Nike Kung Fu Shoes Marketing Plan for Australia

Introduction

Kung Fu has been omnipresent in movies, songs, and other forms of entertainment across the Western Hemisphere. This has led to a surge in the popularity of the martial art, to the point at which people of all ages and cultural backgrounds engage in Kung Fu. Historically, it would have been necessary to travel to Asia to learn Kung Fu from a master, but today such training is offered by specialized instructors across all global regions, including Australia (McCoy, 2010).

A primary challenge encountered in teaching Kung Fu in Australia is a relatively high incidence of injuries among practitioners. The issue is continually addressed by the Martial Arts Industry Association of Australia through safety policies. Nevertheless, despite these organized efforts, it remains the responsibility of each practitioner to safeguard themselves and prevent injuries. One specific means of doing this is the use of adequate footwear — namely, specialized Kung Fu shoes.

The purpose of this report is to create a research and marketing approach that could underpin increased usage of Kung Fu shoes and, subsequently, an increased sales volume for the company Kung Fu Shoes. The project spans one year and is situated within the Australian marketplace.

Kung Fu Shoes is a small-sized company based in China that exports products to various global regions, including Australia. The organization manufactures cloth Kung Fu shoes using local commodities and labour, which translates into lower costs than products manufactured elsewhere. An important strength is that the company operates in a region rich in Kung Fu culture and expertise.

In terms of internal weaknesses, Kung Fu Shoes is relatively small, with limited resources available for powerful marketing operations. Additionally, exporting its products increases operational and logistical complexity and adds to the final retail price. The external environment in Australia generates hope for business success due to the increasing popularity of Kung Fu in the country and the growing need for safety in its practice. External threats are represented by the high levels of competition in the field of sports apparel and footwear (Website of the Martial Arts Industry Association, 2012).

The Kung Fu shoes industry in Australia faces competition from two distinct directions. First, there are providers of specialized Kung Fu footwear, such as WushuKicks and Martial Arts Suppliers. The products of these two businesses are mostly available online, as they are small, niche-focused companies designing footwear specifically for Kung Fu practitioners (Websites of WushuKicks and Martial Arts Suppliers, 2012).

The second category of competitors consists of large sports shoe and apparel companies such as Nike, Adidas, and Reebok. These are large multinational corporations that have developed economies of scale and compete on the basis of cost efficiency and brand strength (Court, Freeling, Leiter and Parsons, 1997).

Environmental Scan

In order to better develop recommendations for Kung Fu Shoes, it is necessary to assess the environment in which the company would sell its products in Australia. This is best achieved through a PESTLE analysis, with the acronym standing for political, economic, social, technological, legal, and environmental.

In terms of the economic background, Australia was affected by the global financial crisis similarly to the rest of the world. Nevertheless, the country quickly restored its economy and in 2009 registered the largest growth rate among countries in the Organisation for Economic Cooperation and Development. At the individual level, Australians rank 19th globally in income per capita (Central Intelligence Agency, 2012), and their disposable income was only limitedly impacted by the international recession.

At a political level, Australia is a federal parliamentary democracy and a Commonwealth realm (Central Intelligence Agency, 2012). It is divided into eight administrative divisions and is characterized by stable political governance. It should also be noted that the Australian government often provides support to small-sized businesses (Buchwald, 2011). However, Kung Fu Shoes should not rely on this support, as it is primarily granted to encourage the development of domestic companies.

At a social level, the large majority of the population — 89 per cent — lives in urban areas (Central Intelligence Agency, 2012). The population is generally extroverted and easy-going, yet Australian consumers have high expectations of vendors (Buchwald, 2011).

Technological development in Australia is considerable, with significant emphasis placed on electricity generation. There are 8.66 million main telephone lines in use, 22.5 million mobile telephones, 16.952 million internet hosts, and 15.81 million internet users (Central Intelligence Agency, 2012).

From a legal standpoint, Australia subscribes to the jurisdiction of the International Court of Justice, with some reservations, as well as the International Criminal Court (Central Intelligence Agency, 2012). Finally, from an environmental perspective, there is increased awareness of the need to reduce greenhouse gas emissions. The population is engaged in activities such as energy-efficient lighting, while ecological challenges are posed by extreme weather conditions in various regions of the country (Buchwald, 2011).

In order to better understand the marketplace in which the Kung Fu shoes would be sold, primary research is also necessary. This research would be qualitative in nature, using the survey method. This approach is efficient because it allows the rapid gathering of data from numerous respondents. The questions in the questionnaire (Appendix 3) were constructed based on the analysis conducted above, as well as the specific needs and characteristics of the product. The sample would be drawn from Australian individuals — both native-born and immigrants — who practice Kung Fu. The questionnaire would be administered at Kung Fu training locations.

