NIKE Overview

Introduction

NIKE globally renowned sports giant based is USA. The company involve in production and
designing of apparel, footwear and related services and equipment’s of sports category. NIKe is
known as the market leader of sports market grabbing the greatest share in sports category. NIKE
conduct effective and efficient marketing and ad campaign to be at top and meet customer it’s
customers satisfactions globally.

NIKE 5Ps of Marketing

The NIKE approach for marketing mix involve designing and manufacturing products and
services for health conscious segment of people and it’s main focus is on designing a customize
footwear for every sports category like football, cricket, basketball etc. market conditions
drastically changed over the time so as marketing mix need to be revised as accordingly. This
revisions is important to maintain organizational success and to meet the market trends and
innovation which impact user needs globally.

Marketers usually use 5Ps of marketing as a tool to analyze how well and efficiently an
organization is initiating and executing it’s marketing campaign and promotion strategy to
capture bigger market share, increase revenues and sales and build a loyal customers base in a
long run.

We are going to analyze how products attributes and diversification affect NIKE product
approach. How it handle it’s prices to capture huge share. How well its promotion and
advertising campaigns successfully attracting new customers and retaining existing ones. How
successfully NIKE expand its access for it’s customer so products are easily available and
maintain and good customer experience. People factor elaborate how NIKE will manage it’s
work force to retain best talent from all around the world. Now let’s discuss in depth how 5Ps of
marketing mix work in case of NIKE.

NIKE - Product Approach

Nike product approach mainly focused on product attributes, innovation and so it is offering
number of products including diversification as it deals in number of products that is includes
clothing, footwear, and related items.

All NIKE products are of premium quality and it offered a range of products for every sports
lover perfectly considering product factor. Being a market leader in sports industry NIKE is
earning most of its revenue from sports shoes.
NIKE is producing customize design of shoes for different sports category to delight it’s users.
Top rated and most trending product of NIKE are sports shoes which make it a market leader and
grow it’s sales heavily. NIKE also focusing innovation by incorporating new technology and
health factors to improve it’s products to cater health conscious and tech lover segment. NIKE
also offering casual shoes category for youth by using bright colors to depict energy. It also cater
kids, men and women by offering an eye catching sneakers for all. Some of favorite brands are:
Nike Air Max, Air Huarache, Nike Blazer etc.

Price Approach

Nike pricing model based on premium price as it’s committed to design and produce premium
quality products to cater it’s target market. NIKE also use value based pricing strategy. Value
based pricing strategy means market will define itself what should be the price of product and
should be decided on the basis of market conditions. NIKE design a strategy that evaluate
customer buying willingness to pay before it define product prices that help out NIKE to set a
realistic price that a customer will pay.

NIKE also offering cutoffs and sales on specific products on different occasions like Easter or
Christmas etc. This strategy help out NIKE to reward it’s loyal customers and also attract the
new ones. Premium quality standard of NIKE products justify it’s prices strategies but with the
passage of time NIKE need to accommodate lower class to expand further.

Place Approach

NIKE had vast network of physical stores outside America. It’s owns 45 direct outlets on
different locations and territories. Due to the nature of product offered by NIKE customer prefer
to visit physical store to check out products personally. NIKE chose specific locations for it’s
physical stores based on idea that clients can easily access all the required products and services.

NIKE establish a physical store which is know as NIKE Town where Nike establish huge stores
that include all top rated and latest products available under one roof. It provide all it’s visitor’s a
premium buying experience offering complete customization facility and professionals sales
personal that guide on products features and benefits.

Promotion Approach

Nike's promotional activities involve well designed marketing and ad campaigns. It’s ads are
featuring out class celebrities of sports category representing different nations or countries like
Serena Williams, Ronaldo, Rafael Nadal etc. It also offering sponsorships on sports to promote
it’s products.

NIKE also focusing on non traditional ways of promotion that is known as direct marketing
which it done with the help of interacting with through verbal communication with colleges,
faculties, firms and sports activist groups. They are offering financial grants to NGOs to build
PR and brand image.

NIKE target market include youth, sports lovers, health conscious category and premium class.
Social media is the trending approach which influence each and every individual especially
youth so it’s a great tool to conduct mass promotion via campaigns as NIKE prominent
campaign “just Do It” catch the attention of vast majority. NIKE also execute a successful social
media campaign with the hashtag #YouCantStopUs expressing the slogan that all sports
categories are perfect and everyone has right to take part in them.

People Approach:
It’s a real challenge to effectively utilize and retain human talent by an organization. It’s the
greatest challenge right now to develop and retain this human capital in a right way. A
productive human capital is real competitive advantage for an organization that boost it’s
performance and revenues.
Due to importance of workforce NIKE put heavy investment on its human capital to provide
them greater growth opportunities and faster career ladder. NIKE with good compensations and
also providing education and trainings to it’s workers to further enhance it’s people asset. It
motivate it’s employees to make them more productive and satisfied.

