Marketing Concepts and Principles in Nike's Operations

This case study explores the marketing concepts and principles used in Nike's daily operations, including the role of marketing strategies and programs in attaining objectives and ethical considerations. It discusses key marketing concepts such as production, product, selling, marketing, and societal marketing, and how Nike applies them. The case also highlights the importance of marketing strategy and programs in Nike's success and the ethical considerations taken into account.

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Nike

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
a) Explaining marketing concepts and terminology related to Nike...........................................1
b) Identifying the role of marketing strategies and programs to attain Nike’s objectives
including ethical considerations..................................................................................................4
c) Explaining how marketing concepts and principles are used in Nike’s daily operations.......5
d) Explaining the relationships of marketing functions with other functional areas in Nike......6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
In the present scenario, firms are facing cut throat competition with each other in the
industry due to which surviving in the long run is very difficult for them. To sustain for longer
span of time, it is essential for companies to give due emphasis on appropriate marketing
principles and practices with the help of which business can run its activities in s such a way that
higher profits with customer satisfaction can be gained (Bhasin, 2017). To retain the customers
for longer period is necessary to stay in competition for which conducting marketing activities in
an effectual manner is essential. In the present report, case study of Nike is given with respect to
which various concepts related to marketing principles and practices will be studied. Here, key
marketing concepts and terminologies will be discussed along with explaining the role of
marketing strategies and programs. Apart from that, relationship of marketing functions of Nike
with its other functional areas are also discussed in detail.
a) Explaining marketing concepts and terminology related to Nike
There are some specific key concepts in marketing which are required to be used in such
a way that set objectives of organisation will be achieved in the most effective and efficient
manner. However, form one organisation to another, these concepts differ each other. Along with
that, the functions with which these concepts deal also vary to a high extent. But, according to
the need of market, all these concepts have been as well as taken in use by the firms. In relation
with the given case study of Nike, key marketing concepts are stated as below:
Production – Only those goods and services are purchased and used by the people that
are available at high quality and affordable prices, that is, as per the capacity of customers to
spend. Also, it is important that at every nearby location of the target customers, these products
will be available to provide them convenience that will increase the sale of products as well
(Brooks and Simkin, 2012). In comparison to the other concepts, it can be said that the idea of
production is highly concerned with operations. For Nike, to conduct the production process
effectually is one of the major concerns and this is the reason; since a long time, it is serving the
society with high quality products. For the purpose of retaining customers for a long period, Nike
understands its responsibility to carry out product process in an ethical and effectual manner. It is
because; company aims at increasing its customer base every year so as to maximise the profits
and goodwill in the market (Ettouzani, Yates and Mena, 2012). As per the give case, it can be
assessed that at present, athlete footwear market across the world is highly dominated by Nike as
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it is having the maximum shares in comparison to other competitor firms. It has been seen that
organisation takes due care of its customers as their bodies which shows the extent to which Nike
is performing production activities effectually as well as ethically.
Product – It has been seen that people always favour those products that are having
superior quality in comparison to the other available substitutes and give better results at a
reasonable price. In the present scenario, firms as well as customers give maximum value and
emphasis to the innovation in accordance with the tastes and preferences of customers that are
getting changed in the dynamic environment at a fast pace. This is the reason; to remain in the
race and attain success with sustainability, this is necessary to provide innovation as well as
differentiation in the products and services offered (Faisal, 2010). In accordance with the concept
of product, gaining loyalty of customers is highly important for which high quality in products
and services is required to be offered by Nike. In addition to this, if firm will offer various
benefits and value to the target audience, they will trust the brand and would be willing to stay
with the firm for longer duration. Nike is offering high quality products around popular athletes
which played a significant role in changing the face of sports marketing in entire world.
However, Nike is covering the major segment of basketball shoes with technical superiority over
all other available brands. Currently, company is leading in the sector in terms of product
development and innovation as it is entering in different product categories and grabbing the
attention of maximum customers (Mukerjee, 2013). In today’s scenario where there is intense
competition among firm, to operate successfully, Nike is offering products for dozen of new
sports that involve -line skating, wall climbing, baseball, street hockey, golf and hiking.
Selling – Nike is making sincere efforts for the promotion as well as selling of its
products and services in the market aggressively. It has been seen that when businesses promote
and sell products aggressively, customers get influenced to buy the same that proves to be
beneficial for the organisation. In today’s era where Nike is performing their marketing with
giving due consideration on the major reason behind it, that is, customer satisfaction, it
understands the fact that only by selling, intending customers with increasing the number would
not be possible. This is the reason; company is using various marketing tactics depending on the
suitability of business (French, 2010). Owing to this, Nike performs various activities as it
organises many campaigns based on the welfare of society like girl’s education and also, it
conducts several CSR activities. Apart from that, company does promotion in such a manner that
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within a short period of time, attention of large customer base can be grabbed like; through
giving ads on digital media. By using all these marketing tactics, it has reached at earning of $9
billion. To increase the sales, Nike had to increase its product range as thus, at present, company
is providing offerings like hockey sticks, sunglasses, batting gloves and soccer balls (Kotler and
Armstrong, 2010). Along with that, it is planning to launch some more products and services so
as to maintain the leading position in market.
