1. Dec 6, 2011 Board Presentation: Marketing Plan

2. Agenda:
i. Executive Summary………………..(p.3)
ii. Situation Analysis…………………..(p.8)
iii. Product Overview…………………..(p.11)
iv. Competition…………………………(p.19)
v. Market Analysis………………….....(p.23)
vi. Product Branding………………......(p.29)
vii. Financial Analysis……………….....(p.41)
viii. Marketing Strategy…………………(p.46)
ix. Q & A …………………...…………...(p.70)
NikeFree Run 2+ 2

3. 3NikeFree Run 2+

4. Mission:
Principal business is the “design, development and
worldwide marketing and selling of high quality
footwear, apparel, equipment, and accessory products.”
Company goal is to “deliver value to our shareholders by
building a profitable global portfolio of branded
footwear, apparel, equipment and accessories businesses.”
Corporate strategy is to “achieve long-term revenue growth
by creating innovative, "must have" products, building deep
personal consumer connections with our brands, and
delivering compelling retail presentation and experiences.”
NikeFree Run 2+ 42011 10-K filing

5. Place:
North American Market
36% of Revenues in 2011, 35% (2010)
 363 Stores
 20,000 Retail accounts
International Market
64% of Revenues in 2011, 65% (2010)
 393 Stores
 20,000+ Retail accounts
NikeFree Run 2+ 52011 10-K filing

6. Customers:
Products are marketed through 2 channels:
 Direct to Customer (B-to-C)
 700+ NIKE owned retail stores including NIKETOWNs & NIKE
Factory Outlets
 Internet sales at www.nike.com
 Wholesale Distribution (B-to-B)
 Independent distributors & licensees in over 170 countries
worldwide
 Partnered Experiences with major athletic retailers (shops within
shops):
• Dick’s Sporting Goods “Fieldhouse”
• Foot Locker “House of Hoops”
• Finish Line “NIKE Running Lab”
NikeFree Run 2+ 62011 10-K filing

7. Product Revenue:
NikeFree Run 2+ 7
(in millions of USD) FYE 2011 ∆ % FYE 2010 ∆ % FYE 2009
Overall Contribution
Footwear 11,493 11 % 10,332 0 % 10,307
Apparel 5,475 9 % 5,037 -4 % 5,245
Equipment 1,013 -2 % 1,035 -7 % 1,110
Other 2,881 10 % 2,610 4 % 2,514
Total Revenues 20,862 10 % 19,004 -1 % 19,176
(in millions of USD) FYE 2011 ∆ % FYE 2010 ∆ % FYE 2009
Footwear
North America 5,109 11 % 4,610 -2 % 4,694
Western Europe 2,327 0 % 2,320 -3 % 2,385
Central & Eastern Europe 600 8 % 558 -17 % 673
Greater China 1,164 22 % 953 1 % 940
Japan 396 -9 % 433 1 % 430
Emerging Markets 1,897 30 % 1,458 23 % 1,185
Overall Contribution 11,493 11 % 10,332 0 % 10,307
55 % 54 % 54 %
2011 10-K filing

8. 8NikeFree Run 2+

9. Benefits:
 Strengthens the muscles, tendons
and ligaments of the foot
 Endorses a natural running posture
that is less susceptible to injury
Claims:
 Shoes provide support, which
doesn’t allow the foot to strengthen
and support it self
 Shoes reduce proprioception, the
body awareness of itself to its
environment
 Shoes add mass to the foot, slowing
down the runner
Starting out:
 People are encourage to start by
walking barefoot, increasing their
time gradually so that the sole has
time to become conditioned.
Barefoot Running:
NikeFree Run 2+ 9http://design.spotcoolstuff.com/barefoot-running-shoes/newton-vibram-five-fingers

