Nike Marketing Problem - Nike Marketing Problem Competitors...

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Nike Marketing Problem Competitors: The rivalry among existing competitors is very high in this industry. NIKE, Adidas and others in this field such as Puma and Reebok have grown tremendously in the last decade and each of them have been offering more choice, more identity due to endorsements by top sporting personalities and by aggressive marketing and sales strategies. The industry is in hyper competition and the rivalry is extremely fierce. The intense competitive rivalry makes the need for differentiation very important. A differentiation strategy required the need for brand creation and enhancement. NIKE must ensure that any international marketing strategies will continue to enhance its already superior brand name through an integrated marketing communication. Legislation: -Minimum wage -Minimum age of employees -Safe working environment -Environment friendly material NGO protest / critics Global Exchange, an international human rights organization published a reports on working conditions in four Nike subcontracted factories in Southern China. According to the report, Children aged 12 to 13 years old who worked in one of the subcontracted factory (owned by a Korean company) earned only 10 cents per hour. They were forced to work up to 17 hours daily and were not allow talking during work. These Chinese workers earned US$1.80 a day which was lower than the Chinese minimum wage of $1.93 for an eight hour day. The report states that Nike labor practices had violated Chinese labor law. However, Nike denied the accusation and claimed that the report incorrectly stated the wages of workers. Company image Causes: Scandal Cheap labor Nike had been accused of exploiting cheap labor and exposing them to destructive working environments. The company is also faced for use of children to make its sport gears in Pakistan factories. As a result, Nike was labeled as forcing "children to slave away in hazardous conditions for below-subsistence wages" (Hill, 2009, pg2 Indonesia is the most populous country of ASEAN with 243 million people. This is 2.4 times the Philippines’ population. Nike – the shoe company that produces those famous athletic shoes – set up factories in Indonesia because of the low wages there. Today, typical workers can earn the equivalent of around $3.50 per day, which for a six day work-week amounts to $21. Nike's subcontractor paid workers in Indonesia less than US$3 a day (Medea, 1998), and the wage did not meet the basic needs of one individual. In 2006, the Worker Rights Consortium calculated that a livable wage in Indonesia is about US$8 per day (Bose, 2008) and the Indonesian government admitted that the minimum wage only covered 70% of the basic needs of one person.
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