Marketing Plan Of NIKE

Introduction:

This report intends to formulate the marketing plan of Nike, Inc. Nike was founded by Bill
Bowerman and Phil Knight in January 25, 1964; before 54 years. The headquarters of Nike
are located in Beaverton, Oregon (Washington Country, Oregon U.S).The origin of Nike is
from America, and it is a multinational corporation that is mainly engaged in the
manufacturing, design, development, marketing and selling of footwear, accessories,
services, equipments and apparel across the world.

In the current time, Nike is delivering their products all around the world, it has nearly 10-
15 operating facilities in UAE and Nike generates positive cash flow by means of these
stores, due to huge demand of Nike’s products and services.

TASK 1: Be able to compile marketing audits

1.1

1. Production Concept:

In the production concept, consumers would favor those goods that are highly accessible
and reasonable in price. This is one of traditional concept in marketing management, which
is used to guide producers. This concept implies that producers usually tend to enhance
their productivity and selling efficiency.

2. Product Concept:

Under this concept, consumers would favor those goods that provides them superior quality,
better performance and unique specifications. However, under this product concept
marketing strategies mainly put emphasis on improving product features and quality.

3. Selling Concept:

Selling concept implies that consumers would not purchase products of specific firm, until
and unless they are not carrying out extensive selling and marketing efforts. Therefore,
management throws emphasis on formation of sales transaction instead of creating long-

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lasting relations with their consumers. Companies usually undertake aggressive programs
for selling their products.

4. Marketing Concept:

Under marketing concept, the accomplishment of firm’s objectives is dependent upon

analyzing the needs and requirements of potential target market and providing them
preferred satisfaction as compare to their competitors. Here, management mainly focuses
on “customer First” strategy.

5. Societal Marketing Concept:

By employing societal marketing concept, companies tend to understand the values and
current trends of society. Under this idea, “marketing strategies needs to provide value to
consumers in such a manner that can sustain or enhance both the customers and society’s
welfare.

Nike: Out of these five marketing concepts, Nike put constant focus on product concept.
This is the strategy that has kept Nike ahead in the line of competition, and is continually
evolving due to their strategies and offerings.

1.2

Nike’s capabilities:

In the current time, the capabilities of Nike lie down in the area of Research and
Development, and human resource. This company has extensively invested billions in
staffing itself with professionals, for instance, industrial architectures, bio-mechanics and
other expert physiologist. However, by this pool of specialist Nike is conducting more R&D in
order to modernize their offerings and providing all time unique products. Thus, for future
planning, HR and R&D would be helpful in enhancing Nike’s capacity.

1.3

SWOT Analysis:

Strength’s
 Nike is global brand and leading
shoe producer.
 It has joint ventures with Apple’s
IPod in continuous innovation.
 It has well-built distribution
channels for promoting its products.
 Nike holds strong position over its
negligible long term borrowings.
 Nike has ground-breaking shoe
designs that encourage customers to
Weakness’s
 The sales of Nike are heavily
dependent upon footwear segment.
 Nike has breached in history and
they offer minimum wages to its
employees.
 The internal organizational
conditions of Nike are poor.
 Due to poor internal environment it
has bad reputation.

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design and propose their own shoe’s  Nike’s products are sold at higher
online. price as compare to its competitors,
 Nike serves diverse products all such as, Adidas.
around the globe.
 Nike has effective marketing
campaigns and supports various
products.
 Nike serves various segments, such
as, baseball, golf and footwear and
many more.

Opportunities’
 Nike can extend its line of products,
for instance, sports wear shoes,
sunglasses along with jewelry and
so on.
 Nike brand can also be extended to
international level.
 Nike can avail the opportunity to
support various marketing events
worldwide, such as, (the Olympics
and FIFA).
Threat’s
 Due to economic downturn and rapid
changes in currencies can lead Nike
to suffer from huge competition,
because competitors are turning
towards more aggressive policies
and generating higher quality
products.
 Sensitivity to price.
 sustaining status of eco-friendly,
(SWOT analysis of the company)

PEST Analysis:

Political factors:

Within the organization there are certain rights of workers that can influence the Nike’s
internal mechanism. Nike has positive policies of government that supports organization in
attaining growth perspectives, particularly in US. However, the surrounded lawful issues
have influence over its operations, but Nike handles these situations by gaining help from
foreign entities and government, and Nike holds constructive relations with them.

