NIKE’S MARKETING PLAN
Executive Summary
Nike’s target segment is anyone between the ages of 11-55 years old who likes sportswear, or loves the athletic wear look
Nike continues to be the leader year after year, even with the growing competitors Nike has found a way to capitalize on the market and remain a top sportswear selector for consumers over the years. Though Nike’s process are ever-changing the company maintains a loyal customer base. More than 30 of North America’s biggest sports leagues and consumers rely on Nike’s products. Nike products can be found on shelves all over the world and on one site.
Additionally, like most companies Nike suffered during the COVID -19 pandemic shutdown. Nike reported a $790 million quarterly loss and revenue $1 billion below Wall Street expectations, but said digital sales climbed 75 percent in July 2020. The Washington County-based sportswear company reported $6.3 billion in fiscal fourth-quarter revenue, below the $7.3 billion expected by stock analysts. The company's loss came out to $0.51 per share, below expectations of $0.09 in profit per share.
● Company Name: Nike
● Industry: Footwear/Apparel Accessories and Sports equipment
● Headquarters (city, state, country): Beaverton, Oregon United States
● Year founded: January 25,1964
● The number of employees: As of May 31, 2021, Nike employed approximately 73,300 workers worldwide.
● Annual revenue (estimated): In 2021, Nike's global revenue amounted to about 44.54 billion U.S. dollars
● Major products and/or services: NIKE, Inc., together with its subsidiaries, designs, develops, markets, and sells athletic footwear, apparel, equipment, and accessories worldwide
● Target customers: Nike's target market includes a demographic of those aged 11-45 but put a greater emphasis on teens to cultivate long-term customers.
● Distribution channel(s): Selling products to wholesalers in the US and international markets. This is Nike’s biggest distribution channel. Direct-to-consumer sales, which include inline and factory retail outlets and e-commerce sales through its website. Nike also distributes its products through e-commerce companies like Amazon. Online sales through Nike Direct is the company’s fastest-growing distribution channel.
● Key competitors: Adidas, Puma, New Balance, and Under Amour.
● Link to website: https://www.nike.com/
● Link to Yahoo! Finance information page (for public companies): https://finance.yahoo.com/quote/NKE/news/
● What problem does your product or service solve? Nike primary goal is is to supply athletes with exceptional products and wearable that aids them in better sports performance. However, due to the success, Nike has gotten the company now provides athleisure wear as well.
· Describe the total market for your solution: Who are potential customers? Nike influences customers on their cognitive level and solves more just the basic need for apparel. It motivates them to work harder for their physical development. It gives them a sense of trust which motivates them to push beyond their stamina.
· What are the key segments within this market? Demographic, geographic, psychographic, and behavioral market segmentation.
· Identify and briefly describe 1-3 segments that this company serves. Demographic segmentation is a factor used by Nike to target individuals according to their age, life-cycle stage, gender, occupation, and generation. Although with apparel and sports the market can be broad, for the most part Nike primarily targets consumers who are between the ages of 15-40.
· Which segment does this marketing plan focus on, and why? Why do you believe this segment will offer growth and profit opportunities? Nike's target market includes a demographic of those aged 11-45 but put a greater emphasis on teens to cultivate long-term customers. Their psychographic segment includes active, fashionable individuals that consider physical activity as apart of their lifestyle.
Nike’s business performance depends on the state of economies where it sells its athletic footwear, equipment and products. The following economic external factors are significant in determining Nike’s performance:
1. Economic stability of developed markets (opportunity)
2. Rapid growth of developing markets (opportunity & threat)
3. Slowdown of the Chinese economy (threat)
Developed markets like the United States are relatively stable, thereby proving Nike with the opportunity to continue its slow but stable growth in these countries. The company also has opportunities to rapidly grow by increasing its operations in high-growth developing countries. However, the rapid growth of developing markets also threatens Nike by increasing labor costs in the company’s supply chain and production facilities. In addition, the slowdown of the Chinese economy threatens Nike’s performance, which is now significantly dependent on the Chinese market for sports shoes, apparel and equipment. The economic external factors in this component of the PESTEL/PESTLE Analysis show that Nike Inc. must emphasize global expansion strategies while devising new ways to capture growth in developing countries.
