Nike Marketing Strategy Analysis

This report analyzes Nike's marketing strategy, including PESTLE analysis, marketing strategies, USP, and competitor analysis. It also discusses the introduction of a new product in Nike's sports shoes range.

Marketing Strategy

Executives Summary
This report included Nike's analysis in terms of its marketing for which PESTLE analysis
of Nike have been discussed in this report. This analysis have been followed by marketing
strategies that have been employed by Nike for promotion of its products. Report also included
USP and competitor analysis of Nike. In second part of this report new product have been
introduced in Nike's sports shoes range. This introduction have been followed by STP for the
product and objectives and goals for marketing of the same product and recommendation have
been provided about its marketing strategies in context of marketing mix of the new product.

Table of Contents
Marketing Strategy...........................................................................................................................1
INTRODUCTION...........................................................................................................................2
Marketing Audit...........................................................................................................................2
Current Marketing Strategy and Performance of Nike................................................................4
Comparative analysis of Nike with its competitors.....................................................................1
Part 2................................................................................................................................................2
New Product Introduction............................................................................................................2
Features and Benefits of New Product.........................................................................................3
Segmentation, Targeting and Positioning of Digishoe................................................................4
Marketing Objectives and Goals..................................................................................................5
Marketing Strategies with application to Marketing Mix............................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
1

INTRODUCTION
Marketing strategies refers to plans and strategies that companies develop to market and
promote their brand and product. In present business environment unlike traditional concept
where marketing function used to start after product has been developed and produced and ready
to sale. In present environment marketing function start from the time individual and company
decides to develop and launch product in the market. This report includes marketing strategy and
audit of Nike brand that comes under category of footwear. In this report first part of the report
includes marketing audit of Nike along with their marketing strategy and positioning in market.
Current market performance of Nike on the basis of market growth, sales trends and profitability.
Part 1 also includes Nike's USP and its comparison with key competitors. Second part of the
report discuss rational for new product introduction on the basis of its environment and
marketing analysis followed by segmentation, targeting and positioning of the new product.
Marketing objectives and goals for marketing have also been discussed in this report. Finally,
what marketing strategies Nike can employ for its new product on the basis of marketing mix of
its new product.
Marketing Audit
Nike that provides sports footwear in almost 200 countries in which primary market
regions are United States, Europe, Asia Pacific and America. For distribution of its products
Nike employs both traditional and non-traditional marketing strategies. Environment analysis of
Nike's marketing is as follows which discuss PESTLE factors of Nike's marketing. Explanation
of these are,
Political factors- Political ideologies and values of a country that affect companies' marketing
operations. This factor is mostly associated with ideologies of ruling political parties. In context
with Nike which is US company and political relations of US with Iran have bounded Nike to
produce and market its product in Iran (Dens, De Pelsmacker and Verhellen, 2018). But there are
policies of US government that helped Nike to advance its product which are like Low interest
rate and favourable international tax agreements that provided strong foundation for Nike.
Economic factors- Economic factors are factors that include economic situation of a country
where a company or in this case Nike operates. In context with this economic recession is an
major threat that Nike may face in future. Economic recession that is prevailed in US and Asia
which is major market regions for Nike and also Nike produce its products in Asia and US. In
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recession sales decrease and cost of labour and material face increase. But Nike has a
competitive market and generating more revenue requires low labour and material cost. Nike has
to maintain its labour cost at low so that it can not affect its revenue. Another factor that can
affect is its competitors and currency movement.
Social Factors- Increasing umber of people who are health conscious and joining fitness clubs
and engaging themselves in outdoor sport activities have made a positive impact on footwear
industry. Nike have managed to become first choice when it comes to fitness industry. On the
other hand there is a negative factor that is associated with Nike that stresses that labours
working at different countries of Asia are being paid less and their condition is also poor. Nike
has also failed to improve and address working condition and of its factories and its workers and
in present social media times people have access to every detail of all the products and Nike's has
not been left (Bronnenberg and Dubé, 2017). This may affect brand image of Nike as people
want to buy products of the company that are ethical and give due consideration for well being of
their employees.
Technological Factors- Nike is using information technology to its best in different field like
designing, production, marketing and distribution and leadership status of Nike rely on this
factor of the company. Social media platforms of all kinds are also being used by Nike to
promote its products and building brand. Technological factors are very important for growth in
present business environment.
Legal Factors- For every business organisation this is an important consideration and major
factor that affect business and its success. In concerned with legal factor of Nike laws in America
and Western world are friendly for footwear business but when it comes to Asian countries these
are quite complicated. This also differs in form of product quality and Nike has also faced may
lawsuits about labour abuse, low wage, bad working conditions and legal issues directly affect
brand image and reputation.
