This paper presents Nike’s marketing strategy, referring to various literature to guide how the company can sell new products. The report contains comprehensive marketing information, including situational analysis explained based on internal factors, competitors, PESTLE and SWOT analyses, new product summary, marketing objectives, promotional strategy, market segmentation, and marketing mix. The last variable is discussed based on the four Ps, namely product, price, place, and promotion. The document elaborates on Nike’s segmentation methods, target marketing strategy, positioning, and customer persona, ending with an evaluation of the whole report.
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Nike is an American organization globally recognized for specializing in sportswear. It is headquartered in Beaverton, Oregon, and it is the leading manufacturer of athletic shoes, clothes, and equipment. Phil Knight and Bill Bowerman launched the company in 1964 in Oregon, and they named it Blue Ribbon Sports (Childs and Jin, 2018, p. 79). With time, the organization changed to Nike Inc., meaning items of victory in Greek. Since its incorporation, Nike designs sports footwear, apparel, accessories, and equipment, apart from offering other athletic services (Moeller, 2018). Production has reached many states, most of the products being sold in 190 countries by Nike store, online sellers, and through retailers. Nike Corporation and independent contractors manufacture the products in diverse brands. The company has seen significant success, apart from facing unfavorable market trends and constraints.
Nike provides various sporting products to its customers. In this section, we group the products into two classifications.
Nike’s leading products in the UK include sports clothing, footwear, and their accessories, and sports equipment. The company offers both direct sales and wholesale to its customers. The company operates in a competitive market in the UK with well-established competitors like Adidas and Puma. Therefore, it is imperative for Nike to further improve its relationship with the customers in order to retain the existing ones and also to acquire new customers. Having and acquiring customers can give Nike a competitive advantage over its competitors.
Nike has a potential customer base in emerging economies such as India and Brazil and in rapidly growing economies such as China. These regions have a high interest in sporting activities, thereby making it easier to purchase Nike’s products.
The BCG Matrix
The BCG matrix divides Nike’s products into segments to enable the company to estimate its market position. The information provided by the matrix is helpful in decision-making as the company will know if it can capitalize on its products, and they are explained as follows:
The products that generate more revenue for Nike are classified as cash cows. These products include; sporting equipment and clothing. These products use up less cash and create more and should therefore be exploited further by the company.
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These are the products that produce the highest returns for the company and are always the company’s most famous brand. For Nike, its star is the footwear, and Nike’s Air Force 1 sneakers are considered the most iconic footwear. Nike Air Jordan is said to have attained the global status symbol than all the sneakers before it.
These are the leading company subsidiaries that have a high market growth than the actual market share. For this reason, a question mark is literally the child of the company that can be problematic. Nike Golf, Jordan, and Converse are the question marks of Nike company. It is better for Nike’s management to know these question marks and apply an efficient strategy to turn them into cash cows.
These are the products that neither generate a lot of revenue nor consume much of the capital. Nike produces skateboard that is not that popular by the skaters but is sporting equipment, and the company continues to make them.
BCG matrix avails the tool used by companies to analyze the business segments in their portfolio to show how their market shares relate to the growth rate of the said companies. Despite being effective, this tool has some limitations. First, it only groups businesses as low and high and forgets to address the medium companies. It also fails to acknowledge the fact that high market shares do not necessarily bring high returns since high costs are associated with increased market share.
Nike’s main competitors in the UK include Puma, Adidas, New Balance, Under Armour, and Reebok. Based on the large numbers of companies providing the same products as Nike in the UK, the competition for customers is stiff and rife.
The political environment of the country influences the operations of the company. Political conflicts between the UK and other countries can hinder the importation of some of the materials that Nike requires to produce footwear, apparel, and sports equipment. The company must follow the UK government’s manufacturing and sales policies even if some of the procedures are tough. Finally, Nike deals with physical goods. The UK government may introduce changes in taxation and laws of manufacturing that the company must follow at all costs.
The currency fluctuations in the UK can affect the sales of Nike products since inflation will influence the customers’ purchasing power. An increase in taxes also has economic implications for the company because of the reduced purchasing power of the consumers. A significant economic issue at this point is the Covid-19 pandemic, which has led to the closure of Nike shops. Recession can also be a more substantial financial problem to the company. This situation might result into the company resorting to firing some staff and lowering advertisements, which can lead to reduced sales.
Nike partners with world superstars ranging from basketballers such as Michael Jordan, footballers like Neymar Jr to musicians such as Rihanna. This move increases the sale of their products since most people follow these stars and will always buy products associated with the superstars. Another social factor affecting Nike is the growing need for body fitness. Most people do exercises and go to the gym ad all these activities involve using Nike products.
