Nike Company Integrated Marketing Communications Plan and Campaign - Case Study Example

Executive Summary

The origin of Nike Company dates back to the year 1955 during the era of athlete Phil Knight, who at that time was a runner for the Bill Bowerman. The main reason behind the formation of Nike was to provide the best line of shoe designs for the athletes and all other sportspersons. At the end of his undergraduate's studies, Knight studied MBA at Stanford University and obtained a degree after two years and during this time he wrote a thesis in the ways a person could outsource the production of shoes that they can use for running to Japan and use a reputable brand during his or her competition. Later he outsourced the shoes and attempted to sell it to his former coach Bill Bowerman, and this led to their partnership. The year 1964 marked the invention of the shoe line known as Nike by Jeff Johnson of the Blue Ribbon Sports and also was the one who came up with the firm marketing material. Later in the same year Knight and Bowerman to a different path from the distribution of the shoes to the designing and manufacturing of their athletic shoes brand. In the launching of the new Nike, they sourced out for an athlete to endorse the shoes so that it can a have a unique exposure to the market.

• Introduction

The origin of Nike was as a result of Phil Knight and Bill Bowerman partnership in the 1960s when they started the business of importation of Japanese shoes. Bill Bowerman was Knight’s coach before he left to finish his MBA. Initially, there existed a company by the name Blue Ribbon Sports which was tasked with the manufacture and distribution of shoes to the athletes. In the year 1971, the company’s name was changed to Nike Inc. and has grown to be among the leading suppliers of athlete shoes across the world.

According to Percy (2008), Nike has managed to establish as strong Brand Asset Value composing of some other subsidiaries such as NIKE Golf, Converse Inc., Cole Haan, Umbro Limited and Hurley International LLC. According to the financial statistics of the year 2009, the company is known to have generated up to $16.7 billion revenue which was an incredible performance compared to the previous year. Percy (2008) states that the footwear sale that year we $10 billion and appeal sales reached up to $5 billion. On the other hand, the sales for Jordan Brand went beyond the $1 billion mark that had been a target by the company come the year 2008. The company has therefore been ranked among the best companies across the world regarding the quality of products, the nature and level of innovation and the amount of aggressiveness, displayed in the market

• Situational analysis

• • Competitor analysis

In the current market, there are only three companies in the athletic footwear industry that have been categories as large market shareholders and they include Puma, Adidas, and Nike. Rebook are currently being owned by Adidas as they acquire up to 25% of the company’s shares. The rest of the companies are therefore group among the least players in the market as the control a very small proportion of the market as compares to the three. Therefore carrying out a study on the current situation the two competitors of Nike we find that still Nike has an upper hand with the incredible mechanisms put in place for marketing their products and also huge investment place in the innovation of new designs.

The products produced by Adidas include TECHFIT Seamless Compression, TECHFIT Power WEB, and TECHFIT Tuned Compression. Among the strengths that the Adidas companies have according to Clow & Baack (2007), include strategies which are based on the endorsement, sponsorship, advertising targeting the huge global events, teams, sub-brand and sports association. The rate of innovation in the company is also high since, in the previous year, the Adi Dessler had already made over seven hundred patent registration.

On the other hand, the weakness that the company has included high prices of their commodities compared to those of its competitors. This may result in the company losing price-sensitive customers who would then prefer buying the same commodity at lower prices for its competitors. As much as the company produces a wide range of products, this action also poses a threat since they are not able to be the leading producers in the market in a particular line of commodities.

• • Consumer analysis

In the market, the main buyer if the Nike products are of male gender with ages ranging between 21 and 30 years. Their income bracket falls between $20,000 and $40,000 per annum. The occupation of the customers is mainly, white collar jobs, those and Junior Managerial Positions in either the public of private firms or the working executives. Werd & Knight (2010) states that the customer values in the market include the need for dressing in an acceptable way in the society, the fun of exciting life, aims to attain Self Esteem, Freedoms, ethnic diversity among others.

