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Zyan Wallace
Professor Weinriech
Marketing Management
April 12th, 2023
Global Brand –Nike
Nike is a well-known international brand in the sports and fitness sector that has effectively established a strong brand identity and positioned itself as a forward-thinking business. To study Nike’s marketing management methods, this paper will undertake internal and external brand analyses, external market assessments, internal assessments of brands, brand management strategies, and suggested growth strategies. The paper’s final section will discuss functional programs and marketing tactics that can be employed to achieve growth and performance measurement.
External Market Analysis
Customer Analysis
Nike’s advertising plan is designed for various customer segments ranging from professional sportsmen/women to amateurs aspiring towards better fitness. Diverse groups with varying needs and preferences such as men,women,and children can find customized products from this brand. Nike’s understanding of different customer group’s motivations and behaviors is facilitated through the application of psychographic and behavioral segmentation. The company can then design products accordingly. Nike’s emphasis on design and style has made their products highly coveted by consumers who seek to appear fashionable while participating in sports or engaging in physical activities.
Competitor Analysis
Puma and Reebok are some of the established competitors that Nike faces in the fiercely competitive sports and fitness market. By investing in innovative technologies and effective marketing initiatives Nike has managed to stay ahead of the competition. Staying ahead of its competitors is possible for Nike due to constant innovation like the development of Flyknit and React technologies. Brand awareness and customer loyalty have been significantly improved by Nike’s marketing strategies including high-profile athlete partnerships and the popular Just Do It slogan. Having obtained significant market share and expanded globally at an impressive pace has positioned Nike strongly as a leading player in the sports and fitness industry.
Market Analysis
Goodman et al. (2021) explain that the growing interest in sports and rising health consciousness are driving the growth of the sports and fitness business. According to the researchers, there is a compound yearly growth rate of 5.3% and the sports and fitness apparel market is projected to reach $231.7 billion by 2024 (Goodman et al., 2021). Nike has a sizable footprint in this area and is in a good position to seize growth prospects. The study by Goodman et al. (2021) further highlights that the trend towards athleisure and the adoption of healthier lifestyles are also significant factors driving the growth of the sports and fitness business. Consumers are increasingly seeking versatile clothing options that can be worn both in and outside of the gym.
Environmental Analysis
Further, Goodman et al. (2021) note that Nike has been at the forefront of sustainability, integrating it into every aspect of their business and thus, doing good in environment protection. According to the author the business has established a target of zero waste and carbon emissions by 2050 (Goodman et al., 2021). In addition, Nike has introduced several environmentally friendly items, like the recycled polyester Nike Flyknit shoe. The business’ ecological policies have boosted its brand recognition and drawn in customers who care about the environment.
Internal Brand Analysis
Size, Growth, Profitability
The sports and fitness industry has a global leader in Nike with a market capitalization of $234.5 billion. In their report on Nike’s financial performance for the fiscal year 2021,Mujahidah and Tan (2021) highlighted that there was an impressive surge of $44.5 billion in revenue with a growth rate of 19% compared to the previous year. A remarkable increase was observed in Nike’s net income as it grew by an impressive margin of 126%, resulting into an overall figure of $5.7 billion for FY21. Nike’s strong brand recognition and innovative product offerings have contributed to its robust financial performance due to effective marketing strategies (Eyada, 2020). Nike proves its continuous growth and success within the highly contested sports and fitness industry through these impressive statistics.
Image, Positioning, and Assets
According to Mujahidah, and Tan (2021), innovation, quality, and performance are all attributes of the Nike brand. The author explains that the business has positioned itself as a socially conscious organization dedicated to sustainability and creating a better future for everybody (Mujahidah, & Tan, 2021). Thus, the advantages of Nike include a reputable brand name, a wide range of products, and a worldwide distribution system. Besides prioritizing innovation and quality in their products Nike has also strengthened their brand image through a commitment to sustainability and social responsibility. Nike’s attempts to decrease its environmental impact and promote positive social change have struck a chord with customers as noted by Mujahidah and Tan (2021). The younger generation is especially concerned about ethical and sustainable practices.
Current and Past Strategies
The current Nike strategy emphasizes innovation and sustainability. The firm has introduced several new items, including the Nike Adapt, which employs self-lacing technology, and the Nike Air Zoom Alphafly NEXT%, which is intended for long-distance runners. Nike has also invested money into marketing initiatives emphasizing its sustainability dedication, such as the “Move to Zero” campaign.
Organization and Culture
Because of its decentralized organizational structure, Nike can make decisions quickly and innovate. The business’s solid corporate culture prioritizes innovation, teamwork, and diversity. The corporation’s success can be attributed to Nike’s culture, which has assisted in luring and keeping outstanding personnel. Furthermore, Nike’s corporate culture of innovation, teamwork, and diversity has also played a crucial role in attracting and retaining top talent, contributing to the company’s continued success.
