rofile in the international market, and ranked number one among American athletic shoe manufacturers in 1990. Annual rates of change for the five years ending 1997 were an impressive 17.5 percent for sales and 13 percent for profits; over the ten-year period ending in 1997, sales increased at an annual rate of 18 percent while earnings increased at 28 percent (Chappell, 1998, p. 1669).
The domestic footwear market encountered four years of stagnation that ended in the mid-1990s. During that time, Nike adopted a strategic position of maintaining low inventory levels, with the result that the company kept low inventory costs and outperformed the rest of the market (Dukesherer, 1996, p. 4). Sales declines in the company's overseas markets, including France, Germany and Japan, also put downward pressure on the company's overall growth and revenue potential during that time.
Buyers of athletic footwear are often not using the shoes for athletic purposes. Today, athletic footwear has become acceptable attire for many casual situations, and some consumers have bought several pairs a month in order to remain fashionable (Chappell, 1998, p. 1666). Consumers are not typically loyal to a particular brand, but are instead interested in the appearance of the shoes and the perceived image that the shoes have in the market. The notable exception to this is Nike, which has established itself and its "swoosh" trademark as one of the most powerful brand images in this market (Carini, 1998, p. 1681M). Those consumers who purchase shoes for athletic use are interested in technology to the point that it brings additional benefit to the consumer, but are not necessarily interested in technology for its own sake. Buyers are not a homogeneous group, but can be reached through television and print advertisements which are typically repeated on a regular basis to introduce new styles and keep consumers brand aware.
Nike has demonstrated marketin...