Nike - PEST Analysis

So now let’s apply PEST analysis on NIKE. We need to analyze how political, economic, social
and technology factor impact on NIKE operations.
Political Factors
Political factors drastically influence a company operations where it is located. Like in the case
of Iran when I government impose sanctions on it NIKE also banned to sell it products to Iranian
athletes. Due to these sanctions that are imposed for a long time NIKE products and services are
not much like by Iranian people and those against these sanctions. It ultimately create a negative
brand image in NIKE customer base.
Recent advertising campaign launched by NIKE that is featuring Colin Kapernick; named as
“consider in something”. Colin Kaepernick is highlighted as a controversial personality as he is
accused of injustice and racism. NIKE should involve all those activities which can hurt it’s
customers and create hatred.
Luckily USA policies are quite favorable for the growth of NIKE. USA government rules and
regulations offer great opportunity to NIKE to boost it’s sales. NIKE is facing fluctuations in
production laws and tax rates globally.
Economic Factors
Economic recession is the biggest challenge that NIKE face during covid 19 and the risk still
exist in the near future. To cope up this risk NIKE establish it’s production units within Asia and
USA. Recession also pose higher cost of acquiring labor and material.
NIKE is operating in a highly competitive market and generating high revenues which means it
had to bear minimum labor costs. Although the labor cost issue addresses recently now in most
of the countries which could effect Nike’s sales in near future.
For a long time NIKE has shows positive figures regarding it’s stock performance and revenues.
Recent drastic competition and fluctuations in exchange rates would definitely hit NIKE in a
negative way.
Social Factors
Today fitness is the most trending phenomena that is followed by vast majority especially youth
is very health conscious. It’s a popular thing to join gym or fitness centers to improve health.
NIKE can take advantage of this trend as these people are easily attracted by the products it is
offering. This could the prime category for NIKE products and services.
NIKE face continuous challenge of low wages, long working hours and bad labor conditions
specifically in Asia. Due to greater access and ease provided by social media to the people all
around the world this issue is quiet alarming for NIKE which it need to be addressed on priority
basis as it can damage it’s brand image and sales negatively.
Technological Factors
The greatest challenge today organizations are facing is to meet technology demand as everyday
a new gadget or technology introduced. There is handsome amount of technology lovers out
there who love to experience new innovation done or introduced by different organizations.
Incorporating innovation in it’s products make an organization more competitive as compare to
it’s rivals. Technology definitely benefit in defining product features and design, stock handling,
pricing model and approaching customers.
NIKE top management evaluated on the basis of level innovation incorporated in it’s operational
process start from design, production, promotion and distribution of the product. Social media
channels boom in recent year force NIKE to ensure its presence on every platform to enhance
brand awareness among audience. NIKE is also offering customization and tech oriented
products to meet the innovation pace successfully.
Nike’s SWOT Analysis
SWOT analysis is prominent tool used to analyses business approaches. Let’s analyze NIKE
SWOT analysis how different factors affect it within business environment.
Strengths
 Strong brand image - The NIKE create a strong and powerful brand picture a ND position
in the mind of it’s target audience. Being the strongest player in the sports industry NIKE
is the most reliable and top brand specially in shoes category.
  Diversification in Brand portfolio – despite the fact that NIKE is doing best in footwear
category still it drastically diversified it’s product range. This diversification minimize
the risk of dependence of NIKE on a single product or category.
 Low labor and material cost – NIKE production units in Asia give it a great advantage of
low la or and material cost which enable it to produce it’s products on very low cost.
Weaknesses
 Drastic dependence on USA market – figures shows that more than 40 of the NIKE
revenues came from American market in 2018 and number still grows further. These
figures shows how much NIKE dependent on USA. It’s a weak point for NIKE as
revisions in tax rule or government policies will negatively influence company earnings.
 Production through third party – although NIKE is producing low cost products from it’s
Asian unit but it create negative brand image as organization is accused of exploitation.
So Nike has two options one is to produce customize products and the second one is to
delegate production to other party. NIKE chose to delegate it’s production to a third party
which means standard of premium quality would be compromised.
 Top focus is footwear category – NIKE introduce diversification in the shoe category
itself but it still focused on its top brand which is shoes. With the passage of time NIKE
need to expand on different horizons to stay in market.
Opportunities
 The growing market – world become a global village containing a number of people from
different nations which are more vibrant and energetic than ever before. NIKE need to
work extensively to grab a great market share and tap the opportunity to attract new
audience to increase its profits.
 Developing nations – developing nations are the biggest opportunity for NIKE as they are
emerging markets to promote products. If NIKE successfully position a build a strong
brand image it could further expand and reduce it’s dependence on USA market.
Threats
 Taxation. – tax rates fluctuations is a great threat for NIKE and it could influence it’s
revenues.
 Competition - Nike competes in a relatively competitive sports wear marketplace, with
strong rivals like Adidas, Reebok etc. NIKE need to play aggressively to survive and
retain it’s position as a market leader.
 Counterfeiting - Like other brands NIKE clothing also face the challenge of fake or
copied products. NIKE need to ensure that fake items does not harm it’s core business by
taking legal steps or by using an efficient marketing campaign to encourage people to buy
original products.
References:

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