Evaluation of Marketing Strategy
Introduction4
The brand.4
The organizational strategy.5
Strengths of the marketing strategy..6
Weaknesses of the marketing strategy..8
Marketing mix..8
Product..8
Price..9
Place.9
Promotion.9
Conclusion10
Appendices10
Appendix 1: SWOT Analysis..11
Appendix 2: PESTELEL Analysis..11
Appendix 3: Michael Porter’s Five Forces Analysis12
References List ..13
Executive summary
Nike, Inc. is a leading manufacturer of footwear, apparel and equipment globally. The company has enjoyed a long history of success due its consistent marketing strategy that gives it a competitive advantage. Nike uses a various strategies to maintain its lead in the vast global market. This study assesses the effectiveness of the marketing strategy of mercurial vapor, a footwear, manufactured by Nike, Inc. Mercurial vapor describes a football boot that is designed for various football players. Nike has manufactured the tenth version of this boot. While launching the eighth version, Nike featured Cristiano Ronaldo in the online marketing strategy. This study utilizes secondary sources which have provided background information for the development of this paper. The study finds out that Nike’s consistent growth is tied to its robust and impressive marketing strategy. This strategy encompasses a marketing mix that involves the Ps of marketing (product, place, price and promotion) as well as high product differentiation.
Key Words: Competitive advantage, Nike, Inc., mercurial vapour, product, place, price and promotion.
Introduction
Located in Beaverton, Oregon, Nike, Inc. has played a central role in the design, development and marketing of footwear, apparel and equipment globally. This company has experienced significant growth over the years. Currently, Nike is the largest designer, developer and supplier of athletic shoes and apparel all over the world. By the end of 2012, the company realized total sales volume amounting to US$24.1 billion (Blery et al., 2014). This figure is no mean achievement. Nike relied on a well-developed online marketing strategy to endear its products to would-be buyers. Since soccer is a global games enjoyed by millions of fanatical followers, the prospects highlighted could have been achieved through a robust marketing strategy. To reach a wide audience, Nike relies on its online platform to create awareness of new products and promote products to realize high profit margins (Hair & Lukas, 2014). This paper evaluates the company’s online marketing strategy for the company’s major footwear, mercurial vapour, by assessing the strengths and weaknesses of the strategy. The study also explores the marketing environment by focusing on SWOT, PESTEL, and Michael Porter Five Forces analyses.
The brand
The Mercurial Vapor refers to a football boot that is designed and developed by Nike, Inc. The key characteristic of the boot is its light weight. This brand is favoured by many international football stars including Cristiano Ronaldo, Raheem Sterling, Didier Drogba and Douglas Costa (Chaffey et al., 2009). The players who use this boot are mainly strikers and wingers. The company produced its first ever mercurial vapour boot in 1998. The boot was mainly designed for Ronaldo and was used in the 1998 FIFA World Cup. The demands of this brand have been favourable across the world. Global players around the world have bought this boot to enhance their speed whenever they are playing football in local and international stages. Because of this popularity, mercurial vapor has enabled the company to realize high profit margins. North America, China and South America have led the world in terms of demand for this boot (Abraham, 2013). Nike utilizes retail stores, retail accounts, websites and independent distributors across regions in the world to sell this boot. The online platforms consist of the company website where this shoes can be obtained directly when a would-be buyer goes online and accesses the company’s website.
The marketing strategy
The online strategy consists of widespread social media campaign. Nike has utilizes the wide social media market to market its footwear. These social media sites include Facebook, Twitter and Instagram in which this brand is sold. The company has a Facebook page where visitors can access and see the types of products that the company manufactures. Facebook in countries or regions where the brand sells most are likely to see the brand being advertised on their pages (Hair & Lukas, 2014). When they click the site, they are redirected to the company’s online platform where they can access a wide gamut of products and buy the brands of their choice. The use of online advertising has helped the company meet the increasing online market. As technology increases the number of people visiting websites for information, more companies take to websites to market their brands.
Nike has developed a series of adverts used on both websites and visual media to promote the various types of mercurial vapor. The mercurial vapor is popular because of the intense marketing campaign by the manufacturer and also for its light weight that makes it easy for footballers to sprint as they chase after the ball. The latest strategy by the company was an advert featuring Cristiano Ronaldo. In the advert, Ronaldo is seen running after the ball. He wore orange mercurial vapour 8, the eighth version of the mercurial vapour shoes. A could of dust could be seen behind the shoes which depicted Ronaldo as running fast towards the goal. The company used colourful images that conveyed a message of victory to an intended audience. A look at the advert revealed three fundamental components of nay win. They include resilience, enthusiasm and determination (Quester et al., 2007). Ronaldo was displayed at the centre of the image, thereby depicting his as being in control of the situation. Reports indicates that since the advert was launched, the company has registered a steady increase in revenues. The increase comes at a time when Nike faces stiff competition from rivals that offer competitive brands to the same target market.
