Nike's Segmentation, Targeting and Positioning on the Tennis Market - Example

MKT100 Individual Assessment Segmentation, targeting and positioning The business tennis Executive summary This report is written with an aim of providing information concerning tennis sport as a marketing tool for companies such as Nike. The report gives details on reasons why Nike together with other companies chooses sports as a way of marketing their products. Through ways such as market segmentation positioning and targeting this report, gives a detailed account of what is required of the companies to market their product through sports such as tennis. The report includes the description of the Nike’s products, detailed information on the tennis market with graphs and pie charts. A detailed description of the tennis market overview and the completion between Nike and other companies such as Reebok and Adidas who are competing for the same target market. Table of content Cover pages…………………………………………………………………………1&2 Executive summary…………………………………………………………………3 Table of contents………………………………………………………………........4 Introduction………………………………………………………………………...5 Market segmentation………………………………………………………………6 Demographic segmentation……………………………………7 Physiographic segmentation……………………………………7 Benefit segmentation……………………………………………8 Market overview……………………………………………………………………8 Positioning matrices………………………..………………………………………9 Quality of products and benefits………………………………..10 Market segmentation………………………………………..11 Competitive advantage of Nike as compared with its competition……………12 Nike specific customer profile…………………………………………………13 Value positioning statement………………………………….……………….14 Conclusion……………………………………………………………………15 References……………………………………………………………………15 Appendix……………………………………………………………………..16 Introduction In the recent past tennis and other sports have been offering an attractive market for many companies that are producing sportswear and other sports accessories. The tennis market is growing rapidly and this is the hot point for various marketing organizations. Enabling them to utilize these market companies need to understand all the details concerning the sport. Ranging from the segmentation of the market to the completion in the market is very critical. In this report, all information that is require to venture and lure tennis by companies such as Nike has been compiled. The efforts and competition strategies that companies have put in place are also given. These companies need understand the market growth rate and how to go about it. Market segmentation Demographic segmentation This is a form of segmentation in which the company has to identify its market mainly using the demographic means including gender, occupation, family cycle, age, income and education. Demographic factors are used mostly by companies to segment their market. The main reason why demographic factors are mostly used is that the need, wants and usage rates of the consumers mostly vary closely with demographic factors. Tennis is a sport that is consumes by many with different demographic factors. A study done showed that there are many antecedents that predict the commitment of the consumer they include enjoyment, social support and constraints, and personal investments. The study was meant to outline the commitment of tennis players basing on the commitment model. Demographic factors affect the market to a large extend. Psychographic segmentation The psychographic segmentation depends on the demographic information for specific detailed information such as lifestyle of individuals, personality, personal beliefs, purpose and geodemographics. It is a combination of demographic, lifestyle and geographic segmentation with an aim of creating effective programs to be used for marketing the product to the consumer who lives in specific small area. Tennis market highly depends on the lifestyle of the people in the place. In Australia tennis is used as a tool for fitness many people both the old and the young. Australia open has started a program and build facilities that enable people plat tennis as a way of enjoyment and fitness. Benefit segmentation With benefit segmentation companies uses the benefits variables basing on the desires and advantages that the customer gets to put the market into clusters or segments. Most of the Australians have many desires that make them play tennis. To most of Australian youth tennis is a hobby this has driven them to play tennis at all times when free. The physical health and fitness which is a necessity to many has driven most of the Australians to participate in tennis competitions such as Australian open(Kotler, 2006). Market overview Tennis is played worldwide, in the last thirty years it has moved into new markets. Tennis has attracted the attention of many and encouraged new talents in ways that were thought to be impossible in the past. This is depicted by the fact that top ten women worldwide come from ten different countries. This shows exactly how global tennis has become. United States was the dominating nation in tennis but at the moment other countries such as Spain and France have taken over(Reid & Bojanic, 2009). Russia has erupted in the last ten years and is considered a strong powerhouse for tennis. The tennis market is escalating daily. China is known to be among the leading countries with up and coming tennis players who are potential sports elites. US were a monopoly of tennis in 1970’s and 1980’s both for the women and men(Barnes, Blake, & Pinder, 2009). This was until 1990’s when Australia and a few nations joined. There is much youth who are very talented and with great passions that are coming up with batter skills to the