Company Summary
The case scenario reflects on the responsibility as a marketing manager to prove and develop new technologies as well as a strategic marketing plan for Nike, Inc. The company is among the world-leading marketer and retailer of athletic footwear, accessories, and apparel. Nike, Inc. was established in 1964 by Phil Knight, together with his coach Bill Bowerman with Blue Ribbon Sports (BRS) as the initial name (Li, 2019). All company operations take into account discovery and innovation perspectives to provide experiences and products for athletes. For decades, the company has remained as one of the leading brands in the U.S. Athletic market, but as per the current brand entities and competitors such as new balance and Adidas, a new technological and strategic marketing plan is paramount. As a marketing manager, this report aims to illustrate the plan suitable developing the tactical and strategic marketing plan based on how Nike can offer new products in terms of current and future market analysis and company status as well as competitor’s analysis and as far as the best Michael Porters basic strategies are concerned.
Suitable Michael Porters Strategy
As the marketing manager, I intend to use generic and intensive forms of Michael porter’s strategy model as a marketing tool to foster the awareness of the brand and associated products. A generic strategy will ensure that there is a competitive advantage based product line diversity. Additionally, the strategy intends to grow the global sports apparel, shoes, and equipment business Nike Inc across the world through corresponding intensive strategies (Geurin & Burch, 2017). The generic competitive strategies from Porter's model perspective involve cost leadership and differentiation strategies. When the management employs generic strategy, a competitive advantage emerges through product mix diversity. Achievement of the business, as well as competitive maintenance, is defined by Michael porter’s strategy. Innovation to develop business is an important aspect Nike has taken into consideration its intensive growth strategy. The managers should implement both intensive growth and generic strategies in current business conditions for better future business.
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Cost Leadership and Differentiation of Generic Strategies
It is paramount for Nike to adopt a cost leadership strategy as a form of generic competitive strategy that brings about the sustainability of costs associated with a competitive advantage. First, when cost leadership generic strategy is embraced, the company will be able to maximize profitability as it reduces selling prices through low production costs. Second, a cost leadership strategy will help Nike with a framework under which it will be able to regain a competitive edge with other competitors such as New Balance and Adidas. However, the company needs to make use of a generic differentiation strategy to offer its consumers unique products based on the integration of shoe designs that have cutting edge features. According to Li (2019), a combination of the two generic strategies under Michael porter’s strategy is ideal for Nike business in the current global market since it has a positive influence on the company performance. Additionally, utilization of both cost leadership and generic differentiation strategies will grow Nike’s competitive advantages and reduce production costs as they embrace new technologies available on the market. Profit margins maximization on new sports shoes is a financial objective of Nike as far as Michael porter’s strategy is concerned.
Intensive Strategies
Product development, market penetration, market development, and diversification are the four intensive strategies as the market manager I intend to utilize to grow business globally. Product development is one of the key intensive strategies that bring about a framework where new products can be easily introduced to grow sales revenues. Embracing product development reflects on the mission statement of the Nike that highlights innovations as a key aspect that propels their business based on the provision of new designs for shoes, apparel, and related products they intend to place on the market. Use of new technology by companies set them apart from the competition and enhance their business (Geurin & Burch, 2017). As a market manager, I believe the use of product development as an intensive strategy reflected in Michael Porter's strategy will make all products from Nike to remain attractive even if consumer preferences change. Production development, in most cases, supports differentiation generic competitive strategy, and for Nike to increase its market share, it has to integrate product innovation with cutting-edge technologies that improve its financial objective as far as intensive growth of its sports shoes, apparel, and equipment is concerned.
Market penetration also is an ideal form of intensive strategies within Michael Porter's strategies that, as a marketing manager, I intend to incorporate as far as Nike business is concerned. Market penetration will help Nike to increase its sales revenues through improvement and an increasing number of stores as well as retailers across the world and be able to sell more athletic products and meet diverse consumers globally. Given that Nike already has a global market presence, the use of market penetration will be a secondary intensive growth strategy that increases product affordability, sales revenues, and market presence via an increased number of authorized retailers. The company will also embrace market development intensive strategy to facilitate its growth by tapping up new markets as well as segments across Africa and the Middle East, hence increasing its sales revenues. Another way of improving market development is by investing in new technologies that offer cutting0edge when penetrating new segments such as bodybuilders as new markets will help Nike to increase its profitability and leading to company growth (Reddy, 2017). Through intensive strategy, diversification will be given priority as one of the elements in Michael Porter's strategy that will enhance company growth through the development of new businesses. Through market mix and product innovation, Nike needs to utilize diversification through the addition of varied products on the market to be free from financial risks.
