Analysis of Nike's Marketing Strategies: A Competitive Report

This report provides a comprehensive analysis of Nike's marketing strategies, focusing on its sustainable competitive advantage, segmentation, targeting, and branding within the sports apparel market. It explores how Nike maintains its market leadership through innovation, customer satisfaction, and strategic investments. The report examines Nike's segmentation strategies based on demographic, psychographic, behavioral, geographic, and socio-economic variables, along with its targeting and positioning in the market. It further investigates the factors influencing customer behavior, including psychological, social, cultural, and personal elements, and how these impact consumer purchasing decisions. The report also assesses the opportunities for growth within Nike's macro environment, using a PESTLE analysis to evaluate political, economic, social, technological, legal, and environmental factors. Overall, the report offers valuable insights into Nike's marketing approaches and its ability to thrive in a competitive global market.

Creating Business Excellence
and Marketing

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
CONCLUSION................................................................................................................................7
REFERENCES ...............................................................................................................................8

INTRODUCTION
Macro economic factors relates to the factors affecting the business environment. The
macro economics factors can be political , social, legal and economic factors. These factors can
lead the company to achieve the desired goals, also these factors can effect the companies in
adverse ways. The report includes the potential change in the Macro environment forces of Nike.
The company Nike is a brand which deals in sports apparels, sports shoes and various sports and
fitness equipments.
The report will include the strategies designed by Nike for sustainable competitive
advantage over its competitors. Also the report will study the segmentation, targeting and
positioning of the customer in the market. The report will include the branding of Nike's product
and also the focus of company on increasing the efficiency of brand in the competitive market.
Furthermore report will include the opportunities for growth in the organizations macro
environment. The external environment in Nike determines the type of product, the quality of
product , the customers to whom product is sold and also the economic environment in which the
products are to be sold.
TASK
A) The company’s strategies for sustainable competitive advantage, segmentation and
branding
Nike's Sustainable competitive advantage
Now a days, company Nike is earning more as compared to its earlier results. This
increase in earning capacity of company is reflective of the numerous advantages it have over its
competition. Though there is tough competition in the sports apparels market, Nike have
survived and created a brand image of its own and have competed in the global market to
achieve its desired success. Nike uses various techniques and tactics in its policies to compete in
global market. The company have introduced new products to increase its customer satisfaction
and also to improve its product from the other companies dealing in sports items.
The company Nike work with a goal to provide better customer satisfaction and
services by proving better sports items. The close competitor of Nike is Adidas both deals with
the manufacturing of sports apparel in market (Ahmad and et.al., 2016).
Nike's growth scale increases as it keep reinvesting its earning in the market. Therefore
Nike's scale provide a big advantage from its competitors as their is continues reinvesting gross
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margin upside back in the business. Nike invest its earning in the business expansion through the
technological advancement and use of new technologies.
Nike's ability to innovate is the second bigger advantage available to the company
against its competitors. The company have introduced many new innovations in order to achieve
its growth and success in the company. Nike produces customer base sports apparels according
to the age group which are very stylish and have different colour options. This makes the
company stand out from its competitors (Baporikar, 2017) .
Nike's focus on the low cost of production helps the company in gaining control over the
market and competing with its competitors. Nike's new products have created a benchmark in
sports apparel in the world.
Segmentation, targeting and positioning in Nike
The product offered by the company needs to be divided according to the needs and
requirements of the customers. Therefore the same thing cannot be sold to the elder person and a
young person. There is wide difference between the age group of people. Likewise their can be
many segmentation in the market in regards to the demand of product in the market. The
company Nike provides wide ranger of products to fulfil the needs of their customer inn
different segmentations.
SEGMENTATION
It is the division of the customers according to the various segments of company.
Therefore the customers are segmented in the six market segments which are demographic
variables, psycho graphic profile, behavioural style, geographic variables, socio-economic
variables and benefits available (Chaffey and Ellis-Chadwick, 2019) . Although, having many
segments in the market Nike mainly focuses on “ all athletes” in the global market the market
segments of customers are explained below-
Demographic variables- these are the segmentation on the basis of demographic positions in the
country.
Psycho graphic profile- it relates to the customer behaviour regarding the product sold and there
use by the company Nike.
Behavioural style- the behaviour of customers relates to the segmentation of the customers
which focus on the taste and preference of that person.
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Geographic variables- this relates to the geographical factors and location of the customers
effecting to the customers need of product.
Socio-economic variables- these are the factors which are effected by the social environment of
the country and the customers living in the country. Nike products and designs are widely
affected by the social preferences of customers (Crittenden and Crittenden, 2015) .
Benefits available- also the benefits offered by the company Nike to its customers also segments
the people and provide a different customer base to the company.
