Marketing is the procedure of promoting and the advertising a particular product in the target market. In this report, marketing strategies will be used in order to enhance the demand of the Nike running shoes in the target market. They are known for producing athletic shoes and the sportswear apparels. The company was founded in 1964 in the name of Blue Ribbon Sports. From the company’s annual report, it was observed that Nike shoes’ demand has been decreasing continuously and the major reason behind this is the introduction of various major brands in the same industry. This report will cover the strategies such as marketing mix, segmentation, SWOT analysis, etc. will be included in the marketing plan for the Nike running Shoes in order to enhance the market share as well as to gain adequate competitive advantage.
Nike is an American multinational corporation engaged in the production, designing, distributing sportswear, apparels, footwear, etc. in the international market. The company’s headquarter is in Portland Metropolitan area. Primary activity of the organization is manufacturing of athletic footwear and apparels. Various countries’ national and international sports teams wear the apparels and the footwear made by Nike. They are also known for delivering adequate qualitative products to its consumers and their quality remains same irrespective of the area. Under this report, Nike’s shoes’ market will be analysed through various strategies. Nike produces various types of shoes and the distribution of these products is mainly done through its authorised stores. Distribution of products through authorized stores is beneficial for the organization as it helps the audience to get the original product. For distributing purpose, Nike uses their own sources of distribution which helps them to avoid the chances of theft and development of plagiarised products. Consumers can get these products from the authorised stores of Nike Inc. as well as through various online shopping websites (Armstrong, et. al., 2012).
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Strengths · Nike is known for producing varieties of sports shoes used in baseball, football, cricket, etc. · Nike is on the peak position across the globe in terms of producing sports shoes. · They sell their products in the USA as well as in more than 180 countries across the globe (Brohi, et. al., 2016). · They have developed a strong goodwill in the competitive international market. |
Weaknesses · Primary activity of Nike is producing shoes and this is the only major source of income for them. · Due to expensive products, their target market audience is limited. · Huge competition is available in the production and distribution of sports shoes in the global market. |
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Opportunities · They have the opportunity to build their name in the fashion industry because their products are very much trending in the youth. · In order to expand their market share in the global market, Nike has the opportunity to get involved in the eyewear industry (Buil, De Chernatony & Martínez, 2013). · Expanding their business in more places of the world with the help of franchising mode of market entry strategy. |
Threats · Being a global brand, buying and selling currencies differs and it leads to the reduction in the profit margins. · Aggressive marketing strategies used by its competitors as well as its competitors are also developing sports shoes in order to overtake the Nike’s market share. |
It is the process through which organization could determine its potential market segments in order to enhance the demand of the particular product in the target market. The primary target market for Nike running shoes will be sports industry as their shoes are mainly used by the various sports teams. Nike has adopted various strategies in order to develop their product qualitative as well as innovative through which their market share could be enhanced and the organization could adequate competitive advantage. Nike Inc. is also focusing on women customers and to develop adequate image in the women segment, they have started developing various types of products for them. They have started promoting and sponsoring young athletics for attaining adequate future growth in the competitive business environment (Cwinkler, 2013).
This is the process through which organization could divide consumer market in accordance with their needs. This process has various crucial aspects which are implemented as per the requirement of the organization (Essmat, 2014).
From the analysis of the segmentation strategies, it was observed that all the approaches are result oriented but from the perceptive of the Nike Inc., the best approach for targeting the adequate market will be Psychographic and the behavioural approach of the segmentation. Both of these approaches are capable enough to generate adequate results for the organization in terms of enhancing the demand of their shoes in the target market.
Nike is the most reputed brand in the athletic apparel market and in terms of expanding their market; they are using various strategies in terms of identifying new markets for the organization. In these scenarios, organization’s typical consumers are known as young athletes, women sportspersons, and the runners. They are the primary target markets for this brand (Freeman, 2010).
