Company Information
The brand analyzed in this report is Nike, a well-established global brand that specializes in footwear, accessories, apparel, and other products. The company has been in operation since 1964, establishing itself as a leading global shoe retailer (Pratama & Hisjam, 2022). The brand has also managed to build a positive image by manufacturing high-quality products and has established itself among enthusiastic sports fans by sponsoring various athletes and events.
Nike’s mission is to bring out the athlete in every individual, as they believe that if you have a body, you are an athlete. The new product proposed in this report is a line of running shoes manufactured from recycled plastic bottles. This new line of running shoes will be called the NikeRenewed and manufactured using the most innovative and sustainable methods. Nike’s decision to introduce the new product is aimed at addressing the issue of sustainability and preventing sustainability-based start-ups from capturing the company’s clients. NikeRenewed will be manufactured from 100% recycled products, ensuring that Nike lowers its environmental impact, unlike traditional shoes.
The fashion industry, where Nike belongs, contributes significantly to environmental degradation. Studies reveal that the fashion industry accounts for approximately 10% of total CO2 emissions into the atmosphere (Saha et al., 2021). Leading brands such as Nike and Adidas have been criticized for promoting production and consumption patterns that hurt the environment (Kaur & Sharma, 2023).
Nike, in particular, has faced sharp criticism for enormous carbon emissions, excessive water consumption, waste generation, and overreliance on tree products in its manufacturing and supply chain activities. Additionally, the company’s manufacturing processes are known to utilize harmful chemicals and rely on unsustainable energy sources. However, Nike has addressed some of these issues over the years by adopting low-energy production methods and implementing material recycling. The proposed product, running shoes made entirely from recycled shoes, will help Nike address some of the key environmental sustainability challenges faced by the company.
Marketing Strategy
SWOT Analysis
The product has several strengths that will enable it to succeed once introduced into the market. First, Nike is a well-known shoe brand; therefore, it will be widely accepted once the product is introduced due to its strong reputation for quality and innovation. Thus, Nike’s strong brand will significantly help market the newly introduced shoes made from recycled bottles.
Another strength that this product will enjoy, making its marketing easy, is its focus on sustainability, an aspect that community members and regulatory organizations closely monitor. The increasing number of consumers seeking environmentally sustainable products will be more drawn to this one, thus giving it a competitive advantage. Additionally, the parent company for the product is known for innovation, an aspect that will significantly benefit the new product.
However, the new line of shoes manufactured from recycled materials will also have some weaknesses. First, manufacturing shoes from purely manufactured bottles will increase manufacturing costs, thus influencing the pricing strategy for the shoes. Ultimately, increasing prices to ensure sustainability will be a harmful marketing strategy for the brand. Recycled bottles will also be scarce, reducing the company’s ability to keep the shoes in the market consistently.
Externally, the new brand of shoes will have an opportunity, as demand for sustainable goods and services is increasing. The product also allows Nike to establish strategic partnerships and collaborations with other organizations, such as those promoting environmental sustainability. There will be a threat to this product, as it will have to compete with similar products from other organizations. The company’s SWOT analysis is detailed in Table 1 of the appendix.
PESTLE Analysis
The proposed line of running shoes will be affected by external factors that will either favor or disadvantage the product. One of the political factors that will affect the brand is governmental regulations that could make it easier and more favorable for the company to develop a new line of running shoes. These political factors may include governmental initiatives that incentivize organizations to adopt sustainable manufacturing methods.
Nike’s management must also consider economic factors when introducing the new product. This will mainly entail cost considerations for manufacturing shoes with recycled materials, which are difficult to gather, and using plastics during manufacturing will force the company to adjust its pricing and marketing strategy. When introducing this new product, Nike must consider sociocultural factors, such as increasing people’s awareness of environmental sustainability. As people become more environmentally conscious, they will be more likely to buy shoes from recycled bottles, thus making the product easily marketable.
