Nike Inc. founded in 1964 by Bill Bowerman and Philip Knight is global leader in sportswear and footwear industry. With Nike occupying around 45% of global market share in footwear and apparels and moving further ahead, much of the organisational success can be credited to its marketing strategy that have helped the organisation achieve revenue worth billions every fiscal year ($18 billion being in 2008). Nike Inc. UK has a major market in the UK for fitness trainers and shoes provided for health and fitness purpose benefits to the consumers.
Nike understands the importance of market analysis and marketing strategy based upon those analytical processes. Considerable amount of research and analysis have been carried on in understanding consumer needs, UK’s environment and potential opportunities. This report consists of situational analysis SWOT of Nike in UK and also presents situational analysis suggestion of ways in which competitive edge can be gained against its rivals with segmentation, targeting and positioning of the products.
The importance of marketing objectives has also been highlighted in the report and thus provides Nike with a glimpse of marketing environment in UK and the expectations with role of marketing mix (4P’s). Introduction Nike has predominantly been successful in shoe manufacturing and distribution among the shoe manufacturers with its superior quality, high tech, ultramodern shoes that meet on going demand of the market and its trends. From professional athletics to most common need for fitness trainers, Nike has got fitness shoes and trainers in all shape, sizes and colours.
Some of the most famous Nike trainers and fitness shoes are Nike + (spelled as plus), Air Jordan, Nike Shox, Nike Lunar glide, Nike Air Zoom, Nike 360 and many more. Nike is the sole distributor of Nike trade mark represented on each of these and many of its fitness trainers sold globally. High quality material, design and cut and technological enhancement of the shoes as per requirement of various activities thus make Nike the best choice for fitness trainers and shoes. Marketing Analysis and strategic evaluation of a company is an important component of any organisational success.
Without well-structured marketing strategies and road maps to planning and achieving them, no organisation can be at the point where they want to be. Nike in UK covers a fair amount of market share and revenue for the organisation. The huge market diversity, brand awareness in market and consumer base loyal to high quality products therefore help to its cause. On the other hand, UK market is generally health conscious and trendy. Trainers and fitness shoes are therefore in much demand over last few years within the country itself.
Marketing Audit (Nike Inc. UK) Nike Inc. UK follows management strategies that combine with six of the most important external factors that can have an impact on the organisation. PESTLE is a situational analysis tool that can be used by firms to determine their position against possible external influences such as politics, economy, society, technology, environment and law. Nike and its positional stand against background of UK market can therefore be analysed in the following way: Political Factors Nike Inc.
has a considerably stable political environment and an economy welfare provided by the state. Considerable amount of legal requirements were accomplished by Nike during its entry in the UK as an organisation completing all political alignments. Considerable amount of fitness shoes and trainers are imported in UK which is sold all over. However, Nike might have to face challenges if government drafts policy or quotas on Nike shoes that can be imported from its production sites such as Asia-Pacific. Economic Factors
UK economy has been unstable in recent years. The double dip recession few years back, inflation rate fluctuating abnormally, growing living costs, income tax rate increments and other economic factors directly or indirectly affected Nike’s performance in the UK with comparatively weak sales figure. Economic balance, employment rate and PDI all must be stable and firm enough in the economy to help a business sustain. Nike therefore needs strategic move that can guarantee its sustainability in such circumstances. Social Factors
UK market comprises of people from multiple culture, religion and ethnic backgrounds. Therefore, Nike needs to understand the social system and practice of all these people whenever approaching them. Sales and marketing of the fitness shoes should be therefore based upon social acceptance of methods, people’s lifestyle and their way of thinking. For instance, consumers in UK who purchase fitness trainers are pretty health conscious and the numbers are growing as well. Hence, Nike needs to provide more health benefitting shoes and apparel.
Similarly, social responsibility image of Nike has to be significantly boosted with accusations of running sweatshops in Nike factories in Asia which it has tried to improve with facilities, factory improvements and commitment towards further improvement. Technological Factors Technological factors are an important aspect that needs to be considered by Nike Inc. UK . Technological advancements in fitness shoes need to be updated and research and development of such apparels have to be advanced.
With fitness shoes that are designed such for injury prevention, sole strengthening, speed sports, less sweating and many other features the advancement has been unimaginable. UK customers are updated and spend good time researching on features and quality of the product they want. Nike therefore has to be technologically capable of providing customer satisfaction. Environmental Factors Nike needs total understanding of UK market as consumers are concerned about how products they purchase can make an impact upon environment.