Nike has adopted a 3-D printing technique to make essential innovations on its products for its UK customers. The company has introduced a Nike-Fit that scans the foot size to find best fitting sneakers for every customer (Childs and Jin, 2018, p. 24). Nike app has improved e-commerce for the company in the UK because there is a direct interaction with the customers.
These factors influence how the industry operates in the UK. Nike has in the past been accused by Adidas of infringing the patent, and it has also accused Skechers of the same claim. The company tries to follow the legal framework used by the UK government to control the athlete-products industry in the country.
Just like any other company, Nike faces environmental challenges in its operations. The company has promised to be eco-friendly by reducing the emissions during its shipping process and using renewable energy for production. It has started producing sports jerseys from plastic wastes, and these products are already available in UK shops.
Porters Five Forces Analysis
|Factor||Description||Likelihood of Occurrence|
|Threat of New Entrants|
|Market saturation |
|There is a large number of players in the market. The large and already established companies can offer price discounts, thereby attracting new customers more accessible than the new establishments. |
Big companies like Nike have established a brand that is accepted among the customers, but small companies cannot make such brands overnight.
|Threat of Substitutes|
|Same type of product |
Low quality and cheaper products
|The existing competitors of Nike, such as New Balance, produce the same products as Nike. |
There are companies that produce low-priced products, but the quality of Nike products cancels out this threat.
|Bargaining Power of Suppliers|
|Manufacturers act as the suppliers||The companies producing athlete products rely on manufacturing industries from the developing nations, and there are many manufactures to substitute another.||Low|
|The Bargaining Power of Buyers|
|Nike produces essential goods |
Cost of the products
|The footwears are necessary products for athletes, so they do not have other products to substitute them for |
Customers are increasingly becoming knowledgeable about social media, and they are using smartphones for many reasons. They go for high prices signifying high quality.
|Market is saturated by players||There is extreme competition among the companies providing footwear and apparel, so companies try to introduce detailed advertising strategies.||High|
| || |
| || |
Critical Success Factors (CSFs)
Nike’s leading success factors include marketing activities, comprehensive research and development, well-established manufacturing and production facilities, sophisticated distribution facilities, a competent workforce, and innovativeness. Creativity is key in product development, commercialization, and selling to consumers (Koziello, 2020, p. 55). Nike collaborates with retailers and contractors to manufacture and distribute its products in their locations within the United Kingdom. It markets the products through various promotional and sponsorship initiatives. Therefore, the smart pouch will have already established distribution channels.
Nike will utilise its knowledge and expertise in product design to create an appealing pouch to attract potential and current consumers and maintain a competitive edge. Its partnership with online stores and phone manufacturers in the UK, such as Wileyfox, will ensure a steady product supply. It will also capitalise on its capability to deliver customized products. It must utilize its marketing campaigns to capture a broader stakeholder and prevent deliveries to the net-zero market.
New Product Summary
Smartphones play crucial roles in today’s life because users can use them to access the internet, listen to music, take pictures, and store information. Consumers add value to their smartphones by incorporating various accessories to protect the gadget and enhance functionality. Thus, mobile phone accessories such as pouches, wallets, casing, and headphones have gained significant growth. Moreover, the rising demand for mobile phones exacerbates the need for mobile accessories. Consumers’ purchasing power and lifestyle in the UK have changed, boosting the sale of smartphone pouches. Nike’s bright bag will be made from silicone, which has better shock-absorbing characteristics than plastic cases.
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Nike aims at remaining innovative and empowering athletes worldwide. This objective is met by creating sustainable products and utilizing a creative and diverse regional teams from the UK and its surrounding nations (Borts, 2018, p. 8). The new development will be available to them to ensure phone safety while engaging in athletic competitions. Another goal is to improve Nike’s stockholders’ income and increase earnings per share As a result, the company will grow in revenue and shares, expanding the production of smart pouches.
Nike also strives to utilize diverse marketing communication strategies to reach its target consumers, including distinct genders, ages, cultural backgrounds, and geographical locations. It will use these strategies to promote the intelligent pouch. To achieve this objective, the company utilizes communication tactics that can strengthen its market position (Zhang, 2018, p. 43). The company will maintain high-quality accessories and ease of accessibility. Its production procedures will promote sustainable development of various designs and product novelty. The company wants to reduce manufacturing waste and utilize green technology to remain environmentally friendly.
Nike has demonstrated an ongoing marketing strategy over the years, using a generic growth framework to maintain a competitive edge. This technique is enhanced by having a diverse product mix for athletic goods, attire, and accessories such as the smart pouch. Initially, the company used guerrilla marketers, who focused on emotional strategies to promote their products (Merikanto, 2019, p. 43). Most advertisements from Nike do not display the product but the story of a sportsman. The strategy will apply in the promotion of a smart pouch to maintain competitiveness.
