Marketing Plan: Nike- LeBron VI Shoes

John OMalley

Current Marketing:
Over the course of the last several decades, Nike has done what no other shoe company
has been able to do. With a marketing strategy based singularly upon its brand image, Nike and
its universally-recognizable swoosh logo have been able to grow from a small running shoe
company out of Oregon, into a global athletic footwear and apparel giant. Like virtually all other

sporting-goods brands, Nikes target market consists primarily of people living an athletic
lifestyle, more specifically, male and female athletes between the ages of 18 and 35 years old.
Nike uses a plethora of strategies to appeal to their market, most notable, however, is the
sponsorship of products by professional athletic teams, collegiate teams, and celebrity athletes.
This strategy causes a bandwagon effect, where all athletes aspire to perform and emulate their
favorite sports icons, by donning their sponsored apparel and gear.
Nike is currently the global leader in both of its major markets: sports footwear and
athletic apparel. As of 2014, Nikes holds a 46% stake in the global footwear market, with its
closest follower, Adidas, trailing at a mere 14%. In regards to athletic apparel, Nike once again is
the world leader, with a market share of 31%. Its next closest competitor, Under Armour, holds a
market share of roughly 16%, about half of Nikes. Both figures have gone up from the previous
year and sustained growth is anticipated through 2020.
As far as Nike is concerned, product performance and innovative technology are just as
important as product design, and it is because of this belief that Nike products are considered to
be cutting edge in every category. From their apparel, Nikes top innovations include Dri-Fit,
Storm-Fit, and Therma-Fit, each of which is named for its functionality. While Dri-Fit is
designed to keep athletes dry, Therma-Fit is meant to keep athletes warm. In regards to their
primary market, Nikes shoe developers have created many distinct technologies, several of
which have become their own product lines. These include; LunarIon cushioning, a soft, yet
resilient, foam core that is encased within a supportive foam carrier for lightweight support; Nike
Air, technology that consist of pressurized air inside a tough, flexible bag to reduce force of
impact; Nike Free, a sole that allows feet to perform in the natural way that they were meant to;
and Dynamic Support, a sole-type that provides stability without added weight or stiffness. Most

notably, is Nike+. A true hybrid of apparel and technology, Nike+ allows its wearers to monitor
their progress with an app and a digital interface. Many would argue that this product line sets
Nike even more apart from its competitors. But why stop at just one of these technologies? In
fact, many of Nikes shoes utilize one or more of these technologies to create shoes that really
are a cut above the rest.
Nikes competition has increased steadily as it has grown from an athletic shoe company
into an athletic brand offering everything from apparel to sporting equipment. Within the
footwear market, Nikes greatest competition has been and continues to be Adidas, with Puma
being its next greatest competitor. One example of this competition in action comes from the
2014 FIFA World Cup. Despite its overwhelming market share, the 2014 FIFA World Cup
elected Adidas over Nike to be the official sponsor. However, Nike was not to be outdone. The
licensing agreements between the individual teams and the brands were still up in the air, and
Nike was sure to agree to a deal with the host-team Brazil, as well as several other national
teams. As the tournament began, millions watched as the teams dressed from head to toe in Nike
apparel began to fight for an Adidas ball. On a separate note, in regards to stock price, every
mishap Adidas has had in recent years has been compensated by Nike.
As for competition in the athletic apparel market, Nike is once again the global leader,
with Under Armour coming in at second and showing continuous gains in market share. Both
companies are similar in that they utilize bio-tech design with creative advertising and many
would argue that they are equally appealing in the market place. Both brands are also currently
investing a great deal of funds in order to further develop their technology and continue to gain
market share.