Strengths of the marketing strategy
Despite competition and dynamic nature of consumer taste and preferences, Nike has relied on various strengths to fortify its lead in the global retail market. The company’s major strength lie in its strong global brand. Currently, Nike is a household name in various parts of the world. Young people in all football regions of the world want to associate with Nike and its products. Although the products range from football boots to apparel, the popularity of the boots in the world cannot be doubted. In the world today, the company can take pride in being the most cherished sports brand globally (Ferrell & Hartlinne, 2012). The company logo is easy to recognize. But how has the company made a strong global brand over the years? Nike has a long history of association with international stars while promoting its online brands. Some years before, the company embarked on a mission to promote basketball brands online and online and through visual media by use of Michael Jordan. During that time, there was an increase in the sale of sneakers. The Jordan shoes quickly gained market traction as many people visited the company’s stores and online platforms for the ‘Jordan shoe’. In the same manner, many people demanded Nike’s mercurial vapour shoes when the advert featuring Ronaldo went viral. In this regard, the company used a successful marketing strategy to increase its sales revenue. The company’s ability to maintain its global appeal has enabled it to enjoy a strong market lead despite competition.
Another strength of the online brand is the low costs involved in manufacturing the products. Nike uses a strategy which involves manufacturing the footwear outside the United States. The company works in collaboration with independent contract manufacturers. These agents have many factories that produce these shoes. For example, Vietnam, China and Indonesia produced 43%, 28% and 25% of footwear branded with Nike logo. This strategy implies that the company is able to save a lot of money to promote the brand through its online platforms. Studies by Belz & Peattie (2009) revealed that the higher the profit margin, the higher the chances of a multinational company to engage in a robust marketing campaign. The high profit margin gives room for further spending in brand marketing to ensure that the brand receives deserving awareness from the target market. The extent of awareness is determined by the number of shoes sold in a given time. In this regard, a company is able to tell if the money spent in a campaign comes back in the form of increased sales volume. Nike has various operations in countries such as Brazil, Argentina, India and Mexico (Chaffey et al., 2009). The choice of Brazil and Argentina cannot be disputed given the long history of professional football in the two countries. China provides a diverse market for footwear owing to its burgeoning population as well as its ability to use cheap raw materials in the manufacturing of footwear.
The company online marketing strategy has been aided by continuous research and development. Unlike other competitors, the company invests resources in the design and marketing stages. One of the key factors of a company like Nike is the ability to come up with creative designs of footwear and the ability to market the design to a wide audience. Because of this reason, the latest type of the mercurial vapour is mercurial vapor X (Hair & Lukas, 2014). This statement means that the company has designed ten brands of mercurial vapour shoes in less than two decades. The company has embarked technical design and strategic marketing to promote its brands. In this regard, Nike has continued to produce good brands by use of diverse staff with different specialties to help with different aspects of the design of the shoes. Nike also relies on research to determine the specific online websites that should help in marketing the products. Popular websites in many countries have hosted adverts of Nike’s online brands. This strategy has made it possible for people across the world to access the company’s products.
Weaknesses of the strategy
Even though Nike stands tall among its competitors in the market, the company has a number of weaknesses affecting its marketing strategy for online brands. There are concerns that the company has poor labour practices. The work environment for the company’s employees has been deemed deplorable (Zeithaml et al., 2010). Although the company has developed initiative to improve the conditions of the workers, there are fears that the company’s factories in developing countries are yet to meet acceptable conditions. The company pays very low wages to its million workforce. This negative publicity can hurt the company significantly and makes it undesirable for customers. Customers that value high ethical standards would not pay attention to the online marketing strategy of a company that violates the rights of workers by entrenching unhealthy work practices (Jobber & Ellis-Chadwick, 2012). Although the company takes pride in low-cost manufacturing, it is said that the price of footwear, especially the mercurial vapour, is relatively higher than what the competitors charge. In this regard, the online marketing strategy may not help in convincing middle income buyers to consider buying the company amid the existing threats of substitutes form competitors.
Marketing mix
Nike employs a strong marketing mix to maintain a strong lead in the market. The company’s marketing mix comprises the four Ps of marketing namely product, price, place and promotion.
Product
Nike develops a wide gamut of footwear. As indicated above, the company has ten types of the mercurial vapour used by international football stars. In addition to footwear, Nike offers equipment and apparel (Churchill & Lacobucci, 2004). These products are sold to millions of customers around the world. At first, the company began by selling apparel and athletics bags before venturing into the lucrative footwear business. These products reach a wide market which include men, women and children. In addition, Nike sells hockey sticks, jerseys and ice skates. The diversity of the company’s products implies that many buyers can find a wide range of products that meets their taste and preferences.
