International Marketing Report: Nike's Guinea Market Entry Strategy

This report provides a detailed analysis of Nike's international marketing strategy, specifically focusing on its potential expansion into the Guinea market with the introduction of 'Nike Roller Skates.' The report begins with an introduction to international marketing and the context of Nike's global presence. It then evaluates how drivers of globalization, such as international trade, telecommunication, and technological advancements, could facilitate Nike's expansion in Guinea. The report also examines the nature of the global environment, considering political, economic, social, and technological factors relevant to Nike's operations in Guinea. It identifies potential target markets within Guinea based on geographical, demographic, and psychographic segmentation. Furthermore, the report explores suitable global international strategies, recommending NikeID as a customer-centric approach. Finally, the report evaluates various international market entry strategies, concluding that franchising would be the most effective approach for Nike's growth in the Guinea market. The report also includes a review of Nike's financial ratios and their implications for the company's market position.

INTERNATIONAL
MARKETING

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1.Evaluation of how drivers of globalisation could help Nike, Inc. expand in the new market
................................................................................................................................................1
P2. Nature of global environment..........................................................................................2
P3. Target markets for Nike within Guinea............................................................................4
TASK 2............................................................................................................................................5
P4. Global international strategy for Nike..............................................................................5
P5. International market entry strategy that would help the firm to grow in Guinea market.5
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
International marketing refers to the practices of the principles of marketing in more than
one country (Papadopoulos and Heslop, 2014). This is the marketing on international scales
reconciling of commercial advantage of the international operational similarities, differences and
opportunities for achieving the overall objectives, The assignment below is based on Nike, Inc.
which is one of the biggest multinational corporations of the world headquartered near
Beaverton, Oregon. The firm deals with foot wears, equipments, apparels and accessories
globally. The assignment includes introduction of a new product of Nike, which is 'Nike Roller
Skates” and the firm is planning to sell this new product in Guinea, which is a country in West
Africa. The report undertakes a critical understanding of global environment's nature, major
trends, social and cultural conventions affecting global decisions and critically evaluated market
entry process of Nike,
TASK 1
P1.Evaluation of how drivers of globalisation could help Nike, Inc. expand in the new market
Nike, Inc. is a globally acknowledged firm having already established in various
countries in the past. With effective marketing strategies and top quality products, it has captured
the market of many countries successfully and drove out its competitors. Globalisation has its
impact on the world lately, and in Guinea, drivers of globalisation could help the firm to expand
itself in the country to sell its roller skates. These drivers of globalisation are mentioned below: International Trade:
The exchange of goods and services, and capital between countries can be termed as
international trade (Hakansson, 2015). These trades are very essential for accelerating a country's
polity, economy and society. Currently, Guinea is experiencing instability in their economy. The
economic performance of the country is very poor. This can be an advantage for Nike as it can
contribute towards stabilizing the economy of the country by increasing trade of its products and
services within the nation.
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 Telecommunication:
This refers to the transmit of messages, signals, signs, images, etc. through
electromagnetic systems like optical, radio, cellphones, etc. This is one of the major drivers of
globalisation and has made huge advancements lately. With such low income levels, country
experiences very low inclination towards telecommunication. Nike would contribute towards
improving this aspect in the country. Technological advancements:
Technology is witnessing advancements almost daily. In this era of cutting edge
competition, technology is the main weapon company used against each other to gain a
competitive edge in the market (Knight, 2015). Nike is known to have always inclined itself
towards using the latest technologies to produce effective products for its customers. With
current technological trends like Augmented Reality (AR) and Virtual Reality (VR), Nike can
help its customers to visualise their products before purchasing which would be very effective
factor to boost its sales in the country. This means people of Guinea could be familiar with such
advancements and that could reform the technological environment of the country.
P2. Nature of global environment
For any business organisation, it is necessary to analyse the nature of global environment
before expanding its business operations in any other country. Nike, Inc. must focus on these
factors before expanding its activities in Guinea. These factors are mentioned below. Political:
To the back end of a firm, the political factors of a country play an important part. The
changes in a company's production and its profitability heavily depends on the political scenario
of a country. These factors include the rules and regulations imposed by the government which,
if favourable for the firm, can be a prime factor success. The political scenario of Guinea has
always been violent but changes in the political scenario is seen after its first election in 2010.
But still, this environment is struggling for stability which can be a threat for Nike. This is
because changing political scenario might cause negative impact on foreign brands. This would
result in less sales.