Nikes mission statement is to bring inspiration and innovation to every athlete in the
world. If you have a body, you are an athlete. Such a bold mission states would be impossible
without planned distribution. Nike distributes it merchandise based on the level or number. High
ticket items are given to particular distributors that handle them with higher care, while in
contrast, lower priced items tend to trade at discounted prices until settling in a larger store.
Currently, Nike operates three distribution centers for footwear. The largest retail account it has
is FootLocker Inc. which accounts for 10 percent of Nikes shoe sales worldwide. At the same
time, Nike has freestanding Nike Town stores as well as outlet stores across the globe and as
close as the Fashion Outlets of Chicago in Rosemont.
Branching from their mission statement, Nike defines its target athletes in different
regions and modifies their marketing plan to meet the specific needs of its consumers. It
segments its demographics into males, females, and kids. An example of slight alterations
between the sexes are that it promotes football and baseball products to men and softball to
women. Some examples of Nikes global segmentation include; the demographic of women in
the USA, endorsing cricket in India, and attempting to promote Nike+ everywhere. Their
marketing campaigns also have three universal divisions: utility based, style based and
technology based. Utility is designed for those who play sports, style is aimed at those who are
seeking athletic apparel based on ascetics, and technology is for those who seek products that are
cutting edge.
Nikes latest and greatest active shoe may be able to push its legendary Jordan products
off the shelf. The next big thing in mens basketball shoes, the LeBron VI, has arrived and is
sponsored by an athlete who many consider to be the greatest basketball player in the world
today, LeBron James. The LeBron series offers maximum protection and unmatched elevation,

combining Nikes FlyWire technology and HyperFuse construction. The wearer is able to cut
sharper, accelerate quickly, and dominate on the court, and even look stylish off the court. It also
features asymmetrical lacing, Nike Zoom cushioning, and even LeBrons iconic signature.
LeBron has already been named the NBAs leading shoe salesman by Forbes Magazine,
after sales of his line of shoes reached over $300 million in revenue in 2012. This most recent
line cannot even be found in stock on Nikes website due to the absurdly high demand. If you
want the latest LeBron shoes, it comes with a high price tag as well, with various shoes priced
anywhere from $159.99 to over $300. The profit margin on this specific line is 44%, which has
created much public scrutiny as a result.
Without a doubt the biggest competition of the LeBron shoes are the Air Jordan lines,
another one of Nikes most popular lines. Although its almost not even competition when both
product lines are owned by the same company. Supplier power plays a huge role in sales of both
lines, because both supply a limited amount of shoes in order to make the product appear more
desirable. Threats of new entry are unlikely due to the fact that there are only so many great
basketball stars that are capable of sponsoring a shoe line that could compete with that of LeBron
James or Michael Jordan. On the other hand, substitution of the product is realistic, however,
substitution of the product is often switched to another Nike product line rather than any of
Nikes competitors products. At the same time, there is not great buying power with a specialty
product such as the LeBron line. The good is inelastic, with competitor pricing being in line or
even higher. The price seen is the price paid. The two shoes may generate a rivalry in the
upcoming years with the LeBron line being the modern interpretation of the Jordan brand.
Promotion of the line is easily accepted by the public, with LeBron James as the face of the
product, the shoes practically sell themselves.

Threats and Opportunities Analysis:

In order to develop a successful marketing plan for the LeBron VI shoe line, Nike must
be sure to avoid pitfalls that can detract from what their customers want, while at the same time,
push their product into new and unique roles. First, one must first understand how Nike got to
the point it is at today with the LeBron VI shoe. Back in 2012, the Nike V shoes were released at
a price of $315 (McCarthy). While Nike products are known to come at a higher price, as they
attempt to sell premium quality, the over $300 price tag was an unprecedented high price that
was unwelcomed by consumers still recovering from recession. Nike would be wise to use
consumer value-based pricing to avoid losing any potential customers. Consumer value-based
pricing is when a company uses buyers perception of value as the key to pricing (Kotler, p.
313). Consumer value-based pricing puts the needs and wants of the consumer at the forefront
by initially considering price, in addition to the other marketing mix variables. However, Nike
seems to be using cost-based pricing. Cost-based pricing is when a company makes what they
deem a worthy product and then, after the fact, add up the cost of what it took to make the
product and add whatever target profit they were trying to reach to that cost (Kotler, p. 313). The
flaw of cost-based pricing is that if the product doesnt sell, then the company just has to settle
for either lower markups or lower prices (Kotler, p. 313). Nike must remember to put consumer
needs first and keep marketing myopia in mind. When it comes to their LeBron VI shoe, they
must know that they are not simply marketing an athletic shoe. They are instead helping the
customer reach their athletic goals and achieve greater personal milestones. In the next year,
Nike should develop the cost of their LeBron VI shoe by keeping the past in mind. Nike must
sell and market the LeBron VI shoe with a singular, unified vision to help the consumer, while
still keeping their bottom line in mind.