Environmental Factors- Factor that is increasing its importance with every passing day. In
context with Nike factories of company are polluting and affecting environment. This have been
claimed for polluting not only air but rivers as well but to this issue Nike respond positively and
promised to ensure that its policies are environment friendly.
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Current Marketing Strategy and Performance of Nike
Marketing strategies are required to be different and unique if business want to survive in
present business environment and Nike which have man aged to survive and is on a leading
position (Ting and Ping, 2017). Nike to get itself at that position have managed to develop many
strategies that helped it to become world leader. Some of the strategies that Nike have adopted
are simpally the best. These strategies are
Meaningful Story and Emotional Branding- Advertisements of Nike are all about inducing
consumers through emotional branding for that each advertisement is crafted to evoke emotions
and need in consumer that they can only satisfy by product of Nike. It does this by playing story
of a hero who works hard and overcome adversity and eventually emerging victorious against a
terrible foe in this terrible foe refers to voice in head and tells its consumers that take consumers
from 'You can't' do it to 'Just do it'.
Self-Lacing Shoes- Nike has taken technology too far and have created shoes that are known as
being self lacing shoes the name itself is enough to build curiosity and want in its consumers.
Specific thing about this shoes is that The HyperAdapt 1.0 has sensors that moulds shoes as per
shape of foot.
Fun Advertisement- Advertisements of Nike are considered as best in the business. This
features world class athletes and display their extraordinary skills. Winner stays ads of Nike is
most successful which features teenage boys transforming Ronaldo, Neymar Jr. and other soccer
superstars.
Constant Innovation- businesses needs to keep moving forward in order to stay alive. For this
Nike developed the ‘Nike+iPod’ this is a Sneaker that tracks and records distance and pace of its
users' workout through sensor.
Social Media- Nike is using social media to its best and does not only work one way its a
conversation. Company maintains separate Twitter accounts for all its brands and use this
accounts to respond to their consumers (Kumar, 2017). Nike's posts are fun, short and
motivational which are easy to read and then share. This helps Nike to build relationship with its
customers that they remain loyal to brand.
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Comparative analysis of Nike with its competitor
Nike and Adidas are two popular international brands dealing in athletic wear which
includes shoes, apparel and other equipment. It is known for its stylish and quality products.
Brand equity is the major strength of both Nike and Adidas. It has focused on the taste and
preferences of its customers. In terms of innovation, Nike has always been aggressive in dealing
with the changing needs of its customers. After the merger of Adidas and Reebok, has helped
Reebok to grab newer market more efficiently (Yong, 2015). Nike has associated itself with
many sports association to take athletes and the same Reebok is doing by tying up with UFC
(Unique Fighting Championship) and MMA (Mixed Martial Arts). Nike's strategies focusses on
design innovation and marketing whereas Adidas strategies focus on cost reduction and market
expansion. Nike has two leading YouTube channels namely, Nike Football and Nike Global.
Adidas also has its YouTube channel which focusses on young people (Sreejesh, Anusree and
Ponnam, 2018). Nike has based its brand on a philosophy that everyone is a athlete and it has the
footwear and apparel to help people realize their ambitions, which is not so in case of Adidas and
Reebok. The most important competitive advantage Nike takes is its famous slogan 'Just Do It'
and distinctive logo differentiates its products from its competitors. Products of Nike and Adidas
are divided into 2 categories. Nike's product range includes sports shoes, sunglasses, body care,
caps and perfumes whereas Adidas includes performance shoes, perfumes, eye wear, vintage
clothings, bags and caps.
Both the companies charges higher prices. Nike uses price leadership strategy and value
based pricing, where the price of the product is based on the value placed by the consumers. It
also uses competitive pricing strategy for its premium products and segment in order to remain
competitive whereas Adidas uses market skimming strategy and its products prices are
dependent on looks and colour of its products (Ind, 2017). Another factor that put Nike on the
top and Adidas on second position is its target market and its various celebrity sponsorship
targeting basketball players. Even though Nike targets basketball players but most of the
basketball shoes are manufactured by Adidas. Business model of Adidas is highly focussed on
innovative product designs to meet customer needs rather than investing on product endorsement
like Nike (SONENSHINE JACOB, 2018). Nike's customer's repeat purchase intentions are high
which shows high customer loyalty as compared to Adidas. The worthily strategy used by Nike
is called cloud loop business model which aims at achieving zero waste by completely reusing

and recycling all materials whereas Adidas has updated its running shoes with Climacool, system
designed to ventilate and A3, a energy management technology that guides athlete's foot. So, it
can be said that Nike and Adidas brands are outstanding but Nike has higher competitive
advantage as compared to Adidas. The competitive advantage Nike enjoyed is related to
innovation. The only difference is Nike gave higher cost while Adidas cost less.