Production materials, process and sites can be harmful to environment in many ways. This can be a grave concern for environmental activists and hence persuade consumer thoughts. Nike has to be able to inform the consumers in UK with their continuous efforts in making Nike shoe production environment friendly and use of raw materials and the production process least harmful to nature. Legal factors Nike has to oblige with all the legal regulations and in relevance with companies operating in the UK.
They must consider their business privileges as well as legal responsibility in concern with marketing, promotion and sales in the Kingdom. Some of the legal acts that they need to consider are regarding press, trade acts, acts on sales and supply of goods, adverts and campaigning, television adverts, environmental acts and so on. Without its compliance of local laws and acts Nike would suffer a huge blow in gaining consumer trust as they cannot operate with efficiency. SWOT ANALYSIS FOR NIKE FITNESS SHOES Strength: Nike is a global leader in shoe manufacturing and has been in market for very long time.
There is a considerable amount of customer trust and loyalty based upon the very fact that Nike has been able to provide highest quality fitness shoes with modern techniques and design over years. The research and development investment in Nike is huge. The very reason has pioneered Nike in producing ultra-modern technology in fitness shoes. Shoes with air compressed soles for low pressure on soles, ankle protecting designs, speed boosting trainers etc. have all been Nike’s brilliant ideas in meeting with modern demands of consumers.
Beside innovations, Nike also provides consumers with choice of designing their own shoes in the UK. Nike has a global presence and their revenues are worth billions . Distribution channels for Nike are well established and it has diverse range of products to cater the consumers with. Weakness: Nike Inc. UK has had to compete fiercely against several of its competitors in recent years with economic downfall regarding price of the product. Several of Nike’s fitness trainers are comparatively expensive than other brands. With buyers focusing their mind on cost efficient purchase, Nike prices are a thought for many.
On the other hand, Nike’s sweatshop factories in Asia which are not owned by Nike themselves but subcontracted had tarnished Nike image among many people. Nike has considerably put much effort in improving the working condition and lives of its workers thereby. Opportunity: UK market has lots of potential opportunities for the Nike. With numerous amounts of health conscious people and growing sport enthusiastic generation of youngsters, Nike has the opportunity to grab market by launching shoes and trainers as per the consumer needs.
Use of internet is wide and common in the UK and e-commerce has been developing in a tremendous pace. Nike can use this opportunity to promote, inform and cater its consumers with its fitness trainers. Threats: Nike has been competing fiercely with rival companies such as Adidas, Puma, Asics, Umbro and others for fitness shoe production and distribution in UK market. Besides, challenges from competitors, forged Nike footwear relatively cheap and of low quality are circulated by counterfeiters in market which has hampered Nikes reputation and brand.
On the other hand growing economic uncertainty, government cuts and rising inflation have been challenging Nike sales. COMPETITIVE ADVANTAGE Competitive advantage can be defined as strategic advantage a company holds against the competitors in the industry. It can be marked as the positional state of company when it is able to create a benchmark in terms of profit in the industry. Nike has the competitive advantage over its rivals through wider market coverage, higher gross revenue and customer loyalty as well. Nike fitness trainers with their high quality design and attributes have been able to outperform other shoe makers.
Nike therefore wants to hold this competitive advantage over its rival sustainably. Competitive advantage can be achieved either by, Cost advantage techniques when production is made in massive quantity and products sold in relatively cheaper price or differentiation techniques of producing unique featured products against competitors and providing relative value to the good priced. In 2003, Svend Hollenson provided seven key factors that provide organisations with competitive advantage. Nike with all these consideration and seven key factors can boost its performance therefore in market.
The seven factors are: Economy of scale: Economies of scale refers to the term when production cost of a company is relatively lower than its sales revenue and earnings made are from massive sales. These companies produce goods on regular basis and avoid shortage in the market. Economy of scope: Economies of scope relates to the idea that cost of production can be further reduced by other organisational means such as joint administrative firms for different products, similar storage for different goods and cost effective methodologies used in production to distribution.
Strategic thinking: The core competence of any business to succeed in modern business world is strategic thinking. With enormous amount of competition and impediments that can affect the business, Nike should be able to analyse its internal and external environment, assess operational lapses so as they can provide effective strategy to eradicate arrears and achieve their objectives. Use of local market: Global companies such as Nike have ample opportunity to provide their range of products to local market in the UK.
With well informed and health conscious consumers growing on daily basis, Nike can exploit the opportunity to provide its trainers in all parts of the country. Nike’s product range and standards are well accepted and with more quality products coming in it can boost with learning of local market and advantages it can take from. Ability to provide global services: Nike has been able to provide its product and service throughout the globe. With communication, transportation and various technological developments that have made international trade reliable, company such as Nike have been able to market and cater their business worldwide.