With technology constantly changing our day to day interaction and activities. Nike has a proven marketing strategy that exhibits a necessity for its products to consumers. The company utilizes its online presence for e-commerce and has been doing so successfully for decades, and with the continued easily accessible mobile-site and or Nike app, only makes online shopping easier for any consumer. With Access being so easy, Nike can continue to create an even easier online shopping website and application. The benefits of the Nike loyalty rewards includes: priority access to tickets to sporting events, exclusive products, early access to product launches, expert advice on training and exercise, rewards for being active through their apps, special offers on birthdays and, to top it off, free delivery.
A key benefit of becoming a Nike member is that you gain access to exclusive perks. Loyal customers have access to priority tickets to sporting and Nike events. They are allowed to shop exclusive collections only available to members. They also gain the privilege of shopping products and collection launches before they’re released to the general public. Loyal Nike customers see the value of this benefit as many products are limited editions and become collector’s items later. Amongst the big online players, Nike ranks ninth in brands with the most loyal customers.
Industry Environment
In the past 6 months Nike’s trends showed that environment, leadership, and management are trending upwards over the past few years., the environment scores increased by 1%. Leadership was rated a 71/100 by employees, putting Nike in the Top 30% of similarly sized companies for Leadership. However, CEO Rating and Compensation scores are trending downwards over the same time period, no with CEO Rating dropping 1%. All in all, employees have had a very positive outlook on the future of the Company.
Competitive Environment
Nike has a number of competitors in their market. Companies like Adidas, Puma, New Balance, and Under Amour to accommodate the shoe market alone, and as their apparel increases the number of different competitors increases as well. One advantage Nike has over the competitors is brand loyalty. When consumers purchase Nike products they presume that the products ate of great quality and can be trusted to do “it’s job” for years to come. Which in turns causes consumers to return to buy lore products.
Political Environment
Nike operates with the US being its main country. Nike is an incorporated company that designs, develops, and markets athletic footwear, apparel, equipment and accessories worldwide. Nike has over roughly 20,000 retailers worldwide, ranging from Nike factory stores, Nike Towns, Cole Hann stores, and other websites that sell Nike products. Nike is a company that has 33% of the global market share in the athletic footwear industry. Nike makes use of both traditional and non traditional distribution channels in almost 200 countries. Current policies have landed Nike in a good position because the nation currently has low interest rates and well-arranged international tax agreements. Any new product they develop they have to get a patent for and on the business side of things have to make sure they are correctly licensed.
SWOT Analysis
HELPFUL Ideas
HARMFUL Concerns
Internal
Strengths
· The main strength of the company is its large market share coupled with the competitive advantage that the company has over its rivals.
· The resources available for marketing activities, include online, stores worldwide, almost monthly promotions, and memberships deals.
· The company does have unique products; and the target audience is satisfied based on the thriving success of the company over the decades.
· Nike is all about displaying creativity and innovation, and the product versatility is very unique.
· Customers get added value, because Nike has unique, creative products that deepen Nike’s relationships with it customers and encourages them to buy more products.
Weaknesses
· Dependent on US market, in 2018 over 50% of Nike’s revenue came from the US market. Demonstrating the huge dependence on the market as apart of Nike’s business model.
· Outsourcing Manufacturing because it requires a company to set up dedicated manufacturing operations in the chosen country or outsource the work to existing manufacturers. Nike has chosen this option which leaves products to be of lesser quality.
· Footwear focus though Nike has had great success with footwear industry and have had a lot of expansion into the clothing industry, but should consider broaden the horizon more.
External
Opportunities
● There are only more and more people in this world, and many of them (especially in developed countries) are becoming gradually more active. Together, these two factors compound to create a constantly growing footwear market. Nike should be able to capture much of the business of this growing market, allowing the company to further grow its profits.
● As countries across the world become wealthier and wealthier, citizens in developing countries have more disposable income. In areas such as South East Asia, growing disposable incomes present an opportunity for new markets in which to sell products. If Nike is able to market themselves in these emerging markets, they could grow their reach and reduce dependence on the US market.
Threats
· Nike is competing in the fiercely competitive sports apparel market, with other big names such as Adidas, PUMA, and Reebok ready to pounce on any new opportunities. As such, Nike needs to tread extremely carefully to ensure it isn’t replaced by one of these, or somewhat less dramatically doesn’t lose out on potential revenue.
· Nike apparel is subject to large amounts of counterfeiting. Counterfeit Nike goods are available everywhere, even on the internet. Nike needs to develop a strategy to ensure that the counterfeiting of their goods doesn’t affect their core business model, perhaps by taking legal action against counterfeiters or with a clever marketing campaign that encourages consumers to buy the real thing.