Target Market Segmentation
The target market and its segmentation in this plan will base on demographic, geographic, psychographic, and behaviouristic variables. The plan will use the four mentioned variables to derive various market segments and meet consumer’s needs. First, the firm will use demographic segmentation as a model that targets an individual’s consumer behaviors based on their life-cycle stage, age, occupation, generation, and gender. For decades, Nike has been targeting consumers aged between 15 and 40, but it is good to note that the apparel and sports market is broad, and therefore, the plan should be inclusive of consumers aged above 40 years. The plan in terms of demographic segmentation will also take into consideration gender equity, taking into consideration both men and women athletes with a focus on tweeds as well as teens as a way of building long-term brand loyalty. Additionally, the plan intends to use education and income as a target variable rather than religion, race, social, and ethnicity of consumers.
Second, the plan will utilize geographic target segmentation to market different populations, cities, nations, and regions based on their cultural heritage and consumer behaviors. Different countries, regions, cities, and populations embrace different sports such as America, where American football and baseball are common, as well as Australia, where rugby is common and therefore becomes vital for the plan to consider geographic target segmentation in promoting its business and products that embrace certain cultures. Nike has to utilize sports such as soccer in Europe, Cricket in India, and rugby in England as well as Australia. However, urbanization and culture will define how the business will utilize geographical segmentation given that people define such areas by a high level of market densities rather than sports cognizant.
Thirds, the plan will utilize behavioristic segmentation where consumer’s preferences and consider feelings. The use of this segmentation is to build customer loyalty to accrue sales and market share increments. Gaining and retaining consumer loyalty is paramount within the sports segment, and therefore, the plan entails to use a behavioristic variable as a tool that captures consumer’s loyalty and through innovations, improves the company growth. Last, the plan will entail a psychographic segmentation, targeting individuals with specific personalities and lifestyles. The plan intends to target people who love watching, playing, and talking about sports since such activities shape these people’s lifestyles and personalities. Transcending products and creating a feeling are two important aspects Nike requires to meet, and therefore psychographic segmentation is a top priority consumer target segmentation the plan will accomplish.
Consumer Decision-Making Process
As one of the leading shoe and apparel brands globally, Nike has to consider and understand the consumer decision-making process to operate well. The consumer decision-making process involves five distinct stages, which are recognition, informative search, and evaluation of alternatives, purchase, and post-purchase behavior. Despite the company making it easy for its consumers to decide regarding which product meets their needs, various factors are weighing in on how a consumer makes their decision when buying these products. Nike provides high quality as well as premium products with an increase in price, and therefore some consumers get reluctant to pay the price as others find it difficult to decide on whether to pay the price or not. However, Nike has utilized technology to offer products with unique designs, and customers have the freedom to place orders with their design through Nike ID technology. Every critical design process of any product from Nike, such as sneakers, has to involve consumers using Nike ID technology, and such an idea transforms through advanced technology factors on the purchase decision process.
Recognition is the first consumer decision process model that has a positive influence on the marketing decision of an organization. Consumer decision-making process (CDP) model takes into account stages consumer undergoes before, during, and after service as well as product purchase (Reddy, 2017). Recognition is an important first stage of CDP and through technology and innovation; companies such as Nike ensure that its reputation for existing and new customer remains high through the provision of high-quality products that meets consumer’s preferences and needs. Consumers are comfortable buying products from reputable brands, and therefore recognition becomes paramount as an important stage of the consumer decision-making process. However, recognition depends on the information regarding such products within the public domain, and this leads us to the next CDP stage, which is an information search. When a company has an informative search engine, the consumer has an easy way to get information regarding the product they intend to buy. Information search has all related information on the internal as well as external resources. Internal resources carry information regarding product storage and previous experience with the product in the same line. As a marketing manager, this report aims to illustrate the plan suitable developing the tactical and strategic marketing plan based on how Nike can offer new products in terms of current and market analysis and company status as well as competitor’s analysis and as far as the best Michael Porters basic strategies are concerned. While external resources carry information regarding the environment and experiences from reviews, consumers will always need reviews, consult friends, and search information available within the public domain before purchasing any product for the first time.
