This sample paper focuses on the marketing concept of Nike. Here, you’ll find Nike’s marketing principles and concepts, branding, organisational culture, and other information that might be useful for your essay writing.
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Nike is an American multinational corporation, which was founded in 1964 as Blue Ribbon Sports, and later changed its name to Nike Inc. in 1971. The company’s core business activities are design, development, manufacture, sales and marketing of sportswear, apparel, and accessories. As of 2014, Nike was ranked the most valuable sports brand in the United States. This report will discuss the marketing concepts used by Nike. It will also identify the role of marketing strategies in the realization of Nike’s objectives. The report will culminate by discussing the correlation between marketing department and other departments in Nike.
Branding
In the corporate world, success hardly lasts, but innovation helps entrepreneurs to find ways of to stabilise their businesses when hit by challenges. Nike is not an exception and has been affected by numerous brand-related challenges. Customers do not prefer repetitiveness, and there are various times when competitors’ brands sell more than Nike’s in the United States. In 1998, Nike’s brand became too common in the market and customers needed to have a different experience. Interestingly, sometimes customers tend to value change more than the quality of products (Pitts & Stotlar 2013). In such situations, business has to reinvent its brand to reclaim the lost customers.
Nike restructured its branding strategy by developing sub-brands. Some of the sub-brands preserved the name Nike but tailored for particular sports such as Nike Golf, Nike Dunk, Nike+, Nike Blazers, Nike Pro, and Nike Skateboarding. Others did not bear the name of the company. They include Air Jordan and Air Max. Today, Nike runs numerous subsidiaries, which include Brand Jordan, Hurley International, and Converse. Branding strategies helped the company to regain dominance in the American sports apparel market.
Organisational Culture
Nike has a distinctive organisational culture. Initially, it was founded as a sports business, but through competition, innovation, and changes in customers’ preferences, it shifted its attention to other equipment and non-sporting products. The apparatus includes sunglasses, watches, and apparel for casual wear purposes. Business-minded persons view the idea as a marketing tool intended to reach out to sports fans and make them part of a business that sponsors big sports events and endorses best athletes.
Nike executes internal marketing amid the forty thousand employees scattered across its subsidiaries. The company uses internal marketing as a promotional strategy. The management appreciates that employees are the business’ most effective marketing tool and have to be motivated to give their best. The workers wear branded uniforms, which resemble the sportswear and enjoy packages that are premised on the concept of Nike being a kind and caring company. As aforementioned, Nike is successful because of its branding and marketing strategies. In marketing, an entrepreneur ought to distinguish between customers’ needs and wants for the business to be successful. Nike separates needs from wants and focuses on the former. That has been the secret behind the spirit for its branding (Pitts & Stotlar 2013).
Product Strategy
Nike is a multinational corporation that deals with various products designed for different market segments. The company has a prudent product portfolio management system that protects the business from drifting from its success path. The method is efficient and has enabled the company to open subsidiaries across the world that specialises in the production of different products. For instance, the company has subsidiaries in China and Indonesia that focus on production of apparel (Pitts & Stotlar 2013). Nike values development of superior products and has invested in research and development. The company has a research facility in the United States, which designs products based on consumer needs. The facility also researches on how to enhance the sportswear to guarantee comfort.
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Promotional Strategy
Nike ensures that all its products bear the Swoosh logo. However, nowadays, the slogan ‘Just Do It’ is not written on most products. That shows the high level of confidence that the company has on its brand. Nike sells its products through major retail sports shops, online marketing, and direct sales in promotional events. Retail stores give the company an opportunity to strategise and enhance competitive advantages by comparing its sales to that of competitors. The company has major retail sports shops that operate under the subsidiary name Niketown, which sells Nike products exclusively. In the contemporary world, large businesses cannot survive without an effective marketing strategy.