10. Minimalist Footwear:
NikeFree Run 2+ 10
Lightweight Footwear – shoes that weigh 9oz or less in men’s shoe
size 9
 Accounted for 28% of the running category during 2Q 2011
Minimalist Footwear – subset of lightweight, designed to emulate the
barefoot running style while protecting your feet from the hazards of
hitting bare ground
 Accounted for 5% of running category for same period
According to market analysis firm SportOneSource, Lightweight products
are on track to hit $1.8 Billion in sales in 2011.
"It's such an important new idea in footwear that in a couple of years, we
probably won't be talking about lightweight anymore, because everything
will be lightweight…But right now, everyone is playing the hot hand, so
they'll be putting their marketing dollars behind it." - Matt Powell, analyst
with SportOneSource`

11. 11NikeFree Run 2+

12. Product Highlights:
NikeFree Run 2+ 12

13. Product Highlights:
NikeFree Run 2+ 13

14. Product Highlights:
NikeFree Run 2+ 14

15. Product Highlights:
NikeFree Run 2+ 15

16. Product Highlights:
NikeFree Run 2+ 16
Nike+ sensor: $19
Nike+ iPod kit: $29
Nike+ SportBand: $59

17. NikeFree Run 2+
NikeFree Run 2+ 17
Since 2005, the line has undergone numerous revisions to improve
performance, comfort and durability
Nike Free offers two levels of barefoot feel with 3.0 and 5.0 soles, allows users to
enter the market and train at their own pace/comfort.
 All models are lace-up style
 Extremely breathable
 Provide cushioning without sacrificing barefoot feel
 Nike + and Nike ID available options
5.03.0

18. Customerization:
Customerization with Nike ID
Free to chose
Cushioning: with 5.0 and 3.0 sole for
reduced weight and enhanced flex.
Width: standard or wide.
Materials: matte, reflective synthetic,
or water resistant treated.
Colors: choose the base mesh, accent
webbing, lining, laces, mid sole rim,
sole.
ID or Logo on tongue top.
NikeFree Run 2+ 18

19. 19NikeFree Run 2+

20. Adidas Climacool Sketchers Gorun Vivobarefoot Evo Saucony Kinvara Saucony Hattori
$90 $80 $120-160 $90 $79-89
NikeFree Run 2 + Vibram FiveFingers New Balance Minimus Merrell “glove” Reebok RealFlex
$90 Base
$95 w/ Shield
$115 w/ Nike ID
$90-125 $99 $110 $90
Competition:
NikeFree Run 2+ 20

21. Points of Parity:
 Promote barefoot feel and movement
 Lightweight minimalist construction
 Breathable upper
 Flexible sole
NikeFree Run 2+ 21
NikeFree
Run 2 +
Vibram
FiveFingers
New Balance
Minimus
Merrell “glove” Reebok RealFlex

22. Points of Differentiation:
NikeFree Run 2+ 22
NikeFree Run 2 + Vibram FiveFingers New Balance
Minimus
Merrell “glove” Reebok RealFlex
Std Price $90 Std Price $90 $99 $110 Std Price $90
Sole choices 3.0, 5.0 Vibram Sole Vibram Sole Vibram Sole
Lace up style
Std
Lace up style
Std
Lace up style
Std
Lace up style
Std
Glove-like fit Glove-like fit Glove-like fit Glove-like fit
Supportive Cushioning
with barefoot feel
Minimal “drop” Minimal “drop” Minimal “drop” Supportive Cushioning
Available at major
retailers
Specialty Stores Available at major
retailers
Specialty Stores Available at major
retailers
Nike ID Customization
Nike +

23. 23NikeFree Run 2+

24. Customer Expectations:
The Nike brand of athletic shoes is the most popular among the
younger sets, with popularity diminishing with age; over-65’s are
least likely to purchase this brand. Nike…has built a reputation on
pushing the limits of athleticism, and…they (consumers) will buy
these shoes because of that very perception of athleticism that is
bestowed upon them via purchase.
NikeFree Run 2+ 24
Source: Mintel/Experian Simmons NCS/NHCS: Winter 2010 Adult
Full Year - POP
Brand of Athletic shoes in last 12 months, Feb 2009-Mar 2010
Base: 13,740 adults who bought athletic shoes in last 12 months

