Strategic Marketing Plan – Nike

Strategic Marketing Plan – Nike

Part A: Environmental Analysis and SWOT Analysis

Company Description

Nike is an American-based and world-largest athletic apparel company. The company engages in the design, development, marketing, and distribution of apparel, athletic footwear, accessories, equipment, and services. The company operates in six segments: the North American division, Asia Pacific, Africa, Greater China, Corporate, Latin, and Converse. Nike’s Mission statement is “to bring inspiration and innovation to every athlete in the world” (Nike, 2023). To achieve this mission, the company comes up with innovative sports solutions, makes its products more sustainable, and incorporates a diverse workforce across its ranks. “On the other hand, the company’s vision statement is to remain the most distinctive, connected, and authentic brand” (Nike, 2023). The company’s vision shows that they are committed to becoming the global industry leader, and to achieve this, Nike uses sustainable production means and cutting-edge innovations.

Environmental Analysis

Competitive Forces

The top five competitors of Nike include Adidas, Puma, Under Armour, New Balance, and Sketchers. Even though the industry continues to experience an ever-changing landscape, Nike retains the top position in all aspects. One of the reasons for Nike’s success as far as industry competition is concerned is its aggressive marketing campaigns and leveraging celebrity marketing to succeed. Adidas, the oldest and fiercest Nike competitor, competes against Nike based on mindshare and corporate deals.

Economic Forces

One of the main economic factors facing Nike is the likelihood of a market collapse. As soon as it becomes possible to manufacture even just decent footwear, consumers may decide to switch to cheaper options (Widodo et al., 2019). Another notable economic factor is Nike’s overreliance on cheap labor from the Far East, but this economic advantage is quickly changing.

Political Forces

Given the multinational nature of Nike’s business, trade barriers emanating from the political environment significantly affect the company’s success. Trade barriers make it difficult for Nike to distribute its products, especially to countries that are seeking to protect local manufacturing. In the same breath, governments seeking to boost local manufacturing are likely to offer multinationals better incentives, such as tax cuts.

Legal, Regulatory, and Ethical Issues

One of the most impactful legal aspects of Nike is the increasing minimum wage regulation. As countries across the world continue to adopt the minimum wage requirement, Nike is likely to lose cheap labor market sources. On the other hand, increasing consumer regulations is likely to cause Nike to drop prices, a factor that may reduce profits.

Technological Forces

The increased adoption of information technology will significantly impact Nike. For instance, the emergence and adoption of online marketplaces and platforms like eBay and Amazon mean that the company will not have to be present physically to make sales (Widodo et al., 2019). Also, social media networks such as Facebook and Twitter help the company collect crucial data to address consumer needs.

Social Forces

A leading social trend that is likely to affect Nike is the growing number of older adults. This trend is an opportunity because Nike can leverage this growing number of older persons to expand its market by making products that match older consumers (Nike, 2023). Furthermore, the ever-increasing adoption of healthy lifestyles has positively contributed to more people buying more Nike products, such as running shoes.

Current Target Markets

Nike tends to target high-end consumers more than any other segment. The company’s target market’s age range is between young teenage to middle age. The company primarily focuses on athletes, but the latest market demographic changes have led them to target a broad customer base beyond athletes.

Review Current Marketing

Nike mostly relies on celebrity promotions to get information to the final consumer. To that end, the company organizes events through which such information is spread. Also, social media platforms are emerging as effective platforms because of the large number of young people that use these platforms. Nike also communicates information to consumers by joining customers’ social media conversations. This strategy helps the company to communicate directly with the customers. In the process, customers feel valued, something that solidifies the company’s relationship with its customers.

SWOT Analysis

Strengths

According to Ahmed et al. (2016), one of Nike’s strengths is its strong brand. Nike is the strongest sports goods brand in the international market. According to the SWOT analysis model, the company can leverage this advantage to gain a competitive edge over rivals in the athletics products and leisure goods industry. Also, Nike is characterized by cutting-edge product innovation, a culture that enhances its products’ quality and attractiveness. This has helped the company to stay ahead of competitors. Another strength is Nike’s control of its distribution channel. To that end, Nike Inc. sells through different retailer platforms such as Walmart, eBay, and Amazon, expanding the company’s market reach.