Economic factors:

Nike acquires funding from various other corporations. Nike can also be the medium in
generating new job opportunities. Owing to economic recession customers can get
influenced and it can also decline customer’s confidence for Nike’s products. However,
currency risk, interest rate risk and exchange rate risk for Nike’s product can be raised.

Social factors:

Customers are showing more loyalty towards the Nike and becoming brand conscious, which
is that can a kind of benefit for Nike. In addition, the increase in market share of women
consumers can also raise opportunity for the Nike.

Technological factors:

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New technological factors can affects Nike as it is involved in its products. By means of
technology Nike can creates extremely innovative goods, such as, shoe construction/
designing. It can also make mobile applications and various facilities and web browsers by
which consumers can engage with online shopping with the help of new digital technologies
and trends, (Hanrahan, 2002).

1.4

Porter’s Five Forces’ (Nike)

1. Competition with Nike Inc. is a Strong Force

Competition in the market decides how Nike sustains its market share of the sports shoes
market. These are following external elements that create stronger force of spirited rivalry
in Nike’s situation:

 Lower market growth rate is considered as stronger force

 Higher aggressiveness of enterprises is also stronger force
 Moderate number of enterprises is a moderate force

The lower market development rate is partially because of enterprises higher market
penetration along with higher market saturation. This situation forms a stronger force,
because Nike and some other business’s fight for those markets that grows gradually. In
contrast, enterprises are heavily aggressive in fighting for getting huge market capital. In
addition, there are just reasonable numbers of enterprises that has significant influence on
Nike. On the basis of this component of porter’s Five Forces, the external elements can give
rise to stronger competition, which is required by Nike Inc. for throwing emphasis on
market growth and product development for ensuring competitive edge and for increasing
share in the global athletic shoes market, apparel, accessories and equipment markets.

2. Bargaining Power of Nike’s Consumers/Purchasers forms

moderate Force
Nike’s consumers directly have impact on firm’s performance. This component of porter’s
Five Forces indicates how customers decide for firm’s competitiveness and the industrial
internal and external environment. However, in Nike’s situation, here are some external
elements that contribute towards moderate bargaining power of consumers.

 Lower switching costs

 Moderate availability of substitute products
 Relatively small size of individual consumers

3. Bargaining Power of Nike’s Suppliers is considered as weaker

force

 Higher entire supply of Nike’s products

 Larger population of vendors and suppliers

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 Moderate amount and size of individual suppliers is considered as moderate force.

4. Threat of Substitute products is also moderate Force for Nike

 Moderate accessibility of substitute products is a moderate force.
 Moderate presentation per price of substituted products is also moderate force.
 A lower switching cost for products is considered as stronger force.

5. Threat of New Entrants

 Higher cost of brand growth is considered as weaker force

 Higher economies of scale is a weaker force
 Moderate cost for conducting trade is considered as a moderate force.

TASK 2: Understand the main barriers to marketing planning

2.1 Assess the main barriers to marketing planning

An effective marketing strategies and proper planning is necessary and fundamental

element for any company. Nonetheless, occasionally, there could be certain obstacles in the
line of marketing planning. For instance, in case of Nike here are some barriers or
challenges the management of Nike is facing.

Lack of motivational aspects towards change: When stakeholders are not

motivated and they do not sense the necessity to deal with the threats or they will not hunt
for opportunities, it will be major barrier to formulate a great marketing plan.

Overconfident in solving problems: Overconfidence will create a defective or

unsuitable answer for the potential problems.

Lack of co-operation among management: HRM and financial divisions are not
agreeing on sharing resources and goals, noticeably the marketing plans would be suffered.

Poor internal Environment: This is the biggest barrier that is ongoing from last
decade in the Nike Inc.

2.2 How Nike may overcome barriers to Marketing planning

Ten rules were proposed by Professor Mc Donald that can be effectively used to deal with
barriers in the line of marketing planning. Here are these rules that Nike can apply.

1. Align marketing strategies with their day-to-day operations.

2. Formulate strategies before formulation of tactics.
3. Follow shared values in relation to marketing perspectives.
4. Create structure based on marketing strategies.
5. Comprehend all the information on SWOT analysis.

