Analyzing Nike's Marketing Fundamentals: STP and Marketing Mix

This report provides an analysis of Nike's marketing fundamentals, focusing on STP (Segmentation, Targeting, and Positioning) and the marketing mix (Product, Price, Place, Promotion). It examines how Nike segments its market based on psychographic and demographic factors, targets niche markets, and positions itself as an aspirational and innovative brand. The report also delves into Nike's pricing strategy, distribution channels, and product diversification. Furthermore, it considers the impact of internal and external factors, including the recent global pandemic, on Nike's business environment and overall marketing strategy. The analysis highlights how Nike leverages its marketing mix to maintain a competitive market position and achieve its business objectives, emphasizing value-based and premium pricing strategies, diverse distribution channels, and high-quality product offerings. Desklib provides access to similar reports and solved assignments for students.

MARKETING
FUNDAMENTALS

Table of Contents
INTRODUCTION....................................................................................................................3
TASK.........................................................................................................................................3
Marketing...............................................................................................................................3
STP Analysis..........................................................................................................................4
Marketing mix........................................................................................................................6
Internal and external analysis.................................................................................................7
CONCLUSION.......................................................................................................................11
REFERENCES.......................................................................................................................12

INTRODUCTION
Marketing is the business practice which is performed by an organization to promote
the products and services organization. The major focus of marketing activities is on
determining ideal customers, and attracting them through which an organization can generate
higher revenues and maximize business profitability (Marketing, 2021). The activities of
marketing involve- advertising, selling, promoting and delivering products and services of
consumers through which consumer demands can be met and this can also support
organization in meeting their objectives.
The activities of marketing focus on promoting and selling the products and services
to consumers through which they can be targeted. Service marketing is the technique which
supports in growth of service economy. The principles of marketing in service industry are
followed, in order to- increase the disposable income, increase specialization, change
lifestyle, promote professional excellence, and to increase governmental activities. The
marketing strategies of services industries focuses on delivering quality customer services to
consumers at competitive prices (Strategic Marketing Management and Tactics in the Service
Industry. (2017). United States: IGI Global.). Business environment comprises of internal
and external factors which can be dynamic an uncertain in nature and such factors are
responsible to create an inmost on the business operations.
Nike, an American multinational business, was founded on January 25, 1964, by Phil
Knight and Bill Bowerman. The company offers shoes, clothes, equipment, accessories, and
other products in addition to offering other services. Nike, Inc. is based in Beaverton,
Oregon, and offers products under the Nike, Converse, and Jordan brands (Nike website,
2021). Nike is one of the firms that uses third-world nations to manufacture their goods. Such
strategies contribute in the enhancement of competitiveness in capitalist systems. Nike is a
clothing, accessory, and sporting goods corporation with a diverse product line. The revenues
of Nike were $12.3 billion which were up 96% in comparison with prior year and increased
21% to the fourth quarter of 2019 (Nike. Inc. report Fiscal, 2021). The direct sales increased
by 73% to $4.5billion. In year 2021, Nike returned $2,3billion to their shareholders.
This project will define the fundamentals of marketing. The project will also analyse
the internal and external factor of business and how pandemic have created an impact on the
business. Recently, the global pandemic is one of the major concerns which has been
influencing internal and external business environment which further led to disruptions in

