Nike - a Marketing Case Study

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The primary goal of a company is financial gains. In addition to creating value for customers they need capture value from their customers in return. For this, a company needs to build profitable relationships and create customer equity. The fundamental concept in achieving this is defined as Consumer Relationship Management (CRM) in modern marketing. CRM deals with all the aspects of developing, maintaining and increasing a customer base. (Kotler et al., 2013).

A customer will always buy a product based on their perceived value of a particular product. Perceived value can be defined as a customers view on a products attributes,

overall performance and opinions on the performance that meet the customers expectations in a particular situation. (Woodruff, 1997).

A SWOT analysis of Nike’s strengths provides a better understanding of this concept. Nike’s strengths lie in the fact that it is a global brand and its famous logo 'SWOOSH' can be recognized instantly by anyone. Also, consumers also have a choice to design their own shoes on the official Nike website where they can choose the design, color, features, etc.

So when Nike roped in basketball legend Michael Jordan, to create the customizable Air Jordan shoe line, It seemed clear that the perceived value of their shoes that apparently gave you a competitive edge was high because I myself have seen these shoes sell for up to 400 USD on eBay.

Customer equity is another important concept that encompasses the total expected income from the company’s current and potential customer base. Although the founders of Nike might disagree, Nike over the years has also ended up becoming a fashion-icon or status symbol of sorts that also potentially attracts customers. The fact that their existing customers might find an owned product fashionably-outdated before the end of its life and proceed to replace it with a newer version might also contribute to the profitability of Nike.

In conclusion, Nike achieved annual sales figures of 30.6 Billion USD and a profit of 14.07 Billion USD in 2015 when compared to its revenues of 27.8 Billion USD in 2014. (NYSE.com, 2016). The numbers clearly indicate that it is a constantly growing corporation that has successfully managed to create a niche for itself through the right marketing mix and by creating value for its customers. In return, it has secured sustainable relationships with its customers that reflect in its ever-growing profits and customer base.

Bibliography

- Apple.com. (2006). Apple - Press Info - Nike and Apple Team Up to Launch Nike+iPod. [online] Available at: https://www.apple.com/pr/library/2006/05/23Nike-and-Apple-Team-Up-to-Launch-Nike-iPod.html [Accessed 14 Mar. 2016].

- Bloomberg.com. (2016). ADS:Xetra Stock Quote - Adidas AG. [online] Available at: http://www.bloomberg.com/quote/ADS:GR [Accessed 14 Mar. 2016].

- Deng, T. (2009). “Just Done It”--- Nike’s New Advertising Plan Facing Global Economic Crisis. IJBM, 4(3).

- Kotler, P., Armstrong, G., Harris, L. and Piercy, N. (2013). Principles of marketing. 6th ed. p.5.

- Kotler, P., Armstrong, G., Harris, L. and Piercy, N. (2013). Principles of marketing. 6th ed. p.6.

- Kotler, P., Armstrong, G., Harris, L. and Piercy, N. (2013). Principles of marketing. 6th ed. pp.8-9.

- Kotler, P., Armstrong, G., Harris, L. and Piercy, N. (2013). Principles of marketing. 6th ed. pp.13-15.

- Nyse.com. (2016). NYSE. [online] Available at: https://www.nyse.com/quote/XNYS:NKE/company [Accessed 14 Mar. 2016].

- Nyse.com. (2016). NYSE. [online] Available at: https://www.nyse.com/quote/XNYS:NKE [Accessed 14 Mar. 2016].

- Peterson, H. (2015). The bizarre story behind Nike's first pair of running shoes. [online] Business Insider Australia. Available at: http://www.businessinsider.com.au/nikes-first-running-shoes-were-made-in-a-waffle-iron-2015-7 [Accessed 14 Mar. 2016].

- Woodruff, R. (1997). Customer value: The next source for competitive advantage. J. of the Acad. Mark. Sci., 25(2), pp.139-153.