Professional Documents
Culture Documents
Date of Submission:
I certify that I have read and understood the Institute Rules in respect of
Student Academic Misconduct policy.
Signature ..
Date
Unit Title: Strategic Marketing Management
C
Assignment Title & Learning Outcomes Covered:
Number: 01
Y/602/2065 Outcome1: Understand the principles of
strategic marketing management
Assessment Criteria
Outcome2: Understand the tools used to
Covered:
develop a strategic marketing strategy
1.1, 1.2, 1.3,
2.1, 2.2, 2.3, Outcome3: Be able to use strategic marketing
techniques
3.1, 3.2, 3.3,
Outcome4: Be able to respond to changes in the
4.1, 4.2, 4.3
marketing environment
heck carefully the hand in date and the instructions given with the
assignment. Late submissions will not be accepted.
Ensure that you give yourself enough time to complete the assignment by
the due date.
Dont leave things to the last minute excuses of this nature will not be
accepted for failure to hand in the work on time?
You must take responsibility for managing your own time effectively.
If you are unable to hand in your assignment on time and have valid reasons
such as illness, you may apply (in writing) for an extension.
Failure to achieve at least a PASS grade will result in a REFERRAL grade being
given.
Non-submission of work without valid reasons will lead to an automatic
REFERRAL. You will then be asked to complete an alternative assignment on
next semester.
Take great care that if you use other peoples work or ideas in your
assignment, you properly reference them, using the HARVARD referencing
system, in you text and any bibliography, otherwise you may be guilty of
plagiarism.
If you are caught plagiarizing you could have your grade reduced to A
REFERRAL or at worst you could be excluded from the course.
The assignment should be uploaded into the LMS on or before the due date.
ALL TASKS ARE RELATED TO THE CASE STUDY
Case Study
Nike hit the ground running in 1962. Originally known as Blue Ribbon Sports, the
company focused on providing high-quality running shoes designed for athletes by
athletes. Founder Philip Knight believed high-tech shoes for runners could be
manufactured at competitive prices if imported from abroad. Nikes commitment to
designing innovative footwear for serious athletes helped it build a cult following
among U.S. consumers.
Runner Steve Prefontaine, the first spokesperson, had an irreverent attitude that
matched the companys spirit. In 1985, Nike signed up then-rookie guard Michael
Jordan as a spokesperson. Jordan was still an up-and comer, but he personified
superior performance. Nikes bet paid offthe Air Jordan line of basketball shoes
flew off the shelves and revenues hit over $100 million in the first year alone. As
one reporter stated, Few marketers have so reliably been able to identify and sign
athletes who transcend their sports to such great effect.
In 1988, Nike aired the first ads in its $20 million Just Do It ad campaign. The
campaign, which ultimately featured 12 TV spots in all, subtly challenged a
generation of athletic enthusiasts to chase their goals. It was a natural
manifestation of Nikes attitude of self-empowerment through sports.
As Nike began expanding overseas to Europe, it found that its U.S.-style ads were
seen as too aggressive.
Nike focused its efforts on international markets, especially China, during the 2008
Summer Olympics in Beijing. Although Nikes rival, Adidas, was the official sponsor
of the Olympic Games, Nike received special permission from the International
Olympic Committee to run Nike ads featuring Olympic athletes during the games.
In addition, Nike sponsored several teams and athletes, including most of the
Chinese teams and 11 of the 12 high-profile members on the United States mens
basketball teams. That year, sales in the Asian region grew 15 percent to $3.3
billion and Nikes international divisions grew to 53 percent of the companys
revenue. Some believed Nikes marketing strategy during the Olympics was more
effective than Adidass Olympic sponsorship.
In addition to expanding the brand overseas, Nike successfully entered new athletic
footwear, apparel, and equipment product categories by using endorsements from
high-profile athletes and consumer outreach programs.
The Nike Golf brand, endorsed by Tiger Woods, has changed the way professional
golfers dress. Tigers powerful influence on the game and his Nike emblazoned style
have turned the greens at the majors into golfs fashion runway. In addition, Nike
has used the superstar to help build its relationship with consumers. In 2009, it
launched a Tiger Web Talkback session at nikegolf.com, where fans could ask
questions and hear Tiger talk about golf. The session was part of a nationwide Nike
Golf consumer experience day, which included equipment demos, long-drive
contests, and in-store specials.
In tennis, Nike has aligned with Maria Sharapova, Roger Federer, and Rafael Nadal
to push its line of tennis clothing and gear. Some called the famous 2008
Wimbledon match between Roger Federer and Rafael Nadalboth dressed in
swooshes from head to toea five-hour Nike commercial valued at $10.6 million.
