Commerce project

By: Tanishq khandelwal

Class: XII-F
Roll number :21

Company 1: NIKE
Nike, Inc. is an American multinational corporation that is
engaged in the design, development, manufacturing, and
worldwide marketing and sales of footwear, apparel,
equipment, accessories, and services. The company is
headquartered near Beaverton, Oregon, in the Portland
metropolitan area. It is the world's largest supplier
of athletic shoes and apparel and a major manufacturer
of sports equipment, with revenue in excess of
US$24.1 billion in its fiscal year 2012 (ending May 31,
2012). As of 2012, it employed more than 44,000 people
worldwide. In 2014 the brand alone was valued at $19
billion, making it the most valuable brand among sports
businesses. As of 2017, the Nike brand is valued at $29.6
billion. Nike ranked No. 89 in the 2018 Fortune 500 list of
the largest United States corporations by total revenue.
The company was founded on January 25, 1964, as Blue
Ribbon Sports, by Bill Bowerman and Phil Knight, and
officially became Nike, Inc. on May 30, 1971. The
company takes its name from Nike, the Greek goddess of
victory.Nike markets its products under its own brand, as
well as Nike Golf, Nike Pro, Nike+, Air Jordan, Nike
Blazers, Air Force 1, Nike Dunk, Air Max,
Foamposite, Nike Skateboarding, Nike CR7,[9] and
subsidiaries including Brand Jordan, Hurley
International and Converse. Nike also owned Bauer
Hockey (later renamed Nike Bauer) from 1995 to 2008,
and previously owned Cole Haan and Umbro.[10] In
addition to manufacturing sportswear and equipment, the
company operates retail stores under the Niketown name.
Nike sponsors many high-profile athletes and sports
teams around the world, with the highly recognized
trademarks of "Just Do It" and the Swoosh logo.

The Nike brand, with its distinct V-shaped logo, quickly

became regarded as a status symbol in modern urban
fashion and hip-hop fashion] due to its association with
success in sport. Beginning in the 1980s, various items of
Nike clothing became staples of mainstream
American youth fashion, especially tracksuits, shell
suits, baseball caps, Air Jordans, Air Force 1's, and Air
Max running shoes with thick, air cushioned rubber soles
and contrasting blue, yellow, green, white, or red
trim. Limited edition sneakers and prototypes with a
regional early release were known as Quickstrikes, and
became highly desirable items for teenage members of
the sneakerhead subculture.
CAPITAL STRUCTURE OF NIKE:
Nike's capital structure has high equity capital relative to debt, with
a debt-to-total-capital ratio of 0.14, though this figure rose slightly
over the 12 months ended February 2016, following a $1 billion
bond issuance. The company's enterprise value grew rapidly over
the three years leading up to April 2016, driven almost entirely by
the appreciating market value of its equity.

rEquity Capital
Equity capital is a measurement of capital contributed by
equity holders and retained earnings, so the value can
include common stock at par value, preferred stock and
minority interest. As of February 2016, Nike had total
shareholder capital of $12.3 billion, comprised of $7.5
billion of additional paid-in capital, $4.1 billion of retained
earnings and $645 million of accumulated comprehensive
income.
Debt Capital
Debt capital typically includes all short- and long-term
debt, such as bonds, term loans and unsecured notes,
though a wider set of liabilities is occasionally used by
some investors. Debt financing is generally senior to
equity financing in the event of liquidation, though it is
often acquired at a lower cost by firms with sufficient
creditworthiness. As of February 2016, Nike's total debt
was $2 billion, consisting of only $7 million in short-term
debt, $66 million of term loans, and $1.99 billion of bonds
and notes. The long-term debt had interest rates ranging
from 2% to 6.79%, with maturity dates ranging from 2017
to 2045. Nike's total debt was $1.3 billion at the end of
fiscal 2015 and $1.4 billion at the close of fiscal 2014. The
company's rising debt load was driven primarily by a $1
billion bond issuance that took place in October 2015.

