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Creating a Marketing Plan for the athletic brand Nike

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Introduction

The following paper represents the marketing plan for Nike by analyzing the brand's

distribution strategy, competitive position using the SWOT analysis, and brand positioning

strategy. The outcome of the analyzis aids in recommending the most appropriate distribution

strategy for Nike. Nike is a manufacturer, marketer, distributor, and seller of the world's best

sports and apparel products. The brand operates under the culture of innovation and teamwork to

create continued progress for athletes and the sports world today and in the future. The company

headquarters are in the United States, Netherlands, and China, but with manufacturing and

distribution stores in other regions across the globe (Nike Inc., 2023). Nike is driven by a unique

marketing strategy to outshine competitors and emerge as the best brand in the world.

Nike Marketing Plan

Nike’s Distribution

Organizations use a wide range of distribution strategies depending on the type of

products and services offered, the target market, the business's location, and the business's type.

As the world's largest sportswear brand, Nike uses a distribution strategy that creates value for its

customers while ensuring the achievement of organizational goals, mission, and vision. Nike

sells brands in the United States and other international markets worldwide. The brand uses a

direct distribution channel named "Direct-to-customer (DTC)" sales. Under the DTC sales, Nike

distributes their products through the factory and inline retail outlets. Also, it makes e-commerce

sales through its interactive website (Oberoi, 2022). The implementation of the direct

distribution channel came after the brand noted its past distribution channels involved thousands

of retailers. Also, direct distribution allows the company to generate higher profit margins than

when using wholesalers and retailers. Under the new DTC sales strategy, Nike has reduced its
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retailers from 30,000 to approximately 40. According to Danziger (2018), the move aimed at

doubling the speed of marketing its products by creating a direct connection with consumers.

Moreover, the advancement in information technologies through the internet and the rise

of social media marketing has prompted the business to concentrate more on e-commerce. Nike

operates the direct distribution sales channel through both online distribution and physical stores.

Nike still operates Nike-owned retail stores that allow customers to walk into a shop physically

for their favorite brands. The retention of the brick-and-mortar stores has enabled Nike to create

a higher value proposition for customers because they can choose to shop online through the

website or visit the physical store (Oberoi, 2022).

Also, Nike uses selective distribution to ensure products reach end customers at the

lowest costs possible. The selective distribution strategy balances product availability with

storage and inventory costs. Nike uses this approach because it best portrays its brand image and

ensures customers worldwide have access to its unique brands. Nike operates its stores with

many other retail shops in different geographic areas.

SWOT Analysis

Strengths

Nike's strong brand awareness makes it the number-one sports' and apparel brand in the

world. According to Danziger (2018), Nike is classified as the top footwear brand worth $21

billion. Second, Nike enjoys low manufacturing and distribution costs, allowing the brand to

record high-profit margins. Nike uses the lean manufacturing model by soliciting services of

independent manufacturers in over ten countries worldwide, leading to increased efficiency and

low overall manufacturing costs. The lean manufacturing strategy saves the company

approximately $0.15 per unit manufactured (Anonymous, 2018). Also, the direct distribution
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used by the company saves the distribution cost through different wholesalers and retailers.

Also, Nike sells a wide range of products, such as apparel, shoes, and accessories. The brands

come with unique stylish designs to suit the needs and preferences of diverse customers. Also,

Nike shoes come in different sizes and tastes, making them family-oriented. Finally, Nike has

distribution stores across many countries, allowing the brand to reach different geographic areas

and become more competitive.

Weaknesses

Nike has some weaknesses that affect its level of competitiveness. First, Nike largely

depends on the North American market while putting minimal effort into growing markets in

other regions. The demand for sports and apparel is a global phenomenon, and concentrating

only on one geographical region makes Nike less competitive in the global market. Second,

Nike faces competition from other brands such as Armour and Adidas. The emergence of new

apparel and footwear manufacturers using sophisticated innovations and customer-centric

marketing and distribution strategies has increased competition for the Nike brand. Finally, the

Nike brand faces accusations of poor labor conditions, especially in developing countries,

making it face numerous lawsuits. For example, in 2013, Indian lawyers sued Nike over poor

sweatshop conditions of subjecting workers to sexual harassment and physical punishment

(Business Standard, 2013). Lawsuits are capable of affecting its brand image and reputation.

Opportunities

Nike enjoys opportunities created by business globalization allowing the brand to extend

and market itself to different markets worldwide. Nike has expanded to Asian markets,

experiencing more growth with the rising number of customers demanding fashion and stylish

footwear and apparel. A study by Thomas (2022) showed Nike's 2022 share price increased by
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2.2% in China after the sports giant settled in the market showing huge growth potential.

