Nike’s Marketing Communication Plan
Nike, Inc. Company is currently undergoing serious competition from its competitors such as Adidas and Old Navy. Subsequently, every effort to salvage the situation and help the company maintain its leading position in the global market share is a welcomed move. Currently, Nike Company is losing its market share to its competitors, which is a highly regrettable phenomenon in the world of business. To secure success in maintaining the market lead and profit making, the strategies used in marketing Nike Inc. Brands have to be enhanced and updated to the most viable options. In this, the market target and the appeal of the marketing strategy outcomes to the potential consumers must be given consideration. Brand Marketing and Strategy
In primeval Greek methodology, the word Nike referred to goddess of triumph, signifying respected conqueror of the battlefield. It is for this reason that Phil Knight and Bill Bowerman, the founders of Nike Company, instill this myth in every Nike’s products. At first, Nike mainly paid attention to high quality athletes’ shoes. Later on, they had to adapt to focus on all kinds of sportswear. Their aim was not limited to helping the world’s athlete achievers. They also had the objective of uplifting ordinary individuals into new spheres of Nike’s athleticism. The founder of this great company wanted its consumers to feel or believe that through buying the Nike’s products, one would be able to achieve happiness, prosperity and power. Based on the mythical symbol of the name Nike, the profit-driven enterprise should take advantage of this and advertise, design and brand, to interpose its buyers into purchasing its products (Keller, 2008).
Store Layout Techniques
According to Holt & Dauglas (2010), Nike’s store is designed according to modern standards. The company can utilize modern in-store techniques to boost the possibilities of customers buying their products. When walking into this state of the art store, the most salient feature is its highly designed and symmetrical arrangement or layout. Every equipment and supplies are arranged according to the sport they are meant for. They are further arranged in order of color and product-type. The whole store looks very organized, and there is a view of miniature stores within one big store. Excellent arrangement and organization of Nike’s products is also attained by wall and floor pigment schemes, which also vary depending on the type sporting equipment displayed. For instance, the swimming equipment section has aqua walls with a blue rubber floor, which actually resembles what a customer would get from the actual swimming pool. On the other hand, soccer and athlete areas are characterized by paintings and pictures that are typical of stadia and marathon ranges. Segmentation
Segmentation is concerned with three major intentions in securing better marketing and sale. The first one is variety. By having a variety of sections for every sport, Nike can have a diverse range of products for each consumer. This is supported by the fact that this idea convinces customers that there is specialization in the production of equipment for sporting and thus specific clothing for every sporting activity. For example, customers are made to believe that Nike yoga shirts do not serve the same purpose as Nike running shirts. This conviction can make the company earn an extra market in every consumer. Secondly, through segmentation, Nike disembodies the potential customer from the company’s store. For instance, through designing a swimming pool in the store to appear like the actual swimming pool in real life case, Nike can facilitate spending and boost purchases through creation of space that attracts imagination. Such imaginations create a picture of the true sporting event that ultimately invokes the decision for purchases. This is probably the reasoning behind the company’s dark and unattractive walls- to lay major focus on the interior design and arrangement of merchandise as this will sway the customer away from the store into a fantasy mythological realm. Finally, the third purpose for this strategy is to create and ambient and maze-like atmosphere. This can be achieved by the bottom floor of the Nike store. Owing to different and varied nature of stores, consumers are left to maneuver, wallowing in disjointed confusion. Due to this technique, the consumer is forced to view all the available merchandise before eventually finding the exit. In a nut shell, application of colors, space and architectural strategies can open a bigger boost for purchases of the company’s products (Goldman & Papson, 1998).
The well designed Nike store also employs the advertisement within the design and arrangement tactic strategy to lure more consumers. However, this strategy is more complex than the design and arrangement tactic. Though both tactics are meant to perplex and mystify customers into buying Nike merchandise, the advertisement tactic is a better strategy to persuade potential consumers. Through internal advertisement, the consumer may not figure out the true meanings behind every product. However, they may be attracted to them because of the inspirational phrases that give ‘life’ and ‘meaning’ to objects which are otherwise lifeless or meaningless (Hays, 2000). Nike store advertisement can also target the professional athletes, where the athletes’ prowess is captured and dressed in sport particular Nike gear. This is also taken to video advertisement as well as wide posters with little or no writings except for the word “Nike swoosh”. This poster can consist of photographs of two varied categories of athletes. In this case, the first category would color photo current Olympic athletes to target the younger Olympic audience who might be persuaded by sense of achievement into buying Olympic clothes.