NIKE INC’s MARKETING MIX:

Nike Inc.’s marketing mix (4Ps) determines the profitability
and growth of the athletic footwear, apparel, and
equipment business. A company’s marketing mix refers to
the strategies and tactics applied to execute the marketing
plan, with focus on products, place, promotion, and price
(the 4Ps)
Nike’s Products (Product Mix)
This element of the marketing mix enumerates the
organizational outputs offered to target consumers. These
outputs are known as the product mix. Nike Inc.’s growth
comes with changes in its product mix. For example, the
business continues its investment in research and
development to produce new products and enhanced
versions of its current products. Originally a distributor of
shoes, the company now manufactures various shoes,
apparel, and equipment for different sports. Based on Nike
Inc.’s generic strategy and intensive growth strategies, the
business integrates new technologies into its product lines
to improve product effectiveness and customer
satisfaction. The following broad categories represent
Nike’s product mix:
1. Shoes
2. Apparel
3. Equipment and accessories
Shoes are the most popular products from Nike Inc. The
business gradually adds more product lines in this
category. For example, the company now offers running
shoes, tennis shoes, and shoes for a variety of other
sports, including cricket. Nike also sells apparel, such as
jerseys, shorts, and related products. In addition, the
company’s product lines include accessories and
equipment, such as golf clubs. These products are
available under a number of the company’s brands,
including Air Jordan, Hurley, and Converse. Based on this
element of the marketing mix, Nike expands its product
mix to address the needs of its target markets and market
segments.
Place/Distribution in Nike’s Marketing Mix
This element of the marketing mix outlines the venues
where the company’s products are sold, accessed or
distributed. Nike Inc. sells its sports shoes, apparel, and
equipment through a large number of outlets worldwide.
For example, these products are available at major retail
stores. The following places/venues form Nike’s
distribution strategy, arranged according to significance:

1. Retail stores
2. Nike Online Store
3. Niketown retail outlets (company-owned)
Retail stores are the most significant places where Nike
products are sold because these venues are strategically
located and easily accessible in various markets around
the world., as well as small local and regional stores. This
4P element also shows that customers can purchase
Nike’s sports shoes, apparel, and equipment through the
company’s online store. In addition, the business operates
its Niketown retail outlets. These outlets are company-
owned and allow access to business and market
information that supports corporate strategic management
with regard to marketing strategies and tactics for current,
new, and emerging products. Based on this element of the
marketing mix, Nike Inc. controls the distribution and sale
of its products, especially through its online store and
Niketown retail outlets. However, the company has limited
control on the distribution and sale of its products via other
retail outlets.

Nike Inc.’s Promotion (Promotional Mix)

This element of the marketing mix is also known as the
marketing communications mix, and involves the tactics
that Nike uses to communicate with its target markets. The
company depends on the effective promotion of its
products to maintain a strong brand image, which is one of
the strengths determined in the SWOT analysis of Nike
Inc. The company uses promotional tactics to
communicate with target customers about its products,
and persuade these consumers to purchase the products.
The following are Nike’s promotional activities, arranged
according to significance:
1. Advertising
2. Personal selling
3. Direct marketing
4. Sales promotions
5. Public relations
Advertising is one of the biggest contributors to Nike’s
ability to attract customers. The company heavily relies on
advertisements, especially those that involve high-profile
celebrity endorsers, such as professional athletes and
sports teams. This element of the company’s marketing
mix also includes personal selling through sales personnel
who persuade target consumers to buy the company’s
products. For example, sales personnel at Niketown retail
outlets are trained to use such persuasion. The company’s
direct marketing activities involve direct communications
with colleges, local sports teams, and other organizations.
In the context of the 4Ps, direct marketing refers to direct
contact with organizations for the purpose of promoting
products to the members of such organizations. In
addition, Nike occasionally applies discounts and special
offers to attract more customers and generate more sales.
These discounts and offers form the company’s sales
promotions tactics. Moreover, in public relations, the
company sponsors and provides financial support to other
organizations, such as community-based networks, to
promote its athletic shoes, apparel, and equipment. Based
on the tactics included in this element of Nike’s marketing
mix, the business depends on its relations with high-profile
endorsers to succeed in promoting its business and
products to the international sporting goods market.
 Nike’s Prices and Pricing Strategies
This element of the marketing mix identifies the prices that
the company applies to maximize profits while attracting
the desired share of the multinational market. Nike’s
investments in technology is linked with a strategy to offer
its products at a premium. Still, the company considers
current market conditions in setting its price points and
price ranges. Based on these considerations for this 4P
variable, the following pricing strategies are applied in
Nike Inc.’s business:

