Marketing Assignment on Nike
The leading innovator and an American multinational corporation which is engaged in the selling, worldwide marketing, development and design of services, accessories, equipment, apparel and footwear. More than 33,000 people are employed by Nike. In more than 180 countries around the world, it sells products (Ramaswamy, 2008). The company’s headquarter is located in Oregon. It is a major manufacturer of sports equipment and the largest seller of apparel and athletic shoes of the world. More than 47 percent of the athletic shoe market is controlled by this brand. In the future growth plans of Nike; a significant role is played by its wholly-owned affiliates, such as NIKE Golf, Hurley International LLC and Converse, Inc.
With highly trademarks of the Swoosh, and “Just Do it” logo, many sports teams and high-profile athletes around the world are sponsored by Nike. Through wise marketing strategies, quality production and attractive and innovative design, legendary position has been attained by the brand. The global fashion trend is followed by Nike and it is popular and well-known in the hip hop culture and youth culture. To maximize profits, to nurture and establish relevant emotional ties with consumer segments, to provide innovative and quality products and services externally and internally, to identify focused consumer segment opportunities and to provide an environment that develops people to maximize their contribution are the main goals of the company.
This report will address the history, mission and vision of the company. Furthermore, it will address the marketing mix strategy of the along with the gap analysis and five dimensions of service quality.
The Company Nike Inc was started by Phil Knight and Bill Bowerman. In 1964, the original name of Nike was Blue Ribbon Sports, i.e., BRS which was founded by Phil Knight and Bill Bowerman with a collective investment of thousand dollars. The company began with Knight and Bowerman being local distributors for the Onitsuka Tiger footwear brand. In year 1996, the first retail store of BRS got opened in Santa Monica (Frisch, 2008). Consequentially, BRS began to market and create their own line of apparel and footwear and cut ties with Onitsuka. In year 1971, the “Swoosh” logo was designed by Carolyn Davidson who was hired by BRS, the spirit of the winged goddess was embodies by the “Swoosh” logo of Nike.
The revenue of BRS reached 1 million dollars, by the year ended 1971. After the Greek Goddess of Victory, the Nike was founded by BRS in year 1972. Their first foreign market was Canada. BRS officially renamed itself to Nike, Inc in year 1978. The first endorsement deal of the company was signed by IIie Nastase, who was an ATP tennis star. Since then, an essential role was played by endorsements in the marketing growth of Nike. The corporate infrastructure of Nike begins to form, towards the end of the 1970’s. Multiple manufacturing sites were opened, and their foreign marketplace expanded to Asian countries.
The famous Nike Air technology got born in year 1979. Until year 1982, a TV advertisement was not run by Nike it overtook nearly half of the athletic footwear market in year 1980. With the spread of positive reviews by both consumers and athletes, the reputation of Nike grew in the athletic footwear industry. For many athletes around the world, Nike remained the first choice and this are the reason why it’s positive image still exists today. Opening with the sale of two million shares of common stock, Nike became a public traded company in year 1980. The first Nike baseball cleat was debuted by a baseball player, who is known as, Steve Carlton.
In year 1980, around 2700 employees were employed by Nike. In year 1981, around in forty foreign countries Nikes were sold. Through a local advertising agency, known as, Wieden + Kennedy, Nike began its advertising campaign. In year 1988, Nike began with its “Just Do it” slogan and began its reputation for creating inspiring and unique advertisements. The cross-training business of Nike got exploded in year 1989 (Spence, 2008). Nike regained its position as the industry leader, by the end of the decade. By christening its beautiful world headquarters in Oregon, Nike entered the era of 90s by a series of successful marketing campaigns and product launches.
Several individual players from the World Cup-winning Brazilian National Team were signed by Nike in year 1994. The distinctive uniform of the team got designed, and the entire team was signed by Nike in year 1995. Dozens of national teams around the world, as well as, national soccer teams of women, and men of the United States were also signed by Nike. Nike continues to grow at the turn of the new millennium. Hurley, Umbro, Cole-Haan was the subsidiaries bought by it.
The corporate responsibility function has been transformed by Nike into SB & I, i.e. Sustainable Business and Innovation (Zadek, 2007). To enable Nike to thrive in a sustainable economy is the mission of SB & I. For SB & I, to enable the company and its consumers to thrive in a sustainable economy, where profit, planet and people are in balance, is the vision of Nike. To mobilize key constituents, i.e., industry, government, consumers, employees and civil society to partner in scaling solutions, to integrate sustainability into the heart of the business model of Nike, and to innovate to deliver enterprise-level sustainability solutions are the visionary goals of Nike.
The Objectives of this report are to address the marketing and service quality perspectives of Nike, which is a global shoe giant company. A lion share of thirty percent of the global market is maintained by this company. In almost 200 countries, the company has its operational units, customer service worldwide. In Asia, the company has maintained its production facilities. This report will reflect upon the marketing mix strategies of Nike. A business tool used by marketing professionals and in marketing is known as the marketing mix. In determining the offer of a brand or a product, the marketing mix is often crucial.
The reason why Nike has been selected is due the competitive and strong position maintained by the company in the market. The approach to marketing of Nike evolved along with its products. One of the first global marketing and truly integrated effort of Nike was its campaign in year 2002, that was, “The Secret Tournament”. In support of the World Cup, a multi-faceted consumer experience was created by Nike, departing from the tradition formula, which was, “big product, bid advertisement and big athlete”. To create excitement for athletes and soccer products of Nike, consumer and retail events, public relations, the Internet and advertising were incorporated by the “Secret Tournament”.