business. In order to understand the disruptions caused due to the change in business
environment, this report will reflect extensive research through which such data can be
analysed.
TASK
Marketing
Marketing refers to the processes, methods, and institutions used to produce,
distribute, communicate, and exchange the company's valuable products and services with its
customers. The principles and fundamentals of marketing is based on various factors, which
are- price, place, product, promotion and some other factors- people, physical evidence and
processes (Marketing fundamentals, 2019). These fundamentals of marketing are responsible
to create an impact on the business operations and affects business profitability.
The marketing process assists the company in enhancing efficiency and profitability
while also expanding the amount of sales activity. According to Martin Callingham,
“Market research is an essential activity for an organization and there are different
approaches to perform right research. Market intelligence helps in evaluating perspective of
consumers where through effective market research, an organization can identify downfalls
and setbacks while conducting the research (Callingham, M. (2004). Market Intelligence:
How and Why Organizations Use Market Research. United Kingdom: Kogan Page.). The
marketing method assists a company in growing sales and building brand value.
Customer relationship management is a strategic approach which helps processing
customer information through which an organization can develop string customer
relationship. The strategies of CRM focus on integrations of supply chain functions in order
to achieve greater efficiency by delivering and improving customer value (Diverse Methods
in Customer Relationship Marketing and Management. (2018). United States: IGI Global.).
Marketing involves strategies and tactics which a brand can use in order to promote their
products and services to consumers.
STP Analysis
STP is a marketing approach which stands for segmentation, targeting and
positioning. This framework is a systematic and strategic process which is followed in
modern marketing which is helpful in streamlining the communication practices of
organisation. The STP model is useful for establishing marketing communications strategies
as it supports marketers to value propositions and then construct and distribute personalised
and appropriate messages to communicate with the segmented audiences. The three phases in

this approach are market segmentation, market targeting and product positioning (STP model,
2021). The process of STP puts emphasis on commercial effectiveness, categorising and
choosing the most valuable market segment for organization and supporting organization in
developing effective marketing strategies which can be helpful in targeting the selected
segment and positioning the product effectively through which consumer demands can be
met. In context of Nike, a detailed STP analysis is discussed underneath:
Segmentation- Market segmentation is the approach of splitting the market in two
different groups on the basis of similar needs, demands and preferences. The purpose of
segmentation is to get a better knowledge of the customer, gain a competitive advantage, and
be better equipped to meet the customer's needs and desires. The process of establishing who
your target market is or to whom you are selling is known as market segmentation. Audiences
are often classified into the following groups: Geographic (age, gender, ethnicity, family life)
and Demographic (age, gender, ethnicity, family life) factors are also important (World
region, country, city, climate), Psychographic information (lifestyle, personality, hobbies,
interests, and views), Sought Benefits, Socioeconomic (income, education, and employment),
and Behavioural (buy frequency and consumer loyalty). In context of Nike, the company
segments the market on the basis of different factors, which are- psychographic segment
where they focus on lifestyle, personality and social factors (Baines, P and et.al., 2021). In
this segment the brand emphasis on population of all age through which they can meet tehri
objectives. Another segment which is focused by Nike is demographic segment, where the
company targets middle and high segment customers of all age group. Therefore, the pricing
strategy of Nike is based on such segment through which their products are more accessible
an affordable to these customer segments.
Targeting- Following segmentation, the company must decide on a targeting strategy.
Companies must choose which market sectors to concentrate on and incorporate them in their
long-term business plans. This is where you pick the categories that best meet your
company's objectives, and then you may define your target market. Market analysis is based
on size, reachability, measurability, and behaviour (Brand positioning of Nike, 2018). In
context of Nike, the brand operates and targets niche market which allows them to offer
specialised and one-of-a-kind things products and services which can support in meeting their
high performance and style demands of their consumers. Their branding also takes into
account psychological difficulties, which ties along with our previous discussion of emotional
branding. Their commitment to sustainability, forward-thinking innovation, and

