Nike is a multinational company operating in more than 190 countries. The company is having its headquarters in United States. Nike deals in athletic shoes, apparel and sports equipment. Nike has a wide product portfolio to carter almost all the needs of athletes (Nike 2017). Nike cultivates the culture of innovation in the organisation. It is a customer centric company and spends a huge amount on research and development of the product to solve customer’s problems ad satisfy consumer needs. Nike has now shifting its focus to women segment to widen its target audience. It is bringing out changes in its products to satisfy demands of women segment. It has also launched many women’s only stores and website.
Marketing orientation approach is a customer centric approach which tailors its products according to the needs and wants of the customers (Hollensen 2015). Nike is one the companies that has adopted market orientation approach to successfully conduct its business. In mid-1980’s Nike lost is position in market, that was the time when company decided to shift its product centric approach to customer centric approach. Since then the company is dominating the athletic shoe industry. There are various examples that show that company has adopted market orientation approach. Nike has golf clubs for recreational golfers (Beall 2016). In basketball segment Nike not only offers basketball shoes it offers a range of products needed by a basketball athlete such as shorts, basketball jersey, water bottle, headband, towel etc. It even sponsors basketball courts.
Nike started as a shoe company and ended up catering almost all the needs of athletes. Nike proves free weekly training to the women at Nike+ training classes. Another recent example of Nike’s customer centric approach is that the company has decided to donate $50 million to Michelle Obama’s campaign to get American kids more active, citing the high social costs of the “inactivity epidemic” (wordpress 2013). All these are just few instances demonstrating the company’s customer centric approach, Nike is doing much more for satisfy its customers. Nike’s growth is credited to deep customer insights.
Marketing environment can be explained as sum of total environmental factors that affect the ability of marketing management to successfully develop strategies for the target market (Cant, Strydom, Jooste, and Plessis 2009). For analysing the market environment of Nike it is divided into 3 basic segments-
Macro environment is the external environment that influences the company but these are out of company’s control. The firm can only frame strategies to overcome the negative implications of the external environment but it cannot make changes in the environment. Macro environment includes political, economic, social, technological and environmental factors (Elearn 2008).
Micro environment of the company involves the company’s internal environment which can be controlled by the company (Smit, Cronje, Brevis, and Vrba 2011). Micro environment factors include vision, mission, objectives of the company, organisation and its management and organisational resources.
The market environment consists of customer’s needs, wants, preferences, buyer behaviour, competitors in the market, intermediaries, suppliers etc. Market environment is influenced by the organisations strategies and it also directly influences the organisations micro environment. Nike is a company conducting its business in various countries and the environment of every country is different. It has to make special efforts to effectively manage the complexities of the marketing environment in various nations.
Social factors
Social factors include changes in culture, behaviour, values and traditions of the customer base. Changes in lifestyle are one the major social factor affecting company’s environment.
Society is becoming more health conscious (Gbadamosi 2013). Factors such as ageing population, obesity, diseases etc. have turned the focus of society towards health and fitness. Recently UK government has invested £300million for funding UK sports and Olympics. This provides marketing opportunities to Nike, because it sells athletic goods. Nike can frame its marketing strategies emphasising the health and fitness concept.
Economic factors
Economic factors are of great importance to the firm they affect price, demand, cost and ultimately profits. These factors include inflation, deflation, changes in taxes, exchange rate, BOP and many others (Reynolds and Lancaste 2013). US, the Nike’s home country has favourable economic policies for the company. These policies include low interest rates and well-arranged international tax agreements. This is beneficial to the company as it reduces the cost of product. This cost can be utilised in marketing activities to increase the sales.
Technology
Changes in the technology provides the company new opportunities, to market their products or services (Chaffey Ellis-Chadwick, Mayer, and Johnston 2009). In the field of technology Nike is continuously upgrading itself it is using digital matrix to analysis customer demands and make the required changes. Not only this, Nike keeps on consistently upgrading its technology to make the best out of it. Enhanced technology provides opportunities to make the marketing more effective.
Work force management
Nike has a negative image of on the work force management. Company faced criticism regarding its poor labour practices and work conditions. Nike was in the news headlines that it abused its workers. With continuous efforts Nike is trying to shed its sweatshop image (Lutz 2015). Though company is aware about the issue it should make continuous efforts to monitor this. If the company doesn’t monitors the issue it can hamper the company image as well as it can have legal implications on the company.
Product differentiation
Nike is having many competitors in the market such as Adidas, Reebok, and Sketchers etc. Still the company is able to capture a large market share by product differentiation. The internal environment of the company influences how effectively these differentiations are adopted from the customers needs and implemented in the product design. This should be monitored regularly to be ahead of competitors.
