Nike Inc.’s Marketing Concepts and Terminologies

Nike Inc. was established in 1964 under the name Blue Ribbon Sports. Today, the company focuses on the design, manufacture, and distribution of sportswear and accessories. It produces sports shoes, apparels, and accessories like gloves, bags, and sunglasses among others. Nike sells products under its brand (Mahdi et al. 2015). Its marketing and promotional strategies enable it to grow the market share and attract many customers. Active segmenting, targeting and positioning techniques allow Nike to serve different categories of clients. A good relationship between the marketing department and other departments facilitates decision-making and organisational efficiency. This article will discuss the various marketing concepts and terminologies that apply to Nike Inc.

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Marketing Concepts

Branding

Mahdi et al. (2015) define branding as a marketing strategy that helps to imprint unique image of a product in the mind of clients. It enables an organisation to differentiate itself from rivals. Nike uses different strategies to brand itself, which include the establishment of sub-brands, brand identity, brand extension, and brand image among others. Nike associates itself with the goddess of success. It underscores the reason the company uses the brand Nike. The management of Nike Inc. endeavours to ensure that clients develop a perception that the firm’s products can enable them to achieve happiness, power, and success. The company uses a logo that is easily recognisable across the globe. The Swoosh logo “has made Nike one of the most highly valued and successful brands today” (Singh & Pattanayak 2014, p. 43). The company’s use of the Swoosh logo has resulted in customers perceiving Nike as a symbol of athletic excellence. Su and Tong (2015) argue that many consumers view Nike’s brand as a spirit of determination. According to Su and Tong (2015), Nike’s brand image embodies numerous aspects that clients yearn for in their lives. They include innovation, dominance, winning, authenticity, and performance.

One of the strategies that Nike uses to popularise its brand is the establishment of a captivating tagline. The company uses the phrase “just do it”, which resonates with all customers. The tagline enables clients to associate with the brand and generate personal interpretation. Singh and Pattanayak (2014, p. 47) allege, “This catchphrase spreads from the fitness world to everyday life, becoming a personal mantra for whatever life may throw your way”. Nike has created multiple sub-brands to enable it to grow its market share. One of the sub-brands is the famous Michael Jordan brand. The company has also established new product lines. Nike has also invested in brand extension to enable it to venture into new markets. Today, Nike manufactures branded iPods in partnership with Apple to target athletes. The company contemplates venturing into the soccer industry, which is currently dominated by Adidas.

Product Strategy

Nike has invested heavily in research and development to enable it to manufacture superior products. Nike uses 3D printing technology in its manufacturing processes (Tong & Su 2014). It allows the company to create superior components for its diverse products. Nike endeavours to innovate for global athletes. Consequently, the company uses technology to devise new performance innovations for sports shoes. Enhanced technical superiority has enabled Nike Inc. to manufacture quality basketball and athletics shoes.

Nike does not focus on sportswear alone. The company has invested in new product categories, regions, and sports. Nike’s sports apparel business has grown tremendously and accounts for at least 25% of its total revenue (Tong & Su 2014). The company has invested in accessories like sunglasses. It has also ventured into other sports, which include football, golf, baseball, wall climbing, ice and street hockey, and hiking among others. Nike has a strong product portfolio management strategy that has enabled it to develop a range of brands that cover diverse lifestyle categories, sports, and price points. For instance, the company’s brands include Hurley, Umbro, Nike Golf, and Converse.

Promotional Strategy

Nike uses numerous strategies to popularise its products. The company spends a lot of money on big-name endorsements. For many years, the company has associated itself with famous athletes like Michael Johnson. It makes the customers believe that they share something with the athletes whenever they use Nike products, thus encouraging them to purchase the company’s sportswear (Wen & Yazdanifard 2015). Apart from the big-name endorsement, the company uses celebrities to market its merchandises. Nike uses notable celebrities and sports personalities such as Tiger Woods, Michael Jordan, and Jackie Joyner-Kersee to advertise its products. It helps the company to draw the attention of customers who associate with the celebrities.

Wen and Yazdanifard (2015) allege that Nike uses the promotional mix to market its brand. The company uses its employees to run personal selling. The employees are trained in how to handle clients and enhance their experience. Also, Nike uses direct marketing to sell new products. It has a team of sales representatives that approaches the target customers to sell new products. For instance, the sales personnel visit sports organisations in tertiary institutions to sell the company’s products. The company’s sales promotion entails special offers and coupons. The sales promotion enables Nike to target new customers by enlightening them on the features and benefits of its products. Wen and Yazdanifard (2015) argue that Nike does not use public relations to promote its products. Instead, “it uses public relations to address social issues linked to the company, such as sweatshops and the use of green technology” (Wen & Yazdanifard 2015, p. 4).