TARGETING
Target marketing is the next step after the market segmentation. It is the process in which
the company systematically chooses the segments that will allow the company to achieve its
goals effectively. The target market helps the company Nike in focusing on the specialised
product and also determine the increase or decrease the production of product and services.
Nike evaluates its customer segments in the market can chooses in sequence the
customers segment for the production process. The customers segment is chosen based on size ,
reachability and behavioural variables. The company Nike targets professional athletes and
sporty individual providing them specialized and innovative products (Enquist and et.al., 2015).
POSITIONING
The final steps in of STP concerning the market decisions is the positioning. Nike has
positioned has positioned its brand as the market leader of sports equipments. As the company is
able to provide high quality of products ans services in the market. The company focuses on
providing the products targeted in the targeting and providing the customers their desired goals.
Above all company have focused on the fashion concerning the different age groups and
providing varieties of products in the sports item according to the age differentiation of market.
Therefore the company innovates new ideas and strategies to increase the product differentiation
in the global marketing and also increasing its customers.
Branding
The company Nike is having a strong brand image in the global market. Also the
company is constantly working to achieve more targeted areas. The products provided by the
company Nike is of very good quality available in the market among its competitors (Hickman
and Silva, 2018). Nike's products are available almost everywhere even online, where consumers
could purchase company's products instantly. There is availability of online shopping options
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which facilitates the customers to order their required products online. Also people believes that
use of branded products can increase their status in the society. For example an individual wears
Nike's limited edition indicated that he/she belongs to the upper class. The company produces
specialised products according to the requirements and cultural environment of the people in the
market. Nike constantly attracts the best athletes from all sports and signs contracts that bring
enormous profitability to the business. Branding of the company helps the company in the
acquisition of the greater customer base by providing products and services as required. This
helps the company in achieving organizational targets by the company Nike in the global market.
B) The potential impacts on the Nike's customer behaviour
There are many factors which can effect the companies working capacity and also the
customer base in the market. Customers buying decisions can be changed by many factors which
can be psychological,social,cultural and personal factors (Schaltegger and Burritt, 2018). Nike's
customers can have varied buying decisions according to their needs and changing circumstances
of the customers behaviour. The various factors can be explained below-
Psychological factors- through the advertising campaigns and headlines which gives a
sense of freedom and motivation to the customers in achieving the fitness targets of sports
persons. The customers of Nike feel the sporty spirit with the use of various sports apparel. This
is an psychological factor which widely effects on the minds and needs of the customer for
making a buying decisions. Also within the change in the customers taste and preferences there
is also a change in the company sale and thereby effecting the overall results in the earning
capacity of the company Nike.
Social factor- Social factors also have effects on the buying decisions of the company
Nike. The decisions making of Nike's customer are highly influenced by the use of those
products which the sports idol uses (Taneja and et.al., 2016) . People have perception regarding
the use of same brands products which their sports idol use that they will become like them.
Therefore the customers are widely influenced by their reference groups, opinion leaders and
family concerning their buying decisions.
Cultural factors- Cultural factors can also effect the customers choice and preferences.
As the cultural factor is very delicate there can be both positive and negative impact on the
Nike's sales. Therefore company aims on the different market segments on the bases of location.
Nike's produces the product according to the taste and preferences of customers in the particular
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region. The company have widespread research on the customers interests based on their cultural
attribute, which affects the buying audience through commercials. For example in India, there
are large number of fans of cricket players, so the company produces sports products according
to that.
Personal factors- there are many personal factors too which affects the customers choice
of products. The various person al factors which effects customers choice can be age, gender,
lifestyle, occupation and personality of the person buying product. Nike's influences its
customers through the unique fashion styles and trendy sports equipment. Also the company
offers varieties in the sports equipments and sports apparel according to the age and requirements
of sports persons which they feel unique and attractive (Zokaei and et.al., 2016) .
Therefore, Nike cope up with the various factors affecting the buying decisions of
customers in market.
C) Opportunities for growth within the Nike’s MACRO environments.
The companies are effected by the factors within the organization and also the various factors
relating to the external factors in which the company is operating. These factors effects widely
on the production and selling capacities of the company. The external factors relates to the
companies external areas which can be social , environmental and legal factors. To evaluate the
factors relating to external environment Nike can use pestle. The includes various factors.
Political- the political factors relates to the political landscape in which a business is set
up. Also the political factor includes the government influence on the remote or macro-
environment of businesses. The political external factors determine some of Nike's strategies-
stable political climate in major markets, expanding free trade policies and also improving
government support for the improvement in infrastructure (Nike's competitive advantage, 2018) .
Economic- Nike's business performance is widely affected by the economic environment
of the state where the business is to be operated. Nike sells its athletic footwear, equipments and
apparel to the various economies according to the country. Through pestle Nike evaluates the
underlying economic factors in the economies. The significant external factors determining
Nike's performance are economic stability of developed markets, rapid growth of developing
markets and slowdown of the Chinese economy.
