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Nike Environment Analysis

Autor:   •  February 21, 2019  •  3,462 Words (14 Pages)  •  63 Views

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2.4 Technology Analysis

The pace of technological change increases rapidly. Hence, new technology changes the way do business (Kolter and Armstrong, 2008). Technology development is crucial for Nike to sells its product. This is the opportunity for Nike to communicate with their target customer as Nike wisely uses the computer database to target potential customer and analyze customer wants to advance their competitive advantage (Myerson, 2007). Moreover, the social media systems become increasingly popular for marketing to consumers and giving Nike the opportunity to do advertisement. However, the awareness needs to be paid as social media can be the double-edged sword.

The rivals of Nike who advance the research and development investment in the technological sector threatens Nike (Dalavagas, 2015). This situation gives Nike pressure to advance product development to avoid eliminate by the customer. However, pressure is a driving force for Nike advance technologies to create innovation product (Johnston and Marshall, 2013). Nike has opportunities to use mobile technologies such as mobile apps to allow new product offer to customers. The customer also can customize their own Nike footwear with the personalize design through NikeiD website. Moreover, the rise of mobile payment system provide the opportunity to Nike gain more profit due to the customer are more convenient to purchase Nike footwear (Kauffman, Liu and Ma, 2015). Based on this part, the new technology regards as the opportunity and threat to Nike because it brings two types of impact.

3.0 Target Customer Profile

The market segmentation differ the market to smaller parts to help Nike identify customer needs and wants more accurately in order to upgrade the performance of firm (Armstrong, Adam, Denize et al., 2015). Nike uses demographic segmentation to target customer with the customer characteristic such as age, population, life-cycle stage, gender, occupation, and generation to divide market (Paul and Jacobs, 1991). A growing population attributed to the growing demand for footwear. Most marketing occurs in the United States due to the populations of United States keep growing. Therefore, Nike targets the population in the US as the market demand is bigger. As illustrated in Figure 2, United States population grew by 0.73 percent in the year 2016 (Multpl, 2016).

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Nike primarily targets consumers who are the youth athlete, runner and women between the ages of 15-40 (Lutz, 2015). Their target market is people who are active and enjoy higher quality footwear. Nike target on women and young athletes segment because these segments are more profitable to Nike. In the fiscal year of 2015, women and young athletes accounted for the largest segment of Nike revenue which shows in Figure 3.0 (Soni, 2015). With respect to the sales, women and young athletes have grown up to15% which results in $5.7 billion and $4.3 billion, respectively.

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The young athlete is growth part of Nike so Nike placing extra focuses on youth in order to build the good customer relationship with them. To develop this segment, Nike put effort on sponsor the potential young athlete to stimulate the sales of Nike. For instance, Nike gets teenage soccer athletes to wear its products through sponsorships in 2014 World Cup (Molina, 2014). It results in the teenager are increases buying footwear from Nike higher than other brands. The figure 4.0 state the Nike is the top preferred footwear brands retailer with 46% of the vote (Lutz, 2015). As partnerships with professional athletes able to draw young customers in, Nike has partnerships with famous basketball star Kobe Bryant (Lefton, 2000).

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Running category is Nike largest performance category. Therefore, Nike focuses on the runner as the target customer. In order to attract the runner, Nike has launched new running footwear such as Nike Air Max 2017 for the runner who prefers long distances (Nike, 2016). Moreover, Nike designs a different kind of running shoes to better compete with rivals such as Adidas (RunRepeat, 2016). Nike also improves its Nike+ running app for iPhone and Android users. Consequently, the runner can use Nike+ to track their progress and compete with others (Nike, 2016).

4.0 Marketing Activities

Nowadays, the customer is more brand-minded so Nike’s marketing strategy focus on the brand image (Moose, 2016). Nike brand image implanted in customer mind because of the strong association with its slogan “Just Do It” has been used in the advertisement. Nike has invested heavily in the advertisement and brand promotion (Hopkins, 2016). As noted by Mullin, Hardy and Sutton (2007), Nike’s marketing strategy depends on a strong brand image as the Swoosh was the 28th most popular brand worldwide in the year 2008.The successful brand image assists Nike maintains its position in the market. Good brand images represent the high quality of products to the customer. At the same time, the brand has made up the lucrative with $18.6 billion in the year 2008 (Transworld, 2008).

5.0 Marketing Mix

Develop a strong marketing mix is significant to the company in order to fit customers needs with Nike’s product range in order to compete with rivals. Nike marketing mix is comprised of the following approaches to product, pricing, promotion and placement (Baines, Fill and Page, 2008).

5.1 Product

Nike ingratiates its products to customer wants that consistently deliver a high level of customer-defined value. Nike offers a diverse range of high-quality footwear for customers (Nike, 2016). Nike designed for sports footwear for different kind of sports activities such as cricket, track and field, football and basketball and also for every day usage. They first products were the track running shoes. Recently, Nike has launch women running shoes to the women. For example, Nike has launch Nike Air Max 2016 with offers striking color to women in the year 2016 (Nike, 2016). For respect of basketball, Nike utilizes thermoforming technology to design high-performance basketball footwear which is Nike Air Max 360 for better experiences to the young athlete (Hope, 2012). Nike has corporate with Ipod to produce a Nike+ product which designs a wireless system that allows Nike+ footwear to links to the iPod nano in order to the know the runner performance (Apple, 2016). Moreover,

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