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6. Provide training to the workers for enhancing their knowledge and skills.
7. Scan the macro and micro environment thoroughly.
8. Systematize the overall marketing procedure.
9. Formulate goals and objectives in sequence.
10. Adopt culture and style based on changing requirement.

TASK 3: Be able to formulate a marketing plan for a product or

service

3.1 Marketing plan for Nike’s products

Nike is considered as world’s famous and leading producer of athletic footwear and
apparels. However, it accounts for more than approximately 47% of agile shoes market
exceeding sales of U.S$ 3.7 Billion (Partlow, 2003). Nike is supplying superior quality goods
in more than 100 nations, although its main target segment counts on U.S, Europeans, Asia
Pacific, and America. Besides, this Nike has obtained this renowned status by means of their
ground-breaking and striking design along with quality production and intelligent marketing
strategies for promoting and selling their goods.

In this entire Assignment I have formulated the marketing plan for Nike’s products, which
includes marketing mix 4Pcs, communication and distribution tools that Nike Company
carries out while undertaking selling and promoting its products.

3.2 why marketing planning is essential in the strategic planning

process for an organization

1. Describe the importance of marketing planning

1. Marketing plan assist companies in developing goods that can meet the preferences and
needs of target consumers. However, good marketing plan gives an idea to the consumers
in differentiating your products than the competitors. They can comprehend what is point of
parity and difference in your product, and why they should decide to buy your products.

2. A well formulated marketing plan assist companies in reaching their target market,
enhance their consumer base and eventually raise their bottom line purpose. It is frequently
needed when company looks for funding, and it assists them in setting SMART goals and
objective.

3. However, formulation of marketing planning needs in-depth research, sufficient time and
devotion, although this process is very useful because it really contributes much more
towards reaching success.

2. Explain the role of marketing planning in the strategic planning

process

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In today’s competitive environment among organizations marketing plan plays vital in
strategic planning mechanism. Nonetheless, a number of marketing status correspond to
the corporate level, many are represented at functional level in an industry units of any
particular organization. Marketing is implicated within strategic arrangement at every level
of organization.

The activities of Strategic marketing can be categorized into three essential components.
First, marketers assist everyone within the business to get familiar among markets and their
consumers. Therefore, they are accountable for assisting organizations in executing
marketing values by means of strategic planning mechanism.

Second thing is that, marketers can provide help in gathering and analyzing data that is
needed for examining the current scenario, identifying current trends existing in the
marketing surroundings, and assessing the impending influence on such trends. However,
this gathered information along with examination offers input for business, production, and
marketing strategic planning’s.

Thirdly, marketers are usually engaged in the growth of business, production, and plans for
strategic marketing. However, the impact of marketing activities varies from one
organization to other. For such forms that are driven by marketing beliefs, marketing
essentially plays vital part in making strategic decisions.

3.3 Examine techniques for new product development

Ansoff Matrix of Nike

Existing New Products

Products
Existing Marketing Product
market Penetration development

New Market Diversification

Market Development

Explanations:

1. In Market penetration Nike enhance its sales to the current existing market, and
penetrates highly in-depth into the existing marketplace. However, Nike raises their
sales by means of advertising campaigns and relationship marketing.
2. Under category of product development Nike develop new products but for the
existing market, through getting better understanding of consumers.
3. In market development, existing products of Nike are sold in new markets, such as,
areas of interests and sporting idols. However, this practice is carried out in countries
like, China, Russia, India and Brazil.
4. In diversification, Nike sells their new products in the new markets that eventually
lead to actual strategic growth.

The techniques that company need to consider while developing new products.

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First, they need to define what their product is all about and how it will meet the desired
needs of consumers. They should examine the needs and preferences of their potential
market. Company should clearly convey what they are proposing, what is point of
differentiation and how their product will fit into the existing market. After analyzing and
answering these questions, company should formulate well-informed marketing plan for
their new offerings accordingly.

3.4 Justify recommendations for pricing policy, distribution and

communication mix for Nike.

Nike Inc follows leading marketing strategy in the market of athletic shoes and accessories.
In general it relies on its marketing mix in order to maximize its revenue and growth.

However, marketing mix is the grouping of company’s strategies and other tactics that
enterprise uses for executing their plan, in accordance with various products, promotion,
price and place.