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Nike’s Organisational Culture

According to Tong and Su (2014), Nike observes a distinctive “cool culture” that contributes to its success. The company manages a pool of employees who believe in the value of what they do and dedicate their efforts to organisational goals. The company practices internal marketing, where employees wear uniforms bearing its logo. Moreover, it encourages its workers to act as brand ambassadors. Nike sells a sports culture. Mahdi et al. (2015) argue that the company is devoted to hard work, performance, serious sports, and disregard for convention. Nike is a caring company that is conscious of the bodies of its clients. The company endeavours to make sure that customers appreciate the value of sports to their lives. For instance, it encourages women and young girls to engage in physical exercise. The company invests in sports that do not have high returns, making the public to view it as a caring firm. Mahdi et al. (2015) maintain that corporate social responsibility is a core component of Nike’s culture. The company strives to conserve the environment, enhance human potential, and transform manufacturing. Nike’s employees interact with local children and encourage them to be physically active. Investment in technology ensures that the company delivers real value to clients.

Marketing Strategies and Ethical Considerations

Marketing Strategies

Nike uses marketing strategies to enable it to realize its objectives, which include earning a profit for shareholders, growing market share, and increasing competitiveness. One of the marketing strategies that enable Nike to boost profitability and increase market share is emotional branding. The company appeals to customer aspirations, needs, and emotions. Su and Tong (2015) argue that Nike leverages the heroism narrative to market its products. Customers get attached to Nike brand as it reminds them of success and motivates them to work hard. The “just do it” slogan arouses clients’ aspiration for greatness. The company’s advertising strategy does not only captivate athletes but also other people as everyone yearns for fame. Consequently, many people opt to purchase Nike’s products contributing to increasing in company’s profit. The use of customer feedback to manufacturing successive products helps to boost Nike’s competitiveness as it develops sportswear that meets the needs of target clients.

Nike appreciates the significance of social media in reaching new customers. The company uses social media platforms like Facebook and Twitter to grow its customer base and expand market coverage. It uses a Twitter account to respond to customers’ complaints, thus enhancing consumer loyalty. The social media platform helps it to gather invaluable customer feedback that facilitates production of subsequent merchandises. According to Kreng and Wang (2013), Nike has invested in digital technology to enables it to grow its market share and boost competitiveness. Nike develops running sensors that gather information about the performance of athletes. The information is invaluable in the development of sportswear. It has enabled the company to manufacture sports shoes that enhance athlete’s performance. In fact, some corporations and sports officials complain that Nike’s sports shoes give athletes an unfair advantage over their competitors.

Ethical Considerations

Nike is cautious of its operations. The company ensures that it operates within the code of business conduct and ethics. Nike encourages contract factories to observe established labor laws. Failure to follow the laws may harm Nike’s reputation and competitiveness. Today, all sweatshops and contract factories have to offer excellent remuneration to employees and observe quality working conditions. Nike discloses the names of all its contract factories to facilitate public scrutiny. The company terminates contract with any plant that does not abide by the established labor laws.

Application of Marketing Concepts at Nike

Nike Inc. uses various marketing concepts and principles in its daily operations. They include the marketing mix, segmenting, targeting and positioning, and marketing research among others.

Marketing Mix

Nike uses the 7Ps marketing mix, which stands for product, price, promotion, place, physical evidence, people, and processes. The marketing mix enables the company to grow its market share and boost profit.

Product

Nike manufactures a range of the goods, which include apparel, shoes, accessories, and equipment. The company is renowned for the production of quality sports shoes. With time, Nike has introduced novel products to its portfolio. Currently, the company manufactures tennis shoes, running shoes, and shoes for numerous other games, including cricket. It also produces apparel like shorts, jerseys, and associated products. Moreover, Nike’s product mix comprises equipment and accessories like golf clubs, sunglasses, soccer balls, and gloves. The products are sold under different brands.

