Marketing Strategies of Apple and Nike

This report analyzes the marketing strategies of two leading companies, Apple and Nike, through detailed case studies. It explores the Ansoff matrix and Porter's Five Forces model for Apple, and the marketing mix for Nike. The findings highlight how both companies leverage their strengths to maintain competitive advantages in their respective markets.

Running head: MARKETING
Marketing
Name of the student
Name of the University
Author Note

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Table of Contents
Introduction......................................................................................................................................3
Case Study.......................................................................................................................................3
Ansoff matrix of Apple....................................................................................................................4
Market penetration.......................................................................................................................4
Product development...................................................................................................................4
Market development....................................................................................................................5
Diversification.............................................................................................................................5
Porters Five Forces Model of Apple................................................................................................5
Industry Competition...................................................................................................................5
Bargaining Power of Buyers........................................................................................................5
Threat of New Entrants................................................................................................................6
Bargaining Power of Suppliers....................................................................................................6
Threat of Substitutes....................................................................................................................6
Case study of Nike...........................................................................................................................7
Marketing Mix of Nike....................................................................................................................7
Product.........................................................................................................................................7
Place.............................................................................................................................................7
Promotion....................................................................................................................................8
Price.............................................................................................................................................8

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Conclusions......................................................................................................................................9
References......................................................................................................................................10

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Introduction
Marketing is one of the most critical and important departments of any organizations
(Burke, 2017). The marketing department is capable of understanding the needs and wants of the
customers and manufactures their products accordingly. Marketing helps in formulating
strategies and proper execution of the planning to get competitive advantage in the market (West,
Ford & Ibrahim, 2015). The function of marketing helps in the creation of place, time and
utilities of ownership. The various marketing tools help in the identification of the strategic
positions of the company and the growth of its products in the market. The report takes into
consideration the successful utilization of the marketing tools by two renowned companies of the
world, Nike and Apple.
Case Study
The case study of Apple defines that the central model of the company has not changed
since its inception from 1980s. The company has produced the hardware as well as the software
for the customers and achieved the competitive advantage and market share. The case study puts
forward the strategic management decisions of Apple that have prompted the company in taking
into consideration the non-PC products in the product portfolio of the company (Gupta &
Prinzinger, 2013). The early market acceptance of iPad, iPhone and iPod has helped Apple in
getting success in the technological market of the world. As far as the case study is concerned,
the sales of iPod have slowed down. On the other hand, the iPhone is facing increased
competition from other mobile manufacturers in the Smartphone industry.

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Ansoff matrix of Apple
Market penetration
Apple is able to sell the existing products in the present market such as the Mac
computers and the MacBook laptops as a strategy to increase the share of the market (Akhter,
Rahman & Rahman, 2014). Apple can achieve this through proper utilization of the core
competencies and the resources in sales and marketing and attracting more customers by
reducing the prices and keeping the focus on constant innovation of the products. Apple has tried
to penetrate the market with the new versions of iPhone that are having better camera, faster
internet connections and other innovative features.
Product development
Apple has a highly talented team of designers and research & development which it can
utilize in the future for the manufacturing of more innovative products for the loyal customers
(Sniukas, Lee & Morasky, 2016). This will help in increasing the satisfaction of the customers.
Market Penetration
iPhone
Product Development
iPod Shuffle
Market Development
iPod Touch
Diversification
iTunes
(Source: created by author)

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Market development
Apple has the chance to extend its existing products by enhancing the geographical area
(Gassmann, Frankenberger & Csik, 2016). It would require the company to identify the new
customers who have not used the Apple products earlier and increase the customer base. The
iPod Touch of Apple is just a replica of the iPhone. The only exception is that it cannot be used
to make calls. Apple has the chance to develop the market of iPod Touch in the international
market.
Diversification
Diversification is the introduction of new products in the new markets as the iPhone was
first introduced in the market in 2007 (Bennett & Pierce, 2016). It involves a lot of risks and
uncertainties about the success of the new products in the market. The case was same for the
launching of iTunes and iPod. The company targeted a completely different group of customers
from their existing customers.
Porters Five Forces Model of Apple
Industry Competition
The level of competition in the Smartphone industry is very intense. Low switching cost
is the main reason for the competition. The costs of the Apple products are very high and the
customers have every chance to switch to other products that are less costly.
Bargaining Power of Buyers
The low switching cost in the Smartphone industry increases the bargaining power of the
buyers. On the other hand, the bargaining power of buyers in case of Apple is very less.

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However, the collective bargaining power of the customers in the market is very high. Apple has
tried to counter this force by substantial expenditure in R&D.
Threat of New Entrants
The threat of new entrants that can affect the market share of Apple is very low. The two
factors that are responsible for this are the huge cost of establishment of a company in the
industry and the additional cost that the other companies need to bear for the recognition of the
brand. A new player in the Smartphone industry needs to invest a lot of amount on the R&D as
well as manufacturing in order to develop the product portfolio before bringing the products in
the market. Another threat that Apple is having for its products is the brand names of Google and
Amazon who are having very strong brand names.
Bargaining Power of Suppliers
The bargaining power of suppliers in the market for Apple is very low. The reason is the
availability of large number of potential suppliers for the company and huge amount of supply.
Apple has created such a huge brand identity that it is free to choose from the large number of
suppliers. Apple has a very low cost of switching the suppliers. Apple has become one of the big
companies for many suppliers in the technological market. Apple does not have to consider the
bargaining power of the suppliers regarding the component parts like its competitors.
Threat of Substitutes
There are very less substitute products that are able to compete with the products of
Apple. A landline phone is less costly than an iPhone and customers have every chance to switch
from the products of Apple to other products.