personalisation is daring and forward-thinking. The market segment selected by Nike is based
on size and growth, structural attractiveness, objectives and resources for meeting their
corporate strategy, sales and marketing initiatives of the brand.
Positioning- In accordance to Hooley, Rudd, Lee, Nicoulaud, “competitive
positioning is the statement which defines target market and differential advantage. The
positioning strategy is developed in order to accomplish objectives which are created under
the core strategy which also supports in gaining market share”
(Hooley, G. J., Rudd, J., Lee, N., Nicoulaud, B., Hooley, P. G. (2020). Marketing Strategy
and Competitive Positioning, 7th Edition. United Kingdom: Pearson Education Limited.).
The last phase of STP planning process is Positioning which is a significant framework for
developing marketing strategies and defining goals. After establishing which market
segments, an organization focuses on targeting where marketers must develop a marketing
plan of action which will define the target segment and marketing strategies. Before creating
a marketing strategy or programme, it's critical to have a complete grasp of the key target
segment's purchasing habits, likes, spending patterns, purchase drivers, media preferences,
and so on. In order to target market groups, the marketing management of an organization
creates a consumer persona for their consumers. For its worldwide target population, Nike
views itself as an aspirational and forward-thinking brand (STP of Nike, 2021). Nike has
successfully converted its brand from one that focuses on products to one that focuses on
attitudes, making it universal in nature and offering something for everyone. Nike is a
visionary in the sports equipment and apparel industry and the brand is established on
innovation. The brand has become icons as a result of their excellent branding and creative
content. Nike is able to tailor its strategy to each region where it operates, allowing it to
market to a wide range of cultures and customers.
Marketing mix
Marketing mix is a marketing strategy which focuses on various factors of marketing
which needs to be observed by an organisation. The four P’s are simple categorization
scheme which are- product, price, placement, and promotion. Marketing mix is a strategy of a
company which is a set of activities or tactics that are followed for promoting, selling and
advertising its brand or product in the industry.
In 1960, the professor and author of marketing E. Jerome McCarthy proposed the
concepts of four Ps which can be used for developing an effective marketing plan (Marketing

mix, 2020). This strategy assists businesses in making strategic decisions while introducing
new products or replacing outdated ones. Principles of marketing are helpful in creating
vibrant and interactive communities of consumers who can make products and brands an
integral part of daily lives of consumers. Marketing mix or principles supports organization in
creating value through innovative customer connection and engagement
(Kotler, P., He, H., Harris, L. C., Armstrong, G. (2019). Principles of Marketing. United
Kingdom: Pearson.). In context of Nike, the marketing strategy of brand promotes their
product range which can support in establishing a competitive market position and achieving
its business objectives. With the help of marketing mix, the profitability and growth of Nike's
sports footwear, clothing and equipment business can be evaluated.
A detailed marketing mix strategy of Nike is discussed below:
Price- Nike, a global leader in sportswear and equipment, employs both a value-based
and premium pricing strategy to boost sales and profits. Nike figures out how much a
customer is willing to spend for a product. The pricing is geared for clients in the top crust of
society. This strategy enables the company to cater to a certain niche while yet maintaining a
loyal customer base prepared to pay a premium for its value-added services. The corporation
adjusts its price ranges as a result of these modifications. Nike uses price tactics to maximise
revenues while exhibiting high value in promoting its products and brand in this part of the
marketing mix.
Place- Nike makes its large product line available to its customers through retailers,
internet sites and Nike exclusive offline locations. Retailers are the most essential distribution
channels for the company's products. Nike has manufacturing operations in practically every
nation in order to reduce transport costs and improve distribution efficiency. Nike sells their
items via e-commerce platforms such as Flipkart and Amazon. As a consequence, Nike can
show off nearly all of its products to millions of people over the internet. Nike stores may be
found in practically every city and neighbourhood around the country which are meeting the
demands of local clients.
Product- Nike is primarily a maker of athletic goods and equipment. Nike not only
makes a broad variety of items, but also guarantees that they are of high quality. The firm
creates one-of-a-kind products for each activity, guaranteeing that sportsmen are at ease
while wearing them (Basil, D. Z., 2019). Nike has a diverse product line that includes shoes,
clothes, and sporting equipment. Nike's marketing approach places a premium on high-