 Economical:
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On economic scale, economy of a country decides the potential of brands to perform in
their nation (Samiee, Chabowski and Hult, 2015). Economically, Guinea is in a bad shape, which
is not profitable for the company to introduce its roller skates in the nation. GDP per capita of
Guinea is $1,083, which is way lower than what could be acceptable by the firm (A List of Third
World Countries. 2018). However, Nike could use this as an advantage and establish its market
in the country. Continuous trade could increase the economic level of the country and more
people would prefer the product offered by the firm.
 Social:
The social and cultural conventions of a nation is equally important for a firm if it needs
to acquire an international market. These factors help the firms to determine customers'
behaviours, the latest trends and their expectation from the firm (Skarmeas, Zeriti and Baltas,
2016). In Guinea, despite of being such a small country, the culture is enriching. There is a
presence of ethnic groups in the country. This can be an advantage for Nike to influence the
customers by providing roller skates that could contribute towards the inclination of the country's
youth into sports. Nike is world renowned. Establishing itself in a country like Guinea where the
youth is so attracted to sports can be an advantage for the firm. This would also help the firm to
address Athleisure, another widespread trend amongst the youth. Moreover, marketing strategies
of the firm can easily influence the behaviour of the people. Nike must include major African
from Africa in their advertisements which would emotionally connect the people from the brand. Technological:
On the technological out-front, Nike has always been a global leader and always has
worked towards modifying their technological strategies to effectively reach more customers. In
Guinea, there is a struggle amongst people to update themselves with the technological
advancements happening all around them (Hoppner and Griffith, 2015). In many parts of the
country, this struggle its seeing a positive impact. Nike can focus more on launching its roller
skates and sell them in Guinea markets. This would allow the firm to gain a wide range of
customers and it could easily expand its business in the country.
Nike Inc., PROFITABILITY RATIOS
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Particulars May 31, 2018 May 31, 2017
Return on Sales
Gross profit margin 43.84% 44.58%
Operating profit margin 12.21% 13.83%
Net profit margin 5.31% 12.34%
Return on Investment
Return on equity (ROE) 19.70% 34.17%
Return on assets (ROA) 8.58% 18.23%
Source: Based on data from Nike Inc. Annual Reports
According to the mentioned ratio, there has been a decline in the profit margin of Nike,
Inc. within one year. Nike must focus on implementing effective marketing campaigns and
should focus on staying away from controversies to reinstate its market position. To increase its
profitability it should keep producing high quality products for people of every age, which would
also help the firm to increase its customer base.
P3. Target markets for Nike within Guinea
Nike is a global brand with customers all around the world. The company has been able
to achieve massive success in its markets and is continue to penetrate new markets to expand its
business operations and satisfy new customers. The segmentation of its potential target markets
is mentioned below:
 Geographical: Guinea
 Demographical: Age- Above 15 and below 45; Income- Above 1000; Family size- 2-4
 Psycho-graphical: Belonging to any social class, with a sustainable lifestyle.
Out of these segments, the firm must target the customers with age between 15 to 40
years. Nike's a sports brand and the target market would constitute students, professionals and
business persons who usually adopt the culture to stay fit and maintain a healthy lifestyle
(Eteokleous, Leonidou and Katsikeas, 2016). Nike must focus its marketing strategies towards
this target market and should emphasize on influencing more customers of this market to adopt
fitness in their routines by developing personal and interactive advertisements that deal with
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people who want to pursue such lifestyle. This would help the company to boost up its sales and
increase its customer base in Guinea.
TASK 2
P4. Global international strategy for Nike
For any organisation, it is essential to implement effective strategies to capture global
markets. Each country and its markets are different and in it is very complex for companies to
satisfy all the customers available in these markets. Thus, the companies need to formulate plans
and modify their products according to their markets in different nations (Kazimoto, 2014).
For Nike, it is crucial to determine needs of their target markets and produce diversified
products to satisfy such needs. This is a very complex task as the demands and the needs of the
customers tend to vary from time to time. To simplify this, and to grow in global markets, the
one global international strategy most appropriate for Nike is NikeID. This strategy allows the
customers to customize their shoes according to their own preferences. This strategy would allow
the customers to choose and design the pattern, colour combinations, shoelaces, etc. according to
their culture and their preferences. This would allow the firm to regain their customers' trust.
And with more drifting of the population towards technology, this would be an interactive and
outstanding approach to reach the customers globally. Moreover, this would enhance its market
of roller skates in Guinea as well as in the world.
Moreover, this strategy would cut the cost of research some extent as the customers
would themselves produce the type of shoe or roller skates they'd want to use. This can be a great
advantage for the firm to stand out in the market and gain a competitive edge. Applying these
strategies would bring out new ideas straight from the market and they can produce segments
which surely be profitable for the company.
