66251, Marketing Strategy MKT 306

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T Marketing Strategy 1 Nike’s Marketing Strategy Course Instructor Institution City and State of the Institution Date

T Marketing Strategy 2 Executive Summary The report provides a marketing analysis and strategy of Nike in the market. The marketing analysis of Nike shows that it has maintained a competitive edge in the market given its effective business strategy. The report is divided into two main sections which discuss different marketing strategies adopted by the company. In part one there is a brief introduction to the company detailing its area of operation, products offered and the performance. It shows some details of its performance such as sales trends, market share, and profitability. The environmental analysis of the Nike shows that it faces many opportunities and threats that can either support or hinder its operation in the market. It also evaluates the current market performance of the company and the competitive edge that has made it outperform its main rival firms. The second section provides a marketing plan for the introduction of a new product on the market. The marketing plan shows the details of the products, its rationale, and the market segmentation, targeting, and positioning.

T Marketing Strategy 3 Table of Contents Executive Summary ......................................................................................................................... 2 Part 1 ................................................................................................................................................ 4 Introduction ...................................................................................................................................... 4 Environmental analysis .................................................................................................................... 4 The PESTLE Analysis ................................................................................................................. 5 Evaluation of the Current Marketing Strategy/ Performance .......................................................... 8 Analysis of the Organization Competitive Advantage and USP ................................................... 11 Part 2 .............................................................................................................................................. 12 Product Rationale and Specification .............................................................................................. 12 Segmentation, Targeting and Positioning ...................................................................................... 13 Recommended Marketing Objectives and Goals .......................................................................... 15 Appropriate Marketing Strategies .................................................................................................. 16 Conclusion ..................................................................................................................................... 17 Bibliography .................................................................................................................................. 18 Part 1 Introduction Nike is one of the leading sportswear companies in the current global market with operation across different countries. It is an American multinational company which

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T Marketing Strategy 4 manufactures and sells several footwear, clothes, accessories, and equipment among other sports items. The company was established in 1964 by tow entrepreneurs Bill Bowerman and Phil Knight. Currently, Nike is the leading global suppliers of the athletic apparel and shoes and the major manufacturer and producer of sports equipment. With the increasing level of competition in the sportswear industry, an organization needs to develop appropriate marketing strategies to make them competitive and survive in the global business environment. Evidently, Nike faces a high level of competition from various rival firms that offer similar products in the market. The future of the company's market share and profitability can be compromised if it failed to pursue appropriate marketing strategies that match the changes in the business environment. In order to implement appropriate marketing strategies, it is important for Nike to assess its external environment current marketing strategies, the competitive edge. Environmental analysis There are several environmental factors that can impact the operation and activities of the company in the market. Given the dynamic business environment, Nike is faced with various environmental factors that can either promote or hinder its operation. It can be argued that Nike's growth has been partly depended on the opportunity provided by the external environment and the development of effective business strategies to survive in the competitive market. The external environmental analysis of Nike considers PESTLE model. The PESTLE Analysis PESTLE is a strategic tool that is used to analyze the external environment of the firm in order to determine how it impacts its operation ( Anton 2015) . PESTLE analysis specifically considers six environmental factors that include political factors, economic factors, socio-cultural factors, technological factors, legal factors, and environmental factors. These factors can either support or hinder the performance of firms. Typically, PESTEL analysis help enumerates the

T Marketing Strategy 5 external environmental factors that have an impact on the firm’s strategic direction and decision- making process ( Armstrong et al. 2015) . Nike, as one of the leading firms in the global sportswear industry, must address the external factors to ensure that it is a dominant company in a market that is composed of several aggressive competitors such as Adidas. Political Factors Nike operates in many countries and thus it is subjected to a varying political landscape that requires it to implement different business strategies. The political factors mainly deal with the influence of the government on the business environment ( Barney 2014) . The strategies of Nike can be affected by various political factors that include the stability of the government, the development of free trade policies and improving the government support for infrastructure. The stability in the political environment in many markets where Nike operates provides an opportunity for the company to grow its business. Also, there development and expansion of many trade policies that encourage free trade across different economies is an opportunity for Nike to expand its business to other countries with a close relationship with the United States. In many developing countries, the governments are making efforts to improve their infrastructure and this also offers an opportunity for Nike to enter such markets. Based on the analysis of the political environment of Nike, it is evident that it has many opportunities as opposed to threats and this supports its businesses. The Economic Factors The business performance of Nike Company depends on the prevailing economic conditions where it operates. The analysis of the economic environment of firms provides important information regarding macro and microeconomic variables that can impact the performance of businesses ( Bryce 2017) . There are many factors are considered when evaluating the economic environment and includes the gross domestic product, interest rates, inflation rates,