A gap in the practice of Kung Fu in Australia is represented by the high incidence of injuries sustained by practitioners. In this context, the Kung Fu Shoes company proposes the extended use of its shoes to improve both the performance and safety of Kung Fu practitioners (Kit, 2002). The uniqueness of the product will be built around the promise of safety and the use of authentic Chinese expertise in shoe construction. The shoes are lighter and safer, thereby supporting the practice of Kung Fu (Graceffo, 2004).

An important step in the marketing strategy of Kung Fu Shoes is identifying the customers to be addressed. Market segmentation is the process of identifying different groups of users within a market who could potentially be targeted with separate products or marketing programmes (Croft, 1994). In the specific context of Kung Fu Shoes, three segments are identified:

The targeting strategy refers to the identification of the customer segment with the most potential to purchase the company's products and/or services (Goldner, 2006). In the case of Kung Fu Shoes, the primary target market is children practicing Kung Fu, meaning the marketing campaign will address both users and buyers — that is, both children and their parents.

The positioning strategy is a core element of the marketing campaign and helps establish the image through which the company and its product are perceived (Harrison-Walker, 2011). For Kung Fu Shoes, the positioning statement revolves around safety and Chinese expertise. A sample positioning statement could be constructed as follows:

Kung Fu shoes are apparel products for children practicing Kung Fu who require safety assurances. Unlike Nike or Adidas, Kung Fu shoes offer the guarantee of safety and the expertise of the country where Kung Fu originated.

The marketing goal at this stage is to increase awareness of Kung Fu shoes and subsequently generate demand for them.

The products are the Kung Fu shoes manufactured by the Chinese company, featuring a range of attributes designed to appeal to customers. Specifically, the shoes are lightweight and available in various sizes for both genders and in different colours. They are non-slip, comfortable to wear, and ventilated to prevent excessive perspiration. In other words, they are created to provide all the support and safety measures inspired by the long-standing tradition of Kung Fu.

The Kung Fu shoes would be distributed through an indirect distribution system, leveraging the expertise of already-established vendors. Using intermediaries would allow the manufacturer to reduce distribution costs and to access the marketplace through the existing connections of Australian retailers.

The promotional campaign would be implemented across multiple media, including the internet, television, and radio. Advertisements would be coordinated with the promotional efforts of retailers and would also run independently. Media used would be local, and these efforts would be complemented by direct interactions with potential customers. For instance, representatives of Kung Fu Shoes would organize meetings with parents and children at Kung Fu events to explain the need for and benefits of specialized footwear.

The pricing strategy to be implemented is a variable pricing approach, whereby the final price of the shoes reflects the totality of costs incurred in manufacturing. As the manufacturing and distribution processes encounter new costs, these will be reflected in the retail price of the Kung Fu shoes.

An important role is played by sales staff, who must be trained to provide the necessary support and information to parents looking to purchase Kung Fu shoes for their children.

Emphasis will be placed on the careful selection of vendors, as collaborations with these intermediaries directly reflect upon the company's image and the perceived quality of its products.

The internet will be used to advertise Kung Fu shoes on vendor websites, Kung Fu-related activity sites, and other relevant online platforms. Additionally, the internet will facilitate the purchase of Kung Fu shoes directly through the websites of Australian vendors.

New Product Concept and Target Marketing

Based on the analysis conducted throughout this project, it is recommended that the company engage in more proactive marketing initiatives. In this regard, it should focus on promoting the Kung Fu shoes as safe footwear designed to offer every possible benefit for Kung Fu practice, while also leveraging its Chinese heritage as evidence and a guarantee of quality. Over the following two years, the Kung Fu Shoes company should pursue a more active penetration of the Australian marketplace by targeting the identified primary market segment — children and their parents.

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Court, D.C., Freeling, A., Leiter, M.G., Parsons, A.J., 1997, If Nike can "Just Do It," why can't we?, The McKinsey Quarterly.

Croft, M.J., 1994, Market Segmentation: A Step-by-Step Guide to Profitable New Business, Routledge.

Graceffo, A., 2004, A glimpse of Shaolin, Black Belt, Vol. 42, No. 3.

Goldner, P.S., 2006, Red-Hot Cold Call Selling: Prospecting Techniques That Really Pay Off, 2nd edition, AMACOM Div American Mgmt Assn.

Harrison-Walker, L.J., 2011, Strategic positioning of nations as brands, Journal of International Business Research, Vol. 10, No. 2.

Kit, W.K., 2002, The Art of Shaolin Kung Fu: The Secrets of Kung Fu for Self-Defense, Health and Enlightenment, Tuttle Publishing.

McCoy, J., 2010, Living Tao, Living Kung Fu, Living My Life, Trafford Publishing.

Central Intelligence Agency, 2012, The World Factbook — Australia, accessed May 9, 2012.