Three-year Marketing Strategy for Nike
Executive Summary
This paper reports a three-year marketing plan for Nike’s products. With reference to previous offerings, this report shows the methods and channels that Nike can use to avail new products in the market. Comprehensive components of the marketing plan are included, such as company analysis (the company’s future and current status), market or situation analysis, and competitor analysis. Based on Nike’s marketing strategies and objectives, and with regard to the company’s 4 Ps, it is shown that Nike has the opportunity to further its product range by offering other merchandise related to the industry in which it operates. This includes things like aerobic products and the likes. This report suggests that a value-based pricing strategy is essential for the company, as well as an increased social media presence to market its new products and expand operations to other countries like the Middle East, China, etc. The report also advances a contingency and execution plan, which is entirely based on teamwork and the company’s senior management’s diligence toward meeting the company’s set objectives.
Introduction
Conventionally, a marketing plan is supposed to assist a trader in promoting his or her services and products in the business so as to fulfill the needs and demands of the firm’s target market. As it is, it needs commitment, time, and research, but it is an invaluable mechanism that can significantly determine the success or failure of a business. A marketing plan can be long-term or short-term, depending on the firm’s intentions. Of the two, the long-term is the strategic one, the type for which Nike intends to work (three years is a strategically long time). Nike is one of America’s most influential multinational corporations engaged in the global manufacture, development, design, sale, and marketing of footwear, services, accessories, apparel, and equipment. With its headquarters in Beaverton, Oregon, Nike acknowledges that it operates in one of the most competitive industries, with big players like Puma and Adidas, as some of its most significant competitors. In that regard, this paper presents a marketing plan that can help stay ahead of the game in the face of such intense competition, with much emphasis on the company’s current situation, proposed marketing strategy, and its 7Ps of the marketing mix.
Nike’s Current Situation
As of 2019, Nike was classified as the global apparel brand with the most value, boasting a brand value of more than 32 billion US dollars. It also claimed the biggest share of the world’s apparel market, along with a significantly robust financial record, having raked in more than 30 billion US dollars in terms of revenue for the past four financial years. Nike has three primary segments of business: footwear, equipment, and apparel. Last year, footwear took the lead with regard to sales revenues, raking in more than 24 billion dollars in that year. One of Nike’s most popular success stories is converses and generates uniform revenues every year.
By the start of 2020, more than 76,000 people all over the world had been employed by Nike. The company’s North American region generated the company’s largest portion of revenue last year, estimated at over 15 billion dollars. As it is, the center of Nike’s market is the United States. Last year, this region alone generated almost well over 40% of the company’s overall revenue. The following SWOT and PESTEL analyses summarize Nike’s present position in the market.
SWOT Analysis
Strengths
One of Nike’s strengths is its strong brand awareness. It is one of the world’s most recognizable brands, with its name alone being very unique, easy to pronounce, and memorable. The company also has a large customer base, with millions of loyal customers worldwide following its trends, participating in its events, and providing customer feedback. Other strengths possessed by Nike include its iconic relationships, low manufacturing costs, in-house professionals, and excellent marketing opportunities.
Weaknesses
One of the company’s most prominent weaknesses is the poor labor conditions in foreign countries, which has often put Nike on the spot on several conditions. Another weakness is the stronger hold by retailers. The company’s retail sector weakens it due to its price-sensitivity. Because retailers are its primary customers, Nike is virtually unable to find any leverage against their pricing strategies. Nike also has pending debts, which jeopardize its operations, amounting to about 3.48 million dollars. Other weaknesses of Nike include over-dependency on the US market, lawsuits, and sexual harassment.
Opportunities
Despite its weaknesses, Nike has some platforms that it can profitably explore, the most prominent one being emerging markets in countries like Brazil, China, and India. Nike also has an opportunity to invest in innovative products, especially in the aerobics industry. Lastly, Nike has an opportunity in efficient integration since its production and supply relies on independent manufacturers. It can make a few of its own or acquire some of these for a better, streamlined, and efficient supply chain.
Threats
Nike’s biggest threat is counterfeit products, whose risks in the global market have risen lately. This can potentially tarnish the brand’s image and compromise customer loyalty. Other threats include heightened competitive pressure, marketing budget pressure, and risks in the exchange of foreign currency.
