Nike is the world's largest sports and fitness company, earning $US14 billion in revenue. The company, with one of the world's most identifiable logos - the 'swoosh', is a leader in sports equipment research and development (R&D). Nike's mission statement is intentionally broad and outward looking, focussing on the needs of athletes, and, through its corporate responsibility work, consideration is given to the needs of communities around the world. How does Nike develop its products and decide what does and doesn't make the cut when it comes to innovation? Nike identified a gap in the sports shoe market. Nike's focus is to continually seek to innovate, design and develop products to improve athletic performance. Its overriding desire is to design products with true performance innovation and technology benefits which help the athlete perform better. With its latest innovation, Nike scientists and designers have developed Nike Free, a sports shoe described as a foot-strengthening training tool. Tagged 'natural technology', Nike Free has been designed to copy barefoot running. By running barefoot, the foot is strengthened, gaining greater flexibility and range of motion which leads to better performance because you are less prone to injuries. Nike sells a variety of products to include: Jordan, running, basketball, tennis, training shoes, clothing line: shorts, hoodies and pullovers, socks, T-Shirts, sweatpants, sports bras, pants and leggings etc. Nike’s pricing strategy is distinctive in contrast with other brands. It merely hinges on recognition which is attributed to the apparent quality of the product. Based on this quality and the attitude of the customers, Nike assesses the pricing strategy it wants to implement. Questions A. Explain which pricing strategy would be suitable for Nike to use when selling its Nike Free shoes?
Nike is the world's largest sports and fitness company, earning $US14 billion in revenue. The
company, with one of the world's most identifiable logos - the 'swoosh', is a leader in sports
equipment research and development (R&D). Nike's mission statement is intentionally broad and
outward looking, focussing on the needs of athletes, and, through its corporate responsibility
work, consideration is given to the needs of communities around the world. How does Nike
develop its products and decide what does and doesn't make the cut when it comes to
innovation? Nike identified a gap in the sports shoe market. Nike's focus is to continually seek
to innovate, design and develop products to improve athletic performance. Its overriding desire is
to design products with true performance innovation and technology benefits which help the
athlete perform better. With its latest innovation, Nike scientists and designers have developed
Nike Free, a sports shoe described as a foot-strengthening training tool. Tagged 'natural
technology', Nike Free has been designed to copy barefoot running. By running barefoot, the foot
is strengthened, gaining greater flexibility and range of motion which leads to better performance
because you are less prone to injuries.
Nike sells a variety of products to include: Jordan, running, basketball, tennis, training shoes,
clothing line: shorts, hoodies and pullovers, socks, T-Shirts, sweatpants, sports bras, pants and
leggings etc. Nike’s pricing strategy is distinctive in contrast with other brands. It merely hinges
on recognition which is attributed to the apparent quality of the product. Based on this quality
and the attitude of the customers, Nike assesses the pricing strategy it wants to implement.
Questions
A. Explain which pricing strategy would be suitable for Nike to use when selling its Nike Free
shoes?
B. Give TWO (2) reasons why the pricing strategy chosen in part A would be the suitable,
highlighting TWO (2) evidence from the case study to substantiate your responses.
C. Explain the product development and test marketing stages of the new product development
process that Nike had to go through in order to make Nike Free Shoes.
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