Peter Down

STRATEGIC SPORTS MARKETING PROCESS

WRITTEN REPORT AND PRESENTATION

TITLE PAGE: NIKE SOCCER

 

EXECUTIVE SUMMARY

Nearly 20 million Americans watched the Round of 16 matches at the 2010 FIFA World Cup on television. Soccer-specific stadiums have opened their doors to resounding success. The National Training Center in Carson, Calif., in its 10th year of existence, has been a valuable facility for all levels, including the U.S. Soccer Development Academy, which kicked off at the state-of-the-art complex with much fanfare in 2007.

(Sportspath, 2011)

Professionally, Major League Soccer continues to grow in popularity and prestige with 19 teams throughout North America, as well as increasing attendance and viewership. Also of significant importance, MLS features 14 clubs competing in 13 soccer-specific stadiums. On the women’s side, the U.S. Soccer Federation is administering the launch of the National Women’s Soccer League in 2013. U.S. Soccer is subsidizing the salaries of up to 24 U.S. WNT players while the Canadian Soccer Association and Federation of Mexican Football are doing the same for up to 16 players. (About U.S Soccer, 2014)

Overall, participation in U.S soccer continues at high levels among both youth and adults, with over 18 million participants in the year 2000 to more than 4 million registered players among the 24 million current participants in the sport according to the FIFA Big Count.

(Fifa, 2014)

Nike, which leads in sales of all sports goods, only entered the soccer market in the 1990s, but has since made stunning progress. Adidas of Germany has traditionally dominated soccer pitches and is an official World Cup sponsor. Nike is to supply the kit for more teams than Adidas for the first time ever at this year’s World Cup finals. It will be providing kit for 10 teams at this year’s World Cup finals — Australia, Brazil, Croatia, England, France, Greece, Netherlands, Portugal, South Korea and the US. Adidas has dropped to eight teams from 10 in 2010. It still has a formidable line-up however, with reigning champions Spain, Argentina, Colombia, Germany, Japan, Mexico, Nigeria and Russia. As of 2012 Adidas’ market share in Sales of soccer goods was estimated at 38 percent, with Nike closing in quickly at 36 percent. (AFP, 2014)

In order to surpass Adidas as the leader in sales of soccer goods in North America and increase its market share in sales of soccer footwear and apparel, Nike Soccer needs to target the following markets:

U.S Soccer Participant Market

24,472,778 Soccer Players

83%: 20,286,000 Unregistered Players

17%: 4,168,778 Registered Players

Registered Participant Target Markets

0.002%: 540 Professional Players

0.03%: 73,763 Collegiate Players

3.2%: 782,514 High School Players

12.3%: 3,020,633 Youth Players

Professional Soccer

19 Teams, 540 Players: Age 24-35

Intercollegiate Soccer

1,632 Schools, 73,763 Players: Age 18-24

High School Soccer

11,600 Teams, 782,514 Players: Age 15-18

Youth Soccer

3 Million Players: Age 5-15

NIKE INTRODUCTION:

Blue Ribbon Sports was created in the 1960s, Bowerman and Knight began to sell shoes to any athlete in need of footwear. With the order they received from Tiger Co., Bowerman used his innovation of designing shoes and created shoes that were lighter and more efficient. He tested them out on his runners and soon they began adding other innovators to the company that suddenly was creating posters, advertisements, marketing materials, brochures, and even a catalog with full of photographs of runners wearing the shoes. They changed the name of Blue Ribbon Sports to Nike in 1971.

Nowadays, Nike has created many designs of shoes from regular everyday wear, such as sandals, to soccer cleats, in which any soccer athlete trades their sandals before every practice and match for a pair of Nike cleats. Soccer cleats made by Nike are known to have been wore by many great soccer athletes such as Mia Hamm, Cristiano Ronaldo, and Landon Donovan. They’re light on the feet making it easy to change direction and just stay speedy as well as unique with the check on them.

While Nike had designed footwear and apparel for golf and soccer for a number of years, the mid-1990s signaled a deepening commitment to truly excel in these sports. In 1994, Nike signed several individual players from what would be the World Cup-winning Brazilian National Team. In 1995, Nike signed the entire team, and began designing the team’s distinctive uniform. Nike also signed the US men’s and women’s national soccer teams, as well as dozens of national teams around the world.