Mission, Objectives & Goals
Nike mission statement is “to bring inspiration and innovation to every athlete in the world.” This statement focusses on the influence that Nike has in the sports sector. It specially resounds the ability of this company to stimulate and turn athletes into their best versions. Some of the components related to this mission statement include: Bringing inspiration, Nike has been on the front row when it comes to motivating its customers how it knows best providing them with comfortable footwear and apparel. Secondly being innovative, Nike has remained at the top in this game narrows down to its unrelenting push for coming up with the most versatile, aesthetically appealing and most of all dependable products. Lastly Nike’s global presence, Nike shows that it is a company that wants its presence felt everywhere.
List three (3) objectives that move the organization a step closer to achieving the mission.
1. To offer the best customer experience at in a brick and mortar Nike store, a department store that sells Nike products, or online shopping.
2. To create distinct innovative styles to set them apart from the competition.
3. To be the most popular sportswear apparel for everyone worldwide.
Convert objectives into specific marketing goals that are easy to measure and evaluate, e.g., SMART. (Example: The company’s goal is to increase market share of international theme park visitors by 10% within the next two years.”)
1. To create and bring inspiration to anyone that feels creative and wants to express it through clothing.
2. To continue to build a loyal customers by creating new different products and so Nike’s presence is recognized by everyone.
3. To build the strongest customer loyalty bond, to prove everyone loves Nike’s brand and loyal customers only want to shop with Nike.
Nike’s has a Corporate Social Responsibility and corporate governance programs that are centered on providing a healthy and tolerant work environment for all employees. In 2020, Nike introduced two new CSR programs, their Juneteenth learning initiative, and their Unconscious Bias Awareness training program to promote a greater understanding of racial equality and social change. Throughout 2020-21, Nike laid out a five-year plan for creating more diversity in their workforce, which included a target goal of 50% representation of women and 35% representation of racial and ethnic minorities in their corporate workforce by 2025. In conjunction with this initiative, Nike announced an investment of $125 million over the next five years to support businesses committed to leveling the playing field.
1. How was Nike impacted by the COVID-19 pandemic?
2. What could Nike due to drastically reduce the company’s carbon footprint, and deforestation?
Describe the information your organization needs to make effective decisions about how to answer this question or solve this problem.
I recommend a financial report of the last 10 years to present to be able to see trends in the data.
Customer Decision-Making Profile
Provide a detailed profile of your target segment using at least three (3) of the following categories:
● Geographic characteristics: Nike’s geographical areas are North America, Western Europe, Eastern/Central Europe, Greater China, Japan and Emerging Markets.
● Personal and demographic characteristics: Nike’s target market is 11–45-year-olds. By spanning the generations, Nike taps middle aged consumers who have disposable income and develops its relationship with younger audiences to ensure future growth and build lifelong brand supporters. Nike targets children because they know how susceptible they will be to peer and group influences..
● Social and Psychological characteristics: Motivation: Slogans and headlines that Nike uses include victory, freedom, change, adapt and such words that gives customers the sense to Just Do It. Perception:Entering a Nike shop, customers see all the motivational headlines, with famous athletes or strong, healthy and good looking models, and these shape the perception. Nike Shoes create the perception that if anybody can do it, you can also do it, so pushes customers to buy shoes and start the change. Beliefs and Attitudes: Consumers’ formed attitudes about the brand are buying a shoe that is comfortable, makes you feel good, and also look cool in it and Nike Shoes satisfy them all.
Nike’s competitive advantages include:
· Decades in operations in the United States
· Decades in operations worldwide
· Loyal customer base
· Strong, localized supply chain
The first niche strategy of Nike’s marketing is the ability to create meaningful stores and sell them to their fan base. One consistent example is the tagline “Just Do It”. Another example of Nike’s awesome marketing, is the company’s ability to become so iconic and memorable along with creating epic content. Last strategy worth mentioning from Nike is that the company, never forget to prioritize their social consciousness and innovation.
Nike is positioned as a premium-brand, selling well-designed and very expensive products. Its products is basically designed for sporting events. Nike’s product is considered to be highly effective and comfortable to the athletes. Nike has dominated United States sports market. It is recognized for the quality of its shoes and has gained the reputation all over the world. II think this is the best marketing strategy because, Nike is arguably one of the most iconic brands in the world. They’ve risen up and dominated the athletic/sportswear apparel market. Numbers display that Nike dominated 48% of general athletic footwear and up to 96% of the footwear used in basketball.
