Analyzing Nike's Marketing Management: STP Strategy and New Products

This report analyzes Nike's marketing management strategies, focusing on the STP (Segmentation, Targeting, and Positioning) model and new product development. It highlights how Nike uses psychographic and demographic segmentation to identify its target audience, emphasizing a focus on middle and high-class consumers seeking comfort and a healthy lifestyle. The report details Nike's eight-step new product development strategy, from idea generation and screening to commercialization and post-launch review, emphasizing the use of technology in both product development and promotion. It also touches upon the importance of a strong customer base in a competitive global market and how Nike aims to achieve a unique market position through effective marketing tools and emotional connections with consumers. Desklib provides a platform for students to access similar solved assignments and past papers for further study.

Running Head: MARKETING MANAGMENT
Marketing management
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Introduction
Due to globalization, the world is facing uncertain dynamic changes related to all business
activities on the global platform and therefore it has become very challenging for every
organization to remain sustainable. In this situation, a strong customer base plays a very
important role not only in attaining the proper growth but also in offering a sustainable business
life to the organization (Kose, Otrok & Whiteman, 2008). Due to heavy competition, every
organization is trying to attain possible maximum share that it can in order to gain a unique place
in the business market especially for those companies which are related to sports products such
as Nike.
STP strategy used by Nike
Segmentation
This is one of the important steps used by Nike organization in business strategy to segregate the
mass market into different crystal with similar wants and demands. The purpose of carrying out
this step is to get detailed information related to the potential customer in order to attain a
competitive advantage over other organization (Khan, 2013). This also helps the organization to
offer a better service to potential customers. Usually, Nike organization uses two types of pattern
in segmentation to achieve its target audience, one is Psychographic and other is demographic. In
Psychographic, Nike organization segregates the mass market on the base of lifestyle, their social
and physical presence. In addition, Nike organization also tries to trigger emotional appeal of the
customer towards their brand. While in demographics, this organization segregate the open
market on the base of age, family size, income level and status (Jun, 2011). They mainly focus
on middle and high class section of the society who are looking for comfort with a healthy life.
Targeting
In this step, Nike organization selects its target audience on the base of criteria in order to
evaluate the business market. These criteria are based on some particular factors like segment
size, structural attractiveness and objective, and resources of the organization because a business
decision is totally based on the fulfillment of these market change factors.

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Positioning
This step is considered as the final stage of formulating the final strategic plan along with the
final objective. In this situation, Nike organization starts developing such a promotional program
by which they will be able to form a strong presence in the minds of potential customer with the
help of effective marketing tools like advertisement, teaser videos, promotion through social
media (Jia et al., 2015). In addition, this organization displays an emotional connection between
their product and the community in which they are seeing their potential buyers.
Example – Adidas organization in America usually target those customers which are somehow
related to healthy lifestyle despite their age group. In addition, Adidas organization makes use of
digital marketing tool as the main medium of communicating their promotional message in order
to create a unique image in the minds of potential American buyers.
Managing product and steps used in new development product by Nike
In order to manage products, Nike organization makes use of product service management in
which they utilize a combined effort of technology right from designing to promote their product
(Zott & Amit, 2008). In this situation, technology is first utilized in developing the product and
then for the promotion of the product through their websites, social media pages, and
advertisements. Nike made use of their website to test their product credibility by displaying it to
small sample target which offers them an idea about their current position of their product in the
business market in which they are going to enter (Nike, 2019). In addition, Nike makes use of
this product service management system to offer protection to their products with the help of
paper.
Usually, Nike use eight steps new product development strategy in order to hit the target
business section on a global platform which are
Generating – In this step, Nike organization do a SWOT analysis of their internal and external
business environment along with current market trend. In addition, organization is trying to gain
cost competency over other organization operating in the same market.

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Screening the idea – In this step, Nike organization tries to analysis the market reach of their
idea along with overall cost efficiency. Also, the organization is trying to understand the impact
of this idea on the potential customer mentally (Hoyer et al., 2010).
Testing the concept – In this step, Nike organization tries to test the reality of the concept in
order to find out whether the potential customer is able to understand the need and demand
associated with the product.
Business analytic – In this step, Nike organization tries to monitor the internal as well as an
external operational process on the base of the matrix such as average time taken in completing
one step, percentage of sale, value of the product and so on.
Beta/ Marketability test – In this step, Nike organization tries to gain the final information
related to the improvement need in their product so that it can stand on the customers’
expectations (Hsu & Fang, 2009).
Technicalities and product development - In this step, all three department manufacturing,
marketing, and finance of Nike organization formulate strategic plan according to their need.
Commercialize - In this step, Product will be available in the market and Nike ensures that
continuous flow of product is going on and technical teams are monitoring progress associated
with the process. In addition, advertisement must be revised in order to offer seal proof facility to
competition.
Post lunch review and pricing- In this step, Nike organization will make use of continuous
improvement technique to provide a competitive advantage to their product and ensure that
sustainable profit can be achieved from this product.
Conclusion
Spots market is considered as one of the greatest business markets in the world due to its
continued growth and development on the international platform. This situation is giving rise to
competition in the market because many small, as well as big companies, have entered the
market. In order to complete this challenge, Nike organization make use of STP strategy to find

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out their best target which can offer them strong customer base which directly impact the market
share of the organization by forming a unique place.

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References
Hoyer, W. D., Chandy, R., Dorotic, M., Krafft, M., & Singh, S. S. (2010). Consumer
cocreation in new product development. Journal of service research, 13(3), 283-296.
Hsu, Y. H., & Fang, W. (2009). Intellectual capital and new product development
performance: The mediating role of organizational learning capability. Technological
Forecasting and Social Change, 76(5), 664-677.
Jia, Y., Zhang, Z., Tan, X., & Liu, X. (2015). Asymmetric active cooperation strategy in
spectrum sharing game with imperfect information. International Journal of Communication
Systems, 28(3), 414-425.
Jun, S. (2011). Technology marketing using PCA, SOM, and STP strategy
modeling. International Journal of Computer Science Issues (IJCSI), 8(1), 87.
Khan, T. (2013). STP strategy for new product launch-a work in progress. International
Journal of Business and Management Invention, 2(3), 56-65.
Kose, M. A., Otrok, C., & Whiteman, C. H. (2008). Understanding the evolution of world
business cycles. Journal of international Economics, 75(1), 110-130.
Nike. (2019) Product service management [online]. Retrieved from:
https://nikemarketingproject.weebly.com/product-service-management.html
Zott, C., & Amit, R. (2008). The fit between product market strategy and business model:
implications for firm performance. Strategic management journal, 29(1), 1-26.