• • Product Background

The product background is built from the following three concepts; stay cool, stay warm and stay protected. Stay cool concept consists of the Dri-Fit feature which is meant to ensure that the athlete is kept dry from sweat and moisture. The warm stay concept consists of the insulated fabric which holds back heat and keeps the body of the user warm during the low-temperature periods. Lastly, the stay protected concept consists of a four-way stretch fabric which enables the use to perform a wide range of motions and has super soft threads that are purposed to minimize chafing. On the other hand, the durability of the product is quite high due to the stretch tape neck like feature. The materials used to produce the product include Heather which we made up of Dri-FIT 45% polyester or 39% of nylon, the Solid on the other hand consists of 16% elastane jersey or Dri-FIT 84% polyester.

• Opportunity and issue analysis

• • Strengths

Nikes strengths in the market are owed to the greatest marketing and technological advancement that has taken place in the company since it started. Currently, they have been ranked as the top athletic industry across the world. To reach out to their customers and increase their market share, the company can invest huge sums of money in advertisement. According to Sayre (2005), the company spends $1.4 billion in advertisement an amount almost double most of its competitors. Ana example is the Adidas Company, which spends only $900 year in Advertisement. The company also has a good control over the basketball market across the world and the global, cross country and Running events. They are currently among the top sponsors of the European events (Subotnick et al., 2010).

• • Weakness

The company’s weakness include an inefficient mechanism to come up with an interactive media with its customers. When to compare to its competitors like Adidas, the company is quite lagging behind in this case. Secondly, the company puts less priority in using mobile phones as their means of advertisement. Integrated Marketing Communications Plan (n.d.) states that the-the next big form of advertisements is through the mobile phones. Its competitors such as the Adidas are already advancing in using a mobile phone to advertise their products to their consumers.

• • Opportunities

Among the opportunities that the company has are to minimize the impact that its competitor Adidas has in the mobile marketing industry. This will increase the ability of the company to continue retaining it large market share. Nike (n.d.) states that at present only 16% of the market share is controlled by both Adidas and Reebok Company, this, therefore, shows that the company has an opportunity to rule the athletic industry for some years. Another opportunity that the company has is the ability to come up with new forms of brand awareness and initiate interactive campaigns across the globe. This is owed to the fact that the company can make huge investments due to the huge revenues they continuously earn every year. When comparing with its closest competitors such as Adidas and Puma, the company has a large budget in the advertisement than the competitors and this given the upper hand in the advertising of its products to the consumers.

• • Threats

Nike faces quite some threats and includes the increased level of competition imposed by the Adidas Company. According to Covell (2007), the Adidas Company is seen to one day surpass the Nike Company regarding the market share and amount of revenue they get annually if something isn’t done soon. Secondly, the company has a weakness in delivering interactive technology to it consumers across the globe. This is geared toward a negative impact in the market and thus, reduce the company’s market share.

• Objectives

For the company to continue being the leading company in the production of athletic footwear, there is a need to works towards improving the interactive media advertisement and outperforming its competitors. Also, the company needs to achieve reaching a target audience of over 40% four times in a duration of four months through digital TV, the mobile phones or the internet campaign. Thirdly, the company’s objectives are to increase the number of hits on its website to above 80,000.

• Marketing communication strategy

The major target of the campaign is to launch the new Nike Pro’s product using a mechanism that will ensure that the awareness of the product reaches a huge number of consumers. This is to be done through the techniques of buzz and guerilla marketing. It entails using word of mouth to spread the awareness of the product in the market. The company considers the fact that a successful campaign is conducted best through integration and layering, and this ensures that a large number of consumers are made aware if the product in the market. To achieve this, the company looks forward to using all marketing communication tools, sources, and avenues that can be found in the company to reach out to the consumers across the globe.

