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marketing of Nike

marketing of Nike

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Published by: John Chatzidis on Apr 11, 2011
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ASSIGNMENT TITLE: Principles and Practice of Marketing In Course
Assignment 2010/2011 about Nike

STUDENT NAME: Ioannis Chatzidis MODULE LEADER: Mr. Sioulis MODULE TITLE: Principles and Practice of Marketing

All the other companies hold the rest 35%. Both diagrams were designed according to clues from the case study that was provided with this specific assignment. needs to make a macro environmental 1 . On the other hand. especially if it is an international corporation. Nike also managed to really quick drop to the second place Adidas. is now one of the richest people in the world. there are two diagrams in the past four-year period. Phil Knights. Something that is really remarkable is that Nike is relatively new to football.Above. Nike’s founder. it can be seen that Nike holds a 35% share of the top football marketers share in Europe. To continue with. Nike’s biggest competitor is Reebok with a 13% market share and all the other brands which hold the rest 47%. it can be seen that Nike holds a 40% share of the United States athletic footwear market share. which holds a 30% share and it was the top football marketer for a lot of years. on the second diagram. Keller and Kotler (2006) mention that every company. In the first diagram.

there will be provided a thorough PEST Analysis and some other analytical models.nikebiz.analysis in order to grow further than the current point that it is. The best tool of a macro-environmental analysis is the PEST Analysis. Thus. The charts that will follow can be found in the annual report of nike in www.com 2 . such as a BCG Growth Share Matrix.

3 .

“E” refers to the Economic environment. “S” refers to the Social-Cultural environment and the letter “T” which refers to the Technological environment.7: Lussier & Kimball (2009). The letter “P” refers to the Political environment of the company. Applied Sport Management Skills To continue with. Taking every chart from above into account. there will be given a thorough PEST Analysis.Resource of Figure 4. Kotler ét al (1999) state that PEST Analysis is comprised of four type of environments. 4 .

More and more people purchase fitness products. According to Cuizon. there is the social-cultural environment. which is applied at every stage of the product.US policies help Nike. Secondly. Cuizon. is absolutely understandable. Nike’s leadership is an outcome of a very well-applied information technology. there is the economic environment.com and the matrixes above. In the case study that was provided to us and at the matrixes above. (2009). According to the case study of Nike that was given to us and clues from www. Inc. due to clues from the annual report of Nike and because of the decrease in Nike’s sales. Inc. G. there is the political environment. However. Nike uses information technology in order to be more innovative. Inc. is the business with huge market shares not only in the Unites States of America but internationally as well. low interest rates. Beginning. people are now more concerned about their health. (2002). fitness clubs are going better and better. Inc. Finally. To continue with. Thus. there will be created a profile of the company’s target customer. What is more. Nike’s publicity got worse. Nike is able to affect the way that its environment will develop. G. As a consequence. it can be said that Nike is definitely the global leader when it comes to the athletic footwear. a profile of Nike’s target customer can be created through a geographic variable. It can be said that Nike has just started to feel this economic recession. stable currency and to be competitive at an international level. claims that Nike uses Information Technology in its marketing systems.nikebiz. Finally there is the technological environment. the biggest threat for the Nike’s economy is the economic recession which still exists. In accordance with the charts above and Messner. taking a good look to the matrixes and diagrams provided. The economy of the United States of America is in a bad situation. Thirdly. every government has to help the companies to grow by the economic policies it creates.M. the sales declined and Nike’s customers now demanding from Nike to be more responsible to the global society. (2009). footwear and several types of equipment. was always helped by the policies that are created by the governments of the United States of America. such as apparel. As a result. to have a general macroeconomic stability. As a result. Nike. in the case study there is a statement about the labor and factory conditions under which a big amount of people work in Asia.Firstly. from its development to its distribution. it is mentioned that Nike. it is most certain that Nike’s growth is still affected by this global economic recession. if somebody take into account the case study that we were given.nikebiz. 5 . Nike’s products are manufactured in Asia. A. according to information accessed in www.com . segmented and differentiated than its competitors. Because of the Asian economic recession the prices of the materials and the labor costs are increasing and this also affects Nike. the growth of Nike. A broad range of segmentation variables will be used. Besides.

