world’s biggest manufacturers and suppliers of apparel and athletic shoes and other sports equipment. Nike operates in a very competitive industry with other notable players, such as Adidas and Puma among others. Segmentation for Nike shoes is viewed in four perspectives: geographic, psychographic, demographic, and behavioral. For geographic segmentation, Nike focuses on big cities like Paris, Beijing, and Tokyo. This is because people living in big cities are more likely to play sports than people in rural areas are. As such, buying habits for Nike shoes may depend on the geographical area, with people in towns willing to pay a premium for sport shoes. In demographic segmentation, Nike is more concerned about the incomes, age, and sex of the potential buyers. In particular, Nike focuses on specific age groups, from 17-40 year olds who tend to engage in sporting activities. Most athletes participating in global sports belong to this age group. In addition, Nike manufactures products for both male and female athletes. Psychographic segmentation is focused on lifestyles, personalities and social class (Kotler, & Keller, 2012). For Nike, the focus is on people who like modern lifestyle and unique products that stand out from competitors’ products. In behavioral segmentation, customers are divided into different groups according to their knowledge levels, differences in behavior and thinking. In this regard, Nike is focused on creating a product that appeals to consumers in terms of aesthetic value and safety in order to influence their buying behavior.
Athletes are interested in comfortable products. Nike athletics shoes are made of lightweight leather with soft texture in order to ensure that consumers have a smooth and safe running or jogging. As such, targeting for this Nike product is focused on people who enjoy sports. In addition, consumers targeting Nike product will not be limited to athletes but also to people who like to use sports shoes for other daily activities since they feel comfortable in sports shoes. Nike’s positioning in customer’s minds is aimed at making people think first about Nike, whenever athletics sportswear is mentioned. The Athletes’ sport shoes are positioned as good quality, although a bit pricy. Nike products are deemed different from competitors’ products, in the sense that they are dynamic and tailor-made for personalities. The harmonious combination of color together with high tech technology used to manufacture Nike products results in a high quality product.
Nike product has to compete with other competitors in terms of price and quality. With this regard, the company constantly innovates on product development in order to create distinct features that differentiate Nike shoes from competitors. Nike also maintains high prices for its products since consumers will always relate high price with high quality. Nike products are distributed by renowned stockiest who have a good reputation for quality and dealing in original products (Kotler, & Keller, 2012).
Marketing communication must be designed to reach the intended segments. In this regard, the target market for Nike shoes is a youthful segment. The best medium to reach this segment is through use of social media and internet advertisement (Evans, 2008). In addition, TV adverts especially on sports channels provide an effective medium, given that the product is made for sporting activities.
In a competitive market, companies use various marketing tools to reach their intended consumer segments. For Nike, social media can act as an important marketing tool in the sense that the company can get instant feedback from customers. Using the customer decision process, Nike can come up with the most appropriate approaches in addressing the customer needs and preferences. The most critical stages of customer decision process that Nike should prioritize is the need of recognition stage and analyzing the post purchase behavior. In need recognition stage, Nike will be seeking to provide a certain need- that of providing high quality sport shoes. The post behavior stage should provide insights on how customers feel about a given product (Evans, 2008).
Features and benefits
Nike athletic shoes are designed to provide an athlete or the user with maximum comfort when wearing the shoe. This enables the athlete to run or jog without experiencing any discomfort. The shoes are light weight and made of durable material. This ensures that the shoe does not slow down the athlete. The durability of the material guarantees the user a long service from the shoe.
Nike prides itself in a long tradition of innovative technology that ensures they attract a loyal clientele made up of elite athletes. The company’s innovative footwear is made using lightweight leather and other special fabrics that make the product comfortable, light, formfitting, and safe for consumers. In addition, Nike enjoys a strong cash flow generated from its global sales. The ample cash is imperative for financing different programs, such as marketing, promotion activities and corporate responsibility (Manufacturing Close – Up, 2008).
Nike operates a costly marketing campaign that involves locking up its rivals in big endorsement deals. Although this strategy has proven to be very successful over the years, its implementation comes at a high price tag.
The emerging markets such as China and Africa provide new opportunities for Nike products. In particular, the growth of middle class in these markets will increase demand for luxury products like Nike. In addition, the trends in sports shows that many people are taking up sports as a serious career. As such, the demand for sportswear products is bound to rise as many people engage in sporting activities.
The rising costs of raw materials provide a threat for Nike market since it will be forced to increase its prices. With this regard, consumers may opt for the more affordable products at the expense of Nike’s products. In addition, the heightened competition from rivals such as Puma and Adidas may pose serious risks to Nike’s business.
