Marketing Management of Nike - Essay Example

?Marketing Management Table of Contents Introduction 3 Marketing Mix Analysis 3 Product 3 Price 4 Place 4 Promotions 5 Stakeholders Analysis 5 Customers 5 Competitors 6 Company 6 Community 6 Brand & Positioning Analysis 7 Conclusion 9 References 10 Bibliography 11 Introduction The era of globalization has not only opened up new vistas for business organizations but has also created a high competition in the business markets with organizations reaching out to every market where opportunities are available. In this regard, ensuring a formidable positioning and a good marketing mix is an essential aspect that is needed to survive in this tough competitive environment. In order to remain sustainable in the market and stay ahead of the competitors, it is very essential to have a product mix that ensures a formidable image of the products or the brand in the minds of the target market segments (Ramesh, 2008:8). It is also very important to analyze the consumer behavior of the target market audience so as to have an idea about the needs and wants of the consumers. This is important as it defines the positioning of the brand which is very critical to the success of the company (Bolles, 2002:10). The present study will analyze the marketing mix as well as brand positioning strategies of Nike so as to have a practical understanding of the importance of these aspects. Marketing Mix Analysis The elements of marketing mix include the aspects of Product, Price, Place and Promotions (Winston, 1984:27). The marketing mix analysis of Nike is presented below: Product Nike caters to the footwear and related accessories market and has operations across the globe. Nike has a wide product portfolio that encompasses mainly sporting products and accessories including shoes, T shirts, badges, bags and other accessories. The product portfolio depth includes sporting gear for different kinds of sport. Nike also has a number of other brands that operate under the company, including Hurley, Colehan, Converse and Nike Golf (Nike, 2012). The rationale behind having such a product strategy is due to the fact that the company has a strategy of having a focus strategy with regard to the business line. It wants to be the market leader in the sports goods and an accessory segment and, hence, has a wide and broad product portfolio that seeks to project the brand as a one stop destination for sports goods and accessories. Price Nike has a premium pricing strategy and its products are largely targeted towards the premium customers (Axelby, 2003:89). The company attributes and justifies its pricing strategy by providing high quality products to the customers. The formidable brand image of Nike also acts as a decisive factor in formulating the pricing strategy. Due to the formidable brand image of the product, the customer is quite willing to pay a premium for the products of the company as it has made a distinction for quality across the markets globally. Place Nike has a multi-channel distribution strategy in which the company uses both the direct as well as the indirect channel for distribution. The company ensures a combination of all vertical channels in an attempt to amalgamate them for distribution. The company has a bricks and clicks format that involves selling products through retail outlets (both company owned and multi-brand retailers) as well as through e-commerce websites. However, the indirect form of distribution is the primary channel of sales considering the fact that it helps in providing more value to consumers. It also gives a tangible touch to the service offering generating competitive advantage (Baiker, 2007:32). Promotions Promotions are the most vital aspect of the marketing mix of Nike as it forms the only channel of communicating with the target market audience. The promotions strategy of Nike involves use of both traditional and online channels for communication. Traditional channels include advertisements on television and print media while online channels involve use of various social networking sites. Sponsorships are also an important aspect of the company’s promotional strategy. The company selects a brand ambassador from the sporting arena so as to ensure a formidable positioning of the brand. The huge promotional expenses of the company are justified from its product category and the high competition that needs a well oiled promotional campaign in order to maintain profitability and sustainability of the organization (Lechner & Boli, 2004:70-71). Stakeholders Analysis Customers Customers form the core of the company and all its strategies are focused on creating enhanced value and full satisfaction of the customers. Customer demand and their fulfillment form the most important aspect of the company’s strategy formulation. The company carries out considerable market research to analyze the needs and wants of the customers. The customer feedback is an important facet of the company’s strategy formulation with this feedback being the basis of the formulation of new product development of the