At the same time, Nike must also keep their marketing environment in mind. A marketing
environment contains the actors and forces outside marketing that affect marketing
managements ability to build and maintain successful relationships with target customers
(Kotler, p. 92). Analyzing the marketing environment involves branching out from the normal
scope of a companys research into marketing a specific product. However, even within the
marketing environment, there are two separate sub-environments: the macro-environment and
micro-environment. The macro-environment examines the larger societal forces such as
demographics that affect marketing, while the micro-environment is the actors close to the
company that affect its ability to serve its customers (Kotler, p. 93). In October, Nike failed to
keep track of their microenvironment. Their LeBron VI shoes were scheduled to hit retail stores
that month but unfortunately, Nike was forced to announce that the shoes launch would be
delayed until further notice, due to a small cosmetic issue with some of the Lebron VI shoes
(Rovell). The cosmetic issue delay came as a result of James choosing to sign with the Cleveland
Cavaliers over the Miami Heat. Consequently, his player number had changed from number 6 to
number 23. On the back of the shoe, a visible tag exists that displays his old number, 6. Nike did
not take into account the actors close to its product line. A shift of one of their biggest marketing
components threw their whole launch off of schedule, and Nike failed to match production due to
the changes in its micro-environment.
In addition to causing problems in the United States market, the delay disrupted their
future marketing plan in China, as well. The LeBron VI shoes were originally scheduled to
launch in China on October 1, while the global launch would follow on October 11 (Rovell). In
Nikes 2014 letter to shareholders, Nike outlined one of their goals by stating, [w]e had one
overarching goal for Greater China in FY14: reset the marketplace for growth (Nike). They

have aims in 2014 to achieve sustainable, double-digit revenue growth; however, they will not
be able to accomplish their goals with a delayed launch so close to its scheduled execution. In the
next year, Nike should keep better track of LeBron James, and its other more prominent athletes,
as their status on any team is liable to change every year. In addition, Nike needs to demonstrate
their commitment to their goals in China by rectifying 2014s mistake. Changes in the marketing
environment can make or break a company, and Nike must keep all relevant actors within their
idea of the microenvironment at all times.
Despite these challenges, the next year holds many opportunities for Nike as well. In May
2014, Marketline, an informal business, released a SWOT analysis that discussed the various
strengths and weaknesses Nikes faces in 2014. Marketline identified Nikes strengths as
dominant market position, focus on R&D activities, and multi-channel approach (Marketline).
They based their analysis on strong evidence as Nike holds more than 14% of the global sporting
goods market (Marketline). Furthermore, Marketline identified a growing global footwear
market as one of Nikes key opportunities (Marketline). Upon assessing Nikes letter to
shareholders, Nike seems to agree with their focus on China. As previously mentioned, Nike
botched the launch of their LeBron VI shoes in China; nonetheless, Nike has a chance to make
up for their mistake. By making sure to keep its next launch on schedule, Nike could regain any
lost faith from their failure. While Nike needs to expand in the next year, they must not lose track
of their customers needs and their marketing environment. In 2015, Nike should focus on the
global market and further increase its dominant market share through smart business decisions
and innovate new designs.

Objectives and Issues:

With the aspirations of making the LeBron VI shoes a successful product, Nikes
marketing objectives are to gain and maintain strong brand representation at global sporting
events, such as The Super Bowl and World Cup, build a stronger relationship with their current
customers and potential customers, as well as further developing their positive reputation.
However, there are several potential issues that could arise when attempting to accomplish the
objectives listed.
An example of one of these issues is when Nike overpriced their last line of LeBron
shoes, the LeBron Vs, which angered their potential customers and may have lost them a
substantial amount of revenue. When the LeBron V shoes were released, Nike believed they
were going to be a huge success, similar to comparable products that they had released in the
past. However, once it was known that Nike was planning on selling their LeBron V shoes at a
price of greater than three hundred dollars, consumers became shocked and outraged. With such
a substantial price tag, the LeBron V shoes had become one of the most expensive athletic shoes
on the market. In todays world, when information can be sent anywhere instantaneously at just
the touch of a button, this was bad news for the multinational corporation and its new shoe
release. In order to avoid bad press, which could hurt Nikes reputation and cause lower revenue
from their new product, Nike quickly made a counter attack, an action in response to an event
during the introductory stage in the product life cycle.
One of Nikes marketing strategies is avoiding developing any kind of bad reputation, so
Nike promptly made a counter attack. The multinational company quickly stated that the three
hundred dollar price tag for the LeBron Vs was incorrect and the real retail price for the shoes
would be half priced. Today, the current price tag for the shoes stands at one hundred and eighty
dollars. Although, Nike may have shot themselves in the foot for overpricing their LeBron V

