This sample paper focuses on the marketing concept of Nike. Here, you’ll find Nike’s marketing principles and concepts, branding, organizational culture, and other information that might be useful for your essay writing.
Nike is an American multinational corporation founded in 1964 as Blue Ribbon Sports and later changed its name to Nike Inc. in 1971. The company’s core business activities are designing, developing, manufacturing, selling, and marketing sportswear, apparel, and accessories. As of 2014, Nike was ranked the most valuable sports brand in the United States. This report will discuss the marketing concepts used by Nike. It will also identify the role of marketing strategies in realizing Nike’s objectives. The report will culminate by discussing the correlation between the marketing department and other departments at Nike.
Branding
In the corporate world, success hardly lasts, but innovation helps entrepreneurs find ways to stabilize their businesses when challenged. Nike is not an exception and has been affected by numerous brand-related challenges. Customers do not prefer repetitiveness, and there are various times when competitors’ brands sell more than Nike’s in the United States. In 1998, Nike’s brand became too familiar in the market, and customers needed a different experience. Interestingly, sometimes customers tend to value changes more than the quality of products (Pitts & Stotlar, 2013). In such situations, a business has to reinvent its brand to reclaim lost customers.
Nike restructured its branding strategy by developing sub-brands. Some sub-brands preserved the name Nike but tailored for particular sports, such as Nike Golf, Nike Dunk, Nike+, Nike Blazers, Nike Pro, and Nike Skateboarding. Others did not bear the name of the company. They include Air Jordan and Air Max. Today, Nike runs numerous subsidiaries, which include Brand Jordan, Hurley International, and Converse. Branding strategies helped the company to regain dominance in the American sports apparel market.
Organisational Culture
Nike has a distinctive organizational culture. Initially, it was founded as a sports business, but it shifted its attention to other equipment and non-sporting products through competition, innovation, and customer preferences changes. The apparatus includes sunglasses, watches, and apparel for casual wear purposes. Business-minded persons view the idea as a marketing tool intended to reach out to sports fans and make them part of a business that sponsors significant sports events and endorses the best athletes.
Nike executes internal marketing among the forty thousand employees scattered across its subsidiaries. The company uses internal marketing as a promotional strategy. The management appreciates that employees are the business’s most effective marketing tool and must be motivated to give their best. The workers wear branded uniforms, which resemble the sportswear, and enjoy packages premised on the concept of Nike being a kind and caring company. As aforementioned, Nike is successful because of its branding and marketing strategies. In marketing, an entrepreneur ought to distinguish between customers’ needs and wants for the business to be successful. Nike separates needs from wants and focuses on the former. That has been the secret behind the spirit of its branding (Pitts & Stotlar, 2013).
Product Strategy
Nike is a multinational corporation with various products designed for different market segments. The company has a prudent product portfolio management system that protects the business from drifting from its success path. This efficient method has enabled the company to open worldwide subsidiaries specializing in producing different products. For instance, the company has subsidiaries in China and Indonesia that focus on producing apparel (Pitts & Stotlar, 2013). Nike values the development of superior products and has invested in research and development. The company has a research facility in the United States, which designs products based on consumer needs. The facility also researches how to enhance the sportswear to guarantee comfort.
Promotional Strategy
Nike ensures that all its products bear the Swoosh logo. However, the slogan ‘Just Do It’ is not written on most products nowadays. That shows the high level of confidence that the company has in its brand. Nike sells its products through major retail sports shops, online marketing, and direct sales in promotional events. Retail stores allow the company to strategize and enhance competitive advantages by comparing its sales to that of competitors. The company has major retail sports shops under the subsidiary Niketown, which exclusively sells Nike products. In the contemporary world, large businesses cannot survive without an effective marketing strategy.
They face various threats, and only effective marketing strategies can guarantee their survival and success. Ironically, the size syndrome is a significant risk, which, if mismanaged, could cause irreversible havoc. By the time a big business realizes the damages attributed to size, the recovery process would take years and a lot of money. Nike uses a marketing strategy to achieve various objectives, which include brand popularisation, market growth, and boosting sales volume.