Evaluation of alternatives is the third stage of CDP, where consumers harmonize both internal and external information before purchase. Most consumers, especially first-timers, would go for quality, affordability, and hospitality, making a comparison to alternative products on the market before a decision to purchase is realized. The feeling and rating for grading are key factors that define the evaluation stage. Through grading satisfaction, the consumer initiates purchase as the fourth stage of CDP to fulfill their needs and desire. However, the product should convince the consumer without a second thought in terms of quality, affordability, and hospitality. The last stage of CDP is the post-purchase rating, where the consumer gives reviews and comparisons based on quality, affordability, and hospitality of the brand and associated products. The post-purchase rating stage takes into consideration the consumer satisfaction rate on account that the review might be in support or disagreement with cognitive demand, desire, and needs. It is paramount for Nike to adopt a cost leadership strategy as a form of generic competitive strategy that brings about the sustainability of costs associated with a competitive advantage. Utilization of both cost leadership and generic differentiation strategies will grow Nike’s competitive advantages and reduce production costs as they embrace new technologies available on the market. As a market manager, I believe the use of product development as an intensive strategy reflected in Michael Porter's strategy will make all products from Nike to remain attractive even if consumer preferences change.
Given that Nike already has a global market presence, market penetration will be a secondary intensive growth strategy that increases product affordability, sales revenues, and market presence via an increasing number of authorized retailers. Through market mix and product innovation, Nike needs to utilize diversification through the addition of varied products on the market to be free from financial risks. It is good to note that Nike has one of the best marketing strategies and incur the consumer decision-making process that has been imitated by competitors as far as the field of sports and science concerned. Despite the company making it easy for its consumers to decide regarding which product meets their needs, various factors are weighing in on how a consumer makes their decision when buying these products. Nike provides high quality as well as premium products with an increase in price, and therefore some consumers get reluctant to pay the price as others find it difficult to decide on whether to pay the price or not. The firm should consider three stages of CDP mentioned above, and through innovations and technology, Nike stands a chance to continue being the leading brand across the world.
Recommendation and Improvement
As a recommendation to make improvements and meet the company's aim and objectives, the marketing plan has to be correct in terms of controlling top management procedures as well as administering proper organization departmental guidance. Second, all objectives of Nike should have proper balance and check to maximize profit, budget, market share, and sales. Improvement is a continuous aspect, and therefore targets and continuous analysis should be in place as far as this marketing plan is concerned. Third, the company has to utilize new technology and innovation for effective service delivery and quality provision, taking into consideration the time taken for service and product delivery. Proper setting of milestones, department selection as well as budget allocation should be a top priority as a marketing manager to achieve the objectives of the company. Few errors and use of marketing communication through social media will enhance and utilize product growth globally.
A contingency plan is also an important aspect recommended in this plan since it makes sure that the execution of the marketing plan sticks to the set standards and as per controlled procedures. An alternative plan is paramount in case the first marketing plan fails, and therefore it is recommended for Nike to consider backhouse resources such as the extra budget that the company will use in redefining and redesigning marketing strategies and marketing plans through new designs and communication channels. Broadening product range such as in the provision of parkour and aerobics products, increasing the use of marketing communication channels such as social media and consideration of technology incorporation with gaming companies such as Apple will enhance growth as far as a proposed marketing plan for Nike is concerned. Other recommendations include proper management that will control labor issues easily, offer online video training for product awareness, and consider merger and acquisition with other companies to expand its business portfolio globally.
References
Geurin, A. N., & Burch, L. M. (2017). User-generated branding via social media: An examination of six running brands. Sport Management Review , 20 (3), 273-284.
Li, S. (2019). Intertextuality as a strategy of glocalization: A comparative study of Nike’s and Adidas’s 2008 advertising campaigns in China. Semiotica , 2019 (230), 495-513.
Reddy, G. (2017). Digital marketing impact on the consumer decision making process in Nike's customer retail operations in South Africa (Doctoral dissertation, University of Pretoria).