The management team at Nike will need to look at the technological factors that will impact the proposed line of shoes. Recently, advancements in recycling technologies have been made, resulting in reduced production costs and improved quality (Wang et al., 2020). The product will directly contribute to environmental conservation, and this aspect should be emphasized as the primary marketing strategy when launching the new line of shoes. Before introducing this line, Nike must ensure that an intellectual property protection law is in place to prevent imitation of the shoes. Table 2 in the appendix provides a detailed description of the company’s PESTEL analysis.
Marketing Strategy Proposal
Overview of the Product
The Nike Renewed brand of shoes will be designed to target all enthusiasts of athletic activities. The primary raw materials used in the design of these shoes are recycled plastic bottles and other sustainable materials. The company will ensure it produces high-quality, sustainable footwear that is acceptable to the sporting community.
The brand will offer a range of shoes, including lightweight and official styles. Studies have shown that organizations must be cautious when designing environmentally friendly products, as failure to make them socially acceptable can result in significant losses (Khan et al., 2022). The product will be designed using well-recycled bottles to ensure sustainability without compromising quality or comfort. NikeRenewed footwear shall also target a diverse audience seeking sustainability and quality.
Market Segmentation and Profiling
The new line of shoes will target a diverse market of customers committed to environmental sustainability, particularly those aged between 18 and 40. This group, mainly composed of millennials, has grown in an era where fitness is prioritized and has an excellent preference for other Nike products. To ensure that marketing communication achieves optimal results, detailed marketing profiling will be necessary to identify the characteristics of the target audience and market effectively. Additionally, understanding the market segments will reveal to the companies areas that need to be focused on when designing and selling the product.
Distribution Strategy
One of the most critical aspects of a product’s or organization’s success is ensuring that it has reliable and effective distribution strategies. The company will ensure that the new line of shoes is distributed through various channels, including retail stores, authorized dealers, and e-commerce platforms. The company will also leverage its previous good relationships with reliable strategic partners, such as Dick’s and Apple, to ensure that the shoes are adequately marketed and distributed. By selecting sustainability-focused stores, the brand aims to reinforce its commitment to producing shoes using environmentally friendly practices. These distribution strategies will covertly communicate to all environmentally cautious consumers the availability of the NikeRenewed brand of shoes.
Pricing Strategy
NikeRenewed shoes will be priced at a premium, which will be justified by the quality and means of the footwear manufacturing. Having the shoes priced higher than average could result in the product having lower market penetration than needed; therefore, the management team at Nike will need to employ targeted marketing to reach environmentally conscious individuals who can afford the shoes and are not price-sensitive. To market the high price of shoes, Nike must employ a combination of psychological influencing factors, such as demonstrating how sustainable shoes offer a sense of class while ensuring the environment is protected.
The promoters at Nike could consider emulating the marketing strategies employed by Tesla. This sustainable car manufacturing brand sells its vehicles at a premium but projects a class image, thereby improving sales (Thomas & Maine, 2019). By effectively communicating value in its NikeRenewed line of products, the company will make the new product a worthy investment.
Processes and Physical Environment
As previously mentioned, NikeRenewed products will be made using the most sustainable and environmentally friendly methods, and the manufacturing team will ensure that this process does not compromise quality. The production properties and equipment will be subjected to rigorous audits to ensure they are eco-friendly and do not release CO2 emissions into the atmosphere.
The degree of sustainability of the processes will be accurately and regularly communicated to the public and other stakeholders. By focusing on preserving the physical environment and communicating accordingly, Nike will create a positive image in the eyes of its customers, thus increasing the likelihood of increased sales for NikeRenewed footwear. The company’s physical environment shall be transformed by having the in-store attendants trained to communicate with clients about the shoes’ quality, durability, and environmental sustainability. This could create a sense of cautiousness in customers and influence them to change their purchasing patterns.
Promotion Strategy
A combination of various strategies will be employed to promote the Nike Renewed brand of shoes. The company will create social media advertisements that associate the product with athletics, social class, and environmental consciousness. Nike must know that environmentally friendly start-ups often fail if they do not combine sustainability appeal with social class and other aesthetic factors (Altuntaş et al., 2021).