For communications and marketing, this new integrated approach became the cornerstone for Nike (Werther Jr & Chandler, 2005). To develop creative methods to directly communicate with consumers and to develop superior products, innovative and new ways are continuously sought by Nike. Involving the deal to become the official sponsor of the NFL and strong growth in China, the company has continued to expand in new ways.
The use of advertising is the most effective promotional tool from the perspective of Nike. During the history of the company, a wide variety of advertising campaigns have been developed. Advertising techniques, which accentuate the functional and quality benefits of the products are primarily used by Nike. To achieve its objectives, emotional appeal has been used by Nike. This can be proved by the below mentioned advertisements, the movements of the focal point are emphasized and emotive, and quite dynamic imagery has been used in the advertisement.
Nike has distinguished itself from its competitors by using these techniques and has reflected itself as a more hardcore sports orientated brand, in comparison to its competitors, who establish a more fashion orientated brand by tailoring their advertising. These advertising techniques are more appropriate as the buying behavior within the fitness, and athletic sector are influenced and characterized by them. During sporting events or within the advertising campaigns, sportspeople endorsement and celebrity are frequently utilized by Nike, which is another very successful promotional technique of the company. Since endorsement create a specific consumer perception and helps in conveying the brand image, therefore, for Nike it is very essential to use the endorsement (Keller, 2009). The Nike Air Jordan trainer endorsement is an example of a very successful endorsement campaign. In year 1985, the Swoosh logo was really starting to take over the world. The same pattern of endorsement was followed by the company with many other successful endorsements with sport personalities, like, Wayne Rooney, Christiano Ronaldo and Tiger Woods.
Public relations are another promotional tool which has had a huge impact upon the operations and brand of Nike. Rather than an effective promotional tool, it has proven to be more detrimental factor to brand image of Nike. Throughout the history of the company, many problems were faced by it relayed to the public relations. By being more environmental friendly, by setting up community programs and investments and by focusing on improvements within the CSR through improving working conditions, the company had made substantial efforts to deal with such issues.
The distribution strategies of Nike are stemmed with its objectives and goals. In comparison to a more fashion oriented market segment, a different distribution strategy is implemented by Nike, looking specifically at the fitness and athletic segment. A selective distribution strategy will help to portray Nike as an elite brand as based on specific benefits of products, like, perceived quality, the fitness and athletic consumers of Nike will make their purchasing decisions (Zentes & Et.al, 2011). The specialist running apparel of Nike is stocked by ninety nine stores throughout the United Kingdom, and this shows the apparent selective distribution of Nike.
The Nike is portrayed as a specialist brand by small retailers who stock the running equipment of Nike and specialize in running equipment. Throughout the distribution channels, legitimate power is exerted by Nike as these retailers are near as powerful and far smaller. Across the United Kingdom, several Nike Town stores have also been developed by Nike.
In order to maintain its high brand equity, it is important for Nike to select an appropriate pricing strategy. Price skimming strategies are primarily used by Nike considering the quality benefits necessary for the consumers. For consumers who have different motivations and perceptions as well as for quality oriented consumers, a price skimming strategy is effective. For instance, for the personal benefits, such as, symbolic consumption and social status, products of Nike may be purchased by consumers and, therefore, an elite brand and up-market is portrayed by a higher price, and for consumers this factor is really important (Erdem & Swait, 2004). However, threats may also be posed to Nike as it uses such pricing strategy.
The impacts of the current economic environment on the consumer spending and the current economic environment itself are the most imminent threats from using this strategy. Price sensitivity has increased due to lack of consumer confidence and the affect of changing personal disposable income levels and due to this the consumers are shopping more at budget price sportswear outlets. It is one of the complex situations for the company, as without comparison its brand equity, it is very difficult for it to compete with lower priced budget stores.
The high brand equity is one of the main attributes of Nike. The marketing strategies of the company are affected by it, and across all aspects of the business it is highly influential. The company is allowed to develop a wide variety of brand extensions by its brand equity. Since there are a wide variety of product categories, like, Nike running and Nike football, the products are simply accessible through the website. Since, brand extensions allow the company to react to any trends that arise from its external environment, and be proactive, therefore, it is important for Nike to develop its brand extensions.
Due to the increase in people taking part in activities, like, running, there is an increasing demand for athletic apparel and the athletic trends are focused more. With the introduction of specialist Nike running products, the company has been quite effective in adapting to this trend. In order to demonstrate a source of differentiation to the customer and to maintain its position, Nike has developed itself as an innovative and cutting edge organization (Miles & Munilla, 2004). Within their product range through technological development and advancement, this innovation has been achieved. From clothing and footwear, like, the new Lunar Glide+running shoes, this product development varies, as an advanced cushioning system is maintained by this product.
Utilizing the horizontal integration, like, iPod+Nike sports kits, this product developed varies to more diversified developments. The company is allowed to gain access to developing or potential markets and offer new products to its existing markets by such product diversification and development.
It can be concluded that across the aspects of the marketing mix, effective marketing strategies have been developed by Nike. However, threats from aspects which they cannot control are being faced by the company, for example, lack of economic stability and negative publicity. However, the company is in a better position to exploit any emerging opportunities and to withstand any threats through its marketing strategies and high brand equity. Nike has become one of the most recognizable brands in the world through its trademark swoosh, the Nike name and the brand image of Nike. The reason behind its high revenues is its brand power. The shoe empire has become a huge success due to its great marketing techniques, loyal customer base and its quality products.
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