Marketing Management for Nike

This report explores the concepts of marketing management for Nike, including market segmentation, targeting strategy, positioning, and customer-based equity model. It provides an overview of the company, its current market position, and marketing objectives. The report also discusses the three target segments and McKinsey's strategic three-year horizon for Nike.

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Content s
Introduction......................................................................................................................................3
Overview of the company................................................................................................................4
Current market position...................................................................................................................5
Market segmentation...................................................................................................................5
Targeting strategy........................................................................................................................5
Positioning...................................................................................................................................6
Customer-based equity model.........................................................................................................6
Marketing objectives.......................................................................................................................8
Target segments...............................................................................................................................9
Three Target segments.................................................................................................................9
McKinsey’s strategic three-year horizon...................................................................................10
Marketing mix...............................................................................................................................12
Product strategy.........................................................................................................................12
Price strategy.............................................................................................................................14
Place/Distribution strategy.........................................................................................................14
Promotion strategy.....................................................................................................................15
Conclusion.....................................................................................................................................17
References......................................................................................................................................18
Appendix........................................................................................................................................21

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Appendix 1.................................................................................................................................21
Appendix 2.................................................................................................................................22
Appendix 3.................................................................................................................................22

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Introduction
The aim of the report is to explore the concepts of the marketing manager for the selected
company. The company that has been selected for the analysis is Nike, which is a multination
company that is engaged in designing, developing and manufacturing of footwear, apparel,
equipment, accessories, and services. The marketing consultant has prepared a report that
includes the five major aspects of marketing management.

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Overview of the company
Nike is well known American Multination Corporation that indulges in designing, production,
marketing with the trades of footwear, accessories, equipment, apparel, and services. The
company was originated by Bill Bowerman and Phil Knight as Blue Ribbon Sports in the year
1964. This has been found that in 2014, the Nike brand was appreciated at $19 billion due to
which it is considered as the most valuable brands among the sports-related businesses (Nike,
2018). In addition to this, the company implement the acquisition strategy that reduce the
competition, enhance the brand value and deals with the competition. This has been witnessed
that the company has acquired footwear companies like Cole Haan, Umbro, and many others.
However, the company sold Umbro in 2012 and Cole Haan in 2013, along with this company has
a subsidiary of Hurley international. The company is considered as the world's largest dealers of
athletic shoes and apparel with a dominant producer of sports equipment.

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Current market position
The examination of the current market position of one of the Nike products is done with the help
of different marketing models and concepts. The product whose market position is examined is
footwear that majorly includes shoes that are offered by Nike.
Market segmentation
Segmentation is the process that helps the company in dividing mass markets into different
groups with identical and diverse wants (Chernev, 2018). Nike makes use of segmentation to
determine the customers that are valuable for the company. These customers are those to whom
the company likes to offer the products. (Refer Appendix 2)
 Psychographic segmentation: - This segmentation divides the market because of people,
lifestyles, social and personal characteristics (David, 2011). Nike segments the people
with different age group who maintain the athletic lifestyle. In addition to this, people
who prefer athletic wear in the world are also segmented.
 Demographic Segmentation: - Demographic segmentation is based on the variables,
which include age, income, family, size, and many others. The footwear prices that are
offered by Nike are generally high and middle. This is the reason it targets people with a
medium and high-income group with all age groups. The age group that is majorly
segmented by the customers starts with 18 years and goes 55 years and more.
Targeting strategy
Once Nike brand segments its customers then it decided the target audience on which they want
to focus the most. Nike brand makes use of multi-segment strategy, in which the company

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different segments for offering the products and services (Rothaermel, 2015). The segments,
which are majorly focused, include youth and athletics that majorly look to buy the Nike brand
products. The age group, which is focused by Nike, is 18-25 years and 25-45 years. Moreover,
Nike majorly focuses on youth who are athletics.
Positioning
The positioning statement of Nike Brand is “For serious athletes, Nike gives confidence that
provides the perfect shoe for every sport”. In the present competitive environment, the brand is
considered as one of the major global leaders that deal in the sporting goods industry that has
majorly formed a strong positioning in promoting the lifestyle that is followed by athletic. The
brand positioning defines that it is the number one sports manufacturer across the world. In
addition to this, the brand is considered as one of the leading goods company that has its
existence in the United stated and a hundred and ten countries (Wilson and Gilligan, 2012). Nike
brand has gained the positioning in the brand by becoming the passion for every customer to
make use of products that form the Nike Just Do It feeling for being competitive.
Nike is focused on the perception of the customers towards the brand as perception can influence
the buying decision related to the sports industry. The brand has been able to position to the
opportunities of customers and athletic fantasy that is majorly endorsed by the real athletes. This
also shows that the brand is more focussed towards the athlete that affects the other people. In
addition to this, this makes the customers feel that their expectation with the brand is not
valuable.