Just as Nike’s products have evolved, so has Nike’s approach to marketing. The 2002 “Secret Tournament” campaign was Nike’s first truly integrated, global marketing effort. Departing from the traditional “big athlete, big ad, big product” formula, Nike created a multi-faceted consumer experience in support of the World Cup. “Secret Tournament” incorporated advertising, the Internet, public relations, retail and consumer events to create excitement for Nike’s soccer products and athletes in a way no single ad could ever achieve. This new integrated approach has become the cornerstone for Nike marketing and communications.

NIKE ORGANIZATIONAL MISSION:

Nike, Inc. is the world’s renowned leader in innovation of footwear, apparel, sports equipment, and accessories. The co-founder of Nike, Inc. believed that everyone can be an athlete. His motto was, “If you have a body, you’re an athlete.” Bill Bowerman, co-founder of Nike Inc., instilled in his athletes the values of their body and showed them on how to achieve success. Thus, Nike, Inc. created one mission statement for all sport lines in the company.

The mission of Nike, Inc. is “to bring inspiration and innovation to every athlete in the world.”

NIKE ORGANIZATIONAL OBJECTIVES:

As with any company, Nike, Inc. has organizational objectives for each sports line. These principles were made to ensure that the work at Nike is well-planned, organized, and complete, in order to be represented throughout the Nike corporation worldwide. The guiding principles are called the “11 Maxims” and shape the Nike culture.

1. It is our nature to innovate.
2. Nike is a company.
3. Nike is a brand.
4. Simplify and go.
5. The consumer decides.
6. Be a sponge.
7. Evolve immediately.
8. Do The right thing.
9. Master the fundamentals.
10. We are on the offense-always.
11. Remember the man. (describing the late Bill Bowerman, Nike, Inc. co-founder)

NIKE SWOT ANALYSIS:

Strengths:1. Brand Recognition2. high product quality3. Effective marketing strategy4. Strong distribution chain5. Customer relationship satisfaction	Weakness:1. High product price2. Medium retail presence3. overseas manufacturing dependency
Opportunity:1. Expansion to emerging markets2. Increase demand soccer products3. well known athletes and other celebrity endorsers	Threats:1. Competition2. revenue relies on consumer income3. Product unsatisfactory

PLANNING PROCESS

A. UNDERSTANDING CONSUMER NEEDS:

1. MARKETING RESEARCH RESULTS

a. Problem Statement:

Statement 1

In order to successfully launch a new soccer line, Nike has to create a multi-faceted consumer experience which incorporates advertising, the Internet, public relations, retail and consumer events to create excitement for Nike’s soccer products and athletes.

Statement 2

Nike currently enjoys an 18% market share of the North American Soccer industry, with sales of $697 million. As Nike’s closest competitor with a 7.5% market share of the North American Soccer industry Adidas is poised to take over the marketplace if Nike fails in its mission to bring inspiration and innovation to every athlete in the world.

(Reuters, 2014)

Statement 3

If Nike does not continue to create must have products by anticipating customer preferences, the goal of achieving long term revenue growth as the world’s leading designer, marketer and distributor of athletic footwear, apparel, accessories and equipment will not be realized.

b. Research Objectives:

Identification of target markets for Nike Soccer in order to –

• Continue to create innovative soccer footwear and apparel that can be customized by consumers
• Continue to provide the market with competitively priced soccer footwear and apparel options
• Capitalize on the phenomenal success of the women’s U.S National Soccer Team through brand association to promote Nike as the flagship of U.S Soccer
• Create a mobile application that can be used to purchase Nike soccer footwear, apparel, and equipment.
• Promote soccer as a physical sport that requires the toughness and grit associated with popular U.S contact sports like football and hockey
• Host US Sports Camps (USSC) operated Nike Soccer Camps to recruit and develop athletes
• Continue to build brand association through visibility

c. Methodology:

Secondary Market Research

Secondary research uses outside information assembled by government agencies, industry and trade associations, labor unions, media sources, chambers of commerce, and so on. It’s usually published in pamphlets, newsletters, trade publications, magazines, and newspapers.