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Case study of Nike
The case study of Nike gives an indication that the company is successful today because
of innovation and gives the emphasis on the research and development (Mahdi et al., 2015). Nike
has kept the prices of its products very high still are able to make huge profits and increase the
sales because of its quality. It has successfully competed with Adidas in the sports segment.
Marketing Mix of Nike
The proper formulation of the marketing mix helped the company in getting success in
the competitive market all over the world. It is now the leading brand in the equipment, athletic
footwear and apparel.
Product
Nike has a number of products in its product portfolio. This is one of the important
elements of marketing mix of Nike. The products of Nike include shoes, apparel and equipment
as well as accessories. The sport shoes of Nike are the most popular products of the company.
The various types of shoes are tennis shoes, running shoes and for other sports. The accessory is
the golf club and the accessories take into account jerseys, related products and shorts.
Place
The distribution system of the products of Nike has helped the company in reaching to a
vast number of customers around the world. The products of Nike are available from the
retailers, official online stores and the retail outlets (Ailawadi & Farris, 2017). Retailers are the
most important in the distribution strategy of Nike. Customers are able to purchase the products
from the online stores of the company without any difficulties. It has a major control on the
distribution and sale of products.

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Promotion
The effective promotional mix of Nike has helped the company in enhancing its brand
name. The promotional activities of Nike include advertising, direct marketing, sales promotion,
public relations and personal selling (Boone & Kurtz, 2013). Some of the attractive advertising
has helped the company in attracting the attention of the customers. The direct marketing
strategies of Nike include persuading the colleges, organizations and the various sports teams
(Brohi. et al., 2016).
Product
 Quality and reputation
 Sporting events
 Effective and comfortable
Price
 Premium pricing strategy
 High-end product
Place
 Multiple retailers
 Shops present globally
Promotion
 Strategic alliances
 Advertising
 Various sports events
(Source: created by author)
Price
Nike has a value-based pricing strategy for the growth of sales and profits (Chang,
Rodriguez & Su, 2016). The prices of the products of Nike are very high and worthy of the
quality. Customers are willing to pay more for the Nike products than the competitors.

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Conclusions
The report has inferred about the effectiveness of a good marketing strategy on the part of
the companies to stay competitive in the market. The report has taken into consideration two case
studies that depict the marketing strategies of two well-known companies of the world. The case
of Apple helped to know how the company has expanded in the market and the analysis has been
done through the Ansoff matrix. On the other hand, the case study of Nike helped us to know
how the company is working successfully all over the world. The present marketing mix has
been discussed using the 4Ps of marketing of Nike in the report. It has been inferred from the
report, some significant marketing models that will be relevant for most of the companies in
formulating strategies accordingly.

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References
Ailawadi, K. L., & Farris, P. W. (2017). Managing Multi-and Omni-Channel Distribution:
Metrics and Research Directions. Journal of Retailing, 93(1), 120-135.
Akhter, S., Rahman, N., & Rahman, M. N. (2014). Competitive strategies in the computer
industry. International Journal of Technology Diffusion (IJTD), 5(1), 73-88.
Bennett, V. M., & Pierce, L. (2016). Motivation matters: Corporate scope and competition in
complementary product markets. Strategic Management Journal, 37(7), 1304-1315.
Boone, L. E., & Kurtz, D. L. (2013). Contemporary marketing. Cengage learning.
Brohi, H., Prithiani, J., Abbas, Z., Bhutto, A. H., & Chawla, S. K. (2016). Strategic Marketing
Plan of Nike.
Burke, W. W. (2017). Organization change: Theory and practice. Sage Publications.
Chang, X., Li, J., Rodriguez, D., & Su, Q. (2016). Agent-based simulation of pricing strategy for
agri-products considering customer preference. International Journal of Production
Research, 54(13), 3777-3795.
Gassmann, O., Frankenberger, K., & Csik, M. (2016). Innovation Strategy: From new Products
to Business Model Innovation. In Business Innovation: Das St. Galler Modell (pp. 81-
104). Springer Fachmedien Wiesbaden.
Gupta, A., & Prinzinger, J. (2013). Apple, Inc.: Where Is It Going From Here?. Journal of
Business Case Studies (Online), 9(3), 215.

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Mahdi, A., Abbas, M., Mazar, T. I., & George, S. (2015). A comparative analysis of strategies
and business models of Nike, Inc. and Adidas Group with special reference to
competitive advantage in the context of a dynamic and competitive environment.
International Journal of Business Management and Economic Research, 6(3), 167-177.
Sniukas, M., Lee, P., & Morasky, M. (2016). The Art of Opportunity: How to Build Growth and
Ventures Through Strategic Innovation and Visual Thinking. John Wiley & Sons.
West, D. C., Ford, J., & Ibrahim, E. (2015). Strategic marketing: creating competitive
advantage. Oxford University Press.