The Marketing Trends that Nike Uses - Case Study Example

Nike’s Social Media Strategy The Company Nike is an American Multinational company that has been in footwear, sports apparel and accessories business since 1964. In fiscal year 2012 the revenue generated exceeded USD 24.1 Billion. It has 44,000 employees and has a worth of USD 10.7 billion. Being a multinational company, there are 45 different countries are engaged in Nike business which has given it an edge for quality production and greater coverage across the world (Schwartz 2010). 2. Introduction Social Media Marketing and Strategies Present age has rightly been named as age of communication. Telecommunication and electronic devices have occupied most of our daily life. They are now eyes and ears of a locality through which it is connected to the whole world. In business, use of these communication means and electronic devices like computers, smartphones, netbooks and digital billboards forms the basis of digital marketing. Its impact and benefits are far reaching because of cost affectivity, greater audience and ease of marketing. According to Morgan Stanley Research, a total of 37% marketing traffic has been shifted to online media and mobile communication (Stanley, 2012). This trend was not foreseeable during early part of networks communication development. But, it is now clear that digital marketing will be the marketing arena for the future. In online communication, websites and web-portals provide large number of audience. In journalistic terms it can be said that digital marketing is a mode for mass media campaigns. Still there is another aspect of online and live communication. It is the development of social media within internet communication. It has not only bonded people but has also bridged the digital divide that existed till the end of 20th century. Digital marketing is now the main stream communication that happens alongside other types of communication between individuals and groups. Along the way it is also a source to advertise any new invention or innovation. Presently many organizations have improved their business and have increased number of customers at various locations of the earth by the help of social media. For social websites, people not only socialize with each other, but also interact with marketed commodities. In this case study, assessment of Nike’s social media strategy is carried out. Two important digital marketing means namely The Power of Like and social media Marketing Strategy of Nightclubs is taken in the case of Nike. Before getting into the details digital marketing strategies and their sphere of action should be noted. Digital Marketing is carried out through emails, search engines, social and mobile. The social media has almost the same impact as that of emails. It is an important strategic move to market products and services through social media as they proved awareness, consideration, loyalty and also feedback. There are two types of marketing areas. One that are paid and the other which are organic (free to search) it is known as a general information that 5 out of 10 online internet traffic concentration are social media destination. There are special portals that are established by companies and organizations that are destined to be the opinion leaders and brand ambassadors. It is also natural for such platform to generate information that can travel viral. These contents as per their marketing and physical merits do not find anything better than social media to roll. However the same advantages are sometimes meshed and can act as disadvantages. One intimidating aspect is that magnification of minor faults can occur. This causes exaggeration but counter campaign elements. Also that management of marketing content and feedback notification is also difficult. The messages are not controllable under these circumstances and can disappoint potential customers. It is also important for the marketing professionals to allocate budgets for social media campaigns, the search engine optimization has also made the situation complex where normal searches get to low or high priority due to manipulation of internet stats and traffic. The data that is retrieved or put on social websites cannot be in details more than pamphlets. This is hard to measure sales that are directly affected with digital marketing. This has given birth to digital presence almost everywhere on social websites. The tool is however not that simple. Another aspect of this case study is social media strategy for nightclubs. They provide excellent platform for dissemination of news and reviews among the general populace of a target market. To analyze marketing strategy the nightclubs are divided first into rural and urban placements. Each according to their location provides varying hours for social media marketing to by exercised. In this case study integration of social media with nightclubs and the marketing trends that Nike uses will be discussed. Social media trends chiefly comprise of the use of Facebook, Twitter, You tube and Bebo as main areas of research in this case study. According to digital flyer marketing, Nike has changed its mode of marketing from traditional to social media. 