Nike’s brand voice saturates every aspect of its messaging, from mission statement to advertisements to product descriptions. Nike is known for its inspirational tone of voice, which also includes an element of grit.
Nike is never irrelevant, discriminate, or uninspiring. Its iconic slogan, “Just do it” has created a powerful brand persona that encourages athletes, and all people to pursue their goals with resilience.
I recommend that Nike continue to utilize its popular products, real life commercials, celebrity endorsements, etc to continue inspiring and creating innovation. Nevertheless, I feel Nike should create a product line with some of the more pricey products at a rather reasonable price, for the new customer who other wise can’t afford products. Which essentially would be available to the already strong loyal consumers.
Making these changes would bring the new customers to Nike, because of the trye variety of prices per Nike products. And it would also, allow the company to bring in another incentive to the already loyal target audience, that may be hesitant to buy the more products or even the higher priced products.
Nike products are generally focused on premium quality and wide range of good for every sports fan from its marketing mix. It leads the sportswear industry and gets its revenues from selling sports shoes. The following broad categories represent Nike’s product mix including, shoes, apparel, equipment and accessories.These various products are avalanche under several companies, such as Air Jordan, Hurley, and Converse. Based off Nike marketing strategy, Nike expands its products to address the needs of target markets and its market segments.
Customers are essential to every company, and are very sensitive to price changes. When Nike is selling to customers I know price is very sensitive and important in getting the customer to buy and love buying Nike products. Every customer perceives benefits and costs differently, and many of these perceptions aren’t even conscious. There are very few buying decisions in which a customer lists and weighs the benefits and costs in order to determine value. And psychological factors likely come into play. Whether customers are the ultimate user of the finished product or a business that purchases components of the finished product, the customer seeks to satisfy a need through the purchase of a particular product. If a customers are unsatisfied one’s whole product will diminish.
Nike utilizes premium and value-based pricing strategies for all its products. Value-based pricing refers to the company's consideration of the current price in the market while setting the prices for its products. Before they implement the pricing on products, they assess the overall response of the customers, if they are willing to pay for the items. This type of pricing strategy allows Nike to boost its profit over time. On the other hand, premium-based pricing refers to providing prices on higher-quality products than the value of Nike's competing products. In some cases, Nike also has discounts and promos, such as the “Easter sales” on its physical stores and website. Utilizing this strategy will help retain existing customers and attract new ones.
Nike distributes 2.4 million dollars each year to the account of promotional schemes and programs, and communicates with their customers through these programs. Nike began mass mediated advertising in 1982 and continues to revise and redefine it’s marketing communication strategies. Nike’s integrated marketing communication approach include, mass mediated advertising, social media campaigns, and celebrity endorser and sponsorships.
First, Nike’s mass mediated advertising uses the transformational approach to persuade customers to purchase. Transformational advertising helps differentiate the product, when the consumers are suggested the types of experiences they may have using the advertised products.
Next nike utilizes social media campaigns, and with the explosion of social networking sites, the company has been provided with a variety of channels to interact with their customers. Nike is able to connect/ interact with new customers. And Nike is able maintain a strong and powerful brand image across all social media. Nike is among the first to assess the potential of engaging their customers through Youtube. For example, Nike’s viral video featuring Ronaldinho which recorded 20 million likes in 2006.
Lastly, Nike has the celebrity and sponsorships, in which Nike throws heavy sponsorship programs and celebrity endorsements to display Nike products, drive awareness and secure popularity and positive images to their target audience. Endorsements like Tiger Woods, Micheal Jordan, LeBron James, etc boosts Nike’s image even more. Hundreds of sponsors have been signed with universities, sports clubs, and international sports teams that empowered the company to get it’s logo embellished on the uniforms of players so Nike is visible to every viewer of sports and potential customers.
Approach
Nike can use email marketing, social media and a sales promotions. For example, a raffle drawing for any Nike product, everyday of the week for customers who buy online. To encourage customers to go to Nike and shop the products or even post online about their experiences and plans if chosen as a winner using the “Just Do It” hashtag. Using these testimonials to amplify dialogue about Nike and the various products (via social media), build awareness (via email marketing, website, targeted digital advertising, celebrity endorsements and sponsors) and convince peers and everyone they should buy Nike.