The next category would be the black and white photographs of brilliant-performance athletes in their younger ages. These photos are likely to attract the older audience who might be inspired to believe the sense of comfort by seeing their popular childhood hockey performers such as Kovalchuk and Naslund. This advertisement strategy is based on the power of suggestion and Nike believe that they do not need to advertise their products vigorously because they know or believe that the myth connected to athletes is a self testimony. Just by relating their products particularly clothes to athletes, make them have a conviction that they can trust the Nike brand and image (Nicholas, 2010). Nike and the community as a branding strategy
Nike can brand itself successfully by associating its products such as swoosh with community projects. For instance, the Nike website shows an e-newsletter known as Nike Responsibility. And the winter 2004 issue featured Nike contribution such as poverty alleviation, “Increasing Physical Activity Among the younger generation” and “Giving Workers A Voice”. These programs can be highly significant to the communities when implemented. Nike enterprise earns a lot of profits and gains brought by images these programs create. When each publicity stunt, television promotion and newsletter recognize these Nike programs, then the Swoosh and the Nike brand incorporated in the myth of generosity and big-heartedness and therefore Nike expands itself from a realm of excellent profits and products to a charitable foundation (Kerine, 2009).
Sports superstar & Nike Michael Jordan is one of the most acknowledged tactic and strategy professionals of Nike branding. As founder of Nike, he knight the slogan “you can’t clarify much in one minute but when you exhibit Michael Jordan, he simply a “superbrand”. This shows that Nike can inculcate a unique blend of prestige with humanism and morale to boost their volume of sales. For instance, when Nike promoted their new product of clothes and named them AIR JORDAN, which not only showed Nike Swoosh but also displayed a tiny Jordon suspended in air, Nike believed that every information Jordan conveyed might direct or sway the customers to merchandise. In a similar way, using sports superstar and associating them with the company’s merchandise is very significant and can be a huge boost for the company’s performance in terms of sales. There are very many super stars such as Drogba, Messi and Van Persie in the world of football which when adopted by the company and embedded in its products, can contribute significantly to the company’s sales volume since these superstars are heroes and every soccer fan would like to associate with them. Demonstrating a fully inclusive campaign in sport arenas
Nike habit of an intensive campaign and demonstration of effective ambush marketing during a sport-full year such as world cup and Olympic is not entering the minds of customers for the first time. Even though many of its competitors have also imitated this tactic, the most interesting thing is how the Nike continues to design the market pace. As marketing expenditure approaches $2.5bn, less than 16% of this amount is currently spent on traditional media such as radio, television and outdoor activities. The company aught to spend much on these areas as opposed to shrinking their expenditure as most of its consumers still access them through the media.
Nike’s Corporate Mission Statement
“To be one of the worlds’ leading sports and Fitness Company”
Nike’s mission slogan is alike a vision statement and therefore is a weakness to the company as its mission is not inclusive. Even though the mission statement broadly shows the business Nike is engaged in, it is not definite as to what products or services we are engaged in. The mission statement also ignores to mention any distribution and channels and customers. It however, shows our beliefs and convictions of becoming the leading distributor of sports and fitness. For the sake of appealing to the market, the company’s mission should be inclusive and state clearly what the company engages in, their distribution channels and targeted customers. This may be helpful for customers as they will be getting inclusive information on the company’s prospects making them be associated with the company without any fear of unknown (Craven, 2006). Recommended mission statement
Our mission at Nike Company is to be a company that supersedes all other companies in athletic industry. We all sustain our place of providing high quality footwear and apparel to both individuals and institutional consumers. Nike will continue to be concerned with all stakeholders through continuing to be a company that is concerned with the social responsibility. We must be committed to treating our clients and employees with respects as will always ogre well with the public and our clients.
