MKT501 Marketing as Value Creation

Week 2 Discussion

Myat Noe Thinzar Kyaw

2205310010

Competitive Profile Matrix (CPM) - Sports Wear Industry

Nike, Adidas, Puma

Competitive Profile Matrix (CPM)

Nike Adidas Puma

Critical Weight Rati Sc Rati Sc Rati Sc

Success s ng ore ng ore ng ore
Factors.
 Price 0 3 0.7 2.5 0.6 1 0.2
Competitiv . 4 5 3 3 2 5
eness 2 4.5 0.48 3.5 0.36 2 0.24
Customer 5 3 0.81 2 0.63 1 0.36
Loyalty 0 4 0.60 3 0.40 2 0.20
Advertisin . 2.5 0.60 2 0.45 1 0.30
g 1 0.25 0.20 0.10
Product 2
Quality 0
Brand .
Image 1
Customer 8
Service 0
.
2
0
0
.
1
5
0
.
1
0

Total 3.49 2.67 1.45

1

CPM model criteria (Muhammad Usama Niazi, 2020) (Comparably, 2022)

Nike's Strategic Plan to Increase its Competitive Advantage

1. Price competitiveness
Nike's score in terms of price competitiveness is lower than it should be because
of the amount of money it spends on advertising to uphold its brand image and
foster good consumer perceptions. Nike is a luxury brand that commands a higher
price due to its reputation. Nike trades this aspect in order to improve its brand
image. One of the most crucial factors in the sportswear industry's success is price
competition. A customer in the business first looks at the product's price tag
before deciding whether to acquire it if it falls within his or her means of
purchase. The sportswear business experiences the same customer behavior.
When it comes to the sportswear market, prices of items matter greatly because
different companies are providing comparable goods; the only differences are in
color and style. Therefore, it may be accurate to state that price competition is
one of the most crucial essential success factors in the sportswear business, which
is why we have assigned it 25% of the weight. And 2831 customers rate Nike’s
pricing score a 4/5, which ranks it 3rd against its competitors, below New Balance.
(Comparably, 2022)

2. Customer Loyalty
Except for customer service, every important success factor has a lower weighting
than customer loyalty (12%). Customer loyalty had such a low rating because
consumers of sportswear choose to purchase goods that are higher in quality and
more affordable. Consequently, the idea of customer loyalty didn't have a
significant effect on consumers' purchasing decisions. Therefore, if we are talking
about client loyalty, it is not a crucial factor. (Muhammad Usama Niazi, 2020)

3. Advertising
Advertising Nike is the industry leader in advertising. The well-known football
player Cristiano Ronaldo has a deal with Nike to utilize and promote Nike's
merchandise. Nike is now the industry leader as a result of this move. In order to
promote his brand and foster a positive brand image in the eyes of customers, Nike
also sponsors several football leagues, and it is doing this successfully. The third
most significant aspect in the sportswear sector is advertising. Advertising is
crucial for every industry in the modern world. Since there are more businesses
opening every day, it is true that the sportswear industry operates in a very
competitive environment. The only way to remain in the middle of the customer,
however, is to advertise. We can draw the conclusion that advertising is critical to
surviving industry rivalry. (Muhammad Usama Niazi, 2020)

4. Product Quality
3161 customers rate Nike’s product quality score a 4.3/5, which ranks it first
against its competitors. The second most significant criterion to success in the
sportswear industry is product quality. In every wearable sector, good quality is
one of the most crucial success factors, but in the case of sportswear, its
significance somewhat increases. Sportswear is used when running or playing
games, so customers desire high-quality items. It is evident from its use that the
product quality is a key component of the sportswear business. (Comparably,
2022)

5. Brand Image
Company Image Nike has successfully and expensively captivated consumers'
attention through advertising. Nike's brand image is crystal clear: Nike is a
premium sportswear firm with high-quality products and is the market leader in the
sector. The Nike swoosh trademark emblem is one of the most recognizable in the
entire globe. The company has established its brand as an athletic and active
lifestyle brand. Nike receives a 4 for brand perception. Brand image is important,
but not as important as advertising. The brand image is given less weight than the
advertisement because the advertisement is the creator of the brand image. Brand
image plays an important role as customer purchasing behavior can also be
influenced by brand image. Brands are also important when it comes to the
sportswear industry. Today, people are buying sportswear inspired by athletes.
Companies with a positive brand image can influence the buying behavior of their
customers. So, brand image is important factor but slightly in sportswear industry,
that’s why given 15% of weightage. (Muhammad Usama Niazi, 2020)

