Nike's Market Segmentation Strategy and Consumer Insights

NIKE MKT 345 – FINAL PROJECT ELIZABETH HAUCK

NIKE OVERVIEW  Nike is the largest athletic shoe and apparel company in the world and is an esteemed brand among professional sports businesses and athletes. The company was founded in 1964 by Phil Knight and Bill Bowerman and the brand is valued at more than 33 billion USD. Nike dominates the market even with several strong competitors including:  Adidas  Puma  Under Armor  Success comes from their digital marketing strategy and building connections with consumers, creating a story behind the brand, and offering both unique and quality products.

MARKET SEGMENTATION  It is critical for marketers to understand that a consumer has diverse needs. For them to properly understand both the wants and needs of their potential consumer, they must divide them into market segments based on the following:  Demographics  Behaviors  Location  Purchasing Habits  Other factors that influence their purchasing patterns.  Market segmentation is dividing the population into subgroups based on certain criteria such as demographics, psychographic, behavioral, and geographic.

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DEMOGRAPHIC SEGMENT • Gender • 67% Male, 33% Female • Age • 15-50 years old • Education • College Degree: • Associates, Bachelor, and/or higher • Income • Upper-Middle Class • Upper Class Demographi c Segmentatio n

BEHAVIORAL SEGMENT Sports Enthusiast Interested in an active and healthy lifestyle Tech Savvy Up-to-date with Fashion Trends

GEOGRAPHIC SEGMENT  Nike’s target market is located all around the world, but mostly in urban areas. Nike generates more revenue from North America than any other region they are in. Resource: http://www.statista.com Above is Nike’s revenue worldwide from according fiscal years 2017-2022 based by region (in million U.S. dollars ):

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PSYCHOGRAPHIC SEGMENT  Nike psychographic segment consists of those that are “aspiring to be and do more’ and “succeeders.” These individuals are motivated to stay fit and be on trend:  The Weekend Runner:  Enjoys training and maintaining a healthy lifestyle.  The Style Shoppers:  Those who want to wear the latest sports fashion trends before, during, and after their regular workouts.

PRIMARY RESEARCH The (3) main primary resources that will be used for this project will be the following:  Statista: https://www.statista.com/  Datarade: https://datarade.ai/  Shapiro Library: https://libguides.snhu.edu/home

SECONDARY RESEARCH Customer feedback is always critical when it comes to understanding if you are successfully targeting the right consumer. In this project, survey websites such as Survey Monkey will be utilized as there are many of surveys on Nike products, pricing, and marketing.  Survey Monkey: https://www.surveymonkey.com/

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THE NEW CONSUMER SEGMENT  Demographic variables:  Female, 15-50 years old, middle-class to upper-class.  Behavioral variables:  Has a busy and active lifestyle  Heavily active on social media  Research brand and products before purchase  Geographic variables:  Populated city and suburban areas.  Opportunity to maintain healthy lifestyle: i.e., parks, local gyms, etc.  Psychographic variables:  Keeping up with the Jones’s: wants to keep up with other like-minded individuals she knows  Image oriented  Retail therapy

THE WEAKNESS & OPPORTUNITY The Weakness  Only 33% of Nike consumers are women.  Women hold 70% to 80% of all consumer purchasing power through a combination of buying power and their influence on their household.  It is heavily known as a male athlete brand, even with many pushes on female-oriented messaging. The Opportunity  TikTok’s data shows that 60% of users are female and between the ages 16 to 25 years old.  This is a new platform where creative content can help reach capture the female audience:  Outfit/shoe combinations  A day with a female athlete  Messaging that isn’t extremely serious  A direct way to purchase Nike product.

MARKETING STRATEGY  Goals:  Increase female engagement across social media platforms.  Increase sales in women’s apparel and shoes.  Successfully enter Athleisure clothing line and add value to Nike’s portfolio.  Strategy:  Launch a social media campaign to be featured on all Nike Women and Nike main social media platforms.  This campaign will push away from just using professional women athletes, highlight real life, everyday women and their journey to maintain a happy and healthy lifestyle.

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RESEARCH NEEDS  Research needs for each segment include:  Finding out who is the main competitors for selling athletic clothing and shoes for the female demographic.  What is the typical price range of the products this demographic purchase?  How to these make their purchases: i.e., online, in store, during sales, monthly, yearly, etc.  Social media activity – exploring each platform and the age demographics.  What styles and colors does this consumer prefer? i.e., neutrals, patterns, vibrant colors, etc.  How do we connect with them? Nike uses professional athletes, influencers, and celebrities to endorse their products. How do we shift to better connect with this consumer?

