Marketing: Nike Inc. Marketing Plan

Nike Inc: Marketing Plan

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Nike Inc. Marketing Plan

Nike Inc. is a company that is devoted to ensuring that its customers are provided with the right product and experience through innovations and discovery. Founded in 1964 by athlete Phil Knight, the company started as a distributor for Onitsuka Tiger a Japanese shoemaker then called Blue Ribbon Sports (BRS). After the end of its relationship with Onitsuka Tiger, BRS started its own footwear line and later became a leading brand in the United States covering about half of the market share in the athletic market industry.  

Nike Inc. engages in sports footwear and apparel products that are produced basically for sport hence mostly targeting athletes. The products sold by the company include sporting shoes, clothes, and sporting equipment. In recent years, the demand for sporting goods has been increasing due to increasing consumer health consciousness encouraging sports participation (Burgelman, 2017). This in the process led to increased demand for athlete equipment. However, it is important to note that the industry experiences a high level of competition requiring the company to develop a marketing plan to ensure continued competitive advantage.

Situational Analysis

The company has been ranked among the top players in the athlete industry and through its intensive brand awareness to its customers it has been able to increase its market share significantly. Moreover, the company has been able to integrate operations vertically with other sporting product manufacturers. The integration focuses on the marketing, manufacturing, designing, and retailing processes that are aimed at examining consumer trends and the development and implementation of new and better technologies (Meredith, 2016). Some of the major products that consumers purchase include athletic footwear, exercise equipment, sports merchandise, and athletic apparel. Most of the company’s products are sold through online retailing enabling a high growth in the market share. However, it is important to note that some individuals prefer to shop in stores.

Focusing on the market trends and evolution, the initial advertising strategy that Nike Inc. used to promote its products was through word of mouth and good publicity. However, with the ever-changing environment and social-cultural aspects, there is a need for the company to embrace the changing trend or lose its competitive advantage. In response, Nike Inc. engages in strategies that are aimed at increasing its target market due to intense competition (Burgelman, 2017). Other strategies include; the development of superior quality, style, and reliability, the introduction of digital sports, and technological advancement in regard to shoe models. Nevertheless, there is still increased competition and the company faces challenges adapting to the changing fashion trends greatly affecting its sales.

To ensure that it maintains a better competitive advantage in the athlete industry, Nike Inc. engages in a situational analysis to determine its internal and external environment. Starting with the external environment, a PESTLE analysis is conducted to determine its political, economic, social, technological, legal, and environmental factors. Research indicates that the external environment plays a major role in influencing the market trend and behavior, thus a PESTLE analysis can help in determining customer behavior and have a better understanding of the market shifts enabling Nike Inc. to develop strategies that are in line with the trends.

In regard to political and legal factors, the major aim is on the state laws and different agencies and groups that are in a position to influence or limit organizations in a given environment (Perrone, & Wodonga, 2015). The political and legal requirements ensure that the company can reach stability by engaging in given countries' financial policies and following foreign market requirements and government bureaucracy. Purchasing power and spending patterns of individuals are affected by economic factors, technology influences social habits, while socio-cultural and environmental factors affect the spending power and product demand of customers respectively. In order to incorporate these factors, Nike Inc. can ensure that it complies with the worker and employee laws engages in positive government policies, handles legal issues, and is in a position to get help from countries with favorable relationships (Meredith, 2016). Moreover, an analysis of the economic state can help in the economic decision-making process depending on the trends social analysis helps in predicting consumer trends and technological analysis focuses on digital trends and innovation.

Focusing on competition, some of Nike’s main competitors include Adidas and Reebok as they engage in similar products. All the companies engage in products that are both involve athletic footwear and clothing that are meant for fitness. Nike has a strong competitive advantage due to its differentiation and distinctive competency enhanced by strong consumer brand awareness (Burgelman, 2017). In addition, its long-lasting slogan “Just Do It” and symbols that are recognizable by the target audience enhance its competitive advantage over its competitors. Nike’s SWOT Analysis provides some of the opportunities, weaknesses, opportunities, and threats that it faces in the industry. Starting with the opportunities, Nike can develop products including sportswear and sunglasses.

