Introduction
Nike, Inc., previously Blue Ribbon Sports is a Beaverton, Oregon-based sportswear corporation. It was created in 1964 as Blue Ribbon Athletics by Bill Bowerman, a University of Oregon sports instructor, and Phil Knight, Bill’s student (Kim, 2020). By the early twenty-first century, Nike had store outlets and suppliers in more than 170 nations, and its emblem, a bent check symbol known as the swoosh, was globally recognizable (Kim, 2020). For Nike Inc. to advertise its products, the company uses the 4P’s marketing mix, including product, price, place, and promotion. The present paper utilizes the 4P’s of the marketing mix to explain how Nike Inc. accomplishes its sales strategy.
Product
This component of the marketing mix details the products and services given by the firm to its target customers. The collection of outputs is referred to as the product portfolio. Nike Inc.’s success was due to a shift in the company’s commodity mix. For instance, the company continues to innovate in order to create new items and upgraded versions of existing ones (Shen et al., 2021). Originally a wholesaler of footwear, the firm currently produces a variety of footwear, gear, and equipment for various sports.
Positioning
Placement is all about establishing a firm’s brand in comparison to rivals. Nike’s swoosh emblem, Just Do It tagline, and advertising endeavors linking its products to the magnificence of great athletes persuaded them that the company was winning and ambitious (Lee et al., 2018). For example, Nike has intentionally positioned itself as the industry leader in sportswear that features cutting-edge technology.
Brand Name
Nike’s emblem has become a globally recognized symbol. Nike also collaborates with athletes to market the brand. Nike’s main product is shoes, and the firm produces a range of footwear for several sports, including golf, hockey, volleyball, soccer, tennis, basketball, football, and snowboarding (Liu, 2021). Additionally, the company manufactures consumer fashion footwear such as flip-flops and Mary Janes.
Company Image
The company’s image of a business is sometimes alluded to as its brand image or how people perceive it outside the corporation. For example, Nike is a market leader in sports-related items like footwear, gear, and equipment. The brand is well-known around the globe since it has a worldwide presence and generates more than $18 billion in sales (Asabuwa Ngwabebhoh et al., 2021). Additionally, a favorable image contributes to recruiting stockholders, company associates, and consumers.
Features and Benefits
Nike’s key values include technological advancements, elevated and fashionable goods, sports pleasure and celebration, optimum effectiveness, self-empowerment and inspiration, and regional and national involvement and it is also committed to global responsibility. Nike’s numerous and diverse rewards include complimentary and reduced in price wellness potentials, world-class athletic facilities, and transit and tutoring support.
Packaging
Nike excels in every category, and its most recognizable and contemporary packaging is constructed entirely of reusable and renewable cardboard. The material has clean, symmetrical lines and is well-known for displaying the Nike tick on a simple orange backdrop (Liu, 2021). Nike’s sneaker wrapping is entirely composed of recycled materials, featuring milk and orange juice boxes and coffee closures.
Warranty
Nike Inc. rallies behind all of its footwear and apparel items. If buyers think their merchandise is defective and return it within 60 days of acquisition, they will get a full refund (Liu, 2021). In addition, Nike’s loyalty program allows buyers to replace sneakers for a fresh set within two years.
After-sale Service
Nike Inc. provides a variety of post-purchase services, the most popular is the warranty service. Warranty solutions execute a warranty firm’s contractual obligation when a producer, merchant, or provider sells a product, including a policy, return policy, or service agreement (Liu, 2021). Nike footwear and apparel are exchanged within two years of the date of manufacture if they display workmanship or element flaws.
Place
This marketing mix component identifies the channels via which the company’s goods are sold, accessible, and disseminated. For example, Nike Inc. distributes its athletic footwear, clothes, and equipment via a global network of retail locations (Andjelkovic & Radosavljevic, 2020). For instance, these things are available at a variety of big retailers.
Channel of Distribution
Nike Direct is Nike’s direct-to-consumer (DTC) sales channel. Comparing Nike’s logistic methods, direct selling to consumers provides a bigger profit margin than intermediary transactions. As a result, Nike’s DTC sales have expanded significantly, as has the percentage of DTC sales in the company’s total sales mix (Andjelkovic & Radosavljevic, 2020). Nike’s DTC strategy is two-pronged, consisting of Nike-owned retail locations, referred to as brick-and-mortar locations, and its internet network (Andjelkovic & Radosavljevic, 2020). Nike’s factory outlets provide a superior product to value-conscious customers.
Type of Distribution
Retail locations are the most important locations for Nike items to be marketed since they are perfectly positioned and readily available in various markets worldwide. These vendors include large corporations such as Walmart and small independent and regional businesses. Additionally, this 4P aspect demonstrates that shoppers may acquire Nike’s sneakers, gear, and equipment electronically.
Promotion
This component of the promotion mix is sometimes referred to as the marketing interactions channels, and it consists of the methods through which Nike communicates with its potential customers. Nike Inc.’s corporate reputation is dependent on good product advertising, which is one of the competitive strengths identified in the SWOT assessment. As a result, the corporation employs promotional strategies to educate and convince target clients about its goods.
