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SEGMENTATION, TARGETING AND POSITIONING STRATEGY OF

NIKE & BUYING DECISION ANALYSIS

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 SEGMENTATION,
TARGETING AND
POSITIONING STRATEGY OF
NIKE & BYING DECISION
ANALYSIS
Master in Business Administration (MBA) Module:
MBA 61 | Marketing

Panagiotopoulou Vasiliki
vasiliki.panagiotopoulou@st.ouc.ac.cy
University ID: 000100001411 Coordinator:
Nektarios Tzempelikos Academic Director:
Christina Christou Words: 2226
1 SEGMENTATION, TARGETING AND POSITIONING STRATEGY OF NIKE & BYING DECISION
ANALYSIS

Table of Contents
Introduction...................................................................................................................2
A. Segmentation, Targeting and Positioning............................................................2
Segmentation........................................................................................................2
Demographic.....................................................................................................................................3
Psychographic...................................................................................................................................4
Behavioral.........................................................................................................................................4
Geographic........................................................................................................................................4
Socioeconomic..................................................................................................................................5
Benefits.............................................................................................................................................5

Targeting................................................................................................................5
Positioning.............................................................................................................. 6
B. Main factors that can affect the buying decisions of the target customers for
Nike’s products
6
Psychological factors...........................................................................................6
Social factors.........................................................................................................6
Cultural factors......................................................................................................7
Personal factors.....................................................................................................7
Conclusion.....................................................................................................................7
References.....................................................................................................................8
2 SEGMENTATION, TARGETING AND POSITIONING STRATEGY OF NIKE & BYING DECISION ANALYSIS

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
choises 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.

A. Segmentation, Targeting and Positioning

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
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).
Demographic Geographic
 Age  World region
 Gender  Country
 Ethnic Background  Country region
 Family life cycle  City
Psychographic  Physical Climate
 Lifestyle Socioeconomic
 Personality  Income
 Activities  Education
 Interests  Occupation
 Opinions Benefits
Behavioral  Consumer needs
 Frequency of purchase  Product features desired
 Loyalty of consumers
3 SEGMENTATION, TARGETING AND POSITIONING STRATEGY OF NIKE & BYING DECISION
ANALYSIS

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.

Age

Children 1-5yTweens 5-10yTeens 11-18yAdults 18-45

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.

GENDER
Female; 45%

Male; 55%
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).

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 (Bilotti, 2011).

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.
Concerning cities segmentation and their fans in New Delhi, the capital of India, Nike
promotes equipment for cricket while in England and Sidney for rugby. Based on Nike’s
statistics, largest market places are North America as well as Western Europe and China
where the company segments more the market focusing on urban areas with purchase
densities. Finally yet importantly,
Nike does not segment the market based on climatic conditions even though the company is
ecologically conscious (Shank and Lyberger, 2014).

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.
Although each type of segment defines groups of customers with similar needs, it is ordinary
implementation in marketing to combine segmentation variables, such as geodemographic
segmentation, for more effective approach in certain circumstances (Ali Mahdi et al,
2015).

Targeting
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, reachability, 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).

Positioning
The final step of STP concerning the market decisions is the positioning. Nike has positioned
its brand as the market leader of sports equipment widely, providing high quality and
innovative technology. Furthermore, Nike has convinced its consumers that is an ambitious
and victorious company through the swoosh together with the slogan "Just Do It" as well as
through the promotional activities that connect Nike’s brand with magnificent achievements
of prominent athletes. It must be stressed that Nike over the years has shifted from product
focus to attitude. Nike “speaks” in athletes hearts through unique & momentous feelings,
which makes the company exceptional compared to others. Above all, Nike has established its
place in fashion, where company's products define certain groups' lifestyle (Chang, 2014).
As it seems, positioning is based on the perception or image that Nike expands and maintains
concerning its sports equipment. With this in mind, the company develops perceptual maps
through marketing research techniques in order to interpret its products position in relation to
competition.

B. Main factors that can affect the buying decisions of the

target customers for Nike’s products
Consumer’s buying behavior goes through various stages before the individual takes the final
decision to purchase the product. Several factors can affect the buying decisions of the target
customers for Nike’s products, which are classified in the following categories such as
psychological, social, cultural and personal factors and will be elaborated below.