Cost Structure
Innovation, marketing, and sustainability are the three main focuses of Nike’s cost structure. The business makes significant R&D investments to produce novel goods and technology. Nike also invests a sizable sum in marketing efforts to promote its brand and products. Costs have increased due to the business’s sustainable initiatives, but they have also enhanced its brand reputation and drawn in environmentally conscientious customers.
External Market Assessment
Opportunities
Besides prioritizing innovation and quality in their products Nike has also strengthened their brand image through a commitment to sustainability and social responsibility. Nike’s attempts to decrease its environmental impact and promote positive social change have struck a chord with customers as noted by Mujahidah and Tan (2021). The younger generation is especially concerned about ethical and sustainable practices.
Threats
In the sports and fitness sector, Nike faces numerous dangers. The business is susceptible to shifting consumer preferences and trends, which may impact its sales and revenue. Intense rivalry from other companies is another issue that Nike must contend with. This competitiveness can lead to price wars and dwindling profit margins. The business is also susceptible to supply chain risks, such as delays and interruptions, which may impact its operations and reputation.
Trends
Keeping up with trends in the sports and fitness business is Nike’s main priority. To develop cutting-edge products and enhance operations, the company invests in new technologies, including data analytics and 3D printing. Sustainability is a key area of attention for Nike and is a developing market trend. Consumers who care about the environment are drawn to the company’s sustainable procedures and products, enhancing its brand reputation.
Insights
Nike has several industry information that can direct its expansion plan. The business is aware that consumers seek out fashionable and useful products that also cater to their unique wants and tastes. Additionally, Nike knows customers are drawn to eco-friendly goods and methods that reflect their values. Utilizing these insights, the business can create new goods and advertising campaigns that appeal to its target market.
External Uncertainties
Numerous outside uncertainties that Nike is dealing with could impact its growth plan. New techniques and fads can appear at any time in the sports and fitness sector as it is a sector that is constantly changing. Nike’s operations and financial results may be impacted by the political and economic risks it faces in various markets. The business must track these uncertainties and modify its strategy as necessary.
Internal Brand Assessment
Strengths
Nike possesses several advantages that could aid in achieving its expansion goals. The company has a solid reputation as a brand with a wide range of products that appeal to various customer segments. Nike also has a global distribution network to reach customers in various markets (Pratama et al., 2022). The business stands out from rivals thanks to its emphasis on innovation and sustainability, which also helps it draw in clients who value these characteristics.
Weaknesses
A few of its flaws may hamper the growth strategy of Nike. It can be vulnerable to shifting consumer preferences because the company heavily depends on several key products, like the Air Jordan and the Air Max. Price-conscious customers who might opt to buy from lower-priced rivals may be turned off by Nike’s high prices, which may also reduce its appeal.
Liabilities
Nikes growth strategy may be impacted by some liabilities it has. Several of the company’s factories overseas have come under fire for their labor policies. Insensitive cultural behavior and a lack of diversity in Nike’s marketing strategies have also been criticized. The brand reputation and liability of the business may suffer.
Problems
Numerous issues Nike is currently dealing that could impact its growth strategy. Given its complexity and potential for delays and disruptions, the company’s supply chain is at risk. Additionally, its high prices may limit Nike’s appeal to price-conscious consumers. Increased costs may result from the business’s emphasis on innovation and sustainability, hurting its profitability.
Constraints
Nike’s expansion goals may face multiple restrictions and limitations. Different markets’ regulatory frameworks might affect the business activities as well as earnings of the firm. Furthermore , Nike may be restricted by its financial and human resources from investing in advanced goods and equipment. Additionally , Nike’s expansion could be restricted by geopolitical hazards like trade disputes and currency variations that may influence the firm’s profitability and competitiveness in various markets. Nike must overcome significant obstacles if it hopes to keep its current level of market share along with strong pricing power within an intensely competitive sports & fitness marketplace. These challenges are compounded by increased investment from rival firms towards product development & promotion.
Uncertainties
The uncertainties Nike confronts may impact its expansion plan. The business is vulnerable to shifting consumer trends and tastes, which may impact its earnings. A supply chain risk that could impact Nike’s operations and reputation includes delays and disruptions. The business must track these uncertainties and modify its plan as necessary.
Brand Management Strategy
Brand Equity
Strong brand equity for Nike is based on recognition, adherence, associations, and identity. High brand awareness exists for the business, and the “swoosh” emblem is well-known worldwide. Due to its creative and environmentally friendly products, Nike enjoys a devoted following of customers. The brand connotations of Nike are concentrated on performance, style, and sustainability, values shared by its target audience. Nike’s goal statement, “To bring inspiration and innovation to every athlete in the world,” representing the firm’s dedication to its clients, is the foundation for its brand identity.