1. Value-based pricing strategy

2. Premium pricing strategy
In using the value-based pricing strategy, Nike Inc.
considers consumer perception about the value of its
products. In the context of the marketing mix, this value is
used to determine the maximum prices that consumers
are willing to pay for the company’s sports shoes, apparel,
and equipment. In relation, the premium pricing strategy
involves high prices, based on a premium branding
strategy that establishes Nike products as higher in quality
and value than competing products. The company’s use of
advertisements involving high-profile celebrity endorsers is
indicative of such emphasis on premium branding. In
2014, the business successfully increased its selling
prices and generated higher sales and revenues. This
trend continues, as the company enjoys increasing sales
revenues while gradually increasing its prices. Based on
the PESTEL/PESTLE analysis of Nike Inc., such trend is
linked to the sociocultural and economic changes in the
industry environment. The business adjusts its price
ranges according to such changes. In this element of the
marketing mix, Nike Inc. successfully uses its pricing
strategies to maximize its profits while emphasizing high
value in promoting its products and brand.

Comparison between product line

of Nike & Adidas
PRODUCT LINE OF NIKE:

Nike produces a wide range of sports equipment. Their

first products were track running shoes. They currently
also make shoes, jerseys, shorts, cleats,[45] baselayers,
etc. for a wide range of sports, including track and field,
baseball, ice hockey, tennis, association football
(soccer), lacrosse, basketball, and cricket. Nike Air Max is
a line of shoes first released by Nike, Inc. in 1987.
Additional product lines were introduced later, such as Air
Huarache, which debuted in 1992. The most recent
additions to their line are the Nike 6.0, Nike NYX, and Nike
SB shoes, designed for skateboarding. Nike has recently
introduced cricket shoes called Air Zoom Yorker, designed
to be 30% lighter than their competitors'. In 2008, Nike
introduced the Air Jordan XX3, a high-performance
basketball shoe designed with the environment in mind.
Nike sells an assortment of products, including shoes and
apparel for sports activities like association
football, basketball, running, combat sports,
tennis, American football, athletics, golf, and cross
training for men, women, and children. Nike also sells
shoes for outdoor activities such as tennis,
golf, skateboarding, association football,
baseball, American football, cycling,
volleyball, wrestling, cheerleading, aquatic activities, auto
racing, and other athletic and recreational uses. Nike
recently teamed up with Apple Inc. to produce
the Nike+ product that monitors a runner's performance
via a radio device in the shoe that links to the iPod nano.
While the product generates useful statistics, it has been
criticized by researchers who were able to identify
users' RFID devices from 60 feet (18 m) away using small,
concealable intelligence motes in a wireless sensor
network. In 2004, Nike launched the SPARQ Training
Program/Division. Some of Nike's newest shoes
contain Flywire and Lunarlite Foam to reduce weight. The
Air Zoom Vomero running shoe, introduced in 2006 and
currently in its 11th generation, featured a combination of
groundbreaking innovations including a full-length air
cushioned sole, an external heel counter, a crashpad in
the heel for shock absorption, and Fit Frame technology
for a stable fit.

