Growing up there was one brand that all professional athletes used in my eyes, Nike. The Swoosh, was the icon that all kids had to have, and why not? All the big time players not only had it, but endorsed it. Ads, which had Michael “Air” Jordan, Bo Jackson, or Wayne Gretsky “The Great One” doing amazing physical feats, always, motivated the crowds. The Nike company new this, and blasted it marketing campaign through all sorts of media.
In this essay I will break down this multi-billion dollar company’s marketing techniques in the areas of: customer value, promotional items, marketing’s four p’s of the marketing mix, the segmentation, targeting, and positioning (STP) approach to market the product, Customer Relationship Management (CRM), environmental trends, the largest customer base, its competitors, and ethical marketing for this corporation both stateside and overseas.
Putting these athletes in the ads is just one way to build value for a company.
From Ashford universities “Principle of Marketing” by “Sara White” We are introduced to marketing with the definition of marketing as “an activity designed to stimulate exchanges that have value for customers, partners, and society at large”.
With this definition of marketing intact the question that still is out pondering is what is value? “Value was defined as the perceived trade-off between benefits and the sacrifice required to take possession of those benefits”. To break it down further we will look at customer value.
Customer value is a title for the cost of a particular trade for the purchaser (buyer) instead of the company (seller). Looking into a selling Nike abroad, whatever a customer may pay in the United States may not be the same overseas. The first thing is to look at is how the current client group influences the market in the states. Nike had a humble start with creators Bill Bowerman and Phil Knight trying to improve on the track shoe of the day. The former “Blue Ribbon Sports Company” now known as Nike wanted to increase value into their product by having athletes endorses it.
So they found the person that they thought would be the best at building future customer value, Steve Prefontaine. During his college time he never lost a race on his home track, and was exposed to national notoriety with is fourth place finish in Munich. This was one of their first successes in marketing. As popularity for their product rose the selected new sports models to display the shoes on the track. This really kicked of the sale of the shoes. Seeing how this success worked at their home setting, taking it to other countries should be no problem.
Paving the way with athletes that had above average ability in their field was how Nike struck the marketing campaigned. Finding someone in another country that could spark the same influence over the masses would keep thing on track for Customer value overseas. This would all depend on what country we planned on taken our product to. The last thing that we are going to look at with customer value is the four utilities of customer value. The four utilities are: Form, Time, Place, and Ease of Possession. The form in the four utilities shows what effort Nike puts into their product that makes it desirable.
Part of this desire is the quality and showmanship they place in every item. The other part is who they put in their invention. This was very clear in the mid-80 when Nike was the company that took on NBA rookie Michael Jordan, to represent their company’s goals. Being one of the leaders of in business, time is important. Nike put their product out when they need to. They also change it enough to keep things fresh. Time also goes along with place. Not only does the timing of releasing product play a huge role, the place does as well. Lastly, ease of possession is just that, how easy will it be to get the product.
Included in this is can I get my item fixed or replaced easily also. With internet available in almost everyone’s pocket from smartphones to tablets getting Nike’s items have become very accessible. With ease of possession we have to look at what trends are working or not, so that we may fix them. Understanding these four utilities just scratches the surface of what we need to know. To be more in-depth with a strategy we must look at the targeting and market mix portion of promoting. In order to utilize the four utilities properly we must look at the STP approach of marketing.
This Approach involves segmentation, targeting, and positioning looks at what a byer values. “Segmentation can be defined as the process of splitting a market into smaller groups with similar product needs or identifiable characteristics, for the purpose of selecting appropriate target markets. Targeting (or target market selection) refers to: An organization’s proactive selection of a suitable market segment (or segments) with the intention of heavily focusing the firm’s marketing offers and activities towards this group of related consumers.
And positioning (which is sometimes referred to as product positioning) is: Positioning is the target market’s perception of the product’s key benefits and features, relative to the offerings of competitive products. ” With the number of competitors only the rise it is important for an organization to forecast what the consumers buying trends are. Nike, although one of the largest establishments in their field, they still are not untouchable. They have to stay a success by continually improving on the products. Nike leads the way with new technology that innovate all sports.
