Nike Marketing Plan

Cameron irby

Westminster CollegeMarketing 300_03

Professor Christine Ye11/04/14

Table of ContentsExecutive Summary.........................................................................................................................1

Situational Analysis.........................................................................................................................1

Company Analysis.......................................................................................................................1

Competitive Analysis...................................................................................................................1

Environmental Trends..................................................................................................................1

Social and Cultural Factors..........................................................................................................1

Technology...................................................................................................................................1

SWOT Table................................................................................................................................1

Target Markets.................................................................................................................................1

Market Segmentation...................................................................................................................1

Target Market...............................................................................................................................1

Marketing Objectives.......................................................................................................................1

Marketing Strategy..........................................................................................................................1

Product.........................................................................................................................................1

Pricing..........................................................................................................................................1

Place.............................................................................................................................................1

Promotion.....................................................................................................................................1

Evaluation........................................................................................................................................1

Conclusion.......................................................................................................................................1

Works Cited.....................................................................................................................................1

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Executive Summary

Nike is a multination corporation that focuses in footwear, apparel, sports equipment, and

accessories. They lead the global athletic footwear market with roughly a 20% market share in

2012 (Great Speculations 2014).

Nike leads the global market share, however, there are still competitor’s, such as Adidas,

New Balance, and Puma. Adidas and New Balance have comparable business strategies, their

main goal is to be the leading global manufacturer of athletic footwear and apparel. Conversely,

Puma’s business strategy is to become fastest athletic footwear company.

The target market for Nike is sports oriented males and females between the ages of 18-

35. The demand for Nike products is always going to be present and there are always going to be

all ages purchasing Nike products.

The goal of this marketing campaign is to expand awareness of the Nike Flyknit Racer

and increase sales by 25% in one year. The product is a low cut minimalistic running sneaker

composed of Nike’s Flyknit technology. The sneaker is priced at $150 without taxes and

shipping. The products are going to be distributed 60% online retailers and 40% in store retailers.

This is a social media marketing campaign with one promotional contest to win a 1 of a kind

color way of the sneaker. The contest involves posting the print ad with #NikeFlyknitContest.

The results of the promotion will be measured with participation by tracking how many

users shared #NikeFlyknitContest as well as calculating if sales increase by 25%. For the

promotion to be deemed successful, the hashtag has to be shared over 20,000 times on social

media. For sales, there has to be a 25% increase from the year before the promotion to the year

after the promotion.

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Situational Analysis

Company Analysis

Nike is a multination corporation that focuses on footwear, apparel, sports equipment,

and accessories. Their headquarters is located in Beaverton, Oregon. Nike is most renowned for

their athletic footwear and apparel. According to Forbes Nike leads the global athletic footwear

market with almost a 20% market share in 2012 (Great Speculations 2014). They have acquired

several companies throughout the years such as Hurley International LLC, Cole Haan, Converse

Incorporated, and Umbro Ltd. Their mission statement is “to bring inspiration and innovation to

every athlete in the world” (Nike Inc. 2014). They believe if you have a body, you’re an athlete.

Their business strategy involves not only focusing on innovation but creating better products by

working with other companies to inspire the creation of new sustainable processes and products,

and improve the lives of people by maintaining the world’s greatest innovation company. As a

whole, Nike offers a vast range of product lines from athletic apparel, casual wear, sports

equipment, athletic shoes, casual shoes, and athletic cleats. Some of their strengths are brand

loyalty, top market share, quality products, and a nationally recognized logo. Their weaknesses

include foreign labor, higher brand name prices, and high cost of athletic sponsors.

Competitive Analysis

Even though Nike leads the global market share they still have many competitors, also

known as threats, such as Adidas, New Balance, and Puma. Adidas mission statement includes,

“The Adidas Group strives to be the global leader in the sporting goods industry with brands

built on a passion for sports and a sporting lifestyle” (Adidas Group 2014). New Balance has a

mission statement that says, “New Balance aims to become recognized as the world's leading

manufacturer of high performance footwear and apparel, by conducting our internal and external

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relationships according to three core values -- Teamwork, Total Customer Satisfaction, and

Integrity” (New Balance 2014). Finally, Puma’s mission statement is, “To be the Fastest Sports

Brand in the world” (Puma 2014). Adidas and New Balance have similar business strategies in

that they both want to be the leading global manufacturer of athletic footwear and apparel,

however, Puma put a focus on track and field trying to become the fastest athletic footwear

company.