market. Teenagers such as Heather Watson and Laura Robson are some of the youth in the market with promising futures. Watson is receiving the Fed Cup experience while Robson recently won the Wimbledon just as a junior(Kotler, 2006). Spain, America, China and Australia invested in tennis in the year 1992 all through to 2008. Many other nations with great market such as Brazil are waiting to prove themselves that they can produce the best too. Whatever comes up, it is important to note that tennis is growing globally and it is very exciting. It is expected to grow in its market and become stronger. The future of tennis is very bright, we are very lucky to witness the growth of tennis in all continents of the entire globe (Kotler,2006) The graph above indicates growth in the tennis over the years in many different countries. Positioning matrices Although Nike has successfully maintained a good position in the Australian market, it is still facing several challenges and competitions. In the recent past Nike Australia Pty ltd started signing up Australia’s tennis stars including Shane Warne and Cathy Freeman in an attempt to stop painting Nike as just American brand but global (Johnson, 2005). Nike is facing strong competition from Reebok, Adidas, New Balance and Converse. Adidas is the most competitive brand for Nike in Australia. Reebok market is growing faster, it shares about 6 percent and revenues of about $500 million. By application of positioning strategy Nike can improve its marketing plan making it is ahead of its competitors. Positioning matrices is a method that involves a certain marketing mix to influence the perception of potential customers towards the brand(Reid & Bojanic, 2009). Making use of the perceptual mapping to ensure the position of the competing products in the mind of the consumer, this way the company can easily differentiate its brands from those of the competing companies. This will definitely increase the efficiency in marketing and development of new products. Nike has a good number of direct competitors who produce almost the same quality of the product for the same target market as that of Nike(Kotler, 2006). Quality of products and benefits Nike produces the best quality of the sportswear; they have incorporated technology in their manufacturing producing high quality products in the market. Nike has constantly developed new designs of sportswear making it stay ahead of its competitors. The fact that a product of Nike are the most interesting since they produce shoes with new looks that are fascinating makes the mind position of the consumer stay with Nike. They always expect new products that are interesting with good quality. Nike has also managed to develop many benefits that its consumers benefit these include the Nike team sports, the athletic sponsorship frenzy and helping out with soccer hence gaining international recognition(Reid & Bojanic, 2009) NIKE ADIDAS/REEBOK ADIDAS/REEBOK Ensuring that high quality products are continuously produced and the consumers get the benefit as appreciation to the consumer for being loyal to the company is one way of making sure that the company is in the right position. Nike unlike Adidas and other competing companies such as Converse and Reebok has made sure that it maintains a good quality of products and support in terms of benefits towards it consumers due to their loyalty(Gupta, 2005). Market segmentation This is the way in which large markets are defined or subdivided into manageable segments sharing similar requirements. The most important fact concerning this issue is that it allows the producer to cluster or divide its market into manageable niche markets with an identifiable number of customers with same characteristics making it very easy for the company to reach them using smart marketing. To make sure that the company has successfully targeted the market, the company abilities must be compared with those of its competitors. Nike has manages it market very by segmenting it into very well manageable segments that allows them a chance to have proper advertising and marketing(Kotler, 2006). Nike has focused mainly on the domestic market this further helps in making the market smaller and manageable. Good segmentation and marketing skills has put Nike as the leader in the industry. Nike has managed to maintain its market of the years without being over the years without being outcompeted by its competitors such as Reebok which over the years have not utilize the local market together with its segmentation. This owes to the fact that Nike has managed to get its products in the right positioning matrix. Its consumers are totally loyal and believe in the quality and sustainability of the company (Reid & Bojanic, 2009). Competitive advantage of Nike as compared with its competition Any business that has the competitive advantage has the ability of attracting more customers as compares with the competitors. This is due to a specific factor that none of its competitor’s poses. The best way of taking competitive advantage is to understand the needs of the customer ad finding ways of giving them all that they need. Most of the sources of competitive advantages last very shortly; hence, businesses are forced to always search for new ways that will boost competitive advantage and beat their competitors. This is all about finding batter ways of making sure that the products of the company are totally differentiated from those of other companies. The main purpose of business strategy is to always find new ways of getting competitive advantages (Gupta, 2005). Nike has developed many ways of getting competitive advantage against it competitors. Nike was developed