Segmentation within Nike Company - Essay Example

? Segmentation within Nike Company Introduction When businesses grow, they intend to expand their service provided to customers in areas within their reach. However, expanding or breaking the business to meet consumers undergoes a number of considerations before it can take effect. To meet the needs of consumers, businesses plan and implement different marketing strategies, which enable them to identify target markets that help in meeting the firm’s goal. Market segmentation is one of these strategies that involves separating a wide target market into layers of consumers who have similar needs and implements a target market plan (Gitman and McDaniel, 2009). It is the process of splitting customers in a market into different groups (McDonald and Dunbar, 2012). Industries can segment the target market according to either large or small consumer numbers, or their geographic location. A target market refers to a group of organizations or people, for which and industry develops and implements strategic plans so as to meet the group’s needs. The essay that follows discusses on segmentation and target market within the Nike Company. Nike Company is one of the largest athletic sport equipment companies in the world. It was founded by Phil Knight, a former Oregon University coach, and has its headquarter Oregon, Beaverton (Hill and Jones, 2010). It is one of the companies that have had a tremendous growth over the past years. It has segmented markets in different areas, which include Oregon, New Hampshire, Tennessee, Europe and Japan (Porter and Norton, 2013). Its inclusion of services in other areas results from the company’s growth and increased service need in the areas. Market Segmentation in Nike Company Demographic Characteristics This is dividing a company’s service provision according to age, race, gender, and social class, among others (Gitman and McDaniel, 2009). It is one of the most common segmentation forms because it touches on almost all aspects of life. Nike Company products fit in all age groups. There are many athletic sport activities in all the areas that Nike operates, which give the various age groups opportunity to participate. There are sports like football, which is associated mainly with the youth, and others like golf, which is mostly played with a bit aged people. Nike’s segmentation of business in the various locations aims at meeting the same need for sport wears both to the young and the aged. Income also contributes to Nike’s market segmentation to other areas. For example, Japan is a country whose income is high due to automobile and other industries. However, it might not have the ability to produce wears suitable for sporting as those Nike Company produces. The need for proper sport wears gives Nike to expand its services to Japan. The company also produces wears for all genders where different clothes exist for women and men players. The target market in this market segment is both male and female athletes who exist in the regions around Nike Headquarters, and those in other countries like Japan. Psychographic Characteristics This involves segregating market in terms of people’s common activities, interests, and opinions (Gitman and McDaniel, 2009). Nike Company’s headquarter is in a location where people have a common interest in sporting. The founder aimed at providing state-of-the-art athletic shoes that convince customers that they are the best-suited and necessary for sporting and athletic interests in the region (Hill and Jones, 2010). The psychographic segmentation by Nike targets sales from athletes from the Oregon region who have an interest in sports and need comfortable shoes to support them in their sporting activities. As Hill and Jones (2010) point, in the past Nike concentrated on making shoes for basketball and track market segments more than other sports like golf and soccer among others, but later realized that engaging in the making shoes for other sporting activities can bring a lot of profits. This made the company to segment its market targeting the need for proper shoes for other players. An example is the refurbishing of aerobics and soccer shoes with a perfect design in the mid 2000s (Hill and Jones, 2010). Geographic Characteristic Nike Company is located in a geographic environment that encourages sports. Although there are other companies making sport wear, the company’s competence in design and marketing outworn the other companies within the region and decided to purchase other footwear companies and this acted as a complement to its production (Hill and Jones, 2010). Nike also segmented its market to other countries like Japan and Europe (Porter and Norton, 2013). The target market in these countries was the growing football sport field, which the company eyes as a stepping stone to its growth. The selection process applied here bases of comparison of the company’s product quality with other companies in the same field and the need to meet the market’s demand for sports wear. Behavioural characteristics of Nike Company From the history, the Nike Company has been associated with making athletic wears, and has gained experience and expertise in the field. Thus; it relies on its competencies in marketing and design to enter new market segments even to the extend of purchasing other companies that make sport shoes (Hill and Jones, 2010). This market and product experience give its market segmentation process easy and profitable since it makes increasing sales by meeting the customers’ desire. Nike’s history in the making of athletic wears makes its marketing easy, and makes market segmentation a viable marketing strategy for the company. Nike Company’s Positioning Statement For all stakeholders of different age groups from different regions and countries in the sporting industry, Nike Company is one of the best companies that aim at making athletes feel like athletes through their sports wear products (Farfan, 2013). Unlike other companies in the sports wear industry like Adidas, Nike Company has a historical reputation that has made it successful in marketing its services to customers and assures customers’ confidence in its products. It ensures the products will meet the athletes need in enhancing their performance. Although the other companies still make sporting equipment just as Nike, the company’s experience and market segmentation strategies ensure it reaches its customers with the provision of efficient services that other companies have not arrived at and aims at accomplishing its mission, which is bringing inspiration to every athlete in the world. Conclusion Successful market segmentation by a firm relies on various aspects. A company’s history may widely affect its performance in the market due to the products and services it offers to customers. The proper target market can be achieved only if consumers have confidence in the firm’s products. Nike’s history in sports wear products gives it a good reputation among its customers all over the world, even with the presence of other companies dealing with the same products. Thus; a company’s reputation makes it easy for its segmentation in the market. References Farfan, B. (2013). Nike Company Mission Statement-About Inspiration, Innovation & World Athletes. Retrieved on December 13, 2013, from http://retailindustry.about.com/od/retailbestpractices/ig/Company-Mission-Statements/Nike-Company-Mission-Statement.htm Gitman, L. J., & McDaniel, C. D. (2009). The future of business: The essentials. Mason, OH: South-Western Cengage Learning. Hill, C. W. L., & Jones, G. R. (2010). Strategic management theory: An integrated approach. Boston, MA: Houghton Mifflin. McDonald, M., & Dunbar, I. (2012). Market segmentation: How to do it and how to profit from it. Chichester: John Wiley & Sons. Porter, G. A., & Norton, C. L. (2013). Using financial accounting information: The alternative to debits and credits. Mason, OH: South-Western/Cengage Learning Read More