shoes, they were quickly able to pick themselves up and keep their customers happy. However,
if Nike had been unable to resolve this issue, their reputation could have taken a hit, potentially
losing them some customers and endorsements in the process. However, thanks to their quick
thinking, Nike was able to maintain their reputation and recuperate any lost sales.
Nike has become known for their celebrity endorsements, as well as naming their shoes
after prominent athletes, such as Jordans (Michael Jordan) and Kobes (Kobe Bryant), and
because of this they have been able to advertise to a wider market. The number of sales of these
specific products, such as Nikes LeBron VI shoes, relies heavily on the reputation of the athlete.
This is why Nike maintains their best to develop and maintain relationships with major sport
stars. However, this can, at times, put them at risk. For example, if LeBron James were to do
something controversial, or negative in the eyes of the public, customers would become outraged
with his actions and would not want to be associated with the athlete, which in turn, will
negatively affect Nikes revenue from their LeBron VI shoes and, in turn, their financial
statements. Not only could the actions of the athletes potentially the number of sales, but it is
possible that Nikes reputation could also be put in jeopardy.
On the other hand, if LeBron James were to do something that the public would find
admirable, then sales could potentially increase, and the price could go up as well as price. For
example, when LeBron James was able to help lead the U.S Basketball to Gold in the London
Olympics, they used this event to advertise their product because they wanted to demonstrate to
the public that LeBron James was able to win the Gold medal because he was wearing Nike
shoes. This marketing strategy is called product placement.
As previously mentioned, one of Nikes marketing objectives is to develop and maintain
a strong connection with global sports events such as the Super Bowl, the World Cup, the NBA

Finals, and the Stanley Cup. In order to do so, Nikes reputation is an important factor when
trying to secure these sponsorships and endorsements. Sponsorships can be easily lost due to a
simple mistake, or they can be secured through hard work. By securing these sponsorships and
endorsements, Nike will be able to expand their brand even further, leading to a potential
increase in sales.
Now that we have discussed the potential problems that could arise from Nikes
marketing objectives, we will focus on increasing and maintaining sales from six months to a
year. The best way to market Nikes is by having a smaller budget for their shoe advertisements.
Nike is already one of the biggest and most well-known corporations in they world. They are
already a multinational corporate giant, meaning there is no need for an endless stream of
advertisements. Everyone is familiar with Nikes famous logo, the swoosh, and their slogan,
Just do it. This is a kind of persuasion that will be continuous and constantly remind the public
why Nike is a premium brand. Because of this, Nike is already a leader in the market. What Nike
must do now is develop advertisements for specific, big ticket products, in this case, their
LeBron VI shoes, in order to maximize sales.
Another marketing strategy that could work well for Nike is the use of ambush
marketing. Ambush marketing is when a company attempts to associate its products with an
event that is already sponsored by a rival company. Nike would be able to promote their LeBron
VI shoes while at the same time comparing its aesthetics and performance to the products
competitors, which could demonstrate to the consumer just why Nikes LeBron VI shoes are the
superior product. For example, any basketball player could wear the LeBron VI while playing
and, if he has a good game, it would prove that the shoes work well. This strategy should be

implemented during the decline stage of the product life cycle so that the public will be reminded
of the product and why it is so crucial to performance.