Weaknesses

Nike Nike Inc. has internal weaknesses, including a limited network of company-owned distribution locations. As a result, the company relies on other retailers who can potentially influence the price of the company’s products (Ahmed et al., 2016). The SWOT analysis model suggests that such a weakness makes the company lose control of distribution channels. Also, Nike lacks product diversification since it mainly manufactures shoes and equipment, which are mostly manufactured in Asia, exposing the company to regional economic changes. Finally, Nike struggles with corporate image issues linked to unfair labor practices in different locations.

Opportunities

The company can expand its market base by establishing more locations. This calls for the company to have brick-and-mortar stores in different locations to attract prospective athletes and more customers (Ahmed et al., 2016). More locations will enhance Nike’s visibility. Another opportunity is the chance to enhance competitiveness relative to rivals. One area that may enhance competitiveness is incorporating advanced technology in manufacturing sneakers (Ahmed et al., 2016). Nike may also improve its competitiveness by improving its labour practices in factories..

Threats

One of the significant threats facing Nike Company is competition from other industry participants. To that end, Addidas and New Balance pause the most significant threat regarding competition. According to the SWOT analysis model, competition threatens to take away a company’s market share. Another threat facing Nike is imitation and counterfeiting of its products, especially in countries that lack strict competition laws. Counterfeits can be sold at lower prices, threatening to take Nike’s market share.

Strengths to Opportunities & Converting Weaknesses and Threats

The SWOT analysis shows that Nike has the strength to support its market leadership position. However, the company ought to commit to a few adjustments to overcome weaknesses and threats. For instance, reducing the risk of the lack of location diversification will require the company to adapt and open more stores (Widodo et al., 2019). Also, the company can address technology use and the increase in competition by making more technological innovations. Another significant challenge facing Nike that needs the attention of the company’s strategy formulators is the imitation of its sports footwear. To address the challenge, Nike can establish marketing agreements with companies like Facebook and Google to counter the negative effects of counterfeits and imitations. One way these platforms can help reduce the penetration of fakes is by spreading awareness about the existence of fakes and how they fail to offer value for the consumer’s money.

Marketing Objectives

Nike will adopt new technologies to address the growing competition from rivals. One such move will be the adoption of Nike+ technology in Nike footwear products. The move will entail incorporating the digital solution to most Nike products, especially those used by athletes and other customers who purchase Nike products for exercising, by the end of the year 2023. The digital technology will record information about the customer or athlete, including the calories burned during an exercise, distance covered, vertical jumps, and speed. The move is expected to raise Nike sales by 10% globally and cement the company’s leading role in different athletics events such as the Olympics and athletic championships.

Another objective is to create a link between its different customers and athletes. The company will adopt a smartphone application to support the Nike+ technology by December 2023. Subsequently, customers can receive updates about their idols and preferred athletes, including speed and distance covered. The strategy is expected to enhance the popularity of Nike products and position the company as the number one innovator in the sports apparel industry. Another positive thing about adopting the technology is that it will portray Nike as a leader in technological innovations and subsequently help them attain a competitive edge.

References

Ahmed, R. R., Brohi, H., Bhutto, A. H., Prithiani, J., Khubchandani, R., Kumar, S., & Abbas, Z. (2016). „Strategic Marketing Plan of Nike “. ResearchGate, Indus Institute of Higher Education.

Eyada, B. (2020). Brand Activism, the Relation and Impact on Consumer Perception: A Case Study on Nike Advertising. International Journal of Marketing Studies, 12(4), 30. https://doi.org/10.5539/ijms.v12n4p30

Nike. (2023). Our Mission. Nike.com; Nike. https://about.nike.com/en

Widodo, A., Mahachandra, M., Widhiyaningrum, M., & Tahqiqi. (2019). Formulating a Strategic Management of Social E-Commerce through a Combination of SWOT and PESTLE Analysis: Case Study. http://ieomsociety.org/ieom2019/papers/668.pdf

 

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Company Description

Describe the company for which you are designing the plan. Include:

• Mission Statement
• Vision Statement
• Product line description
• Company information, such as the size of the company

Environmental Analysis

Analyze the forces that affect the company and marketing efforts.

Competitive Forces

Analyze the company’s key competitors. You may choose to use a BCG Matrix or attribute checklist to compare your company against its competitors. Describe any strategic moves the competition has recently made. Estimate your market share. Identify key competitive advantages against your competitors.