T Marketing Strategy 6 and unemployment rates among others. The developed markets such as the United States have a relatively stable economic environment thereby providing Nike Corporation with an opportunity to continue with its steady growth. In addition, the emerging economies such as those in Asia and Africa offers a huge market opportunity for Nike. The current slowdown in the Chinese economy is a major threat to the Nike business since the company heavily relies on the Chinese economy for the sales of its apparels, equipment, accessories and sports shoes. The analysis of the economic environment of Nike indicates that it should focus on the global expansion strategies and devise ways to enter the emerging markets due to their rapid growth and huge market potential. Socio-Cultural Factors The socio-cultural factors have an impact on the attractiveness of Nike's apparel, shoes, and equipment. The socio-cultural factors are concerned with the impacts of the social and cultural conditions on the firm's business environment ( Berthon et al. 2008) . Nike is exposed to different socio-cultural factors due to its operations in different countries. Each of the countries where the company sells its products is associated with unique culture and social environment and this can affect its marketing strategies. The developing countries have Nike an opportunity to expands its business activities since that is characterized by increasing wealth and rapidly growing population. Also, many of Nike's customers are young and this means that the growing number of the young population in the world provides an opportunity for Nike to increase its sales. The company can take an opportunity regarding the growing need to develop safe and sustainable products. Changes in the lifestyle are another socio-cultural factor that Nike can use to increase its competitiveness in the market. The company can use local celebrities and other sports personalities to market its products across various countries in order to attract targeted customers to purchase its products.

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T Marketing Strategy 7 Technological Factors Technology is a major factor that plays a critical role in determining the strategic objectives of businesses in the marketplace ( Falkner 2017) . In the current business environment, many organizations depend on technological development to ensure that they remain relevant and productive in the market. As the level of technology changes, some of the business processes can become redundant thereby force the companies to change their business strategies. Nike often changes its business according to the changes in technologies that are available for its products. The increasing research and development among the firms can threaten the company since the majority of the rival firms can aim to develop technologically advanced. This puts pressure on Nike to increase its products development. The company has an opportunity to integrate internet and mobile technology to market its products. For example, it can develop various mobile applications to market its products among its targeted customers. The Environmental Factors Currently, companies need to comply with some of the strict environmental policies that are enacted to control the rate of pollution ( Ferlie and Ongaro 2015) . The environment policies that are put in place in various countries can have a significant impact on the performance of companies in the global market. However, the expansion of the environmental laws can provide Nike with an opportunity for Nike to improves its corporate social responsibility programs and ensure sustainable development. The company can also use the opportunity to address the issue associated with climate change which can enable it to gain a high reputation and image in the market.

T Marketing Strategy 8 Evaluation of the Current Marketing Strategy/ Performance The evaluation of the current marketing strategy can provide insight into the performance of an organization in the market. Nike has enjoyed a rapid growth in the market since its establishment. The company performance in the market can be evaluated using various measures such as market share, sales growth, profitability, and revenues among others ( Ginter et al. 2018) . Nike has recorded an increase in revenues in the areas where it operates over the years. The increase in the revenues indicates that the company has been experiencing an increase in the sales of its products. In many markets, the company has been able to retain its existing customers as well as attract the new customers to purchase its products. This has been core to its improved financial performance and indicates that it has loyal customers in the market. Considering its North American market, the company has recorded a growth in revenues from three of its major products that include apparel, footwear, and equipment. Its footwear brand has been the key to its competitiveness as it recorded the highest revenue as opposed to other brands. The graph below shows the Nike revenues for its three brands that include footwear, apparel, and equipment from 2009 to 2017 in the North American market.