3. Case Presentation Nike has come up with concentrating on social network by investing in social media marketing. Alongside providing a wider coverage, Nike marketers are also gathering information and data to ensure loyalty from its customers. Nike has also realized that it is not enough for them to end the marketing cycle on sales. An important move in this regard is the launch of Nike+ campaign. It is actually in its elementary stage and has been point of focus for the market analysts. Nike+ and its Application has been launched which can be shared through Facebook and Twitter. This provides Nike main website with the data and the range of choices and concerns for the Nike products. First relevant gadget which supported computer and mobile Application was launched in early 2012. This was linked through social media to the Nike database. It was named as Nike Fuel Band. Another application that used to send and receive data from social media website was Atta Boy. This was an application which was developed with the concept to provide approximately correct data of workout, running etc. (Nikeinc, 2013). In yet another move Nike is working in development of integral social media application that provides training plans and virtual trainers to enhance its services. Integrating gadgets with application based databanks provide excellent opportunity to have them connected with social media. For example, smartphone have totally connected real time happenings to tweets and Facebook uploads. They are liked and thus shared by the users. Here application development becomes equally important for gadgets to be marketed. In case of Casio databanks and exercise tools, the results, accomplishments of athletes are shared on social media and other websites. They usually go viral. However, in case search engine optimization techniques that are integrated in applications and their information to populace, they social media campaign can strike as hard as any other TV commercial. Presently Nike has aimed to develop gadgets and applications that are sport specific. It can also be seen that the company has shown interest in developing them well before Olympics and NBA and other basketball seasons. The products are a mix of electronic gadgets like pod in shoes that are removable similar to the above mentioned fuel band (Chashman, 2013) It is interesting to note that the types of services and engagement of customers in Nike products and especially in Nike+ gadgets and applications is elementary for the social media campaigns. They Facebook tool as Like-Option and their strategy for nightclubs are basic to the marketing shift of Nike. 4. The Power of Like Being a leading social net-working website, Facebook has higher crowd of its users than that of any other. Each month reports 160 million U.S citizens who visit this site. Facebook takes 90 percent of all the time spent on any social networking sites. Social media has been regarded as the best medium to publicize any new Brand. There are many ways to make the new Brands public through social media. Sharing of Brands by the company, re-sharing by the users, social-marketing tools like Facebook’s “Sponsored Stories” advertising units are some of the prominent ways to advertise any product. Apart from having significant focus on statistics of the events of the brands, social media leaves enormous consequences on the minds of the users. Users of Facebook consume more than 25 percent of their time on site surfing and interacting with the Facebook newsfeed. The Newsfeed is considered as the primary location. The branded content is easily utilized here. It is because the users are 40 to 150 times more interested to utilize the content in the newsfeed than to skim through the Fan Page itself. Generally there are two main dominant users of Facebook. One group is approachable who undeniably “like” a brand. They are easily approachable with social media brand impressions. The other group is of those who can receive social-media brand impressions through their friends. The latter group of users is 34 times more than that of the former one (Lipsman, 2012). By obtaining and employing fans in such activities, a brand can get maximum benefit from sound secondary effects. Inter-transferring of a brand among friends of fans usually surpasses and approach many new users. Sometimes users of Facebook have different lifestyle, demographic needs and physiological profile than typical purchasers of the brand. This shows that social media demands various measures to marketing strategy. One way to assess the value of a product is by knowing the depth of engagement and loyalty among fans. Second way is by comprehending the ability to generate incremental purchase behavior while the third one is information of capability to control friends of fans. Putting two and two together this case concludes that Facebook has become one of the best tools to influence the people to use and shift to the latest brands. It is a source that performs the function of multiplier in the field of advertisement. So it can be proved as the cheapest and easiest way to change the mindset of the people for new brands. Nike, according to their marketing department has realized that they have a focus on three drivers that are likely to give their strategy a boost. It is strong mobile engagement that has caused a shift from traditional techniques to the use social media paradigm. Especially the year 2013 has proven to be special in this regard. Alongside, direct response advertisement and product development response are natural in social media. The powerful socializing and sharing mode of Tweets and Facebook likes engages a large audience. This is why most of the TV campaigns are shifting to these websites. An online marketing company digital fire fly marketing has been working on optimization of advertisements on Facebook and night clubs. This is because of the natural tendency of the target customers to share their likes and dislikes among users. A simplified analysis of line of action that is recommended by marketing company is as follows. Segmentation of