Analysis of Marketing Strategies and Theories

The provided document is a solved assignment that examines different marketing strategies and theories, such as green marketing, social media marketing, and sales research-and-development cooperation. The assignment includes references to academic journals and online resources, providing insights into how marketing can affect consumer behavior and business performance. It also discusses the importance of marketing capability, operations capability, and diversification strategy on business performance from a resource-based view perspective.

Marketing Strategy

Table of Contents
INTODUCTION..............................................................................................................................1
TASK 1............................................................................................................................................1
Company Overview................................................................................................................1
Competitive Advantage..........................................................................................................5
Evaluation of Marketing Strategy..........................................................................................7
TASK 2............................................................................................................................................7
Segmentation, Targeting and Positioning...............................................................................7
SMART Objectives...............................................................................................................8
Marketing Mix for Jordan......................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTODUCTION
Marketing is a discipline which allows a manager in exploring as well as utilising market
for the purpose of ensuring higher productivity and growth rate. Basically, it is a field of study
which assists organisation in promoting and influencing customers to buy their products. It is
used for establishing an inter-relationship in between internal and external forces. There are
different tools and techniques which are used by managers to analyse market and prepare plans
and policies to tackle changes (Bertrand, and et. al., 2010). Today, this function plays a vital role
in company as it provides information regarding market trends which allows company in
adjusting its resources and directing them in the right direction. Nike is one of the multinational
firms which uses marketing as a strategic tool to enhance its market viability and effectiveness.
Currently, it is competing with brands like Adidas and Puma who are making it difficult for the
organisation to gain rapid market share. This report is based on the ways Nike use marketing
strategy as a tool to overcome its own weakness, threats and exploit opportunities using its own
strengths. This assignment will also cover the ways in which company segments, targets and
positions its product in the market to gain a better response from customers.
TASK 1
Company Overview
Nike is an American multinational corporation which is engaged in designing,
developing, manufacturing and global sales of sports footwear, equipment, accessories, apparels,
etc. Headquartering of company is based in Beaverton, Oregon in the Portland Metropolitan
Area. It is the world’s largest supplier of sport shoes and wearable. It is also the major producer
of equipment used in sports industry. The revenue of company is staggering 30.601 billion
pounds in 2015 and its operating profit was stated to be 4.175 Billion pounds. Nike was
established in 1964 and from last 54 years, company has outgrown its own vision of being top
sportswear organisation in the world. Company mainly focuses on designing and developing the
shoes, lifestyle apparel, accessories and sports equipment (Chen, Fay and Wang, 2011). Products
are designed keeping in mind the athleticism of prospects. But they can be worn for athletic as
well as non-athletic purposes. Nike targets most of the segments such as men, women, kids, etc.
Key categories of the product offering are running wear, basketball, football and specific training
wear. Company covers every major field of sports existing such as baseball, cricket, golf,
football, volleyball and other recreational sports as well. Most of the products are sold under
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Nike Brand name where as some of the premium sportswear or lifestyle goods are sold under the
brand name of Jordan. The company's shareholders majorly include institutional and mutual fund
stakeholders carrying up to 40% share each (Christopher, Payne and Ballantyne, 2013).
The operations of Nike are carried out across six geographical segments such as America,
Europe, China, Japan and emerging markets. Company dominates the sportswear and apparel
segment in all markets. The products are produced by third- party apparel in the US and Asian
region.
Situational Analysis.
This is a tool used by managers to analyse the organisation's current environment. The
analysis is done on both the external as well internal factors affecting business operations.
Various techniques utilized are Swot analysis, porter’s five forces and 5C's. This is done to have
a better understanding of market in which company is operating so that the opportunities can be
availed in an effective manner and can be cautious against the dangers existing in market.
SWOT analysis is a great tool in understanding the environment of company. It helps in
the assessment of firm’s strengths, weaknesses, opportunities and threats that lie in market and to
take cautionary measures against contingencies.
Strengths
Company is a dominant player in the field of sportswear and apparels and has been
ranked #1 in the sports industry. According to the CEO of company, “Business is war without
bullets”. Nike knows where to spend its money. For instance: Reebok sponsored the Atlanta
Olympics but instead Nike went with sponsoring the top athletes and gained precious coverage.
Brand name of company is its strength. the swoosh logo of the company is identified all over the
globe.
The R&D of company regularly comes up with innovative ideas and appreciated on a
large scale.