Moreover, Nike will market the product in through sports, especially in the athletic and football industries. Introducing the smart pouch ads during these sporting events in the UK will increase visibility of the product. Apart from television adverting, Nike can use social media platforms, such as YouTube and Twitter responsiveness to reach customers. Because the company has a large number of followers, the intelligent pouch adverts will be accessed by many. This will improve the sales of this smart pouch product. Moreover, Nike is persistent in innovativeness, and it responds to technological signs of progress in marketing; henche, it will produce quality smart pouch for Britons. Further, investing in international women-only stores is another marketing strategy targeting women and it can promote the smart pouch (Carlborg, 2017, p. 1). This strategy engages the internet with intriguing customized marketing frameworks.
From Nike’s demographic segmentation, the company can design the smart pouch based on customers’ age and gender. The majority of the population ranges between 15-55 years. The company uses psychographic and behavioral divisions to study the interests of consumers, buying habits, and product needs. This segment helps the company to promote sports or athletics and an active lifestyle. The geographic segmentation of the country allows Nike to serve its target consumers within the UK.
Target Marketing Strategy
Nike focuses on athletics and other sports and offers them the required accessories, footwear, and apparel with a specific feature. The effective targeting strategy is vigorous marketing to create awareness among consumers to enable them to acquire the desired goods through customized procedures. Sponsorships for teams and elite people also reveal Nike’s targeting strategy. Psychosocial targeting is evident from associating triumphant athletes such as Moh Farah with apparel.
Nike has placed its name in the minds of consumers as the top seller of quality sportswear. The products are satisfactory to the niche market, and they are long-lasting in their memories due to slogans such as ‘Just Do It’ (Trilochan, 2017, p. 59). The company can make the smart pouch appealing to customers through empowerment and confidence creation. Nike’s positioning statement is ‘a serious athlete will get a perfect item.’
Nike can create a customer persona for the smart pouch just like they did for Michael Jordan and indicated his name on a sports shoe. Moreover, Nike can use the voice tone and online smoothies for marketing the smart pouch. The tone should be friendly, reliable, motivational, honest, and bold when the company interacts with buyers online.
Nike manufactures a wide range of products, including apparel, shoes, sports accessories, and equipment. In this analysis, we focus on smart pouch as a product made for Britons. This can be a leading product in the athletic industry, and it can be specialized to suit different consumers. The company can offer the smart pouch in various environments, including baseball, athletics, lacrosse, tennis, hockey, basketball, and soccer. The company can track this product’s performance through the iPod, generating essential data. Nike also has the NikeiD, which allows consumers to select premade designs, and the personalization process is made accessible through the company’s websites.
The prices charged for each smart pouch product will determine customers’ returning ability. Nike bases pricing on the target consumers, and the company focuses on high premium segments. Nike’s pricing framework uses vertical integration, where the company engages in various channel levels and operational units to manage costs and determine product pricing. Nike charges higher prices, implying that more charges are associated with high quality. In essence, the company applies value-based and cost-based strategies to determine product prices. Most high-income earners buy Nike’s products, which are costly, revealing their social statuses. Comparing quality at a reasonable price from rivals helps the company to charge fairly.
Nike has an extensive market to which it delivers products through multiband stores and Nike retail stores. It owns several retail accounts in the United Kingdom, and it sells products to more than 200 countries worldwide. The company’s town stores based in major cities in Britain have diverse products, and they offer customized experiences for consumers. The company reduces production costs by utilizing outsourced activities in other regions. The primary distribution outlets at Nike include Flagship stores, town stores, retail discount shops, NikeiD. NikeiD covers all consumers using service customization online. Flagship shop is a contracted outlet with retail sellers serving consumers with Nike’s products.
The company’s advertisements and social media can use celebrities and sports teams to create lasting impacts on smart pouch consumers. Through personal selling, Nike will use in-store personal promotional efforts to create awareness of the product and persuade buyers. The strategy allows staff to assist customers in selecting the right products. Moreover, Nike will use direct marketing to present new product to the target market (Merikanto, 2019, p. 43). To create lasting impacts, the company will apply sales personnel to approach particular consumers and organizations in targeted segments, for example, sports organizations in universities and colleges. Direct marketing creates strong relationships apart from motivating buyers to purchase the commodities. Nike uses sales promotions such as discount coupons and occasional offers to target customers. The strategy saves customers costs and attracts new buyers, increasing the demand for the smart pouch.
Implementation Evaluation Criteria
- The company will base decisions on strategies, objectives, and implementation plans.
- The company shall establish performance indicators based on developed products, distribution, communication, and prices.
- It then locates roles and evaluates overall performance according to business standards.
- It takes action to remedy or support activity.
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