audience into relatively smaller groups and regions Defining performance metrics and their monitoring (e.g. average value per customer minus cost per customer) Demographic analysis of the users Rotation of ads and posts (click rate which usually goes down with time due to ad fatigue) These aspects are important and are needed to be the part of social media campaign. Nike through Rise Above campaign has led the same concept practically. A special media interface has been developed to promptly respond to posts related to their products. Also those Olympic and other sporting Seasons have been segregated as part of their campaign. As part of the campaign international athletes like Farah and Deng are hired to be the opinion leaders. In 2014 Nike will be spending on these campaigns more than that has been spent ever in social media sites based in UK. Nike has also challenged the Advertising Standards Authority decision which banned its campaigns on twitter (Joseph, 2013). Analysis on internet traffic has shown that in 2014 users are likely to cross the threshold of spending time on internet. It means that the marketing mode will be more focused on social media websites which consume most of the internet traffic Joseph, 2012). Nike formally revealed its plan to run Twitter based ads campaign. This is because of the fact that this social media site has gained a momentum during recent months and provides a more comprehensive way. Twitter works differently as it produces a much better way for the users to visit the whole product and service model. eMarketing experts are of the view that effectiveness of a campaign can be judged by motor response of the surfing individual. These websites provide for frequent visits as the popularity increases with number of Likes on a site. Also the power of bringing greater number of viewers is also subject to the strategic placement of the advertisement. Analysis by Graham Mudd, Sean Bruich and Mike Rich is of great knowledge which provides a statistical analysis of the Power of Like. It shows that first contact with the campaign is intense and information is easily conveyed to the circles that are immediate to the contact. 5. Social Media Strategy for Nightclubs Social Media strategy for Nightclubs is also an important aspect linked to digital marketing. Clubs and forums rely heavily on their internet interface. Their promotions, affiliation notes and subscriptions are now online. This aspect is being used for marketing campaigns by different companies. They have a lot to offer for customer attraction and retention. Today it has gained importance due to heavy competition going on. Telecommunication companies, banks, apparel manufacturer and many other services and products suppliers make use of nightclubs (on-site and on-line) for value added services. Discount packages, preferential status to customers are given in night clubs in shape of discounts and other options. Consumers show different trends and ties to their nightclubs. These trends vary among different age groups and localities. For example in urban areas the social media presence and nightclub memberships vary as far as their memberships are concerned. Membership schemes are reinforced by company promotion schemes and related campaigns. There is another division of this campaign that focuses on customer retention and loyalty. The participants of a survey conducted showed that there is higher tendency to favor nightclub membership scheme that had additive advantage in any form. Most of the participants of the surveys showed that they possessed membership cards that come along with a scheme. This fact was even more reinforced on socializing websites that automatically promoted the scheme among friends and family members. The nightclub schemes are potentially advantageous due to its importance. Nightclubs and social media naturally provide entertainment and thus are places to visit more often than others. The consumer perception of the product is also accordingly effected, which is most often pleasant (Nevin, 2012). The advantage of nightclub campaigns is twofold. It not only provides active consumers to the offered schemes but also helps in enlarging the connected circle. Its affectivity is evident from the fact that the promotional and non-promotional campaigns have a good edge through this type of marketing. The schemes provided are flexible and easily help in keeping communication flowing. Social media as compared to nightclubs is a well-documented method for promotion, whereas Nightclubs are a very flexible way to have marketing on the move. It is also interesting to note that this method of marketing is more effective in places where demographic situation reinforces the effort. The age groups that are usually targeted for these campaigns belong to 28-45 years. Thus a locality that has demographic stats in line with this marketing strategy is naturally more productive. Secondly the choice of channel (type of club, type of service schemes, Facebook, Bebo, and Twitter) is also important to make the strategy productive. The use of social media in this way has become a mundane activity and is not inspiring. The creativity in integrating products and services (schemes) matter the most. Nike has been employing and investing largely in such campaigns. The sponsorship provided by Nike for different clubs is mainly to the sports club but the media campaigns are also being run for the youth. 