Therefore, for Nike to survive in the sportswear industry, it must develop efficient marketing strategies. Currently, the company uses celebrity endorsement to enhance brand popularity. The company understands that many customers prefer to associate with renowned personalities. It underlines why Nike uses athletes like Michael Jordan, Tiger Woods, and Michael Johnson, among others. The company makes customers believe they share their experiences with these personalities (Wen & Yazdanifard, 2015). The use of celebrity endorsement has made the brand popular, particularly in the United States and European markets.
Whenever people hear about sports shoes, the brand that comes to their mind is Nike. Indeed, today, over 60% of athletes use Nike sportswear across the globe. The application of celebrity endorsement has contributed to the popularity of the Nike brand in golf sports. Jackson (2013) alleges that apart from celebrity endorsement, Nike uses event sponsorship to promote its brand and boost its market share. Even though the major sports events are capital-intensive, they offer a perfect opportunity for Nike to communicate with its target consumers (Jackson, 2013).
Nike Marketing Concept, Strategies, Programmes, and Ethical Considerations
Market Diversification
Nike endeavors to meet all consumer needs. The strategy has helped it to increase its sales volume. Today, the company serves 47% of the American market. Moreover, its sales volume continues to grow annually. Mahdi et al. (2015) argue that Nike has ventured into market diversification to boost its sales volume. The company is investing in foreign markets. Nike Inc. has focused on athletics for many years. Currently, the company is diversifying into other sports, such as soccer. The strategy is intended to boost the company’s sales volume and cushion it from competition (Pitts & Stotlar, 2013).
Ethical Considerations
Ethical considerations are at the core of running a business. Nike ensures that its products meet the required standards. It helps boost the company’s sales volume and guarantees the safety of individuals who use the products. The company demands that celebrities observe high integrity and discipline to safeguard its image. Moreover, the company is cautious of the language it uses for advertising and public relation activities.
Moreover, the company ensures that its subsidiaries do not mistreat their employees. For instance, the company has a department focused on enhancing employee working conditions. The company also discloses the names of all its contract factories.
Marketing Principles and Concepts
Nike is a multinational corporation founded on robust marketing strategies. The marketing concepts and principles that drive the company include the marketing mix, segmentation, targeting and positioning model, marketing survey, and research. These ideas contribute to the enterprise’s competitive edge. The marketing department is actively involved in the development of plans and the identification of opportunities. Cooperation between the marketing department and the management team facilitates efficient decision-making processes. The marketing department advises the management on existing and potential business opportunities. Moreover, it helps the management make appropriate marketing strategy changes to boost sales volume.
Marketing Mix
The company’s marketing mix follows the 7ps principle, representing the product, price, place, promotion, physical evidence, people, and processes. Nike has invested heavily in its product mix.
Product
The company manufactures shoes, apparel, and accessories. Jackson (2013) avers that the business offers various shoes ranging from tennis shoes to running shoes. It also sells an assortment of apparel that includes shorts and jerseys. The accessories include socks, bags, gloves, and golf clubs, among others. The product mix enables the company to meet the needs of numerous market segments.
Place
Nike uses multiple outlets to distribute its products. The company has sweatshops in different countries across the globe. Additionally, it has various retail stores in the United States, China, Japan, and other nations. Kotler and Armstrong (2017) maintain that the company has an official online store facilitating merchandise distribution. Furthermore, it has numerous outlets dubbed Niketown that deals with Nike products exclusively.
Promotion
Nike uses numerous approaches to promote its products. They include personal selling, advertising, sales promotion, public relations, and direct marketing, among others. The company depends mainly on advertising, using notable celebrities to popularize its brand. Additionally, the company has salespersons who interact with potential clients and persuade them to purchase its products. At times, the company uses special offers and discounts to attract customers and boost sales volume.
