo,
London, Beijing,
Shanghai, Paris, Milan,
Berlin, Mexico City,
Barcelona, Seoul
12 KEY CITIES
•High-Earning-Not-Rich-
Yet
HENRYs
66. Benefits Descriptions
Nike Leap
(Free)
Nike Fly
($25/mon)
Nike Soar
($45/mon)
Basic
Rewards
2 Swooshes
per $1 Spent
Club members can collect rewards (swooshes) via the
reward program when making purchases through Nike
stores. The collected swooshes would be used as coupon
for future purchases. (100 swooshes = $1)
Birthday
Reward
Birthday rewards include double-swoosh collection and
complimentary shoe accessories.
Pay by Phone
When purchasing, members could use any Nike app to
scan-to-pay or click-to-pay. No need to re-enter the
personal info or use a bank card.
Member
Events &
Offers
Service includes discounts, coupons, special offers, and
events, such as celebrity meeting event.
Precision
shoe fit
testing
Testing service covers foot type, leg shape, running pose.
Based on the test, provide shoe recommendation and
individual 3D foot model.
Nike Membership Program (NMP)
66
67. Benefits Descriptions
Nike Leap
(Free)
Nike Fly
($25/mon)
Nike Soar
($45/mon)
Health
Consultant
Defaulted
Program
Club members will get general suggestions by
inputting personal wellness data into the app.
Personal
Training
Program
Service includes one-on-one training and injury
recovery program. Tailoring the programs to
demands, such as marathon training, losing weight,
or building muscle. Choose
1 in 2
Personal
Nutrition
Program
Service includes one-on-one nutrition program. Based
on members’ physical condition, making daily meal
suggestions.
Prime
Delivery
5-day
Shipping
After purchasing online, club members will be able to
receive the products within 5 days for free.
1 or 2-day
Shipping
After purchasing online, club members will be able to
receive the products within 2 days for free.
Nike Membership Program (NMP) Cont’d
67
68. Benefits Descriptions
Nike Leap
(Free)
Nike Fly
($25/mon)
Nike Soar
($45/mon)
Nike
Customization
Exclusive Color
Option
When launching new products, some colors
options will be club-member-exclusive.
Customized
Swoosh Design
Club members can design their unique
swoosh printing and archive the design in
their profiles (first-time design is free of
charge, $20 for each). For example, they could
print their names on the swoosh logo.
Nike Membership Program (NMP) Cont’d
68
69. Nike Membership Program Credit Card
69
- 3% cash back for Leap member
- 4% cash back for Fly, 5% for Soar
- Personalized card design
- Complimentary ticket to Nike events
- Extra points collection on special days
- Early pre-sale access to athletic events
Source: Nike gift cards
70. Nike-Kicks Club (NKC)
70
Club member fee: $1,000/year
Exclusive privilege
Club members can reserve newly-released shoes by placing a deposit of 30% of the
price which will not be returned if cancellation. They will get the shoes a week
before they are launched in stores (with second-day delivery).
30% of total inventory will be sold online exclusively to members of the club 3 days
before the launch in store
Express lane that will be open 5 mins before the normal lane opens in the store
Sneakerhead events
Free access to Nike exhibition
71. Pricing summary:
71
Services Price
Nike
Membership
Program
(Credit Card)
Nike Leap Free
(3% cash back)
Nike Fly
$25/month
(4% cash back)
Nike Soar
$45/month
(5% cash back)
Nike-Kick’s Club $1,000/year
Products Price
”World’s Lightest”
Running Shoes Series
$100 - $400
(varies by product)
Micro-Chip Running/
Basketball Shoes Series
$200 - $500
(varies by product)
Nike Fashion Series
Shoes and Apparel
20-30% above similar
Nike products
Barefoot Running
Shoes Series
$80 - $150
(varies by product)
76. USA, SOAR WITH NIKE
Nike will Earn $6.36bn for Best Case
76
77. USA, SOAR WITH NIKE
Nike will Earn $4.22bn for Worst Case
77
78. USA, SOAR WITH NIKE
Follow-on Opportunities
78
Big Data Celebrity Collab Collections
E-sports Sponsorship Nike Mobile Games
79. USA, SOAR WITH NIKE
Break-even Analysis
Nike Membership Program
Costs:
➢Website/App: $1,000,000
➢Health Consultant: $85,000 per consultant130
➢Events Budget: $1,000,000
➢Running/foot eval tech: $1,000,000
➢Rewards Products: $5 per person
Revenue Generation
➢$25 or $45 per month per customer
Breakeven:
• 1,044,444 total members
o 70% join in the free Nike Leap
o 20% join in the $25 Nike Fly
o 10% join in the $45 Nike Soar
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80. USA, SOAR WITH NIKE
Break-even Analysis
Nike Kicks Club
Costs:
➢Website/App: $1,000,000
➢Events: $1,000,000