Secondary sources include the following:

Public sources

These are usually free, often offer a lot of good information, and include government departments, business departments of public libraries, and so on.

Commercial sources

These are valuable, but usually involve cost factors such as subscription and association fees. Commercial sources include research and trade associations, such as Dun & Bradstreet and Robert Morris & Associates, banks and other financial institutions, and publicly traded corporations.

Educational institutions

These are frequently overlooked as valuable information sources even though more research is conducted in colleges, universities, and technical institutes than virtually any sector of the business community.

(Secondary Market Research)

d. Data Collection Instrument:

• FIFA Big Count calculated categories of clubs, officials, registered and unregistered soccer participants in the United States.
• Number of Major League Soccer franchises, clubs and stadium venues in North American territories.
• United States College Soccer & Scholarship Opportunities Statistics, 2014
• 2012-13 United States High School Athletics Participation Survey Statistics
• U.S Youth Soccer Key Statistics, 2014

e. Results:

Soccer Participation: Professional

19 Teams, 540 Players: Age 24-35

(About US Soccer, 2014)

Soccer Participation: Intercollegiate (NCAA)

1,632 Schools, 73,763 Players: Age 18-24

(College Soccer & Scholarship Opportunities, 2014)

Soccer Participation: Interscholastic (High School)

11,600 Teams, 782,514 Players: Age 15-18

(2012-13 High School Athletics Participation Survey, 2014)

Soccer Participation: Youth

3 Million Players: Age 5-15

(Key Statistics, 2014)

3. MARKETING MIX DECISIONS

Registered Participant Target Market Percentage Decline

• 74% Decline in participation between Youth (3 Million Players) and High School level (782,514 Players)
• 91% Decline in participation between High School (782,514 Players) and Collegiate level (73,763 Players)
• 99% Decline in participation between Collegiate (73,763 Players) and Professional level (540 Players)

Contributing factors leading to Participant Target Market Decline

• The average U.S sports fan views soccer as a women’s sport or child’s activity because soccer is not promoted as a physical sport that requires the toughness and grit associated with popular contact sports like football and hockey.
• Soccer is the number one sport for the U.S Hispanic/Latino population however there is a lack of representation in U.S soccer due to an absence of opportunities that would contribute to athlete progress recruitment, development and education.
• In addition to endorsement opportunities, professional athletes from other U.S sports such as football and basketball are often well compensated for their participation which makes their respective sports more attractive than soccer to aspiring athletes.

(Zwick, 2010)

IMPLEMENTATION PROCESS

Existing Product:

• Continue to create innovative soccer footwear and apparel that can be customized by consumers

(Nike Soccer, 2014)

Footwear Benefits

• Firm-ground (FG) cleats for use on short-grass fields that may be slightly wet but rarely muddy
• Low-profile toe box to help you get under the ball for improved control
• Medial and lateral reinforcements for added support and lockdown
• Soft, minimalist heel counter to comfortably lock the foot in place
• Contoured, perforated sockliner for low-profile cushioning and reduced cleat pressure

(Nike Soccer, 2014)
Apparel Benefits

• Dri-FIT fabric to wick sweat away and help keep you dry and comfortable
• Made from recycled plastic water bottles
• Rib crew neck with interior taping for a comfortable fit
• Mesh fabric for breathability
• Replica design with woven crest and team details for pride

 Existing Price:

• Continue to provide the market with competitively priced soccer footwear and apparel options

(Nike Soccer, 2014)

Professional Soccer:

Elite

• Cleats: $225-$250
• Apparel: $150
• Equipment: $10-$169

Intercollegiate Soccer:

 Pro

• Cleats $110-$225
• Apparel: $75-$150
• Equipment: $10-$169

High School Soccer:

 Club

• Cleats: $70-$120
• Apparel: $28-$75
• Equipment: $10-$169

 Youth Soccer:

 Team

• Cleats: $45-$70
• Apparel: $9-$75
• Equipment: $10-$169