Nike stands to
be the symbol of sports and fitness. And it’s
a kind of product where pull marketing strategy
is applied more, rather than push, this means
that, people are attracted to buy product through
sponsorships and sports events rather than Nike
offering various sales and discount. It owns selling
subsidiary namely Cole Haan Holdings Inc., Nike
Team Sports, Inc., Nike IHM, Inc., and Bauer Nike
Hockey Inc to sell products and raw material.
The most popular product categories include the
following: Running, Basketball
Cross Training, Outdoor Activities, Tennis, Baseball,
Football, Bicycling, Volleyball, Soccer, Wrestling,
Cheerleading, Aquatic Activities, Auto Racing,
Golf. Ideally, the market segment of Nike is mostly
those who are looking for perfect product for
their sports, fitness or work comforts. Segment
covered are professional and amateur sports players,
school and college going students looking for
style and comforts and finally working class working
on fast pace jobs such as delivery boys, etc.
Now it is a challenge to ensure that the Nike
product continues to penetrate in these segments
as well as find new segments for those who are
less trendy to wear Nike’s product and prefers
to wear cheap products, which are not durable
but economical.
TASK 1: SUSTAIN WITH CURRENT SEGMENT.
In order to sustain and grow in the current segment
group, it is required that Nike continuous play
around with 4 Ps method i.e. price, placement,
product and.
In price Nike has to come up with various options
for those who are looking for economical products
and for those who are looking for reliable products
so that, it can deliver products to entire segment
who want cheap product and who want quality products.
In order to achieve this Nike has to further expand
its production in Asia to get cheap product under
high QC to offer the products globally at economical
prices that even buyers in Asian countries can
afford.
In placement, Nike has to open up stores and
franchise to reach maximum buyers and targeted
customer in order to expand canvas of long term
Nike buyers. Further most, it should maximize
the use of e-commerce, online marketing, e-coupons,
e-bay sells and such activities to attract online
buyers. Besides that various arrangement should
be made to make the whole range of products availability
at convenient point for buyers to buy from. Plus
higher incentive should be offered to the franchise
and resellers to motivating them to increase the
sales.
In product, Nike has to come up with new ideas,
design and make of product specializing for various
sports, various gender, various ages so that masses
can be served and entire family would buy their
sportswear from Nike store instead of going to
multiple store and in long run this would also
create a brand loyalty among the buyers. Nike
has various sports products and these products
should be made more economical so that the masses
could afford to buy it and at the same time quality
should be maintain enabling the brand loyalty
to be strengthen amongst the buyers.
In Promotion Nike has to still strength its Swoosh
brand as the only brand to cater entire demographic
for their sports needs. It has real competitor
like Reebok, Addidas, etc who have the same quality
and pricing strategy and can overtake Nike at
anytime if Nike does not propagate its products
to the target segment. For this Nike has to budget
extra revenue for sponsorships, sports events,
advertisement, etc. This will maintain the Nike
visibility in the eyes of the customers. Besides
promotions, Nike should proactive communicate
with the buyers directly enabling Nike to get
first hand feedback from the customer as finally
they are the one who will buy the products and
they will jump to other brand if they would get
product of their choice at their convenient.
After retaining loyal customers, and attracting
them to buy more of various Nike products, then
the second task is to attract new potential buyer.
Targeting customers could do arranging community
could do this and this based sports or young group
sports and other such activity to bring all potential
customers at one place. And during this gathering
discount coupons or lucky draw of Nike products
could attract potential customers and will give
them an opportunity to feel the comfort and fineness
of Nike products. Plus the selling subsidiary
should also start going around sports club, schools,
colleges, university and all such places to promote
the product or in other words do direct marketing
and find out what the consumer are looking for
and put it into process for future production.
Overall Nike has very good reputation but this
has to continue in front of cheap Chinese sportswear
and Korean brands that has very good technical
expertise and producing some of the excellent
sports products. Furthermore, Nike should also
ensure that their loyal customers are not lost
while Nike searching for new market.
Following are new opportunity verses threat for
Nike in upcoming years
OPPORTUNITIES
The athletic footwear and apparel industries will
benefit from the currently strong economic backdrop
in the United States. Spending is high and is
expected to result in sales growth industry-wide.
Athletic shoes and apparel has become a staple
in wardrobes worldwide. This is due to both the
increasing numbers of people exercising and the
trend towards casual apparel.
Competition is fierce at all levels in within
the industry, especially among the leaders. This
creates a sense of security for the companies
that have been able to create a niche.
Cost cutting due to restructuring of operations
will give many companies the chance to price products
more competitively.
One area in the industry that is ever changing
is research and development. The strong departments
will surely capitalize on the trends of tomorrow
if their efforts are successful.
Increasing financial recovery in overseas markets
proves to be an area of expansion for the athletic
footwear and apparel industry.