Action Programs:
The marketing strategy behind products and services plays a direct role in capturing the
market. The LeBron VI shoe is an extension of a product line that has already seen several other
shoes successfully implemented into the market and has the advantage of the reputation it has
already created. The development of the LeBron VI shoes will seek to increase Nikes sales. The
amount by which it will increase sales is difficult to determine, due in part to the fact that LeBron
James has switched teams from Miami to Cleveland. It is a possibility that this switch could
cause a loss in market share, however it is also possible that it could cause an increase, especially
if Cleveland were to win a championship this season. The push strategy will be employed in
marketing these sneakers to consumers across the globe. Rather than promoting the sneakers to
consumers on the market and preparing for customers to request the shoe, Nike will concentrate
on pushing the product directly to the customer. The push strategy is suited best for standard
products and services, in this in this case, it will be best suited for marketing the LeBron VI
shoes.
The marketing mix for the LeBron VI shoes refers to a controllable set of marketing tools
utilized by a company to realize the desired response from the target market. By correctly
blending the 4 Ps of the marketing mix (product, place, price, and promotion), senior
management will be able to successfully tap into their target market. The design of the shoes,
offered in multiple colors, will allow them to make the product more appealing to a much
broader range of consumers. To parallel this, Nike should make sure to provide reliable and
convenient means through which the customer can access the shoes. This will be done through

stores such as Footlocker and Dicks Sporting Goods, as well as online. Due to the premium
quality associated with the shoe, Nike will focus attention on the style and design and fully
attempt to remove any focus on price. Keeping the product lifecycle in mind, the development
stage can take Nike 3-6 months while researching, studying, and analyzing the expectations of
the potential LeBron VI customers. The target market for the LeBron VI is a wide international
market. Much of the advertising that will be done will be largely facilitated by the NBA and the
overseas presence they hold. Despite an absence of teams and games played overseas, the NBA
maintains significant influence and sales in international markets. Because the shoe is created for
a specific player, LeBron James, this will also have a large impact on that market.
It is crucial for Nike to fully evaluate the success of their marketing plan. It is absolutely
critical for senior management to set standards to be met. For example, a 2% increase in gross
profit in the first year. This will allow for the marketing plans success to be evaluated against its
expectations. Finally, it is very important that Nike is prepared for their marketing plan to yield
unfavorable results. Despite the fact that this outcome is unlikely, due to the massive influence
Nike has on the athletic fashion market, it will allow management to be able to minimize the
impact of any unforeseen circumstances there is already a plan in place. If there is some kind of
failure due to the marketing plan, management must have an alternative plan in place that will
still allow for Nike to maximize sales and diversify their markets.

Budget Analysis:
In regards to the market budgeting analysis, there was very little information to be found.
However, there were some key figures available. The LeBron VI shoes will be priced between
$160 and $300, depending on certain aspects, such as design, color, whether it is limited edition,

etc. The LeBron VI shoes are projected to increase shoe sales by 25 % in the upcoming fiscal
year. This is the highest market price any shoes from the LeBron line have ever had. If Nike had
elected to choose a price based on a cost-plus pricing model, the estimated shoe cost of the shoe
would be around $75. Unfortunately for consumers, Nike has elected choose a priced based off
the value-based model instead. In Nikes statement in regards to this issue, they expressed that
they are pricing the shoe at such a high cost in order to maximizing shareholder value. Nike
did not really discuss any concerns in its budget analysis except for the Jordan shoe brand.
Jordans shoe brand accounts for 58% of the basketball shoe market share, a number they would
like to maintain, but are fearful could decline, due to the fact that they have no plans to release
any new premium Jordan shoes comparable to the LeBron line in the upcoming fiscal year. The
most recent shoe from the LeBron product line, the LeBron 5s, were able to bring in roughly
$300 million in revenue. The revenues for the LeBron 6s are expected to bring in an estimated
$375 million. Because of this the market share is expected to shift more towards the LeBron line.
Another factor in this is LeBron Jamess increased popularity since returning to Cleveland to
play for the Cavaliers. Truly, the future has a lot of bright prospects in store for Nike and its
extending brands and product lines.

Works Cited
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Mar. 2014.
NIKE. "NIKE FY2014 Annual Report." NIKE FY2014 Annual Report. N.p., 25 July 2014. Web.
8 Mar. 2014.
Price, Greg. "LeBron James Shoes: Price, Release Date And Market Impact After Move From
Miami To Cleveland." International Business Times. N.p., n.d. Web. 8 Mar. 2014.
Rovell, Darren. "Launch of LeBron VI Is delayed." ESPN. ESPN Internet Ventures, 02 Oct.
2014. Web. 9 Mar. 2014.
Watkins, Lawrence. An Analytical Look at Nikes Pricing of the LeBron VI Shoe Part 1.
NIKE, Inc. Lawrence Watkins. 25 July 2014. Web. 11 Mar. 2014.