Second, Nike's direct distribution strategy is boosted by enhanced e-commerce operations. The

rise of social media marketing through various platforms such as Twitter, WhatsApp, Facebook,

and YouTube allows more consumers to view the brand content increasing their international

sales. Third, Nike has diversified to other products and service lines, increasing its sources of

revenue. Nike has extended its market to new brands, such as sports sunglasses and other

fashionable wearables, increasing the customer segment and penetrating deeper into the global

market.

Threats

The greatest threat affecting Nike is the increasing number of counterfeit products today.

According to Kim (2016), counterfeit products in footwear threaten the growth and expansion of

other known brands like Nike. Most counterfeit targets Nike because of the brand's popularity

and reputation. Counterfeit Nike brands sell $5 to $200 less in the market. Also, Nike

experiences the threat of increased competitive pressure from substitute brands offering similar

products at lower prices. Nike brands are priced based on some factors, including size, shape,

fashion, and style. Competing brands have emerged in the market, offering brands that give

customers similar experiences to Nike but at lower prices. Finally, Nike faces the threat of

maintaining its brand name and reputation. Nike's accusations of workers' harassment and poor

pay have affected the brand's reputation. The accusation is a major threat to brand failure soon.

Positioning Strategy

Brand positioning entails placing a brand in the market to face other competitors. The

unique value proposition is the best and most appropriate positioning strategy for Nike to win the

sports and apparel industry market competition. The unique value proposition allows the brand
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to define a unique value proposition of its brand by highlighting benefits and features that

differentiate it from competitors. According to Ratcheva (2019), brands have to work under

emerging market pressures as advancements in technology bring new features that make the

ground more competitive than before. Nike is a world brand known for its unique brand image

and recognition. The outcome from the SWOT analysis shows that one of the brand's strengths

is a strong brand awareness that drives its value proposition in different markets worldwide.

Nike's positioning strategy uses innovative technology to give consumers the first choice for

sports and apparel products and create a connection between consumers and favorite athletes

worldwide. Nike should apply a strategic approach to position their brand, and ensure they

remain the market leader for sports by offering premium and innovative quality technologies.

Moreover, the unique value proposition strategy allows Nike to compete with other

brands because of their unique and customer-oriented distribution strategy. Nike sells their

products directly to customers through online or physical stores, creating more value

propositions for consumers. Pereira (2023) claimed Nike's customer-oriented and consumer

loyalty remains a key source of its competitive advantage. The company has invested in unique

designs and manufacturing of quality brands that meet emerging customer needs regarding

fashion, styles, availability, and affordability. Also, Nike sponsors many sporting teams

allowing customers to experience the life of sports with their favorite celebrities.

Distribution Strategy

A distribution strategy adopted by an organization determines its competitiveness in the

market. Nike's DTC sales strategy allows the brand to interact directly with customers through

its website and physical stores located in various towns and cities worldwide. The brand should

continue with the direct distribution strategy but invest more in direct marketing efforts, such as
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advertisements and brand promotion programs. One benefit of sticking to the direct distribution

channel is the ability to allow customers to find their favorite brands efficiently. According to

PRNewswire (2019), the most appropriate distribution channels in the sports market

segmentation are e-commerce, brand outlets, supermarkets, and discount stores. Nike runs brand

outlets and an online website where customers can view different brand varieties and select those

that suit their needs. The brand needs to invest more in online marketing by building a more

interactive and user-friendly online shopping platform. The interaction between the customer

and the online selling platform affects the consumer purchase intention (Kusumawardani &

Purniasari, 2021). Nike needs to keep the website more active by ensuring customers get

immediate responses, regular updates whenever new products arrive, and offering discounts for

online buyers. The brand will attract more buyers to its online store by practicing customer-

centric strategies that bind customers closer to the brand.

Conclusion

The analysis of Nike's marketing plan shows the brand uses a direct distribution channel

to market and sell sports apparel products. Direct distribution (DTC) uses online and offline

selling points consecutively through a website and a physical store. Nike's competitive

advantage is achieved through a strong brand image and reputation, adopting lean

manufacturing, and producing quality and customer-driven brands. Also, the brand has the

opportunity of spreading to international markets and the integration of technology to market

brands across the globe. Regarding positioning, the discussion recommends a unique value

proposition positioning strategy. Moreover, it has recommended using direct distributions with

additional efforts put into advertising and promotions.

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References

Anonymous. (2018, Apr. 04). From factor to footwear: Inside Nike supply chain. Retrieved 07

March 2023 from https://supplychainx.highjump.com/nike-supply-chain.html

Business Standard. (2013). Nike sued over Asian sweatshops conditions. Retrieved Mar. 07

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sweatshops-conditions-198042201097_1.html

Danziger, P. N. (2018, Dec. 01). Nike's new consumer experience distribution strategy hits the

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Pereira, D. (2023, March 03). Nike business model. The Business Model Analyst. Retrieved 10
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PRNewswire. (2019, Dec. 04). Sports Apparel Market by End User and Distribution

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