Economic Forces

Analyze the economic environment in the areas affecting your business. Consider differences within your industry and the economic impact on suppliers.

Political Forces

Analyze relevant political forces. Examples may include an election year or a law to drastically reduce or eliminate plastic waste in your county.

Legal, Regulatory, and Ethical Issues

Analyze the legal, regulatory, and ethical issues that may affect your business. Considerations may include local laws such as a ban on the use of plastic bags, the ability to post billboards, or a possible increased regulation on direct mail.

Technological Forces

Analyze whether your company will be affected by emerging technologies or trends in hardware and software industries

Social Forces

Analyze social trends and how they may affect your business. Considerations may include if your business will be affected by demographic trends, a growing dependence on computers, or whether interest in your product might be affected by growing preferences in the way things are done or changing social values.

Current Target Markets

Define the company’s current target markets. Describe the demographic, geographic, psychographic, and product usage of these targets.

Review Current Marketing

Review the company’s current marketing tactics. Consider how people find out about the product, how they get information about the product or service, what might be involved in the buying process, and what money is available for marketing. If your company is a start-up, describe your competitors’ current marketing.

SWOT Analysis

Assess your company’s strengths, weaknesses, threats, and opportunities, and then evaluate how to address these in your marketing plan.

Strengths

Assess your company’s competitive advantage. Consider core competencies, assets, location, practices, etc. that are distinct in the way the organization meets the needs of its customers.

Weaknesses

Assess what limits the company may have in its current marketing strategy. Consider if there is a company weakness that needs to be addressed through Public Relations or Marketing.

Opportunities

Assess the opportunities you see based on trends or environmental conditions.

Threats

Assess the threats or limitations that may interfere with the company’s ability to meet its objectives or interfere with marketing plans.

Strengths to Opportunities & Converting Weaknesses and Threats

Convert weaknesses and threats to strengths, then strengths to opportunities in the marketing plan. Consider the implications for addressing supplier relationships, implementing new technologies, or changing the product line or addressing new markets.

Marketing Objectives

Establish marketing objectives based on the results from the SWOT analysis. Marketing objectives must align with corporate objectives, modified by the company’s resources. Objectives should include a date for the completion of the objective and the way in which success will be measured. For example: The company will expand its marketing efforts to include a new market segment of 21- to 29-year-olds. This will entail the development of a customized product by June 2020 that will address the specific psychographic and technological needs of this age group. This strategy is expected to attain a 20% growth in overall sales by January 2020. Customer loyalty (willingness to recommend the product) will increase by 30%.

Part B: Marketing Data Analysis

(Due in Wk 4)

Internal Data

Evaluate internal sources of information available to you inside the organization and what information you will receive from each source. Identify 3-6 sources of internal data. Insert or remove rows as needed.

Secondary Data

Evaluate secondary data sources and the specific information you need from each source. Insert or remove rows as needed.

Primary Data

Evaluate primary data needs to create and evaluate the marketing plan. Insert or remove rows as needed.

Customer Relationship Management

Establish customer touchpoints and develop appropriate CRM events for customer acquisition, retention, and profitability. Insert or remove rows as needed.

Part C: Market Strategy, Marketing Channels, Implementation, and Monitoring

(Due in Wk 6)

New Customer Segments

Determine any new customer segments for your strategy and describe how you will provide value to each segment.

Marketing Mix for New Customer Segments

Determine adaptions for each new customer segment.

• Products
• Price
• Distribution
• Traditional Promotion
• Online Promotion

Marketing Implementation

Create the implementation for your marketing plan. Describe how you will organize and implement the plan, such as whether it will be organized by market, geography, and who is responsible for marketing decisions.

Marketing Communication Channels

Evaluate the marketing communication channels you will use to reach selected audiences. Include Internet and traditional communication channels to convey key messages. Describe the advantages and disadvantages of each channel you select. Insert or remove rows as needed.

Strategic Actions

Develop specific activities required to implement the marketing plan. Identify the person or role who will be responsible for each action, when it will be complete, and what standard or metric indicates that the activity is complete. Insert or remove rows as needed.

Monitoring

Develop the measurement to identify how you know you have been successful with each strategic action. Specify the measures to track performance against goals. Identify standard reports from your online and traditional marketing efforts. Insert or remove rows as needed.