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Executive summary The purpose of this text is to give a comprehensive look over the past achievements of Nike Inc. The author is offering a brief history and is presenting, Nike Inc through the Marketing Mix of a company. All 4P’s Product, Price, Place and Promotion are presented and systematically defined and explained. Examples about the 4P’s are given and suggestions are made. Some opportunities that Nike must try to achieve and threats that the company has to overcome are described. In the conclusion the writer is presenting its own opinion about the future development of the company. 1.
Introduction: The story of Nike Company started in the year 1962 when an accounting student from Oregon University Phil Knight and middle-distance runner Bowerman started a “crazy” idea to import innovative sporty shoes from Japan into USA. The beginning was encouraging and in the year 1965 the first full-time-employee joined the company a middle-distance runner called Johnson. Following, in 1966 the first retail store opened its door under the name of Nike Inc. Starting with 500$ capital and a handshake , after 35 years Nike Company is the biggest sports shoe and sportswear company in the world.
Nike Inc is counting on the Marketing mix of the 4P’s to continue it’s growing pace and maximize profits. Although all 4P’s are important for the company, product and promotion are the areas where Nike is most striving to achieve. 2. Product: Product is” anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or a need” . Nike Inc. fully comprehends the brilliance of the 4P’s and tries to follow strictly all points of the Marketing mix. The company offers great diversity of products to its customers.
Starting from sport shoes, sportswear collections and finishing with equipment for practicing extreme sports. Every year Nike is offering to its customer’s new collections with big assortment of design, variety and features. Nike is future minded firm, but the company must consider designing new brands of shoes, clothing and specialized equipment to serve better the masses. Clothes for different gender, age, style and unusual sports are produced, but there should be greater variety of choice for the customers to choose from. Only by doing this Nike Company can count on customer loyalty.
Designing products more economically is an option but quality must be mainta ined so that more people can afford buying Nike goods. Although, Nike is offering to its customers, products with good quality, diverse design, lasting warranties and big amount of features there are areas where Nike must consider improvement. The company brand name is well know all around the word, offering big diversity of products, innovative design, great amount of features, excellent quality, long lasting warranties and attractive packaging. Price:
The formulation for price is” the sum of values that consumers are willing to exchange in order for the benefits of having and using a product or service”. Nike Inc. comprehends that price is the major factor in a deal or exchange of a product, so the company is moving its production in places where labour is cheap and low wages are paid. By decreasing the cost of production, Nike is allowing itself to reduce prices and to attract more new customers. Nowadays, Nike is lowering prices, so that customers from Asia and Africa can afford theirs products.
The Company is also increasing production in Pakistan and India where the working hand is low-priced. Another beneficial step for Nike is if they start to offer home deliveries (like pizza’s companies. To increase sales Nike is offering family discounts, enhanced payment periods and excellent credit periods. Only by using the forces of globalization, Nike can secure safe future. Place: The definition for place is “All the company activities that make the product or service available to target customers”. Nike goods are sold about in 29,000 stores in USA.
Outside US Nike products are sold in 120 countries. All this shows that the company is determined to offer its product wherever is possible so. According to Nike, e-commerce represents an immense possibility and new place for selling its products. Also the company is creating new websites, and is offering e-coupons and e-bays to attract new customers faster that it’s main competitors. The Firm is increasing inventory so that it can allow customers to choose from bigger assortment of goods. Nike is starting to explore the markets in Asia and Africa because they are offering high potential for profit.
When dealing with reaching maximum efficiency, Nike Company must consider the opportunity of opening store and franchise in different spot and target other groups of potential buyers. Safe and fast supply chains must be secured, allowing huge presence of stocks in America, Europe and Asia. The company transportation or delivery of goods is mostly done by ships, which is a cheap way but simultaneously very wasteful of time. Promotion: Promotions are all the “activities that firms communicate the product or service and its merits to target customers and persuade them to buy’ (Liassidis, 2006).
Communicating directly with customers and understanding their wants and wishes is one of the major goals for Nike Inc. Nike Company is giving extra funds to advertising and sales promotion on sports events, because Addidas and Reebok are offering the same pricing and eminence and can easily take away Nike’s customers. The company is considering advertising heavily on sport occasions, in colleges and universities, places where young people gather. Nike task is to attract new customers, but the company must ensure that their old regulars are not lost.
Nike’s association’s with successful athletes is a winning combination for the company. Bill Perez said: “We saw FC Barcelona win the Spanish League. Juventus win the Italian League. PSV win the Dutch League. Arsenal wins the FA Cup. Ronaldinho named FIFA Player of the Y ear. Thierry Henry wins Europe’s Golden Boot Award. Brasil win the Copa America. All in Nike Gear. “. Through the advertising campaign of “Just do It”, Nike managed to persuade its customers that the company products are quality and durable.
The company turned the old fashion working-out into something new, sexy and exciting with the products of Nike Inc. As a sales promotion Nike is also sponsoring the Lance Armstrong Foundation giving 1$ of every purchase made in the collection 10//2. Opportunities: In my opinion, there are several existing opportunities that Nike must take advantage from. New markets like Asia and Africa should be better penetrated. Further development of E-commerce ought to be done. The situation in the USA economy is good and that means better profits for Nike and the other main competitors.
A present problem, but a future possibility may be that Nike is offering the same line in Tokyo, New York and in Bangladesh. Customers are different and their needs are different. Nike must understand this fact and try to satisfy the various wants of their clients. China and India offer huge market and Nike must try to “grab a piece of the pie”, but also to maintain its good attendance in America and Europe. Threats: Consumers are spending less than they used in the past, and clients may look for discounted products.
Discounts are not Nike’s strongest quality. When decreasing prices it is obvious that quality is falling too. But clients are buying Nike products because of combination of factors and quality is one of them. Quality, durability, prices, designs all these are important factors that affect customer’s choice to obtain a given product. If clients are satisfied by all factors then they will buy again and again Nike’s products. In a search for new customers Nike could lose its present loyal customers, so measures must be taken to prevent this from happening.
The niche of sportswear, sport-shoes and sport equipment is “very well filled with the presence of Addidas and Reebok”, so the threat of new firms inflowing the industry is very small. Another problem heavily concerning Nike is the “wave of criticism from human rights and child labor organizations”. (Loche, 2003) All this must be taken seriously by the board of Nike Corporation, because today Nike is N: 1, but tomorrow is a different day. Conclusion: Like Mr. Perez ex C. E. O of Nike Company said” the-lower-priced segment is the fastest-growing segment on the footwear market”.
The company should focus on that segment, because the market demands that niche. When decreasing the prices, Nike can easily enter the fast growing markets in China and India. The company supply-chain problems must be fixed, if the company wants to maximize its profits ever. Because of some shipment delays Nike Inc. is losing money worldwide. Although this problems nowadays Nike is the biggest company in the sportswear industry. Selling its products in 126 countries and having 500, 000 employees worldwide, the future of the company seem secure. Nike Company must persist to play with the marketing mix of the 4P’s.
In my opinion Nike, should continue to count on its innovative style and fashion design. Only by continues desire to keep customers happy Nike Inc. can attract new customer and maintain the old loyal ones. Reference: 1. Liassidis, C. (2006) The Marketing Mix of the Four P’s [4Ps]. 2. Locke, R. (2004) The promise and Perils of Globalization: the Case of Nike. [Online] Available from: web. mit. edu/polisci/research/locke/nikepaperFINAL. pdf [Accessed 27 April, 2006] 3. Perez, D. (2006) Slightly tasty Nike divorce come down to data vs. Feel. [Online] Available from: [Accessed 27 April, 2006]