According to its just-released annual report, Nike Inc. reported demand creation expense grew 5 percent in its fiscal year ended May 31, to $2.74 billion from $2.6 million. The gains were mainly driven by an increase in sports marketing expense, marketing support for key product initiatives, including the Nike Fuelband and NFL launch, as well as an increased level of marketing spending around global sporting events such as the European Football Championships and London Summer Olympics.
Excluding the effects of changes in foreign currency exchange rates, demand creation expense increased 8 percent.
Demand creation expense consists of advertising and promotion costs, including costs of endorsement contracts, television, digital and print advertising, brand events, and retail brand presentation.
The report also showed:
In fiscal 2013, contract factories in Vietnam, China and Indonesia manufactured approximately 42 percent, 30 percent, and 26 percent of total NIKE Brand footwear, respectively. I
