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Nike Inc.’s Marketing Research Report

Executive Summary

Nike’s threats and opportunities, marketing mix, ethical and social issues, and the role of global marketing are presented in this paper. Opportunities include using advanced technologies in products to increase their attractiveness, expansion of consumer law, expansion to international markets, and the maintenance of a strong brand image. The threats are the growing investment in R&D by other firms, developing markets that attract both local and international players, and the company’s inability to integrate foreign cultures in the advertisement. The representation of women and minorities in advertisements is also somewhat flawed. The company should utilize online communities and global marketing strategies to enhance the positive perception of the brand among potential and current clients.

Marketing Mix

Product

Nike’s product lines are the following: shoes, apparel, and equipment or accessories. The mainline is sports shoes that vary in shape, size, and color and are manufactured specifically for the needs of various athletes engaged in different types of sports. It also developed smart shoes with built-in fitness trackers to attract the audience’s interest in sports technologies (“Nike granted patent for smart shoe,” 2016).

Price

Nike’s pricing is value-based. It tracks how customers perceive the value of the brand and its products and customize the price accordingly. An essential part of this strategy is the process of determining what highest price the customers will agree to pay for the product.

Promotion

Nike utilizes social media, TV and online advertising, and other forms of aggressive marketing; various TV and sports stars are seen in its ads, which increases the effectiveness of the promotion. It also used ads about feminism to increase the success of promotions; its uniqueness is that Nike was one of the first companies that supported women empowerment through marketing (Nike, 2015).

Place

Products are sold both in offline and online stores. The company has a wide net of brand divisions across the world. Customers can also purchase products in distribution centers.

Environmental Scan

Opportunities

Technological opportunities include the use of advanced technologies in products to increase their attractiveness. Additionally, the company can use mobile technologies and develop applications and ease online-based shopping to support consumers who mostly use mobile technologies. Opportunities in regulatory processes include an expansion of consumer law in third-world countries to increase customer satisfaction and an improvement of safety rules and regulations at the workplace to gain employees’ engagement. Social opportunities involve starting a program to promote recycling and emphasizing the importance of correct waste disposal. The stability of developed markets and expansion to international markets provide economic opportunities for Nike to increase its operations and revenue (Soni, 2014). Nike’s competitive opportunities are a strong brand image supported by loyal customers and global expansion and distribution.

Threats

Investments in research and development of other firms proliferate, increasing their competitiveness; technologies become obsolete fast, resulting in the need for constant advancement (Tewari & Misra, 2015). Laws that increase labor and production costs in developing and developed countries present a serious risk of losses. The promotion of sustainable business and developing awareness among customers can result in increased pressures on Nike, causing a social threat. Emerging markets can be a threat, too, as they attract both local and international players, undermining Nike’s presence and creating a strong competitive advantage, which is also a serious competitive threat.

Marketing Segmentation

Market segmentation is divided into four approaches: geographic (based on country or rural/urban areas), demographic (based on age and gender), behavioral (loyalty to the brand is taken into account), and psychographic (lifestyle is considered) (Open University, n.d.). The primary geographical target of Nike is North America, the second-largest market is Europe, and the third is China (Soni, 2015). Nike targets male and female athletes (15 to 40-50 years old) who live in urban areas; it also develops aggressive marketing targeted at young adults and utilizes advertisement as a target source. The behavioral approach uses specific strategies, such as customization of products by customers and individual or bulk sales, to enhance customer loyalty. Customization also relates to the psychographic approach, showing customers that they will wear a unique product designed for and by them alone. The psychographic approach includes emphasizing the way the product makes customers feel and what emotions they have, stressing the importance of a healthy lifestyle and leisure and self-expression (Stribley, n.d.).

Ethical Issue

An ethical issue that arises in Nike’s marketing is the representation of individuals, especially women and minorities. As Patel (2017) points out, while Nike has used women in its ads to send messages about empowerment and strength, it still avoids representing various races when it targets Arab athletes in the video. Black Arab Muslim women are not shown in the ad, targeting customers from the Middle East. Thus, Nike could invite Yemeni or Sudanese women to participate in the video, which would then present Black Arab women together with women with different skin tones. Nike also did not include women athletes of varying body shapes, although it is evident that female athletes are not all slim.

Social Responsibility Issue

Nike’s social responsibility is translated through its approach to the understanding of equality and its promotion. With the help of athletes or ambassadors, as they are called, Nike translates the importance of spreading the message supporting equality in local communities (Nike, 2018). Through its marketing, it also shows how important the mentoring of youth is, encouraging individuals to become mentors in local communities. Such initiatives are indeed useful, but it is clear that the company uses social issues and problems also to promote its products and the brand, which could be perceived as unethical. Raising awareness of social issues is crucial, but previous scandals related to Nike, such as the use of child labor and sweatshops, cast a shadow on their social justice campaigns. Nevertheless, attention to society’s issues is better than the absolute lack of marketing pursuing a positive change.

Global Marketing and the Internet

Nike is actively engaged in global marketing and adjusts its advertisement to the cultural specifics of the target audience. Okazaki, Mueller, and Diehl (2013) use Nike as an example of a brand “with a widely understood and recognized set of symbols believed to constitute emerging global consumer cultures” (p. 258). Nike had experienced struggles with global advertising, too, when it used NBA stars in an ad, whose gaze during it was directed at the viewer; the Chinese audience perceived it as intimidating (De Mooij, 2013). The brand actively uses the Internet. Its Nike+ line of products collects statistics about the individual and sensed data, encouraging competition between users. Users can share the results in social networks to form communities around the product (Atzori, Lera, & Morabito, 2014). Thus, the brand is competitive both in global marketing and online platforms.

Recommendation

The first recommendation for Nike would be to research cultural specifics and issues more thoroughly to ensure that advertisements for global markets are as effective as for the domestic (North American) market. The second recommendation is to investigate labor conditions at worksites in developing countries to decrease the impact of lawsuits and scandals on the brand image and customer loyalty. The third recommendation is to customize manufacturing costs in such a way that they both increase Nike’s competitiveness and do not undermine products’ quality.

References

Atzori, L., Iera, A., & Morabito, G. (2014). From “smart objects” to “social objects”: The next evolutionary step of the internet of things. IEEE Communications Magazine, 52(1), 97-105.

De Mooij, M. (2013). Global marketing and advertising: Understanding cultural paradoxes. Boston, MA: Sage Publications.

Nike granted patent for smart shoe with in-built fitness tracking. (2016). The Sydney Morning Herald. Web.

Nike. (2015). Nike puts women front and center for 40 years and counting. Web.

Nike. (2018). Nike uses power of sport to stand up for equality. Web.

Okazaki, S., Mueller, B., & Diehl, S. (2013). A multi-country examination of hard-sell and soft-sell advertising: Comparing global consumer positioning in holistic-and analytic-thinking cultures. Journal of Advertising Research, 53(3), 258-272.

Open University. (n.d.). Market segmentation and targeting. Web.

Patel, A. (2017). The issues with the Nike ad that we aren’t talking about. Mail & Guardian. Web.

Soni, P. (2014). An overview of Nike’s brand stable. Web.

Soni, P. (2015). Analyzing the prospects of Nike’s geographic segments. Web.

Stribley, M. (n.d.). How to get into the hearts of your audience with the emotional branding tactics used by Apple, Nike & Coca-Cola. Web.