There are no clear corporate objectives with regard to overall company. Keller (2008) argues that this lack of corporate objectives shows a company’s weakness and can be very detrimental to its marketing. Nike Shareholders should be well conversant with the company’s corporate objectives to facilitate better understanding of the company and its direction. Initially, Nike established corporate objectives with respect to our perceived corporate responsibility that reads “to be the leading in corporate citizenship via programs which shows caring for the Nike family”. This objective itself is a weakness since it does not take care of the company’s requirements of being measurable and duration to complete a given objective. Grand Strategies
Currently there is insufficient innovation in Nike production. This had made its competitor overtake it in marketing and retaining of customers as they are producing facilities that are up to date for sports and fitness. To be a head of its competitors such as Adidas, Nike should embrace the application of innovation and produce top quality sport and fitness wear. This should come as a result of devoting huge resources to the Nike research and development team. Accomplishing these will enhance Nike to capture the largest market share in athletics or sports domain and continue to be the leading quality products producing company. Competitive Strategies
Nike is spending a lot of resources on marketing basing their strategy on individuals in sports such as athletes and soccer. However, the competitive strategy that Nike structured at late 1990’s focus more on marketing strategy concentrating on the spirit beliefs or conviction of the athletics towards the end of 1990s. This has so far been substituted with a sense of individualism. The current generation is hoping from one retail outlet to another in search of a sense portraying individual style. Nike should therefore respond to this market shift in a number of ways. Whilst the company retains the ancient culture of placing performance and achievement in newly innovated product a head of other strategies, the company should always give more considerations to building the element of fashion in their products and image (Booney, 2006).
The once loyal Nike’s market is but slowly fading. This implies that our customers or consumers are not embracing athletes like they used to do in the past. However, this can not be taken as a major setback for Nike since we still have the potential to influence and persuade the current generation to be our customers. We can realize this by using the older customers to persuade or influence these young generations and be the future Nike’s loyalties. Moreover, by marketing and promoting different kind of shoes this new market, the already won customers will continue to be loyal to Nike. Threat
The continued fading and diminishing of our loyal market share is a great setback and a threat to the company as it leaves the company guessing whether the new generations will be also be part of the Nike loyal customers. In the present market share, some of the major competitors are not inclusively athletic oriented. For instance, Gap and Old Navy, which doubles up as manufacturer and retailers are producing products such as clothes and shoes which are highly competitive to Nike’s products hence causing a great threat to its market share. In addition, Nike is not changing its style of production despite the ever dynamic fashion and this scares away its clients especially the current generation to its competitors like Adidas and Tommy Hilfiger. Subsequently, Nike should respond to this challenge and adopt the culture of dynamism to move with the fashion trend and prevent the loosing of its customers to its competitors. Pressure groups
Opportunities formed by pressure groups lies in the company’s ability to respond positively to the concerns of the general public and its customers. Consumer watch organizations are closely paying attention to the manner in which Nike uses child labor and sweatshops to produce our merchandise. The company opportunity therefore lies in our ability to prove to the consumer force that we are surely taking appropriate measures to eliminate the number of sweatshops and child labor through well defined and strict implemented policies and procedures. In addition, we need to prove to the consumer activist that we are committed to promoting code of ethics as we strive to be efficient and economical Threats
Failing to respond promptly to these consumer activism societies similarly poses a great danger and threat to the company. The negative portrayed image that Nike has suffered in the recent years has detrimentally declined its popularity and image to the extent that a majority of the consumers see it as an ethical company. Such negative publicity has the ability to destroy the company to its knees. By ignoring the voice of the concerned consumer activists is a show of disregard to our customers who happens to be our major stakeholders so avoid such scenarios and situations, we need to comply and listen or react promptly to these consumer activist for the betterment of perpetual and continuous success Key Opportunity
The major opportunity for Nike, Inc. presently lies in the flourishing United States economy. Presently, Nike has the potential and resources to rise to the occasion and react to this opportunity. Nike has taken advantage over the recent economic detonation as can be realized in its record of high sales and incomes. However, we are not using our resources exhaustively, yet there are a thousand plus one opportunities in which Nike is not focusing. Currently, we are not concerned with current new generation that is always keen about fashion and styles. In addition, Nike Company must focus on the ever changing demographics which characterize the current global market. This new market kind of has peculiar taste and preference that Nike should always strive to satisfy (Keller, 2008). To react and exploit this opportunity, there is need for Nike to start guessing on who the subsequent generation of devoted consumers will be and to start preparing in satisfying their needs. Moreover, the world economy is currently gradually recovering and this opens another opportunity for the Nike to exploit foreign market. The fact that Nike is doing well in many foreign countries does not limit us from exploiting or focusing on the younger market. Besides, given that Nike is doing well in research and development should make us work hard and maintain the lead in the market share and we must always look at the trend of this market as we maintain high standard quality of production (Booney, 2001).
