CRITICAL EVALUATION OF MARKETING ORIENTATION AT NIKE

AND ITS IMPACT ON NIKE’ BUSINESS PERFORMANCE

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Introduction

Market orientation is the organizational culture that is used to develop superior value for the
customers which eventually supports superior performance of the business (Mollering, 2019).
Nike is one of the world’s leading brand in the sports apparel and foot ware industry which is
running its successful business with the help of its more than one million employees across
the globe. Nike is the world’s biggest supplier of sports shoes and apparel and is considered
as the first choice of sports people all over the world. According to the CEO of Nike, the
brand applies market orientation as well as product orientation while running their
businesses. This essay will critically evaluate the affect of market orientation on Nike’s
business performance.

Marketing Orientation

There are five basic components of marketing orientation as mentioned below;

1- Customer Focus
Every company is expected to explore a deep understanding of their target consumer’s
choices, preferences and needs because a thorough analysis of all these are required to
create products as per their needs (Odoom, and Mensah, P., 2019). Companies are
supposed to carefully analyze their customer’s demands, conduct market research to
know the upcoming trends and focus on the future needs and opportunities. As
discussed by Selmi, and Chaney, D. (2018) customers should be taken as the center of
decision -making process so that every new product is made according to their
preferences.

2- Competitor Analysis
Ozkaya, H. (2015) have identified in their research that marketing orientation requires
that brands should investigate market dynamic and have a sharp eye on their
competitors. A deep analysis of competitor’s strengths and weaknesses can help the
companies in exploring their potential threats and opportunities. Ziggers, and
Henseler, J., (2016) have claimed that after analyzing competitor’s business strategies,
brands can easily differentiate themselves from others and can attract the target
audience more effectively.

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 3- Cross -Functional Collaboration
Marketing orientation requires that there should be a collaboration between different
departments of a company and all should be working in coordination with each other.
According to Dekoulou,, and Trivellas, P. (2017) different departments like
marketing, sales, production should be interlinked with each other. Team
collaboration is necessary to know customer’s needs and deliver a positive customer
experience through that.

4- Social Responsibility
Kraa, J. (2016) have mentioned in their research that marketers should apply
transparent and ethical marketing practices to their business and should safeguard the
privacy of their customers. Practicing ethical and social responsibility while
marketing a business is mandatory to develop a long- lasting relationship with the
customers. A marketing orientation approach also requires that the above- mentioned
aspects should be implemented so that customers can be given more value and long-
term success can be achieved (Chin, C., and Ramayah, T., 2014).

Company’s Marketing Orientation

As discussed above, marketing orientation stands on five basic pillars and the success of any
brand depends upon how effectively they have applied marketing orientation aspects to their
functionality. Here is a thorough analysis of marketing approach adapted by Nike which will
identify how market oriented is this brand;

 Customer Orientation
According to the marketing orientation assessment given in Appendix 1, Nike has
been found to outshine the most when it comes to customer orientation. According to
Kamboj, and Rahman, Z. (2015) Nike offers a product review section on their website
where their customers can share their experiences and reviews regarding the Nike
products used by them. Nike also uses celebrity endorsement to raise the confidence
of their customers in Nike’s products. The brand also offers an exclusive consumer
buying process which is the most effective attribute of this brand. Public rating given
by the consumers of Nike helps the brand in improvising the faults identified in their

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 products (Chin, and Ramayah, T., 2014). Nike is aware of their target markets and
customer’s needs and demands which proves the company is customer oriented.

 Competitors Orientation
As far as competitor orientation is concerned, Nike secures poor scores there because
Nike is always found responding very negligently towards competitor’s actions
(Ashrafi, A., and Ravasan, 2018). Nike has to face an extremely competitive footwear
market where big names like Adidas, Puma and Under Armour are spreading their
marketing campaigns by utilizing advanced technology. Chin, C., and Ramayah, T.
(2014) have stated that Adidas is applying unique point of sale and have introduced
their products with 60 unique shoe technologies and Nike is not responding to this
with same strong marketing techniques which shows that Nike is not responding well
to its competitors.
However, one positive aspect of Nike’s competitor orientation is that they have the
capability to motivate their customers and gain their loyalty which is not done by its
competitors (Ashrafi, A., and Ravasan, 2018).