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Place

Nike distributes its products through various channels across the globe. They include retail stores, online store, and Niketown outlets. Nike sells its products primarily through retail stores. They include big business like Wal-Mart. Customers can also buy the company’s products through its online store. According to Mahdi et al. (2015), Nike runs numerous Niketown outlets that sell its products exclusively. The company manages the distribution of its products.

Promotion

Promotion helps to boost the brand image of Nike Company. The corporation uses advertising, direct marketing, personal selling, and sales promotion to popularise its products. Advertising is the primary method of promotion that Nike utilises. The company relies on celebrity endorsement to promote its merchandises. It also uses personal selling to boost the sales volume. The company’s employees approach target consumers and persuade them to purchase the business’s products. The direct marketing entails visiting sports organisations and tertiary institutions to encourage them to buy Nike’s products. At times, the company issues vouchers and discounts to attract new customers.

Price

Mahdi et al. (2015) allege that Nike uses the value-based pricing technique to boost profit and sales volume. The company sets prices based on consumer’s feelings about the value of its products. The perception that clients have about merchandises determines the maximum rate that the corporation can set. The strategy enables Nike to raise the prices of its products without losing customers.

Physical Evidence

Physical evidence refers to the tangible proof that shows the existence of an organisation. Nike has many Niketowns across the United States that serve as the points of contact between the company and customers. The outlets offer exceptional services to customers.

People

Nike has a pool of experienced employees who facilitate research and development as well as the distribution of the company’s products. The workers persuade clients to purchase the business’s products and enlighten them about their benefits.

Processes

Nike has centralised its research and development facility. Thus, it ensures that all contract factories follow similar procedures to manufacture its products. The company provides that the retail outlets distribute products on time.

Segmenting

Nike uses demographic, geographic, psychographic, and behavioral strategies to segment its target market. The company targets customers aged between 15 and 40 (Ko et al. 2012). It does not discriminate against customers based on gender. Recently, the company established a segment that focuses exclusively on women. It sells bras and tights meant for women. In the United States, the company focuses mainly on baseball and football. Nike targets primarily individuals who live in towns as they have a high level of disposable income. Ko et al. (2012) aver that Nike targets people who are conscious of their physical fitness and health.

Targeting

Nike targets three different categories of customers. They are sports enthusiasts, Fitness-centric clients, and high-income earners. The company manufactures jerseys, shorts, and training kits for high-income earners. The apparels are sold at high prices (Ko et al. 2012). Moreover, Nike has training tools for individuals who are fitness-centric. The company target clients who engage in physical activities. Nike does not manufacture sportswear for athletes only. The company also targets people who like to associate with various sports like athletics, soccer, and golf among others.

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Positioning

Nike uses the mantra “For serious athletes” to position itself in the market. The management presents Nike as a company that manufactures preferred brands of sportswear meant for different sports (Ko et al. 2012). As a result, athletes have confidence in using the business’s products. Indeed, most athletes regard Nike as the leading manufacturer of sports apparels.

Marketing Research

Previously, Nike focused on the design and production of sports products and paid limited attention to customers. However, today, the company appreciates the significance of marketing research. According to Kotler (2012), innovation cannot thrive without marketing research. Nike conducts marketing research to identify the needs of the existing and potential markets. Information from the marketing research helps to develop novel products. Nike has revolutionised the sports apparel business through research and development. The company researches on the anticipated changes in the games industry and manufactures products to address them. Currently, the company is investigating the viability of the soccer industry with an objective of venturing into the business in the future.

Relationship between Marketing Department and other Departments

As per Kotler (2012), the marketing department serves as a link between an organisation and the outside world. A company cannot communicate with the target market without the marketing representatives. Therefore, a marketing department is an essential organ in a business. For a business to succeed, there must be a healthy relationship between the marketing division and other units. Other agencies rely on information from the marketing department for decision-making. Kotler (2012) argues that even though organisations have a sales staff, other departments should reflect on marketing in their operations. It would be difficult for an institution to establish an effective marketing strategy without promoting cooperation between the different departments.

Management Department

The management relies on information from the marketing division in making decisions regarding new and existing products. In Nike Company, the management unit uses information from the marketing sector to make investment decisions. The data from the marketing department enables the management to identify viable projects. The department considers information about the likely and definite market as well as consumers’ response to products to decide whether to invest in merchandise. According to Rubera, Ordanini, and Calantone (2012), Nike uses information gathered by the marketing department to identify potential risks and diversify its market. The management also uses information from the marketing department to plan for research and development. It ensures that the research and development unit fulfills the present and future consumer demands. Kotler (2012) claims that the management use data from the marketing department to ensure that Nike manufactures and delivers products within the required schedule.