In the athletic footwear market these companies are not comparable to Nike nevertheless

they still pose as a threat. Adidas, New Balance, and Puma have been Nike’s main competition

but Nike always come out on top. The biggest threat for Nike is in the athletic apparel market.

According to Forbes, “The major risks to Nike’s market share growth stem from increased

competition” (Great Speculations 2014). Currently Adidas is the leader in the athletic apparel

market with $8.21 billion in annual revenue in 2012 followed by Nike with $6.33 billion

(Greater Speculations 2014). Another threat is the growing amount of counterfeit products such

as sneakers and clothing. The growing popularity of counterfeit products could obstruct with

Nikes market share and annual revenue.

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Environmental Trends

In today’s world, the terms “eco-friendly” and “green” have become one of the latest

trends that could possibly pose as a threat to Nike’s sales. People who support this trend will

refrain from purchasing products that were manufactured in foreign countries or products that

were manufactured in poor working conditions and unfortunately Nike falls into both of those

categories. Nike is known to manufacture all their product overseas in Asia then import them to

the United States. They have also been involved in a few working condition scandals when

someone has reported that a factory that produces Nike products hires either children or does not

comply with safe working conditions. If the eco-friendly trend rises and more and more people

join it, it could possibly affect Nike’s sales as well as their competitor’s sales.

Social and Cultural Factors

The latest social trends could pose as an opportunity and advantage for Nike because their

footwear is commonly worn for both sporting events as well as a fashionable sneaker. An opportunity

for Nike would be to participate in today’s social trends of fashionable athletic shoes and broaden their

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market from mainly athletic shoes to manufacturing more casual wear shoes as well. If Nike

implemented these opportunities they could see a potential growth in revenue as well as market share.

The current trend in footwear is a lightweight, minimalistic, and fashionable running sneaker than can

be worn casually and be used to run in (See Graph). For instance, Adidas current product line is fitting

the category of stylish minimalistic running sneaker perfectly with the Adidas Pure Boost, ZX Flux, and SL

Loop. Those three product lines are exactly what is trending in our society. Lastly, If Nike expanded their

range of products from only producing predominately athletic shoes to also producing causal shoes so

Nike can be recognized as not only an athletic footwear company. By producing more casual shoes it

could increase their sales which would inadvertently broaden their market share.

Technology

Technology is a huge factor in both Nikes business strategy as well as the footwear industry.

Footwear companies like Nike put technology and innovation at the top of their priorities list. To smaller

competing companies who are trying to gain market share, technology comes as a threat because they

do not have all the amenities that a company like Nike does. However, technology can act as an

opportunity because even if a smaller company creates a certain technology that has never been

implemented in a shoe before and it is marketed properly it could be the newest trend which would

cause the company’s sales to increase rapidly. Whichever way you look at technology it can act as a

treat or an opportunity.

In our society, technology is constantly improving in every aspect of life. In the footwear

industry, new technology is replacing the old technology. For instance, in 2004 the Nike Shox sneaker

was the latest and greatest technology in a basketball sneaker. Currently, the Shox technology has been

replaced with Nike’s newest basketball technology called Flywire which is supposed to reduce weight

while still maintaining the structure of the shoe. Technology also improves beyond just sneakers. A

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company also has to look at how efficient the technology in producing the sneaker is as well. The

company that can manufacture, package, and ship their product the fastest while keeping their costs

down is also a matter of technology.

SWOT Table

Strengths: Brand loyalty Top Market Share Quality Products Globally Recognized Logo

Weaknesses: Foreign Labor Higher Brand Name Prices High Cost of Athletic Sponsors

Opportunities: Social trends of fashionable

athletic shoes Broaden market from mainly

athletic shoes to more casual wear shoes

Threats: Athletic apparel market share

decreasing from competition Increased amount of counterfeit

productso Nike loses millions due to

counterfeit products

Target Markets

Market Segmentation

Nike’s Demographic consists of all ages, all income distribution groups, single or

married, employed or unemployed. Nike accommodates all ages because they offer both male

and female shoes from infant sizing all the way through adult size 15+. They also accommodate

all income distribution groups because shoes and apparel are necessities in today’s society. There

is no discrepancy to single or married people purchasing Nike products because they sell

products for males and females. Finally, as long as they can afford it, employed or unemployed

people purchase Nike products.

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Target Market

After the breakdown of Nike’s demographic, their target market is slightly more specific.