5. Effectiveness and Comprehensiveness of the Campaigns Above analysis of power of Like is important in the understanding of the concept of effectiveness of a campaign. The statistical analysis produced by Nike is evident in this regard. It shows that the content namely, (this is) Just the Beginning by Nike marketing department was in July 2013 was one of the most successful campaign. It received 286 thousands likes and about 6 thousand comments in the thread. This was because of the advertisement campaign that starred Brazilian soccer player Neymar. Similarly, the affectivity of Nike marketing lost ground with the use of weak advertisement named The True Heart of Champions. This ad got only 470 likes and only 65 comments. This shows that the social media is subject to the presentation of the campaign aids. The videos that were used as aid were later the point of focus. Demographic analysis of the users that clicked the ad-post shows that it is important for them to have a serious look on its target age groups, gender and region. Late Nike dedicated a campaign solely for the women consumers. Viewers have shown a trend that they do not approve of the campaigns that only communicate information. Comparative analysis of the pages managed by competitors like Puma and Adidas show that SWOT analysis needs to be shown in the campaign. Similarities and Differences, when depicted, are of great use in concluding a campaign to be successful. The sports outlook and product line of Nike is its strength. It is therefore important case point that it should be revaluated to clearly produce Just do it promotions (Patarini, 2011). A research has shown that social media marketing (SMM) can be tested for affectivity. The case was presented by Blanchard (2011). The eight steps method progresses as follows. This research will enable us to understand that what part of marketing is missing in Nike’s campaign. The first step is formation of base line. This benchmark enables managers to scrutinize the data they look after and measure transaction, number of mentions, volume and sale of the product. Second is creation of activity timeline. The marketing team, its activities on the social media are judged in this step. It basically tells about the efforts that are put and the productivity achieved. The volume of mention and Facebook-Twitter type Likes tell about another benchmark. They are juxtaposed across the sales which give an easy way to judge the intensity of the campaign and its productivity. Majority of studies in this regard have not been able to produce exact data measuring the volume of shares, followings, comments are also one of the key performance indicators which measure the effectiveness of the social media marketing. Analysis of this data tells about the potentials that are available for the campaign. Through these types of techniques affectivity of a campaign can be noted. This method is gaining importance in targeting customer growth also. The field of SMM and research is relatively new and it is difficult to gather information. Also, the field is yet to be evaluated that how much receptive it could be. The feedback from the consumers and market trends are hard to be evaluated with SMM. This is because of limitations encountered that are natural to this new field. Alongside this constraint, companies like twitter and Facebook do not put out data that could be compared with the timeline. However it will be interesting to comprehend direct impact of these campaigns on sales and popularity of products. Nike has taken up the task with its marketing team to help gather more audience. It will be possible only after upcoming Olympics to gather the data for Sales versus SMM analysis. 6. Retailer Brand Awareness Nike has been engaged in a number of retail brand presentation activities. It is evident from their Nike Women campaign that Nike has tried to specialize into retail brand awareness. The media and messages that Nike focuses are to maximize brand awareness and its sale. The customer experience is now being gathered through social media conduits. This information is taken as feedback and response is created in order to improve customer experience (Roy, 2012). Brand awareness can directly affect purchase intention and thus the brand profitability. The perceived quality and customer loyalty are also important aspects on which brand purchase depends upon. The social media and nightclub campaigns as discusses above are important in achieving the target (Nazia, Mariam, Amir, 2011). The case of Nike is more comprehensive. The organization has segregated the task into functional and territorial domains. The campaigns are a partnership project with brand management, advertisement, sports marketing and merchandising. It is usually said that the customers make the decisions at Nike. It not only affects customer experience but also helps in developing internal band awareness. Retail brand awareness impacts heavily on gathering audience and formation of potential customers. Nike in this regard, as mentioned above, is frequently engaged in launching campaigns, retailer trainings and regionalization of products (Deng, 2009). In this report it was also analyzed that the brand awareness by scrutinizing the market trend by dividing the situations that develop into stages. In first stage the awareness campaign were launched through advertisements that had athletes. Their word of mouth was enough and had impact on the audience. Later in 1980s different competitors emerged and the product line was emphasized which was the result of feedback and trends among consumers. The media campaigns were in better details for the awareness among the target consumers. In the last stage due to greater sporting trend the support was extended through the internet and road shows. The competitor analysis shows that Nike had two attributes that were present during the campaigns, namely the retailer brand awareness and distinct area of marketing. Nike therefore became part of regional culture especially in USA. Thus the area of marketing that was emphasized cause brand awareness and brand power and has resulted in making Nike number one brand. 