They face various threats, and only effective marketing strategies can guarantee their survival and success. Ironically, the size syndrome is a significant risk, which if mismanaged could cause irreversible havocs. By the time a big business realises the damages attributed to size, the recovery process would take years and a lot of money. Nike uses marketing strategy to achieve various objectives, which include brand popularisation, market growth, and boosting sales volume.
Therefore, for Nike to survive in the sportswear industry, it has to lay down efficient marketing strategies. Currently, the company uses celebrity endorsement to enhance brand popularity. The company understands that many customers prefer to associate with renowned personalities. It underlines the reason the Nike uses athletes like Michael Jordan, Tiger Woods, and Michael Johnson among others. The company makes customers believe that they share the experience with these personalities (Wen & Yazdanifard 2015). The use of celebrity endorsement has resulted to the brand becoming popular particularly in the United States and European market.
Whenever people hear about sports shoes, the brand that comes to their mind is Nike. Indeed, today, over 60% of the athletes use Nike sportswear across the globe. The application of celebrity endorsement has contributed to the popularity of the Nike brand in the golf sports. Jackson (2013) alleges that apart from celebrity endorsement, Nike uses events sponsorship to promote its brand and boost its market share. Even though the major sports events are capital-intensive, they offer a perfect opportunity for Nike to communicate with its target consumers (Jackson 2013).
Nike Marketing Concept, Strategies, Programmes, and Ethical Considerations
Market Diversification
Nike endeavours to meet all consumer needs. The strategy has helped it to increase its sales volume. Today, the company serves 47% of the American market. Moreover, its sales volume continues to grow annually. Mahdi et al. (2015) argue that Nike has ventured into market diversification as a strategy to boost its sales volume. The company is investing in foreign markets. Nike Inc. has focused on athletics for many years. Currently, the company is diversifying into other sports such as soccer. The strategy is intended to boost the company’s sales volume and cushion it from competition (Pitts & Stotlar 2013).
Ethical Considerations
Ethical considerations are at the core of running a business. Nike ensures that its products meet the required standards. It helps boost not only the company’s sales volume but also guarantee the safety of individuals who use the products. The company demands that celebrities observe a high degree of integrity and discipline to safeguard its image. Moreover, the company is cautious of the language it uses for advertising and public relation activities. Moreover, the company ensures that its subsidiaries do not mistreat their employees. For instance, the company has a department that focuses on enhancing employee working conditions. The company also discloses the names of all its contract factories.
Marketing Principles and Concepts
Nike is a multinational corporation founded on robust marketing strategies. The marketing concepts and principles that drive the company include marketing mix, segmentation, targeting and positioning model, marketing survey, and research. These ideas contribute to the enterprise’s competitive edge. The marketing department is actively involved in the development of plans and identification of opportunities. Cooperation between the marketing department and the management team facilitate efficient decision-making processes. The marketing department advises the management on the existing and potential business opportunities. Moreover, it helps the management to make appropriate changes in marketing strategy to boost sales volume.
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Marketing Mix
The company’s marketing mix follows the 7ps principle, which represents the product, price, place, promotion, physical evidence, people, and processes. Nike has invested heavily in its product mix.
Product
The company manufactures shoes, apparel, and accessories. Jackson (2013) avers that the business offers a variety of shoes that range from tennis shoes to running shoes. It also sells an assortment of apparel that includes shorts and jerseys. The accessories include socks, bags, gloves and golf clubs among others. The product mix enables the company to meet the needs of numerous market segments.
Place
Nike uses multiple outlets to distribute its products. The company has sweatshops in different countries across the globe. Additionally, it has various retail stores in the United States, China, Japan and other nations. Kotler and Armstrong (2017) maintain that the company has an official online store that facilitates distribution of merchandises. Furthermore, it has numerous outlets dubbed Niketown that deals with Nike products exclusively.
Promotion
Nike uses numerous approaches to promote its products. They include personal selling, advertising, sales promotion, public relations, and direct marketing among others. The company depends mainly on advertising where it uses notable celebrities to popularise its brand. Additionally, the company has sales persons who interact with potential clients and persuade them to purchase its products. At times, the company uses special offers and discounts to attract customers and boost sales volume.