Weaknesses
 The source of revenue largely relies on the shoes business.
 The retail sector is highly price sensitive. Any change in the price will have a huge
impact on the demand of product.
 The level of competition is very high in sportswear segment. Reebok, Under armour,
Puma are the major competitors of Nike.
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 Nike buys and sells around the globe so there lies dealing in different currencies. Thus,
the cost and margin of product are not stable for company.
Opportunities
 Nike can focus on venturing into the fashion segment as there are people who get
offended by the fact that it is a sports brand and not to be meant for fashion wear.
 Along with other accessories, company can launch some sportswear watches, sunglasses
and jewellery. Entering into the high value products can ensure better returns.
 There still needs to shift focus on the developing nation in Asia where they can improve
their operations because of high percentage of young population. Venture into Global Marketing events to enhance the brand name of the company.
Threats
 Recession in the market has done heavy losses to company.
 Operating at a global level makes company vulnerable to the price fluctuation in foreign
markets. The image of company in terms of environmental exploitation is not very good and
today's generation is more of environment conscious so that might bring some harm to
company financially or non-financially.
PESTLE
It is a technique used by company to assess the external factors affecting company. The
environment consists of various components which are as follows:
Political Factors:
The political factors of home nation of Nike are business oriented so the company enjoyed
the benefits of the favourable policies and grew in terms of business (Cronin, and et. al., 2011).
Stability in exchange rates, low interests and taxation policy helps company in the best possible
manner. The government policies favour company as well but, there were some concerns
regarding employment practices of Nike which brought them under the political pressure.
Economic Factors
During the period of recession in 2007-08, company saw a great decline in the operations
and challenges were faced in while trading at a global manner. Nike was benefited by
establishing brand equity to fulfil the demand in growing market. The established value chain got
benefited as the wages were lower during that period. But even today the company is dependent
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upon the lower wage rate in backward nations. The economic resources at present are abundant
and company can easily venture into growing as well as small markets.
Social Factors
Social factors today are a critical source of organisation. The favourable social image will
have a direct impact on the sales of product and will enhance the brand value of company.
People today are more health conscious so organisation get a direct benefit from the same. The
company should keep an eye on the social dynamics and introduce products for the same to make
the best out of the circumstances. CSR effort is to be undertaken as well to develop positive
image about an organisation.
Environmental Factors
Nike follows the concept of sustainable development. The company maintains a postitve
image when it comes to following the norms of the environment. The company is certified with
ISO 14000 standardisation of green development. The first sustainability policy was launched
back in 1990 and since then organisation complies with the rules and norms of sustainable usage
of resources. The company have also appointed 100 'sustainability champions' to monitor the
operations of the organisation and to see that there is minimum carbon emissions and proper
facilities to eliminate the waste. Such an involvement of employees in the environmental policies
have brought a positive change in the productivity and psychological aspects.
Legal Factors
Nike adopts the legal policies of the nation of operations. Countries having similar law
structure are comparatively easier to follow where as countries whose legal policies are different
organisation takes time to comply with the same.
The company has got into some legal trouble following the allegation of exploitation of labour.
Due to this the company has to close its operations in many of the nations such as Pakistan,
China, Thailand where the company was equipped with cheap availability of labour. The
situation of contingent employment go them into legal trouble with Asia-American Free Labour
Institute. But Nike said that they always followed of the law of providing minimum wage in the
operational nations. Nike in America was sued under the unfair competition and false advertising
in California's law. The company used some false statements because of which they were legally
sued (Krishna, 2012).
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Competitive Advantage
Competitive advantage is a situation faced by the company in which they achieve an edge
over its competitor. The company gains a superiority among its competitors. The company
carrying competitive advantage can now provide the same product at a lower prices or can
charge higher prices achieved through product differentiation. This can be achieved over various
factors such as cost structure, distribution, product and customer support.
Competitive advantage generally means at what company does the best. For instance
Nike has a competitive advantage when it comes to sportswear. It focuses on utilizing the
opportunities in the market and fulfilling them in the competent manner a company can achieve
and sustain competitive advantage (MacInnis, 2011).
The Porter's five forces model is utilized to understand the competitive advantage for
Nike.
Bargaining Power of consumers
There will always lies a power with the consumers as they have number of brands to
choose from. A consumers buys a product for the value, attributes and its benefits. If these
qualities are fulfilled by a company no matter the name a consumer will go for that product.
