NORTH EAST UNIVERSITY BANGLADESH

Assignment
ON

Segmentation and Targeting Strategies of NIKE

Course Title: Marketing Management

Course Code: MKT-531

SUBMITTED BY
Aktarujjaman
ID: 200101010823
Program: MBA
Session: Spring-20
Department of Business Administration
North East University Bangladesh

SUPERVISED TO
Samiha Sanjana

Lecturer

Department of Business Administration

North East University Bangladesh

Date of Submission: 29th May, 2020

Introduction:
Marketing choices are crucial components of a strategic marketing process. At this stage of
planning, decisions are made in order to indicate the direction of the marketing mix not to
mention the way products are going to be perceived in the market place. These marketing
chooses group consumers together based on common needs with the ultimate goal to affect
the buying decisions of the target customers for these products, which stands for segmenting,
targeting and positioning strategy. In other words, STP is a marketing signification that
associates the way to evaluate and choose a target market for specific product or service.
Considering the factors related to this topic, the question of what specific consequences arise
when addressing this topic must be elaborated. This research is particularly outstanding for
the reader because it will analyze the STP strategy of a well-known company that produces
sports equipment, which is Nike.

Objective of the Study:

The main objective of this Assignment is to describe the “Segmentation and Targeting
Strategies of NIKE”.
Objectives:
 To explore the segmentation and targeting strategy of NIKE.
 To point out different Segmentation variable of NIKE.
 To describe the Targeting strategies of NIKE.
 To identify the Target customers of NIKE.
 To make some recommendation and conclusion of segmentation and targeting
strategy of NIKE.

Limitations of the Study:

 The main constraint of the study was inadequate access to information.

 Confidentiality of data might be another important barrier that might be faced during
the conduct of this study.
 Lack of experience;
 Most of my research is dependent on the secondary sources rather than primary
sources.
 Time and cost are the key constraints of my report. Due to lack of time and increased
cost I could not properly done my report

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Segmentation and Targeting Strategy:
The perception of mass marketing and behave all customers the same way, has led to the
comprehension of the unique needs of consumer groups, that has to be segmented for greatest
sales opportunities. In particular, all sports fans differentiate. For instance, a sports company,
such Nike, could not market the extreme sports equipment to elder people. As Michael Porter
(1998) mentions, “You can’t be all things to all people”, explaining that firms, which
specialize in meeting needs of consumers, tends to be more effective. However, if the first
marketing choice is market segmentation, how does Nike group consumers based on common
needs?

Segmentation strategy of NIKE:

In the customary way, there are six interactive bases for market segmentation, which are
demographic variables, psychographic profile, behavioral style, geographic variables,
socioeconomic variables and benefits sought. While Nike has a general targeted segment “all
athletes”, nevertheless precisely defines various market segments (Shank and Lyberger,
2014).

Segmentation variables of NIKE:

Demographic Geographic Psychographic

 Age  World region  Lifestyle
 Gender  Country  Personality
 Ethnic Background  Country region  Activities
 Family life cycle  City  Interests
 Physical Climate  Opinions

Socioeconomic Behavioral Benefits

 Income  Frequency of  Product features
 Education purchase desired
 Occupation  Loyalty of  Consumer needs
consumers

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Demographic:
Demographic segmentation is the most widely used technique from Nike because the
characteristics are easy to identify and measured, are available from many sources, such as
the government population count and are associated to sport attitudes such as attending a
game or watching sports. Based on the demographic segmentation, Nike targets individuals
according to their gender, age and life cycle stage. First and most important to be told is that
Nike targets customers between 11-45 years old, with greater weight to teens in order to build
long-term loyal consumers. For instance, in 2014 before the world Cup, Nike created a
promotional campaign that glorified great football athletes playing football with teenagers
inspiring them to become like
their idols Furthermore, gender is another significant factor that Nike uses to attract its
audience. Despite the fact that its male purchasing audience is higher, recently Nike has
invested heavily in females. Specifically, Nike has developed a strategic approach to
targeting Women by launching a variety of female sports lines where revenues are expected
to grow significantly in the next years. It must be stressed that Nike does not segment the
marketplace based on ethnic background including nationality, race and religion in order to
group the consumers. Respectively, does not take into account the life cycle to segment the
market (Statista, 2017).

Psychographic:
Nike utilizes psychographic segmentation to target customers based on lifestyle, personality,
activities and interests. Specifically, Nike aims to active individuals who take pleasure in
sports, gym regularly, are athletes and passionate with sports, which tend to be part of their
life. Nike does something exceptional. Associates individuals’ lifestyle with their activities,
interests and behavior creating the unique “feeling” and as a result they buy similar products.
Nike applies sports-centric strategy motivating, inspiring and connecting emotionally all
athletes with its products. Nike’s statement “To bring inspiration and innovation to every
athlete in the world” not to mention “Run with me” encourages all kind of athletes to follow
with loyalty the firm with the sense that they belong to the same family. Apart from the sports
consumers, Nike approaches a crowd that loves fashion. There are categories of people who
are passionate about the brands and buy company’s products just to follow fashion trends.
These individuals are convinced that Nike’s products are not ordinary athletic shoes but a
fashion lifestyle (Deng, 2009)
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Behavioral :
On the one hand, Nike focuses on the way its products make consumers feel. Clearly, the
company follows the direction “If you have a body you are an athlete” and “If you are an
athlete, Nike’s products make you feel athletic”. On the other hand, Nike builds customers’
engagement by providing them unique quality as well as various and innovative products to
choose in order them to purchase more frequently company’s products. Furthermore, Nike
gives its consumers the opportunity to share their experiences with their friends and family
including the review products on the internet, which spread to social networks having a huge
effect to purchasing behavior of the customers.

