Nike Segment Analysis

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A second alternative strategy Nike should employ is to price competitively. Nike charges a premium for its products and customers pay the premium. Nike has positioned its products at the higher price points in the market for all its products. This is because its strong brand image, tradition of introducing innovative products to the marketplace, current product stable, and high-profile endorsements from world-class athletes(Kozients, 2017). The Nike + watch is one the most expensive digital fitness trackers on the market and it is also the newest. Numerous methods are used in setting price such as: charging prices that consumers expect to pay or charging the same or better prices than your competitors. However, regardless of the policy used, price must be justified by value to the customer (Ellickson, 2012). Therefore, by being the “new kid on the block,” the Nike should consider lowering the price of The Nike + watch. This will better positon itself in the demographics segment because it will allow for a whole new demographic of customers that can afford Nike prices. Also, it will strengthen the behavioral target segment as it will allow for new consumers to build a connection with Nike whereas the past these consumers were excluded due to the high price.

Furthermore, there will be challenges with positioning the Nike + watch using the two above strategies as it can change the customers perceptions of the product. The first is aligning with the different areas: basketball, football, action sports, and athletic training. The Nike+ watch is currently marketed for runners where it connects to a Nike Running App. This alienates the rest of Nike customers that include basketball players, football players, etc. Also, it creates a perception this digital fitness tracker can be at no value to them. This is actually far from the truth. The Nike+ watch can be valuable to them. Nike provides a full network of services and tools to support customers in their athletic pursuits. The Nike Running App is just one example of how Nike looks across the full spectrum of the customer experience to create meaningful interaction. The app is a free web and mobile platform that allows runners to track their runs, create custom training programs, engage with friends, track shoe mileage, listen to music, and receive motivational messages from celebrity athletes. It becomes a tool that integrates Nike and the customer’s actual fitness ritual, beyond the product purchase (McCune, 2015). This app also connects with the Nike + watch. Nike can provide this same experience for athletes in the other areas with meaningful apps that can connect with the Nike + watch.

Additionally, Nike is known to charge more than its competitors due to branding, the creation of a strong image among its customers that allows the company to charge premium price over its competitors. This is a result of providing high quality and high tech products to its customers. The buyers know what they are getting and thus, customers are, “paying for what they buy,” which is great quality and high end products. By lowering the prices of it products, it can cause a negative perception in the eyes for customers (Wiersema, 2014). Loyal Nike customers can perceive the lowering of prices to inexpensive, less innovative products. Nike can curtail this perception through proper effective marketing( Ottman, 2014).

References

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