In your analysis of the South African market, would Nike be right to use price leadership. If yes why? If no why?

Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
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In your analysis of the South African market, would Nike be right to use price leadership. If yes why? If no why?
Product and Pricing Strategies of the Nike Athletics Shoes Essay
Nike Incorporation competitiveness for sportswear and equipment market leadership has continued to expand. The
Company has developed flexible product and pricing strategies for its athletics shoes. The Company has varying pricing
strategies depending on their consumer groups (Hill & Jones, 2010). Consequently, the prices for its products fluctuate
subject to diverse aspects of their products including type, features, design, and edition. Particularly, the Company sells
its athletics shoes at standard prices to consumer groups who can pay. However, the Company normally design and
manufacture shoes, which target a particular group of clients. The shoes normally have specific features preferred by
different consumer groups. Nike Incorporation product and pricing strategy flexibility has enabled it to capture varying
consumer groups.
The Company applies value-based and price leadership, product-pricing strategy in determining prices of its items. The
strategy incorporates setting prices by considering the value various clients place on particular products. To this end, the
Company relies on a strong brand appeal among consumers. The customers can purchase Nike recognized products
regardless of the standard price for such items (Ferrell & Hartline, 2011). In addition, Nike applies vertical integration
pricing approach, which focuses on retaining clients in multiple level operations. The strategy enhances price
competitiveness in relation to other market players while ensuring that they remain manageable to retailers (Hill & Jones,
2010). It is notable that the approach also focuses on the premium segment of the market based on consumers' loyalty
to the brand.
The Company's current product positioning strategy incorporates using super stars like Tiger Woods to endorse products.
In addition, the Company enhances its product positioning through promoting the "Just Do It" trademark (McKinley,
M2005). The Company invests in developing pricing strategies for diverse items based on the traditional product life cycle.
The Company must determine the readiness of a target marketplace before executing an appropriate approach such as
introductory pricing for its penetration.
The Company also ensures that business intricacies such as marketing, supplies, and promotion do not present
detrimental effects on product sales during the life cycle (McKinley, M2005). Furthermore, adopting public relations and
sustainability practices escalates brand awareness within the target marketplace and potential consumers.
It is recommendable that the Company uses product and pricing strategy, which can provide a twin approach (Koester,
2011). The strategy should focus on ensuring smooth entry of a new product within a targeted marketplace as well as
strengthening prices as the product continue to establish itself within the product life cycle. To this end, it is
recommendable that the company uses introductory pricing strategies to facilitate a smooth entry.
Subsequently, the Company should adopt a premium - pricing approach to cater for all its clients in the marketplace
(Koester, 2011). The strategy entails fixing the price for shoes based on their quality and the clients' willingness to pay.
This approach should be anchored on the realization that clients who purchase Nike recognized brands have developed
a strong brand emotional intelligence and are willing to pay for the items because of the worth of such products.
It is notable that this recommendation does not signify that going forward the company should ignore the pricing strategies
based on product leadership and value (Ferrell & Hartline, 2011). The Company should recognize that widening its pricing
strategies could escalate the targeting of all its consumer groups.
Transcribed Image Text:Product and Pricing Strategies of the Nike Athletics Shoes Essay Nike Incorporation competitiveness for sportswear and equipment market leadership has continued to expand. The Company has developed flexible product and pricing strategies for its athletics shoes. The Company has varying pricing strategies depending on their consumer groups (Hill & Jones, 2010). Consequently, the prices for its products fluctuate subject to diverse aspects of their products including type, features, design, and edition. Particularly, the Company sells its athletics shoes at standard prices to consumer groups who can pay. However, the Company normally design and manufacture shoes, which target a particular group of clients. The shoes normally have specific features preferred by different consumer groups. Nike Incorporation product and pricing strategy flexibility has enabled it to capture varying consumer groups. The Company applies value-based and price leadership, product-pricing strategy in determining prices of its items. The strategy incorporates setting prices by considering the value various clients place on particular products. To this end, the Company relies on a strong brand appeal among consumers. The customers can purchase Nike recognized products regardless of the standard price for such items (Ferrell & Hartline, 2011). In addition, Nike applies vertical integration pricing approach, which focuses on retaining clients in multiple level operations. The strategy enhances price competitiveness in relation to other market players while ensuring that they remain manageable to retailers (Hill & Jones, 2010). It is notable that the approach also focuses on the premium segment of the market based on consumers' loyalty to the brand. The Company's current product positioning strategy incorporates using super stars like Tiger Woods to endorse products. In addition, the Company enhances its product positioning through promoting the "Just Do It" trademark (McKinley, M2005). The Company invests in developing pricing strategies for diverse items based on the traditional product life cycle. The Company must determine the readiness of a target marketplace before executing an appropriate approach such as introductory pricing for its penetration. The Company also ensures that business intricacies such as marketing, supplies, and promotion do not present detrimental effects on product sales during the life cycle (McKinley, M2005). Furthermore, adopting public relations and sustainability practices escalates brand awareness within the target marketplace and potential consumers. It is recommendable that the Company uses product and pricing strategy, which can provide a twin approach (Koester, 2011). The strategy should focus on ensuring smooth entry of a new product within a targeted marketplace as well as strengthening prices as the product continue to establish itself within the product life cycle. To this end, it is recommendable that the company uses introductory pricing strategies to facilitate a smooth entry. Subsequently, the Company should adopt a premium - pricing approach to cater for all its clients in the marketplace (Koester, 2011). The strategy entails fixing the price for shoes based on their quality and the clients' willingness to pay. This approach should be anchored on the realization that clients who purchase Nike recognized brands have developed a strong brand emotional intelligence and are willing to pay for the items because of the worth of such products. It is notable that this recommendation does not signify that going forward the company should ignore the pricing strategies based on product leadership and value (Ferrell & Hartline, 2011). The Company should recognize that widening its pricing strategies could escalate the targeting of all its consumer groups.
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