Marketing – Nike performs all its marketing activities with the purpose of gaining
competitive edge over others in the market. Company is performing all its marketing activities in
such a way that customer satisfaction at the utmost level can be gained so that they can be
retained in the long run. However, it is not that since the year company got established, business
is earning profits as in the year 1998, sales of the firm has declined as its competitors like
Reebok and Adidas have grabbed the market share that was higher from Nike. But, to regain the
leading position in market, Nike again moved to its basics and started giving major emphasis on
innovation as well as on developing the new product lines with improving the sub-brands too
(Lovelock, 2011). For the purpose of capturing attention of target customers, Nike promotes its
products in such a manner that it is able to grab a large customer base and earning higher profits
with market share. Hundreds of millions of dollars have been spent the firm on its big-name
endorsements that it conducts almost every year with the help of organising splashy promotional
events along with giving several ads that proved to be successful in grabbing the attention of
target audience. Apart from that, company is making sincere efforts in order to keep the
customers highly satisfied so that they would remain with the firm in the long run and would not
switch over any other competitor brand (Hair Jr and Lukas, 2014). Further, high value is
provided to the customers by providing superior quality products to them which is the reason
since a long time, they are still loyal towards the brand.
Societal Marketing – Nike is always known for making initiatives for the society that is,
for the welfare of them. It is offering every product with keeping in mind the interest and good of
society that would prove to be beneficial for them. Whenever people see or hear the name of
Nike, sports click in their mind as it has always promoted the clothes and other accessories for
that segment only. It can be said that Nike played a significant role in changing the perception of
people towards sports and people into it (Peter and Donnelly, 2011). The campaign launched by
Nike known as “If you let me play” clearly shows the theme that firm used for the promotion
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which is rising the number of women taking part in sports so as to increase the level of economy
and to raise their standard at personal level. In addition to this, a good amount has been invested
by the firm in a wide range of lesser known sports with an aim to promote them as well and
make people aware with them. However, while doing the same, Nike was well aware that it will
be getting very less lucrative marketing opportunities. It shows that Nike is not just a producer of
good athletic gear but also, it is highly concerned about society and makes sincere efforts for the
good of them by offering high quality and value to them (Armstrong and et.al., 2012).
b) Identifying the role of marketing strategies and programs to attain Nike’s objectives including
ethical considerations
In every organisation, marketing strategy plays the most significant role according to
which all activities are conducted by firm so as to attain the set objectives of plan. Main role of
marketing strategy is to ensure that activities of all departments are being performed in a
systematic manner. Taking into consideration the case study, Nike has created many products
and services that are leading the firm to earn very high profits as well as market share. Under the
marketing strategy of Nike, at first, in-depth research on the market is done with ain aim to
analyse that whether products and services offered in a particular market will be successful or
not (Marketing in a Changing World: Creating Customer Value and Satisfaction, 2017). This
strategy put high emphasis on the existing competition, optimal target customer as well as trends
of the current market on the horizon. Based on this market research, Nike takes decisions about
products and services offering of which will help the firm to gain highest rate of returns along
with increased customer base in the market. Also, marketing strategy and programs help the firm
to assess that whether bringing innovation and differentiation in products is required or not and if
it is needed, then firm makes efforts for the same so as to keep customers satisfied (Gummesson,
2011).
Marketing strategy and programs help Nike to assess the pricing strategy as well on the
basis of which prices of products and services are set in such a way that would be willingly
acceptable by customers to give and by which firm will gain maximum profits. By keeping in
mid the target customer segment, Nike always set prices that are affordable to the customers and
will give vale to them in return. Marketing strategies play a significant role in providing ways to
the firm to face and beat existing competition in the market. Apart from that, Nike gives due
consideration to customer’s convenience also that is one of the most important parts of its
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marketing strategy and program (Wilson and et.al., 2012). It is offering facilities like online
shopping for younger customers as they prefer to shop by using a Smartphone or on a website as
well as through paying with PayPal or a credit card. However, on the other hand, company has
its retail outlets everywhere so that people who do not use online services can purchase the
products from there.
Nike has always maintained ethics in marketing activities and so, while formulating and
implementing the marketing strategies and programs, it has taken care of all ethical
considerations. While advertising, firm has never communicated any wrong information to the
stakeholders. It always informed the customers with true, fair and transparent information about
products and services it offers (Hair and et.al., 2012). Prices charged from the customers are also
fair as they are set in accordance with the quality and value which company is offering to the
target audience. In addition to this, Nike always offered the best quality and never compromised
on that parameter. In terms of performing business ethically, it performs several CSR activities
like promoting girl’s education that is for the good of society. With making all these efforts,
company is gaining loyalty and trust of customers over the brand since a long time (Albers,
2010).
c) Explaining how marketing concepts and principles are used in Nike’s daily operations
There are several types of marketing principles and concepts which can be used by Nike
in order to sustain the success in the targeted market. These principles have concepts which can
give positive response in adverse marketing environment. Marketing principal to find out
customers want then providing it for them. Nike to identify and describe to marketing principal
being applied by Nike to its product. Marketing is about organisation as a Nike acquiring to
product to right time, right product, to right market places and using right promotion strategies.