PRODUCT LINE OF ADIDAS:

One of the main focuses of Adidas has always
been football kits, and the associated equipment. Adidas
remains a major company in the global supply of team kits
for international association football teams and clubs.
Adidas makes referee kits that are used in international
competition and by many countries and leagues in the
world. Adidas has also provided baseball equipment and
sponsors numerous players of Major League
Baseball and Nippon Professional Baseball in Japan.
Adidas Baseball hardgoods are licensed to Dick's Sporting
Goods. From 1997 to 2008, Adidas sponsored New York
Yankees. Adidas' Superstar and Pro Model shoes,
affectionately known as "shelltoes" for their stylized hard
rubber toe box, were fueled by, among others, coaches
such as UCLA's John Wooden. Adidas drew about even
with Converse in basketball by the mid 1970s before both
started to fall behind then-upstart Nike in the early
1980s.[45] Subsequently, Adidas Superstar became very
popular in the 1980s hip hop street wear scene alongside
Adidas's stripe-sided polyester suits, From 2006 to 2017,
Adidas was the outfitter of all 30 franchises in the National
Basketball Association, replacing the Reebok brand after
Adidas' acquisition of Reebok. Adidas was replaced by
Nike as the official outfitter of the league after the 2016–17
season.

BRAND LOGOS:
NIKE
Meaning: Nike. In Greek mythology, Nike is the Winged
Goddess of Victory. The logo is derived from goddess'
wing,'swoosh', which symbolises the sound of speed,
movement, power and motivation.
Tagline: JUST DO IT.

The slogan was coined in 1988 at an advertising agency

meeting. The founder of Wieden+Kennedy agency, Dan Wieden
credits the inspiration for his "Just Do It" Nike slogan to Gary
Gilmore's last words: "Let's do it."

THE NIKE LOGO:

ADIDAS:

Meaning: Adolf 'Adi' + Dassler 'das' = Adidas. Very soon it

become three stripes become trademark for theAdidas,
The three stripes come from their 3 striped shoe design,
but also form the shape of a mountain, which represents
the challenges athletes face. The creation of
the Adidas Equipment logo

Tagline: Adidas, a company that started off with a core

vision to support athletes, has always been true to its
positioning that is highlighted by the old Adidas slogan,
“Impossible is Nothing.” Adidas changed theirslogan to
“Adidas is All In” in 2013.

The adidas logo:

PACKAGING OF PRODUCTS:

NIKE:

The most iconic and modern Nike package is made from recycled
and recyclable cardboard materials, offer clean, symmetric lines,
and are well-known to display the conspicuous tick on a plain
orange background.

When applied alongside a particular marketing strategy, variating

packaging designs still adopt a similar character as the well-
known orange box and the clean, recyclable orange paper bags.
Consider the black box packaging below.

There is very little reason to suspect that the black packaging is

anything other than a Nike product because of particular elements
that are routinely utilised throughout all Nike packages. It’s no
surprise than that Nike is one of the most highly-regarded and
instantly recognisable brands on the planet.

ADIDAS:

The adidas Group aims to find materials that reduce

wastage or that have a lower impact during its life. The
adidas Group only tries to avoid raw materials from
endangered species, while they should actually not use
them at all! However, they have still eliminated PVC
usage, and try to include more recycled goods in their
products. They use recycled materials such as textiles,
metals, plastics, packaging and rubber to reduce their
environmental impacts. By using recycled polyester, they
realised that they saved 40-85% of non-renewable energy.
Organic cotton, grown without synthetic pesticides and
fertilisers, and seeds that are not genetically modified,
improve the quality of the product. adidas does not tan
leather as it has a terrible toll on the environment, and as
they support Greenpeace in end the illegal deforestation in
the Amazon forest, they ensure that the leather they use is
not by cattle that are from deforested farms.

PRICE COMPARISONS

NIKE:

Average shoe cost: $50

Average t-shirt/shorts cost:$40

Average hoodie cost:$75

Average backpack cost: $65

ADIDAS:

Average shoe cost: $55

Average t-shirt/shorts cost:$45

Average hoodie cost:$65

Average backpack cost: $50