by Bill Bowerman and Phil Knight at the beginning of 1960. Bowerman was famous nationally known as a couch for the athletes at the University of Oregon while Phil was middlelength athletics. He took his studies of Oregon and later studied MBA in finance from Stanford University. Bowerman always esteemed to giving his athletes a more competitive advantages by continuously experimenting on diverse athletic sportswear, drinks and designing innovative track shoes (Gupta, 2005). The fact that Nike was founded by people who really practiced athletics gave it a competitive advantage, the two founders understood very well what its customers experienced and what they needed. Reebok as compared with Nike was started in United Kingdom, in the mid 1980’s by joseph William foster whose main intention was to make shoes that could make athletes run faster. Reebok produced the first known shoes with spikes. Nike produced high quality products that the customer needed and this has made Nike to appear on the lime light all through (Johnson, 2005). Product innovation and continuous improvement is one of the ways in which Nike has managed to maintain a good competitive advantage. Nike has always created new business opportunities that set it apart from its competitors. Nike has spread to more than 160 countries and employs over a million people and this demand more for the company to keep its competitive advantage. The company in the market should be maintained through innovative ways (Gupta, 2005). Nike specific customer profile Tennis players are a specific category of consumers of Nike products. Nike has produced a variety of products including footwear, accessories, bags and even hats. Nike has been always at the top when it comes to quality of the products and satisfaction of the customer demands. Most of the famous tennis players use Nike accessories, shoes, and clothes when playing (Kotler, 2006). A good example is Roger Federer, who started playing tennis at 8 years. His mother named Lynnette is a South African while his father Robert is a Swiss, the two met when they were on a business trip. Federer has one sister named Diana, she it two years older than him. His idol while growing up was Boris Becker and his most favorite player was Pate Sampras. He compiled fascinating results in his junior and won the junior title in 1998. He also won the Wimbledon junior singles and doubles that year. He also managed to win his way to the get to US and Australian open in 1998(Gupta, 2005). Rodger Federer enjoys sitting spending time on the beach and playing table tennis. He is a fanatic of his hometown football club FC Basel. He initiated the Roger foundation in 2003 with the aim of helping out disadvantaged children in South Africa (Gupta, 2005). He was elected as president to ATP player council in 2008. His wife Mirka is a former WTA tour player; they met at the 2000 Olympic Games and got married in 2009. In 2013 he received the Stefan Edberg Sportsmanship Award, this was his ninth time. Value positioning statement Nike as a company is a brand on its own. Many famous sport stars have approved of the products of Nike. Marketing and using Nike project is being on the right track as compared with all other competing brands. The quality of products, technology involved when manufacturing and continuous improvements on the product makes Nike project the best in the market (Gupta, 2005). Over time Nike to come up with batter adds such as “life is a sport. Make it count” this has elevated Nike’s trademark value. The perception of many customers has changed and many people are realizing the universality of Nike’s brand. Nobody should be left out from enjoying the brand and life itself (Kotler, 2006). Conclusion Tennis as one of the most attractive sport has potential of creating a good market for companies such as Nike. It is important to note companies should respect the values of the game and avoid ways that can frustrate the spread of the sport by their completion. Competition for this market should be free and fair to avoid conflict. Barnes, C., Blake, H., & Pinder, D. (2009). Creating & delivering your value proposition: managing customer experience for profit. New York: Kogan Page Publishers. Gupta, S. L. (2005). Managing Customers as Investments: The Strategic Value of Customers in the Long Run. Pearson Education/Wharton School Publishing, 70-77. Johnson, G. S. (2005). Exploring Corporate Strategy:Text and Cases. Washington DC: Prentice Hal. Kaplan, R. S., & Norton, D. P. (2004). Strategy maps: converting intangible assets into tangible outcomes. New York: Harvard Business Press. Kotler, P. (2003). Marketing Management, Eleventh Edition,. Washington DC: Pearson Education publishers. Kotler, P. a. (2006). What is geographic segmentation'. Prentice Hall, 78-98. Marrow, M. (2005). Strategies to Achieve Market Leadership. New York: he Example of Amazon publishers. Reid, R. D., & Bojanic, D. C. (2009). Hospitality Marketing Management. Hospitality Marketing Management journal John Wiley and Sons, 139-567. Thompson, A. a. (2003). Strategic Management Concept and cases. London: McGraw Hills publishers. Appendix Market segmentation There are various ways to be used to evaluate and carry out market segmentation. Apart from the one given above we have geographic market segmentation and many others. Companies should look into all aspects of market segmentation to get good value. Market overview This refers to the general view of the market. To understanding of the market the company can conduct a market analysis using SWOT analysis, this way all aspects of the market will be tabled and there will be a lot of ease in executing the strategies. Read More