Price
The company utilizes a value-based approach to set prices for its products. Kotler and Armstrong (2017) allege that Nike sets prices based on consumers’ perceptions regarding the quality of its products. Many customers prefer Nike due to its honesty in setting prices and failure to apply price discrimination methods. Niketown retail shops help to keep the market prices at reasonable levels.
Physical Evidence
Marketing mix demands that there must be physical evidence of the product regarding packaging and contact persons where direct marketing is applied. Otherwise, the marketing cannot be successful since potential customers need to see a product and talk to a person with adequate information about the merchandise. Nike uses branding strategy and establishment of Niketown outlets as physical evidence.
People
Whenever customers think of sports, the first brand that comes to their mind is Nike. The company has hired experienced workers who help in the manufacture of products as well as their distribution. The employees contribute to identifying customers who trust Nike’s products.
Processes
Nike outsources a majority of its functions to foreign subsidiaries. However, the company coordinates operations within the subsidiaries to guarantee the timely delivery of goods to the market.
Segmenting
Nike applies marketing segmentation, targeting, and positioning model in its marketing activities. The company has segmented its market based on consumer needs and purchasing power. Additionally, it used demographic factors to identify the target market. Today, the company manufactures an assortment of sportswear for different sports. Additionally, it has training kits for children and adults. Recently, the company established a new market segment that comprises women only.
Targeting
Targeting is mainly considered at the initial stages of business development when a product is at the design stage. However, Nike keeps innovating new methods of improving its products and meeting the needs of its target markets. The company serves numerous categories of customers. They include high-income earners, sports enthusiasts, and fitness-centric clients. Nike has training kits for fitness-centric clients. Additionally, the company manufactures an array of sportswear for sports fans. Some products are sold at high prices to target high-income earners.
Positioning
Nike uses the slogan “for serious athletes” to position itself. The leadership of Nike positions the company as one that caters to the interests of athletes by manufacturing sportswear that suits their various needs (Armstrong et al., 2013). The company’s primary customers comprise athletes and individuals serious about physical exercise.
Market Research
The company has invested in research and development, intending to develop superior sportswear that corresponds to changes in sports activities. Recently, the company acquired sports shoes, which rival companies claimed gave athletes an advantage over their counterparts. The development of sophisticated sportswear aligns with the company’s objective of serving serious sportspersons.
Nike is actively involved in market research to facilitate the identification of new business opportunities and the development of novel products. Nike specializes in the sales of sportswear. Thus, its primary market is the sports industry. Currently, the company is analyzing the potential of the soccer industry, intending to venture into the business. The company has marketing representatives who help to research and identify new markets.
Currently, Nike is in the process of establishing subsidiaries in Africa and Asia (Proctor, 2014). The company’s marketing department conducts research to build efficient strategies that can help boost its competitive advantages. Market research helps Nike analyze rival companies’ performance and devise mechanisms to outdo them in the sports industry. It also enables the company to identify customer behaviors, tastes, and preferences and respond accordingly (Kotler & Armstrong, 2017).
Relationships between Nike Marketing Department and Other Departments
Successful organizations do not tolerate division in their management operations. They succeed by embracing teamwork and effective competition among different players and departments within the organization. The marketing department is responsible for marketing functions in most corporations. Nike has strong interdepartmental relations, which promote teamwork and facilitate organizational growth.
Jackson (2013) alleges that the relationship between different functional areas is crucial as it guarantees organizational efficiency. An organization’s management team comprises various functional entities that are independent. However, their success depends on how they relate to one another.
Nike company values the marketing department because it helps establish new markets and facilitates decision-making processes. The marketing functions contribute to establishing merchandise prices based on market forces. The company gathers information about consumer behaviors, level of customer satisfaction, and product enhancement methods through market research. The marketing functions enable the company to interact with clients. In return, information obtained from the market is channeled to other functional areas, such as production and managerial departments.