6. Customer Service
One of the sportswear industry's least significant triumphs is its customer service.
The industry places a great value on customer service. But when we discuss the
sportswear business, that component loses significance. Customer service's
primary objectives are to assist consumers and walk them through the product.
Sportswear sector items are straightforward; therefore, clients don't need to be
given any detailed information beyond generic descriptions. Additionally, since the
product is neither guaranteed nor maintained, customer service is not extremely
crucial. We can get the conclusion that the sportswear business places the least
value on the client. (Muhammad Usama Niazi, 2020)

Nike's Strategic Plan to Increase its Competitive Advantage

Nike and Adidas have almost similar strategies but different implementation
methods. Both the companies concentrate heavily on technology and strive to
produce new and innovative products. Nike focuses on the American markets
whereas Adidas focuses on the European market. Nike does not have any
production plants as they only design, distribute and market their products and
hence they outsource to various countries in Asia, mainly Taiwan and Korea,
which outsource their production to China, Indonesia and Vietnam. Adidas on the
other hand, carry out all of them production in Germany and recently has adopted
Nike’s outsourcing policy by outsourcing too Asian countries. Nike and Adidas
both follow a premium pricing strategy which according to Kotler (2003, p.272) is
a strategy where companies charge a premium price for their products. Their
competition is always intense.

1. Enhance Customer Service Experience

Nike is such a highly engaging brand but not on social media. They have already
created a bond with their audience through years of marketing. But according to
CPM analysis, Nike must enhance their customer service such as,

(a) Building relationships with customers through mobile apps

(b) Implementing retail innovations guided by the voice of the customers
(c) Make more amount of queue at physical stores when the hot items are going
to release (Kindra Cooper, 2019)

2. Marketing Strategy that could make Nike the Leader in Markets

According to reports, Nike invests about $3 billion on advertising. The brand may
engage with potential consumers through ads. 36.79% of respondents think that
Nike has outperformed its rivals thanks to an outstanding marketing plan.

(a) Use emotional connection to customers

(b) Utilize the power of influencers
(c) Appeal to nostalgia (Steven Warner,2022)

Nike founded successfully because it connected with a certain client base. It is

an athletic clothing line. As a result, the brand has excelled in the market for
athletic wear. Overall, Nike continues to be the biggest sportswear manufacturer in
the world. But producing a variety of styles will keep the business at the top of its
market. substantially enhancing the Nike client experience globally. A well-known
brand on a worldwide scale is Nike. Therefore 73.75% of respondents to the Real
Research study said Nike is well-liked in their nation. Real research asked
respondents via the survey app why they wore or used Nike items, and they gave a
variety of answers. It's interesting to see that 35.84% of respondents to the Real
Research online survey app use Nike gear while they play sports. Nike continues to
rule as the most popular sports shoe brand worldwide. Then, 24.57% think that
fashion trends are to wear, and 19.78% say that high brand quality is to wear. Next,
there is a high level of comfort (4.35%) and affordability (3.38%).

References:

Just a moment. . . (n.d.). https://www.comparably.com/companies/nike/competitors

Niazi, M. U. (n.d.). CPM For Nike. https://www.slideshare.net/MuhammadUsamaNiazi/cpm-for-

nike

Lukasanto, A. (2014, June 6). NIKE FINAL CONTENT.

https://www.academia.edu/7278720/NIKE_FINAL_CONTENT

Cooper, K. (2019, October 11). Nike's Top 3 Priorities for the Digital Customer Experience.

CCW Digital. https://www.customercontactweekdigital.com/customer-insights-

analytics/articles/nikes-top-3-priorities-for-the-digital-customer-experience

Rodoplu, I. (2022, August 29). NIKE’s Social Media Customer Service Performance. Juphy.

https://juphy.com/blog/nikes-social-media-customer-service-performance

Author, R. R. (2021, August 2). Over 40% of the Respondents are satisfied with Nike products –

Survey Results. Survey Results & Insights - Real Research Media.

https://realresearcher.com/media/40-percent-of-survey-respondents-are-satisfied-with-

nike-products/