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Part 2
New Product Introduction
This part of the report involves introduction of a new product. New product of Nike that
is going to add in its sports shoes range.
Rational for this Product
Increasing number of health conscious people- Increasing number of people who are getting
and being conscious about their health and most important and key feature of all these people is
that they are all engaged inactivities like work out and sports. When more people are engaged in
sports and work out they require sports shoes and that increase demand for sports shoes and
being the most trusted brand for sport shoes demand for Nike's product and shoes is likely to
increase more and that is why Nike decided to offer something that is more beneficial and
helpful for those who trust Nike and its products,
Already available product in form of Nike+iPod- Nike+iPod that is shoe that have a specific
feature that this sneaker is able to track and record distance and pace of user's workout (Ghose,
Heiman and Lowengart, 2017). This new product that has been named Digishoe have a feature
that this shows calories and helpful for user in achieving daily fitness objectives.
Increasing trend of Smart product- new product is all about an addition in the product range
that is known to be smart and are there to ease user's life. This product has been prepared with
same intention and users' can connect this with their smart phones and check their daily fitness
and maintain their fitness goals.
Effective research and development- Everything that comes with something innovative requires
to undertake research and development. This product whose every feature is innovative and
something that no one can think of even just before a year required hard-work of research and
development executives and employees engaged in marketing (Nasution Fauzi and Matondang,
2018). Nike's R&D is very effective which have proved their effectiveness through product Nike
have in their product range.
Consideration of technological factor- This product is an example of Nike's technological
thinking and their technological advancement which though to connect shoes with mobile and
then provide information about people's health and fitness and what they can do to achieve their
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daily fitness goals as sometimes it becomes really difficult for people to maintain track of their
fitness.
To stay ahead from competitors- One of the best strategies that help in giving competitors a
tough fight and that help to stay ahead from them in competition is to provide something that is
exceptional and innovative and something that is difficult for others to even imagine and by this
product Nike will be able to add in its competitive advantage.
Features and Benefits of New Product
This product is for those who are health conscious and looks after themselves very well.
The product has been named “Digishoe”. This name has been based on its features (Kumar and
Kandoi, 2018). Specific feature of these shoes is that this shoes is interactive smart shoes for
smart people of present world.
These shoes have been prepared to give personalized feedback to analyse fatigue, posture, steps,
calories in short all the important factors to consider fitness of individual, this shoes create
precise data and improving health and prevent injuries.
This shoe has been prepared after market analysis and required hard work of those who are
engaged in research and development. These shoes are advanced and better version of Nike+iPod
which used to track and record activities of individual. Shoes are designed in a way that these
can be connected with smart phone and at one click they warm feet and by tracking moments can
give information about calories burn and these have been designed in such a way that they fit
exactly the way people want them to fit and also are wear and tear by themselves. All the
information that these shoes provide information through application and help user to achieve
daily fitness goals.
Benefits of this product are, this will create ease for people who think of doing workout but
cannot do this or feel it difficult to track their daily workout. This is specially beneficial for those
who are base their workout on calories and workout till they lose a particular number of calories
and other fitness factors like fatigue and posture are important for everyone to consider.
For company, it will not be difficult to convince people about benefits of the product and Nike
can use its brand image and reputation to do that and features of the product ensure that this
product will be successful and will add value in brand image of the company.
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Segmentation, Targeting and Positioning of Digishoe
Segmentation- segmentation refers to division of overall market on the basis of specific features
they have (Khan, Jian and Zhang, 2018). This is required for companies so that they can
undertake marketing activities according to need of that particular market place. This markets
have been divided on the basis of
Demographic- on the basis of age, gender, marital status, ethnicity and education and occupation.
Geographic- on the basis of country, region and city.
Psychographic- on the basis of personality, values, lifestyle, attitude, interest and opinion.
Behavioural- Behaviour towards product and how they use product.
Targeting- This includes decision of the company after its segmentation of market like which
market is able to provide best return on investment. This is about size of the company and are
people of that particular market segment ready to pay what company is asking in exchange for
their product. This also requires that company is able to clarify the difference between two
market segments.
Positioning- on the basis of previous two actions taken by company in this step company
requires to position itself in a situation that it offers better value than those of competitors. This
is a critical and thoughtful activity and defines what kind of competitive advantage company is
able to take.