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Customer-based equity model
Keller's brand equity model is majorly known as CBBE (customer-based equity model). The
evolution in marketing has made the customer a major focus of the company. CBBE model is a
pyramid to form brand equity by understanding the consumers and creating the strategies
accordingly. The CBBE model includes five major elements like Resonance, judgements,
feelings, performance, and imagery. The below-given image shows the CBBE model in Nike: -
 Resonance: - People are loyal to a brand or loyal to the sports shoe industry irrespective
of the brand that shows their resonance towards footwear industry. Sports athletics who
are the major customers of Nike find this brand different from other brands. The brand

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has a strong position in the market due to which the customers remain loyal towards
Nike.
 Judgements: - Once the customers of Nike get aware about the brand then they make the
opinion about the brand. Nike customers make the judgement for Nike, which includes
high quality, and innovation profiled brand. The customers of Nike are aware about the
brand that it values the needs and demands of customers due to which brand offer
innovative products.
 Feelings: - After justifying for the brand, the customers also express their feelings for the
Nike brand. Nike customer feels that sense of achievement with the ability to do anything
with the brand. Brand understands the feelings of their customers due to which they can
easily make the perception about the products that are offered by the company.
 Performance: - The performance of the company in the eyes of customers is valuable for
the company. The targeted customer feels that Nike offers high technical performance in
terms of the footwear industry. The high technical performance helps the brand to
achieve success in the market in terms of brand value.
 Imagery: - The image of the Nike brand in the eyes of the customers is very valuable.
The targeted customers of the brand think that company has status in the market for cool
and innovative footwear and accessories.
Marketing objectives
Considering the above analyses about the positioning of the company's current product, the
company has prepared the three major marketing objectives that are -

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 The objective of Nike is to improve the market share in developing countries like Asia
Pacific regions in 3 years by 25% to 30%.
 The objective of Nike is to improve the awareness about the new innovative products
among customer through Nike owned stores in the next 3 years as this will help them in
gathering the valuable feedback of customers.
 The objective of Nike continues to collaborate with the different high-end brand that can
offer an effective way to brand through which they can conduct their marketing activities.
In addition, the brand is willing to collaborate with more than 25 brands in the next 3
years.
Target segments
Three Target segments
Target segments include the customers to who company targets with the motive to offer the
products on the priority basis. The target segments are essential for Nike brand, as this is the only
way through which they can generate loyalty among the targeted customers (Brohi, et al, 2016).
The major three segments that have been selected include -
 Age group- 18-25 years: - Nike brand likes to target people with different age group and
one of the target markets that are selected by people with 18-25 years age group. The
people with the age group of 18-25 years are likely to purchase branded sports products.
Thus, this is the reason due to which this target segment has been selected by Nike.
 High income: - Another target market that is considered as the most valuable target
market for the company is High-income group. Nike product range remains expensive
due to which the high-income group is considered as the appropriate target market for the

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company. Thus, the motive for which company is working is to earn the profit, which can
be achieved when customers make the purchase of Nike products (Pitts, 2017).
 Athletic lifestyle: - The target segment that has been selected is people who follow the
athletic lifestyle as the company majorly provides the sports products. The lifestyle of the
people makes people purchase the products that are offered by Nike to their customers.
Sports footwear is one of the major product categories in which the company brings the
innovation (Finchum, 2017). Thus, this is the reason due to which the athletic lifestyle is
considered appropriate for Nike.
McKinsey’s strategic three-year horizon
McKinsey’s three-year horizon of growth keeps the focus on the innovation and growth of the
company. This strategy framework majorly requires to categories the goal majorly into the three
different horizons. Nike changes and growth has been discussed with the help of the McKinsey’s
strategic three-year horizon framework.
(Source: McKinsey Quarterly, 2009)

