Nike Inc. is a worldwide company based in America. It is engaging in the designing, manufacturing, and global marketing and footwear sales and the sales of sports apparel and equipment. The company has its headquarter in Beaverton, Oregon, within the metropolitan Portland area. The company is the top global supplier of sports shoes and apparel and major equipment used in sports. The company generates a high revenue from the products it offers in the sports sector. For instance, it generated an excess of 37.4 billion dollars by the end of 2020. Besides, the company had more than 70,000 employees worldwide by the end of the same year. The company’s brand alone was valued at more than 32 billion dollars, making it one of the most valuable sports business brands. The company delivers innovative experiences and services that inspire athletes worldwide and within all types of sports.
The Company’s Mission And Brand Description
Nike’s mission is to inspire and bring innovation to each athlete across the globe. The company is driven by its mission to do any possible thing to help expand human potential. The company does that by creating a groundbreaking sports innovation, making more sustainable products, building and creating a diverse and global team, and impacting positively within the communities where people live and work (Nike News, 2021) . Besides, the company further states that every person is an athlete. According to Bill Bowerman, if one has a body, then one is an athlete. Nike's mission statement represents its strategic goal of reaching out to the worldwide market for leisure and sports footwear, apparel, and other equipment. Nike's mission statements' three key components include inspiration, innovation, and every world athlete.
Delegate your assignment to our experts and they will do the rest.
Nike Inc. is inspiring individuals to have a mindset of being a winner. That is covered within the component of inspiration in its statement of mission. The company has a slogan with a statement, "Just do it." The slogan is also a good representative of the company's inspirational goal. Besides, the company's mission statement also gives more emphasis on innovation. The component is applied to the company's continuously improving its products through the technologies, just as indicated in its generic strategy for competing and intensively growing. The last component, which is "every athlete in the world," indicates that Nike Inc.'s mission is pushing the nosiness to target each consumer in the globe. As it has been noted, the company is considering each person to be an athlete. Therefore, based on its mission, Nikes' products are designed to satisfy and attract a wider variety of market segments worldwide.
Nike is among the most popular brands globally. The brand’s current market standing relies on strategic marketing strategies that the company utilizes in marketing its products. The company invests at least $3 billion annually in promoting its products, which enhances brand awareness (Dabbous & Barakat, 2020) . The company works with athletes and celebrities to create awareness about their products, helping reach a diversified market. Moreover, the company is on the front line in sports sponsorship which has helped enhance brand awareness. It is the promotion that has enhanced the current standing of the organization and facilitated its acknowledgment globally.
Both the mission statement and the company’s brand are important drivers in decision-making within the company. For instance, the mission statement affects all parts of the business, such as customers and employees. It creates the company's core identity and establishes a basis for each person in the company to make decisions. Besides, the mission contributes to the company's brand and encourages unity among individuals supporting or working with the company. Furthermore, the company's brand also generally affects consumers' purchase decisions. The global sportswear market is highly competitive. Besides, it is the most branded area in the worldwide apparel market. Therefore, there is a need for the various brands to differentiate themselves from the other competitors. Nike has been creating an athletic brand image for many years. Therefore, its association with sports personalities drives many people to decide on purchasing its products.
How New Idea Fits Into The Brand
The footwear market is dynamic, which requires that a company in the industry have a business model that accommodates such changes. Moreover, the organization needs to have an innovative workforce such that it becomes possible to accommodate the changes and implement new designs. Another factor that influences the industry is the availability of good product quality, ensuring that the company is successful. A company must possess all these factors since by doing so, it becomes possible to compete with other strong brands within the market.
The new Nike Inc.’s marketing strategy of using celebrity as a marketing strategy helps create its brand image. The new entrepreneurial idea in the company is the company’s training shoe trial. With this new idea, the customers are given a chance to try out Nike's new training footwear freely personally. After the customers can head to the company's retail stores for the same day trails after they have booked a time and have also noticed their shoes' size, they swap their usual workout shoes as they get a pair of Nike's footwear, and then they freely go and try them out. After that, they return the shoes to the store that same day and take their shoes back.
Before you buy an idea, the ultimate try lets the customers decide to buy the shoes after they have noticed that the product is right for their needs after they have tested them I the field. If they find that the shoes are good and like them, they create a sense of ownership over the shoes before they buy them. During the time, they have won it, lived in it, and made it part of their life for a short duration. All these together translates into sales. The company's team also gets feedback from the testers to evaluate what they liked and disliked about their experience with the product. That helps the company develop a better product or service in the future. The new idea of trying before one decides to buy fits into the company's brand in that it gives many customers trust the company's brand across the globe. Therefore, the new idea will thrive well if it also promotes the company's brand's trustworthiness. Because it gives the customers the freedom to try without the pressure of buying the product shows that the company trusts their customers and gives a certain level of confidence in the company's products and the ability to deliver what their customers require.