P5. International market entry strategy that would help the firm to grow in Guinea market
An organisation can set up an overseas market in a number of ways. Every market entry
has its imitations and thus, firms should adopt different entry strategies which suits best for the
kind of market they want to penetrate. There are many factors that determine the entry strategy
of a firm, such as, tariff rates, transportation costs, marketing costs, etc. An entry strategy must
be well implemented so that the sales in these markets would offset the cost incurred due to these
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factors. Some of these market entry strategies that could help the firm sell Nike Roller Skates are
described below: Direct Exporting: It refers to selling the firm's products directly into the market chosen.
Companies hire sales agents to represent them in their chosen market after establishing a
sales programme. If the hired agents are effective, the firms would be successful in
selling their products in these chosen market. Franchising: Another effective way to enter the markets is through franchising which
allows the firm to expand its business by granting an individual or a group the authority
to run a business by selling products or services under the firm's business format. Many
global companies have adopted this option to expand their business in global markets.
 Licensing: This is referred to transferring the rights from a company to other to use its
products and services. Usually firms who want to enter other markets provide these
rights to a firm which already has a large share in the chosen marketing. It can be both
for production as well as for marketing.
Out of these three options, the best strategy for Nike to enter Guinea is Franchising.
Because franchising suits best to the firms which are have already established themselves as a
brand. However, franchising has some benefits as well as some drawbacks which are as follows:
ADVANTAGES:
 The research work and the funding of outlets will be handled by the franchisees. This
would help the firm save the extra cost or acquisition of funds from banks.
 It can be a major source of additional income for Nike as the franchisees are bound to pay
royalties for the franchise. The franchises can each be customized effectively and easily according to the needs and
preferences of their target markets.
DISADVANTAGES:
 It takes a lot of efforts for a company to establish a franchises. It needs a heavy
investment of money as well as time for the development of these franchises. Also, there
are numerous legal documentation that are required to be developed, thus adding to the
cost.
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 If in case Nike comes in a disagreement with one or more of its franchisees in Guinea, the
legal action will be very costly for the firm, also it would disrupt its reputation in the
market because of such controversies.
 Franchisees are mostly independent, which means that the firm might not be able to
regulate the working of these outlets.
However, to enter the market, the company would modify its strategy to promote Nike
Roller Skates. Until now the firm was focusing on using online methods to market their products.
But, due to less advancements in Guinea, the company would focus on traditional methods such
as print and television media that help it to grab attention of maximum population of the country.
(Source: Custom Designed Nike Dunk Rollerskates + Swarvoski, 2018)
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Illustration 1: Custom Designed Nike Dunk Rollerskates + Swarvoski

CONCLUSION
Thus, from the above report, it is concluded that firms must concentrate on the nature of
the global environment. This requires a detailed analysis of the overall environmental factors of
the country, as well as its social and cultural conventions and current trends that influence the
population of that country. Proper segmentation and targeting must be done by companies to
select their target markets on whom they want to imply their market strategies. It is also
necessary for firms to develop global international strategies to enter successfully in foreign
markets. Largely, a critical evaluation must be done before implementing the market entry
strategies to enter a specific market.
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REFERENCES
Books and Journals
Eteokleous, P.P., Leonidou, L.C. and Katsikeas, C.S., 2016. Corporate social responsibility in
international marketing: review, assessment, and future research. International
Marketing Review. 33(4). pp.580-624.
Hakansson, H., 2015. Industrial Technological Development (Routledge Revivals): A Network
Approach. Routledge.
Hoppner, J.J. and Griffith, D.A., 2015. Looking back to move forward: a review of the evolution
of research in international marketing channels. Journal of Retailing. 91(4). pp.610-626.
Kazimoto, P., 2014. Assessment of challenges facing small and medium enterprises towards
International Marketing Standards: a Case Study of Arusha Region Tanzania.
Knight, J., 2015. Five myths about internationalization. International higher education, (62).
Papadopoulos, N. and Heslop, L.A., 2014. Product-country images: Impact and role in
international marketing. Routledge.
Samiee, S., Chabowski, B.R. and Hult, G.T.M., 2015. International relationship marketing:
Intellectual foundations and avenues for further research. Journal of International
Marketing. 23(4). pp.1-21.
Skarmeas, D., Zeriti, A. and Baltas, G., 2016. Relationship value: Drivers and outcomes in
international marketing channels.Journal of international marketing. 24(1). pp.22-40.
Online
A List of Third World Countries. 2018. [Online]. Available through:
<https://financesonline.com/a-list-of-third-world-countries-10-poorest-nations-with-
rising-economies/>.
Custom Designed Nike Dunk Rollerskates + Swarvoski. 2018. [Online]. Available through:
<https://poshmark.com/listing/Custom-Designed-Nike-Dunk-Rollerskates-Swarvoski-
58446aa9d14d7ba16b001423/>.
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