T Marketing Strategy 9 Figure 1: Nike’s Revenues from 2009 to 2017 in the North American market From the graph, it is noted that the company is rapidly growing in the market as its revenues have been increasing over the years. This is an indication that the company sales performance is strong. A strong sales performance can suggest that the demand for a product is increasing. As a result, it can be argued that the marketing strategy adopted by Nike has been effective in improving its sales performance. Apart from sales, Nike has been recording increases in its profitability across different markets. The increase in profit of the firm can be attributed to its improved sales performance. The company recorded an increase in net come profit of 15 percent to $ 3.8 billion in 2016. The profit of the company also increased in 2017 and this shows that the company is enjoying improved profitability as compared to its competitors. The profit of the company is also above the industry averages.

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T Marketing Strategy 10 Nike is also a dominant brand in terms of its market share in the global market. The company's global sales are above the majority of its competing brands that include Adidas, Puma, Asics, and Amour. This shows that Nike controls the largest share in sports and apparel industry. Figure 2: Graph showing Nike’s Sales in the sportswear industry for 2016 and 2017 as compared to other competing brands. From the graph above, it is evident that Nike performed better than its main competitors in terms of sales for the years. This shows that many customers still value the product of Nike and thereby shows that it has customer loyalty.

T Marketing Strategy 11 The improved performance of Nike in the global business environment can be explained by its effective marketing strategies. Nike uses a number of marketing strategies to promote its products to the customers. This includes sponsorship programs, online market, celebrity endorsement and the marketing mix ( Grant 2016) . Its pricing strategy has also been effective in attracting customers to purchase its products. Many customers regard that Nike offers high- quality products and thus are ready to pay for the premium prices. Analysis of the Organization Competitive Advantage and USP With a high level of competition in the global business environment, it is necessary for firms to create a competitive edge in the market to ensure that they remain profitable ( Johnson 2014) . The competitive edge is necessary for firms to outperform their competitors in the marketplace. Nike as a leading sportswear company depends on the competitive advantage to outperform its competitors in the market. There are several factors that contribute to the competitive edge of Nike in the business environment and include its innovation, highly skilled staffs, pricing strategy, and brand. Nike is an innovative company that continues to provide unique products in the global sportswear industry. The company has a comprehensive research and development programs that it uses to develop some of its unique products ( Khan et al. 2015) . The innovativeness of the company has played an instrumental role in enhancing its performance in the market. The research and development programs focus on the current needs of the customers and attempt to provide solutions that address the needs of the customers. The other competitive edge of Nike relies on its image and reputation in the market. Nike as a company has a huge reputation and image in the market that makes it outperform its rival brands. Nike is recognized as the best sportswear company that offers quality products to targeted customers. The company has been in operation in the market for many years offering the

T Marketing Strategy 12 customers with quality products that best suits their needs ( Longoni and Cagliano 2015) . The reputation of Nike has been its key selling point for many years that it has been in operation in the market. The company is associated with the high-performance sportswear and this makes it preferred by many sports personalities in the market. Another element that contributes to the competitive edge of the company is its employees. The company has highly skilled staffs that adequate skills and expertise in the sporting industry. The employees of the company are also motivated and work hard to achieve its established objective in the market. The organizational culture that Nike uses is the main factor that has been motivating to its employees in the market. Part 2 Product Rationale and Specification Nike can improve its performance in the market by introducing a new product. The new product should be designed in a manner that helps meet the needs of the customers. The proposed new product is a watch. Although the company has invested in making some sports watches, it should introduce a new line of watches that are technically advanced. The watches should be computerized and fitted with important features such as internet connectivity. The advanced watches can make it possible for the users to browse and surf, send emails and visit other online sites. In addition, it should have certain features that make it possible to serve the function of a Smartphone. Segmentation, Targeting, and Positioning There are several factors to consider when making decisions regarding the appropriate marketing strategy to apply for a given product. A company should attempt to come with the best decisions that can help it accomplish its aims and objectives in the marketplace ( Nekrasov and Melnyk 2017) . The major factor that Nike should consider when making marketing decisions