Consumer's perception is an important component in this, if he perceives a product to be the
same as others the product will not be successful. Therefore positioning of a product has its
perks. Nike is frequent with the innovation as well as marketing to gain a competitive advantage
over its competitors.
Bargaining Power of suppliers
The support of East in terms of production has helped the company achieve economies of
scale. The cost of inputs is comparatively lower and labour is available at a cheaper price these
factors has helped Nike to produce a product at a economical price. At present there are some
complications faced by the company. Closing down of various sites of operations have affected
the company's supply chain. Political rest is another important factor affecting the bargaining
power of suppliers.
Threat of a new entrance
The new entrants can really hinder the working of the organisation. The new entries in
the segment are equipped with strategies to capture the market. The new comer comes with
adequate finances and resources to lure the customers into buying their product (Marketing.
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2017). The incumbents also try to achieve a bigger market share by entering into sportswear
category.
The cheap substitutes in the countries carries a bigger impact in the on the sales of the
company. During such circumstances Nike was reaching saturation so the company started to
discovering new markets to improve their sales.
Competitive Rivalry
This is the most crucial factor which can help company lose its position in the market.
Nike being the market leader in sports segment is in continuous threat from its competitor. The
company is having a cost benefits over its competitor. The position of the company is supported
effectively by its distribution network and its marketing strategies. The biggest rival for Nike is
Adidas who is equipped with same resources as the company. There was a time when rivals of
the company started eating away the market share from the company.
An organisation can never take its position in the market for granted. Reebok have
strengthened its position in market by offering more choices and same is done by Adidas with
the launching of the right product mix (Nath, Nachiappan and Ramanathan,2010). To gain
competitive advantage Adidas and Reebok have merged. And a new innovative product line is
seconds away from launching. To counter this obstacle Nike came up with a technique in which
a consumer can design and customise their brand which help company in enhancing their brand.
Threat of a substitute good
Nike has established themselves as a professional sports brand. So there are very few
companies in that particular segment. For instance if a consumer is looking for basketball shoes
the only option he will have is Nike, Adidas, BBB and less popular Under armour. So as the
individual is familiar with the name and functionality of Nike. He will prefer the known
company only and there are very less chances of experimentation. The scenario in fashion world
is completely where people don't prefer the company as a fashion brand.
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Evaluation of Marketing Strategy
Nike is one the biggest operator in the sports category. The company owns 47% share in
the total sports market with a sale of 3.7 billion USD. The company emphasis on supplying
quality goods in the market. Nike caters more than 100 countries covering almost all the
continent (Nike, Competitive Advantages. 2011).
The marketing budget of the company is 315 million USD. The company has invested
approximately 1 billion for the development of stores.
 The company aims to excel all its rivals internationally by providing quality goods at
effective prices.
 Innovation and designing are two main aspects of the company which helps them to
sustain in the market.
 Making products keeping in mind the requirements of the customers.
 Encouraging the sustainable methods of production.
 Quality goods at affordable prices.
TASK 2
Segmentation, Targeting and Positioning
Nike Jordan is one of the oldest division of Nike created in 1985. It caters shoes and
apparel requirements of the people. The shoes and apparel are designed and inspired by Michael
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Source 1: Porter’s Five Forces of Competitive Position Analysis, 2013

Jordan (a basketball legend). Earlier the focus was only on the basketball fans but have now
extended to the general people as well (Rahbar and Abdul Wahid, 2011) .
Targetting
The target market for Jordan is very broad. There is a separate product line for Men,
women and children. The company develops shoes for basketball, football, track and field and
for casual wear as well. The target market for this subsidiary of Nike is the people between age
group of 15-25. That segment mainly involves people who are involved in sports in professional
manner either in school or in college.
Segmentation
The segmentation for the sub brand can be categorised onto various factors such as
geographic, demographic and psycho graphic.
Geographic: This segmentation focuses on the division of prospects on the basis of
political boundary. In UK the women edition of AIR Jordan is not available when compared to
the United States.
Demographic: This segmentation is done on the basis of gender, age, occupation and
income. AIR Jordan is available for both men and women. The target age group is from 15-35
and preferably for the people who are into basketball professionally or personally (This is Nike's
secret weapon, 2015). The shoes in this sub brand are comparatively expensive so the targeted
people are the one having high purchasing power.
