How do Nike Trainers add value?

Hypothesis: Nike adds value to their trainers by advertising

Introduction

Added value is the difference between the price, which is charged and the total cost of material inputs for the product.

Nike was founded Phil Knight, who was an athlete and is also chief executive of Nike and Bill Bowerman who was a coach, in America. It was names after the Greek Goddess of victory in 1972. Canada became Nikes first international market.  Before Nike the company was know as BRS. Which was founded in 1962. The first pair of BRS trainers was sold late in 1963

Nike is a sporting brand name. They specialise in clothes and trainers but they also produce other sporting equipment. They started out with just the footwear but have later developed into other areas.

Nike is recognised by their very simply logo a small tick (swoosh) and the slogan “just do it”. Recently Nike has signed a deal with Manchester United football club to be the official suppliers of the club kit. They also were awarded the right to make the footballs used in the Barclaycard premiership. Nike is a well-established brand. They have shops in many parts of the world called Nike Town, which are highly popular.

The Nike swoosh is an internationally recognized symbol, which people generally identify with a good quality and original products.  

The cost of sales for Nike in 1997 were $5503.0, in 1998 it rose to $6065.5 and then in 1999 the cost of sales went back down to just below $5494

In 1998 the cost of sales was higher then in the following year 1999. This could be because in 1998 they was a world cup in Football and Nike were a sponsor of the world cup so people saw the adverts and bought Nike products.

Main analysis

Advertising

Nike advertises on the T.V, in newspapers, magazines, on billboards and at major sporting events. Sometimes they sponsor major sporting events like some football matches and being the official suppliers of Manchester untied football clubs kit.

78% of the people that I asked did not like the way which Nike advertises their products. Many of them said the adverts that they have seen on T.V were boring and did not show the product very well. Another person said that the adverts don’t have any voices so you have to watch the advert to see what it is about and you cant just listen to the advert in the background, but she did also say that it is an effective campaign to make you watch the advert.

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Many people only buy Nike as they have seen adverts in which a famous face such as Michael Jordan who was seen wearing the Nike Air Jordan trainer in a T.V advert. They see the famous faces wearing the trainers and then it makes them want to buy a pair just like the ones they have seen in the advert.

When Nike advertises there aim is to increase demand, which will increase their profits.

             

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