According to Frisch (2004) one of the key threats or challenges facing Nike Company is market saturation. This implies that the athlete shoes which forms major Nike products is saturated with varieties of brands and firms to the extent that there in very little or no room for expansion or upcoming of new companies. Similarly, this has shrunk the window for product innovation, expansion development and growth of market share for those companies that produce sports and fitness like Nike Inc. In fact, there is need to hold onto our already earned market because if we fail, it is us to loose. Nike Company is currently competing with many other athletic firms as well as companies which produce and sell clothes or any other make of shoes and in case these companies gain even a small share of the market capital, then it implies that Nike will proportionally loose the market share (Craven, 2006). To respond to this major challenge, we must put a lot of emphasis on keeping and maintain our already got market share and to be on the look that these competitors do not get any proportion of it. To realize this, we need to focus on the broader market. This will include the new and the younger generation whose interest is in sports as well as those that are interested in other extreme sport activities. We should make sure that we not only stay put in making and selling athletics shoes but also remain competitive in the world of athletics.
In the past, Nike Company has been utilizing the product differentiation as one of its major competitive strategy. Based on our reputation, we will always be focusing on this area. Nike has won its brand name by producing products of superior quality and this has made us achieve what we have got today. Nike is also famous with its technology oriented products. Since we are superior in this area, which makes us stand tall among our competitors, will always continue to adopt technology in producing high quality merchandises. Nike will also be focusing on striving to leaders in price setting. Our products traditionally have been centered to the higher side of price category. We will now make a grand entrance into lower pricing category despite our quality products. This will make us extend even deeper into the market share.
Long-term: To boost our market share in Asia Region from 27% to 30% by 2013
Short-term: To elevate our market share in Asia Region from 27% to 29% by fiscal year ending
Start date Completion date Budget
1 Market research
engage a market research firm that is well conversant with Asia, precisely the booming market that is existing in Japan
This team will find out what factors attracts their athletic sport and fitness purchases. 4/26 4/28 $500,000
2 Conduct focus group In Asia to acquire feedback on our products including our prototypes 4/26 4/28 $100,000
Establish price points for our Asian products offerings that are well adjusted for regional buying power, currency evaluation and competition. 4/26 5/27 $5,000,000
Advertisement and promotion 1 Sponsor regional sport activities for college teams, amateur and professionals. This include taking part in sponsorship of Brazil world cup 2014 4/26 7/28 $10,000,000
2 Conduct advertisements in the most famous forms of regional media including television, magazines and billboards 4/26 7/28 $1,000,000
3 Conduct fashion shows at top retail venues to show our latest products in the market 4/26 7/28 $100,000
4 Provide discounts and rebates for certain current models products to encourage sales and inventory. 4/26 7/26 $1,000,000