Nike’s Product Mix:

1. Athletic shoes
2. Apparel
3. Accessories and equipments

Recommendation: Nike is one of the well-known brands that have created trust by
offering superior quality products. According to me Nike should extend its line of products in
a bid to serve diverse market across the world.

Place or Distribution in Nike’s marketing mix:

Nike sells its products across the world by means of various retailers and it has large
number of outlets around the world.

1. Various retailers
2. Niketown retailing outlets
3. Official online stores of Nike
4. Flagship stores
5. Nikeid

Recommendation: This component of marketing mix is the reason due to which Nike
is generating huge profit. I would suggest Nike to start some other outlets to those places
where there is unavailability of Nike’s products.

Nike’s promotional mix:

In order to sustain the brand image, Nike relies on most effective channels for promoting its
products.

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1. Personal selling
2. Advertising
3. Direct marketing
4. Public relations
5. Sales promotion

Recommendation: I would like to recommend Nike to use social media, in order to

increase promotion of its products.

Pricing Strategy:

Nike Inc put emphasis on value-based strategy for pricing its products. This strategy
enables Nike to enhance growth in its sales and generate more profit. The current Pricing
strategy followed by Nike is like; it might constantly use it. Nike's existing consumer base
currently specifies what they will be ready to pay the cost/price of the good to make sure
the quality and service they are getting from Nike.

Recommendation:

However, Nike is just using value-based pricing model, although it can also use some other
pricing strategies in a bid to attract more customers.

3.5 How factors affecting the effective implementation of marketing

planning have been taken into account

For maximizing revenue and minimizing risks within firms, the only consistent way is to
adapt an appropriate marketing planning with the specific requirements, in the meantime by
applying accessible marketing techniques and information for enhancing the flexibility. The
factors that could have impact over the progress of marketing plan are listed down below:

Management support (internal factor)

Financial budget (source of funding, external or internal factor)

Legality in terms of production and supplying goods (legal requirement)

Carrying out necessary research (internal and external factor, as well as technological
factor)

All these factors that are stated above would cause affect on the effective execution of
marketing planning. However, it may consider as important to taken into account because
these factors may impair the marketing plan if there is lacking and can destroy the overall
marketing plan.

TASK 4: Understand ethical issues in marketing

4.1

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Ethics conducting practices of right behavior that forms the decision making process by
people or business units. Promoting ethics in the marketing activities has consciously deals
with the principles of justice, equality, moral principles, values and wrongs within the
workplace.. The major use of marketing ethics is to prevent someone from doing any
deceive or taking advantage by means of unethical practices.

In general, unethical marketing activities will directly have impact on a good marketing
procedures and it can have adverse affect on marketing planning. Therefore, majority of
firms has taught to be responsive towards consumer’s needs and views in a bid to sustain
this long-term interest and relations in their business. Furthermore, social responsibilities
are subjected towards marketing activities for protecting customer’s rights, avoiding
inequitable trading and encouraging trade in extensive range.

4.2 Analyze examples of how organizations respond to ethical issues

(Nike)

Adler and Bird (1987) and Stead (1990) stated certain strategies for enhancing ethical
practices and for avoiding unethical practices within firms. However, they recommended
that, firstly, leading managerial needs to promote ethical awareness to the subordinates by
means of providing motivation, support and showing care upon ethical activities. Secondly,
they suggested that leading managerial positions needs to put emphasis on
institutionalization of moral values, norms and fair procedures that are included into every
level of organization.

In Nike case, the management is not engaged in motivating their employees and valuing
their norms. Therefore, they have bad reputation in the market owing to this reason. Based
on world report, Nike is practicing to overcome these issues and working towards
responding ethical issues.

4.3 Analyze examples of consumer ethics and the effect it has on

marketing planning

Mintel (1994) clarifies "ethical consumer" as a customers who usually considers environmental
problems, animal problems and also ethical problems that counts harsh regimes and defender
while shopping. However, in a bid to continue with a great marketing planning, the firm needs to
consider customers rights. However, being morally wrong in selling and buying products, it may
create bad intention and attitude. For instance, if consumer is buying product that is not lawful,
obviously the firm will not consider consumers right during selling products. It will influence the
overall market itself and eventually unethical practices would be spread all around.

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