Discuss about the Marketing Management About Nike.
Nike Inc is an American multinational organization. The company was founded by Phil Knight and Bill Bowerman on January 25, 1964 (About.nike.com 2017). The name of the company is inspired from the Greek Goddess of victory, Nike. The company belongs to the apparel and accessories industry headquartered in Washington, United States. The organization has offices and stores located across the world making it a popular brand and preference among consumers (Mathew 2017). The mission is to bring inspiration and innovation to every athlete in the world (Nike.com 2017). The core values of the organization are authenticity, performance and sustainability. These drivers are reflected in every decision made by the company. The slogan used by the company ‘Just Do It’ is inspired from Gary Galmore’s last words (Fairs 2017). This slogan helped in increasing Nike’s market share in the North American market as the campaign was advertised through print media, billboards, graffiti art and various other channels (Sharkey 2017).
The marketing orientation of Nike focuses on three main pillars- customer focus, strong commitment and providing superior value to the customers. Nike sponsors sports personalities as it is a major manufacturer of sportswear and equipment. The products offered by the brand are athletic footwear, recreational products, sport equipments, apparel and other products. The brand has other subsidiaries such as Hurley, Nike Golf and Converse (Help-en-us.nike.com 2017). The main marketing strategy of the company is to sell benefits and not the products. Nike uses the story of hero as a brand motivator. The brand uses emotional branding technique for maintaining competitive advantage and implementing marketing strategies successfully (Barakat 2014).
A situation analysis is performed for Nike using 5C analysis covering the micro-environmental and macro-environmental situation.
Company- Nike is a competitive organization selling a large variety of shoes for sports. It is one of the most renowned brands in the world. The famous brand has a wide variety of products available. However, the income of the brand is heavily dependent on the footwear market. Moreover, the sector is price sensitive. Therefore, there is a scope of low margins to combat competition in the market. Nike has many opportunities regarding product development. There is further scope for development of sportswear, jewellery and sunglasses. The most significant threat for Nike is significant competition in the international market (Friedman 2015).
Customers- Nike serves three main consumer groups- women, young athletes and runners. Nike sells training and running apparel for women such as lace-trimmed jerseys and skirts. Their behaviour is to wear leggings to errands, gym and brunch. Further, the kids playing sports have an intention of wearing Nike to clubs, federations and local leagues. The runners buy Nike accessories to track their calories, route, distance, pace and time (Lutz 2017).
Collaborators- Nike has a strategic partnership with Swiss company bluesign technologies so that the company becomes accessible to material suppliers. Nike is also in collaboration with Apple that provides great experience in fitness hardware (the Guardian 2017).
Competitors- The direct competitors of Nike are Adidas, Under Armour, Reebok, PVH and various others that provide the same kind of products, apparels and accessories. With the rapid changes in technology and other factors, innovation and price, a few other competitors are V.F. Corp, Crocs, Atac, Skechers and many more (Su and Tong 2015).
Context- Nike is subject to change in manufacturing and tax law of every country. Due to political conflicts, Nike may be affected leading to prevention of imports and exports. The revenue is dependent on labour costs, ease of production and cost of production. Market collapse may be a bad news for Nike as the customers may switch to cheaper products. Nike sweatshops have received criticism affecting the social perspective of the brand (Soener 2015). However, the increase in health consciousness among people is leading to increased demand in Nike sportswear and apparel. Nike is affected by technological factors as social media helps in building brand image. Nike has legal repercussions as it practiced shady marketing tactics. Nike has dodged tax in the past that leads to crackdown. The brand is also affected by environmental factors as the mass production factories emit harmful pollutants triggering the need to be more eco-friendly (Gürhan-Canli et al., 2016).
It is necessary to discover insights, achieve targets for business growth and collect information so that the customer needs can be fulfilled. Nike collects information from the customers including telephone numbers, referring websites, information about other purchases and interaction with the company. The customer information is also collected from Nike sources, communication and transactions. Nike also collects information about gift recipients provided by the giver. Customer interviews are conducted for gathering information about needs and preferences (Zikmund 2013).