Nike teamed up with seven-time Tour de France champion Lance Armstrong not only
to sell Nike products but also to help Armstrongs LIVESTRONG campaign. Nike
designed, manufactured, and sold over 70 million yellow LIVESTRONG bracelets,
netting $80 million for the Lance Armstrong Foundation. It also featured Armstrongs
message of survival, willpower, and giving in a series of Nike commercials.
To promote its line of basketball shoes and apparel, Nike continues to feature
basketball superstars such as Kobe Bryant and LeBron James. In addition, it formed
a partnership with Foot Locker to create a new chain of stores, House of Hoops by
Foot Locker, which offers only basketball products by Nike brands such as Converse
and Jordan.
Recently, Nikes lead in the running category has grown to 60 percent market share
thanks to its exclusive partnership with Apple. Nike (Plus) technology includes a
sensor that runners put into their running shoes and a receiver, which fits into an
iPod, iTouch, or iPhone. When the athlete goes for a run or hits the gym, the receiver
captures his or her mileage, calories burned, and pace and stores it until the
information is downloaded. Nike is now considered the worlds largest running club.
In 2008 and 2009, Nike hosted the Human Race 10K, the largest and only global
virtual race in the world. The event, designed to celebrate running, drew 780,000
participants in 2008 and surpassed that number in 2009. To participate, runners
register online, gear up with Nike technology, and hit the road on race day, running
any 10K route they choose at any time during the day.
Once the data is downloaded from the Nike receiver, each runners official time is
posted and can be compared to the times of runners from around the world. Like
many companies, Nike is trying to make its company and products more eco-
friendly. However, unlike many companies, Nike does not promote its efforts. One
brand consultant explained, Nike has always been about winning. How is
sustainability relevant to its brand? Nike executives agree that promoting an eco-
friendly message would distract from its slick high-tech image, so efforts like
recycling old shoes into new shoes are kept quiet.
Today, Nike dominates the athletic footwear market with a 31 percent market share
globally and a 50 percent market share in the United States. Swooshes abound on
everything from wristwatches to skateboards to swimming caps. The firms long-
term strategy focuses on basketball, running, football, womens fitness, mens
training, and sports culture. As a result of its successful expansion across
geographic markets and product categories, Nike is the top athletic apparel and
footwear manufacturer in the world, with corporate fiscal 2009 revenues exceeding
$19 billion.
Assume that you are employed as a Marketing Consultant specializing in the global
athletic footwear and apparel market and have been hired by Nike. With reference
to the case study and additional background information, prepare a report to the
Nike management addressing the following tasks.
Task 01
1.1As the marketing consultant hired by Nike, critically evaluate the role of
strategic marketing in Nike. (LO 1.1)
1.2Explain the process involved in strategic marketing in Nike (LO 1.2)
1.3Prepare a comprehensive report to present for the next board meeting
evaluating the links between Nikes marketing strategies and corporate
strategy. (LO 1.3)
Task 02
Task 03
3.1As the marketing consultant, advise Nikes management how well Nike can
ascertain growth opportunities in the athletic ware market of a new
geographical location (where Nike has not yet exploited business
opportunities) by using appropriate marketing techniques. ( LO 3.1)
3.2Using a relevant theoretical framework, plan how Nike can use marketing
strategy options available in the athletic ware market to maximize growth
and profitability in the new location proposed in task 3.1. ( LO 3.2)
3.3Create appropriate strategic marketing objectives for Nike in the new
geographic market proposed in task 3.1 (LO 3.3)
Task 04
2.2 Discuss the links between strategic Task AC 2.2: Learners need to
positioning and marketing tactics understand that day to day tactical
decisions have to be made in order to
implement strategic plans. In their
discussion, they need to provide examples
of how tactics are related to strategic
positioning decisions by taking the given
organizations tactical and strategic
decisions into consideration.
8
2.3 Analyse the merits of relationship Task AC 2.3: Learners need to show the
marketing in a given strategic marketing understanding of the nature of
strategy relationship marketing. They need to
discuss the place of relationship marketing
in a strategic marketing plan and then
analyse the merits of using this marketing
technique.
9
example current and past political and
economic statistics, data from the
organisation and markets ect.
4.2 conduct an internal analysis to identify Task AC 4.2: Learners are supposed to
current strengths and weaknesses in a closely screen at the given organisation
marketing strategy and the strengths and weaknesses in the
marketing strategy should be identified.
(The strengths and weaknesses can be
focused in the areas such as focus of
marketing objectives, links to corporate
strategy, speed of new product
developments, ability to customise, ability
to handle information to gain competitive
advantage;)
4.3 propose strategic marketing responses Task AC 4.3: It is required to identify key
to key emerging themes in a marketing emerging themes affecting the given
strategy organisation. Learners should show how
the internal strengths and weaknesses can
be exploited against external opportunities
and threats.