In the late 80’s the introduction of Nike air did this well. Again they launched a promotional campaign that introduced a series of ads by Bo Jackson one of the top athletes at the time. They saw the future of what their clients wanted, Air. It was the first shoe out on the market with air in the sole. Following the marketing targeting set at this point propelled them ahead of their competitors. To stay ahead of the game the implementation of the four P’s is the next tool to evolve business plan. The four P’s that come from the widely used “marketing mix” developed in the 60’s includes production, price, place and promotion.
“Product: The combination of tangible goods, services, and beliefs offered at a specific price. ” To stay on the breaking edge of athletic gear with rivals on your heels they have to produce a “product” that reaches the masses. The creations did just that, they made it tangible for all with a specific price. “Price: The amount of money or other consideration a customer must exchange for the offering. ” Nikes merchandise because it was ahead of others cost a little more. At the same time they could justify their cost due to the fact the merchandise operated better than anyone else’s.
“Place: The strategy by which a company gets the right goods in the right quantity to the right place. ” Because Phil and Bill both had roots on the west coast mainly Oregon, this is where the perfect place to offer the product out of was. Now, a global sensation you can get it from any corner of the world. “Promotion: The advertising and selling activity a company undertakes to create demand for the offering . ” The only real way to endorse this type of product is to show the benefits in different people that use it. This not only sums up the four P’s but gives examples of how it applies to this enterprise.
While putting all of these aspects together there has to be a way to track certain trends to be more productive. This can be done by customer relationship management or CRM system. CRM is a good tool to utilize once your product has hit the market. This system tracks the companies’ relationship with the purchaser. The data collected will be from sale and overall marketing . Some items that might be pulled from this information are demographics of the individual buying an item. This is so important to direct and promote ads to those that will actually be utilizing them. When I got my first pair of Nike shoes I was stoked.
They were everything that I wanted and more. I was fast to show them to my friends. At that point I would have done anything that Nike asked me to (I was a typical kid). Inside the box was a card and at the time I did not understand what it for. It had questions on it like race, age, sports that I played in at school level…etc. This was there way of finding out who is buying their goods. Some places will add in rewards or freebies to get their customer feedback. This information can also give feedback on when to promote certain items so that there will be a larger return.
Now that all the information is being tracked and fixed, we can now see how it does abroad. In the 90’s Nike wanted to figure out how to reach an even larger fan base. Soccer was the ticket to gain that popularity not only in one country but almost every country in the world. At the point of taking production to another country the process of building customer value and marketing kind of starts over. Knowing this Nike took players from the World Cup-winning Brazilian National team. They redesigned the uniforms and pulled in some US teams as well .
This organization could go a little farther by endorsing other sports as well. One of the most important things about going into other countries with this appeal line is to see what effects it has on the area. From “Principles of Marketing” by “White” there are a couple of things that affect the marketing environment. The acts that affect the environment are actors and forces . They both exist in two different categories Micro environment and Macro environment. In Micro-environment actors are individuals like: stockholders, board members, competitors, public, and customers .
In this category there are also forces which include: Strategic moves by, competitors, Channel partners, Changes in consumer behavior . Macro- environment deals actors with leaders in Culture/society, Politic, Economics, Technology development, Finance and Law . Forces in Macro-environment are; globalization, Technology and media . Let’s see how this looks with Nike. If Nike is to be a success in other countries they have to know how they are going to affect the environment where they go. They also need to know how other countries can affect them.
An example of this would be in the Middle East females are not treated as equals. Therefore it would not be a good idea to start up only female sporting lines there. Another example of how they could be affected by the environment is the culture is different that the US, some countries that would use their product cannot afford American prices. This would cause a new marketing scheme. A good place to start is checking the CRM to see what trends these cultures prefer. So currently who is Nike’s biggest byer? Nike hits such a wide range of sports, from their start in track, to sponsoring golfer Eldrick “Tiger” Woods.
