International Marketing Report: NIKE's UK Market Entry Strategy

This report provides a comprehensive analysis of NIKE's international marketing strategies, focusing on its global expansion and market entry into the UK market. The report begins with an introduction to international marketing and the context of NIKE, a U.S.-based multinational company. It then examines the roles of globalization drivers, including technological, political, market, cost, and competitive factors, in expanding NIKE's market. The report critically analyzes the global environment for NIKE, considering customer trends, social factors, and cultural influences. It identifies and justifies a specific target market in the UK and explores various international strategy methods, with a focus on the transnational strategy. Finally, the report critically evaluates international market entry strategies, highlighting the advantages of licensing as a key strategy for NIKE's global growth. The report provides valuable insights into NIKE's approach to international marketing and its potential for success in the global market.

INTERNATIONAL
MARKETING

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
P1. Roles played by drivers of globalisation in market expanding of NIKE..............................1
P2. Critically analyse the nature of global environment for NIKE.............................................2
P3. Identify and justify one specific target market in UK .........................................................3
P4. Identify and justify one global international strategy method for NIKE to grow globally...4
P5. Critically evaluate one international market entry strategy for NIKE to grow in global
market..........................................................................................................................................5
CONCLUSION................................................................................................................................6
REFRENCES...................................................................................................................................7

INTRODUCTION
International marketing is carried out at international level. It is done by creating market
strategy in their respective country which will then incorporated in new market area. Another
option is to hire a firm in new targeted area to develop plan according to their requirement.
International marketing is based on the extension of local market strategy of the firm. This
report is presented in the context of NIKE, which is a U.S. Based multinational company
headquartered near Oregon (Bianchi and Mathews, 2016). It was founded in 1964 by Bowerman
and knight. In this report, impacts of globalisation drivers on NIKE market expand, are
mentioned. Expansion of NIKE in UK by introducing new product which is bicycle. Analysis of
global environment involving customer, social, culture trends is carried out. At last, strategies to
enter new markets are discussed.
TASK
P1. Roles played by drivers of globalisation in market expanding of NIKE
Globalisation is defined as a mean according to which different countries and people
around the globe interact with each other. It is concerned with economy, government policy,
trade and technology.
(Source: NIKE products, 2017)
1
Illustration
1: NIKE products

Economic globalisation is related with the countries coming close to make international
trade easy. With the help of technological advancement people purchase and sale products
around the globe. Political globalisation involves the impact of certain institutions on the world.
One example is United Nations as most of the countries are member of it (Czinkota and
Ronkainen, 2013). Globalisation affects culture in a way that most people acts similar in
accordance with same situation. In reference with NIKE, drivers of globalisation will create a
huge impact in enhancing their market area. They are outlines as follow:
 Technological drivers: Modern technology like microprocessor and telecommunication
enables interaction at low cost. Internet supports e-business along with e-commerce.
These will helps NIKE in improving their brand reputation across the globe. Million of
people distant from U.S. will be able to order products with in a short period.
 Political drivers: Liberal trading rules results in low tariffs and allows FDI all over
world. Foreign direct investment benefits an organisation in increasing their market
shares globally (Stoian, Rialp and Rialp, 2012). This allows NIKE to expand in areas
which promises high profit margins and increased market growth without facing
difficulties like high tax , tariffs and surcharges.
 Market drivers: As regional market became more saturated regarding their needs, the
chances of growth is limited. In reference with NIKE, this is a great opportunity to satisfy
the needs of international customers through global market channels.
 Cost drivers: Efficiency and cost of product varies for different countries. Global firms
can gain benefit of this fact by building global scale economy. NIKE can use this
opportunity to create high product development costs and in generation of large economy
around world.
 Competitive drivers: As competition among regional firms increases companies are
tilting towards international market. For NIKE, two way trade along with FDI policy
eases trading internationally at a wide scale .
P2. Critically analyse the nature of global environment for NIKE
The large extrinsic world beyond the domestic boundaries is considered as a global
environment. It is analysed in terms of technological, cultural, social, political approaches which
2

