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New Production Development Case Study

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Product development from concept to consumer

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 identified a gap in the sports shoe market - a shoe which mimics barefoot running in order to strengthen runners' feet and legs, giving them more power and speed while reducing the risk of injury. After extensive R&D, the shoe, Nike Free, was developed. Nike Free was given an initial, strictly controlled, limited 12 month release before being promoted to consumers worldwide. After reading this Case Study, students should be able to:

  • Demonstrate and evaluate the stages involved in the product development, from conception of a product, through the research and development stage, to design, production, promotion and market release
  • Understand what is meant by product or brand positioning and analyse market research methods
  • Identify promotion strategies and their application as they apply to Nike Free and other Nike products.

Introduction

Nike's 'swoosh' is one of the world's most identifiable logos and, in just 32 years, Nike has grown to be the industry's largest sports and fitness company.

Anticipating the needs of the consumer

Innovation is what sets Nike apart in the industry.

Research and development

How does Nike develop its products and decide what does and doesn't make the cut when it comes to innovation?

Ensuring correct product positioning

Nike was conscious that Nike Free needed to be positioned as an additional training shoe in your kit bag, not necessarily as a replacement to your traditional running shoes.

Reaching the consumer

Advertising is synonymous with Nike. In partnership with its advertising agency, Nike has created some of the world's most attention-grabbing advertising.

Conclusion

Nike aims to bring inspiration and innovation to every athlete in the world - and it considers everybody to be an athlete!

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Learning Area(s):
  • Business Environment | Mission and Objectives
  • Entrepreneurship/Innovation | Fostering innovation within business
  • Entrepreneurship/Innovation | Innovative business
  • Entrepreneurship/Innovation | Product/service innovation
  • Marketing | Market research methods/analysis
  • Marketing | Marketing analysis and segmentation
  • Marketing | Product development
  • Marketing | Promotion strategies and their application

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