Almost every sport today has some kind of influence from Nike. The largest in today’s market is probably the NFL. The National football league has just signed up Nike to create some new gear for this 2012 – 2013 season. The great thing about Nike is it now has sister labels that produce more than just athletic products. “A significant event in Cole Haan’s timelines happened in 1988 when Nike acquired Cole Haan . Thence, international flagship stores and more outlets opened making the reach to influence the use of quality and fashionable footwear become broader and wider .
” “Then the technology of Nike Air was incorporated in the design of women’s shoes which made a mark on Cole Haan’s emphasis on providing comfort and protection not only for men but also for women. This was the first at that time and the demand for Cole Haan shoes continued to rise . ” Nike seems to be unstoppable but they are only a small percentage of the market. There are so many different shoe companies out there today. If an individual can get it in the States they can get overseas via the internet. A few brands that compete with Nike are: Reebok, Adidas, Asics, and New balance.
But they are not close to the company that distributes to over 170 countries. Unfortunately although Nike from the stand point of business is a great company they have a dark side also. Ethics is gaining power in the business world. People are tired of seeing cooperation’s destroy morale of the world and marketing is no different. There is a responsibility to the public to give honest communications and things that are not going further corrupt children mind. A lot of marketers will play to children’s weaknesses. Rebecca Clay wrote an article on advertising to children.
The article goes on to explain that children’s psyches are not to the level to decipher fact from fiction. This weakness is exploded and ads well over load kids with ideas of toys and games that they do not need nor should they have. One case of unethical marketing goes deeper than what we can see. It was what was going on behind the curtains. According to” Mail Online” that put out an article on Nike, about the treatment in the converse factory . They continue on to say that the employees are under paid, making around 50 cents an hour. Terminology such as; dog or pig from supervisors are thrown around in a derogatory way.
This is a decade after Nike came under fire for their child labor seat shops in Indonesia. Should something be done to this marketing tycoon? Some kind of apology should come to the public not only in America but to the world. This is part of their obligation to the society has a whole. As kids we can be drawn into many different that catch our attention. Mine, like many juveniles was following the dream of growing up to become a professional athlete. It was the lifestyle at the time that seemed effort less. Nike open my eyes to this more than probably any other brand. The slogan” Just do It” was what I needed to pursue my goals.
For a while it felt as though they were not just talking about sports but life who knows maybe they are. Whatever it may be there marketing plan from the start of the back of a trunk; to multibillion dollar cooperation is one of the best. Going through the marketing world with Nike we covered the following: customer value, promotional items, marketing’s four p’s of the marketing mix, the segmentation, targeting, and positioning (STP) approach to market the product, Customer Relationship Management (CRM), environmental trends, the largest customer base, its competitors, and ethical marketing for this corporation both stateside and overseas.
References: (n. d. ). Clay, R. A. (2000, September). Advertising to children is it ehtical. Retrieved Jan 11, 2013, from American Phychological Association: http://www. apa. org/monitor/sep00/advertising. aspx Fripp, G. (2012). .segmentationstudyguide. Retrieved Jan 14, 2013, from www. segmentationstudyguide. com Reporter, D. M. (2011, July 13). Mail Online. Retrieved Jan 13, 2013, from daily mail: http://www. dailymail. co. uk/news/article-2014325/Nike-workers-kicked-slapped-verbally-abused-factories-making-Converse-line-Indonesia.
html uknown. (2011). History & Heritage . Retrieved 01 10, 2013, from Nike, inc : http://nikeinc. com/pages/history-heritage unknown. (2013). A History of Cole Haan. Retrieved jan 13, 2013, from Shoe metro delivering sole satisfaction: http://www. shoemetro. com/t-history-of-cole-haan. aspx unknown. (2013, jan 13). Forbes: profile and News. Retrieved Jan 2013, 2013, from Forbes. com: http://www. forbes. com/companies/nike/ White, S. (2012). Principles of Marketing. San Diego: Bridgepoint Education,inc.