In context with Digishoe Nike can chose a segment mix of demographic, Geographic,
psychographic and behavioural (Kara and Arslan, 2019). In this Nike targets age and market for
this product is individuals above age of 15 and product have been designed in a way that male
and female consumers can use this. This product is available to everyone and all people can use
this consideration is that they must be in some sports activity and workout activity. This is
market of this product. When it comes to positioning company have positioned itself as leader
reason behind this is that this kind of product is not yet available at market is first of its kind.
Company also seeks to take advantage of being leader and have priced it higher. Segmentation of
this product that is why excludes those who are not ready to pay higher price for this product.
Marketing Objectives and Goals
Marketing objectives are those which business set for their marketing operations. This
objectives define what company is willing to achieve by its marketing operations and activities
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and strategies that are decided for marketing are also designed in a way that these are able to
achieve marketing objectives. Marketing objectives that Nike has designed for Digishoe its new
product with smart and special features is as follows (Cuneo and et.al., 2019). Marketing
objectives are divided in four types that are profitability, market share, promotional and growth
objectives. All these objectives are SMART and allow company to achieve them in specific time
which are easily measurable.
Profitability- These objectives are in context with profit that company expect to earn from its
promotional activities.
Market share- Percentage of marketing that Nike aims and want to capture through its
marketing activities.
Promotional- This objective aims at promotion of company's products. What level of awareness
company want to create about its product.
Growth- This determines current level of business operation and level that company wants to
gain and grow itself in future.
Nike's Objectives on the basis of all these types are-
 To increase profit of the company by taking advantage of special features of this new
product.
 To reduce future cost of product by increasing its sales that lead to increase production
and productivity.
 To increase its market share by 50 percentage overall which is currently 37 percentage.
 To create awareness by using brand image and introducing new product at large scale.
 To grow company's presence by developing and designing more effective distribution
channels.
Goals of the Company are
 To rum profitable company and reduce cost of the product.
 Using brand image and high priced policy so that company can achieve higher profits.
 Increasing market share of the company and effective measurement of new customers.
 Increasing customers who are able to buy highly priced products.
 Encouraging customers to come back and increasing number of loyal customers by
offering customer rewards.
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 Increasing sales and using various mediums of sales and strengthening existing
distribution channels.
 Improvement of internal business activities that can contribute for growth and removing
obstacles from business operations.
 Providing preference to customers and their needs and desires and adequate handling of
customer complaints so that company can maintain its existing customer base and repeat
business.
Marketing Strategies with application to Marketing Mix
Marketing Mix is combination of various features that impact marketing of a product.
These are as follows-
Product- Nike's product is something which one and only of its kind and biggest advantage
company can take (Lal, 2019). With concerned with Product it is recommanded that company
need to showcase all its features in a very clear manner.
Price- Price of this product have decided very high and that is why company should promote
their product to those people who belong to higher class in terms of their financial status.
Promotion- Promotional strategies of Nike are already very effective and well-used company
can use customer rewards and encourage customers to try and buy their new product.
Place- Place refers to places where product of the company is available and these places in resent
business environment have increased as most of the products are not just available but are
available at e commerce websites. Nike should make sure that its product is available at all the
shopping websites and specially at those who are well known.
Packaging- Packaging of the product works as an attraction and that is why company should its
packaging that attract customers to buy product. Company can use creatively sophisticated
packaging for this product.
Positioning- Position where company maintain for its products and Nike have managed to
maintain itself at leadership position and new product should be maintained in same frame.
People- People of the marketing mix refers to employees and people who are working in and for
company (Kahlon and Vaidya, 2018). Development of this product shows efficiency of its
employees and Nike should maintain its employees motivation so that they can keep their
innovative spirit alive.
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CONCLUSION
On the basis of above discussion it can be concluded that marketing strategies and their
effectiveness is very important for company's survival and growth. A company like Nike that
have survived and managed to establish itself at global level and is a leader in its industry have
employed best strategies for marketing its product. All the factors that are connected with
marketing are well maintained and managed by companies. There are few factors in PESTLE
analysis of the company that company needs to consider and remove their effect so that they
cannot negatively affect company's brand image. USP and its competitor analysis have also been
discussed in this report. Second part of the report involves new product development by the
company on the basis of existing business scenario. STP strategies and marketing mix of this
new product have also been discussed in this report.
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Online
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<https://www.referralcandy.com/blog/nike-marketing-strategy/>.
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<https://www.smartinsights.com/digital-marketing-strategy/customer-segmentation
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