 Long Term Perspective

Nike sometimes get hit hard by their over-confident behavior, as discussed by
Alhakimi, W. and Mahmoud, M., (2019) although Nike always represent itself as a
future oriented company but fails to achieve this status practically. Nike outsource its
labor and face extreme criticism from people, moreover, the green sustainability
approach among consumers is not satisfied properly by Nike which shows that the
brand has to go away long to prove itself a sustainable and eco- friendly company
(Alhakimi, W. and Mahmoud, M., 2019). Nike scored poor here also.

 Inter- functional Coordination

Nike has proved itself to be a higher scorer at inter-functional coordination because
they have adapted an inclusion and diversity team (Cui, & Wu, 2016). Nike is well-
versed in using their teams in diverse ways. Although the brand is not good at
circulating customer’s information within the organization but their collaborative
approach in the form of teams always brings a winning position to the brand
(Beverland, and Lindgreen, 2017). Nike is advised to develop their own research

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 teams to collect latest info about their customers. The hierarchy of control applied at
Nike is regional and global as well which allows each regional marketing department
to act in their own way according to the choices and preferences of customers in their
region (Watson, Weaven, Perkins, Sardana, and Palmatier, 2018). Nike is also
recommended to give more trust to their retailers in different markets so that they can
apply the most appropriate marketing strategies.

 Organizational Culture
Nike secures highest score when it comes to justify their organizational culture. The
brand runs their business with an outstanding internal culture. According to
Beverland, and Lindgreen (2017). Nike believes in respecting the rights and freedom
of their employees and receive high productivity and outclass performance in return.
Nike is giving an outstanding market performance due to its satisfied employees
because the brand skips no chance to empower their employees. Watson, et al. (2018)
have stated that Nike offers health insurances and career development opportunities to
its employees which ultimately motivate their employees to work in the best interest
of their company.
Nike provides special training to its managers and those providing outclass
performance receive exclusive bonuses from the company (Watson, et al., 2018).
Besides all the positive aspects of Nike’s organizational culture, there are reports that
the brand also faces controversies and conflicts when it comes to labor practices in
their overseas manufacturing facilities (Watson, Perkins, Sardana, D. and Palmatier,
2018). Nik needs to resolve all the issues raised by their employees at local and
international offices.

In short, Nike performs very well in customer orientation and company’s internal culture but
the company didn’t score higher in their competitor’s orientation. Overall impact of Nike’s
marketing orientation is that the company applies a moderate to high level of orientation but
they still require lot of improvements in their competitor and long- term perspective.

Recommendation

Nike is running its business with a progressive approach but they need to focus more on the
strategies followed by their competitors. Adidas and all the competitors of Nike are attracting
more audience towards them by endorsing their products through celebrities, Nike also has to

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be flexible enough in their marketing approach and should be prepared to transform their
marketing strategies according to the latest trends in the market. Nike has to design exclusive
products for their different segments of customers, should manufacture and market innovative
ideas in short period of time.

Similarly, in order to achieve long term sustainability, the company has to reduce the stress
prevailing in their company due to outsourced labor. The company should allow labor unions
and safeguard their rights. Moreover, Nike is suggested to promote fair labor association
reports and should take the help of third parties to evaluate and deliver these reports. Nike
should encourage fair treatment to the outsourced labor and should give them all benefits as
enjoyed by their own employees. As far as inter-functional coordination within Nike is
concerned, it is recommended that the company should offer integrated and comprehensive
products to their customers so that it can help in maximizing shareholder’s returns. There are
different incidences where the company has been criticized for their worker exploitation,
sweatshop labor conditions and pollution released by the company. It has been assumed that
if Nike fails to address these issues, it will lead to consumer backlash and negative
impression of brand loyalty.

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