Internal factors- These are the factors which affect the price of the product internally. When the product is in growth stage, its demand in the market continuously rises and with the increase in the demand, its prices also increase. With the effect of change in the customer’s tastes or preferences, product’s demand will be decreased and with the decrease in the demand of the product, price of the product also decreases and it is also known as the decline stage of the product. Increase or decrease in the demand of the product affects the price of the product which is also known as the price elasticity of the demand (Keller, 2010).
External factor- These are the factors which affects the organization’s performance from external sources. These are government regulations, competitor’s strategies, etc. With the change in the competitor’s pricing strategies, Nike also needs to amend its pricing strategies.
There are numbers of price adjustment strategies is available and these are quite crucial in terms of smooth performance of the organization. Approximately seven approaches are available under price adjustment strategies and under this scenario, discount and allowance price adjustment approach will be used. In terms of launching a new product in the market, providing discount attracts the consumers and the allowance approach provides the adequate reward points on the every purchase made by the consumers (Kotler, et. al., 2015).
Hierarchy of effects model: In terms of the promotion of the product, hierarchy of effects model analyses the effectiveness of the promotional strategy used. In this model, 6 steps are involved i.e. awareness, knowledge, liking, preference, conviction, purchase. The first step awareness defines that organization needs to adopt and implement those strategies through which organization could spread awareness regarding the newly launched shoes in the market. The advertisement must be strong enough so that consumers could gain adequate knowledge in relevance with the product so that they could compare them with the competitor’s products. The next step is liking under which is made up from the effective advertisement campaign only. After comparing and analysing the outcomes of the Nike’s shoes and the competitor’s shoes, consumers will reach to a stage in which liking for a particular product will be builds up. Then, preference step comes when consumer gets convinced to get the product. But there doubt still rotates in the consumer’s mind in relation with the product and this comes in the fifth step of hierarchy effects model. This is the last stage in which consumer purchases the product and after purchasing the product; it is duty of organization to satisfy the consumer’s needs so that above stages does not affect the consumer’s decision (Lefebvre, 2011).
IMC: Integrated marketing communication channels are used to communicate with the target audience in relevance with the product. These are the steps which are quite crucial in terms of enhancing the demand of the product. Promotion of the product through social media, print mediums, etc. could be used. Apart from this, there are numerous strategies such as personal selling, sales and promotion activities (Sharma & Lambert, 2013).
All the promotional and the advertisement strategies used in this situation for enhancing the demand of the Nike running shoes in the target market are quite impressive and effective and with these strategies organization will be able to attain its desired objectives and the goals.
Distribution Channel: This is the process through which organization delivers the product to the final consumer. One level, two level and three level distribution channels are available in the business environment but in this scenario, Nike Inc. will require three level distribution channels (Moore & Doyle, 2010).
The channel of distribution selected by the Nike is three levels and under this, manufacturer, agents, wholesalers, retail outlets are involved till the product reaches to the final consumer. Organization needs to consider verification procedures for verifying the agents, wholesalers and retail outlets engaged in the procedure of distribution the product till the consumers. This is crucial because false representatives can decrease the goodwill of the organization and consumers may get the duplicate products (Park & Kincade, 2010).
Departmental store: In this type of store, Nike will distribute its products to the consumers directly and this will also reduce the cost of the intermediaries which will reduce the price of the product. Under this store, wide range of variety will be offered to the consumers under one roof (Rosenbloom, 2012).
Conclusion
After discussing the marketing strategies of the Nike running shoes, it has been concluded that organization has developed their unique image in the sportswear, footwear, etc. apparels. They had planned to introduce a new product in the Australian market and to introduce this in the target market successfully; organization has included effective marketing strategies in order to make the marketing plan effective. SWOT analysis of the company, target market, segmentation and marketing mix are the crucial components for introducing the Nike’s new shoes in the target market. Apart from this, innovative recommendations have also been given in order to make the product unique and more effective for consumers as well as for the society.
References
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