Nike. in which Emerging markets refer to South Europe. In the chart above.com .nike. and the emerging markets with $342. Continuing. Inc. However.2 mil. the following tables can be created. according to information taken from www.3 mil. it can be seen every geographic area in which Nike. Greater China with $575.com/customer_service . $) The chart above was created with data taken from http://invest. because of the high raise in the sales in Central-Eastern Europe. which will help in segmenting demographically and behaviorally.4 mil. Japan with $205. it can be concluded that. Inc.1 mil. It can be seen that. does business in a global range.nikebiz. Emerging markets and Japan. in almost every country of every continent with Northern America market being the a highest-income customer and Japan with the emerging markets being the markets with the fewest sales. 6 . has businesses.6 mil. Nike. Africa and the Pacific. Greater China. Americas. Central and Eastern Europe with $415. geographically. $) 2009 (mil.1 mil. is focusing more on these markets as a target customer rather than the markets of North America and Western Europe. To continue with.. the first in the sales in 2009 comes North America with $1429.1600 1400 1200 1000 North America (-2%) Western Europe (+2%) Central and Eastern Europe (+16%) Greater China (+34%) Japan (+15%) Emerging Markets (+12%) 800 600 400 200 0 2008 (mil. Thus.. it can also be said that. Inc.. there is Western Europe with $939.

7 .

New Nike’s products are expensive. Furthermore. golf or lacrosse is 8 . as it can be seen through a research on www. it can be said that Nike provides its customers products for almost every type of sport and activity. Nike. Nike has products for sports that focus on different social classes.According to the tables above. can sell products for every age and gender of either boys/men or girls/women. Inc. a company’s market can be segmented by a behavioral or a psychographic variable. it can be concluded that Nike mainly focuses on middle and high income families.com/customer_service about the prices of Nike’s products. it can be mentioned that when it comes to the demographic variable of selecting a market. However. Yet. Nike very often does discounts on its products and sometimes even people from low-middle income families can afford Nike’s products. As it can be seen in the tables above. For example.nikebiz. Moreover.

Nike. a certain product may be used in different occasions and it may has a different usage rate of it may benefit different people in different ways. it can also be mentioned that Nike has a wide range of products which can satisfy almost every people who may and will have not only a different lifestyle. Inc. takes into consideration a lot of other factors except for the market growth rate. In continuance. their growth rate will decline and stars will be transformed to cash-cows. Nike’s products can cover almost any type of these behavioral factors. However. Thus. It can be seen in www. a company can categorize every strategic sector of the company’s activities that are used in accordance with the growth share. Moreover. Nike Corporation has been helped by a very helpful socio-cultural and technological 9 .considered to be the sport of the rich people. the market growth rate. but a different personality as well.nikebiz. which were all created by information taken by the balance sheet and the annual report of the corporation and www. In the vertical axis there is the market growth rate and in the horizontal axis there is the relative market share. Inc. On the other hand. there will be provided a BCG Growth Share Matrix and a SWOT analysis of Nike. the profit margins of the market and the size of the competition.nikebiz. Inc. Eventually. has been helped by the policies of the countries that has expanded (especially from the US policies). that the marketing strategies that Nike uses. Also. which are the business activities or the products with a high growth rate and a high market share. In the upperleft box there are the stars.com . that by using a BCG matrix. Nike.com and in the annual report of the company. as it was mentioned above in the PEST analysis of the company and due to the marketing strategies that are applied. It is often important for the company to make huge investments to further grow. It is stated by Kotler & Armstrong (2001). uses a market elasticity indicator which takes into account the market size. However. basketball is a sport which is played by every social class.

10 .environment. Nike has managed to come over a really bad economic environment. What is more.

