Target Market of Nike

“To bring inspiration and innovation to every athlete in the world.” A mission statement is a statement of the organization’s purpose- what it wants to accomplish in the larger environment. Nike has evolved a lot over the years, from a US-based footwear distributor to a global manufacturer and marketer of athletic footwear, apparel and equipment. Over the years of this evolution the target market for the company has kept on evolving.

“Market segmenting, by grouping together with similar needs, provides a commercially viable method of serving these customers”.

According to the Nike’s official website the goal of the company is to carry on with innovating thinking to develop product that helps athletes of every level of ability to reach the potential they are capable of and side by side create business opportunities that set Nike apart from the various competitors.

According to the official website of Nike the core consumer categories is action sports, basketball, football (soccer), men’s training, running, sportswear and women’s training.

Thus in a way the primary target market for the company are athletes.

Keeping this in mind I have selected a new athlete shoe as my product.

The Marketing Mix

For our case study we have concentrated on the traditional 4Ps marketing mix. Nike is one of the pioneers in marketing and has one of the strongest Marketing Mix.

Product

We define a product as anything that is offered to a market for attention, acquisition, use or consumption and that might satisfy a want or a need.

Jim Blythe rightly said “product brought to satisfy personal and family needs are consumer goods “and Nike caters to all the relevant aspects in terms of its products and understanding consumers.

A customer would emphasis at the three levels of benefit from product.

• Core Product
• Actual Product
• Augmented Product

Core Product: The Problem solving services or core benefits that consumers are really buying when they obtain a product. Briefly it can so be said that Nike deals in four core categories which is footwear, apparel, equipment, accessory product.

Actual Product: A products part’s, quality level, features, design, brand name, packaging and other attributes that combine to deliver core product benefits, Nike has taken these factor into special consideration in terms of the product it brings in the market.

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Augmented Product: Additional consumer service and benefits built around the core and actual product, it is so said the more you keep your customers satisfied and happy the better for the business and Nike has given priority to these factors one being after sale service.

Nike considered Design creates performance innovation products that minimize environmental impact by reducing waste throughout the design and development process, using environmentally preferred materials and eliminating toxics. Nike designers make smart, sustainable design choices at the start of their creative process, working to achieve breakthroughs to solve the big problems that hinder progress toward a sustainable future Internally, NIKE works across product teams and with groups ranging from the hub of product design and creation functions to influence the development of short-, mid- and long-range projects that make progress toward closed-loop products.

The product choose is a new shoe for athletes manufactured after doing research and talking to making athletes to find out there requirements and needs of a shoe. The product will be light as well as durable and will athletes to run faster and more easily.

Promotion

Promotion, according to Kotler and Armstrong (2010), mean activities that communicate the merits of the product and persuade target customers to buy it.

Promotion for Nike is the most critical and though about part of the marketing mix. Nike uses the following tools to promote its brand:

Tool 1: Advertising

Advertising, according to Kotler and Armstrong (2010), is any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor.

The basis thing that Nike does through its advertising is makes its corporate visual identity: the swoosh, as popular as it can get. Corporate identity is a broad term referring to the set of meanings by which an object allows itself to be known and through which it allows people to describe, remember and relate to it (van Rekom, 1997). The literature suggests that firms who standardize their global corporate visual identity achieve communication benefits beyond the usual marketing mix (Melewar and Saunders, 2000).

In all of the banner, newspaper advertisements, holdings, T.V commercial and even on their product Nike is recognized now through the swoosh instead of the brand name. Advertisements have been instrumental in marketing most of Nike’s products(Hunger & Wheelen, 2003).

Tool 2: Personal Selling

Personal Selling, according to Kotler and Armstrong (2010), is personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships.

Nike has setup two mediums through which it achieves personal selling: Nike has set up Nike exclusive store across the globe though help of distributor where one to one marketing of the brand is carried out by the sales person with in the stores and second Nike has setup a virtual store where any one visit anytime of the day and not just order the product even customize it.

Tool 3: Sponsorship

Sponsorship, according to Fahy, Farrelly and Quester (2004), has been viewed as an appealing communication tool, given the increasing clutter and fragmentation of the traditional mass media.

Nike sponsors numerous sporting personalities in a wide range of sporting activities; for example: Tiger Woods in Golf, Wayne Rooney in Football, Roger Federer in Tennis (Brown, 2010). The strategic role of sponsorship is to attain advantage in the competitive market where the sponsorship must rise above the clutter and effectively resists the efforts of competitors to ambush it (Fahy, Farrelly and Quester, 2004). Nike has been known to use ambush marketing strategy for a long time now.