influences our thinking. Environment beyond the physical reach of NIKE is included as global
environment for the company. NIKE is a U.S. Based global player and manufacturer of sports
related items. For successful expansion in UK by introducing bicycles it is important to
consider some factors along with their impacts on the company.
 Customer trends: They are either a change in behaviour, opinion or expectations of
customers. Basic requirements of consumers like creativity and status and improvement
never changes. The way with which new products satisfy the needs of clients determine
new trends. In present time, people have again started following the traditional means of
transport i.e. cycling (Schlager and Maas, 2013). It helps in reducing pollution and
creates ozone-friendly atmosphere. NIKE's expansion in bicycle market will be a great
success. According to 2016 reports, around 16% of total which is around 6.5 million
population in UK rides bicycle often or at least once in a week. Approx 42% of
population aged more than five years owns a bicycle. People are getting more aware
about positive impacts of cycling this will helps NIKE in familiarising their product in
UK market. If NIKE will not be able to improve products in comparison with changing
trends, chances of success are low.
 Social: This aspect is linked with the social settings in which people lives. It is a factor
that determines active & healthy ageing. Large number of people in UK are choosing
bicycles over motorbikes and cars as people are concerned with degrading environment.
Benefit for NIKE is bicycles are affordable at reasonable price so market growth is wide
and easy (Ripollés, Blesa, 2012). Along with it, cycling has certain merits such as
improved cardiovascular fitness, muscle strength, posture, joint mobility etc. In 2002
average cycling was around 39 miles per year. In 2016, it has increased to 54 miles which
is around 35% increment. If Bicycle price will be high people will feel reluctant in
buying them which will be a demerit for NIKE.
 Culture: This is the aspect related with the region, religion, knowledge and behaviour of
people. People opt products which are acceptable and useful in accordance with their
cultural behaviour. People of UK have knowledge regarding the health benefits of
bicycle. Women are free there to express their opinion. Targeted market in UK is wide.
From 2012-2016 people from age band 30-39 and 40-49 are widely using bicycle. NIKE
have advantage as people of UK are educated and liberal in thoughts. Poor section within
3

this age group will be unable to buy bicycle which will create a negative impact for
NIKE.
P3. Identify and justify one specific target market in UK
It is a group of consumers which are interested in buying the goods and services of the
company. As these clients want organisation's product, it is important for NIKE to focus on its
marketing strategy. UK is a developed nation and the standard of living is high. People there
appreciate only standardised products. For NIKE, targeting London is most favourable as it is per
capita income of people there is fairly high than other cities (Özsomer, 2012). Target markets
that can be focused are mentioned below:
 Age based market targeting: In UK, people from age group 15 to 45 are more health
conscious in comparison with other age group. In case of NIKE, company can target the
wants and requirements of above mentioned age group for their successful expansion in
London market.
 Income based market targeting: Living standard in London is fairly high but the poor
section living there will not be able to buy expensive bicycles. It is very important to
consider this aspect to target a wide section of population. NIKE can introduce bicycles
in different price range to target specific population.
 Gender specific market targeting: Company can target advertisement towards specific
gender or section of people. In this context NIKE can launch bicycles with different
themes and colour. As for males and females above forty age, NIKE can focus on broad
seat concept which will increase their comfort while driving bikes.
 Geographic target market targeting: Different areas have different needs. people of
London living in hilly areas have less access to cars and trucks (Terpstra, Foley and
Sarathy, 2012). They use bicycle as a medium of transport. Population in cities prefer
bicycles due to environmental reasons. NIKE can target people according to their
geographic needs. Seasonal marketing will be a better option too.
P4. Identify and justify one global international strategy method for NIKE to grow globally
Global international strategy is a tool that covers three strategic fields: global,
international and multinational (Meissner, 2012). These strategies helps a company in achieving
its desired objective in reference with global and international expansion. If strategy of a
company is focusing their domestic market, then ideas outside its regional market is termed as
4

international. NIKE must choose an efficient international strategy to implement its brand in
various countries. Widely accepted international strategies are transnational, global and multi-
domestic. In context with NIKE's popularity, transnational strategy is mentioned here.
Transnational strategy: An organisation that implements this strategy opts a middle
path between global and multi-domestic strategy. In this, company tries to manage efficiency of
product along with considering basic preferences within different countries. NIKE's transnational
strategy is flexible approach (Koschate-Fischer, Diamantopoulos and Oldenkotte, 2012). NIKE
can hire subsidiary units overseas to improve competencies which results in overall development
of the company. Managers of NIKE can take advantage of this strategy by focusing on areas
where competency is high. This strategy requires proper planning, maximum utilisation of
resources, uniform global policies. NIKE must incorporate these points appropriately this will
helps in the expansion of brand within a large globalised area. NIKE before launching bicycles in
international market must familiar itself with different policies either governmental or uniform
for the targeted nation. Along with it, focus must be given on aspects like easy availability of raw
material required in the production of bicycles. Living standard of people must be given
consideration before introducing some expensive series of bicycle as society consists of both
poor and rich section people (Hsu, 2012). If all these aspects will be given proper care, NIKE can
expand their new product globally with an appreciating results.
P5. Critically evaluate one international market entry strategy for NIKE to grow in global
market.
There are several methods through which an organisation can enter in a foreign market.
No single strategy works for every international market scenario. For one market direct exporting
will be best and for other joint venture (Westjohn, Singh and Magnusson, 2012). There are
several factors that can influence NIKE's strategy choice such as tariff rates, transportation cost
etc. The strategies outlined below are main options available to NIKE for market entry:
 Direct exporting: It is related with direct selling of product into market. Once a sales
program is managed, companies hire agents and distributors to further represent their
brand. NIKE can choose an efficient distributor as a face for its company (Hakansson
2015). That distributor will represent NIKE within their respective area. The popularity
of NIKE will depends upon distributor's efficiency in this case.
5