Goal
Nike should utilize the current marketing campaign to continuously secure that their reaching their teacher audience, and stimulating the audiences innovation and creativity. The “Just Do it” slogan or tagline has be popularized by Nike and has had it trademarked since 1988. Just like all of Nike other successes, this promotional phrase can mean whatever you want it to mean.
Messages
1. Nike sells high quality sportswear apparel, apparel, shoes, and other various products that suit all creative styles.
2. Message Pillar: Nike provides customers with high quality products that’ll create loyal, returning customers.
3. Proof Point: Loyal customers return to replenish Nike products, because Nike inspires creativity and innovation.
Promotional Mix and IMC Tools
Digital Marketing
Add testimonials of customers, fans, and celebrities using the Just Do it tagline to attract more consumers to the company’s website.
Direct Marketing
Mail or email advertisements, promotions, or offers to reach target audience generating interest and desire in Nike product.
Sales Promotion + Digital Marketing
Offer giveaways of Nike products on Facebook, Twitter, IG, etc to trigger interests and foot traffic to the company website. Allowing three social media entries a day to build interest for the company and its products.
Guerrilla Marketing + Digital Marketing
Utilizing celebrities and social media influencers to reach the target audience.
Utilizing social media to reach the potential worldwide target audience.
Sales Alignment
When first starting off most of Nike sales came from selling to wholesale partners such as department stores, mom and pop shops, sporting goods specialists, thousands of retail businesses. And relied on these businesses to distribute it’s products to shoppers. In 2021, sales reached $10.36 billion, up from $10.1 billion in the same period last year, during the coronavirus pandemic. Just in 2011, roughly 84% of Nike brand sales were still to wholesale customers. The sales to shoppers were just 16% of the business.
Measurement (KPIs - Key Performance Indicators)
Nike’s marketing expenses have been declining over the past few years. In 2021, Nike spent nearly 3.2 billion in advertising and promotions, compared to the nearly 3.5 billion in 2020. Nike demands creations grew by 5% in 2019, though the company spent 3.75 billion compared to the 3.57 billion in 2018. Nike’s spending on advertisements remain fairly constant but in the last five years the total is nearly 18 billion in advertising. In 2019, there were 384 U.S. Nike retail stores dropping to 338 in 2020. The non U.S. stores were at 768 in 2021, and 758 in 2020.
Nike runs lots of social media networks that gather millions of fans. Here are the numbers of followers:
* Instagram – 196m
* Facebook – 35m
* Twitter – 8,9m
* LinkedIn – 4,7m
* TikTok – 2m
* YouTube – 1,67m
* Pinterest-826k
Twitter – Nike’s video tweets are willingly retweeted. The average number of retweets is 1.9k which stands for a 0.13% average engagement rate.
Tik Tok – the average number of reactions for the profile is2.1k likes, 22.58 shares, and 201 comments which stands for a 0.11% average engagement rate.
YouTube – this profile has the lowest average engagement rate. The average number of reactions for the profile is 323 likes and 499k views, which stands for a 0.06% average engagement rate.
Item
Purpose
Cost Estimate
Item #1: Create prints/e-prints for the mail and email
Create mailers and emailers announcing the new products, promotions and giveaways
$1,000,000
Item #2: Create social media campaign
Create media ads with celebrities and social media influencers.
$1,000,000
Item #3: Create offers/giveaways for social media
Create coupons for the daily social media giveaways
$1,000,000
Estimated campaign impact: 3,000,000,000.
Timing
Activity Type
Brief Description
Audience
Owner
5/1/2022
Website Update
Add new key messages that fit repositioning strategy and audience focus
Tech company hiring managers
TBD
5/1/2022
Expand reward programs
Rollout the better rewards program for loyal customers
Marketing
TBD
7/1/2022
Implement email/mail promotions
Implement new mailings and email promotions
Marketing
TBD
9/1/2022
Implement improvements found during the focus groups meetings
Implement new improvements from customer experiences.
Marketing
TBD
9/1/2022
Launch new social entry promotions for products
Rollout the nee promotions, coupons for social media entry drawings.
Marketing
TBD
Risk Factors
Contingency plans and risk management: You should consider the possible risks to your business and make contingency plans to address them. You note some possible risks under the “weakness” and “threats” sections of your SWOT analysis. Identify steps you can take to either reduce risks or work around them if they occur.