Brand Equity and Points of Differentiation
According to Daye (2012), Nike’s brand equity is built on a robust foundation of its product line. Nike commenced their business with running shoes, which was a product that they were well acquainted with. As such, they committed themselves to building and expanding on the same product line for many years while increasing the efficiency of its marketing expenditures. Consequently, the company has grown from a single product line to provide all types of sports shoes. More importantly, the company’s endeavor to build a lasting and sturdy brand image of superiority and performance has made it easy for the company to command a large market share despite stiff competition from irk “rivals” such as Puma and Adidas (Kohli & Leuthesser, 2010).
The company’s brand equity is built through the choices that it makes concerning each crucial elopement of its products’ message that constitute its brand image including its unique logo and symbol, spokesperson, and celebrities who are associated with the company’s brand. For instance, the hiring of a professional spokesperson called Steve Prefontaine helped the company build a strong brand image and the company’s promotion of various sports such as soccer has indeed helped it to command a huge market share globally.
In addition, the company uses famous athletes and celebrities such as Tiger Woods and Michael Jordan who reflect the brand personalities such as winners and better than the rest to market its products. Nike’s brand awareness among global consumers is widely and not narrowly spread, a marketing strategy that the company has consistently endeavored to uphold through quality and credibility. These sorts of marketing initiatives help the company to support its brand promise ensuring that it captures a large market of potential consumers (Kohli & Leuthesser, 2010).
Regarding the product’s positioning in the marketplace, Nike’s competitive points-of-differentiation include presence in all sports, such as football, soccer, basketball, tennis, and golf among others (Daye, 2012). The company’s ability to develop a variety of sportswear has significantly affected its ability to attract a huge following in terms of brand loyalty. This increases the company’s target market opportunities allowing it to exploit the market and capture a large market globally.
Another point of differentiation is through technology. This has often helped the company to come up with many unique innovative sportswear that reflect the way customers feel, act, and think about the quality of Nike’s products (Daye, 2012). That is, the ability to meet the customers at their point of need, want, and desire in relation with the prevailing lifestyle. For instance, most athletes heavily rely upon the Nike IPod device, which when stuck in a shoe and linked with a receiver that is plugged into the athlete’s Ipod, it measures and records the distance and speed of a run or walk. This is just one among many unique characteristics that Nike uses to position its products in the market and ensure that it stays ahead of its competitors at all time.
The company understands the market needs and desires of their consumers and the use of the famous tagline “Just do it” was a perfect product message that had a strong symbolic meaning and focused more on the customer rather than the product (Kohli & Leuthesser, 2010). These differentiators help the company to reach a wide market ensuring that it keeps a sustainable growth in the market share.
The company should actively promote its products on social media. This should also be done on sports websites. These are websites where sportsmen, women, and fans frequent regularly. They are likely to purchase products from Nike especially new and better ones. Sports managers are also likely to learn about the latest Nike products from social media and sports website and get user reviews. Through social media, the company can interact with its consumers and inform them about product prices and availability. These two platforms also provide an ideal opportunity to inform the public of new product releases way before they are released.
The achievement of objectives will be based on comparison of results with those indicated in the objectives list. This will act as a guide that will portray a clear image of how the company is performing. The management will use this information to determine the areas that need to be improved. The objectives will be set in quarterly manner to help the management asses its staff every few months. This way, the objectives will be measured and the progress of the company determined.
The company should use a value pricing approach. This is to sell its high quality products at the prices equivalent to the value. Its products are already popular due to their high demand. Consumers would be willing to pay for this high quality.
The best distribution strategy is multiple channels. This is because both individuals and institutions buy Nike’s products. The global market cannot be sated through use of a single channel. This can limit the penetration of the products in some markets.
Nike can use both traditional promotion methods such as mass media combined with new promotional methods mainly social media. Social media is relatively cheaper because it mostly relies on per click payment system. The number of people visiting the page and clicking on Nike products determines the amount they pay. This is similar to posting adverts on different popular websites and blog sites in the Internet. This is a very effective tool because most of the people active in sports are common users of social media and the Internet. Mass media is another highly effective promotional tool that the company can use. Adverts placed on popular television stations especially those watched globally provide an opportunity to reach target audience across the globe. This will reduce costs because there will not be need to place adverts in all targeted markets. Both the traditional and contemporary promotional methods should be used to advertise the products at all stages of the product cycle.
Social media $1,000,000
Mass media $50,000,000
Daye, D. (2012). Brand Positioning: Selecting a Point Of Difference. The Brand Positioning Workshop, 1-10.
Evans, D. (2008). Social Media Marketing: An Hour a Day. Indianapolis, Ind: Wiley.
Kohli, C., & Leuthesser, L. (2010). Brand equity: Capitalizing on intellectual capital. California State University Fullerton, 1-16.
Kotler, P., & Keller, K. (2012). A framework for marketing management / Philip Kotler, Kevin
Lane Keller. Boston: Prentice Hall, c2012.
Research and markets adds report: Nike Inc – SWOT framework analysis. (2011). Manufacturing Close – Up