Price
Nike uses a competitive pricing regimen to ensure that it retains a market lead. Pricing requires delicate considerations which include retaining customer while achieving profits to ensure growth and sustainability of business. The company pegs its pricing on the various market segments. The company is highly valued in the market. In this regard, it employs vertical integration by engaging in various channels to control costs. This strategy helps in determining product pricing.
Place
The company uses various stores locally and internationally to sell its products. There are over 20,000 retail accounts in the United States and 200 countries globally (Kotler & Armstrong, 2010). The company uses independent distributors and subsidiaries to reach out to distant markets. Apart from distributors, Nike has customer service services in many parts of the world. In this regard, the place strategy enables the company to achieve its expansion mission.
Promotion
The promotion of the company is contingent upon the availability of store locations. The company utilizes print, visual and social media advertisement to reach out to a wide global audience. The print advertisement is done using newspapers in different countries and creating strategic partnerships with sports associations globally. The use of athletes and footballers during promotional events buttress the company’s commitment to profit maximization. Already, Nike has partnered with stars like Ronaldo, Renaldo, and Roberto Carlos (Feizchou, 2011). In basketball, the company has partnered with Jermane O’Neal while Tiger Woods of Gold has featured in the company’s promotional campaigns. The use global stars in the promotional campaign underscore the company’s mission towards internalization. Promotions also involve sponsorship of events such as the Golden West Invitational. Nike’s brands are easily recognizable owing to the uniqueness of the company’s logo. The quality of its products contribute significantly in the company’s increasing international reputation.
Conclusion
This paper sought to evaluate the marketing strategy of an online brand. The brand under study is Nike footwear called the mercurial vapour. The study reveals that Nike’s marketing strategy has been designed to in a way that is appealing to a wide global audience. The company uses international stars who feature in most of its brands to encourage buyers to purchase the company’s products. The marketing strategy for the mercurial vapour featured football star, Cristiano Ronaldo. The use of stars in marketing underscores the company’s commitment to an international appeal. Nike relies on print, visual and social media while marketing its brands. These use of diverse marketing platforms increase awareness towards the company’s brands. The study has revealed that Nike employs the four Ps of marketing effectively to realize an increase in sales.
Appendices
This section focuses on the market environment. It explores three market environment analysis tools namely SWOT, PESTEL and Michael Porter Five Forces Analysis.
Appendix 1: SWOT analysis
This section explores the strengths, weaknesses, strengths and opportunities of the brand. The major strength of the brand lies in the competitive ability of its manufacturer. Mercurial vapor relies on Nike’s global appeal to give it a competitive advantage. In addition, the product is light in weight, making it popular among international players. The weakness of this brand is the exposure to international trade (Santos & Laczniak, 2015). The differences in currencies leads to unstable profit margins. The opportunities for the brand depend on the company’s product development. The company ability to develop ten types of mercurial vapour in two decades gives evidence of product development. The threats of this brand include competition from rivals such as Rebook, Puma and Adidas. These companies produce less costly boots.
Appendix two: PESTEL Analysis
This consists of political, economic, social, technological, environmental and legal aspects in the design, development and marketing of the brand. The political stability in the countries manufacturing Nike’s brands has made it possible for the company to market beyond the borders (Abraham, 2013). Government policies on taxes have been favourable for the company. The economic element of this analysis is viewed in terms of the growing middle class. The increase in disposable income among this market segment makes it a target for the brand. The social aspects include demographics in countries that buy Nike’s brands. The population of people between 20 and 45 years has increased significantly in Brazil, Argentina and Mexico (Blery et al., 2014). These countries offer a large market segment for Nike. Nike depends on technology and innovation to produce new designs of mercurial vapour. The company utilizes technology in marketing. The technological take-off in countries such as China, India and Brazil cannot be doubted. Environmental issues include the threats of competition and substitutes. The company has warded off competition through product differentiation, research and innovation. The legal aspects of the development of brand involve trade barriers and restrictions. So far, the brand has not suffered undue trade barriers and restrictions imposed by countries of operation.
Appendix three: Porters Five Forces Analysis
Michael Porter Five Forces analysis include the threat of substitutes, threat of new entrants, the bargaining power of buyers and suppliers and the intensity of competitive rivalry (Porter, 2008). The threats of new substitutes include brands made by other footwear companies all over the world. These substitutes offer cheap and affordable alternative to Nike brands. For this brand, new entrants do not pose a significant threat because of its history of success. Nike is stable enough to fight the threats that new entrants pose. The bargaining power of buyers may lower the pricing of the brand. This reduction may imply a reduced profit margin. The bargaining power of suppliers may raise the cost of production if this power is high. This means that the company must have trusted suppliers and enter a contract with them. The competitive rivalry is intense for this brand (Dobbs, 2014). Competitors such as Reebok, Puma and Adidas struggle to wrestle market dominance from Nike.
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