International Market Analysis For Nike: Recommendations And Strategies

Research Analysis

As a marketing consultant for Nike Inc. you have been asked to recommend 2 international growth markets for it to enter in 2017/18.

Growth markets should be countries or cities where there is currently no presence.

Primary focus for market entry will be through physical store presence but you may recommend that online presence may be required to support this.

You should prepare a report for the board of directors addressing your consultancy brief, this should include:

• An analysis of the macro and micro factors impacting on the sports retail market and the market recommendations

• An analysis of Nike Inc. internal business factors

• An evaluation of market potential, to include an identified shortlist of markets with potential.

• Then using a clear and identified screening criteria, select two recommended markets with clear justification as to why these markets have been selected.

• Recommended and justified market entry strategy to take Nike Inc. into each of these markets

• Recommended adaptations to Nike’s marketing mix for the proposed markets, ensuring differences in culture and consumer behaviour are recognised in their marketing mix activity

International Marketing or the international trading is a platform which provides the business with the new approaches and the perspectives. It plays a major role while contributing towards the revenue generation and improves the financial aspects too. The major contributors for the Nike are the North America, Western Europe, Central and Eastern Europe, Greater China, Japan and the other emerging markets. The report defined below is related to the discussion of international market of the Nike. It is essential to conduct the survey and analyze the actual scenario of the market, where the subsidies or the stores are about to open. In the report, two international cities or the countries are defined where Nike can implement its new venture in the year 2016-17. The report shown below covers the major sections like the research analysis and constructive analysis in which there are sub sections too (Nike Team, 2016). This report will be present in front of the CEO, so that the countries can be finalized for setting up the retail store. To analyze the international market, the two countries which are selected are named as the UAE and the New Zealand (Soni, 2014). These are the countries which also require the retail stores, outlets and manufacturing unit at some of their locations.

Macro and Micro Economic Factors

Before opening the stores or the retail outlets in the other countries, it is essential to go through the suitable studies and research related to the market. By this, the probability and the success of the product may also increase. Some of the major aspects involved in the research analysis are defined below: –

Macro and Micro factors are those which are essential to analyze before starting the business in any other country. These factors can become key to success and can also result to the cause of the problems. The Macro factors generally include the PEST analysis of the country, which is helpful in showing the suitable rules and regulations related to the country. PEST analysis for both the countries, the table is shown below: –

PEST ANALYSIS	UAE	New Zealand
Political	The rules and regulations for trading are quite tough.	The rules and policies are applicable.
Economic	The country possesses the strong economic background. So, for the sports outlet, no financial issues will happen.	The economy of the country totally depends upon the agriculture. So, it is suggested that the outlet of Nike should be open after observing the demographic conditions.
Social	Socially, the country is very cooperative.	The country involved in the CSR activities.
Technology	The technology is also considered as an additional factor, because to promote the retail store, technology is required.	Technically, the country is sound but only in the major cities. Rural areas are still not connected.
Environmental	The manufacturing units have to place out of cities to prevent the environment.	Due to the agriculture perspectives, the production should be secure and environment family.
Legal	The rules and the policies are tough. So, the legal authorization is must.	The legal approval for the retail store and the manufacturing unit is mandatory.

(Tick, 2013)

After the Macro environmental factors, there are some micro environmental factors too which are creating the impact on the sales and the marketing of the Products. These factors are mainly controlled by the organization. The micro environmental factors affect the small sized, medium sized and the large sized companies in the different manner (Team, 2015). Some of the common Micro Environmental factors for the both the countries are shown below: –

Micro environmental Factors	UAE	New Zealand
Competitors	Adidas	Adidas
Suppliers	Due to the absence of the manufacturing unit, the shoes demanded by the customers are purchased by the vendors rather than the suppliers.	The online sites and facilities are available. Some of the retail stores keep some of the pieces of shoes. But, for the authorized dealership, the Nike have to try hard.
Customers	Due to the strong economic background, the customers want to purchase the products.	The teenagers & the youngsters and the sports team of different games will definitely like the product. So, the product should be prepared according to the choice of the customers.
Public	The hope of the positive feedback from the customers.	The hope of positive feedback from the customers.
Workers	Easily Available	Have to search through recruitment
Marketing Intermediaries	Advertising, campaigning and Promotions	Promotions and Advertising is the option.