Psycho graphic: this segmentation takes into account lifestyle, attitudes and tastes and
preference of the people. So individual having favourable outlook towards basketball will
definitely go for this sub brand.
Positioning
The positioning statement of Jordan is “don't just watch Jordan, become one of the
Jordan”. This focuses on the perception of the consumer regarding that brand. At present Jordan
is “status” brand. People having abundance of purchasing power go for this brand. This brand is
categorised into premium sports brand. Consumer who owns a product of AIR Jordan would
love to flaunt it.
SMART Objectives
The AIR Jordan focusing on the enhancing the awareness, market share and sales volume
of the company by establishing goals which are specific, measurable, attainable, relevant and
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should consist a specific time period (Xu and et. al. 2011). Jordan aims to capitalise the market
share by effective utilisation of opportunities.
S- Specific: AIR Jordan focuses on increasing the revenue on the Retro Sneakers by
increasing the supply and prices simultaneously.
M- measurable: the goal stated by the company should be measurable in monetary terms
as the company is focusing on the enhancing the revenue which can be measured in monetary
values. The company have refreshed the retro line up recently which consists of 50% of the
revenue of company.
A- Attainable: The goals set by the company should be achievable in the specified period
of time. For instance the company aiming to increase the revenue for that purpose a company has
to increase the supply of the retro line up as well.
R- relevancy : the goals set by the company should be relevant to the company's vision.
The motto of the company should be kept in mind while formulating goals. Organisation
believes that everyone should become like Jordan keeping that in mind the company has
increased the supply by 15% and marketing strategies have been formulated for the same.
T- time bound: In the last year the revenue increased by 17% to 2.6 billion USD. Keeping
in mind last year's data. The company wishes to achieve increase in 15% revenue on in retro
shoes line up of the company.
The goals and objectives play a crucial role in the organisation. They provide the
employees with the direction. Marketing strategies will be developed keeping in mind the
objectives of business. The company aims to increase the revenue for that purpose only Jordan
has developed a database of 500K prospects and can utilise for the purpose of increasing
revenue.
Marketing Mix for Jordan
Marketing mix consists of various factors which are utilised by a company for their
benefit. The integration and coordination of the controllable factors is to be done in such a
manner that prospects buy the product (Nike, Competitive Advantages, 2011).
The main factors of marketing mix are as follows:
Place: This refers to the distribution strategies used by the company. The AIR Jordan are
available at all exclusive Nike retail outlets, Nike' s online store and through exclusive AIR
Jordan stores. Retail is the most profitable and preferred medium while buying the product. The
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Company has a strong hold in the United States whereas the availability of products outside USA
is not very easy. In order to increase the revenue the company should focus on increasing the
market coverage of the product.
Price: the price range for products ranges between $79.99 to $129.99. The pricing
strategy is good. When the supply is low, price even goes up due to scarcity of products. The
prices of Adidas and Under armour stays below $100 only. This helps to understand the value of
the product.
Product: The products mix for Jordan includes shoes for various sports, sneakers and
apparels. Sports shoes are the most profitable product out of these. The company has added the
Retro line up in shoes category and aims to increase the sales by 15% in this financial year. It is
believed that changes in the product mix will help a company grow.
Promotion: The promotion strategies are formed according to the requirements and
budget assigned for the same. The supreme promotion method in Jordan is the All star players or
athletes promotes the product. These athletes are endorsed by the company by wearing them on
and off court. It is a type of celebrity endorsement where people see a celebrity or a sports star
wearing the product so people who adore him buy the same. “Dunkman” and number “23” are
the major highlight of this product line. Another important tool is social media which is not very
frequent as well. The sales of these products are only because of the “status” this company have
achieved overtime. Where as Adidas and Reebok have thousands of millions as their advertising
budget (Kaplan, A. M. and Haenlein, 2011).
CONCLUSION
This report concludes that Nike is one dominant player in the sports segment. Company
offers wide range of products such as sportswear, lifestyle apparels and equipments. The
company has a strong hold when it comes to innovating or designing the sportswear. Today's
generation is health oriented so the company wishes to take the advantage in the best possible
manner. With the utilisation of the right product mix and marketing mix. The company is
looking to expand its operations into the newly discovered markets. The premium sub-brand of
Nike AIR Jordan should focus on increasing the market coverage by utilising effectively the
distribution channels of the company.
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