• Creative strategy

According to Arafat (2016), the Nike Pro is the company’s secret weapon that aims to put the company on the top of the list in the athlete footwear industry. This feature considers the fact that the nature of the sport has taken a different turn as the athletes have grown strong, bigger and the rates of colliding are quite high compared to the previous years. Therefore, the company expectation is that the athletes will consider using Nike Pro since it provides tight-fitting base layer and maintains the body of the athlete cool and dry through the sporting event. The incorporation of the Dri-FIT fabric ensures that the moisture is constantly removed from the skin thus ensuring a cooler and drier experience by the athlete. Moreover, the seamless design has seen to offer a reduction of chafing thus making the athlete more comfortable.

• Tactics and Action Programs

• • Guerilla Marketing

Theses technique is mostly used when there is a need for instant results, and the availability of the resources are quite limited. It is mainly made efficient by use of creativity and the risk to carry out new approaches in marketing. This tactic has been incorporated by the company in the launch of the Nike Pro through the use of the Bluetooth Video Download technology. This technique also involves carrying out surprise tactic to reach out to the customers, and it has proven to contribute positively to the consumer-company relationship. Using this technology, the company is geared towards creating a cool image to its consumers.

• • Buzz Marketing

This technique involves the sharing of videos through the internet and mobile phones. According to the research done by Percy (2008), this mechanism of advertisement is the fastest growing form of advertisement when considering an alternative to media marketing. It is built on the recommendation that a consumer gives to another consumer which has proven to be a powerful tool in expanding the market for the company’s Nike Pro. In the video, the scenes show the stars, Rafael Nadal, Fernando and other popular stars in sports recommending the use of Nike Pro Compression Wear to other consumers.

• Controls

The last section is to carry out an assessment of the results that are directly related to the objectives of the company geared towards the achievement of the campaign. To measure the effectiveness of the campaign, the number of people who are aware of the company’s product is considered. This can be achieved by carrying out a random survey of customers within a given market and the percentage taken to represent the rest of the customers.

At the end of the campaign, the second section involves the post-test measure that is done to gauge the state of increase in the awareness in the market. It is carried out despite the objectives and may include the impact of the campaign message. Also, the installation of a Bluetooth counter devices can be used for determining the rates of downloads. Integrated Marketing Communications Plan (n.d.) suggests the used counting of the number of magazines that are being bought and carrying out a post-purchase survey so that the effectiveness of the advertisement can be evaluated.

• Reference list

Arafat, K, 2016, Nike. Oxford Classical Dictionary. doi: 10.1093/acrefore/9.780199381135.013. 4425.

Clow, K. E., & Baack, D, 2007, Integrated advertising, promotion, and marketing communications. Upper Saddle River, NJ: Pearson Prentice Hall.

Covell, D, 2007, Globalization, ethics, and the sporting goods and athletic footwear and apparel industry. Managing Sports Organizations, 50-81. doi:10.1016/b978-0-7506-8238-1.50005-5.

Nike, n.d., Der Neue Pauly. Doi: 10.1163/2214-8647_dnp_e822130.

Integrated Marketing Communications Plan, n.d., Dictionary of Marketing Communications. doi:10.4135/9781452229669.n1693

Percy, L, 2008, Strategic integrated marketing communication: Theory and practice. Oxford: Elsevier/Butterworth-Heinemann.

Sayre, S, 2005, Campaign planner for integrated brand communications. Mason, OH: Thomson/South-Western.

Subotnick, S. I., King, C., Vartivarian, M., & Klaisri, C, 2010, Evolution of Athletic Footwear. Athletic Footwear and Orthoses in Sports Medicine, 3-17. Doi:10.1007/978-0-387-76416-0_1.

Werd, M. B., & Knight, E. L, 2010, Prescribing Athletic Footwear and Orthoses: The Game Plan. Athletic Footwear and Orthoses in Sports Medicine, 133-140. Doi:10.1007/978-0-387-76416-0_14.