The target market for Nike is males and females between the ages of 18 and 35. This is because

Nike is predominantly an athletic and sports centered brand. Males and females between those

ages are the ones who are typically purchasing their products because they are still physically fit

and active. The demand for Nike products is always going to be present and there are always

going to be all ages purchasing Nike products. Potentially one day they will revamp and expand

their target market to accompany a wider age group.

Marketing Objectives

The goal of this marketing

campaign is to expand awareness of the

Nike Flyknit Racer (as shown in the image

to the right) and increase sales by 25% in

one year. The new flyknit technology is a

“computer-controlled weaving technology,

which knits the entire upper part of the

shoe in a single piece that’s then attached to the sole” (Townsend 2014). Flyknit technology has

been implemeted into 5 types of sneakers running, basketball, soccer, training, and sportswear.

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Courtesy Nike

Marketing Strategy

Product

The Nike Flyknit Racer is the low cut running sneaker in the flyknit collection. It’s

extreme low profile and minimalistic appearance is just a few of its strengths. The flyknit racer is

currently offered in seven different color ways however their all low in stock. The flyknit

technology that the entire shoe is composed of consists of “yarns and fabric variations are

precisely engineered only where they are needed for a featherweight, formfitting and virtually

seamless upper” (Nike Inc. 2014).

The flyknit racer is currently the only one in its product line of flyknit running shoes

however there is a flyknit trainer that is similar to the racer although its main purpose is for

working out and training. Potential modifications to the flyknit racer could be improvements to

the flyknit construction as well as offer another model that focuses on casual running rather than

performance running. The new model could act as an addition to the product line and could use

more materials combined with flyknit technology.

Branding is something Nike is most renowned for. The Nike Flyknit Racer features Nikes

signature “swoosh” logo on both side panels of the sneaker as well as on the tongue. Nike places

high value on brand name and brand image so they place their Nike swoosh on the side panel of

almost every sneaker they manufacture and that adds to why their logo is arguably one of the

most well-known logos in the world.

Pricing

Nike has priced this shoe very competitively in comparison to their own products as well

as other competing products. The current price for the flyknit racer is $150 without taxes or

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shipping (if applicable). It is a good price when compared to Nikes yearly air max running shoe

which is priced at $180 and features far less innovative technology. However, one of its

competitor’s, the Adidas Pure Boost is priced $30 less than the flyknit racer at $120. Relatively

speaking when a customer is in the market for a high performance, high technology, and high

reliable running shoe, the $30 difference is not going to differentiate a sale.

As a customer’s perspective lowering the price point more around $120-$140 considering

the average cost for a brand name running shoe in 2013 was $88.26 (Statista 2014). Although,

when looking at Nike’s target market of 18-35 year old athletic enthusiasts, they could pay a

premium for new innovative technology. Comparing other Nike products along with competitors

I would conclude that Nike should stick with their current price point of $150 for the flyknit

racer.

Place

The major focus of sales should be put on internet based retailers considering the online

shopping market is rapidly increasing and the retail market in decreasing. An appropriate

distribution strategy would be to send 60% of all inventory to various online retailers such as

Nike, Eastbay, Champs Sports, Finishline, Foot Locker, etc. Then distribute 40% to in store

based retailers such as Champs Sports, Finishline, Footlocker, and Niketown.

The distribution plan is going to be a vertical marketing system in which Nike is the

producer and they are distributing their product to wholesalers who then distribute it to their

various retail stores. However, Nike is also going to act as the retailer because they provide an

online web store as well as in store locations called Niketown’s. This method used is going to try

and maximize profit while lowering costs and effort. If Nike was the only one who manufactured

and retailed the product that would be the best way to maximize profit, however, it would take

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longer to sell all the products and it would be an immense burden on Nike to manage all those

sales and inventory.

Promotion

The majority of promotion in this marketing campaign is going to come from social

media. This is going to be a test to see the success rate of social media marketing campaigns. The

campaign is going to begin with several print ads which will be posted of various social media

sites such as Facebook, Twitter, and Instagram.

After one to three months of promoting

the flyknit racer, Nike will post a contest and

the winner will receive a one of a kind color

way of the flyknit racer (color way will not be

shown to public). The rules of the promotion

are after Nike posts the print ad announcing

the promotion each user will copy and paste the picture and share it on their various social media

accounts with the hashtag #NikeFlyknitContest. Every post with the hashtag will count for an

entry into the contest. The contest will accept entries on Facebook, Twitter, and Instagram. A

randomizer will be used to select the winner and they will be direct messaged on social media. If the

selected winner does not respond within five days, another user will be selected using the randomizer.