Social- social issues impact the attractiveness of Nike's athletic shoes, apparel and
equipment. The various social factors which affect the business environment are increasing
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individual wealth in developing countries, increasing emphasis on product safety and also
improving positive attitudes towards leisure among the customers of the company. Nike have
considerable opportunities for product development and business growth (Ahmad and et.al.,
2016) .
Technological- These are the factors which relates to the development in the
technological conditions of the business. These technological advancement can have a major
impact on the development of the company through the development of its products and
services. The following are the technological external factors which affect Nike are increasing
research and development among the competitors of the company, rapid technological
obsolescence and widespread use of mobile technology (Baporikar, 2017) .
Legal- legal terms influence businesses like Nike. In Nike's case, the various legal factors
which affect the functioning of the company. In Nike's case, the following legal external factors
are important in the sports shoes, apparel and equipments- improving employment law in
developing countries, expanding consumer law in developing countries and also expanding
health and safety regulations.
Environment- these factors relates to the various environmental factors effecting the
company and its functioning. The various factors which influence Nike's external environment
are- expanding environmental law, climate changes and increasing sustainability strategies
among firms. These factors can be both positive and negative for the growth Nike (Chaffey and
Ellis-Chadwick, 2019) .
Opportunities for growth for Nike
Through the pestle analysis Nike can evaluate various threats and opportunities by the
company. These factors are responsible for the growth and development of the company. On the
other hand some factors can result in the degradation of the companies capabilities thereby
effecting the earning capacity of Nike.
With the evaluation of Nike through pestle it is evaluated that company have opportunity
through the social external factor which relates to the increasing of the individual wealth in
developing countries. Through the development of wealth in the developing countries there are
opportunities of more wealth expenditure on the sports apparel, sports shoes and equipment
(Crittenden and Crittenden, 2015) .
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Also with the widespread use of mobile technology which is technological external factor
of Nike. This is also from one of the opportunities by the company. The mobile networking is
widely used by Nike to advertise for their products and also helps the company in informing
widespread number of people regarding the comping of any sports apparel, sports shoes and any
other fitness product. The advertising through the mobile network is most effective source of
advertising (Enquist and et.al., 2015) .
CONCLUSION
The report, concludes that there are two major factors in the economy which effects the
functioning of the company which are micro and macro economics. The company Nike is widely
affected by the macro economics factors which includes political, environmental, legal, social ,
technological and economic environment.
The report, concludes that Nike opted for the strategies which involves the segmentation,
targeting and positioning of the market customers and providing goods and services according to
their needs. The report states that the segmentation of the market helps the company Nike in the
evaluation of the different group of the persons according to their needs and also their age
groups.
Furthermore, report states that the branding of company Nike is important for the
increase in the sale of its products. Also the report includes that Nike uses innovative ideas and
strategies to compete from the its competitors in the global market.
Also the report, states that there are growth opportunities in the macro environment of
Nike by the increasing of individual wealth in the developing countries also the use of mobile
networking is a social advantage to the company. Nike makes its plans and policies to develop its
business in global market.
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REFERENCES
Books and journals
Ahmad, N. S. and et.al., 2016. The impact of social media content marketing (SMCM) towards
brand health.Procedia Economics and Finance.37. pp.331-336.
Baporikar, N., 2017. Business Excellence Strategies for SME Sustainability in India. In
Managerial Strategies and Solutions for Business Success in Asia(pp. 61-78). IGI Global.
Chaffey, D. and Ellis-Chadwick, F., 2019.Digital marketing. Pearson UK.
Chaffey, D. and Smith, P. R., 2017.Digital marketing excellence: planning, optimizing and
integrating online marketing. Taylor & Francis.
Crittenden, V. and Crittenden, W., 2015. Digital and social media marketing in business
education: Implications for the marketing curriculum.
Enquist, B. and et.al., 2015. The paradigm shift to Business Excellence 2.0.International Journal
of Quality and Service Sciences.7.(2/3). pp.321-333.
Hickman, C. R. and Silva, M. A., 2018. Creating excellence: Managing corporate culture,
strategy, and change in the new age. Routledge.
Schaltegger, S. and Burritt, R., 2018. Business cases and corporate engagement with
sustainability: Differentiating ethical motivations. Journal of Business Ethics.147(2).
pp.241-259.
Taneja, S. and et.al., 2016. Leaping innovation barriers to small business longevity. Journal of
Business Strategy. 37.(3). pp.44-51.
Zokaei, K. and et.al., 2016.Creating a lean and green business system: techniques for improving
profits and sustainability. Productivity Press.
ONLINE
Nike's competitive advantage. 2018. [online]. Available through .
<https://www.businessinsider.in/nikes-competitive-advantage-is-a-lot-like-amazons/
articleshow/64798603.cms>
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