company. Considerable efforts are also made to ensure good after sales service including grievance handling so as to ensure a formidable image of the brand (Hill & Jones, 2009:200). Competitors Nike operates in a product segment that is characterized by intense competition among the market players. Competitors are also engaging themselves in predatory pricing and ambush marketing strategies to dislodge the competitors. Internationally, the main competitor of the company is Adidas that competes with the company in almost all the markets with a very similar product offering and similar target customers. Nike competes in the market by virtue of its formidable brand image and quality of products that are the most important strengths of the company. The company’s famous ‘Swoosh’ logo is another distinctive aspect that gives an edge to its competitors and symbolizes the strength of the brand (Kotler, 2010:442). Company The most important duty of the company is to generate highest return to its shareholders that forms the ultimate aim of any organization. In this regard, the company has followed a strategy of expanding rapidly into international markets, and also seeks to formulate strategies such as outsourcing in a manner so as to help reduce cost and generate greater efficiency that can be ultimately generated as profits to be passed on to the shareholders. Community Nike has a strategy of not only satisfying customers and shareholders but to cater to the needs of the society at large. The company has a policy of Corporate Social Responsibility that seeks to promote environmental sustainability by ensuring fair practices in procurement and other aspects. The figure below shows the basis of the CSR strategy of the company in which there is equal emphasis on the aspects of environment along with societal needs at large. Nike funds numerous NGOs in their activities to eradicate poverty and provide education in backward areas. Figure 1: Nike’s CSR Approach (Source: Nike-a, 2012) Brand & Positioning Analysis Nike has a monolithic branding approach in marketing with the company basing all its marketing and branding related activities on the company level. The analysis of Nike as a brand reveals that it has a good appearance widely accepted by the customers (Muhlbacher, Leihs & Dahringer, 2006:340). The famous swoosh logo has become the symbol of the company and is quite popular among the customers to the extent that it has become a status symbol. This also reflects the strong personality of the brand with the company associating the brand with ambassadors who are leading sports personalities and also sponsoring various events that are linked to the company. It has a cool identity that is firmly in line with the product offering and the demands of the customers. Analyzing the brand in terms of reputation also reveals a positive aspect of the brand. The brand has been into existence since 1964 and has been always known for its high standards in quality. Nike has also been a sponsor of major sports events that have also enhanced the reputation of the brand. Moreover, with numerous famous personalities endorsing the brand, it has become a symbol of style, passion and reliability in the entire market. Figure 2: Positioning Map for Nike (Source: Author’s Creation) The figure above shows the positioning map of Nike with regard to two customer segments, namely the price sensitive (low price) and premium segment (High Price) as well as quality conscious nature of the customers. The figure also shows the perceived positioning of the two other competitors, namely Reebok and Adidas that are the two global competitors for Nike. The image reveals that Nike is largely perceived as a high quality brand but available at a premium price. Adidas also has a somewhat similar positioning; however, Nike is better positioned than Reebok both in terms of price and quality where it is perceived as expensive but with a better quality and reputation. Conclusion The analysis of the marketing strategies of Nike reveals a considerable influence and high value of the brand in the market. However, in order to maintain a long term sustainability, it is necessary for the company to not only devise strategies for attracting new customers but to also focus on innovation and retaining customers so as to generate sustainable competitive edge in the market. References Axelby, G. (2003) CIM Coursebook 02/03 Management Information for Marketing Decisions. Taylor & Francis. Baiker, A.K. (2007) Fighting Brand Counterfeiting in E-commerce: Nike as an Example. GRIN Verlag. Black Enterprise. (1984) Marketing America Bolles, D. (2002) Building project management centers of excellence, Volume 1. AMACOM Div American Mgmt Assn. Hill, C. & Jones, G. (2009) Strategic Management Theory: An Integrated Approach. Cengage Learning. Kotler, P. (2010) Principles of Marketing: A South Asian Perspective, 13/E. Pearson Education India. Lechner, F.J. & Boli, J. (2004) The globalization reader. Wiley-Blackwell. Muhlbacher, H., Leihs, H. & Dahringer, L. 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