Nike's marketing strategy and competitive positioning in the athletic footwear market

¶ … viable marketing plan for the footwear giant, Nike. The plan has been adequately substantiated with thorough research on different factors affecting the firm along with various ways of addressing future challenges. This research paper highlights that Nike is confronted with multifarious issues which need to be negotiated amicably. Result of the study concludes that there is still a world waiting for the Nike to be exploited, outsmarting its competitors employing its innovative and creative business strategy.

MINI Business / MARKETING PLAN -- NIKE, INC.

COMPANY OVERVIEW

In 1962, two individuals from the University of Oregon established a small company with the name of Blue Ribbon Sports (BRS). In 1972, the company was renamed to Nike, the name adopted from the Greek goddess of victory. At present, Nike owns facilities in Oregon, Tennessee, North Carolina and The Netherlands. It also operates leased facilities for 15 Nike-towns, over 80 Nike Factory Stores, 2 NIKE goddess boutiques and over 100 sales and administrative offices. There are approximately 23,000 people employed by the Nike, worldwide. The company's first year sales did not cross $10,000 however, its present revenues exceed well over $10 billion. [Facts, Nikebiz.com, page 3]

The Nike mission is "To bring inspiration and innovation to every athlete in the world." [Nikebiz.com, page 4] Nike research lab is constantly pursuing innovation in the field of sports. The research work in the lab is distributed into three categories including biomechanics, physiology and sensory/perceptual attributes. The research mainly focuses on differentiating factors like geography, gender, age and skill level. [Product Technology, Nikebiz.com, page 6]

Products of Nike can broadly be distributed into two categories as footwear and equipment. The footwear has been sub-categorized into various product lines including sports culture, running, basketball, soccer, women fitness, baseball, football, track and field and kids. The equipment products comprise of bags, golf items and timing tools. [All products, Nike.com]

CROSS CHANNEL MARKETING

The concept of cross channel marketing emerged last year and focuses on utilizing different channels/medium simultaneously for communicating with the consumer. It has not been considered as just another management fad. The proposal got strength, when the Interactive Advertising Bureau (IAB) released results of a two-year study highlighting that effectively synchronized on and offline advertising, can raise brand awareness by 8 to 34% hence increasing desire to purchase by 5 to 1,000%. [Mark Kingdon, Cross-Channel Marketing, January 18, 2005, web-link] The concept is perceived with seriousness throughout the industry and has been adopted by many. Nike will be affected significantly if its competitors take a lead in this regard.

IMPACT OF TECHNOLOGY ON SALES

Technology has made a tremendous effect on all spheres of life. It has virtually reshaped the way things used to work. With the outburst of information technology, consumers are getting more knowledgeable. Concurrently, products have found cheaper and faster ways of reaching the consumers in their homes. A product can be sold with a mere click of the mouse button. Companies that have realized the true impact and importance of the technology, are making best use of world wide web for better promotion as well as for convenient sale of their products.

BEST PREACTICES IN MARKETING AND SALES

A large number of books have been written on best practices which have been successfully employed in producing effective marketing and sales strategies. A gist of effective marketing and sales practices include assigning your best people of recruitment, making best use of internet for information-based training, configuration of the sales territory, business process re-engineering, restructuring of sales force, implementing a simple compensation plan etc. [Andris A. Zoltners, Prabhakant Sinha, Greggor A. Zoltners, Accelerating Sales Force Performance, April 2001]

NIKE'S INTERNET INITIATIVE

1n 1996, nike.com was launched for purely information and entertaining purposes. The site lacked e-commerce capabilities. It focused more on brand building. It also contained tips and advice from athletes, news and updates on sports events. The Nike adopted a careful strategy to interact with its customers through world wide web. At first it planned to experiment selling of Nike Posters via internet and after one year of scrutiny, finally in 1998, the plan was implemented. Over next one year, Nike redesigned its website and launched it with e-commerce functionality. Nike could not sell much through this site and finally in September 1999, it signed a deal with Internet sporting goods retailer, Fogdog Sports. It allowed Fogdog Sports to sell entire Nike product line on its own website. [Graduate School of Business Stanford University, Nike Channel Conflict, February 2000,-page 5-6]

THE FUTURE

Nike has still a long way to go. A comprehensive internet-based strategy is required to keep the giant at top. Few suggestions in this regard are appended below:-

1)

Personalization.

As the technology grew, Nike selected Critical Mass, an internet services firm to give a new look to its e-commerce by adding personalized features. [Critical Mass, website] Nike.com is offering custom-based product and for this purpose has established NIKE ID Studios at selected locations around the world. To get appointment, a simple form has to be filled on Nikeid.com. To increase the interaction with customers, the firm is recommended to offer personalized service at the website. Customers should be able to fill in their preferences on internet instead of visiting the field offices.

2)

Customer Information File.

To personalize the product design, Nike would be required to maintain a database of customers' bio-data, attributes, preferences, likes, interests etc. The customer information file should consist of records comprising of all essential details regarding their customers. The file though containing sufficient details should still be kept as simple as possible.

3)

Mass Customization.

Information technology has made the customers perceptive and demanding. Markets today are transforming faster than ever. Last decade brought the concept of Mass Customization which can efficiently tackle the new market realities. The idea is based on providing personalized goods at cheaper rates. For this purpose, all the resources dealing with individual customers' needs have to be networked to enable required mass production. [Mass Customization, Frank Pillar's website] To meet the challenge, Nike will have to adopt new ways to interact with its customers during the process of co-designing and configuring a customer specific product.

4)

Yield Management.

With the expansion of internet, firms can now keep a track of their customer preferences and anticipate their behavior in order to maximize revenue. This sort of processing can only be possible on computers. To meet the future challenges, Nike will have to embrace this system. With the system fully functional, the buyers will be able to receive an advance forecast of pricing which will enable them to act accordingly. [Yield management, Wikipedia, the free encyclopedia] In this way, Nike will be able to provide an optimal mix of goods at a variety of price points.

5)

Maximum Utilization of Internet.

The Nike.com is presently offering services like product finder, boot recommender, store locator etc. The need now is to incorporate additional features in its e-commerce module. It's the right time for the Nike to transform into an internetworked e-business enterprise. Its information portal should comprise of operation support system coupled with management support system. [James, Management Information Systems, page 25] All the transaction processing systems, process control systems and enterprise collaboration systems networked under operation support system will enable Nike to continue leading the world for times unlimited.

CONCLUSION

Over the last 30 years, Nike has emerged to be a successful manufacutrer of footwear and other sports gear. Its annual revenue out side U.S. has now exceeded its inland sales. It is undoubtedly evolving to be a global enterprise with inherent characteristics of expansion. Its strength lies in its customer focused attitude and self-driven motivation to work with zeal. Creativeness and innovations, suiting the requirements of customers have led it to the front. The firm due to its limitation of product range, will however be requied to pursue an information intensive strategy, to keep a pace ahead of its competitors.