Total 3 months Completion date depends on 7/31 financial year end
Appendix A-3: Nike Target Audiences
Figure A-3-1: Regular participants in sports, by demographics, February 2009
Swimming Cycling Running Football Snooker Darts Golf Badminton Tenpin bowling Tennis Other sports
% % % % % % % % % % %
All 18 17 16 10 8 7 6 6 5 5 19
Gender: Male 17 22 20 18 12 9 10 8 6 8 20
Female 20 13 12 3 4 4 2 4 4 2 18
Age: 16-19 22 29 41 27 26 15 8 15 12 14 33
20-24 21 23 31 22 14 9 7 10 9 10 29
25-34 25 19 26 19 10 10 9 11 9 7 28
35-44 19 19 15 7 5 7 4 5 4 3 18
45-54 15 15 5 3 4 3 6 2 1 1 10
55+ 14 10 2 1 2 3 4 1 2 2 11
Region: Inner and Greater London 24 17 23 15 10 7 6 10 6 9 20
South East/East Anglia 14 19 17 8 6 7 8 4 5 5 18
South West and Wales 20 20 15 7 7 8 6 7 6 5 22
East and West Midlands 15 18 11 10 7 4 6 6 4 4 16
North West 21 18 17 13 12 10 5 8 5 6 21
Yorkshire, Humberside and North 16 11 13 11 7 7 4 5 6 3 18
Scotland 25 15 12 10 8 2 6 3 3 1 18
Working status: Employee full-time (30+ hours/week) 19 21 18 14 9 9 8 8 7 5 19
Employee part-time (less than 30 hours/week) 18 13 15 5 5 4 3 4 5 3 15
Any self-employed 19 17 10 8 7 7 10 3 5 5 16
In full-time education 24 25 35 22 18 7 6 13 5 12 37
Retired 13 8 1 1 2 3 4 1 1 2 15
Not working for any other reason 13 11 11 5 4 5 3 3 2 2 16
Socio-economic group: AB 24 20 22 12 10 8 9 9 7 7 25
C1 18 19 17 10 7 5 4 6 5 6 21
C2 18 17 12 12 9 8 7 4 5 3 15
D 9 12 8 5 4 5 2 4 2 2 7
E* 10 8 2 6 3 6 3 2 2 1 12
Education: Less than secondary education 12 12 10 6 5 6 5 7 5 7 14
Secondary education (GCSE/O-level or equivalent) 13 14 8 7 4 7 3 3 3 1 13
High school education completed (A-level or equivalent) 20 20 19 15 10 7 8 7 5 6 21
Further qualification (between high school and university) 17 16 10 9 6 5 6 3 5 3 16
University degree 25 22 25 12 10 7 8 11 6 8 26
Doctorate level or professional equivalent* 25 12 25 12 6 9 5 10 4 6 20
Daily newspaper readership: Broadsheet readers 26 25 28 18 13 10 10 13 9 11 28
Mid-market tabloid readers 22 20 18 10 12 8 8 8 7 7 23
Popular tabloid readers 23 19 19 16 11 10 8 7 8 6 18
Gross annual household income: Under £15,500 12 15 11 5 4 4 1 2 1 2 15
£15,500-24,999 19 16 11 9 7 7 4 7 6 5 16
£25,000-49,999 19 18 17 12 8 6 6 6 6 5 19
£50,000 or over 26 24 25 15 11 10 12 10 8 8 28
Household size: 1 15 18 9 5 5 7 4 3 2 3 18
2 14 12 11 6 4 4 6 3 3 4 17
3 21 22 17 14 11 10 7 9 8 7 21
4 22 18 22 13 10 6 7 9 7 5 20
5 or more 24 21 27 20 11 10 7 8 5 6 22
Marital status: Single 18 23 26 17 13 10 6 8 7 7 28
Married/civil partnership/living as married 19 16 13 8 6 6 6 5 4 4 16
Separated, divorced or widowed 15 13 6 3 5 5 6 4 4 4 13
Daily personal internet usage: Up to one hour* 20 11 10 8 3 3 2 5 4 3 19
1-3 hours 18 17 15 8 6 6 6 5 4 4 18
4+ hours 18 19 18 14 11 8 7 7 7 6 20
Supermarket used: Asda 20 17 16 11 8 8 6 6 6 5 18
Marks & Spencer 29 22 23 14 12 10 10 10 9 8 26
Morrisons 22 18 15 11 8 7 6 7 7 5 20
Sainsbury’s 20 19 19 11 9 7 6 8 6 6 20
Tesco 20 18 18 10 9 7 7 7 5 5 21
Waitrose 27 30 24 17 13 11 9 14 9 12 27
I have digital satellite (BSkyB) 20 17 17 12 8 8 9 7 6 5 19
I have digital cable (Virgin Media) 16 17 16 11 7 7 6 7 5 5 17
Freeview digital box/TV 18 17 15 10 9 7 5 6 5 5 20
Other digital TV and analogue cable 21 24 17 10 9 9 8 7 3 6 16
Terrestrial TV only* 17 17 18 5 7 1 2 2 2 2 18
Base: 2,000 internet users aged 16+
( source Key Note : HYPERLINK “http://academic.mintel.com/sinatra/oxygen_academic//”http://academic.mintel.com/sinatra/oxygen_academic//
we have inspired potential consumers with the slogan “Just do it” and the iconic “SWOOSH”.