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This section shows the way through which the Nike brand will be able to create customer loyalty
among the three selected target segment over the strategic three-year horizon. These three years
include -
Horizon 1: Maintain & Defend Core Business
This horizon majorly focuses on the activities that are closely connected with the current
business operations. This horizon majorly contributes to increase the day-to-day objectives that
are related to improvement in margins, better existing processed, and keeping the cash
management. This will be possible once the Nike brand will be able to maintain the loyalty with
the target segments. Nike products include good shoe with the innovative functionality and
athletic aspiration value through their design, quality, and innovativeness in products
(Westwood, 2015). This makes the brand indeed in the mind and heart of the customers that
enhance sales. Further, this has been found that Nike performs different modes to generate the
loyalty that includes membership, endorsement and many others. In addition, this makes the
brand will be able to generate sales from targeted customers.
Horizon 2: Nurture Emerging Business
This strategic 2nd-year horizon majorly focuses on the changes that are made by Nike current
proven business model (McKinsey Quarterly, 2009). This has been found that targeted customers
change their preferences and choices for the products that make Nike bring the changes. Thus,
this is the reason due to which new products like ‘Flyknit’ racer shoes, sneaker shoes and Nike
women Air 2012 and Women Air Max shoes. This is the way through which brand generate
loyalty among targeted customers. In addition to this, the innovation and technology help the
brand to maintain the loyalty of customers. (Refer Appendix 1)

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Horizon 3: Create a Genuinely New Business
The third strategic year includes bringing entirely new elements in the businesses that do not
exist until the day. Nike brand brings the new elements which are clear with the fact that earlier
brand used to offer the footwear but it gets indulged in new fields which include accessories,
apparel and many others. This shows that business has been genuinely driven a new add on in
their business which made the targeted customers loyal towards the brand (Westwood, 2015).
Marketing mix
The marketing mix is a tool that defines the organisation of the firm practice to follow its
marketing purposes in the target (Išoraitė, 2016). Nike Company makes use of a tool of the
marketing mix with the motive to position the brand in a competitive advantage. The major
strategies that are formed by Nike are related to product, price, place, and promotion. (Refer
Appendix 3)
Product strategy
The product is one of the major elements of the marketing mix that helps the company in dealing
with the competitors present in the market. Nike offers a wide range of shoes to meet the needs
of the customers that are present in the market. It has been found that Nike innovates new
products according to the needs of customers that will enhance the company brand value in the
market (Bhasin, 2018). This was found in the survey conducted by Kent that more than 47% of
girls prefer to wear shoes that can achieve the expectations related to design, durability,
protection and many others. This expectation makes the brand to innovate and bring new
products that are evident from Women Air Max Shoes (Gregory, 2017). In addition, this has

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been found that Nike increases its product mix to examine the desires of its target markets with
its market segments.
The three layers of the products are -
(Source: Lovelock and Patterson, 2015).
Core product: - Core product is refers to as the main product of the company that is offered by
them for offering the safety and comfort to the customers while conducting the activities such as
playing, jogging, walking, running and many others.
Actual product: - The actual product supports the base product of the Nike that majorly includes
quality, features, style and design of the Nike products.
Augmented product: - This level of product includes the additional benefits that are offered to
the customers. Nike offers the after sales services to the customers and with this, they can
customize the services according to the demand of customers and deal with competitors.

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Price strategy
Price of the products is the amount that the company charge from its customers for the product.
Nike brand make use of value-based pricing strategy in the global market (Kotler, 2011). The
value-based pricing strategy is set by the company after considering the willingness of customers
to pay for a shoe that makes them keep high prices with high revenue. This has been found that
for the effective positioning of the brand, it makes use of premium pricing strategy also in the
market. The premium pricing strategy includes the high process that is majorly founded on the
premium branding strategy that forms Nike products as advanced in terms of quality and value
than competing the products in the market (Shank and Lyberger, 2014). Thus, this reflects that
the positioning of Nike totally depends on its pricing strategy due to which they keep switching
their strategy.
Place/Distribution strategy
The place strategy that is followed by Nike summaries venues where business’s products are
sold, accessed or distributed. Nike deals majorly in sport's shoes, apparel, and equipment through
a different large number of openings across the world. Nike majorly makes its product available
through retail stores, online store, and the Niketown retail stores that are owned by the company.
Nike implements the vertical integration strategy that helps the brand to gain control over its
distributors with the motive to improve the position of the company. The supply of the raw
material to the manufacture its own products majorly depends on the effective distribution (Patil
and Bach, 2017). This effective distribution will make the products easily available to customers,
which will create a positive effect on brand. Thus, the customer mind for the customers will
fluctuate which will lead to the improvement in the positioning.