Price
The company utilises a value-based approach to set price for its products. Kotler and Armstrong (2017) allege that Nike sets prices based on consumers’ perception regarding the quality of its products. Many customers prefer Nike due to its honesty in setting prices and failure to apply price discrimination methods. Niketown retail shops help to keep the market prices at reasonable levels.
Physical Evidence
Marketing mix demands that there must be a physical evidence of the product regarding packaging and contact persons where direct marketing is applied. Otherwise, the marketing cannot be successful since potential customers need to see a product and talk to a person with adequate information about the merchandise. Nike uses branding strategy and establishment of Niketown outlets as physical evidence.
People
Whenever customers think of sports, the first brand that comes to their mind is Nike. The company has hired experienced workers who help in the manufacture of products as well as their distribution. The employees contribute to identifying customers who trust in Nike’s products.
Processes
Nike outsources a majority of its functions to foreign subsidiaries. However, the company coordinates operations within the subsidiaries to guarantee timely delivery of goods to the market.
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Segmenting
Nike applies marketing segmentation, targeting, and positioning model in its marketing activities. The company has segmented its market based on consumer needs and purchasing power. Additionally, it used demographic factors to identify the target market. Today, the company manufacture an assortment of sportswear for different sports. Additionally, it has training kits for children and adults. Recently, the company established a new market segment that comprises women only.
Targeting
Targeting is mostly considered at initial stages of business development when a product is at the design stage. However, Nike keeps on innovating new methods of improving its products and meeting the needs of target markets. The company serves numerous categories of customers. They include high-income earners, sports enthusiasts, and fitness-centric clients. Nike has training kits for fitness-centric clients. Additionally, the company manufactures an array of sportswear for sports fans. Some products are sold at high prices to target high-income earners.
Positioning
Nike uses the slogan “for serious athletes” to position itself. The leadership of Nike positions the company as one that caters to the interests of athletes by manufacturing sportswear that suits their various needs (Armstrong et al. 2013). The company’s primary customers comprise the athletes and individuals who are serious with physical exercises.
Market Research
The company has invested in research and development with an objective of developing superior sportswear that corresponds to changes in sports activities. Recently, the company acquired sports shoes, which rival companies claimed that they gave athletes added advantage over their counterparts. The development of sophisticated sportswear is in line with the company’s objective of serving serious sportspersons.
Nike is actively involved in market research to facilitate identification of new business opportunities and development of novel products. Nike specialises in the sales of sportswear. Thus, its primary market is sports industry. Currently, the company is analysing the potential of the soccer industry with an objective of venturing into the business. The company has marketing representatives who help to research and identify new markets.
Currently, Nike is in the process of establishing subsidiaries in Africa and Asia (Proctor 2014). The company’s marketing department conducts research with an objective of building efficient strategies that can help to boost its competitive advantages. Market research helps Nike to analyse the performance of rival companies and devise mechanisms to outdo them in the sports industry. It also enables the company to identify customer behviours and tastes and preferences and respond to them accordingly (Kotler & Armstrong 2017).
Relationships between Nike Marketing Department and Other Departments
Successful organisations do not tolerate division in their management operations. They succeed by embracing teamwork and effective competition amid different players and departments within the organisation. The marketing department is responsible for marketing functions in most corporations. Nike has strong interdepartmental relations, which promote teamwork and facilitate organisational growth.
Jackson (2013) alleges that relationship between different functional areas is crucial as it guarantees organisational efficiency. An organisation’s management team comprises various functional entities that are independent. However, their success depends on how they relate to one another.
Nike Company values the marketing department not only because it helps to establish new markets but also facilitates decision-making processes. The marketing functions contribute to establishing the prices of merchandises based on the market forces. The company gathers information about consumer behaviours, level of customer satisfaction, and product enhancement methods through market research. The marketing functions enable the company to interact with clients. In return, information obtained from the market is channelled to other functional areas such as production and managerial departments.