Regarding competitors, Nike collects information about the competitors using competitor intelligence research. The information is collected using the websites including press releases, new product launches, financial reports and pricing data. Press analysis reviews publicly available information such as change in key personnel or senior management (Bolton et al. 2013). Their advertising patterns are monitored by reading about their advertisements in magazines, newspapers and other media channels. Competitor pricing research is followed using statistical techniques and software. Therefore, the information is gained to what competitors pose a threat (Zhao, Fan and Hu 2014).
For collecting information regarding the context of changing business, information sources such as newspapers, personal contact, commercial database, internal reports, books and others. Environment scanning shall be useful to study the context of changing business as the trends can be recognized and products can be sold accordingly (Griffin et al. 2013).
Nike follows collaborative information seeking so that it can gain information regarding situations, methods and motivations. Nike works closely with its staff members so that they provide appropriate information. Collaborators play a shift role and work jointly with Nike so that a trusting and working relationship is established. The problems between Nike and market are defined and plans of action are developed accordingly (Lim, Chen, and Chen 2013).
Nike has huge range in its target market. They have wide range of different products each targeting and appealing a specific group of people. They aim to meet the requirements of people of all ages belonging to varying categories. This strategy has made this company to gain maximum number of customers and profit. The primary target market currently for Nike is the teens and youth of people above 15 years of age. The potential target market of Nike could be the kids aged below 15 years of age.
The target market is chosen for kids as the main focus of parents for purchasing products is the affordability. Small children outgrow a pair of shoes in every three or four months thereby depicting a short shelf life. Therefore, the parents intend to by affordable shoes so that it can be replaced in short span of time. Also, kids need to get involved in physical activities and sports such as running, cycling, and others. Nike may focus to make the new generation a ‘Fit Generation’. Therefore, by working to achieve the goal of strengthening kids and involving them in several activities, Nike can attract kids with their sportswear and apparel to engage in outdoor activities. In the generation where kids are busy in their smartphones and other digital tools, Nike may attempt to engage the kids in sports and other recreational activities (Lunt et al. 2014).
Nike is one of the most successful international brands in the equipment, footwear, apparels and accessories market. The brand is a simple solution for the young women, athletes and can potentially meet the needs of kids by encouraging them to engage in physical activities or sports. The target customer or segment are the kids where Nike can offer school shoes, soft slippers, tough trainers, sandals or show-off shoes that can suit the different need of kids (Lim, Chen, and Chen 2013). This offering adds to competitive advantage for Nike in terms of scale, scope, customization, and innovation. In case of kids as customer base, Nike branding shall allow the company to charge affordable price over the competitors. Nike may offer a wide range of shoes and gears for kids under a single corporation rather than different units that make it a one point destination for clothing and apparel. Further, Nike can allow customization of products thereby offering tailored solutions (Dibb 2013).
Nike has attained this legendary position through innovative and attractive design, quality production and wise marketing strategies. The market positioning statement of Nike could be ‘The Fit Generation’. As the current generation is more involved in electronic gaming and gadgets, Nike can take an initiative in generating self-awareness among children about the importance of outdoor games and activities. A belief shall be created among the customers as Nike being the most preferable brand for sportswear creating desirability among kids. The kids shall feel the need to engage in outdoor sports and recreational activities so that they stay energetic and fit. The market positioning strategy shall be able to build self-confidence among kids and eliminate negative aspects while strengthening them (Dibb 2013).
Marketing tactics can be defined a strategy for reaching the goal. The 7P marketing mix framework is adopted for supporting the marketing strategy as under-
Product- Nike has adapted to the changing times are now designing and selling smart products which have capability of connect to iPod nano bringing about the combination of products from Apple Inc and Nike which measure the performance of the sportsperson. Nike offers a wide range of sports footwear, apparel and equipments. As the potential target segment are kids, Nike can enhance its product range by manufacturing and distributing hockey sticks, roller skates, hockey jerseys, protective gear, casual wear for kids, shoes, and sandals. The target customer or segment are the kids where Nike can offer school shoes, soft slippers, tough trainers, sandals or show-off shoes that can suit the different need of kids. Different age groups from toddlers to school-going kids can meet their needs by purchasing products at Nike. Different accessories that are loved by kids shall also be offered by the brand. The augmented product is the non-physical part of the product where it may offer warranty and customer support service after sales (Hanssens et al. 2014).
