A Marketing Case Study on Nike
1.0?INTRODUCTION OF NIKE
Nike is a major sport traded, supplier of shoes and equipment based in the United States which was founded in 1962, originally know Blue Ribbon sports. Nike is the world leader in the manufacture of apparel for sport and gear with 47 more than market world (Nike.com), 2011.
Nike produces a wide range of sports equipment such as the running shoes, sport, football, basketball, tennis, golf, etc. Now Nike global fashion trends and is well known and popular in the culture of youth and culture hip hop to provide products of mode. Nike team recently with the Apple company to produce products Nike which can monitor the performance of an athlete with a radio in the shoe which can bind to the iPod. In addition, Nike is also top of three companies that are climate friendly companies that build the best image to clients.?
Nike excellence marketing strategies are their energy to achieve their market objectives. Nike believes that the “influence of the pyramid” preferences of a small percentage of high level athletes to influence to the choice of products and brands. If Nike contracted with many athletes spokesman, professional teams and college teams to advertise and promote their products to customers. Nike has serious attention on technology, design and production such as e-commerce, runners of high technology, Nike, Apple, etc.. Nike outsourcing of their products, most of the factories are located in Asia such as China, the Indonesia and the India.
2.0 CORE MARKETING strategy NIKE PROS
Nike put heavily proportion in their marketing strategies and products deign. In order to sustain their dominance in the industry and retain their competitive advantages, Nike actively responds to the market trends and changes in consumer preference by adjusting their marketing strategies, the mix of existing product offerings, developing new products, styles and categories, and influencing sports and fitness preferences through various marketing strategies. Now we discuss the pros of Nike’s core marketing strategies and related them to the relevant marketing theories help us to depth understanding.
2.1?Distribution
More efficient product distribution is the more sales and thus more profits. The delivery of the right products and at the right time to the customers is not only effect the utility but also leads to high level of consumer’s satisfaction and loyalty. Nike distributes its products on different level basis. The high premium products are given to a certain distributors while leaving the low priced to be sold at highly discounted price at the retail stores such as Wal-Mart (Jeannet J, 200, pp 44).
Nike has become the leader in the e-commerce by being the first to the market with its e-commerce website. Nike launched its e-commerce site in April 1999 by offering 65 styles of sport shoes to the US market for purchasing (Nike, 2000). This program represents the first time a company has offered mass footwear through the Internet and provides competitive advantages to Nike.
2.2??Advertising and Promotion
Nike makes contracts with some celebrity athletes which can draw attention to their products such as Tiger Woods, Ronaldo. This has created a relatively high level of Nike’s awareness. Besides that, Nike also employed a large amount of advertisements through the mass media (Goldman S, 2000, pp 154). Nike’s brand images, including the Nike’s name and the trademark are considered to represent one of the most recognizable brands in the world. The Nike name and associated trademarks have appeared from players’ shirts, pants and everywhere. Their aggressive advertising campaigns, celebrity endorsements and quality products all enhance their brand and image. For example, when a celebrity athlete sponsors a specific brand of athletic shoes, the brand will be associated with success.
2.3?Price
Nike targets on the consumers who care more about the utility and quality of the products rather than the price. In this way, the price is not affect too much (Frank, 2004, pp173). This has make Nike to set relatively higher price than its competitors. This strategy focuses on the consumers who like Nike and pushes the products value to a higher level. The customers who consider a product to be high quality are likely to pay the high price more often and consistently. Once the consumers develop the product intimacy, they come to associate their person with the products and will pay whatever price quoted on the products.
Nike use vertical integration price strategy in which they take ownership of the participants at channel level that differ and they also engage in various channel level operations both to control costs and thus influence the pricing function (Goldman S, 2000, pp154).
2.4??Market Segmentation and Target
Most of the consumer of Nike’s products is mainly athletic. Nike is the master of segmentation, their segmenting market typically target’s athletes, both women and men from the age 15 to 35. Nike’s targeting market is active people who enjoy high quality sporting goods, especially footwear. Nike focuses on creating premium consumer experiences on product innovation, brand leadership and elevated retail presence. Nike targets on these customers by agreements between Nike and athletic teams, college’s athletic teams for products sponsorship and eventual promotion to the members of these teams. Even though others are likely to buy the products, Nike focuses on the athlete more than any group of individuals even though it also target on the youth. This strategy is especially successful because of its ability to reach a large number of athletes.
3.0??CONS OF NIKE’S CORE MARKETING STRATEGY
Although Nike’s marketing strategies had brings lot of positive implications to the company, but it will bring negative implications to Nike too. The negative implications that will identify in this assignment are high cost incurred, influence of spokesperson, and competitors.
3.1?Costly
Since Nike has implemented several marketing strategies, it had incurred high costs in producing and promoting its products. The costs are increase among handling inventory, designing, advertising and production. (Abhiroopsur, 2009) Beyond that, the inflation had raised the costs of raw materials and transportation. To deal with these problems, Nike has increased the products’ prices and reduces its marketing budget. Therefore, this could hurt the long-term growth of the Nike. (Taulli, 2011) According to Boggan (2001), Nike had also employed child labor in Cambodia to reduce its production and labour costs. This had affected its brand image, and it might have many people boycott Nike and stop to buy anything from Nike. (Boggan, 2001) Furthermore, Nike has been using child labour in the production of its soccer balls in Pakistan. (TED, 2011)
3.2?Influences of spokesperson
One of the Nike’s core marketing strategies is depend on a group of athletes to promote its products. Nike prefers to have high profile athletes as its endorsers, like Runner Steve Prefontaine, Michael Jordan, and LeBron James. The athletes had positive and negative influence on changing consumer preferences, changes in consumer tastes and priorities, and also consumers’ buying decisions. The action and attitude of Nike’s chosen spokespersons could bring the impacts on its promotional strategies. For instance, it will attract the athlete’s idolater to purchase the products if Nike using a popular athlete as endorser. On the other hand, if the athlete were caught in drug addicted or any immoral attitude, it will affect the customers not to buy Nike’s products, thus will affect Nike’s sales, revenue and profit. (Cloke M., 2011)
3.3?Intense Competitors
There is intense competition faced by Nike. Their competitors are Adidas, Reebok, Puma, and so forth, whilst competition is tighter with the coming of Adidas. More, the product line is slightly different between Nike and Adidas. Nike is mainly focus on footwear for men and women who between 15 to 35 years old, while Adidas is specialize in footwear for men, women and children between the age of 10 to 30. This had shown that there is less diversification of Nike marketing strategy. They could also provide footwear for children to attract more parents to become their potential customers. Additionally, Nike distribution strategy is mainly focus in domestic market which is United States of America, whilst Adidas’s main office is located at Germany, but it focus in European market. Therefore, Nike should distribute its products to more region and countries in order to capture more potential customers and achieve greater reputation. (Allick et al., 2000)
4.0?RISKS OF NIKE’S CORE MARKETING STRATEGY
Identity Fraud
Identity fraud is one of the more complex forms of crime, fundamentally, by which a person tends to steal the identity of someone else to open a credit card account, demand for loans, or to purchase goods using its new identity identity.
Most people tend to confuse theft usually between identity fraud and credit card. Many have the misconception that the if someone steals another person’s credit card, then this should be categorized as identity fraud. This is not the case. According to experts, identity theft can be described simply as illegal procedures to change the identity. It includes the Act of of identity of other individual primarily to obtain a loan or were even designed. In some cases some cheater identity, decide to create their own identity. This makes it even more difficult to track them once they are committing the crime.
How LinkedIn can help your online business grow
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