Three factors are as follows:
Strong at research and development
Nike has a strong base for research and development. Nike makes the efforts to identify the customer needs and then develop the products accordingly. It spends a huge amount on conducting the research in the various markets. It is the company that provides an enhanced framework for product development. This is one of the key strengths of the company.
Innovation
Nike cultivates the environment of innovation in its company. Designs of Nike’s products are so innovative that it turns out the competitive advantage for the company. In the year 2016 the company came with 9 remarkably innovative designs in shoes. These are Hyperadapt, Lunarepic Flyknit, Aeroswift technology, Anti clog traction etc (Nike 2017). Innovation is the source of strength for the company.
Poor HR management
The company has been in the news for labour unfriendly conditions. Steps have to be taken to ensure that company sheds this image and make a new image that shows Nike as one of the best companies to work for. This factor is a weakness for the company.
Marketing segmentation can be described as divided the large market into small groups on the basis of similarities or differences in customer needs (Venter, Wright and Dibb 2015). For every firm it is necessary to divide its market into smaller segments. It serves as the basis for framing successful marketing strategies. Nike is the customer centric company therefore segmentation allows the company tailoring its market mix to satisfy the needs of individual customers. Market segmentation divides large customer base into small groups thus the requirements of each group can be analysed individually and different strategies for each group could be developed. Also affordability of each group can be identified the planning marketing strategies could be framed according to different affordability of different groups. Also demographic segmentation allows planning market strategies according to different sections such as men and women. Overall the importance of market segmentation cannot be ignored for planning the marketing strategies.
Undifferentiated marketing strategies are made to satisfy the needs of large market segment. It is a common strategy that is adopted for all the targeted segments. Whereas differentiated marketing strategy is designed to satisfy the needs and wants of the single targeted segment (Firat, Turker and Metin 2014).Nike has adopted differentiated target marketing strategy for the women’s products. During early years company only focused the male segment but gradually company realised that importance of women segment and shifted its focus to women as well. It has developed and adopted differentiated strategies for women. Examples of those strategies are given as follows:
Nike’s product mix comprises of 3major sections shoes, apparel, equipment & accessories. It has wide range of products under these segments which caters almost all the needs of athletes. It entered market as a shoe brand but today it has a vast product portfolio. It offers differentiated products for different sports. Recently Nike’s product mix is changing a bit to focus on the women segment.
Nike has adopted the strategy of value based pricing. In this strategy price of the products are decided not according to the cost of the product according to the value that product is offering to the customer (Baker, Collier and Jayaraman 2017). The firms adopted pricing strategy is effective for the business. It is helpful in increasing the firm’s revenue every year.
Nike is operating in more than 190 countries. It sells its products through retailers,
Official online store and Nike town retail outlets. Among all the places retailers contribute most part of the total sales. Nike has also opened women only stores at various locations to target the female customers. The company ensures adequate supply of products to every place of distribution.
Promotion plays a vital role in building brand awareness (Huang and Sarigöllü 2014). Nike has strong promotion mix to increase its sales. Nike’s major promotional activities include advertisement on various media, personal selling, direct marketing, sales promotion, public relations and social media marketing. In all the listed activities social media marketing and advertisement are most effective and major constituents of the promotion mix of the company. Discounts and special offers also promote impulsive buying.
Nike effectively manages the people related to its organisation culture it is trying to shed the negative image developed regarding poor management of people. The people of Nike include its employees, management, stakeholders and customers. It tries to satisfy needs of everyone and build a suitable organisation culture for everyone. Also it aims at providing the customers with quality product and services.
Processes at Nike are customer centric and well supported by latest IT technology. The company spends the huge amount on research and development to provide best product to the customer in terms of design as well as in terms of quality.
Physical evidence
In Nike physical evidence consist of extra things that assure the customer of the company’s product. Nike has a well trained staff to enhance the customer contact information. Special emphasis is laid on product packaging, guarantee/warranty cards and online experience.
Conclusion
From the study it can be concluded that Nike is taking efforts to be ahead of its customers. It is a customer centric company and focuses on customer needs and demands. Nike continuously brings innovations in its products to be ahead of its competitors. Nike has also adopted measures to shed its image regarding unfriendly employee practices. In the years the Nike has gradually shifted its focus to cater the needs of women customers. Overall Nike is moving at a great pace to maintain and capture more market share.
Nike has decided to widen its target audience. It has shifted its focus to the women. In order to attract the customers company has introduced various women only stores and websites. Company is providing special training sessions to women. The motive behind this is to encourage women participation in women. This part of report contains a poster and rationale for the campaign of the company to attract women.
Conclusion
It can be concluded Nike has adopted an appropriate promotion mix to publicise its campaign. It has used integrated market communication strategy and Aida market approach to reach to the newly target audience. It is also making efforts to make changes in the products as per the consumer feedback.
References
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