Marketing Communications Campaign of Nike Inc - Research Paper Example

Analysis of the Marketing Communications Campaign of Nike Inc Table of Contents Introduction 3 Integrated Marketing Communication 3 Steps and Model for Implementing Integrated Marketing Communication 4 Overview of Nike Inc and its marketing and communication strategy 6 Application of Integrated Marketing Communication Models in Nike Inc 7 Conclusion 8 Reference 9 Bibliography 10 Introduction Contemporary organisations are known for their extensive use of marketing techniques. Marketing technique can be defined as a set of plans that facilitates a company to gain competitive advantage over its competitors. This in turn helps a company to accumulate higher market share and increase its sales revenue. It also indicates that the company has developed a large number of loyal customers. In this respect, the customers are the key determinants of growth of a company. Marketing strategies are drafted taking into account four aspects of marketing i.e. product, price, promotion and place. Herein, the decision makers attempt to serve their customers in a way better than its competitors (Payne, p57). In these respect, communication is a vital factor. Communication plays a fundamental role in facilitating the entire marketing plan. Therefore, an organisation must develop ‘two way communications’ with its employees and customers. Proper communication channel helps a company to spread awareness regarding its product among the customers. ‘Integrated Marketing Communication’ is the latest and the most effective way of developing proper planning marketing. This primary objective of this paper is to explain and analyse integrated marketing communication in the context of a shoe brand company. In this respect, it will attempt to deal with various aspects of integrated marketing communication (IMC) and its formulation. At first, a brief description about the concept of IMC will be discussed followed by its implementation process. In order to study the effects of implementing integrated marketing communication, an athlete shoe making company is chosen and is briefly introduced. It will be followed by a comprehensive analysis of Integrated Marketing Communication Model. Finally, the conclusion will present the important findings of this paper. Integrated Marketing Communication Among the four Ps of marketing, ‘promotion’ is very necessary for spreading awareness and for convincing the customers about the product. The promotional activities deal with adverting, communication and public relation. The integrated marketing communication (IMC) is a concept that helps to formulate the entire promotional planning for a company. Specifically, it can be defined as the ‘marketing mix for communication’. Therefore, it is necessary to understand the role of communication in developing effective and efficient marketing strategies. Marketing communication is important to attract new consumers for new product categories. Consumers’ perception regarding the available products in the market keeps changing. For understanding the changing behaviours, efficient communication system is of paramount importance (Narayanan, Manchanda and Chintagunta, p.3). IMC helps to enhance the communication strategy of a company. Schultz and Schultz defined IMC as “a strategic business process used to plan, develop, execute and evaluate coordinated, measurable, persuasive brand communication programs over time with consumers, customers, prospect, and other targeted, relevant external and internal audiences” (Stuart, Sarow and Stuart, p.154). It has become a major tool for enhancing the effectiveness of communication. An IMC approach helps the decision makers of a company to manage its strategy for marketing communication. A decade ago, promotional and communication mix were considered as entirely separate functions of an organisation. These functions were generally handled by expert marketing agencies. However, at present, the modern concept of management indentifies communication as an integral part of organisational strategies. With technological advancements, the communication activities have become easier. Development of electronic media and e-marketing has facilitated communication strategies. IMC approach includes all facilities and important areas of communication. Primarily, it focuses on important communicational areas like public relation, direct marketing, sales promotions, e-marketing etc (Koekemoer and Bird, p.4). Steps and Model for Implementing Integrated Marketing Communication Communication has become an integrated part of business level strategies and it facilitates the integrated communication at corporate level. Companies use communication strategies as a crucial competitive advantage. Therefore, there is a close relation between the marketing and corporate communication. The following figure shows the relationship between corporate communication and IMC. Figure 1: Corporate and Marketing Communication: An Integrated Approach (Source: Philip, Kitchen and Schultz, p.107) In order to implement IMC approach at corporate level, various factors needs to be identified and analysed. First of all, it is necessary to identify the core component of communication mix. Market mix is composed of four Ps and the communication mix is composed of four Cs. The former’s component comprising of product, price, promotion and place are replaced by consumer, cost, convenience and communication of the latter. In communication mix, the focus is on the requirement and convenience of the consumers rather than the products (Swanson, “4 Ps vs. 4 Cs”). After taking into account the four basic factors of communication mix, the IMC can be implemented