Nike Inc. Branding Strategy Analysis

Table of contents

Introduction

Nike Company incorporated in the fashion industry in the year 1967. Nike is currently the world leader in the manufacture and sale of different types of shoes, mostly sportswear. The Company has approximately 62,600 employees who work on part-time or permanent basis.

The company has its largest market in the United States of America although it has expanded to other regions of the world. Its United States market accounts for 46% of its total revenue while other markets in different regions in the world account for the other 54%. Nike mainly deals with eight main categories of products. These include: Action Sports, Women Training, Running, Soccer, Golf, Basketball, sportswear and men’s training.

Internet Properties & Marketing Implications

Nike Company comes out as the first company to initiate marketing of its products with the help of e-commerce through the company website. The e-commerce site for the company was through in April 1999 by giving 65 different shoe styles to the United States market for buying.

In November 1999 the company elevated its presence in the e-commerce through the launch of NIKEiD which permitted online consumers to design the shoes they bought. This was the first time in the history of e-commerce that a company offered mass footwear customization.

The Marketing Mix

Nike Company is one of the pioneers in the marketing field and its marketing mix remains one of the strongest. Its strategy is solely dependent on the pull strategy which it has established and held onto to remain ahead of its major competitors; Reebok and Adidas. Nike offers a wide variety of equipment products, apparel and shoes, which are currently at the helm of its top-selling products categories.

By 1979, the company had begun selling its accessory products, athletic bags, and sports apparel. Also, the company manufactures head gear under Sports Specialties brand name, through which Nike team manufactures and further distributes skate blades, ice skates, protective gear, in-roller skates, hockey jersey, hockey sticks, and accessories.

Nike pricing in the marketing mix is further designed to remain competitive to the other retailers that deal with fashion shoes. The pricing is often based on the basis of premium segments, which are the target customers. As a brand, Nike commands very high premiums.

Consumer Characteristics & Branding Strategy

Nikes financial position is greatly influenced by different branding strategies adopted by the company’s management. An essential branding technique adopted by this incredible company is an emotional advertisement. The main aim of Nike Inc. is to build a powerful brand that inspires customers from different regions across the world (Toma, 2016).

Research has proved that Nike ad strategy is the only one that uses Hero archetype to inspire community members. This has made this company highly reputable hence an unbeatable market leader in the sportswear industry. The ability to take a hero story and turn on its head has made the emotional branding strategy quite successful hence huge sale and profit to the company (Toma, 2016).

Website Analysis

Nikes website has a key role in allowing consumers to purchase, view, and discover new products offered by the company. The main audience of the website includes boys, girls, men, and women. The website has high-quality images, bold and concise statements that ensure essential and relevant information is portrayed to the audience. Two main colors which entail black and white are used in well readable font to ensure the audience reads it with ease.

The main contents of the website include tabbed categories, subcategories, and filtering contents. The website also avails essential contact details that enable the users to reach the management with ease. These contacts include phone numbers, online chats, and emails among others.

The website also avails details on available careers within the company hence creating employment opportunities to community members. By usability, the website offers fast loading pages, a search bar, minimum scroll, consistent layout and a submit feedback platform. The site works fast hence adequate for different users. Finally, the website is straightforward and appealing design, user-friendly, clear and concise information, correct functionality, all which make it a successful internet site (Blocher et al., 2012).

Business Model

There are key primary segments where Nike reports its revenues. These segments include the footwear section, apparel section, equipment, and global brand divisions such as converse designs, Hurley designs, and Jordan brand designs (Carbasho & Greenwood, 2010). The key business segments can be illustrated using the diagram below;

Key Elements in the Business Model

What Nike has succeeded in doing it transformed its basic Website and e-commerce platform using customer relationship management (CRM) and marketing tools like Twitter and Instagram Shop. Its approach to the use of social media is one of the factors that differentiates Nike from many of its.

The new CRM as characterized by Toma (2016) capitalizes upon the Internet and the tremendous connectivity promoted by the Web, which has created a dynamic, open, and convenient environment for social challenges as well as business opportunities. The new CRM model made possible by social media has changed many transactions because of a focus on customer-server, peer to peer, and mobile networks.

Communication in cyberspace and social media is distributed, creating a communication customer company in which individuals find synergies with e-commerce entities and these entities capitalize upon the opportunities to interact constantly and in multiple venues with their target markets (Toma, 2016). Nike is one of the businesses that has succeeded in mastering the new CRM paradigm and generating tangible and intangible benefits for itself.