Contents
Executive Summary 01
Mission and Vision Statement 01
1.0 Task 1 - Role of Strategic Marketing in Nike 03
Literature review on marketing 03
Concepts of Marketing 03
1.1. Evaluation of the role of strategic marketing at Nike
06
Branding Tactics
06
Segmentations
06
10
Targeting and positioning
07
1.2 Process involved in Strategic Marketing in Nike
08
Nikes Strategic Markeing Planning Process in General
08
Kotler and Kellers Marketing Plan
09
Malcolm MacDonalds Marketing Plan
09
Evaluating the process involved in Strategic marketing planning of
Nike PESTLE 10
1.3 Links between strategic marketing and corporate strategy
11
Literature review on corporate strategy
12
Nikes Organizational Structure
12
2.0 Task 2 - Value of Models used in strategic planning process of Nike.
13
2.1 Importance of models in the strategic planning process
13
Importance of Using Swot Model
14
Importance of Ansoff Matrix
15
Product life cycle of Nike
15
2.2 Links between strategic positioning and marketing tactics.
16
Literature review of strategic positioning and marketing tactics.
16
Nikes current position/ What is future positioning/ The link to strategic planning 17
11
2.3 Merits of Relationship marketing in Nikes strategic marketing strategy 18
Bibiliography
Appendix
Task 1
1. Role of Strategic Marketing in Nike
1.1 Literature review on marketing
Nike is a global brand so its marketing plan is also planned according to that. When the Nike is
evaluating marketing performance, It should measure marketing outcomes from the consumers' points of
view, include all marketing activities, measure across a continuous time period, and meet statistical and
technical criteria required of all measurement systems.
The art of marketing is the art of brand building. If you are not a brand, you are a commodity. Then price
is everything and the low-cost producer is the only winner. (Kotler & Armstrong, Principles of
Marketing, 2010)
Concepts of Marketing
Product Concept
Its really hard to design products by focus groups. A lot of times, people dont know what they want
until you show it to them. (jobs, 2016)
The Product of Nike can be delegated a buyer item. Consumers utilize Nike items for different reasons.
Clients purchase shoes and sports apparel to fulfill their need for various lifestyles. Nike has crossed into
different product offerings beginning from the early 1980's to incorporate shoes to serve different games
as opposed to showcasing to Running. Nike offers Sneakers to Basketball, Baseball, Football, Soccer,
Running, Golf, Casual, etc; which goes over their fundamental product offering profundity. Nike doesn't
just offer fancy shoes, yet they additionally offer dress that incorporates Jeans, Shirts, Sweaters, Hats, and
Sport Accessories; which goes over their essential item blend width. Nikes brand name is their Big
Check that is situated on each and every item they offer. Nike have utilized numerous late innovation
propels with a specific end goal to make new items to offer to their current and new clients. Nike have
12
teamed up with Apple to make sensors that can fit inside the sole of numerous Nike Running shoes, in
request to track their Workout and Training. This Nike+ IPod Sensor is compatible with many Nike
running shoes because Nike has started to cut out a portion of the inside of the Running shoe in order to
make it fit perfectly inside the shoe.
Selling Concept
The Selling technique of Nike grasped by numerous associations can either give them a market frame or
make them protect the market leader (Nike, Inc). The more reliable the distribution of the product is will
improve the sales and in the process more benefits. Product delivered at the correct time to the end users
will not just affect usefulness, however also results in high level of customers satisfaction as well as
loyalty..... Nike sells its sports shoes, apparel and equipment products through a large number of outlets
worldwide. This element of the marketing mix outlines the venues where the companys products are
Diagram1 Nikes product offerings
sold, accessed or distributed. The following places/venues form Nikes distribution strategy, arranged
according to significance:
1. Retailers
2. Nikes Official Online Store
3. Niketown retail outlets
Retailers are the most significant places where Nike products are sold. These retailers include large firms
like Wal-Mart [Read: Wal-Marts Marketing Mix]. Customers can also purchase Nikes sports shoes,
apparel and equipment through the companys online store. The firm also operates Niketown retail
outlets. Based on this element of the marketing mix, Nike Inc. has major control over the distribution and
sale of its products, especially through the companys official online store and Niketown retail outlets.
Nike's sales promotions are mostly coupons and special offers given to target clients. The organization
utilizes sales promotions to spur new clients by indicating the advantages, for example, the components of
13
the items and the reserve funds they can make by utilizing markdown coupons or special offers. sales
promotions in Nike's marketing communications mix drive demand from new clients since they are
inspired to buy the association's items on the premise of these apparent advantages.