Psychological factors
Nike gives its consumers the belief that when they wear its sports equipment, they can
achieve everything without limitations; they can be unbeatable. The company's advertising
campaigns and headlines give a sense of freedom and victory not to mention that the brand
itself gives the motivation, “Just do it”. Nike affects not only beliefs but also attitudes. It
could be said with certainty that Nike invests on customers perception by the incentive “If
anybody can do it, you can do it”. Consumers are persuaded to purchase company’s products
and take the change to become healthy and good looking like Nike’s top athletes (Vainikka,
2015).

Social factors
It is for granted that all Nike’s commercials promote exceptional athletes like Michael Jordan,
Cristiano Ronaldo, Carl Lewis and more using company’s products. In terms of sociology, all
consumers tend to choose products that their idols use and are highly influenced by their
status and lifestyle. Therefore, Nike’s customers are influenced by reference groups, opinion
leaders and family concerning their buying decisions due to their need to fit in based either on
the role they represent or through the social status. For instance, an
individual who wears Nike’s limited edition indicated that he/she belongs to the upper class
(Otnes & Zayer 2012).

Cultural factors
Culture is an important factor in consumers’ buying decision but at the same time, it is also a
very delicate issue for companies that use it with the aim of influence. Nike segments the
marketplace by location, and then, having researched consumer interests based on cultural
attributes, affects the buying audience through commercials. An illustration of the above
written is India’s official sport. Due to India’s culture, there are more cricket fans than any
other sport. Therefore, Nike through cricket idols affects fans to buy the sports equipment that
provides.

Personal factors
Many personal factors affect the buying decision of the consumers, which are the age, the
economic condition, the occupation, the lifestyle, the personality, the quality of the product,
the availability, even the price. Nike influences its consumers through the one of a kind
fashion styles and trendy sports equipment that address to different ages, the comfort that
athletes feel wearing company’s products, the innovation and quality that is proved by
product duration as well as the price escalation where every athlete could buy, wear and feel
unique. Finally yet importantly, Nike’s products are available almost everywhere, even
online, where consumers’ could purchase company’s products instantly (Vainikka, 2015).

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 STP 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.
 References
[1]. Porter, M., E. 1998. The Competitive Advantage: Creating and Sustaining Superior
Performance. NY: Free Press.
[2]. Shank, M., D., Lyberger, M., R. 2014. Sports Marketing: A Strategic Perspective. 5th
ed. London & New York: Routledge.
[3]. Statista: The statistical portal. 2017. Statista dossier about Nike. [ONLINE] Available
at: https://www.statista.com/study/12870/nike-statista- dossier/.
[Accessed 3 January 2018].
[4]. Deng, Τ., 2009. “Just Done It”--- Nike’s New Advertising Plan Facing Global
Economic Crisis. International Journal of Business and Management, 4/3, 102-105.
[5]. Bilotti, K. 2011. Emotional Brand Attachment: Marketing Strategies for Successful
Generation. [ONLINE] Available
at: http://scholarship.claremont.edu/cgi/viewcontent.cgi?article=1257
&context=cmc_theses. [Accessed 6 January 2018].
[6]. Ali Mahdi, H., A., Abbas, M., Mazar, T. I. et al, 2015. A Comparative Analysis of
Strategies and Business Models of Nike, Inc. and Adidas Group with special
reference to Competitive Advantage in the context of a Dynamic and Competitive
Environment. International Journal of Business Management and Economic
Research(IJBMER), 6/3, 167-177.
[7]. About Nike. 2018. Sustainable Innovation. [ONLINE] Available at:
https://about.nike.com/pages/sustainable-innovation. [Accessed 10 January 2018].
[8]. Chang, C., Y. 2014. Visualizing brand personality and personal branding: case
analysis on Starbucks and Nike's brand value co-creation on Instagram. MA (Master
of Arts). United States of America: University of Iowa.
[9]. Vainikka, B. 2015. PSYCHOLOGICAL FACTORS INFLUENCING CONSUMER
BEHAVIOUR. Bachelor’s Thesis. Finland: Centria University of Applied Sciences.
[10]. Otnes, C., C., Zayer L., T. 2012. Gender, Culture, and Consumer Behavior. 1st ed.
New York & London: Routledge.

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