By assuming this analysis, it is clear that the establishment of the Nike retail store in the International market can only become easier when the store will follow all the norms and conditions related to both the countries (Elliman, 2013).

Due to the strong identification of the organization in the market, the internal business strategy and the internal business environment of the company is also very strong and well defined. There are various primary activities which help the organization maintain the unique identity in terms of the business. On an average, Nike possesses about 765 factories in 46 countries of the World. This shows the efficiency and the effectiveness of the inbound and outbound logistics of the company. To manage and maintain the self-identity and renowned brand name in the world, the Nike used its swoosh logo and the Just do it slogan also (Mai & Nicholas Warmke, 2012). The service activities of the Nike are mainly conducted by the internal system of the organization and for the other activities, the organization may use the outsourcing. To handle such a large business, technical aspects are also taken into consideration (Lindblad, 2011).

While doing the business or launching the new stores, the company (i.e. Nike) has to face the challenges which relate to the customers, the maintenance of the stores, the policies related to the campaigning & advertising and many more aspects. For this, the company has to maintain the potential in the international market to perform well. To identify the potential or the market demand, it is essential to collect the data from the customers (Lazazzera, 2014). The mode of data collection may be survey, personal interviews and many other aspects. By this, the product strategy for the international market can be easily planned. For evaluating the potential, the sales analysis of the product, market analysis reports and the other essential reports can be analyzed, so that the actual potential of the market can be determined (Germano, 2013).

Internal Business factors of Nike

As it is clear in the paragraph above that the UAE and New Zealand are selected for introducing the products of the Nike. The reason behind selecting the market will be that there is no manufacturing unit of the company established in these countries and the demand is also rising continuously of these products. To increase the sale of the product in the market and to provide the customers with the various options, these markets are selected. New Zealand generally supports various sports and the economic level of the UAE is very well-defined, so in both the markets, the chances of growth of the product is very high and the customers can easily purchase the products too.

In this phase, the market entry strategy and the marketing mix related to the company will be defined. By the help of this, the promotion of the company can become possible.

A market entry strategy is the process which is considered as the direct entry of the product in the market, according to the demand of the customer or the country. When any company tries to enter into the overseas market, various growth options are provided to them. Though the market strategy possesses the common methods, but these methods are modified according to the location of the country and the requirement of the customers. To identify the common type of market entry strategies follow the Appendix 1.

As it deals with the sports shop and wants to establish the physical store in the UAE, so it is essential to decide the market entry strategy according to the requirement of the country. The most appropriate market entry strategy which provides the growth options in the UAE are the Licensing, Contracting, Merger and Acquisition, Fully owned manufacturing facilities and sometimes exporting also suits the country. After analyzing the key factors related to the Macro and Micro economics, it is identified that according to the investment point of view, the country can support the new venture very easily and by this, the business will get the definite promotion. For an example, in the Gulf countries, mainly in UAE, the females mainly like the high heels and the kids & teenagers mainly like the sports shoes. Due to the improvement in the standards of the sports and various games, the sportsperson or the athletes also want some different types of shoes. This increases the demand of the branded retail shoes in the market. So, the Nike planned to open the retail store in the UAE. For licensing, the company has to deal with the government and the regulation authorities. Whereas for the manufacturing units, the company can purchase the location and manufacture the most demanded products. For Contracting & the Mergers and the acquisition, the shoe company can tie up with the other branded stores or can also sign the treaty with different domain brands (For e.g. sports clothes making company, sports accessories making company).

Identification of Challenges

In comparison to the UAE, the New Zealand possesses the slightly different strategy. As the rural areas are mainly focused towards the agriculture, so the location of the store should be decided in such a way so that the possibilities of growth will increase. The most suitable market entry methods according to the New Zealand are the Franchising, contract manufacturing, Joint Venturing and Exporting. Exporting is successful, because it provides only those products which are in demand, but simultaneously with the increase in demands the requirement of the store is also required. Contract manufacturing and the Joint Venturing is also considered as an option in which the chances of product selling increases. The other organizations can easily invest in the contract manufacturing and by venturing, the customers can easily become profitable.