Production Department

According to Kotler (2012), the production department relies on information from the marketing division to determine the type and quantity of products to manufacture. Failure to consult the marketing department would result in a company incurring costs associated with inventory management due to the production of surplus products. Nike uses the marketing department to identify the products that are in high demand. The marketing and production departments work together to ensure that the company manufactures products based on consumer demand. Additionally, the marketing department gathers information regarding customers’ tastes and preferences. The information is handed over to the production department, which uses it to manufacture products based on consumer needs. The marketing department monitors the production cycle to ensure that the manufactured goods meet customer expectations.

Finance Department

The success of an organisation depends on timely production and distribution of products and services. A company cannot guarantee smooth operations without availing the necessary financial resources. The financial department works in liaison with the marketing division to ensure that there is sufficient budget to cater to the production costs. Moreover, the marketing department computes the research, distribution, and advertising costs and seeks fund from the financial division. At times, the marketing department may request additional funding if it identifies valuable marketing opportunities. Nike would not have realised its current success without a healthy relationship between the marketing and financial departments. The finance division funds investment in technology, which goes a long way towards enhancing organizational efficiency. Moreover, it ensures that the salaries for marketing department staff are available to prevent possible go-slow, which might affect productivity.

Human Resource Department

The human resource department is responsible for recruiting and training staff. It ensures that an organisation gets the right employees who can help it to meet its long-term goals. The human resource and marketing departments work together to equip employees with essential marketing skills. Moreover, the human resource department ensures that the marketing division has adequate workers to meet production targets. According to Kotler (2012), the human resource department determines the level of employee engagement in the entire organisation. The department is mandated with setting employee salaries and rewards. At Nike, the human resource department helps the marketing division in recruitment and training of employees. The department ensures that all marketing personnel has the necessary skills to enable them to popularise Nike’s brands. Additionally, the department sets salaries for marketing staff. The degree of motivation in the marketing department is based on the rewards that the human resource division offers. At Nike, the human resource department offers competitive remuneration to encourage employee motivation. It helps to establish a motivated and experienced sales team.

Research and Development Department

Most organisations have research and development department, which is responsible for coming up with innovative ways of developing and distributing products. The marketing department works with the research and development division to generate ideas about new products based on the consumer feedback. According to Calantone and Rubera (2012), the marketing division and research and development department work together to generate and implement ideas. The research and development department uses the data on marketing research to identify the most marketable products and services. It then uses the information to formulate strategies for the development of the goods. Additionally, the department consults the marketing division to identify the features of the product that captivate clients. The marketing department also liaises with other sectors, which include the sales division and procurement sector to guarantee smooth operations in Nike Company.

Reference List

Calantone, R & Rubera, G 2012, ‘When should RD& E and marketing collaborate? The moderating role of exploration – exploitation and environmental uncertainty’, The Journal of Product Innovation Management, vol. 29, no. 1, pp. 144-157.

Ko, E, Taylor, C, Sung, H, Lee, J, Wagner, U, Navarro, D & Wang, F 2012, ‘Global marketing segmentation usefulness in the sportswear industry’, Journal of Business Research, vol. 65, no. 11, pp. 1565-1575.

Kotler, P 2012, Kotler on marketing, The Free Press, New York.

Kreng, V & Wang, B 2013, ‘An innovation diffusion of successive generations by system dynamics – an empirical study of Nike Golf Company’, Technological Forecasting and Social Change, vol. 80, no. 1, pp. 77-87.

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.

Rubera, G, Ordanini, A & Calantone, R 2012, ‘Whether to integrate R&D and marketing: the effect of firm competence’, The Journal of Product Innovation Management, vol. 29, no. 5, pp. 766-783.

Singh, P & Pattanayak, J 2014, ‘The impact of brand loyalty on consumers’ sportswear brand purchase’, Journal of Brand Management, vol. 11, no. 4, pp. 40-52.

Su, J & Tong, X 2015, ‘Brand personality and brand equity: evidence from sportswear industry’, Journal of Product & Brand Management, vol. 24, no. 2, pp. 124-133.

Tong, X & Su, J 2014, ‘Exploring the personality of sportswear brands’, Sport, Business and Management: An International Journal, vol. 4, no. 2, pp. 178-192.

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.

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