ANALYZING THE CONSUMER BUYING BEHAVIOR  There are (3) primary reasons why a business needs to analyze the consumer buying behavior: 1. To be observant to consumers responses on a specific marketing strategy and to determine what types of strategies work with different groups of consumers. 2. To ensure that the Marketing Mix (product, price, place, and promotion) is satisfactory. 3. To help predict future trends and how consumers will react to future marketing strategies.

STAGES OF CONSUMER BUYING PROCESS  There are (6) main stages of the consumer buying process: 1. Problem Recognition – Becoming aware of a need or want 2. The Search Information 3. Evaluating Alternatives 4. The Purchase Decision 5. The Actual Purchase 6. Post-Purchase Evaluation – Satisfactory or dissatisfactory outcome

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ATHLEISURE LINE & FORECASTING TRENDS  Nike will be introducing a new line of athleisure apparel specifically marketed towards the female demographic between the ages of 15-50 years old in 2023. Athleisure is considered comfortable and casual clothing that is designed for both exercise and everyday functions. Although Nike is a leader in athletic apparel and shoes, they are missing an immense opportunity not catering to this demographic. Women who are looking for this type of apparel, do not necessarily relate to the professional athlete or celebrity.  The global athleisure market size was valued at $306.62 billion (USD) in 2021 and is expected to expand at a compound annual growth rate of 8.9% from 2022 to 2030. Since the COVID-19 Pandemic, athleisure wear is on the rise in the fashion industry and orders have jumped over 80%. It has pushed the trend of consumers spending more money on apparel that is multi-seasonal and multi-function. This is because more individuals work or study from home and prefer to do physical activities at their own convenience.

MARKETING CHANNELS  Nike has:  (108) Facebook pages  (104) Twitter handles  (16) Instagram accounts  (41) YouTube Channels  (1) SnapChat  (1) TikTok  (1) LinkedIn

SOCIAL MEDIA ENGAGEMENT INSTAGRAM – 222M FACEBOOK – 35M TWITTER – 8.9M LINKEDIN – 4.7M TIKTOK – 2M YOUTUBE – 1.67M

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CONTENT EXAMPLE Some examples of differing content 1. Instagram 2. TikTok 3. Twitter 4. Facebook 1. 2. 3. 4.

MESSAGING STRATEGY  Nike will use a messaging strategy that is specific to the women demographic and include topics that are a mixture of emotional messaging, generic messaging, and brand image.  Emotional Messaging: A strategy that uses feelings and built connections to sell.  Generic Messaging: Focuses on selling the type of product instead of the actual brand itself.  Brand Image: Helps create the personality of the brand and company.

ONE-TO-ONE MARKETING  One-to-one marketing, also known as relationship marketing means, being willing and able to modify your behavior towards an individual customer based on what the customer tells you and what additional information you know about the customer.  This type of marketing helps improve customer loyalty and a return on marketing investment. Nike is well known for implementing this type of marketing strategy as they introduce products that are based on the wants and needs of the consumer.  They do this by reviewing the feedback of the consumers which include reviews, surveys, and social media engagement. If Nike continues one-to-one marketing, they will be successful because they will improve their products to better fit the consumers needs and wants.

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REVIEW  Nike entering the athleisure line successfully will add value to their portfolio and build connections to the female demographic that they do not necessarily hit. With this marketing strategy, they are building more than just another clothing line, they are building relationships and meeting the needs of female segment.

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RESOURCES  5 types of market segmentation and how to use them . SurveyMonkey. (n.d.). Retrieved September 18, 2022, from https://www.surveymonkey.com/market-research/resources/market-segmentation/  Analysis of female marketing—taking Nike as an example - researchgate . (n.d.). Retrieved September 19, 2022, from https://www.researchgate.net/publication/347915118_Analysis_of_Female_Marketing- Taking_Nike_as_an_Example  Nike market segmentation, targeting, and positioning . Edrawsoft. (n.d.). Retrieved September 18, 2022, from https://www.edrawmind.com/article/nike-market-segmentation-targeting-and- positioning.html  Nike Target Market Segmentation & Brand Analysis . Start.io - A Mobile Marketing and Audience Platform. (2022, August 8). Retrieved September 18, 2022, from https://www.start.io/blog/nike- target-market-analysis/  Sample response Nike segmentation and targeting - Los Angeles mission ... (n.d.). Retrieved September 19, 2022, from https://mymission.lamission.edu/userdata/schonfd/docs/Assignments/ Nike%20Segmentation%20and%20Targeting.pdf  Tighe, D. (2022, August 15). Nike's wholesale revenue by segment 2022 . Statista. Retrieved September 18, 2022, from https://www.statista.com/statistics/888763/nikes-revenue-by-customer- segment-worldwide/

