Nike is one of the top and well-known companies in the sportswear industry. It is involved in design and development, manufacturing, and distribution of footwear, clothing and sports equipment. As far as the company’s core marketing activities are concerned the company focuses on selling high quality products at premium price. It invests a huge part of their budget of advertisement and promotion. Besides, the company has outsourced its manufacturing activities, majority of them to the Asian countries. The company uses different distribution channels for effective distribution of its products.
Pros of Nike’s core marketing strategy:
The company majorly depends on celebrity sponsorship for its promotional activities that provides high customer awareness and enhanced brand image.
The company utilizes a highly efficient distribution system that enables it to deliver the right product to the right customers. The company sells its premium products using distributors, whereas the low priced products are sold through discounted stores.
The company utilizes an effective market segmentation and targeting strategy that helps it in taping the needs of the customers in a better way.
Cons of the marketing strategy:
Due to its heavy expenditure in marketing activities and increasing cost of design, development and advertising of products, the cost of product development is very high for the company. As a result of this, the company needs to increase the price charged to the customers as well as cut down its marketing budget.
The company is facing huge competition from its rival firms including Adidas. The company needs to diversify its portfolio of products to maintain a competitive edge.
Using celebrity endorsement can also be risky for the brand image of the company as if a celebrity is found to be involved in unethical or illegal activities, it can negatively impact the Company’s brand image.
Risks involved in the marketing strategy:
The company faces the biggest risk of changing customer needs and preferences. With the dynamic market environment, it is very crucial for the company to develop the products as per the needs and preference of customers, otherwise it can lose its market share to the competitors.
The company has outsources its manufacturing activity to foreign countries mainly from Asia, which might be risky for the company in case of fluctuation of currency exchange, recession, government intervention, etc.
Nike has developed strong relationship with its customers using its customer centric strategies and products. The company has developed a new business division to develop products that would help in tracking the personal performance of individual customers. It would also help the company in understanding customer’s needs and communicate with them regrading that. The company offers a wide range of products to address the varying needs of its target customers which has made it an inseparable part of their lives. The company also uses Nike Fuel program to enable the customers feel more connected with the company.
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