Marketing Concept
Nike has enormous range in its objective market. They have extensive variety of various items each
focusing on and engaging a particular gathering of individuals. They intend to meet the necessities of
individuals of any age having a place with shifting classes. This technique has made this organization to
increase greatest number of clients and benefit.
The organization has utilized electronic media (advertisements, official site of Nike and daily papers) to
promote their image. Many popular athletes have worked for the advertisement of brand like Brazilian
Soccer Team (particularly Ronaldo). They support occasions (e.g. Band It Up) for the promoting of brand.
Nike also sponsors events such as Hoop It Up and The Golden West Invitational. Nikes brand images, the
Nike name and the trademark swoosh; make it one of the most recognizable brands in the world. Nikes
brand power is one reason for its high revenues. Nikes quality products, loyal customer base and its great
marketing techniques all contribute to make the shoe empire a huge success.
According to Dr. Philip Kotler Business has only two functions marketing and innovation. It
indicates the importance of strategic marketing in the modern world.
There are plenty of ambassadors for Nike as it is being used by various numbers of top sportsmen.
Notably Lebro James, Roger Federer, Rafael Nadal, Serena Williams, Wayne Rooney, Viraht Kohli and
the former Indian soccer team captain Baichung Bhutia are also brand ambassadors of Nike.
The role of strategic marketing is the process that allows the organization to concentrate its limited
resources on the best possible opportunities to increase the number of sales and have a competitive
advantage over the competitors.
.
Branding tactics
14
Globally this is a market where brand is all-important, dominated by the big three (Nike, Reebok and
Adidas). All three organizatons have succeeded in evolving their products into lifestyle icons for millions
of customers around the globe. In the developing markets the big three brands are aspired to as signs of
modern sophistication, but they remain equally desirable in the US, Western Europe and other highly
developed countries.
Geographical Segmentation: The running 4 senses of shoe segmentation focus on big cities like in Viet
Nam; there are HCMC, Ha Noi Capital, District attorney Nag city, etc. People live in big cities tend to do
sports than people living in rural places and they are more willing to pay more for sport shoes, that can be
observed by buying habit in different areas. It is very hard to find a Nike showroom in rural area or small
cities because people there have to work on farm instead of doing exercise, this point can be observed by
travelling and focus in interview. Rural people prefer domestic product such as Bitis, Asia,etc with cheap
price although it is not dedicated for running or walking. This information is from focus interview which
has been done during researching.
Demographic segmentation: This segmentation is based on income sex career age etc. when company
gives out one product, this product has been availed for whose. Nike Air Max running shoes has various
product lines for both men and woman during years, and Nike also targets on high income level. Also
New Balance decide to aim at people that have high income and for man than woman.
Nike also gets young athletes to wear its products through sponsorships with local leagues, clubs, and
federations.
It also sees partnerships with professional athletes as an important way to draw in young customers.
Psychographic segmentation: Lifestyles, social class, personality are factors that the Company must
base on when doing psychographic segmentation. New balance is also product for sport, this brand name
aim at people who like durability and quality than design and performance. Nike mostly focuses on the
modern lifestyle, unique, audacious dare to express, colorful style and of course love sport style.
Targeting Positionng
15
After creating the different market segments, its Nike must first create a positioning map based on
time for a company to target the audience and customer perceptions of their brands with respect
analyze which segments it will cater to and how. to an existing competitors brands. Depending on
Market targeting helps the company to come up the price and orientation, they will find out the
with tailor-made products and marketing brands relative share in the market, based on
campaigns to address the needs of the different which the positioning can be developed. Creating a
market groups, but companies need to factor in the selective set of benefits is crucial to a brands
current market environment, buyer preferences, growth and success. The positioning statement of
competitor actions etc. to launch their targeting Nike would be ; For every serious athlete Nike
plan. provides perfect shoe or sports products that gives
confidence for every sport activity (Nike, Inc
2016)
TOWS MODEL
The below diagram explains the maketing strategy used by Nike
16
1.2 Process involved in Strategic Marketing in Nike
17
examination of the association and its relationship to the market in which it competes. According to Peter
Drucker "The purpose of a business is to create a customer." So the companys Marketing planning
process will be the determining factor for creating long lasting loyal customers to ensure the continuity of
the business.
A marketing plan has been defined as : A written statement of the marketing aims of a company,
including a statement of the products, targets for sales, market shares and profits, promotional and
advertising strategies, pricing policies, distribution channels etc. with precise specification of timescales,
individual responsibilities etc. (Masner, 1988)
18
Malcolm MacDonalds Marketing Planning process
According to Malcolm MacDonald the marketing planning is simply a logical sequence and a series of
activities leading to the setting of marketing objectives and the formulation of plans for achieving them.