Geographic :
Geographic is simple, yet powerful segmentation basis. Nike segments market based on
world and country region, city and popularity density in different way. In particular, Nike
promotes different campaigns in the United States of America, in Europe, in Asia, in
Australia as well as in Africa because sports differentiate by region, even cities. For instance,
all the commercials in the
United States are around football and baseball, while in Europe, advertisements refer to
soccer. Socioeconomic Commonly, income, education and occupation are interrelated due to
the fact that people with higher educational level enjoy higher income as well as most
respective status. Thus, Nike segments market in lower, upper middle and upper class, where
in the last group, the company provides sports equipment in limited editions, which could be
bought only from individuals with high income (Bilotti, 2011).

Benefits :
Benefits segmentation is considered the underlying factor where every purchase satisfies a
need. Nike focuses on “benefits sought” to segment market place. Company’s products strive
to meet elite athletes’ as well as professional and casual performers’ needs. These needs that
consumers looking forward to fulfill through Nike’s products purchases are the quality, the
duration, the comfort, the style, the innovation, the price and the brand awareness. Thus, Nike
segments the market in three core bases concerning benefits, which are the Utility in order
consumers to accomplish high performance, the Style where individuals follow the fashion
brand statement and the Technology bases, which gives customers the opportunity to own
innovative shoes such as Air Max.

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Targeting strategy of NIKE:
Target marketing is the next step of segmentation process where the company systematically
chooses the segments that will allow to most effective and efficiently achieve its goals. Nike
evaluates its target market based on size, reach ability, measurability and behavioral
variables. In particular, Nike has niche market to serve. The company targets professional
athletes and sporty individuals providing them specialized and innovative products.
Furthermore, all products are reachable, even online, with the unique opportunity Nike’s
consumers to create their own custom designed shoes, which makes the brand more
identifiable and remarkable in differentiation to other footwear companies. It should be noted
that Nike also targets the marketplace through psychological tactics by sponsoring great
athletes with tremendous achievements and victories. This tactic intimately links company’s
products with triumph (Shank and Lyberger,
2014)
It is for granted that sustainable innovation is the trigger for revolutionizing the way the
company does business and manufactures its sports equipment. For that reason, Nike applies
aggressive marketing strategies in parallel with the marketing mix the company develops in
order to make further known its target consumers company’s products, enchasing its
uniqueness and exclusivity (About Nike, 2018).

Target customers of NIKE:

Nike is going after 3 kinds of customers:-

Women

Nike is expanding women's apparel, especially sports bras and tights. Sales of Nike's training
and running apparel for women grew by double digits in the last quarter, outpacing the men's
business, Parker said. The company also released a new couture-style collection with offbeat
items like skirts and lace-trimmed jerseys. Women in their 20s and 30s are largely driving the
"athleisure trend," in which customers buy leggings with the intent of wearing them to the
gym, errands, and brunch. Nike says the women's line could add $2 billion in additional sales
by 2017.

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Young Athletes

Kids who play sports are a growing part of Nike's business, according to Parker. Nike gets
young athletes to wear its products through sponsorships with local leagues, clubs, and
federations. It also sees partnerships with professional athletes as an important way to draw in
young customers. All NFL teams currently wear Nike gear. The brand also has partnerships
with scores of famous athletes, including basketball star Kobe Bryant and tennis champion
Roger Federer. Under Armour has also started signing famous athletes as a way to attract
young customers.

Runners 

Much of Nike's innovation efforts are focused in the running category, according to
Parker. Despite this focus, the running category isn't performing as well as the brand would
like. "The pace of innovation at Nike has never been faster, and our pipeline has never been
more robust," he told investors. "Running is our heritage and our largest performance
category."New running shoes include the Lunar Tempo, which is designed for distance
runners. Nike is also innovating running apparel to better compete with Lululemon, Under
Armour, and Adidas. The company also revamped its Nike+ running app. Nike+ lets runners
track their route, distance, pace, time, and calories. It also lets them share photos and compare
progress with their friends. 

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Recommendation:
 Experience and expert personnel should be kept in the company.
 Increase personal care for the customer.
 The company should set up effective channels for customer’s feedback and use the
latter constructively.
 Effective training may increase the productivity of the employees. So proper training
and incentive must be offered to the employee to generate higher net profit, total asset
and loan per employee.
 The employee should be upgraded as per their performance.
 In order to get higher customer satisfaction, NIKE has to concentrate more on
employee satisfaction, which will lead to more quality of service?
 Service department should be more reliable in ensuring that customers are constantly
aware of their services.

Conclusion:
In conclusion, it would be wise for business world to consider these factors when addressing
this issue. In my opinion, Nike is the leader in sports equipment creating a fortress in the
sports market that is difficult to conquer. The company excels because is the first that brought
innovation to sports shoes through the R & D department. At the same time, Nike constantly
attracts the best athletes from all sports and signs contracts that bring enormous profitability
to the business by associating the products with triumph and victory, creating the consumers’
the need to acquire the product. Clearly, the company has applied the Segmentation and
Targeting strategy correctly, as well as having understood the needs of consumers affects
their buying decisions with a tremendous success. I feel very strongly that this topic will be
discussed and researched further in order to help marketing plans be more productive as well
as innovative.

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Reference:

 https://www.researchgate.net/publication/338370597
 https://www.businessinsider.com/nike-is-going-after-3-kinds-of-customers-2015-4
 https://www.academia.edu/37156778/SEGMENTATION_TARGETING_AND_POS
ITIONING_STRATEGY_OF_NIKE_and_BYING_DECISION_ANALYSIS
 https://www.researchgate.net/publication/338370597_SEGMENTATION_TARGETI
NG_AND_POSITIONING_STRATEGY_OF_NIKE_BUYING_DECISION_ANAL
YSIS

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