Nike has been for many years the main granter in the English football Premier League and also major granter in the Spanish football league. the general increase in the demand for clothing/footwear for leisure activities. All things considered. One of the most competitive of Nike’s strengths is the investments in great celebrities and major athletic events.nike. despite the global distribution network of the company. According to Jeannet and Hennessey (1998). in the Athens Olympics. Thus. Nike’s investments in athletes brought the company back. Inc. are mainly a marketing solution for firms (especially the international ones) that approach a really large segment of the market. Inc. Nike. What is more. which is Nike’s biggest competitor in the European market. Despite of the increase of women demands for clothes and footwear. Also. Campaigns which use a pull-oriented marketing strategy. Inc. Furthermore. there are poor employment practices at their international manufacturing sites.com and www. a big weakness that comes up because of these strategies is that Nike. Reebok has a really strong presence in the global market with more than 200 factories and Adidas. the women demands for clothes and footwear and the growing e-commerce. Inc.nikebiz. What is more. has moved beyond sponsoring individually athletes. 11 . Furthermore. through its official website has managed to come into contact with its customers with a more personal and personalized way. Nike. Nike has taken into advantage the development of the international trade. the other marketing strategy that is used by Nike is the sports promotions and the sponsorships. Nike. as it can be seen in www. has started to sponsor entire teams. becomes more and more heavily depended on the footwear sales. Nike has a lack of stores catering exclusively women. has also invested in many other phenomenon athletes. such as Michael Jordan and Tiger Woods. Nike. Moreover. As it is mentioned to the case study that was provided. Nike has developed certain marketing strategies that help the corporation to further expand its strengths. Finally. the main characteristic of the pull strategy is that the company is heavily depended on advertising a product directly at the final user of this product (or service in general). 50 gold medals and many other silver and bronze medals. besides its strong brand recognition and a superior research and development department. Inc. it has also managed through its marketing strategies to be really competitive. there are two big threats for the marketing strategies that are used and those are Nike’s biggest competitors. uses mainly two specific marketing strategies. Inc. However.Moreover. Nike. However.com . there are also some weaknesses that have risen up because of these strategies. it can be concluded that Nike. Nike had signed in the past the basketball phenomenon LeBron James to a $90 million contract. One is a pull-oriented strategy and the other one is the sports promotions and sponsorships. Nike has a wide global range of distribution networks (and online networks) and invests on them to accomplish an increase at the company’s sales and market share and the satisfaction rate of the customers. As it is mentioned by Jeannet and Hennessey (1998).

etc. A great outcome of this marketing strategy as it can be seen in the charts in the beginning of this assignment. Italy. since Nike now sponsors the national football team of the USA. Russia.Inc. Word Count: 2198 12 . One final thing that Nike must take into account from its product mix is the high level of its products’ prices. the Netherlands. Moreover. which are Adidas and Reebok. Brazil. had spent more than $200 million to be the only sponsor of the Brazilian national teams at any sport for a ten-year period (1997 – 2007). Nike has started sponsoring matches between these teams outside the formal championships. Nike has managed to be more competitive against its biggest rivals.

New Jersey: Published by Prentice Hall. N.K. C. (2006). Inc. Published by Pearson Education. pp. Marketing Audit of Nike’s Strategies. (2001). 501. Hennessey. 2nd European Edition. A. (2008) Strategic Marketing: Planning and Control. J. 88-90 4. Kimball. pp. L. and Jeannet.ebrary. Principles of Marketing. p. pp.R. 2. P. G. D. Ashford. Marketing Management.M. and Lussier. USA: Published by Houghton Mifflin Company.suite101. and Sullivan.zhtml?c=100529&p=irol-finReporting 13 .. 100. New Jersey: Published by Prentice Hall Europe.. Kotler.L.. Assignment’s Case Study about Nike FURTHER READING 1. Available from: http://www. 4.action?docID=10151221&p00=ta king%20field 7. Inc. Applied Sport Management Skills. WEBSITES 1. 3rd Edition. 481.H. Saunders. Kerin. (2010) Strategic Marketing Problems: Cases and Comments. Men and Sports. 5. Radebaugh. 168-192 6.com http://www. 3.com/customer_service/ http://invest. (2002).nikebiz. and Kotler.REFERENCE LIST BOOKS 1. Cuizon. http://site. (2011) International Business: Environments and Operations. 12th International Edition. 13th Global Edition.corporateir. Available from http://media. 3. Global Marketing Strategies. J. (2009). 5.R. USA: Published by Human Kinetics.nike. 3. 5. Armstrong. 9th Edition. New Jersey: Published by Pearson Prentice Hall. Armstrong. and Peterson. and Kotler. Oxford: Published by Elsevier. G.com/phoenix. P. and Wong. Ltd.ebrary. A. Messner. (2009). (1999).com/lib/teesside/docDetail. Inc. Principles of Marketing.R.nike. H.net/media_files/IROL/10/100529/nike-ar-20100804/index. Available from: http://site.D. 12th Edition. Published by Pearson Education. Keller. P. J. USA: University of Minnesota Press.com/ http://www.com/content/marketing-audit-of-nikes-strategies-a94402 4. Taking the Field: Women. D.J. 127. R. and Ensor. 2.D. (1998).. P. Daniels.com/lib/teesside/ http://www. G. 502. Annual Report of Nike 2010. G. Drummond.P. A.html 2.nikebiz. V.

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