The below diagram shows the ten steps of marketing planning process :
Diagram 5
The above process starts with the Nikes mission and final objectives, moves onto the marketing audit
stage which has the SWOT method in summarizing. Then the assumption and the setting of draft
marketing takes place for some time period. Now the other functional managers will also get involved to
19
ensure the company is capable of meeting the markets requirement. Other plans and options are
discussed and one will be chosen. Afterwards Budgets will be finalized then the tactical plans are decided.
Business mission
As mentioned above Nikes mission statement is "To bring inspiration and innovation to every athlete* in
the world.", and as per Bill Bowerman "If you have a body, you are an athlete." . The understanding is
that Nike wants to be the leading company in sportswear, and theyre currently on the right path to
success as they are the market leaders in the market.
SWOT Model
Swot is The top concept for internal analysis and analyzing for Nike. It will show us what the firm is
doing right, and where it is going wrong. The SWOT analysis is one of the most widely applied concept
of marketing. What makes SWOT especially compelling for Nike is that, it can help it uncover
opportunities that the organization is well-placed to take advantage of.
Refer Appendix 3
Strengths Positive things in Organizations business and in its control. The big strength of Nike is that
it is a globally recognized brand that has top of the mind recall among consumers and the youth in
particular. Further, the Nike brand is synonymous with quality and resilience as well as endurance and
fitness, which makes it the brand of choice for athletes and anyone who wishes to run.
Weaknesses Factors that are in Nikes control yet brining down its capacity to get or keep up an
aggressive edge in the market. Nike is almost totally driven by its footwear business and because of that
the footwear market contributes the majority the share of its revenues making it dependent only on this
segment. In these recessionary times, it is not a good business practice to be overly dependent on one
segment and hence, Nike ought to diversify horizontally as well as vertically and include apparel and
other accessories.
20
Opportunities - Nike is not a fashion brand still consumers that wear Nike product do not always buy it
to participate in sport. In youth culture especially, Nike is a fashion brand. This creates its own
opportunities; There is also the opportunity to develop products such as sport wear, sunglasses and
jewellery. Such high value items do tend to have associated with them, high profit
Threats - Nike is exposed to the international nature of trade. It buys and sells in different countries,
currencies and so costs and margins are not always stable over long periods of time. Such an exposure
would mean that Nike may be manufacturing and/or selling at a loss. This is an issue faced by most of the
global brands.
Nikes Goals
Nikes goal is ;
To increase the 3-4% profitability in each of its product lines (i.e. increasing sales
growth
by 10% annually)
To meet the demands and requirements of the targeted market (sneakers for young and
old age
clients)
21
focusing more on the brand image rather than just product commercial. A strategy which led to the "Just
Do It" catchy campaign.
would be a great type of activity to make shoes for. With parkour Nike would need to make alightweight
shoe that had a really good traction for its soles.
Refer Appendix 2,
It will further clarify the strategic and marketing planning process.
According to Michael Porter, he has found that in the concept of corporate strategy to be
acknowledged were principally focused on financial area. These three examples are the findings
of Michael porter in determining the corporate strategy. (Goold & Campbell, 1987 )
A generic strategy, according to Michael Porter, presents how a business achieves and maintains its
competitiveness. Nikes intensive growth strategy reflects the companys focus on innovation to develop
the business. The strategies are as followings ;
22
1. Cost Leadership Strategy - In this generic strategy, the company minimizes production costs to
maximize profitability or reduce selling prices.
2. Differentiation Strategy - A financial objective based on the differentiation generic strategy is to
maximize Nikes profit margins, such as on new sports shoes.
Nike has a geographic divisional organizational structure. The following characteristics are notable in
Nikes organizational structure:
1. Global corporate leadership - Nike Brand, Finance, Product & Merchandising, Administration &
Legal, Global Sports Marketing, Operations, Global Human Resources, Office of the President &
CEO, Nike, Inc.
2. Semi-autonomous geographic divisions - Western Europe, Central & Eastern Europe, Japan,
Emerging Markets, North America and Greater China
Nike Inc.s organizational structures characteristics support growth and stability. Global corporate
leadership has the advantage of facilitating control on the entire organization. The advantage of the semi-
autonomous regional (geographic) divisions is flexibility in satisfying regional market-specific consumer
preferences for Nikes athletic shoes, apparel and equipment.
Task 2
23
There is no perfect way of strategic planning process, or model, to use the same way all the time with
every organization. Different organizations should customize the best approach to suit the culture of its
members, the current situation inside the organization and outside, and the purpose of its planning.