quality and diverse items for sports enthusiasts. It is the industry leader in sportswear, with
athletic shoe sales accounting for the majority of its income. It has a wide range of items,
including specialty shoes for a wide range of sports. Air Jordan, Hurley, and Converse, to
mention a few, are among the companies that provide these items. Nike increases its product
mix based on this component of the marketing mix to meet the expectations of its target
consumers and market segments.
Promotion- Advertising, personal selling, direct marketing, sales promotions, and
public relations are all part of Nike's marketing activities. Nike is well-known for its cutting-
edge branding and marketing techniques. This is due to the fact that Nike's promotional
strategy in its marketing mix is extremely detailed, aggressive and employs all marketing
tools and media. Nike has a large online presence with campaigns on YouTube,
Instagram and Facebook reaching millions of people (Fahy, J. and Jobber, D., 2019). Nike
employs athletes as brand ambassadors, using a variety of advertising and promotional tactics
to deliver a strong impact on buyers. Nike also uses sponsorship opportunities to promote its
brand, such as supporting marathons and major sporting events like the NBA basketball
tournament. Nike invests heavily to promote their presence on the jerseys of many different
football teams.
Internal and external analysis
Business environment is the composition of internal and extremal factors which are
responsible to create an impact on the decision making, strategy, functions and profitability
of business. An external analysis of business environment focuses on environment which is
outside of the organization and at wider context which can affect business operations.
Whereas, internal analysis is the approach of understanding strengthen and weakness of
business which can bring opportunities and make business face threats. Through analysing
the internal factors, an organization can evaluate their resources, assets, competencies,
capabilities and sources of their competitive advantage.
Internal- SWOT analysis
SWOT analysis is a framework for determining an organization's competitive position
as well as supporting strategic planning. SWOT analysis is the approach which is used to
evaluate existing and future potential that can define strengths, weakness, opportunities and
threats (Jobber, D. and Ellis-Chadwick, F., 2019). SWOT analysis is a strategy for identifying
key strengths, weaknesses, opportunities and threats from internal factors to an organization

which can support business in analysing on the basis of factual data through which more new
innovative ideas can be formed.
In the case of Nike, the following is a descriptive SWOT analysis:
STRENGTHS
 Brand awareness- Nike is a well-
known and well-recognized brand,
which adds to the success of the firm
(Klever, S., Visser, M. and Engelfriet,
A., 2021). The company has built itself a
strong position in the sector, accounting
for approximately 31% of the global
footwear market.
 Strong customer base- As Nike
competes in a global market, the brand
is able to deliver high-quality products,
which has proven to be a strength for the
company in terms of attracting and
retaining customers.
 Sustainability centred- By employing
sustainable materials and offering
sustainability in their products, Nike has
attracted a bigger number of customers
and created more income. Such factors
add to the brand's strength.
WEAKNESS
 Competitive market- Nike competes in
a very competitive field, with companies
like Adidas and Rebook battling for
market share and diverting competitors'
attention. The company may experience
a loss as a result of fierce competition,
which is one of the factors contributing
to the brand's weakness.
 Lack of diversity- Due to a lack of
diversity in its product range and
portfolio, this has been a disadvantage
for Nike. Nike offers shoes, but other
companies sell a variety of items, which
has a negative impact on the company's
customers and revenue.
 Lawsuits and allegations- Nike has
been accused of sexual harassment,
workplace discrimination, a lack of
employee safety, and other issues
(Moscato, P. and De Vries, N. J. eds.,
2019). These legal charges have led in a
surge in litigation and unfavourable
disputes, both of which might harm
Nike's brand image.
OPPORTUNITIES
 Growing market- Nike should focus on
expanding their business in international
markets, as this will help them to
expand their customer base, which will
THREATS
 High competition- Nike competes
against other brands such as Adidas,
Skechers, and others in an intensely
competitive economic atmosphere,

open up new business opportunities and
increase their long-term sustainability
and profitability. This sort of business
expansion in a growing global market
may also help a company's brand image
inside the industry.
 Innovation- Product innovation, current
technology, and the use of sustainable
materials might all help ensure optimal
product development, allowing the
company to generate more money and
maximise profits (Pride, W. M. and
Ferrell, O. C., 2021). Product innovation
has the potential to open doors for Nike,
as it will help to peak customer interest
while also supporting Nike in
maximising revenues.
 Better working conditions- In order to
recruit a bigger number of people, Nike
should focus on improving labour
conditions. Job chances would improve
as a result of such factors, which would
help to build the organization's brand
image.
which can have an impact on the
company's profitability and product
sales.
 Technological advancement- Rapid
technological advancements have put
the company's competitive position and
commercial activities in jeopardy. Nike
may face more competition as a result of
technological advancements.
 Patents and trademarks- As it
distributes a wide selection of footwear,
the company has been involved in
intellectual property lawsuits against
other firms in the same industry. For
their product line, Nike has filed a patent
infringement case against Adidas and
MSCHF.
 Pandemic- The pandemic had an
influence on many sports and outdoor
activities, resulting in a decline in
footwear and clothing sales. Such global
pandemic has been a threat for Nike as
this as created a negative impact om the
profitability of business.
External- PESTEL analysis
PESTEL analysis is a microenvironmental framework that facilitates in the scanning
of components that might have an influence on an organization's operations (RM, M. V. and
Berry, M., 2018). The marketing principles concepts serve in the tracking of external factors
that have an influence on the company. PESTEL study can reveal political, economic, social,
technological, environmental, and legal aspects, among other things.
The following is the comprehensive PESTEL analysis of Nike:

Political factors- Nike works on a global scale, and a variety of political factors
might have an influence on its operations. Nike's operations and profits are impacted by
political factors such as import tariffs, labour laws, and trade regulations. Furthermore, a
change in government as well as an increase in corruption may have a negative influence on
Nike's operations.
Economic factors- As a result of the recession, customers' purchasing power may be
diminished, and they may opt for less expensive alternatives, making it difficult for Nike to
continue. Nike can sell its products in new emerging markets, increasing their attractiveness
and giving them additional opportunities to expand their market share (Schroeders, S. and
Visser, M., 2019). The company's supply chain and production facilities are also being
impeded by its rapid development into new locations, which is driving up labour prices.
Social factors- Social factors such as social issues and concerns are responsible to
influence Nike's athletic shoes, gear and equipment. Nike has made a concerted effort to
expose its questionable production practises. On social media, Nike have been addressed for
their production processes and practices. Nike has the ability to reach out to customers in
emerging markets where individual income is increasing. Through marketing operations,
Nike can manufacture safer product range and promote and advertise the safety of their sports
shoes, equipment and apparel. Nike can also follow new product development (NPD)
techniques in order to meet consumer demands for leisure products which would help with
product development and commercial growth.
Technological factors- Nike spends money on research and development for its
products and services, which helps the corporation meet customer expectations by bringing
new products to market. Nike invests consistently in superior research and development to
maintain enhanced product quality and quality for their customers (Visser, M. and Kloos, M.,
2021). With revolutionary technology and equipment, the brand works on biomechanics,
industrial design, engineering, exercise philosophy, and other activities.
Environmental factors- Nike is dedicated to using environmentally friendly practises
in its production, product creation, and research & development. Nike's business and
profitability might be jeopardised if government climate restrictions, such as the prohibition
on leather and deforestation, change.
Legal factors- Improved labour laws in developing countries pose a concern since
they boost labour costs in areas where many of Nike's production facilities are situated. This

external component also allows the company to follow stricter labour and employment rules.
Nike has the chance to improve its health and safety procedures in order to meet a variety of
requirements. Nike is also facing legal action as a result of their unethical marketing
practises. Fake discounts are a major problem when it comes to this topic. These aspects have
the ability to tarnish Nike's reputation throughout the world.
CONCLUSION
From the above report, it can be concluded that marketing is the activity which is used
by an organization to promote the products and services which are offered by them. The
process of establishing, organising, controlling, and implementing marketing strategies and
programmes in order to achieve a company's marketing and business objectives is known as
marketing management. SWOT analysis is a framework for strategic planning that identifies
strengths and opportunities while also performing corrective actions to eliminate weaknesses
and threats. It can be understood that global pandemic is responsible to create uncertain
market condition which is responsible to hamper the operations, profit margin, sustainability
and growth of business. Due to the global pandemic, this has hampered various internal and
external factors of business which has affected the ability of an organization to meet their
profit margin and generate revenues. Therefore, the modern marketing approach, such as STP
helps a organization in segmenting the market according to the similarities through which a
business can selected the most suitable and desirable target group through which they can
effectively position their product at right time to right customer which will be helpful in
meeting consumer demand and meeting organizational revenues.

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