by following four stages. Schultz and Kitchen have identified four primary stages for developing an effective and efficient IMC approach. The following figure represents the four steps of IMC implementation in an organisation. Figure 2: Stages in IMC Implementation (Source: Kitchen and Pelsmacker, p.25) The above model shows four ideal stages of IMC implantation. However, before developing IMC approach, a company must follow a number of steps. The following table shows these steps. Table 1: Steps for Implementing Integrated Marketing Communication 1. Development of Communicational Mission, Vision and Objective 2. Identification of Target Audience 3. Identification of Demography, Consumer Behaviour and Culture of the Target Audience by Conducting Marketing Research 4. Segmentation of Target Audience as per the Outcomes of Marketing Research 5. Development of Four Cs of communication Mix (Customer, Cost, Convenience and Communication 6. Formulation and Implementation of Proper IMC Strategy 7. Evaluation of implemented strategy through Performance Measurement The above table includes four steps needed for implementing IMC within an organisation. The above mentioned steps of IMC implementation can be clubbed with four stages of IMC development (figure 2). The first stage is the tactical management of marketing communication and in this stage an organisation must develop its mission and vision for market communication. In this stage, communication must be developed within the cross functional departments. The primary objective of marketing is to facilitate inter departmental communication and helps to develop “one sight and one sound” (Philip, Kitchen and Schultz, p.109). The second step is to provide more clear and specific scope of communication. In this stage, an organisation must gather necessary information regarding the customers through market research. For increasing the accuracy of information, the target audience must be indentified and segmented as per their demography, characteristics and buying behaviours. The next step is to apply the revealed information for formulating the IMC strategies. In the process of IMC strategy formulation, the company must utilize consumer data base by using information technology for gaining consumer knowledge. Consumer knowledge must be shared with other departments so that each department can contribute and co-ordinate in implementing IMC strategy. The final stage deals with the monitoring of implemented IMC strategy. Here, the company is required to evaluate the effectiveness of the strategy. For evaluation process, performance measurement system is very necessary. Performance is measured from the financial perspective using ratios like return on investment (ROI). Implementation of IMC requires investment and hence, the return on investment is ideal method for performance measurement. In the process of implementing IMC, an organisation may face several challenges. As per Eagle and Kitchen, there are four major potential barriers that includes “power, coordination, and control issues; client skills, centralization/organisational and cultural issues; agency skills/talents, overall time/resources issues; and flexibility/modification issues” (Kitchen and Pelsmacker, p.25-26). Overview of Nike Inc and its marketing and communication strategy In order to apply IMC strategy using the IMC model, Nike Inc has been selected. Nike is a US based sportswear manufacturing company. It has expanded its operation in the global market. Nike Inc was established in 1972, with the aim of encouraging the new generation towards sporting activities. The company focuses on developing innovative products that help athletes at every level to enhance their sporting activities (Nike-a, “Nike Facts”). Nike’s sports shoes are very popular among the athletes and it has captured a large portion of the market share in sporting shoe segment. Nike Inc has also acquired a number of subsidiary companies that also offer sporting goods and sportswear. Converse Inc., LLC, NIKE Golf, Hurley International, Umbro Ltd and Cole Haan are its other business segments that are very important for future growth of the company. The company has developed effective marketing strategy that has enhanced the brand perception of its products. In 2000, Nike Inc acquired the highest market share in global athlete shoe market (The University of North Carolina, “Athletic Shoe Market Share”). The brand recognition in the global market is the most important strength for the company and facilitates the marketing strategies. In order to market and develop its brand, the company has implemented effective marketing strategies by setting different level of business strategies. However, in recent years, other leading companies like Reebok, Adidas, Timberland, Asics etc have become a major threat for Nike Inc. The company is facing intense competition in the global market from these competitors. For retaining its market position, the company is focusing on the unexploited market by developing innovative and effective marketing strategies. Application of Integrated Marketing Communication Models in Nike Inc Increased competition in the sportswear industry has forced Nike to focus on the development of new sets of strategies. The company has not implemented the IMC approach in its strategic planning. In the previous sections, the growing important of IMC strategies has been discussed. Therefore, implementation of this strategy will help Nike Inc to retain its higher position in the market. The Nike Inc is operating in most of the developed market of the world. The culture and demography of each regional market is different from each other and hence, the communicational activities