E-tailing, or customer-designed Internet merchandise,
is threatening the traditional distribution channels,
thus eliminating the "middle-man" distributors
and allowing for increasing profitability.
THREATS
The industry has reached a level of maturity.
While style and technology in athletic apparel
and footwear has reached a leveling-off point,
the important aspect now is for companies to differentiate
their lines.
Inflation is looming over the U.S. economy, which
may spark a cutback in consumer spending.
Consumers are becoming savvier and may lean towards
discounted items.
In terms of market saturation, many of the key
manufacturers in this industry have been around
for many years. Consumers may be scanning the
market for new and different footwear and apparel
products.
Now coming to internal strengthen to manage the
delivery of quality products on time and widely
to the market at their comfort just like ordering
PIZZA.
For this purpose following is required:
DESIGNING WORLDWIDE SETUP
Firstly Nike has to further dive into the designing
aspect of sports product. The difference between
yesterday shoes and today’s is simply the
design and comfort and this comes from customer
choice and ideas. Nike caters worldwide customers
and so different region has different sets of
requirement and to maintain the market share Nike
has to listen and serve customers demand. These
days there are huge demand for designer sportswear
especially for women and children, Nike has to
consider touching new horizon in design and comfort
to continue serving the masses and at the same
time controlling the prices and slashing out any
unwanted cost or high cost account heads. Besides
USA, Europe – Asia, Middle East and South
Pacific has also become a possible market to expand
direct sales and opening up stores to serve the
local customers. Today Asia has a population of
2 Billion plus and Nike with its presence especially
in India and China can grab the market and continue
maintain their strong hold in US and Europe.
MANUFACTURING UPDATES
In order to bring creative design and professional
comfort sports wear it is require to have minimum
process time to the market, i.e. Nike should come
up with shortest possible cycle to bring the customer
choice to the shelf in minimum possible time.
This way it can grasp the market before anyone
could catch their idea and roll similar product
to the market. And to fulfill this, a good manufacturing
setup is require to provide quality products at
least possible time. Although lots of testing
is done before bring the design in to mass scale
production, such as alpha product, beta product
then tester launch and finally mass production.
But the manufacturing setup should be in such
place where the cost can be kept minimum and throughout
the year production could be produce.
SUPPLY CHAIN
Supply Chain has become an important factor in
modern market, with modern logistic system and
fast vessels, products could be transfer place
to place in no time if right logistic links are
made and if manufacturing setup is made away from
the port it may make very difficult for Nike to
ensure delivery to the market on time. Supply
chain start from point of manufacturing till the
end consumer and various arrangement like international
warehousing and multiple warehouse pockets needs
to be establish for fasted moment from the manufacturing
to the consumer. As Nike not only deals in finished
products or to the direct consumer, so it has
to be more fast in order to match all deadlines
for different sports event world wide and for
that a structured supply chain management system
and monitoring tool needs to be implemented as
it is not wise to care about US and Europe market
and leave the 2 Billion plus Asian Market. Besides
supply management, Nike has to ensure minimum
damage to the goods, so that the product reaches
to the final destination i.e. to the consumer
with all its freshness.
RETAILING AND E-TAILING MANAGEMENT
After controlling over design, manufacturing and
supply chain – the most important part is
to sell the products in fact this is the first
and foremost part and for this Nike has to arrange
to get prime spots to retail the products, announce
specials pricing and discount at events and do
whatever possible, plus Nike should further consider
to market it products online to reach maximum
buyers including those leaving in remote areas.
Nike should also consider in going into idea to
deliver shoes like Pizza where new shoes can be
deliver at home so that the consumer can reach
the Nike products at the comfort of their home.
There is billions of dollars sales expected through
e-tailing i.e. through Internet, online orders,
mail orders, etc and a systematic approach needs
to be setup to ensure timely delivery at minimum
cost so that the consumer can get their choicest
shoes at the comfort of their home with or without
shipment charges. What else the customer would
seek from a company? Other than home delivery,
budget price and quality product.
LOYAL CUSTOMER DISCOUNTS
Nike should consider to come up with more active
programme's to bring the past customers to their
active circle by sending them offers, samples,
catalogues and other stuffs so that they would
always see Nike around and when the opt for shopping
they would have one and only brand to shop i.e.
Nike. Various schemes like Nike E-card, Nike Mileage
Card.
RESEARCH AND TURN KEY APPROACH
Once the design is made and through jumps the
shoes is liked to the customer and been sold now
there is more hectic work to be done that is what
customer would like Nike to have so that s/he
would come back to Nike again. There are many
factors such as design, durability, accessibility,
pricing, etc. This would bring customers to Nike
again and again. At the same time Nike has to
be more innovative in terms of sporting activity
and should come up with sports and sporting product
to create new concept of sports like Sony did
for walkman where all small player are called
walkman or disc man because this was put into
everyone heads like Cadbury, so Nike still has
to work to bring branding so powerful that sports
would be called as Nike one day.
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