Various planning models have evolved over the years to suit the needs and cultures of various types of
organizations, management styles, and the state of understanding of the strategic dynamics of the
particular organization in its environment. Without a business model, Nikes new technology can have
limited value. A successful business model can maximize the commercial return from this high cost
investment as well as drive innovation. Successful businesses are willing to innovate and move to a new
business model if required and Nike are on the same track. Their existing business model may be
constantly evolving in response to new business opportunities, market trends, technology and
competitors.
Further we will focus on the importance of some of the business models in relation to Nike.
Ansoff matrix will help Nike decide the future of the company. The Ansoffs matrix helps Nikes
marketers decide the future strategies which they can implement at product level or brand level as well.
Market Penetration in Ansoff Matrix In the Ansoff matrix, market penetration is adopted as a strategy
when Nike has an existing product and needs a growth strategy for an existing market. By using market
penetration, Nike is ensuring that only the existing resources of the company are being used and no extra
costs need to be incurred in setting up a new unit for.
Market Development in Ansoff Matrix Market development is the second market growth strategy
which can be adopted as per the Ansoff matrix. The market development strategy is used when the
Company targets a new market with existing products.
Product development in Ansoff Matrix Product development in the Ansoff matrix refers to firms
which have a good market share in an existing market and therefore might need to introduce new products
for expansion.
Diversification strategy in Ansoff Matrix Diversification is a strategy used in the Ansoff matrix when
the product is completely new and is being introduced in the market. The best example for Diversification
24
can be big groups like Nike or TATA which initially started with one product but have expanded into
completely unrelated segments by introducing new or their own products.
For further clarification ABOUT ansoff And Nike please refer appendix 5.
P is for Political
The political factors affecting business are often given a lot of importance. Several aspects of government
policy can affect business. As a company that produces and sells physical goods, Nike is, however,
always subject to changes in tax and manufacturing laws.
Various political conflicts can always make customs related processes difficult, or prevent imports and
exports.
E is for Economic
Nike sells a well-respected medium range product, so they are less vulnerable to economic factors than
others. Nike has used its established brand equity to take advantage of growing consumer demand in
emerging economies. Nikes revenues are to some extent dependent on the low cost of labour in Far
Eastern countries. This is changing, though, which might mean higher Nike prices across the globe come
with the development in Less Economically Developed Countries.
S is for Social
Social issues impact the attractiveness of Nike athletic shoes, apparel and equipment. In developing
countries, Nike has opportunities to tap consumers with increasing individual wealth. Also, the company
has opportunities to develop safer products and use marketing campaigns that highlight the safety of its
sports shoes, equipment and apparel. Nike can also adopt new product development strategies to address
needs for products for leisure activities.
T is for Technological
Nike has been able to use enhanced levels of digital metrics to analyse customer demand and revise its
segmentation accordingly. In the optimum model, transaction and supply chain event management are
25
linked via SOAP (Simple Object Access Protocol) and MPPS (Massively Parallel Processor System)
systems. Meanwhile consumers will be able to make contact-less payments via mobile phone platforms.
L is for Legal
In Nikes case, the following legal external factors are important in the sports shoes, apparel and
equipment business:
Improving employment law in developing countries is a threat because it leads to an increase in labor
costs in areas where many of Nikes production facilities are located. However, this external factor also
provides an opportunity for the company to apply higher standards for labor and employment.
E is for Environmental
Environmental issues are of ever-growing importance. Nikes mass production factories are, without a
doubt, harming the environment. Not only do they release plenty of aerial pollution like most factories,
but Nikes production centers occasionally go as far as directly polluting rivers. However, Nike also
shows promise of a change in their current practices, with a strong resolve to become more eco.
Introduction Stage The firm seeks to build product awareness and develop a market for the product.
Growth Stage The firm seeks to build brand preference and increase market share.
Maturity stage Defending market share while maximizing profit
Decline Stage Maintain the product and rejuvenating by adding new features. (Apple wrist watch)
Refer Appendix 4 It will further show the product life cycle of Nike. The products that changed their
course of the cycle are clearly shown in the picture.
26
Introduction Growth Maturity Decline
Product Branding and Quality Additional Features Features may enhance to Maintain the product
Products are may be added. differentiate from and rejuvenating by
established (Shoes) ( Bags and apparels competitors. ( Body spray adding new features.
) etc ) ( Apple wrist watch )
Pricing Low penetration Maintained as the May be lower because of Lower than the
pricing to capture company is the competitions. previos stages
market share profiting.
Distribution Selective until Channels are added More intense and sales Will be in the same
customers show as the business targets will be increased level, depending on
acceptance grow. with high incentives. the need of the
clients.