must be developed as per the market characteristics. For example, in India, initially many multinational companies failed to convince the Indian consumers due to difference in cultural dimensions. These companies were unable to implement proper marketing and communication strategies in the Indian market (Chandra, Cheek and Rai, “The Asian Market”). Figure 2, table 1 offers an ideal implementation model for IMC development in an organisation to develop integrated corporate communication. Nike Inc must develop different sets of IMC strategies for each market, and in this respect it can follow the steps mentioned in table 1. In order to operate in a new market, the company should recognize key determinants of the market. Nike can develop its communicational mission, vision and objective based on its global strategy. It also needs to develop effective organisational structure for improving communication among the cross functional departments. Internal communication is very important for effective IMC development. It must choose its target audience for each market. Company’s target audience includes athletes who can afford high price for high quality product of Nike. For identifying the characteristics of the target audience, like demography and standard of living, it must conduct market research, which will reveal important consumer data. The outcomes of marketing research must be used for developing IMC strategy. This can help Nike to gain consumer knowledge that facilitates in developing effective communication with customers. Communication is also very important to deliver important message regarding company’s other activities like CSR to its target audience. Implementation of IMC strategy must consider organisational culture of that particular market. Finally, Nike must compare and analyse the investment for IMC implementation and the consequent change in return. This will help the company to realize the effectiveness of its IMC strategy. Nike’s key strength is its strong brand image. Nike has developed its reputation by effectively communicating with its major audience in US market (Lawrence, “Nike Positioning Statement”). However, in other markets, it is facing hurdles due to certain reasons. In South-East Asian market, Nike Inc had received negative response due to unethical labour practices. This has affected the image of the company among its potential consumers. In response to this allegation, the company took necessary steps for communicating with its target audience through public relation strategy to re-establish its corporate image (Latin America Institute, “The Evolution of IMC”). In this process, the implementation of proper IMC strategy would have helped the company in better way. Conclusion The above discussion and analysis has reflected the importance of integrated marketing communication (IMC). Marketing strategy not only helps to avoid competition but also helps to achieve competitive advantage by developing effective communication strategy for the organisation. In order to explain and analyse the process of integrated marketing communication, this paper has dealt with two major sections. The first section has described the importance of IMC and its application process. A proper model has been developed, in this section, which guides an organisation interested in implementing the IMC strategy. A model has been depicted in this regard, which shows seven necessary steps for implementing IMC strategy. The second section has dealt with the development of IMC. In USA, the company has gained very high reputation. However, in other regions it has been experiencing difficulties due to allegations, increasing competition etc. This section has discussed a proper method of introducing IMC strategy in Nike Inc, which is expected to help the company in countering these challenges. Reference Chandra, A. R., Cheek, U. and Rai, K. The Asian Market. Advertising Sensitivity and Integrated Marketing Communications in the International Environment. No date. . Kitchen, P. J. and Pelsmacker, P. D. Integrated marketing communications: a primer. Routledge, 2004. Koekemoer, L. and Bird, S. Marketing Communications. Juta and Company Ltd. 2004. Latin America Institute. The Evolution of IMC. No date. An Introduction to Integrated Marketing Communications. November 20, 2010. . Lawrence, L. Nike Positioning Statement. No date. Integrated Marketing Communications Building OSU’s Reputation. November 20, 2010. . Narayanan, S., Manchanda, P. and Chintagunta, P. K. February 2003. The Informative versus Persuasive Role of Marketing Communication in New Product Categories: An Application to the Prescription Antihistamines Market. November 20, 2010. . Nike-a. Nike Facts. 2010. Company Overview. November 20, 2010. . Payne, A., Christopher, M., Peck, H and Clark, M. Relationship marketing for competitive advantage: winning and keeping customers. 2nd Edition. Butterworth-Heinemann. 1998. Stuart, B. E., Sarow, M. S. and Stuart, L. Integrated business communication in a global marketplace. John Wiley and Sons. 2007. Swanson, D. J. 4 Ps vs. 4 Cs. No date. A Model for Integrated Marketing. November 20, 2010. . The University of North Carolina. Athletic Shoe Market Share. No date. Nike. . November 20, 2010. . Bibliography Dacko, S. G. The advanced dictionary of marketing: putting theory to use. Oxford University Press. 2008. Kitchen, P. J. A reader in marketing communications. Taylor & Francis. 2006. Pike, S. Destination marketing: an integrated marketing communication approach. Butterworth-Heinemann. 2008. Morris, L. M. December. 2003. Integrated Marketing: The Process and Challenge of Implementing this Evolving Concept at Three Private Universities. November 20, 2010. . Read More