Nikes Plan for China Essay -- Nike Sales Retail Business Marketing Es

Nike's Plan for China Nike is already a global power house, however the potential to increase sales in China was the topic of the most recent annual investor meeting. One may question Nike’s preoccupation with China. After all, Nike China is dominant. They are currently the number one brand with the number one market share while competitors Reebok and Adidas are in 4th and 5th places respectively. They have tripled revenue in the last two years. With 2000 points of sale, 400 stores in the top three cities (Beijing, Shanghai, Guangzhou) and 50 cities with 3 or more stores, Nike is primed to begin pushing into the second tier cities. Let’s examine â€Å"why China? â€Å" Socially, China presents a portrait of change. The attitudes and preferences of today's generation of "twenty-something" consumers diverges markedly from those of their parents' generation. In fact, in the economically churning coastal cities, this gap is as wide as ever and growing, leading to comparisons between China toda y and the 1960s in Europe and the United States. Nike sees a large and growing market for its products in China. China has: †¢ 20% of the world’s population. †¢ 50 million middle class households. †¢ 430 million youth under the age of 20 (5X the number of youth in the US). †¢ 50 million middle class households –- which will grow to 150 million in next 10 years. †¢ 65% of its youth involved in sports. †¢ A consumer market that embraces brands -- particularly Western brands. †¢ 300 million people expected to move from rural areas to the cities in the next 10 years. With this information in mind, Nike has created a strategic marketing plan to strengthen their position in the China market. The Global supply chain is in place, now they just need a strategy. But, before Nike can execute their well laid plans, they must first do a little damage control. In 2004, Nike advertisements featuring basketball star LeBron James slaying a Chinese dragon and a kung fu master were banned in China and met with a flurry of criticism. The TV commercial offended government regulators because it showed an American sports icon defeating the dragon, a symbol of Chinese culture, and the martial arts master, a symbol of national pride. Nike clearly disrespected the Chinese culture, and was forced to pull the ads and apologize. Nike spokeswoman Shelley Peng said th... ...arket. However, Nike's estimates suggest it will maintain its lead in China after the merger. Nike said it has 30 percent of the Chinese athletic market, trailed by Adidas's 19 percent. The inclusion of Reebok will catapult Adidas's share to 27 percent. How is Nike’s strategy working? A survey asked Chinese which brands were the coolest. The results came in: Nike 52%; Adidas 38%; Reebok 15%; Li-Ning 13%; and New Balance 10%. Bibliography Nike China (NKE) growing fast (4Q05 conf call) The China Stock Blog Brands in Transition: Making it Work in China 2005/04/12 by Christopher Millward, Beijing This Month Nike China (NKE) growing fast (4Q05 conf call) The China Stock Blog 2005 Business Report & Independent Online, www.busrep.co.za/index.php?fArticleId=2337753 2005 Business Report & Independent Online, www.busrep.co.za/index.php?fArticleId=2337753 Nike China (NKE) growing fast (4Q05 conf call) The China Stock Blog CSRwire, http://www.csrwire.com/article.cgi/2411.html Beijing This Month, featured in Business Beijing, July 2005 China Daily Online. Adidas, Reebok vie against Nike for China market(Bloomberg) 2005-08-09 10:31 JUNE 29, 2005 -- Nike Investor Day Recap