The company needs to identify its target audience, primarily consisting of educated and affluent consumers, who may reside in urban areas. This demographic can be reached particularly through print media advertising. The company needs to target sports and business magazines to reach this audience and project class and quality in the adverts, with sustainability being a bonus benefit. The company could also hold sustainability workshops to educate people, particularly those from lower socioeconomic backgrounds, about purchasing sustainable products and services.
People and Partners
The company will need to employ a team of skilled individuals and partners who will communicate the benefits of the Nike Renewed brand of shoes to the broader public. A good partner and promoter will need to be cautious of the environment, have a good influence, and be committed to the mission and vision of Nike. Through establishing these strategic collaborations, Nike will strengthen its position as a leader in the fashion industry and achieve market penetration in sustainable, high-quality footwear production. The right people and partners will also be able to target the required market segment, comprising environmentally conscious, wealthy, and price-insensitive clients. This holistic marketing approach will ensure that Nike generates increased revenues and contributes positively to the environment.
Marketing Communication
Marketing Objectives
The primary communication marketing objective will be to gain a significant market share in the growing sustainable footwear industry. NikeRenewed will seek to ensure that it positions itself to the customers as a sustainable line that can deliver quality products. The communication marketing strategy will educate potential clients on the benefits of choosing sustainable footwear brands like NikeRenewed.
The training will be conducted through various channels to educate the clients on how the products are produced and how to use them. The marketing communication strategy will also be focused on ensuring that Nike is not just viewed as a leader in athletic shoe products but also a champion for sustainability.
This new brand of shoes will reveal the commitment towards this objective, thus offering the brand a positive image to various stakeholders. The communication strategies should also ensure that Nike can achieve brand loyalty and thus get some repeat purchases of its new line of shoes. Building brand loyalty will not be a combination of communicating directly to the clients on the importance and sustainability of the shoes and indirectly through delivering high-quality products.
Key Marketing Message
The key marketing message for the shoes shall be “Embrace the new quality, environmental shoes through the NikeRenewed -Recycled, Reimagined and Rewarding sportswear.” This marketing message will place the quality of the shoes before their sustainability, as customers are likely to go for quality over sustainability. The marketing team needs to be aware that the sustainability of the shoes is just a supporting factor.
Thus, customers are only willing to pay top dollar for high-quality products. All Nike employees, including those outside the marketing department, must be made aware of this key marketing communication message since it will promote an inclusive culture within the organization. Graphic designers need to be employed to tailor and decorate this key marketing message in a manner that will be visually captivating to the target audience.
Promotion Strategy
The new brand will be promoted through various social media avenues such as Instagram, Facebook, Twitter, and YouTube, as these have the largest audience. The marketing communication team will be tasked with creating visually appealing and engaging messages for its clients. The content will be created with the knowledge that most Nike clients are athletic enthusiasts and that most people who like environmental sustainability will likely also be focused on keeping their bodies in good shape. The messages on the digital platforms will be particularly targeted to the younger generations under 27, as they are likely to be influenced by such media.
As mentioned above, the NikeRenewed line of shoes will be targeted toward people who are athletes or fans of the sport. The shoes will also seek to intersect this love for sports with the need to conserve and keep the environment safe. To this end, two kinds of brand promoters must be employed: Environmental influencers and athletes.
Partnering with these well-known individuals will make the brand be viewed as credible, and the love for influencers will likely be transferred to Nike and the shoe line as a whole. The hired promoters will be asked to help promote the NikeRenewed brand of shoes on their popular social media pages and incorporate the key message for the line in their advertisements. When leveraging the promoters, the company must be keen to do the ads sparingly, as they could sometimes be counterproductive to the organization’s mission.
Proposed Marketing Channels
As previously stated, the company will significantly leverage social media marketing channels like YouTube, Facebook, and Twitter to market its products. Social media advertising benefits organizations as it can reach additional audiences without incurring marginal costs for increased advertisements (Wibowo et al., 2020). A marketing team will need to be tasked with regularly posting videos, quotes, and images on the said social media platforms to increase awareness of the NikeRenewed brand of shoes. Additionally, the team must be regularly engaged and offer customer feedback in the social media feeds whenever necessary.