Price- Nike is designed to be competitive in comparison to other shoe retailers. As there are multiple competitors involved in the same product line, the prices cannot be set too high as customers would prefer buying other low prices products. However, the prices cannot be set too low as Nike may be considered compromising on the quality. As the sportswear and apparel for kids have a very short shelf life, the customers prefer buying high quality but affordable products. Nike may follow premium pricing strategy in which they raise prices despite market lowering theirs as it is a customer-driven model. The customers may be willing to pay more prices to obtain high quality products and loyalty towards the brand (Mintz and Currim 2013).
Place- Nike sells its products in exclusive Nike stores across the globe. The identified products and services shall be sold in retail outlets across the world. The brand can also sell the products through licensees, independent distributors and subsidiaries. Not only physical outlets, but the products can also be sold online through the internet on different e-commerce websites. In this manner, the products can be taken to the consumers and vice versa (Mintz and Currim 2013).
Promotion- Promotion is significantly dependent upon store locations. Nike can collaborate and partner with different companies. Nike can tie up with different ambassadors such as soccer teams, cricket or other sports that would be loved by kids. As kids are more attracted to television and online channels rather than print media, the promotion campaign focus shall be on television and internet. Television and social media such as YouTube shall be useful in attracting kids’ attention through animated advertisements or other ideas (Mintz and Currim 2013).
People- The marketing mix relating to people shall be establishing a healthy relationship between customer and the retail store. The customers may put up their requests or opinions regarding the products such as footwear, apparel and accessories. It is the responsibility of the staffs to meet the needs of its customers. Therefore, Nike selects its employees very carefully. People play a critical role in the progress and development of the company (Mintz and Currim 2013).
Process- Nike provides several services to increase the customer satisfaction. Nike can sell its products through authorized distributors. The process of purchasing products and be assisted by employees so that they guide the customers about the suitability of the product. Also, Nike is available for sale in online stores. The process of purchasing can be made simpler without visiting the store. The customers can simply look at the catalog of the online distributor and select a product of their choice. However, it is mandatory that the products are purchased from official distributor as they would ensure high quality products (Mintz and Currim 2013).
Physical evidence- The efforts made by Nike intends to get the products purchased by potential target segment. Therefore, Nike can put its new or superior products in the front entrance so that the kids segment can be differentiated in the store. The customers must understand that Nike is exclusively introducing the kids’ line products and not only for the adults. Evidence could also be the website created exclusively for kids. This shall enable easy access and information regarding the products sold at Nike (Mintz and Currim 2013).
Conclusion
Conclusively, Nike can bring inspiration and innovation to every athlete in the world. The products offered by the brand are athletic footwear, recreational products, sport equipments, apparel and other products. The brand uses emotional branding technique for maintaining competitive advantage and implementing marketing strategies successfully. Nike has many opportunities regarding product development. Nike is also in collaboration with Apple that provides great experience in fitness hardware. Market collapse may be a bad news for Nike as the customers may switch to cheaper products. The brand is also affected by environmental factors as the mass production factories emit harmful pollutants triggering the need to be more eco-friendly. The customer information is also collected from Nike sources, communication and transactions.
Environment scanning shall be useful to study the context of changing business as the trends can be recognized and products can be sold accordingly. The problems between Nike and market are defined and plans of action are developed accordingly. Nike may focus to make the new generation a ‘Fit Generation’. The target customer or segment are the kids where Nike can offer school shoes, soft slippers, tough trainers, sandals or show-off shoes that can suit the different need of kids. The kids shall feel the need to engage in outdoor sports and recreational activities so that they stay energetic and fit. As the sportswear and apparel for kids have a very short shelf life, the customers prefer buying high quality but affordable products.
References
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