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T Marketing Strategy 13 include market segments, target, and position. In essence, segmentation, targeting and position and three major marketing considerations for companies interested in becoming competitive in the market. With regards to segmentation, Nike considers three major factors that include demographics psychographics and geographic segmentation. Demographics segmentation refers to the grouping of customers based on factors such as age and gender ( Rothaermel 2015) . Nike has segmented its market based on age and gender of its customers. The company serves both male and female across different countries. In addition, it targets people who are aged between 15 and 55 years old with its sportswear. The other market segment is the psychographics and behavioral segmentation which define the behavior of the customers in a market. Nike Company has behavioral segmentation to help it answer questions related to why the consumers prefer its products. In addition, it identifies why the consumers are interested in purchasing its products. Ideally, the psychographic segmentation explains the purchasing habits of the consumers ( Sarooghi et al. 2015) . The company normally targets sports personalities with its products. Its apparel, shoes, and equipment are made to suit the needs of specific sporting activities such as race, football, and basketball among others. Besides, the company targets individuals who are active in lifestyle. Majority of its apparel is developed to cater to the needs of people who are interested in the modern lifestyle. The last is the geographic segmentation which involves defining the market based on regions where a company serves. On the segmentation basis, Nike has segmented its markets to serve customers across various regions in the global market. The company has major markets in the United States, Asia-Pacific, Europe, and Africa. The company also operates in regions that include North America, Japan Middle East, and China. The operation of the company in various countries implies that it targets many regions across the global market.

T Marketing Strategy 14 Targeting is another element of marketing that Nike use to gain a competitive edge in the market. Targeting involves the identification of the most attractive segments from the segmentation stage ( Schaltegger and Burritt 2017) . Nike targets a wide market segment in the market where it operates. The company primarily targets the athletes or sports personalities by providing the required products that include apparel and footwear. The sportswear products that the company manufactures and sells in the market have certain unique features that make them appropriate for specific sports. The target strategies of the company include aggressive marketing campaigns to create awareness of its products to the customers. Nike has enabled its targeted customers to obtain the desired products through customizations. The other targeting strategy for Nike is the sponsorship deals and programs. The company sponsored various sports organizations and teams as well as the individual sports personalities or celebrities. The main objective of the company is to style its products using the psychological tactics on the target market. This is achieved by linking victories with its apparel. Market position is another important strategy that companies use to gain a competitive edge in the market. Effective market positioning can enable a company to stay ahead of its companies in terms of market share, sales, and profitability ( Schaltegger and Wagner 2017) . The company is known for its high reputation and image in the market. For instances, its slogan “Just do it” is appealing to the targeted markets and inspires individuals to purchase its products. This has helped it to become a leading and competitive company in the market. Recommended Marketing Objectives and Goals In order for Nike to ensure that it remains competitive in the market, it is necessary for it to adopt certain marketing strategies to help it remain profitable. The company can enhance its performance by launching a new product in the market. The launch of the new products should be associated with intense marketing strategies to create its awareness among the targeted

T Marketing Strategy 15 customers. The company should come up with certain marketing objectives and goals that can help improve its performance. The marketing objective that the company chooses should be clearly defined and measurable. On recommended marketing objective of the company is to improve its sales by 10 percent each year. Notable, the level of competition in the apparel industry is increasing and thus companies needs to develop strategies to help improve their sales performance and improve profitability. The other recommended marketing strategy is for the company to increase its market share in the global market. As many companies continue to enter the industry coupled with the high level of competition in the market, there are chances that Nike can lose its market share to other rival firms. The loss of the market share by the company can compromise its performance and profitability. As a result, it is ideal for the company to increase its market share by 20 percent. The increase in the market share can help the company to increase its sales and profitability. It is also recommended that the company improves its online sales strategy. The online presence of an organization can contribute to the creation of awareness as well as builds a strong relationship with all its stakeholders such as customers, employees, and suppliers. In addition, online marketing provides an important platform where a company can market and sells its products to various targeted customers. Some customers might also be ready to purchase its products in the online market and makes it profitable. Appropriate Marketing Strategies Nike has implemented an effective marketing mix that has proved pivotal in attracting the purchasing decision of the customers. The marketing mix that Nike uses incorporates the four primary elements that include the price, product, promotion, and place. The product refers to the physical attributes of a given product ( Slack 2015) . Nike typically offers a variety of products