Effectiveness Of Nike Inc.’S Current Brand
Nike is among the most popular brands globally. The brand's current market standing relies on strategic marketing strategies that the company utilizes in marketing its products. The company invests at least $3 billion annually in promoting its products, which enhances brand awareness (Keller, 2014). The company works with athletes and celebrities to create awareness about their products, helping reach a diversified market. Moreover, the company is on the front line in sports sponsorship which has helped enhance brand awareness. It is the promotion that has enhanced the current standing of the organization and facilitated its acknowledgment globally.
The company's brand strategy is to build a powerful brand that inspires enthusiastic customers’ loyalty from individuals across the world. That is made possible because Nike adverts are using the emotional branding techniques of archetypes within its advertising. Nike has been successful because it is among the best brand within the globe. Their brand is the number one brand in the athletic goods industry and was ranked the thirteenth most valuable brand worldwide (Forbes, 2021) . The company's business strategy has also contributed to the effectiveness of its brand strategy. Nike's business strategy is to invest in brand building through sports celebrity endorsement and emotional marketing, developing high-quality products, and having a marketing technology.
The company's current brand has been successful, making it provide a wider variety of sports products that capture a greater market share. Nike is having a greater variety of sporting products. That is including the sports equipment and the apparels for soccer, track and field, ice hockey, baseball, auto racing, volleyball, cycling, wrestling, combat sports, and basketball, among other various sports activities. Besides the provision of shoes and sports equipment, Nike Inc. also provides clothing, watches, belts, scarves, hair brands, sunglasses, gloves, wallets, and watches. Furthermore, the company also owns Jordan, Converse, and Hurley brands. The fact that the company can offer a wider variety of products to more people globally indicates that Nike Inc.'s brand has been successful in the market more than any other competitive company.
The company's success has also led the company to own 40% of the US's athletic footwear market. The company specifically has 96% of the basketball footwear market share (Keller, 2021) . In 2016, the company's sales revenue was 32.5 billion due to the effectiveness of its brand. Furthermore, the company's statistics relating to market success resulting from its effective brand show that Nike's sales revenue had increased from 1996 when the company had a revenue of 6.4 billion dollars to 32.46 billion dollars as of 2016 financial year. Besides, the company has managed to control 31% of the global footwear market despite many competitors in the same market.
The company’s brand effectiveness is also evident considering that it has become the biggest sneaker maker in the US, keeping ahead of Under Armour and Adidas. The company's dominance in the sports sector is undeniable since its brand I loved all around the teens, adults and any person in between. The company's brand effectiveness has managed to share a market value of over 130 billion dollars and rallied over 15% of the market in 2020. All these are as a result of its effective brand. All these effectiveness of Nike's brand has a greater and favorable influence on its new entrepreneurial idea of allowing the customers to try the newly developed shoes before buying them. The greater market share means that many customers will be aware of the new idea of allowing them to test the shoes before they can get by them freely. Hence many people customers will be influenced to buy the new shoes through this new idea due to the well-known company's brand.
Company’s Targeted Market
There is uniqueness in Nike Inc. in that it has a generally targeted demographic segmentation. According to the company, their targeted market is "all athletes." That does not mean the company is not using market segmentation to define its various market segments in defining more specifically. Nike market segmentation has four categories, namely geographic, behavioral, psychographic, and demographic. Under demographic segmentation, Nike has categorized its products into different categories, namely gender and age (Flynn, 2015). Consequently, it becomes possible to reach a wider market share. Moreover, the company has a specialized marketing strategy targeting each group.
Demographic and Geographic variables
The company uses a demographic segment for targeting people based on their age, generation, occupation, and the stage of their life-cycle, with the broad market of the sports shoes. Therefore, the company will primarily target consumers between 15 to 40 years since they are still participating in different sports of their choice. Besides, the company will equally cater to sportsmen and sports ladies and heighten focus on teenagers to build loyalty for a longer period for the company's brand. The company will address the segmentation by using marketing campaigns concerning youths struggling to be like their athletic role models. For instance, Nike produced a video starring essential athletes whom the company had sponsored with some young football players before the world cup in 2014. There is a higher probability that the choice will be important since recently. The company launched various women's lines to help them tap into the highly growing women's segmentation. Today, 20 percent of the company's income is based on product sales that are targeting women. However, Nike Inc. Expects the number to grow significantly in the future. Therefore, the new marketing idea will not target the consumers based on race, social class, religion, or ethnicity. With the new products' prices, the company will use income and education as a targeting variable for all the customer segments to penetrate the new idea into the market successfully.
Nike Inc. will also use geographic segmentation for marketing regions, cities, nations, and population density differently. For instance, the company will focus on American football and baseball and create and deploy several adverts and marketing campaigns in the US concerning football, baseball, and football products using the sportsmen and women who are specific to those sports. However, there is variance in sports depending on the various regions. For example, it will be unlikely to see commercials of American football and baseball within Europe. Instead, there are more chances of getting soccer players in Europe. Therefore the company will use the soccer stars t help in the marketing of new Nike shoes sold using the new "try before you buy" strategy.