Promotion Aimed at innovators Aimed at a broader Emphasizes product Will be reduced to a
and early adaptors. Audience. differentiation. certain extent and
again will restart.
Competition will determine how Nike maintains its share of the sports footwear market. The low market
growth rate is due to firms high market penetration and market saturation. This situation creates a strong
force, as Nike and other organizations compete for a market that grows slowly. Firms are highly
aggressive in competing for a bigger market shares. Also, there are only a very few number of firms that
significantly impact Nike.
Nikes consumer and clients directly affect the annual revenue The low costs make it easy for customers
to get and buy sports shoes other than those from Nike. The very few availability of substitutes also
enables clients to buy other products instead of buying from Nike. However, the small size of individual
consumers minimizes their individual forces on the company. These external factors will lead to the
moderate bargaining power of customers. .
27
Suppliers affect Nikes business by the availability of raw materials and goods The higher supply of raw
materials minimizes the effects of individual suppliers control on Nikes business. Likewise, the large
number of suppliers reduces the impact of individual suppliers demands on big companies like Nike Inc.
suppliers are among the least concerning factors determining Nikes strategies in the market.
Substitutes pose a significant threat to Nikes performance as the market leader in the global athletic
shoes market. The less availability of substitutes imposes a moderate force against Nike, as cunsumers
have some alternatives to Nikes products. Customers have a moderate chance of picking a substitute
because of the moderate performance of substitutes in the market compared to Nikes.
New competitors or new organizations can disrupt Nikes industry environment. The demanding cost of
brand development makes it difficult for new companies to succeed in competing against Nike Inc.Tthe
high economies of scale provide Nike with a competitive advantage against new companies, considering
the companys global production and distribution network to the market.
28
2.2 Links between strategic positioning and marketing tactics.
Nikes current position - The Positioning statement of Nike is For serious athletes, Nike gives
confidence that provides the perfect shoe for every sport. Nike's positioning revolves around serving
athletes, growing its business and being a source of inspiration. These strategies are at the center of its
business model and marketing strategies.
What is future positioning - Each futurology is based on the past and present. It is important for
everybody to map the non-volatile developments which are relevant to the organization. A first
exploration of the strategic positioning can be constituted by extrapolating the trends and by gearing them
to the field in which the own organization operates.
29
The link to strategic planning -
Heres the study of William J, Bowerman which inspired Nikes marketing plans and tactics in late 1970s
1. Put Customer Interests First - Customers like great products and they like serious benefits. For them,
things that benefit them personally are easy to justify.
2. Base Your Strategy On A Felt Need - Initially for Nikes audience, the felt need wasnt for better
running shoes, but for a better way to get in shape.
3. Believe In the Product You Are Selling - As marketers, we should believe in the product and the ideas
we are selling.
4. Sell Easily Identifiable Benefits Instead Of The Product - The goal was to make the worlds most light
weight running shoe. He believed that this factor alone could dramatically improve the speed of a distance
runner.
Relationship marketing is a marketing approach that focuses on creating an ongoing and long-term
relationship with customers. It is geared toward building and nurturing strong consumer/customer
connections and affiliations, rather than pushing sales or purchases. The ultimate outcome of relationship
marketing is the building of a unique company asset called a marketing network. A marketing network
consists of the company and all of its supporting stakeholders: customers, employees, suppliers,
distributors, retailers, ad agencies, university scientists, and others with whom it has built mutually
profitable business relationships. It also builds strong economic, technical and social ties among parties.
relationship marketing is the practice of building long term satisfying relations with key parties-
customers, suppliers, distributors in order to retain their long term preference and business (Kotler &
Keller, 2009)
30
Relationship Marketing VS Transactional Marketing
Relationship marketing uses methods to develop long term relationship with clents to retain and develop
a healthy relationship with their customer. Transactional marketing is focusing its marketing efforts on
attracting customer for one off sale.
It is the values and strategies of relationship marketing with particular emphasis on customer relationship
turned into practical application
Save Money
When the company knows who it should market to, you don't have to spend extra on advertising
marketing to individuals who may not be interested in your company.
Word-of-Mouth Marketing
The customers who have been patronizing your business for a while are likely to tell their friends and
family about the company. This will prompt more people to inquire about the business
Since the existing customer are treated well Nike might miss out on new potential customers who are
interested.
Even though the customers love hearing about new products and sales, the company should not over do it.
If it is over done the value of the brand will go down and the customers will get irritated.
31
32
Bibliography
A Marketing Case Study on Nike. (2012, May 15). Retrieved November 14, 2012,
from ArticlesBase: http://www.articlesbase.com/international-marketing-articles/a-
marketing-case-study-on-nike-5907782.html
Akitunde, A. (2012). Nike Nabs The Crown Jewel Of Sports Branding: The NFL.