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T Marketing Strategy 16 that include shoes, equipment, and apparel. The company is recognized for its value and high- quality products. High performance is one of the main factors that the company considers when designing its products. The company designs the products to cater to the need of individuals participating in different sports such as football, athletics, basketball, and netball among others. The price is another element of marketing mix applied by Nike to improve its performance in the market. In the current business environment, companies use different pricing strategy to attract the purchasing decision of the customers. In essence, the pricing strategy has become an important marketing tool for any company interested in outperforming their competitors. Nike uses a premium pricing strategy to penetrate various market segments. The company charges different prices for each of the products it offers. Promotion is also used as a major marketing strategy by the company. Promotion is typically the process that the company uses to create awareness of its products among the targeted customers ( Tietenberg and Lewis 2018) . Nike uses different strategies to market its product with endorsements and sponsorship programs the leading promotional strategies. Print advertisement is another promotional strategy used by the company to gain a competitive edge in the market. The company has various adverts across different places such as billboards to help market its products. Online marketing strategies are also used by the company to increase its performance in the market. The last element of the marketing mix is the distribution or place which typically refers to the mean the company uses to distribute its products. Nike has many distributors and retailers in the market. The distributors and retailers are located at various places in the global market. In addition, the company sells its products through online avenues.

T Marketing Strategy 17 Conclusion Nike is a leading player in the global sportswear industry. The company has enjoyed rapid growth in the market where it has established many retail stores and outlets in several countries across the globe. The competitiveness of the company in the market can be attributed to its intense marketing strategy. An analysis of the environment of the company shows that it faces several threats and opportunities with varying impacts on its performance. However, the effective business strategies have been the core to the performance of the company in the market. Although the company offers a variety of products that serve the needs of different consumers, there is a need for it to introduce a new product to meets the needs of its customers. The new products should be innovative and associated with high performance. In addition, it should use appropriate marketing strategies to market the new product. Bibliography Anton, R., 2015. An Integrated Strategy Framework (ISF) for Combining Porter's 5-Forces, Diamond, PESTEL, and SWOT Analysis. Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction . Pearson Education. Barney, J.B., 2014. Gaining and sustaining competitive advantage . Pearson higher ed. Berthon, P., Pitt, L., Cyr, D. and Campbell, C., 2008. E-readiness and trust: macro and micro dualities for e-commerce in a global environment. International Marketing Review , 25 (6), pp.700-714. Bryce, H.J., 2017. Financial and strategic management for nonprofit organizations . Walter de Gruyter GmbH & Co KG. Falkner, R., 2017. Business power and conflict in international environmental politics . Springer.

T Marketing Strategy 18 Ferlie, E. and Ongaro, E., 2015. Strategic management in public services organizations: Concepts, schools, and contemporary issues . Routledge. Ginter, P.M., Duncan, J. and Swayne, L.E., 2018. The Strategic Management of Healthcare Organizations . John Wiley & Sons. Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition . John Wiley & Sons. Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach . Cengage Learning. Johnson, P.F., 2014. Purchasing and supply management . McGraw-Hill Higher Education. Khan, U.A., Alam, M.N. and Alam, S., 2015. A critical analysis of the internal and external environment of Apple Inc. International Journal of Economics, Commerce and Management , 3 (6), pp.955-961. Longoni, A. and Cogliano, R., 2015. Environmental and social sustainability priorities: Their integration in operations strategies. International Journal of Operations & Production Management , 35 (2), pp.216-245. Nekrasov, V. and Melnyk, V., 2017. Application of SWOT and PESTEL analysis in combating economic crimes and when identifying threats to the economic security of the state. Probs. Legality , 136 , p.193. Rothaermel, F.T., 2015. Strategic management . McGraw-Hill Education. Scrooge, H., Libaers, D., and Burkemper, A., 2015. Examining the relationship between creativity and innovation: A meta-analysis of organizational, cultural, and environmental factors. Journal of business venturing , 30 (5), pp.714-731. Schaltegger, S. and Burritt, R., 2017. Contemporary environmental accounting: issues, concepts, and practice . Routledge.

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T Marketing Strategy 19 Schaltegger, S. and Wagner, M. eds., 2017. Managing the business case for sustainability: The integration of social, environmental and economic performance . Routledge. Slack, N., 2015. Operations strategy . John Wiley & Sons, Ltd. Tietenberg, T.H., and Lewis, L., 2018. Environmental and natural resource economics . Routledge.

66251, Marketing Strategy MKT 306

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