Psychographic and Behavioristic Variables
The company will also use psychographic segmentation to help in targeting individuals with certain lifestyles and personalities. Therefore, the company will target people who are enjoying sports. Activities such as playing, watching, or just talking about sports are important as they shape an individual's lifestyle and personality. The marketing target will be to create an individual's feeling towards the products.
Besides, targeting consumers based on the consumers’ behavior is important. The company will focus on lauding some specified product’s attributes and how they will make the consumer feel. That means the variable will clearly define the benefit expectation of the company’s product. For instance, the company will use a clear definition such as “You are an athlete. Nike products make you a feet athlete!” that will help seek the customers' loyalty. When the customers have developed loyal behavior towards the product, Nike will gain by accruing an increase in sales and the market share. Therefore, it is important to gain and retain customer loyalty in such a competitive sports market in which Nike engages. Nike will therefore excel in this realm by providing the wit quality, choice, and innovation.
Customer’s Want or Need
The targeted male and female customers between 15 to 40 years are always sports enthusiasts. Their main need is involvement in various sporting activities to improve their health, strength, emotional balance, and life. They feel that ding exercises release their cortisol which helps in stress reduction. Besides, exercises also help their bodies to feel good naturally. Besides, they need to do sports exercise activities to help th reduce the chances of being attacked by heart disease and diabetes as well as other health benefits. Those who are still learning in various schools also need to engage in sporting exercises to improve their academic performance. Participants in high schools have been linked to better grades and perform better in their workplace (Viana et al., 2018) . Therefore the chosen customer demographics mainly need more exercise.
These chosen demographics of consumers will fit well with the new products and sell the new products. For instance, since they will be allowed to try the new products before they buy them. They will do so during the time they will be feeling to do the various exercises. Therefore, they will be more attracted to exercise with the free new shoes they can try. After the trial and experience the benefits of the shoes, they will then be prompted to buy them from any company stores worldwide.
Pricing and Costs
The new shoes that will be sold to the customers based on the trial and feel will incur both fixed and variable costs. The following table shows both the fixed and variable cost of 500 new shoes.
| Variable cost | Cost |
| Material for production of the shoes | $10,000 |
| Direct labor | $13,000 |
| Additional materials | $2,000 |
| Packaging cost | $500 |
| The total variable cost of 500 shoes | $25,500 |
| The total variable cost for one shoe | $51 |
| Fixed cost | |
| Rent | $5,000 |
| Insurance | $1,000 |
| Total fixed cost of 500 shoes | $6,000 |
| Total fixed cost of one shoe | $12 |
The new shoes' targeted market is willing to pay 150 dollars for a pair the sports shoes. That is due to their income levels in the various fields in which they are engaged. However, the competitors are pricing is slightly higher than the customers’ expectations. For instance, Adidas, as the main competitor, is charging sports shoes at approximately 200 dollars. On the other hand, the Under Armour Company charges 250 for the normal sports shoe. However, the most expensive sports shoes from Under Armor costs 300 dollars (FashionNetwork, 2021) . There is a difference between the price that the competitors offer and what the customers are willing to pay. The main reason for the difference is that the customers expect to pay based on their average income level and their need for the shoes. However, both the fixed and variable cost of producing the shoes they used to determine the profitability price they decided to charge for the pair of sports shoes in the market helped them determine the competitors' price charges.
References
Dabbous, A., & Barakat, K. (2020). Bridging the online-offline gap: Assessing the impact of brands' social network content quality on brand awareness and purchase intention. Journal Of Retailing And Consumer Services , 53 , 101966. https://doi.org/10.1016/j.jretconser.2019.101966
FashionNetwork. (2021). Under Armour releases a pricey, ambitious sneaker . FashionNetwork.com. Retrieved 12 March 2021, from https://ww.fashionnetwork.com/news/-under-armour-releases-pricey-ambitious-sneaker,809881.html .
Flynn, P. (2015). Scholars Archive Nike Marketing Strategy: A Company to Imitate . https://scholarsarchive.library.albany.edu/cgi/viewcontent.cgi?article=1013&context=honorscollege_accounting
Forbes. (2021). The World's Most valuable brands . Forbes.com. Retrieved 12 March 2021, from https://www.forbes.com/the-worlds-most-valuable-brands/#568ed59e119c.
Keller, C. (2021). Nike Strategy - How Nike Became Successful and the Leader in the Sports Product Market . Profitworks.ca. Retrieved 12 March 2021, from https://profitworks.ca/blog/marketing-strategy/545-nike-strategy-how-nike-became-successful-and-the-leader-in-the-sports-product-market.html#basketballshoes.
Viana, R., Campos, M., Santos, D., Xavier, I., Vancini, R., Andrade, M., & de Lira, C. (2018). Improving Academic Performance of Sport and Exercise Science Undergraduate Students in Gross Anatomy Using a Near-Peer Teaching Program. Anatomical Sciences Education , 12 (1), 74-81. https://doi.org/10.1002/ase.1790