25. Positioning the Customer:
NikeFree Run 2+ 25
Sneakers Purchased in last 12 months
$75K-$99.9K - 59%
$100K+ - 63%
0
0.1
0.2
0.3
0.4
Other
Hiking
Aerobic
Tennis
Basketball
Cross-Training
Exercise/Walking
Jogging/Running
Casual
14%
4%
5%
6%
9%
16%
26%
30%
34%
$100K+ households
Mintel/Experian Simmons NCS/NHCS: Winter 2010 Adult
Full Year - POP

26. Target Market:
NikeFree Run 2+ 26
Potential Market - All sneaker buyers who have a favorable opinion of the
Nike brand
Available Market - All types of runners and casual/style sneaker wearers
who already own, or would, own Nike shoes
http://www.prweb.com/releases/running_shoes/market_research/prweb39
56384.htm
Weekend Warrior
20 - 25 miles per week
25 - 35 years old
male and female
This person is looking for
quality and an affordable
price.
Running for Attention
6 -10 miles per week
30 - 55 years old
male and female
This person wants to look
like a runner regardless of
ability.
True Runner
20 - 40 miles per week
25 - 45 years old
male and female
This person wants the
latest in
technology, regardless of
price.

27. Unique Selling Proposition:
NikeFree Run 2+ 27
The NikeFree Run 2+
Is The Ultimate Running Trainer
Strengthens Feet
That Reduces Injury
Enhances Performance
For The “Competitive” Runner

28. Strengths:
NikeFree Run 2+ 28
Pioneer in the Barefoot Market
Strong Brand Portfolio
Celebrity Athlete Endorsements
Research & Development
Wide Supplier Base
http://galenet.galegroup.com.ezproxy.lib.uconn.edu/servlet/BCRC?vrsn=unknown&l
ocID=22516&srchtp=glbc&cc=1&c=1&mode=c&ste=60&tab=1&tbst=tsCM&ccmp=Ni
ke+Inc.&mst=nike+&n=25&docNum=DC306325&bConts=8993

29. 29NikeFree Run 2+

30. SWOT Analysis:
NikeFree Run 2+ 30
Strengths
•Capacity of Innovation, Brand
recognition
•Light weight & Durable
•Strong CRM, Celebrity
spokespersons
•Marketing campaigns
Weakness
•Adoption Time
•Not for watering activities
•Lack of Search Engine
Techniques
Opportunities
•Innovation
•Expansion into emerging
markets
•Internet sales - Growing e-
commerce’s positive
•Sports Events
Threats
•Competitors
•Company’s business model
•The impact of foreign currency
fluctuation
•Labor and political unrest

31. Five Force Analysis:
NikeFree Run 2+ 31
Threat of entry
(Low/Medium)
Supplier Power
(Low)
Threat Of Substitute
(Low/Medium)
Buyer Power
(Low)
Rivalry
(High)
Source: Group Estimate

32. 5 Product Levels:
NikeFree Run 2+ 32
Fun Running
Experience –
Track your success
Flexibility in Options
and Appearance
Quality, Durable Shoe
Comparably Priced
Stronger Foot &
Leg Muscles to
reduce Injury
Barefoot Running
Experience

33. Value Proposition:
NikeFree Run 2+ 33
Durable
Responsive
Cushioning
Flexibility
Customizable
Nike+
Vibram FiveFingers
New
Balance
Minimus
Reebok
RealFlex
Saucony Kinvara
Adidas
Climacool
Vivobarefoot
Evo
Merrell
“glove”Saucony
Hattori
Nike Free
Run 2+

34. Distribution Channels:
NikeFree Run 2+ 34
http://www1.american.edu/carmel/ms1137a/industry.html
Class Derived this data from 2.8% of Nike share

35. Pricing Calculator:
NikeFree Run 2+ 35
Availability
Of
Substitutes
Characteristic
Relative to
Competitors
Brand
Positioning
Income/
Target
Markets
Price/
Strength Of
Demand For
Related
Products
Market
Environment
Competition
Source: The art of Pricing - Rafi Mohammed