7. Analysis of Nike’s communication Strategy Nike has been using its unique selling proposition (USP) like coca-cola for off the chain communication with its user the product line of Nike has its own identity for being specialized in sportswear, apparel and gadgets. Its integration with social media has boosted its communication with users and potential consumers. As stated earlier that the slogan, Just Do It, helped Nike products to capture markets because of the athletes who were the opinion leaders during first stage of formal marketing. These campaigns have now shifted from traditional lines of communication to social media marketing. Similarly the discount packages and other localized campaigns for customer retention and loyalty have also proven to be of great importance (Saylor, 2012). Nike’s communication with consumers can broadly be divided into two eras. First era emphasized broadcast which had a focus on Television and print media. During the second era, social media such as Facebook, Twitter, Bebo have been used to communicate with the masses. This communication had a special feedback mechanism and management of the feedback lead Nike to develop customer-is-our-guide stance. This communication is now seen in all brand awareness campaigns. It has also steered Nike to add a number of products and services like Fuel band etc. under Nike+. During London Olympics and NBA seasons the Nike+ was extensively advertised to capture new market which gave positive results as discussed above. 8. Conclusive Analysis and Suggestions The social media strategy of Nike is consumer centric and with their paradigm shift in marketing technique has become data driven. With the use of social media websites Nike has been able to achieve effective branding and a solid feedback mechanism. This has enabled Nike management to have strong organization control. The target audience in social media and nightclub campaigns is both hardcore and recreational runners and has men, women of age 18 to 45. Two key attributes to Nike campaign is interactivity and connectivity with the audience. This not only encourages consumers to keep intact with Nike but has also attracted potential consumers to try Nike sportswear. Nike has been able to make this strategy work by being user focused, product tie in, niche building and community interaction. Still there are number of issues that question affectivity of the strategy. Management of the data and producing modified product line is not clearly conveyed which causes doubt among the market analysts and consumers. Accordingly they rely on endorsements from sports icons that are subject to change of opinion in case of leniency toward Nike’s competitors. The sponsorship programs run deep into the marketing strategy. This is also a risky program to follow. The social media is supplementing the campaign with these activities. And they can be the arena of casting doubts if Nike unnecessarily kept relying on these risky programs (Mourdoukouta, 2012). References Blanchard, O. (2011). Social media ROI. Indianapolis, IN: QUE. Chashman (2013, September). How Nike is Killing It In Social Media Marketing. Retrieved from https://digitalfireflymarketing.com/how-nike-killing-it-social-media-marketing Deng (2009). “Just Done It”--- Nike’s New Advertising Plan. Retrieved from www.ccsenet.org/journal/index.php/ijbm/article/viewFile/267/244More Joseph (2013, January). Nike takes social media in-house | News | Marketing Week. Retrieved from http://www.marketingweek.co.uk/sectors/sport/nike-takes-social-media-in-house/4005240.article Joseph (2012, July). Nike to run Olympic Twitter ads | News | Marketing Week. Retrieved from http://www.marketingweek.co.uk/news/nike-to-run-olympic-twitter-ads/4002827.article Lipsman (2012). Retrieved from http://www.waafiles.org/whitepapers/the_power_of_like_comscore.pdf‎ Nazia, Mariam, Amir (2011). Impact of Brand Awareness, Perceived Quality and Customer Loyalty on Brand Profitability and Purchase Intention. Retrieved from http://www.journal-archieves13.webs.com/833-839.pdf Nevin (2012). Investigating the Social Media Marketing Strategies of Nightclubs in the Midlands and West of Ireland. IJM, 7(2), 76-79. Nikeinc (2013, August). NIKE, Inc. - Nike Redefines "Just Do It" with New Campaign. Retrieved from http://nikeinc.com/news/nike-evolves-just-do-it-with-new-campaign Panos (2012). Why Nikes Buzz Marketing Strategy Is Riskier Than Red Bulls - Forbes. Retrieved from http://www.forbes.com/sites/panosmourdoukoutas/2012/10/18/why-nikes-buzz-marketing-strategy-is-riskier-than-red-bulls/ Patarini (2011). Social Media Marketing: Measuring Its Effectiveness and Identifying the Target Market. Retrieved from http://www.uwlax.edu/urc/JUR-online/PDF/2011/pradiptarini.MKT.pdf Roy (2012). Nike: “Make Yourself”. Retrieved from http://d284f45nftegze.cloudfront.net/cadebalsi/Nike%20Final%20Paper.pdf‎ Saylor (2012). Advertising, Integrated Marketing Communications, and the Changing Media Landscape. Retrieved from http://http://http://www.saylor.org/site/wp-content/uploads/2013/02/BUS203-PoM-Ch111.pdf Schwartz (2010, March). The Worlds Top Sports Brands - Forbes. Retrieved from http://www.forbes.com/2010/02/03/most-powerful-sports-names-tiger-woods-nike-cmo-network-sports-brands.html Stanley (2012). www.kpcb.com/file/kpcb-internet-trends-2012. Retrieved from http://www.kpcb.com/file/kpcb-internet-trends-2012 Read More