Retrieved December 1, 2012, from Fast Company:
http://www.fastcodesign.com/1669444/nike-nabs-the-crown-jewel-of-sports-
branding-the-nfl#1
Cendrowski, S. (2012, February 13). CNN Money. Retrieved October 22, 2012, from
CNN: http://management.fortune.cnn.com/2012/02/13/nike-digital-marketing/
Goold, M., & Campbell, A. (1987 ). Many best ways to make strategy. Harward
business review (6), 70-76.
Kotler, P., & Keller, K. L. (2009). Marketing Management (13th ed.). Prentice Hall .
Ktle.
Marketing Plan of Nike. (2011, 17 March). Retrieved October 23, 2012, from
Marketing Mixx: http://marketingmixx.com/marketing-plan-2/164-marketing-plan-of-
nike.html
Marketing Plan on Nike. (2011, March 17). Retrieved November 14, 2012, from
Marketing Mixx: http://marketingmixx.com/marketing-plan-2/164-marketing-plan-of-
nike.html
33
Our Workforce. (2012). Retrieved December 1, 2012, from Nikebiz:
http://www.nikebiz.com/crreport/content/people-and-culture/6-1-0-our-
workforce.php?cat=our-workforce
Rose, L. (2006). The World's Best-Paid Athletes. Retrieved December 1, 2012, from
MSNBC: http://www.msnbc.msn.com/id/11961246/ns/business-forbes_com/t/worlds-
best-paid-athletes/#.ULvz-Erjku8
http://www.businessweek.com/bwdaily
34
Appendix
2.
Strategic Planning Marketing planning
Concerned with overall, long term Concerned with day to day performance
organizational direction. and results.
Provides the term framework for the Represents any one stage in the
organization. organizations development.
Overall orientation needed to match the Functional and professional orientation
organization to its environment. tends to predominate.
Goal and strategies are evaluated from Goals are subdivided by specific targets.
an overall perspective.
Relevance of goals and strategies is only Relevance of goals and strategies is
evident in the log term. immediately evidenced.
35
3.
4.
36
5.
37
6.
38
Joyce, P. & Woods, A. (1996), Essential strategic management - from modernism to pragmatism,
Butterworth Heinemann; London.
Originally published in Consumer Superbrands Volume IV, May 2001. The book reviews the UK's
strongest consumer brands as judged by the independent Superbrands Council.
Read more at http://www.campaignlive.co.uk/article/148384/superbrands-case-studies-
nike#I2I8VoGViyosv5zh.99
Nike Inc., (2010), Nike Inc. Introduces 2015 Global Growth Strategy,
Nike Inc. 2013, Sustainable Business Performance Summary, Beaverton, OregonNike Inc., 2015,
http://www.malcolm-mcdonald.com/strategicmarketing.php
Peter Drucker
About Nike The official corporate website for Nike, Inc. and its affiliate brands.
(P & A, 1999)
Porter, M.E. (1980). Competitive strategy - techniques for analysing industries & competitors. The Free
Press; New York.
Bibliography
A Marketing Case Study on Nike. (2012, May 15). Retrieved November 14, 2012,
from ArticlesBase: http://www.articlesbase.com/international-marketing-articles/a-
marketing-case-study-on-nike-5907782.html
Akitunde, A. (2012). Nike Nabs The Crown Jewel Of Sports Branding: The NFL.
Retrieved December 1, 2012, from Fast Company:
39
http://www.fastcodesign.com/1669444/nike-nabs-the-crown-jewel-of-sports-
branding-the-nfl#1
Cendrowski, S. (2012, February 13). CNN Money. Retrieved October 22, 2012, from
CNN: http://management.fortune.cnn.com/2012/02/13/nike-digital-marketing/
Goold, M., & Campbell, A. (1987 ). Many best ways to make strategy. Harward
business review (6), 70-76.
Kotler, P., & Keller, K. L. (2009). Marketing Management (13th ed.). Prentice Hall .
Ktle.
Marketing Plan of Nike. (2011, 17 March). Retrieved October 23, 2012, from
Marketing Mixx: http://marketingmixx.com/marketing-plan-2/164-marketing-plan-of-
nike.html
Marketing Plan on Nike. (2011, March 17). Retrieved November 14, 2012, from
Marketing Mixx: http://marketingmixx.com/marketing-plan-2/164-marketing-plan-of-
nike.html
Rose, L. (2006). The World's Best-Paid Athletes. Retrieved December 1, 2012, from
MSNBC: http://www.msnbc.msn.com/id/11961246/ns/business-forbes_com/t/worlds-
best-paid-athletes/#.ULvz-Erjku8
40