 Licensing: It is an arrangement where a company allows other company to use its
products by transferring certain rights. This strategy will prove very effective for NIKE
if the purchasing company has a large market presence. Licensing can either for
production or marketing depending upon the purchasing and owner company wants.
 Franchising: It is a very useful tool for rapid market increment. Companies having
repeatable business modals are mostly benefited by it. For considering this strategy,
NIKE must come up with more strong recognisable brand identity which will be utilised
effectively in the targeted international market.
All these strategies are important for global growth but out of all these the most
desirable is Licensing. The main advantage of this strategy is along with NIKE some other
renowned company will also promote its products. It will helps NIKE in improving their
production level and marketing level (De Clercq and Zhou, 2014). If a firm has licence regarding
marketing then the advertising of product will increase to a appreciable extent. The disadvantage
of this strategy is if the purchasing company has not wide roots prevailed within the market.
People will not generate more interest in the products they are advertising for. Choosing
appropriate Licensing partner to penetrate successfully in other countries is a challenging aspect
for NIKE.
CONCLUSION
From the above mentioned facts, it has been concluded that to successfully expand into
UK appropriate marketing strategies are required. The roles of driver of globalization defines
the ways in which NIKE can expand globally. Nature of global environment including customer
trends, social and cultural aspects plays a wide role in success of an organization. Target
markets, global strategies and market entry are some required tools for successfully penetrating
into foreign markets.
6

REFRENCES
Books and Journals
Bianchi, C. & Mathews, S. (2016). Internet marketing and export market growth in Chile.
Journal of Business Research. 69(2). 426-434.
Czinkota, M. R., & Ronkainen, I. A. (2013).International marketing. Cengage Learning.
De Clercq, D. & Zhou, L. (2014). Entrepreneurial strategic posture and performance in foreign
markets: the critical role of international learning effort. Journal of international
Marketing. 22(2). 47-67.
Hakansson, H. (2015).Industrial Technological Development (Routledge Revivals): A Network
Approach. Routledge.
Hsu, Y. L. (2012). Facebook as international eMarketing strategy of Taiwan hotels. International
Journal of Hospitality Management. 31(3). 972-980.
Koschate-Fischer, N., Diamantopoulos, A., & Oldenkotte, K. (2012). Are consumers really
willing to pay more for a favorable country image? A study of country-of-origin effects
on willingness to pay. Journal of International Marketing. 20(1). 19-41.
Meissner, H. G. (2012). Strategic international marketing. Springer Science & Business Media.
Özsomer, A. (2012). The interplay between global and local brands: A closer look at perceived
brand globalness and local iconness. Journal of International Marketing. 20(2). 72-95.
Ripollés, M., & Blesa, A. (2012). International new ventures as “small multinationals”: The
importance of marketing capabilities. Journal of World Business. 47(2). 277-287.
Schlager, T., & Maas, P. (2013). Fitting international segmentation for emerging markets:
conceptual development and empirical illustration. Journal of International Marketing.
21(2). 39-61.
Stoian, M. C., Rialp, A., & Rialp, J. (2012). International marketing strategy and export
performance in Spanish SMEs: a contingency approach. International Journal of
Entrepreneurship and Small Business. 15(2). 213-236.
Terpstra, V., Foley, J., & Sarathy, R. (2012). International marketing. Naper Press.
Westjohn, S. A., Singh, N., & Magnusson, P. (2012). Responsiveness to global and local
consumer culture positioning: A personality and collective identity perspective. Journal
of International Marketing. 20(1). 58-73.
Online
Cycling Statistics in UK. 2018. [Online] Avaliable Through: <https://cyclinguphill.com/cycling-
statistics-uk/>.
NIKE products. 2017. [Online]. Available
through:<https://www.pinterest.com/pin/5911043237206740/>.
7