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What Small Businesses Can Learn from Nike’s Lebron X Pricing Controversy

Should we persecute Nike for marketing a segment of their new product line at a high price point, amidst economic uncertainty? The entire debate leaves me a bit...

The clothing, footwear, sportswear, and equipment giant, Nike is under scrutiny over a recently announced product line — the LeBron X which is slated to hit stores this Fall, with shoes that will retail at a $315 price point – the most expensive shoe marketed by the company to-date.

The specific LeBron X version (in current debate) is estimated to comprise twenty percent of sales coupled with a standard (lower-priced) offering. Nike spokesman Brian Strong recently clarified that the main version of the shoe would come at a significantly lower price point. “The LeBron X will be launched in the fall at a suggested retail price of $180,” Strong said, in a statement.

“The initial introduction of the LeBron X will be the red, white and blue Nike+ enabled version and that price is still being set, but will be at a higher price to reflect the Nike+ technology embedded in the shoes.”

Nike’s LeBron X Controversy

Loyal Nike customers await the new launch with bated breath.

However, the premium-priced LeBron X product line has been met with marked criticism from advocacy groups and consumers. Some argue that Nike’s pricing strategies are insensitive.

National Urban League President Marc Morial has urged Nike to drop plans to release its LeBron X sneakers,” according to recent reports. “To release such an outrageously overpriced product while the nation is struggling to overcome an unemployment crisis is insensitive at best,” Morial said in a statement.

Reportedly, the president of the National Urban League has taken ‘incessant phone calls and emails’ from angry consumers who can’t afford the new shoes.

The Bigger “LeBron X” Picture

Recent events have left members of the small business community, including myself, wondering:

Should we persecute Nike for marketing a segment of their new product line at a high price point, amidst economic uncertainty?

The entire debate leaves me a bit confounded, with one predominate thought:

“Seriously?”

Can we revisit the for-profit business model for a brief moment?

Nike brand marketers aren’t plotting evil deeds – they’re simply doing their job and navigating the challenges that face most businesses – rising costs, global macroeconomic pressures and slowdowns.

Market leadership and premium brand positioning are rare commodities. Any entrepreneur endeavoring to build a world-class brand understands this. Particularly, footwear marketers operate in a dynamic, competitive environment that is highly fragmented.

To address these pressures, many premium brands such as Nike, Louis Vuitton, Tag Heuer, Mercedes-Benz and others employ a diverse pricing strategy to reinforce positioning and drive sales.

Ultimately, a company’s pricing strategies and subsequent sales are based on what the market can bear.

If you cannot “bear it,” don’t buy it.

 

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