Questions 1: What are the pros, cons, and risks associated with Nike’s core

marketing strategy?
a) Nike’s core marketing strategy _ They focused on providing high-quality running
shoes designed for athletes by athletes. Nike believed in a “pyramid of influence” in
which the preferences of a small percentage of top athletes influenced the product
and brand choices of others. _ Contracted with many athletes spokesperson,
Professional teams an college athelic teams to adverstise and promote their
products to customers. Ex: Nike focused its efforts on international markets, es
pecially China, during the 2008 Summer Olympics in Beijing. Nike received special
permission from the International Olympic Committee to run Nike ads featuring
Olympic athletes during the games. Nike sponsored several teams and athletes,
including most of the Chinese teams and 11 of the 12 high-profile members on the
United States men’s basketball team. _ Expanding new product lines, linking with
many other businesses to increase coverage and brand identity. Ex: Nike’s lead in the
running category has grown to 60 percent market share thanks to its exclusive
partnership with Apple. Nike (Plus) technology includes a sensor that runners put
into their running shoes and a receiver, which fits into an iPod, iTouch, or iPhone. _
Nike outsourcing their produts most of factories are located in Asia such as China,
Indonesia and India d) Risks The major risk associated with Nike at present is of
competitors (Addidas, Puma,…). The competitors are increasing day by day and yet
more development is needed in its product line.
Pros and Cons of Nike Core Marketing Strategy:
Pros:
Nike put heavily proportion in their marketing strategies and products deign. In
order to sustain their dominance in the industry and retain their competitive
advantages, Nike actively responds to the market trends and changes in consumer
preference by adjusting their marketing strategies, the mix of existing product
offerings, developing new products, styles and categories, and influencing sports and
fitness preferences through various marketing strategies. Now we discuss the pros of
Nike's core marketing strategies and related them to the relevant marketing theories
help us to depth understanding.
Nike is very much efficient in its distribution of products. More efficient distribution
means more sales. By delivering right thing at a right time to customer, Nike is
building beneficial customer relationship and gaining customer satisfaction and
loyalty. Nike distributes its products on different level basis. The high premium
products are given to a certain distributors while leaving the low priced to be sold at
highly discounted price at the retail stores such as Wal-Mart.
The e-commerce program of Nike is the first time a company has offered mass
footwear through the Internet and provides competitive advantages to Nike. Nike
website is very well designed and it is very easy and comfortable for a customer to
look for the desired footwear. As stated earlier that Nike made contracts with
world's most renowned Sports celebrities like Tiger Woods etc. this creates high level
of awareness among customers and people about what Nike is all about. Their
aggressive advertising campaigns, celebrity endorsements and quality products all
enhance their brand and image. Nike targets on the consumers who care more
about the utility and quality of the products rather than the price. That is why Nike
sets higher price of its shoes than its competitor like Adidas.
The customers who consider a product to be high quality are likely to pay the high
price more often and consistently. Once the consumers develop the product
intimacy, they come to associate their person with the products and will pay
whatever price quoted on the products. Most of the consumer of Nike's products is
mainly athletic. Nike is the master of segmentation, their segmenting market
typically target's athletes, both women and men from the age 15 to 35. Nike's
targeting market is active people who enjoy high quality sporting goods, especially
footwear.
Nike focuses on creating premium consumer experiences on product innovation,
brand leadership and elevated retail presence. Nike targets on these customers by
agreements between Nike and athletic teams, college's athletic teams for products
sponsorship and eventual promotion to the members of these teams. Even though
others are likely to buy the products, Nike focuses on the athlete more than any
group of individuals even though it also target on the youth. This strategy is
especially successful because of its ability to reach a large number of athletes.
Cons:
However, unlike many companies, Nike does not promote its efforts. One brand
consultant says that, “Nike has always been about winning. How is sustainability
relevant to its brand?” Nike executives agree that promoting an eco-friendly
message would distract from its slick high-tech image, so like recycling old shoes into
new shoes are kept quiet. One other con of the Nike brand is that the price of Nike
products are quiet expensive as compare to other global competitors. So, instead of
buying such expensive product customers go for other competitive brands like
Adidas. One of the Nike's core marketing strategies is depend on a group of athletes
to promote its products.
Nike prefers to have high profile athletes as its endorsers, like Runner Steve
Prefontaine, Michael Jordan, and LeBron James. The athletes had positive and
negative influence on changing consumer preferences, changes in consumer tastes
and priorities, and also consumers' buying decisions. The action and attitude of
Nike's chosen spokespersons could bring the impacts on its promotional strategies.
For instance, it will attract the athlete's idolater to purchase the products if Nike
using a popular athlete as endorser. On the other hand, if the athlete were caught in
drug addicted or any immoral attitude, it will affect the customers not to buy Nike's
products, thus will affect Nike's sales, revenue and profit.
Risks:
The major risk associated with Nike at present is of competitors. The competitors are
increasing day by day and yet more development is needed in its product line.
Question no 2: if you were Adidas, how would you compete with Nike? Answer:
Adidas should continue to tap into the Russian and Asian markets, making Adidas a
more popular brand than Nike in these places.
The very first thing I would do would be reducing the prices of the products without
compromising on the quality. Increasing the advertisement and promotion would be
my next strategy. The promotion would be globally. Overpay what Nike is paying the
best athletes in the world to endorse their shoes. The product would be advertised
by the national sports heroes. There would be selling promotions. Product line depth
would be more. I would check the availability of my products in each outlet. Huge,
variety of ladies sports items would be included. Next, I would target the school
educational attending, pupils as well. The development of a product line of smart
shoes will build on this reputation and show buyers that Adidas is humorless about
innovation and using technology to advance athletic accomplishment.