Nike Online

Nike promotes CRM programs that are both active and strategic. Examples include Nike Digital Sport (NDS) which links customers concerned with performance to Nike, Nike Fuel which helps customers record their progress regarding exercise and competition, and Nike+ Connect which is an app made freely available by Nike that uploads Nike+ data from mobile devices to Nike+.com accounts. These efforts, according to McCulloch (2014), are augmented by Twitter, Facebook, and Instagram – each of which Nike employs to good effect as it reaches out to both global and local markets.

Millington (2015) described Nike’s Twitter and Instagram efforts in its click to buy campaigns. In the fourth quarter of 2014, the company reported that its revenues, driven by these campaigns, rose by 13 percent to $7.8 billion while revenues for the fiscal year 2015 increased by 14 percent to $30.6 billion.

CEO Mark Parker stated that the company’s growth in 2015 was largely due to its commitment to innovation in the e-commerce and digital space and that Nike regularly launches curated product collections through Twitter while its women’s business launched Instagram Shop as a tool that allows users to click on a photograph and then is directed to the appropriate product page on Nike.com (Millington, 2015).

Recommendations

Twitter and Instagram sit at the core of Nike’s efforts although its Facebook activity continues to grow as well (Vizard, 2015). Nike has chosen to use a localization strategy particularly with respect to Twitter and Instagram (McCulloch, 2014). This particular strategy appears to work well on generating responses not only to new product launches, but also to opportunities for online purchases, in-store purchases, and participation in Nike events. The company can use a variety of data such as re-Tweet counts, favorites tracking, and follower levels to assess the viability of its Tweets and Instagram offerings.

Conclusion

CRM in the age of the Internet provides myriad opportunities for building customer loyalty and trust and growing a business (Toma, 2016). Almost from its beginnings, Nike has been in the head of marketing. The world created by the Internet and mobile communication technology has given Nike yet another opportunity to demonstrate its superior marketing and CRM competencies (Millington, 2014, 2015). Companies can certainly learn a great deal from Nike’s successes in this and other areas.

References

  • Singh, T., Veron-Jackson, L., & Cullinane, J. (2008). Blogging: A new play in your marketing game plan. Business Horizons, 51(4), 281-292.
  • Ramaswamy, V. (2008). Co-creating value through customers’ experiences: the Nike case. Strategy & Leadership, 36(5), 9-14.
  • Fowler, S. J., & Hope, C. (2007). Incorporating sustainable business practices into company strategy. Business strategy and the Environment,16(1), 26-38.
  • http://about.nike.com/
  • http://www.nike.com/language_tunnel?ref=https%3A%2F%2Fwww.google.com%2F
  • Blocher, J. M., Tu, C.-H. M., Yen, C.-J. M., & Chan, J.-Y. M. (July 01, 2012). A Study of the Predictive Relationship Between Online
  • Social Presence and ONLE Interaction.International Journal of Distance Education Technologies (ijdet), 10, 3, 53-66.
  • Carbasho, T., & Greenwood Press (Westport, Conn.). (2010). Nike. Santa Barbara, Calif: Greenwood.
  • Toma, M. (2016). Customer relationship management: A theoretical approach.
  • Economics, Management, and Financial Markets, 11(1), 86-93.
  • Vizard, S. (2015, September 25). Nike e-commerce growth accelerates as it prepares for
    Rio Olympics. Marketing Week, 1.
  • McCulloch, A. (2014, August 13). Social customer care: Nike goes local on Twitter.
  • Retrieved from www.socialbakers.com/blog/2225-social-customer-care….
  • Millington, A. (2014, December 19). Nike’s premium positioning drive growth as it
    continues to invest heavily in e-commerce. Marketing Week, 1.
  • Millington, A. (2015, June 26). Nike taps Twitter and Instagram as part of drive to
    connect social and e-commerce. Marketing Week, 1.
  • Toma, M. (2016). Customer relationship management: A theoretical approach.
  • Economics, Management, and Financial Markets, 11(1), 86-93.
  • Vizard, S. (2015, September 25). Nike e-commerce growth accelerates as it prepares for
  • Rio Olympics. Marketing Week, 1.
  • Yahoo Finance. (2015). Nike, Inc. Retrieved from http://finance.yahoo.com/q/ks?s=
    NKE.

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