Other opportunities include developing its brand internationally, increasing brand recognition in the market, supporting different market events, and growing its segmentation of women athletes (Perrone, & Wodonga, 2015). Major threats include economic recession and currency fluctuations, increasing competition, maintaining reputation, and price sensitivity. In regard to the company’s strengths, it has strong distribution channels, it is the world’s number one shoemaker, a joint venture with Apple’s iPod increases innovation, engages in different segments, and personalized products through innovative design, and strong marketing campaigns. Some of its weaknesses include higher prices as compared to competitors, high dependence on footwear sales, minimum wage rates, poor working conditions, and a bad reputation.

Target Market

On the issue of the target market, Nike focuses on products that serve customers between the ages of 15 and 55, in regard to interest and purchasing habits the company market segment ensures its products are sports-oriented and focus on an active lifestyle. Geographically, Nike's products are aimed at reaching markets across the world (Burgelman, 2017). The strategies utilized to ensure that the products reach its target consumers include aggressive marketing, product sponsorship, and Nike's cross-training approach.  

Positioning

The company’s ability to make products that satisfy customers and its slogan “Just Do It” which appeals to customers with a sense of confidence and inspiration, has enabled it to become a major competitor in the athlete industry. Some of the strategies that have enabled it to position itself at the top include appealing style and attitude, enhancing athletic lifestyle, quality, and valuable products, and well-designed products.  

Product Strategy

Nike Inc. has a wide range of products that include shoes, equipment, and apparel that are currently top-selling and are all specialized for sports. The main product is shoes, and the company focuses on different categories including baseball, soccer, tennis, ice hockey, lacrosse, and cricket (Perrone, & Wodonga, 2015). Additionally, the company engages in other sports products such as shirts, shorts, and products meant for outdoor activities and recreational use. Engaging in personalized products, the NIKEiD sub-brand focuses on customized designs by offering a selection of products that engage with what the customer wants. This approach allows customers to create different designs and choose from different shoe areas, colors, and fabrics.     

Promotion Strategy

The company engages in the marketing communications mix as it is effective due to its ability to attract new customers and retain existing customers. Nike engages in print advertisement as it is simple but presents a strong message and is one of Nike’s strengths. Furthermore, Nike utilizes commercials, celebrities, and billboards to ensure its target customers are aware of the offers although, it requires new strategies to encourage new products (Burgelman, 2017). As a way to ensure its brand remains recognized, Nike Inc. sponsors different events including Hoop It Up and The Golden West Invitational. This helps it maintain its high revenues and better its competitive advantage against its competitors.

Price Strategy

The main objective of Nike’s pricing is to target consumers in the premium segment as it targets consumers that have the financial capability such as expensive clothes and status as a symbol. The pricing strategy that Nike uses is more competitive than its competitors and it mostly utilizes vertical integration where different participants at different points take a role in controlling the cost and impact of the product pricing (Phau, Teah, & Chuah, 2015). The company uses Value-Based Pricing due to its known brand that encourages customers to pay more to secure quality products as compared to its competitors offering low prices. Due to Nike’s current customer trend that specifies what they are willing to pay to ensure the quality of products or services, Nike has the advantage to continue using its pricing strategy.

Distribution Strategy

Nike Inc. uses multi-brand stores and exclusive Nike stores across the world with about 20,000 retail stores in the United States and sales of its products in over 200 countries worldwide. In an aim to increase its distribution ability, Nike has manufacturing facilities across the world and involves independent distributors and other operational units that promote service and product delivery (Perrone, & Wodonga, 2015). Its outsourcing strategy helps in reducing the cost of products in developing countries. Besides, Nike utilizes its online store to reach customers across the world in a more customized approach.

References

Burgelman, R. A. (2017). 9. Complex strategic integration at Nike: Strategy process and strategy-as-practice. Handbook of Middle Management Strategy Process Research, 197.

Meredith, L. (2016). Multiple marketing plans: an analytical template. Journal of Business & Industrial Marketing, 31(4), 519-530.

Perrone, A., & Wodonga, T. A. F. E. (2015). Centralian College: Creating a strategic marketing plan for long-term growth. Marketing, 85.

Phau, I., Teah, M., & Chuah, J. (2015). Consumer attitudes towards luxury fashion apparel made in sweatshops. Journal of Fashion Marketing and Management, 19(2), 169-187.