36. Brand Messaging:
NikeFree Run 2+ 36
Sincerity
•Down – to earth
•Honest
•Wholesome
•Cheerful
Excitement
•Daring
•Spirited
•Imaginative
•Up-to-date
Competence
•Reliable
•Intelligent
•Successful
Sophistication Charming
Ruggedness
•Outdoorsy
•Tough
Jennifer Aaker – Dimensions of Brand Personality
http://www.youtube.com/watch?v=hbV6qsWEESw
Video - Our Brand

37. Customer Based Branding:
NikeFree Run 2+ 37
High Quality Shoe
High Technical Performance Symbol of Status
Innovation Achievement
Activities
To bring inspiration and innovation to
every athlete* in the world
*"If you have a body, you are an
athlete." - Bill Bowerman

38. Growth Rate:
NikeFree Run 2+ 38
Nike Free Market Share
Revenue
in
Billions
Nike Revenue Growth
Source: Google Insight & Factivia Data

39. Sustainability Framework:
Strategies
 Economies of scale
 NIKE Sports research Lab
 Better Financial Controls
 Customer Engagement – Design new products
NikeFree Run 2+ 39
Comparative
Advantage
Valuable Rare Non-
Imitable
Non-
Substitutable
Assessment
Brand
Recognition
Y Y N Y Sustainable
Cost Efficiency Y N/A N N Temporary
Inventory
Management
Y N/A N Y Sustainable
Product Quality Y Y Y Y Sustainable
Effective – In
Store operation
Y N N N Temporary
Contemporary Strategy Analysis - Grant R.M
Values are Group Estimates

40. Product Lifecycle:
NikeFree Run 2+ 40
Video – NIKE FREE
http://www.youtube.com/watch?v=jO2oBiZ6k2k&feature=related

41. 41NikeFree Run 2+

42. Nike Running Growth:
Running accounted for 24% of Footwear sales in Fiscal 2011
 30 % Growth in 2011
 “Running is one of our most important innovation engines. Lunar
technology, Dynamic Support, the Tempo Short and NIKE FREE all came out
of the Running category.” – Charlie Denson, President
“Fueling the growth of our NIKE Brand footwear business was the
increased demand in our performance products, including the NIKE
Lunar and Free technologies which are used across multiple categories.”
 “The increase in unit sales was primarily driven by double-digit percentage
growth in Running, Men’s Training, Action Sports and Women’s Training
products.”
NikeFree Run 2+ 422011 10-K filing, Earnings Release FY2012 Q1

43. Footwear Market: US
NikeFree Run 2+ 43Mintel
Forecast for U.S. Footwear Sales 2011-2015

44. Budget & Expectations:
figures in USD $MM (include currency translation effects) 2008 2009 2010 2011 CAGR 2012
Total Revenues 18,627 19,176 19,014 20,862 4% 21,665
Footwear Revenues: 9,733 10,307 10,332 11,493 6% 12,148
% of Total Revenue 52% 54% 54% 55% 56%
Western Europe 2,411 2,385 2,320 2,327 -1%
Central & Eastern Europe 702 673 558 600 -5%
Greater China 738 940 953 1,164 16%
Japan 374 430 433 396 2%
Emerging Markets 1,031 1,185 1,458 1,897 23%
North America 4,477 4,694 4,610 5,109 4% 5,339
% of Total Footwear 46% 46% 45% 44% 44%
Demand Creation Expense* 2,308 2,352 2,356 2,448 2% 2,496
% of Total Revenue 12% 12% 12% 12% 12%
Total Footwear Marketing Budget** 1,206 1,264 1,280 1,349 4% 1,400
North American Footwear Marketing Budget** 555 576 571 600 615
*Consists of advertising and promotion expenses, including costs of endorsement contracts
**Theoretical, calculated by growth & "% of Sales"
NikeFree Run 2+ 4410K Filing

