Business Performance of Nike Inc.

Introduction

Marketing analysis of any company’s performance allows for a comprehensive and broad understanding of its primary field of work, advantages, and strategies. Some large profit-oriented corporations employ extensive marketing plans within which their tactics for the exploitation of the target market are demonstrated. Nike Inc., as one of the leading companies manufacturing and selling sportswear, is an interesting example of marketing analysis since its long-lasting international success implies the thorough application of some effective strategies. In this paper, the business performance of Nike Inc. will be provided in five consecutive sections.

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In these parts, 4 Ps marketing mix, product differentiation strategies, competitive advantages, commoditisation tendencies, and the ways the company deals with them, as well as market segmentation, will be discussed in detail.

Marketing Mix: 4 Ps

The marketing mix includes a significant number of variables that determine the presence of a company’s product on the market and its performance aimed at the introduction of goods or services to the target clients. Using a pull strategy and attracting customers to the company’s products, Nike has managed to build a strong marketing mix by developing competitive tactics within pricing, locating, and promoting products (Ahmed 2016). Within the 4 Ps approach, four constituents of the marketing mix are viewed, including product, price, place, and promotion.

Product

Nike Inc. has occupied a significant place in the international sportswear segment of the market since its creation in the 1950s. The range of products the corporation produces includes apparel, shoes, and sports equipment. One of the widest categories of products is shoes for different kinds of sports, including basketball, cricket, baseball, tennis, football, and others (Ahmed 2016). Also, the company offers shorts, skirts, t-shirts, and other sporting clothes items for running, tennis, cricket, and other kinds of sport, targeting both professionals and non-professionals.

Price

The pricing policy exploited by Nike is related to the long-established quality of the products, which are rather costly. Unlike its competitors, Nike Inc. does not offer lower prices due to the target clients being financially capable of paying more for a reliable and high-quality brand. Therefore, the entity utilises a “cost-based/value-based” strategy to determine the highest price its customers are willing to pay for an item, on the quality of which they can rely (Ahmed 2016, p. 16-17). In such a manner, the manufacturer is capable of investing in quality and providing its clients with the best products, meeting their high expectations.

Place

The products distribution is performed within the introduction of Nike’s goods to multi-brand sports shops and to exclusive Nike stores. The manufacturing and selling facilities of the company are located in different countries of the world, including the USA, where the Nike headquarters are based, and Asian countries. Overall, there are more than 200 states where Nike shoes, clothes, and equipment are presented on the market (Ahmed 2016). In addition, the company has developed an easily accessible online store that provides customers from different parts of the world with items that can be delivered to their homes.

Promotion

The company’s promotion campaign embodies a wide range of activities and initiatives that are based on its mission to “bring inspiration and innovation to every athlete in the world” (About Nike 2019, para. 1). The aim Nike pursues entails keeping the existing customers by providing the expected quality of products and attracting new clients with the help of an extensive advertising campaign.

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Billboards, TV-advertisement, print materials, and other ways of promotion are used to reach the public and make the available products known to potential buyers. The corporation does not include explicit pricing information in its promoting materials but rather concentrates on the advantages, innovative features, and quality (Ahmed 2016). Importantly, endorsement and celebrity branding are the main constituents of the successful promotion of the company (Masaviru 2016). Thus, such a strong marketing mix helps Nike to be a leading company and outrun its competitors.

Differentiation

Product differentiation deals with the attempts of a business entity to be unique and provide a one-of-a-kind product or service to its target population (Zehir, Can, & Karaboga 2015). Nike develops a wide range of products targeting diverse groups of clients, including men, women, and children, thus entering new markets and expanding its market presence (Mahdi et al., 2015). According to Zehir, Can, and Karaboga (2015, p. 360), differentiation “provides higher profitability by creating brand loyalty and low price sensitivity.” This idea is relevant for the analysed entity because Nike is a premium brand whose products are differentiated according to the kinds of sports it targets. The goals achieved with the help of differentiation strategies have contributed to Nike’s sustainably performance on the global market.

Competitive Advantage

For Nike, its competitive advantage incorporates several important issues. As mentioned on the company’s official website, the top priority of the corporation is an innovation that is impossible to achieve without technology and research (About Nike 2019). Continuous work aimed at the improvement of the existing products is based on the innovative ideas that contribute to the products’ quality and reliability, as well as comfort. Such a vector of performance shows Nike’s loyalty to its customers and wins the mutual attitude from the clients. Apart from technology and research, the entity has many patents on its ideas that secure the uniqueness of the products (Ahmed 2016). Also, according to Ahmed (2016), Nike uses a manufacturing outsourcing strategy that enables saving expenses for goods production, thus enhancing the profitability of the corporation.

Commoditisation and Coping with It

Nike tries to maintain its reputation as a reliable brand that meets the requirements of professionals and beginners in the world of sports, as well as promotes the message of healthy and active lifestyles (Mahdi et al., 2015). In order to avoid commoditisation, the organisation invests technological innovation, design, scientific and social research, as well as sponsorship of celebrities. All these actions contribute to the uniqueness of Nike on the market of sportswear.

Segmentation

Nike’s marketing segmentation strategy is manifested in the development of specific products capable of meeting the needs and requirements of diverse groups of people: males and females, sports professionals and those interested in an active lifestyle, and representatives of different kinds of sports (Ahmed 2016). Also, the company uses segmentation in its advertising campaigns by streaming ads during sporting events on television and by attracting a celebrity representative of a particular kind of sport (Mahdi et al., 2015). Such an approach allows for attracting new customers and empowers the company’s place in the market.

Conclusion

In summary, Nike Inc. is a big corporation that utilises very effective marketing strategies to achieve its goals and compete with other brands in the market. As a successful business, it has features in marketing strategy that guarantee a company’s winning position in comparison with its competing entities. Nike prioritises quality and innovation, target diverse segments of the market, and apply product differentiation strategies to withstand competition and refrain from the favourable reputation of its brand.

Reference List

About Nike 2019. Web.

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Ahmed, R R 2016, Strategic marketing plan of Nike. Web.

Mahdi, H A A, Abbas, M, Mazar, T I, & George, S 2015, ‘A comparative analysis of strategies and business models of Nike, Inc. and Adidas Group with special reference to competitive advantage in the context of a dynamic and competitive environment’, International Journal of Business Management and Economic Research, vol. 6, no. 3, pp. 167-177.

Masaviru, M 2016, ‘Image restoration: From theory to practice; The case of Manny Pacquiao and Nike company’, New Media and Mass Communication, vol. 51, pp. 22-29.

Zehir, C, Can, E, & Karaboga, T 2015, ‘Linking entrepreneurial orientation to firm performance: The role of differentiation strategy and innovation performance’, Procedia – Social and Behavioral Sciences, vol. 210, no. 2, pp. 358-367.

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