Issues involved for NKE in

brand Building
· NKE was originally selling in a given region
and now wanted to go national which
means it wanted to make the whole country
its market place.
· This was because Mr Rajkiran the owner was
of the view that the growth in retail business
can only come through multiple stores for
which he supported the idea of franchising.
Through multiple stores by means of franchising he will be
able to tap the entire country and carry its brand name.
For carrying his name in other regions he need to invest in
brand building.
He was of the view that the cost of brand building has to be
recovered from customers. And this was about 1 – 2 % of
the product cost and it has to loaded on to the customer.
Ramanraj ,the father of Rajkiran was against rajkiran’s point
of view about building the brand name and charging the
cost from the customer.
Ramanraj was of the view that the brand name for
NKE was built over 30 years without him spending
anything on it.He only spent on emotions.
Ramanraj provided his customers the fair
deal,passed on all company promotions to them,did
repairs and after sales service,delivered goods at his
cost,gave them product demos even when the
company did not provide NKE with the demo
product.
Though he was supporting the view of setting up 20
more stores all over Maharashtra,Gujarat and MP
but not because that exercise will build a brand name
for NKE,but the name is so well entrenched that it
must spread.
He was of the view that brand name was already
built and that brand name has to be sustained by
ensuring consistent quality of service etc and for this
spending required should come from past profits.
There was a consultant Jaideep who supported the
view of Rajkiran.
He was of the view that unless NKE is not
established as a brand , it would perish as
competition will increase.
For establishing this brand the huge sum of money
cannot come from accumulated profits/past profits.
The cost of brand building involved money spent on
advertising,promotions,publicity,store decor etc.
Though Neel Kamal is known for various service
efficiencies that it offers but in the future these
service efficiencies that it offers are not uniquely
sustainable as everybody will provide the same
service level and for this NKE has to establish itself
as a brand name.
Grandfather Tilakraj had a completely different view
point.According to him no one wants to pay more for
what can be bought cheaper.Shopping is a necessity,
not an entertainment.
Both Rajkiran and Jaideep emphasized on unique
buying experience.
For eg there are 20 brands of TVs to choose
from.Now it is the retailer who will tell the customer
which one is best suited to his budget, the size of his
drawing room,his usage situation.This is the buying
experience.
The buying experience holds a big value for the
customer and that influences his perception of the
price he pays eventually.