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VIETNAM NATIONAL UNIVERSITY

UNIVERSITY OF LANGUAGES & INTERNATIONAL STUDY
FACULTY OF LANGUAGE EDUCATION & PROFESSIONAL DEVELOPMENT

REPORT OF MARKETING 113

WEEKLY TEAM ASSIGNMENT 10

Class: KTTC.21E5
Lecturer: Ph.D Le Thi Thu Mai
Major: Economic & Finance

GROUP MEMBER
1. Nguyen Long Gia Quy

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Choose one type of product of your company and analyze

One of the products Nike concentrates on and spends the most effort on is footwear.

Which pricing strategy does the company choose to set the price?

A typical pricing strategy that Nike may use is a premium pricing strategy. This strategy entails setting a
higher price than competitors to create a premium brand image and emphasize the quality and exclusivity of
the product. This points to Nike sneakers' quality and exceptional performance, which draw buyers
searching for top-tier footwear. Additionally, this tactic promotes exclusivity and extravagance, draws in
worthwhile customers, and raises the profile of expensive items.

Analyze the pros and cons of this strategy.

Pros of premium pricing strategy:

Perception of quality: Higher prices may attract buyers who appreciate high-end goods by evoking
impressions of outstanding quality and superior production.

Brand image: High prices also create a sense of exclusivity and prestige among customers who value
owning premium products, increasing interest in the brand.

Profitability: The premium pricing strategy gives Nike higher margins on our products, helping to invest in
research and development of breakthrough technologies and materials.

Cons of premium pricing strategy:

Price sensitivity: Budget-conscious customers who wish to buy things with lower costs could look for rival
products that are less expensive than Nike.

Competitive disadvantage: Price-sensitive customers may be drawn to rivals' comparable-quality items at

cheaper costs, which might result in a loss of market share.

Limited market reach: Nike's potential customer base may be limited by premium pricing because not all
consumers are ready or able to pay premium rates.

Choosing a premium pricing strategy helps Nike create a strong brand image and attract customers who
want to own its premium products. But Nike has to consider customers' price sensitivity and adjust its
pricing strategy based on the company's and market's situation.

How does the company set price for its new products to the market? - Describe the product line/mix
pricing strategies of the company

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Nike uses a product line/mix pricing strategy to set prices for the new products in the market. This strategy
involves setting different price points for various product lines or categories based on features, materials,
design, performance, and target market.

Nike offers customers a wide range of items, including sports shoes, clothes, sports equipment, and sports
accessories. Each product line is aimed at different customers with varying demands.

Nike also offers a variety of running shoes, priced from around $100 to $300. The price of each shoe is
based on the features and performance. For example, the Nike Air Zoom Pegasus is a popular running shoe
that is priced at around $130. The Pegasus is a good all-around running shoe that offers good cushioning and
support. The Nike ZoomX Vaporfly Next is a high-performance running shoe that is priced at around $275.
The Vaporfly is a lightweight and responsive shoe that is designed for elite runners. (Melbado, n.d)

Besides, the Nike Revolution line will be less expensive than the premium line because of the simpler
design and fewer features. However, it will still provide customers with comfort when wearing.

In addition, Nike also releases limited collections in collaboration with celebrities such as singers and sports
athletes, designers and artists which are often priced higher due to their exclusivity and unique features.
( TBH, 2023)

By employing a product line/mix pricing strategy, Nike can cater to a wide range of customers with different
budgets and preferences. It allows the company to maintain a premium image while offering more
accessible options.

It's essential to note that market demand, production costs, rival price, and overall marketing strategy can all
affect pricing decisions for new products.

What are your suggestions to improve the pricing strategy of the company.

To improve the pricing strategy of Nike, I have some suggestions below:

Target different customer segments with different prices. Nike could segment its customers based on factors
such as income, age, and loyalty. It could then offer different prices to different segments, based on their
willingness to pay. For example, Nike could offer lower prices to students or seniors, while charging
premium prices to collectors or high-income customers.

Use bundling to increase sales. Nike could bundle the products together to offer customers a discount. For
instance, Nike could bundle a pair of shoes with a matching shirt or socks.

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Reference

The pricing strategy of Nike and why it is so effective. Melbado. (n.d.). https://melbado.com/the-
pricing-strategy-of-nike-and-why-it-is-so-effective/

TBH, T. (2023, June 15). Marketing strategies and marketing mix of Nike. The Brand Hopper.
https://thebrandhopper.com/2023/06/09/fueling-success-nike-marketing-strategies-and-
marketing-mix/

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