45. Budget & Expectations:
figures in USD $MM (include currency translation effects) 2010 2011 2012
Total Revenues 19,014 20,862 21,665
Footwear Revenues: 10,332 11,493 12,148
Running Revenue 2,100 30% 2,730 30% 3,549
% of Total Footwear Revenue 20% 24% 29%
North American Footwear Marketing Budget** 571 600 615
Running Shoe 80 84 123
% of Total Demand Creation Expense * 14% 14% 20%
*Consists of advertising and promotion expenses, including costs of endorsement contracts
**Theoretical, calculated by growth & "% of Sales"
NikeFree Run 2+ 45
10K Filing
http://invest.nike.com/phoenix.zhtml?ID=1422879&c=100529&highlig
ht=&p=irol-newsArticle
Category
Offense
2011* 2012
Action Sports 14% > 20%
Basketball 14% 6.7%
Football 14% 6.7%
Running 14% > 20%
Sportswear 14% 6.7%
Training (M) 14% > 20%
Training (W) 14% > 20%
100% 100%
*Assumed as flat percent
2 Major Running Lines:
Free 50% $61.5
Lunar 50% $61.5

46. 46NikeFree Run 2+

47. Strategy Execution: Past
Nike Free launched at the height of the barefoot
running trend
Strong advertisement presence
Strong media presence
 New York Times
 Oprah listed the Frees on the “One of Her Favorite Things”
episode in 2005
 Commercial campaigns: http://youtu.be/8u-yA6fe_Ts
NikeFree Run 2+ 47
http://www.nytimes.com/2005/06/23/fashion/thursdaystyles/23Barefoot.html?pagewanted=2
http://nl.newsbank.com/nl-
search/we/Archives?p_product=MWSB&p_theme=mwsb&p_action=search&p_maxdocs=200&p_topdoc=1
&p_text_direct-0=10A923A40C2FB109&p_field_direct-
0=document_id&p_perpage=10&p_sort=YMD_date:D&s_trackval=GooglePM
http://www.nytimes.com/2005/06/23/fashion/thursdaystyles/23Barefoot.html
http://www.wired.com/science/discoveries/news/2005/08/68474?currentPage=all
http://completerunning.com/running-blog-mark/index.php/archives/2005/11/23/oprah-winfrey-nike-free/

48. Campaign: Power To Your Feet
48
http://www.coloribus.com/adsarchive/prints/nike-free-training-shoes-58-muscles-7337355/
http://www.coloribus.com/adsarchive/prints/nike-free-training-shoes-strength-7337455/
NikeFree Run 2+

49. Marketing Plan Objective
• Reintroduce the Nike Free as the leader in the barefoot running industry
Goal:
• Print
• Digital
• Live events
Create New Ad Campaign
• Duration Mix
• Network vs. Local
• Day Part
Keep TV Execution
• Website
• Banner
• Broadband
• Paid Search
Keep Digital Execution
• Facebook
• Twitter
Increase Social Media Usage
49NikeFree Run 2+

50. Campaign: Just Free It
Designed by: Lisa Alberts 50NikeFree Run 2+

51. Campaign: Just Free It
Spinoff on Nike’s “Just Do It”
Opportunity to get people buzzing about barefoot
running
Display in malls, movie theatres, gyms, on billboards
Ad emphasizes the similarities of Nike Free to running
barefoot
Use in conjunction with editorial opportunities
 (Runner’s World, Health Magazine)
Continue researching and opening new running stores
Emphasis on customization
51NikeFree Run 2+

52. NikeFree Run 2+ 52
Campaign: Just Free It

53. Strategy Execution: Future
53
$61.5
MM
Total Advertisement
Investment 2012
PAT: Professional athletic teams
CA: Celebrity athletes
CAT: College athletic teams.
SPENDING BY TACTIC
NikeFree Run 2+
0 10 20 30 40
Trade
OOH
Print
Digital
Sponsorship
TV Network Cable
PAT
Banner
CA CAT
Broad PS Web Others
30%
35%
20%
8%
1%
5%
Others

54. Television:
54
Nielsen
Evolution of TV
NikeFree Run 2+

55. Television:
Still Dominant form of media
55
P 18-49 May 2011
NikeFree Run 2+

56. Digital Transformation:
56
Nielsen
Device Transformation
NikeFree Run 2+

57. Digital Transformation:
57
Nielsen
What are people doing when they are watching TV?
NikeFree Run 2+

58. Television:
Mix of 60% :15’s copies and 40% :30’s copies
 Utilize :15s copies to optimize ROI.
 :30s copies can be used to drive volume and increase share.
Mix of 65% Network and 35% in Local
 Network can be optimized for new launches, driving more
volume.
 Network can be used to sustain media presence while keeping
cost down.
 Local drives higher share growth while Network offers a more
efficient opportunity to maximize ROI.
Day Part
 Prime Time and Late Night are the most effective times during
the day
NikeFree Run 2+ 58