This process will be repeated every five days until the selected winner responds via direct message with

their name and address to ship the shoes to.

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Evaluation

The results of the promotion will be measured with participation by tracking how many

users shared #NikeFlyknitContest as well as calculating if sales increase by 25%. If there are

more than 20,000 posts on Facebook, Twitter, and Instagram this social media marketing

campaign will be deemed successful. If this social media marketing campaign is successful there

will be more created in the near future.

Nike’s benchmark is set at 20,000 posts with the contests hashtag although if the hashtag

receives 15,000 posts the successfulness of the campaign will be taken into further consideration.

Anything less than 15,000 posts will conclude that social media marketing campaigns are not

successful and social media should only be used to post pictures of products and for CRM.

Calculating the increase in sales is done by recording the year sales the day before the

campaign starts then after the yearlong campaign is over calculate its sales. Compare each

yearlong sales and calculate if there was a 25% increase after the campaign ended. We set a

benchmark at 25% increase in sales although anywhere from 15-25% increase will be considered

successful.

Analytics will also be used to track the popularity of each post of social media. The

analytics will show which post was the most successful in terms of likes and comments. The

analytics will also show the best time to post an image on social media for future campaigns. It

will also show the time frame of the most posts with the hashtag #NikeFlyknitContest.

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Conclusion

This social media marketing campaign on the Nike Flyknit Racer has an objective to

promote awareness and increase sales by 25%. Nike will benefit from this marketing campaign

because they will increase sales as well as find out how successful social media marketing

campaigns are.

The Nike Flyknit Racers low profile and minimalistic appearance are just a few of its

aesthetics. The price point will be $150 which is slightly higher than competitor’s although the

technology is unlike any other. The distribution will be 60% online retailers and 40% in store

retailers. This campaign is strictly a social media campaign with one promotional contest to win

a 1 of a kind color way of the sneaker. The contest involves posting the print ad with

#NikeFlyknitContest.

The achievement’s from this plan not only will increase sales and improve flyknit

awareness, it will also expand Nike’s brand online which will increase their influence on social

media. Nike will gain a larger following which will allow them to promote products to an even

larger audience.

Works Cited

Adidas Group. "Our Mission, Vision, and Values." Adidas Group. N.p., n.d. Web. 16 Nov. 2014. < http://careers.adidas-group.com/mission-and-values.aspx>.

Great Speculations. "Nike Shares Can Find Some Zip On Emerging Market Sales." Forbes. Forbes Magazine, 11 Apr. 2013. Web. 11 Nov. 2014. <http://www.forbes.com/sites/greatspeculations/2013/04/11/nike-shares-can-find-some-zip-on-emerging-market-sales/ >.

Great Speculations. "Why Nike Will Outpace The Sports Apparel Market's Growth." Forbes. Forbes Magazine, 13 May 2013. Web. 16 Nov. 2014. <http://www.forbes.com/sites/greatspeculations/2013/05/13/why-nikes-growth-will-outpace-the-sports-apparel-markets/ >.

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New Balance. "Our Mission." Tricity New Balance. N.p., n.d. Web. 20 Nov. 2014. <http://www.tricitynewbalance.com/mission.php>.

Nike Inc. "Business Overview." Nike CR Report. Nike Inc., n.d. Web. 12 Nov. 2014. <http://www.nikeresponsibility.com/report/content/chapter/business-overview>.

Nike Inc. "NIKE Engineers Knit for Performance." NIKE, Inc. N.p., 21 Feb. 2012. Web. 18 Nov. 2014. <http://news.nike.com/news/nike-flyknit>.

Puma. "Strategy." PUMA®. N.p., n.d. Web. 14 Nov. 2014. <http://about.puma.com/en/this-is-puma/strategy>.

Statista. "Average Price Running/jogging Shoes United States 2013 | Statistic." Statista. N.p., n.d. Web. 19 Nov. 2014. <http://www.statista.com/statistics/280408/average-price-jogging-running-shoes-us-channel-of-distribution/>.

Townsend, Matt. "Is Nike's Flyknit the Swoosh of the Future?" Bloomberg Business Week. Bloomberg, 15 Mar. 2012. Web. 18 Nov. 2014. <http://www.businessweek.com/articles/2012-03-15/is-nikes-flyknit-the-swoosh-of-the-future>.

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