The “Just Do It” campaign helped Nike to increase its market share. Nike increased its share of the domestic sport-shoe business from 18 percent to 43 percent, from $877 million to $9.2 billion in just ten years between 1998 and 2008. This campaign made Nike so identifiable that Nike stopped using the word “Nike” in the commercials, the swoosh was enough for the customer to understand who’s ad they were seeing.

By 2000s, just as the evolution of Nike product has occurred, the approach of the company towards marketing has also evolved. In 2002, Nike started its very first global marketing effort through the “Secret Tournament” campaign. “Secret Tournament” is an integrated approach which has now become the cornerstone marketing and communication effort by Nike.

Ambush marketing is an effective way by which Nike over the years has promoted its brand and increased its brand image. “Ambush marketing occurs when one brand pays to become an official sponsor of an event and another competing brand attempts to cleverly connect itself with the event, without paying the sponsorship fee and more frustratingly without breaking any law.”

Now the product that we are forwarding is specifically for athletes but can be used by anyone who wants to be fit. Thus again ambush marketing will be used. The product poster and advertising will be everywhere. The main cost in the marketing mix will be given to promotion to get the product successful.

Place

“Nike has come a long way from when its founders used to sell the shoes out of the trunk of their cars until the first Nike store was built in 1966.”

During the November of 1990, Nike opened its retail- as- theatre experience called Nike town in Portland. Nike town won many architectural design and retail awards. Nike then also opened a dozen of other Nike town around USA and also internationally.

According to Jobber (2004), “Place involves decision concerning the distribution channels to be used and their management, the locations of outlets, methods of transportation and inventory levels to be held”.

The recent World Headquarters (WHQ) of Nike, Inc. encompasses of 17 buildings spread across 193 acres of land which totals 1.9 million square feet of interior space. The World Headquarter is in Beaverton, Oregon. Nike, Inc. also leases out 750,000 square feet or more of space in the area which is in the surrounding metropolitan.

The European Headquarters (EHQ) of Nike, Inc. is located at Hilversum, The Netherlands. The office space is around 500,000 square feet which has been leased. Nike, Inc. has three major distribution and customer facilities for all the Nike-branded products. The location of these facilities: two are in Memphis, Tennessee and one is located in Wilsonville, Oregon.

Place includes company activities that make the product available to target consumers. Nike, Inc. has approximately six production office located outside of the United States. There are over 100 sales offices and showrooms which are located worldwide. Nike, Inc. also has over 70 administrative offices worldwide.

The product will be available in each and every shop and retail outlet that NIKE owns. It will also be sold online on the official Nike website. To gain maximum profit out of sales online sales of the product will be given emphasis.

Price

In a narrowest sense price is the amount of money charged for a product or service. More broadly, price is the sum of all the values that customer give up in order to gain the benefits of having or using a product or service.

In marketing mix pricing is the only element that produces revenue; all other elements represent costs and that is the sole reason where Nike has been very successful as it has priced its product according to the needs of the customer.

The various segments where Nike proves why Nike is so very popular and successful among its customers in terms of price are:

• Footwear (54% of Revenue)

Nike specializes in athletic footwear, although Nike also sells sport-inspired casual footwear like its Air Force Ones footwear line. Footwear sales increased 14% in 2009, reaching about $10.3 billion, and accounted for 54% of Nike’s 2009 revenue.

• Apparel (27% of Revenue)

Apparel sales totaled $5.24 billion in 2009, a 0.2% increase from a year earlier. 2008 sales from this segment grew by 14% from 2007, a trend that Nike attributed much of this revenue growth to a 25% increase in sales in emerging markets like Russia in the EMEA region as well as a currency-neutral 50% increase in revenues from China.

• Equipment (6% of Revenue)

Nike also sells sports equipment such as balls, protective equipment, and golf clubs. Sales of Nike branded equipment reached $1.11 billion in 2009, a 9.5% increase from 2008. This increase was driven primarily by a 10% increase in equipment sales in the Asia region.

• Other (13% of Revenue)

Nike also sells apparel and footwear under the Nike Golf, Cole Haan, Converse, Hurley International, and Umbro brand names and earns approximately 13% of its revenue, or $2.5 billion in 2009, from these segments.

As we can see the main income of the company is from the Footwear’s and its main target market is athletes, this product is going to be for high class people.

The product will be in the high range band.