Marketing Mix is the process which is mainly defined for building the suitable identity of the product in the market. The concept of Marketing Mix was firstly defined by the Kotler. Marketing mix mainly consists of the 4P’s namely the promotion, price, place and product. The extended version of the 4 P is the 7 P in which the 3 more factors will be added .They are the people, processes and physical Evidence. The marketing mix plays a major role in the success of the product in the international as well as the local market. To identify the 4 P’S in the diagrammatic form see Appendix 2 (Bennett, Coleman & Co. Ltd, 2015).

In the UAE, there are various sports clubs available which may be helpful in promoting the suitable accessories related to the sports. Some of the common names of the sport clubs are the Al Nasr, Dubai Club for special sports, Hatta club and many more. The first step of the Nike to maintain the marketing mix is the involvement of the Company in the activities related to these sports clubs (Nahyan, et al., 2012). For product, the organizations do not have to make the tough efforts, because due to the brand image all the customers want to purchase their product. For promotion and advertising, the company can support the event and provide the gift hampers. By the help of this, the customers get attracted towards the offers provided by the company. For pricing, the company has to plan the nominal prices, so that it becomes easier for the customers to purchase the products. For better result, the categorization of the size may be done so that the customers can find out their choice easily. For selecting the place to open the store, the Nike can easily get the suitable location, but it would be preferable if the store will open in the Malls or heavily crowded areas. The people also contribute in purchasing the products and due to the advance economic infrastructure, the demands are very high. The marketing strategy also follows various processes to promote the product. In the UAE also, various market processes are followed by the Nike. The brochures, price-list and the product appearance are included in the Physical Appearance. It can be distributed in the printed form to the customers’, so that the customers can purchase the products easily.(Team, 2010).

Justification of the Market

Though, Nike already adapts various methods to promote the products. The most common methods are the agreements of the sponsorship with the celebrities and the athletes, support through the college and school students who are interested in the athletics. But, every country possesses the different policies and rules and regulations, so it is essential to identify them (kasi, 2011). Similarly, with New Zealand to manage the marketing mix, the company has to plan various aspects. As the product has already got a strong brand image, so there is no requirement to introduce the product in any of the markets. In the market in New Zealand, the company has to introduce the nominal rate products with good feedback so that the customers can purchase it easily. It’s not possible for the customers to purchase the product with high prices. If the product may be divided into category of school going kids, teenagers and college going students, working professionals and many more then the price can be defined easily and the promotion of the product can also become easier. To promote the product, various hoardings, advertisements and communication through the radio can be done. The other mode of publicity can also be used like promoting the sports events, schools and universities event, so that the kids and students get attracted toward the product and the retail stores gets the publicity. For locating the stores, it is essential to select the location according to the demographic conditions of the country (Hanssens, et al., 2005). The most prominent locations should be selected to open the retail store, so that it can become the center of attraction and various customers purchase the products from the store. The people of New Zealand are generally middle class to high class, so the product can only be launched according to the requirement of the customers. The different processes used in the form of the products services are also provided to the customers’. Finally, for the physical evidences, the promotional coupons or the cash back coupons are provided to the customers, so that they can build the trust on the people.

The models related to the marketing are helpful in defining the different marketing strategy and the methods by which it becomes easier for the organization to enter into the global or international market. Some of the common models are the value chain and discipline model, SKEPTIC Model, Life Cycle Model and many other models (ecdcus Team, 2015). These models directly or indirectly help in defining the suitable platform for the new business in the country or the city. The value chain and the discipline model will be helpful in defining the actual value of the product in the market. Whereas, the life cycle model will define the strategies related to the market from the very beginning till the end (Kerlinger, 1994).

Conclusion

The market strategy and the future perspectives related to the Nike are already provided above. It is essential to make the suitable marketing strategy to enter in the overseas or the international market. But simultaneously, it is recommended that the pre-preparation and the gathering of the information related to the international market are very essential. The surveys and the market reports also add as an additional feature for the information related to the market. This will definitely contribute in the success of the product in the international market.

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