59. Digital: Broadband
Yahoo, Vevo, ABC, AOL, CBS, Hulu, NBC, CNN, MSN.
NIKE Free Running Shoe
59NikeFree Run 2+

60. Digital: Banner
Google, Amazon, CBS interactive, Yahoo, Facebook, Pandora, Weather.com, Discovery.
Yahoo, Bing, WebCrawler, Dogpile.
60NikeFree Run 2+

61. Digital: Paid Search
Google, Yahoo, Bing, WebCrawler, Dogpile.
61NikeFree Run 2+

62. Digital: Website
It allows viewers to buy Nike sports product online, custom design Nike products, place
orders online, as well as access corporate information.
62NikeFree Run 2+

63. Social Media:
Goal: Build social authority
Supplements traditional marketing practices
Current Management of Social Media for Nike is Poor:
 Facebook Page lacking
 No dedicated NikeFree page
 Poorly managed Twitter account
 Outdated twitter feeds on the NikeFree website
63NikeFree Run 2+http://en.wikipedia.org/wiki/Social_media

64. http://en.wikipedia.org/wiki/Facebook
http://www.telegraph.co.uk/technology/facebook/8283072/Facebooks-Mark-Zuckerberg-attacked-by-hackers.html
2004
• June: Facebook was launched
2010
• April:41.6% of US population had an account
2011
•June: Reached 1 trillion page views, making it the most visited site in the world
• June: 750 million users
•July: Over 800 million active users
Facebook:
64NikeFree Run 2+

65. Create “official” NikeFree page
 Dozens of unofficial NikeFree pages
 No single place to view this growing product
Facebook:
65NikeFree Run 2+

66. Benefits:
Consumers spend more than 6 hours on social
networking sites
Smartphone
Analytics
SEO
Direct Interaction
Embedding
Facebook:
66NikeFree Run 2+
https://www.facebook.com/note.php?note_id=219338781435544

67. Twitter:
NikeFree Run 2+ 67
http://www.pcmag.com/article2/0,2817,2383408,00.asp
http://socialmediatoday.com/dom-bradbury/280032/twitter-business
http://twittnotes.com/
Information exchange
People go on to learn things and share
what they know
Less busy Facebook
Older demographic (could translate to
more disposable income)
Allows for real time interaction
Ideal for smartphone usage
 Put message directly in the pocket of the
consumer

68. Strategic Retail
Nike strategically opens up and develops specific types of stores
depending on the location
10 Nike Running store locations
 Run clubs that leave from the store
 Back your Block
$500 million for new stores between now and 2015
NikeFree Run 2+ 68
http://www.hubmagazine.com/2010/06/the-new-swoosh-2/
http://inside.nike.com/blogs/nikerunning_news-en_US/2010/05/04/newly-opened-
nike-running-store-gives-palo-alto-runners-a-head-start
http://help-us.nike.com/app/answers/detail/a_id/16208/~/where-are-the-nike-running-
stores%3F

69. 69
Sponsorships:
 Support person, event, activity financially or through
products/services
 Athletes:
• Allyson Felix
• Sanya Richards-Ross
• Matt Tegenkamp
• Lashawn Merritt
 Events
• Chicago marathon
Camps and clinics
 Cross country, track and field, running coach workshops
 Makes its name synonymous with sports success in the eyes of
young consumers
 The message they send is always the same: “If you have a
body, you are an athlete”
Sponsorship & Grassroots:
NikeFree Run 2+
http://www.ussportscamps.com/running/
http://phx.corporate-ir.net/phoenix.zhtml?c=100529&p=NewsArticle&id=1128176
http://en.wikipedia.org/wiki/Sponsor_(commercial)

70. 70NikeFree Run 2+