Revenue Generation
➢$1,000 per customer
➢Possible additional revenue for canceled shoe orders
Breakeven
➢2,000 members in the first year
80
81. USA, SOAR WITH NIKE
Contingency Plans – Nike Membership Program
81
Met/Exceeded
- Add additional benefits for
members
- Plan more events in
smaller key cities
- Expand loyalty program
internationally
- Hire additional team
members to support club
members
Not Met
- Increase membership acquisition efforts
through marketing
- Evaluate efficacy of current influencers and
consider choosing more or different influencers
- Conducts market research through focus
groups or surveys to determine why people are
hesitant to join or leaving the program
- Review offered benefits and look into
removing less commonly used benefits and
creating additional benefits
- Re-evaluate price points for membership tiers
Metrics
# of members
# of conversions from
influencers
Average spend per
member
Retention Rate
Average length of paid
subscription
Attendance at club events
# of pre-purchases
# of social media
mentions
82. USA, SOAR WITH NIKE
Contingency Plans – Nike-Kicks Club
82
Met/Exceeded
- Expand program internationally
- Complete the CRM system for
NKC
- Increase attendance at relevant
streetwear conventions and events
- Create a referral program; offer
discounts or credits when current
members refer new members
Not Met
- Conducts market research through
focus groups or surveys to determine
why people are hesitant to join
- Look into partnering with celebrity
Sneakerheads to promote subscription
program
- Offer additional benefits with
subscription
- Increase marketing and PR efforts
Metrics
# of subscriptions
# of mentions on
social media
Retention Rate
# of returns
ROI
83. USA, SOAR WITH NIKE
Contingency Plans – Nike Brand Perception
83
Met/Exceeded
-Continue pursuing
partnerships with more
top tier universities
-Partner with more
global charities to add on
to current domestic
partnerships
Not Met
- Create awareness campaign for Nike
sustainability efforts
-Pursue more charity partnerships and
sponsorship opportunities
-Evaluate slate of current partnerships
and get rid of any problematic
partnerships
-Conduct market research on brand
perception and determine problem
areas
Metrics
Brand favorability
surveys
# of positive press
mentions
# of negative press
mentions
# of positive social
media mentions
# of negative social
media mentions
84. USA, SOAR WITH NIKE
Contingency Plans – Increasing Nike Direct Sales
84
Met/Exceeded
-Open more Nike Stores or
Nike concept stores in key
locations
-Continue developing new
product lines to be exclusively
offered through Nike Direct
channels
-Build more distribution
centers in key locations
Not Met
-Offer more discounts or
promotions when purchasing
through Direct channels
-Increase marketing campaigns
with a CTA towards Direct
channels
-Evaluate efficacy of current
influencers and consider choosing
more or different influencers
Metrics
# of transactions
Revenue
Foot traffic in stores
Web traffic
Profit margin
Conversion rates
Average spend per
transaction
85. USA, SOAR WITH NIKE
Impact on existing product sales, current
customers, distribution systems
85
• Consolidates Nike’s leadership position in product innovation and digital transformation.
Drive growth by serving consumers in 12 key cities, across 10 key countries. These key
cities and countries are expected to represent over 80 percent of Nike’s projected growth
through 2020.
Impact on Product Sales
• Increase brand loyalty through better identifying key consumer segments and
addressing each one’s pain points accordingly. Increase brand relevance through social
media efforts with creative campaigns and influencers-collaborations. Ethical concerns
will be addressed through digital campaigns.
Impact on Brand Loyalty
• The current customers will be able to contact Nike more directly. They will get a more
customized, interactive and fun retail experience if they shop at one of the new Nike
concept store. More customers in the athleisure segment will be included as Nike starts
to collaborate with fashion designers, artists and luxury brands.
Impact on Current Customer
• On the production side, the recommended plan will help Nike be on a path to cut
product creation cycle times in half. On the retail distribution side, Nike will shift its focus
towards a D2C model while maintaining a good relationship with current key third-party
distributors. Additionally, Nike will need to cut less effective distribution partners.
Impact on Distribution