Brand Differentiators
Innovation, sustainability, and performance are Nike’s three key brand differentiators. According to Valerie, and Hariandja (2022), the company invests in emerging technologies, including data analytics and 3D printing, to develop cutting-edge products that satisfy its clients’ demands and tastes. Thus, customers who care about the environment are drawn to Nike’s eco-friendly business methods and products. Compared to rivals, Nike stands out because it emphasizes performance and style. Valerie and Hariandja (2022) also note that Nike’s focus on innovation and sustainability has not only attracted environmentally conscious customers but also helped the company stay ahead of the curve in terms of product development and design, giving it an edge over competitors.
Branded Energizers
Nike’s branded energizers aim to uplift and motivate their consumers. The company’s marketing initiatives are made to inspire clients to surpass their limitations and accomplish their goals. The athletes and sports teams that Nike sponsors encourage its users to follow their dreams and succeed. By utilizing marketing campaigns and sponsoring athletes in various sports fields, Nike seeks to build a brand image centered around not only athletic performance but also the principles of perseverance, determination, and hard work. The company hopes this will encourage their customers towards excellence.
Recommended Growth Strategies
Product-Market Investment Strategy
Adding additional sports and fitness categories, like yoga and outdoor activities, should be the main objective of Nike’s product-market investment strategy. The business might also break into new areas, such as Asia and Africa, with a rising need for sports and fitness products. To reach more people and boost its sales, Nike should also invest in digital marketing and e-commerce.
Customer Value Proposition
Offering customers fashionable, useful, and environmentally friendly items that cater to their unique needs and tastes should be the main focus of Nike’s customer value proposition. The business should also offer outstanding customer service and assistance to increase client retention and loyalty.
Sustainable Competitive Advantage
Nike’s brand recognition, innovation, and sustainability should be the focal points of its sustained competitive advantage. Strong brand recognition and a committed customer base provide the business an edge over rivals. Nike distinguishes itself from rivals by strongly emphasizing innovation and sustainability when developing items for its customers.
Implementation of Marketing Strategies and Functional Programs
To establish synergy and a long-lasting global brand, Nike’s implementation of marketing strategies and functional programs should concentrate on integrating marketing management within other business activities of the brand. To develop cutting-edge products, enhance its operations, and recruit and retain top personnel, the company should work with other divisions, such as research and development, supply chain, and human resources.
Performance Measurement
Nike should measure key performance factors, including sales revenue, market share, client satisfaction, and brand awareness. The business should use this information to assess the efficacy of its functional programs and marketing initiatives and make necessary improvements. Nike can leverage data analytics to gain valuable insights into consumer behavior, market trends, and product preferences, enabling it to stay ahead of the competition and innovate in response to changing consumer demands.
Conclusion
For long, Nike has been doing well as far as brand awareness is concerned. The brand is doing well due to its nature of innovation and environment sustainability and these factors make it an outstanding brand amongst other competitors in the market. For the company to continue doing well there is need for Nike to focus in growing its product line to get into new fitness category and it should make good use of the digital platform that will enhance its marketing strategy and growth in future. Additionally, the business should concentrate on offering customers fashionable, useful, and environmentally friendly products that cater to their individual requirements and tastes. Nike’s brand recognition, innovation, and sustainability should be the focal points of its sustained competitive advantage. To construct a durable worldwide brand and generate harmony among its various business activities, the corporation should practice its marketing strategies and functional programs.
References
Eyada, B. (2020). Brand activism, the relation and impact on consumer perception: A case study on Nike advertising. International Journal of Marketing Studies, 12(4), 30-42.
Goodman, P. S., Wang, V., & Paton, E. (2021). Global Brands Find It Hard to Untangle Themselves from Xinjiang Cotton. The New York Times, 6, 21.
Mujahidah, A. S., & Tan, P. H. P. (2021). The Influence Of Country-Of-Origin Image, Brand Image, And Brand Evaluation On Purchase Intention Towards Nike Brand In Jabodetabek. JMBI UNSRAT (Jurnal Ilmiah Manajemen Bisnis dan Inovasi Universitas Sam Ratulangi)., 8(1).
Pratama, A. Z., Sutopo, W., Hisjam, M., & Istiqomah, S. (2022). Comparative Study of Global Business Strategy: Lessons Learned from Excellent Sports-wear Companies (Nike and Adidas). In Proceedings of the International Conference on Industrial Engineering and Operations Management Istanbul, Turkey (pp. 3062-3071).
Valerie, I., & Hariandja, E. S. (2022, August). Influence of Values, Brand Activism, Brand Consciousness, And Behavioral Intentions in Predicting Nike’s Sportswear Consumption In Indonesia. In Proceeding National Conference Business, Management, and Accounting (NCBMA) (Vol. 5, pp. 535-558).