Table A-1-2:Frequency of participation in sports, February 2009, UK
Once a week or more At least once a month At least once every six months Have done but not in the last six months Have never done
% % % % %
Running 9 7 6 31 48
Swimming 9 10 15 50 17
Cycling 9 9 9 47 27
Football/soccer 5 5 5 31 54
Snooker 3 5 8 34 50
Darts 3 4 6 36 51
Golf 2 4 5 21 68
Badminton 2 4 5 36 52
Tennis 2 3 7 36 53
Tenpin bowling 1 4 19 54 22
Any other sport 12 7 6 32 43
Base: 2,000 internet users aged 16+
Product Channel Quality Segmentation £ Market size Willingness H School
(age 16-18) X L
(age 19-44) H
L Third age
(age 45-54) X L
L X Retired X X L
This perceptual map illustrates the relationship between head-to-head competitors and indirect competitors which they are possible to affect New Pegasus project in the UK market. The conditions consider between diversified and non-utilization within the shoe’s performances (used in sport and ordinary life) on the horizontal line and between high price and low price in the UK market on the vertical line.
As the reason why we have to concern other competitors in fashion sector because the purpose of the New Pegasusobjective is not only used in sport but also it can be used in ordinary life.
Nike shoe price is quite more expensive than other competitors in comparison with the head-to-head competitors like Adidas Puma and Reebok.
Nike, Adidas Puma, and Reebok are general similar in their product line.
Product life cycle and BCG matrix
For the new Pegasus, it causes to move the position on product life cycle from decline period to introduction period.
The company was foundedon January 25, 1962 by HYPERLINK “http://en.wikipedia.org/wiki/Bill_Bowerman” o “Bill Bowerman”Bill Bowerman and HYPERLINK “http://en.wikipedia.org/wiki/Philip_Knight” o “Philip Knight”Philip Knight and was established under the name, Nike, Inc. on May 30, 1978producing a wide range of the world’s dominant shoe and sports equipment under the brand logo “SWOOSH” which was created in 1971. Due to manufacturing products related to athletic footwear and apparel, sport equipment and other athletic and recreational products, Nike has created its own brand to operate retail stored under the name related to its products such as Nike Golf, Nike Pro, Nike+, Air Jordan, Nike Skateboarding, and other subsidiaries.Nike has contracted shops and has internationally offices around the world. By the end of 80s century, Nike succeeded in promoting the new products on promotional campaign rather than spending on ads. According to the success of creating inspirational stories with the long-term promotional using motivation and connection with a product spokesperson in the ads like Michael Jordan, Nike has reflected the culture of consumption lending to actively influence buyers in every age including younger buyers due to the brand imagebeingmoved to become as anexperience brand indeed. In the 90s century, Nike developed the shoe manufacturing technology and continuously launched the new promotional campaign focusing on major sport event like world cup and the internationalcelebrity endorsers such as Tiger Wood, and finally became a truly global brand.
Socio-economic groups are based on the head of household or chief income earner and are defined as follows:
Socio-economic group Occupation of chief income earner
A Higher managerial, administrative or professional
B Intermediate managerial, administrative or professional
C1 Supervisory or clerical, and junior managerial, administrative or professional
C2 Skilled manual workers
D Semi and unskilled manual workers
E All those entirely dependent on the state long term, through sickness, unemployment, old age or other reasons
Retired persons who have a company pension or private pension, or who have private means are graded on their previous occupation.
Students in higher education living at home are graded on the occupation of the head of the household. Students living away from home are graded C1 (no account is taken of casual or vacation jobs).
Lifestage and Special Groups
In addition to the standard breaks, Mintel also analyses the consumer research in the following manner.
Lifestages are derived from analysis of the exclusive consumer research and are split into four main groups, as follows. The following percentages are nationally representative. Internet representative would differ slightly.
% of population
Pre-family/no family aged under 45 who are not parents 26
Family any age with at least one child aged under 16 still at home 29
Third Age aged 45-64 with no children aged under 16 still at home 26
Retired aged over 65 with no children aged under 16 still at home 20
As part of an ongoing policy to find new ways of analysing data, Mintel has created Special Groups of consumers to typify consumer habits in the early years of the 21st Century.