This report also proposes that Nike adopt influencer marketing to reach the target audience. The content creators and influencers can create original and captivating advertisements to promote awareness of the proposed product. The company should also initiate workshops and sports events where some sustainably made shoes from recycled plastic material will be freely given to the participants.
Evaluation
Evaluation is a critical component of ensuring that the marketing strategy implemented by an organization while introducing a new product into the market is successful. This proposed marketing strategy will be critically evaluated based on the set objectives and the direction of the performance of the NikeRenewed brand of shoes. The product’s success will first be measured based on the product’s market share growth, which will be measured based on the sales data and market research done by the responsible teams. Careful market analysis will be needed, and a comparative analysis of NikeRenewed revenues will be done against other organizations’ similar products. While measuring the growth of its marketing share, Nike must be careful of start-ups that could leverage sustainable shoewear to take its market share in the shoe and the wider fashion industry.
The product’s success will also be measured based on consumer awareness and their perceptions. Surveys and interviews will provide the organization with both qualitative and quantitative data on the level of receptivity that the new product has to the consumers. Additionally, Nike will need to closely monitor its purchases and ensure that the customers remain loyal to the brand and that there are repeat purchases.
A higher repeat purchase rate indicates that the customers have received the product well, while lower repeat purchases demonstrate low engagement rates. The company will also need to evaluate its media coverage rates and the rate of reviews it receives on its social media pages about brand receptivity. Nike will ensure that it rewards customers who recommend the NikeRenewed brand of shoes to their friends.
The company will need to set up some key performance indicators and metrics to assess the performance levels of its new brand. The market penetration of the new product will also be evaluated through customers’ brand perception, where a Likert scale measure will be used. Social media metrics will include customer engagement rates, customers’ impressions of the product, and the number of mentions the brand receives.
Another key performance indicator the company must rely on is the rate of repeat purchases the organization receives. The repeat purchases metric is critical, showing organizations whether their products are effective (Suh & Lee, 2023). The brand will set an objective of having high repeat purchase rates, which will be achieved by ensuring the product is high-quality and durable. In the future, the company will need to assess the impacts of the new product on carbon emissions and measure the levels it has achieved in CO2 reductions.
References
Altuntaş Vural, C., & Aktepe, Ç. (2021). Why do some sustainable urban logistics innovations fail? The case of collection and delivery points. Research in Transportation Business & Management, 45. Web.
Kaur, G., & Sharma, S. (2023). Challenges of cross-cultural marketing in the current times. 96–108. Web.
Khan, S.A.R., Yu, Z. and Farooq, K. (2022). Green capabilities, green purchasing, and triple bottom line performance: Leading toward environmental sustainability. Business Strategy and the Environment, 32(4), 2022-2034. Web.
Pratama, A. Z., & Hisjam, M. (2022). Comparative study of global business strategy: lessons learned from excellent sports-wear companies (Nike and Adidas). In E. Qi, J. Shen & R. Dou (Eds.), Proceedings of the International Conference on Industrial Engineering and Operations Management. pp. 3062-3071.
Saha, K., Dey, P.K. and Papagiannaki, E. (2021). Implementing circular economy in the textile and clothing industry. Business Strategy and the Environment, 30(4), 1497-1530. Web.
Suh, T., & Lee, S. B. (2023). Configuring managerial factors to enhance the omnichannel experience and customer engagement behaviours for a solid loyalty loop. Electronic Commerce Research, 1-29. Web.
Thomas, V. J., & Maine, E. (2019). Market entry strategies for electric vehicle start-ups in the automotive industry – lessons from Tesla motors. Journal of Cleaner Production, 235(1), 653–663. Web.
Wang, Y., An, N., Wen, L., Wang, L., Jiang, X., Hou, F., Yin, Y., & Liang, J. (2020). Recent progress on the recycling technology of Li-ion batteries. Journal of Energy Chemistry, 55, 391-419. Web.
Wibowo, A., Chen, S.-C., Wiangin, U., Ma, Y., & Ruangkanjanases, A. (2020). Customer behavior as an outcome of social media marketing: The role of social media marketing activity and customer experience. Sustainability, 13(1), 189. Web.
Appendices
Table 1: SWOT Analysis
Table 2: PESTEL Analysis