NIKE is a recognized brand all over the world, which can boast of quality goods as well as services. In order to sustain such success, the company commits itself to sustainable development as well as the maintenance of effective distribution channels (NIKE News, 2010). The retail model of NIKE is based on three major principles: selling goods to American and international wholesalers, direct-to-consumer (DTC) sales, and selling products to global divisions (Soni, 2014). In addition, e-commerce has become increasingly popular among NIKE’s partners and buyers. Therefore, the current paper addresses such topics as electronic, franchise, service-based and international marketing channels for NIKE’s products.
Electronic Marketing Channels
E-commerce is a popular distribution channel among the retailers who wish to capture their target markets well across the world. International sales have become easy for NIKE with the help of a custom website and worldwide shipping. This retail channel is especially important for NIKE, because the majority of DTC international sales happen with its help (Soni, 2014). In 2014 alone, NIKE sold 15% of its produce with the help of an online DTC channel (Soni, 2014). This number has increased by 3% since the 2013 fiscal year (Soni, 2014). Online sales category grew by 42% in 2014, and, more importantly, it increased even more – by 70% year-over-year in the first quarter of 2015 (Soni, 2014). Therefore, online sales are a key to the future growth of NIKE.
Electronic marketing channels allow the company to offer more affordable prices due to the lack of personal selling experience (Soni, 2014). A well-designed and easily navigable website helps clients choose the models and colors they would otherwise be unable to find in local stores. For that reason, NIKE plans to keep expanding its electronic distribution practices (Soni, 2014).
Franchise Marketing Channels
NIKE’s marketing channels are extremely innovative and adaptable, which in turn makes the company successful worldwide. One of the distribution tactics of the company relates to franchise marketing. For instance, one of its franchise products called the Air Force 1 sells 15 million pair every year since its introduction (NIKE News, 2010). In such a way, the company can offer differentiated goods by focusing on specific product lines. Two other examples of NIKE’s franchise products are the LeBron VII as well as the Kobe V shoes, both of which are obviously named after well-known athletes (Carbasho, 2010, p. 100). NIKE does not offer individual franchisees to become partners, because NIKE’s stores are corporate owned. However, NIKE does work with retailers who can prove their financial as well as corporate strength.
Marketing Channels for Services
NIKE has much pricing power when it comes to the physical location. A full bricks-and-mortar retail experience is offered to the client at NIKE’s stores (Soni, 2014). Premium shops can boast of having the best customer experience. They are usually referred to as NIKETOWNs (Soni, 2014). They feature six to seven new product lines along with the best customer experience that can be found at NIKE’s shops. This premium service allows NIKE to enjoy high pricing latitude on the goods that it offers (Soni, 2014).
One example of NIKE’s premium service is offered in New York, where NIKE Running Store’s staff takes care of all the needs of the runner, no matter whether he is training, competing, or just looking to express himself (Soni, 2014). Being a loyal customer of NIKE also means belonging to special clubs and communities. In this sphere, NIKE achieves premium service by offering category experiences. Together with its partners (who benefit by being brought to the limelight), NIKE organizes such events as the House of Hoops for Basketball with Foot Locker, or NIKE Track Club for runners with Finish Line or the Field House with Dick’s Sporting Goods Store (Soni, 2014). During these events NIKE’s customers get special treatment and premium services offered by NIKE’s staff.
International Channel Perspectives
As it has been already mentioned, besides wholesalers and online sales, NIKE devotes special attention to its global brand divisions (Soni, 2014). DTC sales mainly happen through three channels at NIKE: category and brand experience stores, factory stores, and online sales (Soni, 2014). All of these categories have international basis, which means that factories as well as shops are located in different parts of the world. Global exposure of NIKE allows for better market place penetration and capacity (NIKE News, 2014). The company is extensively selling its sports goods and offering great customer experience in North America, Japan and Western Europe (NIKE News, 2014). However, it plans to expand its distributional operations further to Greater China, emerging markets, and Eastern as well as Central Europe (NIKE News, 2014).
All in all, NIKE has achieved considerable success in market coverage and premium customer experience. Its customer-focused category strategy is expected to bring additional income in the upcoming years as NIKE expands to new markets. Its current success in digital commerce is prominent as well. All in all, altogether, the marketing channels of NIKE are well-organized and effective. What is more, NIKE has a long-term plan to offer great shopping as well as sporting experiences in the emerging markets. This goal can be achieved efficaciously with the help of electronic as well as retail strategies already upheld in all of the NIKE’s stores.
References
Carbasho, T. (2010). Corporations that target the world. NIKE. Santa Barbara, CA: ABC-CLIO.
NIKE News. (2010, May 4). NIKE, Inc. introduces 2015 global growth strategy. Retrieved from http://news.NIKE.com/news/NIKE-inc-introduces-2015-global-growth-strategy
Soni, P. (2014, December 29). The growth factors spiking NIKE revenues and earnings. Market Realist. Retrieved from http://marketrealist.com/2014/12/growth-factors-spiking-NIKE-revenues-earnings/