Production Department
The production department is responsible for manufacturing apparel, sports shoes, and accessories based on the information gathered through the marketing function. According to Mahdi et al. (2015), the marketing department works closely with the production unit to ensure that the manufactured products meet the needs of the target consumers. Additionally, the marketing department provides that the production team produces adequate goods based on the volume of orders. At Nike, the marketing department ensures that sportswear is manufactured and delivered to the market on time to guarantee a competitive advantage.
The marketing department demands that products meet high standards of quality as depicted in Nike’s promotional campaign messages. Customers have a perception that Nike manufactures the best sportswear in the world. Thus, the marketing department would not allow the company to frustrate customers through the production of inferior products. Nike has a quality assurance team that works in liaison with the marketing representatives to assess the quality of goods before they are released into the market. Nike, being one of the leading corporations in the sports industry, spearheaded the establishment of international standards for sportswear, and therefore cannot risk selling inferior products.
Management
The marketing department gathers information about substitute products and the potential of introducing new merchandise into the market and shares data with the management for further deliberations. Moreover, the staff helps the management to make decisions on issues regarding innovation and production of new products. The management uses information from the marketing department to direct production and distribution of new products. The information gathered via market research enables the management to identify threats in the market and diversify the company’s operations to mitigate risks.
Finance Department
As aforementioned, the marketing department is the most critical unit because it determines the survival and profitability of an enterprise. It underlines the reason Nike allocates a huge budget to the department. According to Mahdi et al. (2015), the marketing department works in collaboration with the finance division. It ensures that the finance sector allocates adequate financial resources to facilitate promotion and distribution of products. At times, the marketing department requests for additional funding if it identifies lucrative opportunities. A healthy relationship between the marketing and financial departments has helped to build market share and boost sales volume.
Risk Department
The law requires multinational corporations to have a risk department. As such, Nike has a risk department that works together with the marketing unit to identify potential hazards and cushion the company. The major risks in the apparel industry include competition and large size syndrome. The risk department assesses the performance of the different brands compared to those of rival companies and advises the marketing team on the strategies to take to mitigate competition.
Mahdi et al. (2015) posit that the marketing team works with the risk department to set prices for different merchandises based on the current market forces. Sports activities are seasonal, and therefore there are times when demand for certain products rises significantly. Whenever the marketing department predicts significant growth of the request for certain goods it notifies the management team, which advises the production department to make necessary arrangements to meet customers’ needs. The marketing department is required to give accurate information about the projected demand. Nike uses inventory management system to identify the flow of products and predict future needs (Jackson 2013). The system helps in product portfolio management.
Human Resource Department
The marketing department comprises many employees. The department works in collaboration with the human resource management to enhance working conditions. Moreover, the marketing department and human resource management collaborate to equip employees with requisite skills. The human resource management contributes to the success of marketing research and production of quality goods by ensuring that employees have the necessary skills. Mahdi et al. (2015) allege that Nike’s human resource management motivates the marketing team through competitive remuneration and rewards.
Moreover, the management addresses the needs of the sales team to prevent possible industrial action. Technological advancement has enabled customers to order products online. Once the clients purchase goods online, the marketing department has to liaise with the transportation division to facilitate their delivery. Thus, the marketing department works with the transportation unit to ensure that products are delivered to the right customers without delay.
Reference List
Armstrong, G, Kotler, P, Harker, M & Brennan, R 2013, Marketing: an introduction, Pearson Education Limited, New York.
Jackson, N 2013, Promoting and marketing events: theory and practice, Routledge, Abingdon.
Kotler, P & Armstrong, G 2017, Principles of marketing, Pearson Education Limited, New York.
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.
Pitts, B & Stotlar, D 2013, Fundamentals of sports marketing, Fitness Information Technology, Incorporated, New Jersey.
Proctor, T 2014, Strategic marketing: an introduction, Routledge, Abingdon.
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.