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Promotion strategy
This element of the marketing mix is considered as one of the important element that helps the
brand in generating awareness and communicating with the target markets (Hollensen, 2015).
Nike majorly depends on the effective promotion of products that helps them in forming a strong
and positive brand image. This has been found that the brand makes use of different tools to
promote the brand and to improve brand positioning (Luca and Suggs, 2010).
 Advertisement: - Advertisement is considered as one of the effective and traditional
approaches that are majorly used by the company for promoting its products and services.
Nike endorses celebrities that majorly include athletes and sports teams to promote the
products (Thusyanthy and Tharanikaran, 2015).
 Personal selling and sales promotion: - These are important promotional tools that help
Nike brand to generate awareness for purchasing the products. The staff of Nike
contributes effectively in creating the conversation that is must for understanding the
needs and offering the products according to their needs (Armstrong, Adam, Denize and
Kotler, 2014).
 Social media: - The rise in the use of internet and technology up-gradation has provided
new opportunities and platforms to the brand for promoting and generating awareness
about the products. The social media channels, which are majorly used by Nike Brand,
include Facebook, Instagram and many others. On these channels, the brand attains the
positive as well as the negative views from the customers that are further acknowledged
by them (Abrar, Safeer, Baig and Ghafoor, 2016). The customer reviews also affect the
customers purchasing decision of Nike brands.

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Conclusion
In the end, this can be concluded that Nike is a global brand who is able to maintain strong brand
positioning in the market. In addition, the marketing of the business is improving the market
share and brand awareness that helps the company in generating brand loyalty among the
targeted customers. Further, the marketing objectives that are stated in the assignment reflect the
future steps that are required to be undertaken by the company.

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References
Abrar, M., Safeer, A.A., Baig, S.A. and Ghafoor, A. (2016) E-Marketing and Its Implementation
on Developing Social Perceptions of Customers through Effective Marketing Mix of Organic
Textile Products. American Journal of Industrial and Business Management, 6(12), p.1194.
Armstrong, G., Adam, S., Denize, S. and Kotler, P. (2014) Principles of marketing. Australia:
Pearson.
Bhasin, H. (2018) Marketing Mix of Nike. [Online]. Available from:
https://www.marketing91.com/marketing-mix-nike/ [Accessed on 22nd February 2019]
Brohi, H., Prithiani, J., Abbas, Z., Bhutto, A.H. and Chawla, S.K. (2016) Strategic Marketing
Plan of Nike.
Chernev, A. (2018) Strategic marketing management. Chicago:Cerebellum Press.
David, F.R. (2011) Strategic management: Concepts and cases. India: Pearson/Prentice Hall.
Finchum, A. (2017) Marketing Missions–A Case Study For The Social Marketing Mix. Global
Journal Of Business Pedagogy, 1(1), p.11.
Gregory, L. (2017) Nike Inc. Marketing Mix (4Ps/Product, Place, Promotion, Price) Analysis
[Online]. Available from: http://panmore.com/nike-inc-marketing-mix-4ps-product-place-
promotion-price-analysis [Accessed on 22nd February 2019]
Hollensen, S. (2015) Marketing management: A relationship approach. Pearson Education.

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Išoraitė, M. (2016) Marketing Mix Theoretical Aspects. International Journal Of Research –
Granthaalayah, 4(6), 25-37.
Kotler, P. (2011) Marketing Management (14 Edition). Harlow: Pearson Education.
Lovelock, C. and Patterson, P. (2015). Services marketing. Australia: Pearson.
Luca, N.R. and Suggs, L.S. (2010) Strategies for the social marketing mix: A systematic review.
Social Marketing Quarterly, 16(4), pp.122-149.
McKinsey Quarterly (2009) Enduring Ideas: The three horizons of growth [Online]. Available
from: https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-
insights/enduring-ideas-the-three-horizons-of-growth [Accessed on 22nd February 2019]
Nike (2018) About, [Online]. Available from: https://about.nike.com/pages/executives [Accessed
on 22nd February 2019]
Patil, D.D. and Bach, C. (2017) Marketing-Mix For Strategy Building. Marketing, 4(4).
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Rothaermel, F.T. (2015) Strategic management. UK: McGraw-Hill Education.
Shank, M.D. and Lyberger, M.R. (2014) Sports marketing: A strategic perspective. New York:
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Thusyanthy, V. and Tharanikaran, V. (2015) The relationship variables to celebrity endorsement
and brand equity: A comprehensive review.

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Westwood, R. (2015). Three Ways To Build Brand Loyalty [Online]. Available from:
https://www.forbes.com/sites/ryanwestwood/2015/07/30/three-ways-to-build-brand-loyalty/
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Appendix
Appendix 1
Nike flyknit
(Source: Nike, 2018)

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Appendix 2
(Source: Chernev, 2018)
Appendix 3
(Source: Chernev, 2018)