Marketing Audit Report: Nike Air Max 3 - Case Study Example

Marketing audit report: Nike Air Max 3 (Authors Name) (Institutional Affiliation) Company Profile Nike Air Max 3 is a line of Shoes from Nike Inc. that was originally released in the 1987. Nike Inc. was first registered as a company in September 1969 and has since been engaged in developing, designing, marketing accessories, services, footwear, equipment and apparel all over the world. Nike Inc. designs its products to suit different needs from different consumers. Their products are categorized into basketball, women training, Men’s training, football, Action sports and sportswear. The company also designs products for children and other recreational purposes such as cricket, golf, baseball, outdoor activities, tennis, walking, wrestling, volleyball, lacrosse and golf. The company also sells athletic footwear which is specifically designed to suit the specific needs of athletes. Nike also sells sports accessories and apparel including bags and other accessories items such as headbands and wrist bands. Moreover, the company also sells market apparels with professional teams, licensed colleges and league logos. NIKE’S air max is a running shoe specifically designed for this purpose. This report will look at the target market of Nike Air Max 3, marketing mix, competitive advantage and finally evaluate how the company’s marketing mix is used in the target market (Nike Inc ,2014). 1.0 Target market Target marketing can be defined as breaking a market into different categories known as segments and then focusing on one or more of those market segments. Markets can be segmented in accordance to different geographic locations, demographic factors such as age, income and other measurable statistics and based on psychological factors such as lifestyle preferences. Nike Air Max 3 mainly targets the sportsmen or athletes. This is because of their lightness and comfort that comes with the shoes and allow them to exercise with ease and comfort. The reason why Nike Air Max 3 mainly target sportsmen and athletes is because it is easier for them to shoes specifically designed for them as compared to an ordinary individual who will probably buy any shoes. The company reaches its target market by having agreements with sports team, become team’s sponsors, college athletes and sometimes they endorse specific team members. That way Nike Inc. is able to get its product to a wide range of its consumers who are likely to buy this product. Although the company also targets other individuals such as teens who still hold the hip hop customs, they mainly concentrate their markets on sportsmen who are more likely to buy Air Max for their exercise. Nike Inc. has put in place a number of targeting strategies aimed at reaching their target market. Some of these strategies include product sponsorship by well-known athletic teams and individuals, using professional and using celebrity athletes to reach out to the consumers. Using this marketing strategy, Nike has been able to reach so many athletes and sportsmen. This is because, if a sports team manager lays down instructions that all athletes have to use Nike Air Max 3 for their exercises, then they have no choice other than to buy those shoes. Other sport’s teams just buy the shoes and deliver them to the members of the team. Another targeting strategy that Nike can use is styling of product objective, here, the company will use superstars to sponsor its brands and then when they prosper, the brand is then associated with victors. This then influences other athletes to use the product (Nike Inc ,2014). 2.0 The marketing mix 2.1 Product A customer buys a product that is able to satisfy his/her needs (Kotler 2009). Nike Air Max is currently produced to specifically target the sportsmen and athletes due to its comfort when they are exercise. 2.1.1 Category of Nike Air Max 3 products Nike Air Max 3 products fall under the category of shopping products. Shopping products are described as those products that the customer purchases after long considerations. The customer uses much of his/her time looking at factors such as the prices offered by other competing companies offering the same product and also the effectiveness and efficiency of the product (Baines 2011). In relation to Nike Air Max 3 the product is professional running shoes and therefore the consumers take a considerable time comparing the ability of the product to guarantee good performance they take little consideration on the price. Teenager consumers however, compare prices and also factors such as style and color. They are more concerned about the current fashion and trends that are there in the society. There are different distinctions through which Nike Air Max 3 customers purchase their products they include: 2.1.2 Core product This is defined as the main product that is sold in the company. The core product is also flagship product that was produced by the company and which strongly represents the company’s core competencies (Bensoussan 2008). In relation to Nike Air Max 3 its core products are athletic running shoes. Since 1987 Nike Air Max 3 has focused on producing and improving professional running. 2.1.3 Actual Product This can be described as the aspect of the products that is tangible and appealing to the ordinary consumers. The actual product represents the features of the as the design, the quality or the styling and the one that can be easily purchased by the ordinary consumers (Cheverton 2004). Nike Air Max 3 actual products are the running shoes. 2.1.4 Augmented product This defined as the intangible aspects of a product. The augmented aspects of products include additional features that give the product their competitive advantage and thus a reason of raising the price of the product. Nike Air Max 3 products can be considered to be augmented since they increase performance of the professional athletes and sportsmen. 2.1.5 Brand Nike Air Max 3 is a very effective brand. Its brand equity is very strong because more sportsmen and athletes are wearing the brand in various competitions. It is the world’s most popular and sold running shoes. The brands image and heritage is derived from its competitive line of products in sports shoes (Nike Inc, 2014). When they do product sponsorship with famous athletes and they win this competition, Nike uses this to its advantage to imply that they won since they used their sports shoes. 