PESTEL Analysis
The table below summarizes Nike’ external operating environment:
| ELEMENT | ANALYSIS |
| Political | Low interest rates and properly structured international tax agreements in the US, Nike’s home country. The company is subject to changes in manufacturing and tax laws Political conflicts, especially in foreign and developing markets, slow down the company’s growth. |
| Economic | Potential collapse in the market due to the coronavirus pandemic The company’s revenues are somewhat dependent on the low labor costs in Far Eastern nations Nike has an opportunity to expand operations into small emerging markets due to its ‘deep pocket’ of fun |
| Sociocultural | Increased global awareness on health could mean people buying more sports apparel, putting Nike in a good spot Longstanding criticism over dubious processes of production |
| Technological | Increased social media presence has increased Nike’s popularity Technological advances have enabled the company to use valuable metric-based information |
| Ecological | Nike’s mass production factories are said to hurt the environment. They are releasing a lot of aerial pollution Nike has shown a strong commitment to adopt environmentally sustainable practices |
| Legal | There are allegations that Nike is evading a lot of tax due to its huge size The company sometimes suffers legal consequences for its shady marketing practices, such as false discounts. |
The Marketing Strategy
This is viewed in terms of Nike’s segmentation, targeting and positioning
Segmentation
Nike’s segmentation will occur in the aspects of demographics, gender, psychographics, and behavioral. Demographic segmentation is the most generally utilized procedure from Nike on the grounds that the attributes are anything but difficult to distinguish and estimated, are accessible from numerous sources, for example, the administration populace check and are related to wear perspectives, for example, going to a game or watching sports. In view of the segment division, Nike targets people as indicated by their sexual orientation, age and life cycle stage. First and generally critical to be told is that Nike targets clients between 11-45 years of age, with more noteworthy load to adolescents so as to assemble long haul, steadfast purchasers. With regard to gender, in spite of the fact that it has a higher male buying audience, the company’s new strategic approach targets women by launching several women’s sportswear, from which revenues are expected to increase considerably in the future. Psychographically, Nike intends to engage individuals who are active in athletics, gymnastics, and sports generally to be part of its operations. This will work to lure customers who look up to these individuals as icons in the sporting world and thus earn the company more mileage.
Targeting
Nike analyzes its target market on the basis of behavioral variables, measurability, reachability, and size. In essence, the company has a niche to serve in the market. Nike’s targets are sporty persons and professional athletes by availing to them innovative and specialized products. In addition, the company’s merchandise is reachable, even online. The company can also use psychological tactics such as sponsoring sportspersons with great victories and tremendous achievements.
Positioning
Nike has situated its image as the market head of athletic gear generally, giving high caliber and creative innovation. Besides, Nike has persuaded its customers that it is a driven and successful organization through the swoosh along with the trademark “Get it done” just as through the limited time exercises that associate Nike’s image with heavenly accomplishments of unmistakable competitors. It must be focused on that Nike throughout the years has moved from item center to disposition.
Marketing Mix
The following table summarizes Nike’s 7ps of the marketing mix:
| P | ANALYSIS |
| Product | Nike sells its products under five main categories, each serving a separate product line Variety of products Highly differentiated products High quality than competitors Famous traditional design |
| Price | The company should introduce allowances and discounts Use psychological pricing Launch new products with a price penetration strategy |
| Place | Company should open up social media shops Focus on developing a better website Expound on personal selling to retailers to expand customer base Company should set up company-run retail stores |
| Promotions | Nike should use social media influencers It should introduce more advertising campaigns especially through social media It should employ several digital marketing techniques It should make more target-audience-centric social media posts |
| People | Nike should train its purchasers, customer service, and sales force more It should give its sales force incentives It should hire employees who value respect to customers |
| Processes | Nike should employ more computerization in handling its production processes It should seek more technologically inventive and innovative ways |
| Physical Evidence | Nike should seek customer feedback more Its stores need to be more ambient and shopper-friendly |
Nikes Porter’s Five Forces
| Competition | Low market growth rate Competitors highly aggressive Moderate number of competitors |
| Customer bargaining power | Low switching costs Not many substitutes Few individual buyers |
| Supplier bargaining power | High overall supply Many suppliers Few individual suppliers |
| Threat of substitution | Not many substitutes Low switching costs |
| Threat of new entrants | High brand development cost High economies of scale Moderate business operation cost |
Conclusion
Nike, one of the world’s biggest producers of sportswear, has is currently not doing quite badly in the industry. However, with the increasing strength of competitors and the number of substitutes, the company may need to adopt better marketing strategies such as increasing its social media presence and using more psychological selling.