Use if information technology in global service is an essential tool which has been used by Nike to deliver its goods and services. Competitive advantage (Company specific): Every organisation should have a distinct and unique feature which provides a competitive edge over its rival companies. Nike has been providing high quality footwear from their founding days. Superior technology, design and features of Nike footwear are second to none. This very reason has made Nike achieve higher market share globally than its competitors by building excellent customer relationship.
Human resource (competitive advantage): Nike and its success can be credited on high level to the employees of Nike who with their commitment, skills and attitude have made tremendous development and market coverage for them. Human workforce is an essential element of any business where firm should be able to provide the employees with business specific skills. This helps organisation achieve most out of the available workforce. SEGMENTATION, TARGETING AND POSITIONING (STP)
The marketing strategy of a company starts from mission and vision statement to selection of market and then positioning of the plans and objectives of the product in the market. Philip Kotler (1994) provided segmentation, targeting and positioning as the essence of strategic management for any organisation. Here, in terms of Nike Inc. UK, we can suggest following steps to be followed for strategic move: Segmentation: Research on existing market, types of customers and distribution of similar market should be carried out. Targeting: A target market (generally mass and more productive) which has to be served has to be analysed.
Positioning: The plans are carried out to be performed in the target market and all the activities positioned. Nike Inc. UK should be able to research and develop the segments within UK market where consumers with similar characteristics can be served. The three approaches of market segmentation such as differentiated, undifferentiated and concentrated can be used to determine segments and plan accordingly by Nike. Nike can distinguish its market with several features and variables which determine the general concept about products that Nike offer, fitness shoes in this case.
Socio-demographic variables such as age, gender, occupation, income and family etc. can be considered. It may also be based on geographic information such as area, area density, household and neighbourhood, market size and more. Behavioural data can be assessed to determine customer loyalty, buying trends, user choice and others. Psychographic studies would help Nike understand consumer lifestyle, fashion choices and many more. Nike and its segment targeting approach in the UK Socio demography: Nike Inc. UK provides fitness shoe and trainers in wide range and designs to offer different kind of customers.
Trainers and shoes come in all shape, size, specification and quality. Trainers in multiple ranges for men, women and kids are available in the UK market. Sizes are marked effectively for fit in purpose and available readily in all the sales stores. Fitness trainers for men range from ? 38 least for Nike Zoom to ? 120 highest for Nike Trainer 1. Women have wide range of choice as well from Nike Air Cardio designs costing mere ? 28 to ? 140 for Nike Air Max+ 2011 id. Kid products range from ? 18 to ? 100. Geography: Nike has made its presence felt in all the major towns and cities in the UK.
The points those are most likely to be consumer targeted have been covered as market by Nike. However, reaching the country sides would be a challenge and point of thought if Nike wants to expand its business all over the nation. Nike provides point of sale services in London, Birmingham city, Glasgow, Manchester city, Edinburgh and many other cities. However, internet usage is the only medium for other geographic parts to purchase Nike trainers. Customer Behaviour: It can be important for Nike to realise the importance of customer behaviour in UK.
To learn more about consumer preferences and expectation, it is important to communicate with them and share their experiences. Customer loyalty can be earned by providing customers with benefits and services such as after sales, exchange facilities, warranty and making them feel cared for. Nike has to develop such credentials to learn more about customer status and capacity. Consumer psychograph: Nike has so far been successful in providing trainers and fitness shoes to varying demands of consumers that are available in the UK. Prices of the trainers range from ? 28 to ? 140 which shows that Nike has its focus on all sets of customer status.
Some exclusive products are also sold in the market that focuses on trendy, fashionable and youthful nature of trainers and fitness shoes for the consumers. POSITIONING OF MARKET Nike Inc. has been very successful in positioning itself as a global leader in athletic footwear market. Even in UK, Nike has been really successful in covering huge market, enormous amount of consumer trust and therefore considerable amount of revenue for the company itself. Technological advancement, high quality materials, innovation and design in Nike footwear are what even the competitors try to imitate.
Even though several European brands provide Nike with stiff competition in the UK, Nike has been efficacious in fending off challenges and come up with even better trainers and footwear as per the demand of demanding health conscious population. With a very competitive pricing strategy that is in concern with market expectations, Nike provides footwear of different sizes, design and price for different market segments. Nike has invested considerable amount of time and money on research of UK market since years which has made it one of the most trusted and loved brand in the UK.