2.2 Promotion Nike Air Max 3 has over the years adopted a unique strategy in advertising and promoting its products through the use of sponsorships. Sponsorship advertising involves a company paying for association with a certain event or product. The main aim of this kind of advertising is to enable the general public to perceive your brand in a positive manner. The various criteria that are used to determine sponsorships include; relevance to the service or product that the company is offering, the brand fit which simply means that the brand must fit the event and the mission alignment which means that the company interest must align with the sponsored event or product interest (Richard 2008). Nike Inc spent 2.7 billion dollars in annual marketing with a big proportion of the money being spent in endorsement of famous athletes. Nike Inc forges partnerships with NFL team to supply them with Nike Air Max 3 and uniforms for all its 32 teams. Nike is the officer soccer sponsor of the English premier league. The figure below is a picture of Paula Radcliffe after she pulled out of the Olympics due to injury. Nike Inc advertising is said to be one of the most emotional branding in the world today. The company’s strive to ensure customer loyalty is off the charts due to well use of emotional branding. Nike brand strategy is built on their powerful brands Nike Air Max 3 being one of them. This is because the company uses emotional branding in its adverts and more specifically the story of the hero. This story is an old one where a great hero is pitied against one great enemy and after a long hard struggle, the hero triumphant. In a way, this message communicate that Nike is together with the sportsmen and athletes through their hard and torturous training and eventually they will win. 2.3 Place (Distribution) Nike Air Max 3’s distribution strategy is through formation of strong partnerships and collaborations with its various suppliers and distributors. Nike Air Max 3’s suppliers all adhere to the Code of Employment Standards for Suppliers. Due to the fact that Nike Air Max 3 has a vast supply chain it is very difficult for them to manage them therefore Nike Air Max 3 only communicates with the direct suppliers who then communicate with their subsequent suppliers. Nike Inc shoes include Nike Air Max is distributed to the customers through exclusive Nike stores all over the world and multi brand stores. Nike Inc sells Nike Air Max 3 in over 20000 retail stores in USA alone and in over 200 countries all over the world. In the international market, the company distributes its products through distributors, subsidiaries and licensees. Nike Inc. has production facilities based in Asia and it has operational units and customer service facilities all over the world (Nike Inc, 2014). 2.4 Price Pricing strategies are techniques employed by companies to with an aim of selling their products at the most profitable and reasonable price. Flexible pricing strategy is one of these methods that companies employ. Flexible pricing is characterized by the company openness to bargaining for their goods (Norton 2007). Nike Air Max 3 maintains a flexible pricing strategy that will enable it to cope with the changing economic environment. The various promotional activities also demand lower prices and so Nike Air Max 3 maintains a flexible Price strategy in order to cope with such issues. Latest Nike Air Max 3 innovative athlete’s shoes are charged at a premium. This is due to the fact that professional sportsmen and athletes get the advantage of high performance sports shoes which is unmatched in the market and therefore have no other options but to purchase Nike Air Max 3 sports shoes. 3.0 Competitive Advantage Kotler P. and Armstrong (2012) have defined competitive advantage as the “an advantage over competitors gained by offering greater customer value, either by having lower prices or by providing more benefits that justify higher prices.” Nike Air Max 3s competitive advantage is clearly seen in its advanced sports shoes that are manufactured using the latest technology. Nike Air Max 3 has successfully introduced in the market efficiently designed sports shoes that are of the latest technology. Nike Air Max 3 is able to offer a high price for it sports shoes that are aimed for professional sports men and athletes and to offer a low price for the commercially produced sports shoes. Nike Air Max 3 faces stiff competition from international brands that have also employed efficient marketing activities such as FILA. Nike Inc commitment to research and development is also a core competency that should be maintained. The commitment to research and development is the key reason why Nike Inc leads in developing the newest and most efficient sports shoes. Nike Air Max 3 also has a competitive advantage in its unique marketing strategy of sponsoring athletes all over the country. Nike Air Max 3 has sponsored to athletes and this has enabled it to have a competitive advantage against its competitors. References Kotler P., & Keller K. L.(2009). A framework for Marketing Management (4TH Ed) Upper Saddle River, New Jersey: Pearson Prentice Hall. Kotler P. (2011). Marketing Insights From A to Z: 80 Concepts every manager needs to know. London: John Wiley and Sons. Norton Paley (2007) Marketing Strategy: Desktop Guide Thorogood Publishing Armstrong, Gary & Kotler, Philip (2005) Marketing: An Introduction Upper Saddle River, N.J. Prentice Hall, 7. Edition Bensoussan E. B., Fleisher S. C. (2008). Analysis without paralysis: 10 tools to make better strategic decisions. USA: Pearson Education Ltd. Bensoussan E. B., Fleisher S. C. (2008). Analysis without paralysis: 10 tools to make better strategic decisions. USA: Pearson Education Ltd. Cheverton P. (2004). Key marketing skills: strategies, tools and techniques for marketing success. Great Britain: Kogan Page Limited. Cheverton P. (2004). Key marketing skills: strategies, tools and techniques for marketing success. Great Britain: Kogan Page Limited. Nike Inc (2014). Company profile. Retrieved on 5th may 2014 from http://nikeinc.com/ Read More