Production Department
The production department is responsible for manufacturing apparel, sports shoes, and accessories based on the information gathered through the marketing function. According to Mahdi et al. (2015), the marketing department works closely with the production unit to ensure that the manufactured products meet the target consumers’ needs. Additionally, the marketing department provides that the production team creates adequate goods based on the volume of orders. At Nike, the marketing department ensures that sportswear is manufactured and delivered to the market on time to guarantee a competitive advantage.
The marketing department demands that products meet high-quality standards depicted in Nike’s promotional campaign messages. Customers have a perception that Nike manufactures the best sportswear in the world. Thus, the marketing department would not allow the company to frustrate customers by making inferior products. Nike has a quality assurance team that works in liaison with marketing representatives to assess the quality of goods before they are released into the market. Nike, being one of the leading corporations in the sports industry, spearheaded the establishment of international standards for sportswear and, therefore, cannot risk selling inferior products.
Management
The marketing department gathers information about substitute products and the potential of introducing new merchandise into the market and shares data with the management for further deliberations. Moreover, the staff helps the management make decisions on innovation and manufacturing new products. The management uses information from the marketing department to direct the production and distribution of new products. The information gathered via market research enables the management to identify threats in the market and diversify the company’s operations to mitigate risks.
Finance Department
As aforementioned, the marketing department is the most critical unit because it determines the survival and profitability of an enterprise. It underlines the reason Nike allocates a considerable budget to the department. According to Mahdi et al. (2015), the marketing department collaborates with the finance division. It ensures that the finance sector allocates adequate financial resources to facilitate the promotion and distribution of products. At times, the marketing department requests additional funding if it identifies lucrative opportunities. A healthy relationship between the marketing and financial departments has helped to build market share and boost sales volume.
Risk Department
The law requires multinational corporations to have a risk department. As such, Nike has a risk department that works together with the marketing unit to identify potential hazards and cushion the company. The major risks in the apparel industry include competition and large-size syndrome. The risk department assesses the performance of the different brands compared to rival companies and advises the marketing team on strategies to mitigate competition.
Mahdi et al. (2015) posit that the marketing team works with the risk department to set prices for different merchandise based on the current market forces. Sports activities are seasonal, and therefore there are times when demand for certain products rises significantly. Whenever the marketing department predicts significant growth in the request for certain goods, it notifies the management team, which advises the production department to make necessary arrangements to meet customers’ needs. The marketing department is required to give accurate information about the projected demand. Nike uses an inventory management system to identify the flow of products and predict future needs (Jackson, 2013). The system helps in product portfolio management.
Human Resource Department
The marketing department comprises many employees. The department works in collaboration with human resource management to enhance working conditions. Moreover, the marketing department and human resource management collaborate to equip employees with the requisite skills. Human resource management contributes to the success of marketing research and the production of quality goods by ensuring that employees have the necessary skills. Mahdi et al. (2015) allege that Nike’s human resource management motivates the marketing team through competitive remuneration and rewards.
Moreover, the management addresses the sales team’s needs to prevent possible industrial action. Technological advancement has enabled customers to order products online. Once the clients purchase goods online, the marketing department has to liaise with the transportation division to facilitate their delivery. Thus, the marketing department works with the transportation unit to ensure that products are delivered to the right customers without delay.
Reference List
Armstrong, G, Kotler, P, Harker, M & Brennan, R 2013, Marketing: an introduction, Pearson Education Limited, New York.
Jackson, N 2013, Promoting and marketing events: theory and practice, Routledge, Abingdon.
Kotler, P & Armstrong, G 2017, Principles of marketing, Pearson Education Limited, New York.
Mahdi, H, Abbas, M, Mazar, T & 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.
Pitts, B & Stotlar, D 2013, Fundamentals of sports marketing, Fitness Information Technology, Incorporated, New Jersey.
Proctor, T 2014, Strategic marketing: an introduction, Routledge, Abingdon.
Wen, O & Yazdanifard, R 2015, ‘The review of the effectiveness of celebrity advertising that influences consumer ‘s perception and buying behaviour’, Global Journal of Management and Business Research: E-Marketing, vol. 15, no. 4, pp. 1-7.