Such strong position and market share therefore is a positive sign for Nike in days to come. NIKE AND ITS MARKETING OBJECTIVES AND GOALS IN THE UK Nike has been established as a reputed business enterprise in the UK for years now. Their capability and product effectiveness are reflected in choice of people in using Nike fitness trainers before any available option. SMART based goals and objectives which relate to features of objective setting such as specification, measurement, attainment, realisation and time are necessary for Nike to implement in their strategies.
Here, we analyse how Nike’s objectives can be related to the SMART approach. SPECIFIC: Nike is the leading women fitness provider in UK with revenue grossing worth 200 million dollars in 2010. Nike Inc. wants to double the gross amount by the fiscal year of 2014. MEASURABLE: Nike targets revenue of $27 billion by the end of 2015 as well as cumulative cash flow increment to $12 billion. ACHIEVABLE: Nike wants to provide UK consumers with 100% cotton used fitness trainers based upon consumer survey in coming years. Nike Inc.
has plans to endorse its own athletics footwear during the 2012 summer Olympics in London by sponsoring all the American athletes participating in the games. REALISTIC: Nike Inc. UK wants to increase its market coverage in the UK which is 18% now to 25% within 2013 as Nike footwear have had tremendously appreciated response and promotional endorsements are to be boosted during Olympic games. TIME BOUND: All afore mentioned plans and objectives of Nike Inc. UK are to be completed in certain time allocated for each objective completion.
MARKETING STRATEGIES AND PROGRAMS OF NIKE INC. UK Nike Inc. UK would have to define its objectives and the process of determining the achievement of those goals. Out of various strategic plans available, Nike Inc. UK can use growth strategies using both product and market. Figure source: http://highn. me/ansoffs-matrix-planning-for-growth/ Nike Inc. UK can develop its strategies by using various methods of strategic moves such as Market Penetration: by providing competitive prices against others, promotional campaigns, enhancing customer support and care etc.
Market Development: by getting into newer geographic area, building newer distribution channels, creating new product dimension, creating new market segment etc. Product Development: by producing exclusive products, creating a new trend, using technological advancements in product, diversifying product ranges etc. Diversification: by producing new merchandises than usual for instance sweat free socks for Nike trainers, or other products to match Nike footwear and apparels such as caps, jogging scarfs etc. THE MARKETING MIX (4P’S) FOR NIKE INC. UK Nike Inc.
UK and their marketing strategies may be subject to changes from external forces of environment such as politics, economy, society, technology, environment and law. The company however has no control on these factors and have to make adjustments on several occasions. The 4 p’s are variables that the organisation can control within its own marketing strategy and is generally known as 4 p’s of marketing mix. Here, we analyse Nike Inc. and its marketing mix. Product: Nike should be able to provide product variety to the consumers in UK. With people interested in different sports, Nike can make an impact on market here.
The quality and features of the new trainers have to be of highest quality, design and durability. Latest trends and technology used in performance enhancement, accident prevention and safety of athletes should be made available in Nike trainers. Sizes and shapes have to come out in all different ways and the products need to be attractively packaged as well. Price: Nike needs to focus on all kinds of customer and research on the customer behaviour or purchasing pattern in the UK. Though Nike already provides trainers from as cheap as ? 28 to ? 140 and more, the prices need to be justified.
List of the prices and their features marked with products can be helpful. Price discounts on times can be helpful for boosting business. Place: Nike should focus on locations where footwear can be retailed, distributed or sold more efficiently. Study of market is necessary to determine where Nike can make best out of its sales. Placement in this case may be stores around sport clubs, distribution to other sellers and others. Information technology has covered almost the whole part of UK which can be utilised by Nike to exploit the market and attract the customers. Promotion: Nike Inc.
has used several of global athletes as brand ambassadors for the company. Their very link with the company and attachment has provided lime light to the Nike trainers as well. The company can advertise its trainers through media; create sales promotion from time to time and even sponsor future sport events to promote their products as well. Conclusion/Recommendation: Marketing Strategy is an important aspect in achieving the organisational goals and objectives. Only with considerable investment in analysing Nike Inc. ’s strength, weakness, opportunity and threats can the organisation implement marketing strategies.
Nike enjoys good market presence and customer loyalty in the kingdom and thus can improve further. From the report, we can recommend some of the following aspects for Nike; The emerging youth culture and trend is an opportunity for Nike to market its products. More technological use in trainers, design can be improved so as to promote fitness trainers. Health benefits associated with fitness Nike trainers should be made aware to the consumers. Use of information technology can be great way to market coverage for Nike trainers and their distribution.