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RESOURCES CONT.  Athleisure Market Size & Share Report, 2022-2030. (n.d.). Retrieved September 29, 2022, from https://www.grandviewresearch.com/industry-analysis/athleisure-market#:~:text=Mass%20athleisure%20dominated %20the%20market,are%20today%20considered%20work%2Dappropriate.  Bringé, A. (2021, December 10). Council post: The rise of athleisure in the fashion industry and what it means for brands . Forbes. Retrieved September 29, 2022, from https://www.forbes.com/sites/forbescommunicationscouncil/2021/05/03/the- rise-of-athleisure-in-the-fashion-industry-and-what-it-means-for-brands/?sh=69bbf62b3ae0  Global athleisure market forecast report 2021-2028 - rising trend of sustainable athleisure, increased demand from millennials, growing penetration of e-commerce - researchandmarkets.com . Business Wire. (2022, April 25). Retrieved September 29, 2022, from https://www.businesswire.com/news/home/20220425005443/en/Global-Athleisure-Market- Forecast-Report-2021-2028---Rising-Trend-of-Sustainable-Athleisure-Increased-Demand-from-Millennials-Growing- Penetration-of-e-Commerce---ResearchAndMarkets.com  PhD, S. B. M. (2013, January 7). Stages of the consumer buying process . ToughNickel. Retrieved September 29, 2022, from https://toughnickel.com/starting-business/Stages-of-the-Consumer-Buying-Process  Take online courses. earn college credit. Research Schools, Degrees & Careers . Study.com | Take Online Courses. Earn College Credit. Research Schools, Degrees & Careers. (n.d.). Retrieved September 29, 2022, from https://study.com/academy/lesson/information-search-control-risk-factors.html  Women's Clothing & Apparel. Nike.com . Nike.com. (n.d.). Retrieved September 29, 2022, from https://www.nike.com/w/womens-clothing-5e1x6z6ymx6 

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RESOURCES CONT.  Unmetric. (n.d.). Social Media Analytics & Intelligence Dashboard by Unmetric . Unmetric. Retrieved June 8, 2022, from https://unmetric.com/brands/nike  What you can learn from Nike branding strategy . Rival IQ. (2022, March 1). Retrieved June 8, 2022, from https://www.rivaliq.com/blog/nike-branding-strategy/#:~:text=Nike%20uses%20social%20media%20to,%2Dbuilding%20ha shtags%20like%20%23nikewomen .  Fillmore, K. (2022, February 27). Nike targets women - marketing communications . ZABANGA Marketing. Retrieved June 13, 2022, from https://www.zabanga.us/marketing-communications/nike-targets-women.html  Mathieu-Phillips, C. (2022, February 10). Why brands should be on TikTok in 2022 . The Social Element. Retrieved October 9, 2022, from https://thesocialelement.agency/why-brand-on-tiktok#:~:text=TikTok%20allows%20for%20simple%20and,is %20really%20effective%20for%20brands.  Nike market segmentation, targeting, and positioning . Edrawsoft. (n.d.). Retrieved October 9, 2022, from https://www.edrawmind.com/article/nike-market-segmentation-targeting-and-positioning.html  Message strategy, content marketing and brand development . Counterpart. (2021, December 7). Retrieved October 9, 2022, from https://www.counterpartcd.com/message-strategy/#:~:text=Simply%20put%2C%20message%20strategy %20is,communications%2C%20and%20communications%20into%20results.  Nelson, A. (2019, July 17). Women drive majority of consumer purchasing and it's time to meet their needs . Inc.com. Retrieved October 9, 2022, from https://www.inc.com/amy-nelson/women-drive-majority-of-consumer-purchasing-its-time- to-meet-their-needs.html#:~:text=Women%20drive%20the%20majority%20of%20purchasing.&text=In%20fact%2C %20Women%20drive%2070,their%20buying%20power%20and%20influence

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MKT 345 Final Project

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