Message/Positioning
Nike’s positioning principle is as follows: “For dedicated athletes, Nike inspires confidence by providing the ideal shoe for every sport,” (Lee et al., 2018, p. 460). Thus, Nike designs its goods with its prospective clients in mind. They study and enhance their merchandise for the general population and individuals with additional requirements.
Advertising
Advertising is a critical component of Nike’s ability to attract consumers. As a result, the corporation depends extensively on advertising, particularly those with prominent celebrity endorsers such as prominent sportsmen and teams. In addition, Nike Inc. employs direct marketing to reach out to target consumers with new items (Li, 2019). Typically, its new products, equipment and items get extensive advertising.
Personal Selling
This component of the firm’s marketing mix involves individual advertising through sales representatives who convince target customers to purchase the company’s goods. For instance, sales associates at NikeTown retail locations are taught to utilize this enticement. However, to maximize effect, the corporation employs salespeople to contact specific organizations or individuals inside key market categories.
Sales Promotion
Nike periodically provides special deals promotions to attract new consumers and increase sales. These reductions and discount coupons are a part of the firm’s sales marketing strategy.
Public Relations
The corporation promotes and financially supports groups such as society-based networks that promote the brand’s sports shoes, gear, and equipment in public affairs. According to the methods in this component of Nike’s promotion mix, its success in marketing its brand and products to the worldwide sports goods market is contingent on its relationships with prominent endorsers.
Price
This component of the marketing mix establishes the pricing at which the business operates to optimize revenues while capturing the targeted proportion of the international market. Nike’s efforts in technology are connected to a plan of charging a premium for its goods. Nonetheless, the corporation considers current market circumstances when establishing its pricing levels and price ranges (Liu, 2021). Under prices, the paper discusses Nike’s pricing objectives, strategies, and influence on competition.
Objective
Nike launched a new pricing strategy as the corporation concluded via market research that its consumers valued the brand’s worth, which allowed it to charge a premium for its goods. Therefore, Nike’s pricing objective has always been for-profit purposes, thus growing its annual revenue.
Strategy
Nike Inc. prices its brands using a combination of value-based and upmarket pricing tactics. Nike Inc.’s value-based pricing approach considers customer perceptions of the items worth (Liu et al., 2019). The premium pricing approach entails high costs, which are justified by a premium advertising strategy that positions Nike items as superior in terms of performance and worth (Liu et al., 2019). The corporation’s usage of high-profile endorsements in ads demonstrates its commitment to premium pricing.
Impact of Competition
Nike and Adidas’ pricing methods contribute to their sales success since they are closely related to consumption. Nike, for example, developed a low-priced brand portfolio in the aftermath of their 2010 world cup loss to Adidas (Batmunkh, 2021). The price reductions were made to gain more consumers to the company’s diverse line of shoes, apparel, and supplies. Unfortunately, this was a type of price war, and although it drew in a large number of consumers, it dragged down the company’s profitability ratios.
Conclusion
The promotion mix is an excellent and appropriate method of building a promotional campaign. Nevertheless, the 4P’s alone are insufficient and should be increased to the 7Ps to improve effectiveness and success to adjust to different circumstances. Furthermore, the 4Ps are completed by adding three Ps: process, physical environment, and people. As such, Nike Inc. should incorporate the additional 3P’s to ensure further success and effectiveness.
References
Andjelkovic, A., & Radosavljevic, M. (2020). The length of the distribution channel as a factor of its efficiency. Strategic Management-International Journal of Strategic Management and Decision Support Systems in Strategic Management, 25(2), 1-9. Web.
Asabuwa Ngwabebhoh, F., Saha, N., Saha, T., & Saha, P. (2021). Bio-innovation of new-generation nonwoven natural fibrous materials for the footwear industry: Current state-of-the-art and sustainability panorama. Journal of Natural Fibers, 1-11. Web.
Batmunkh, E. (2021). Role of football in international business and economy. Management Science and Business Decisions, 1(2), 39-56. Web.
Kim, M. (2020). How Phil Knight made Nike a leader in the sport industry: Examining the success factors. Sport in Society, 23(9), 1512-1523. Web.
Lee, J. L., Kim, Y., & Won, J. (2018). Sports brand positioning: Positioning congruence and consumer perceptions toward brands. International journal of sports marketing and sponsorship, 19(4), 450-471. Web.
Li, S. (2019). Intertextuality as a strategy of glocalization: A comparative study of Nike’s and Adidas’s 2008 advertising campaigns in China. Semiotica, 2019(230), 495-513. Web.
Liu, C., Lee, C. K., & Leung, K. H. (2019). Pricing strategy in dual-channel supply chains with loss-averse consumers. Asia-Pacific Journal of Operational Research, 36(05), 1-22. Web.
Liu, X. (2021, March). NIKE’s general company analysis based on it 2020 annual report. In 6th International Conference on Financial Innovation and Economic Development (ICFIED 2021) (pp. 799-803). Atlantis Press.
Shen, B., Xu, X., Chan, H. L., & Choi, T. M. (2021). Collaborative innovation in supply chain systems: Value creation and leadership structure. International Journal of Production Economics, 235, 1-16. Web.