Nike to decided right product to right people Nike must follow main principles of marketing
(Sheth, 2011). To understand customer needs, wants fulfil all needs. To coordinates function to
achieving marketing strategic goals and objectives. Nike is also create a market strategies.
Basically four principles can be used by cited these are as follow product, price, place and
promotion.
These above mentioned principles can be used be used by the cited entity in order to
sustain better results. Like if Nike will provide those footwear and sportswear outfits to its
customers at the right place where they are demanded and at the right level of price which they
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can afford with a promotional strategy through which a huge customer base can be get attracted
towards its products (Khang, Ki and Ye, 2012).
Marketing Principles and Concepts Related With Nike
Marketing - It is a place where exchange of activities takes place through advertising
shipping, and different sales promotion activities. There are five types of concepts production
concepts, selling concept, market concepts, product concept and society concept. Production
concept defines to Nike dominate the market that customer will chose the product or services to
available are a low cost Nike concentrating on producing maximum volume such business
object to maximize the profit of cited firm (Yoo, Lee and Bai, 2011).
Marketing principles of Nike
 Creating utility: Nike has made a position at market place. Nike is recognized as brand
and is able to satisfy the need of its customers.
 Differentiate: Nike is successful in make its product different from other band and thus
customer can easily differentiate Nike products. It has captured an image in market place.
 Online presence: Nike has made its product presence online and thus according to the
needs of present generation they can buy Nike products online.
 Narrow market focus: For any brand or product to become successful it should focus on
narrow market to sell its product and then when a stable position is achieved than it
should expand its market and thus Nike has followed the same strategy (Chabowski,
Mena and Gonzalez-Padron, 2011).
 Awareness: Nike was able to create a good image for its customer in the market place and
thud capturing large market.
 Retention: Nike was able to retain its loyal customer and thus brand loyalty was also
achieved by Nike which is the basic need of any company to sustain at market place.
d) Explaining the relationships of marketing functions with other functional areas in Nike
Some people relate the word marketing from just the selling but marketing is not only a
selling function it is a board function of a business or we can say it is a business philosophy. The
function of marketing affects the other departments and functions of the enterprise at large. So
one can say that the marketing function of Nike just not include the selling of their products but
much more than this (Touzani and Moussa, 2010).
Relationship of marketing with other functions
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 Finance department/function: Finance department of the enterprise is the one which
decide the budget for all the activities of the firm. So it is very important for marketing
department to continuously coordinate with the finance department and to tell the finance
department about all the finance they need for the promotion, distribution and for selling
the product. So the finance department can make a budget for the enterprise according to
the needs. So it is necessary for Nike to coordinate with the finance function or
department of its enterprise.
 Operations department/function: Operations department is one of the important
department of the enterprise, marketing department should keep coordinate with them to
ensure that the required development is being done by the operations department in the
product to meet the changing demands of the customers and also to check that the
delivery of the products to the customers should be on time (Brooks and Simkin, 2012).
Other than this the marketing department should tell the operation department that the
product should pass the quality standard. For achieving the quality standard in their
products there is a need to Nike to coordinate with its operations department of the
enterprise.
 Human resource function/department: Human resource management is one of the other
important department of the enterprise from which a coordination should be there with
the marketing department or function of the enterprise. It is the responsibility of the
manager of marketing department to keep check that the proper training is given to the
human resource of the enterprise in order to get the product quality, product quality can
only be achieved by the enterprise when the task force of the operation department is full
of capabilities (Ettouzani, Yates and Mena, 2012). Other than this it is necessary for
marketing department to coordinate with the Human resource department to meet the
production target and training should be provided to the task force for making or to build
a competent taskforce. Nike should provide a proper training and should develop a proper
development plan for their human resource to make them capable in producing a product
which can beat the other competitors of it and can meet the specific and current
requirement of each and every market segment (Faisal, 2010).
 Sales department: Sales is one of the major department of the organisation because it is
the one from which all the revenue of the enterprise is created. So it is very important for
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Nike to make a coordination with the sales department of their enterprise in order to meet
the delivery demand of the customers and at the same for generating revenues for their
enterprise.
CONCLUSION
From the above report, it can be concluded that marketing in the present scenario has
become high important for firms to face the competition and stay in market for longer duration.
It has been assessed from the report that Nike is facing high rivalry from Reebok and Adidas and
thus, to gain a competitive edge over them, giving due consideration on the marketing principles
and practices is important. For the same, bringing innovation and differentiation in products time
to time is significant but in a way that it will be successful to meet the needs and expectations of
customers of target market. Overall, it can be said that to earn high profits and increase market
share along with rising goodwill and brand image, just doing marketing is not enough but, to
perform the same in an ethical manner is equally important.
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