Environmentally Friendly Marketing at Nike

Environmental awareness coupled with a sense of social responsibility is leading many companies to assess their environmental policies and business practices. Companies such as General Electric are developing environmentally sensitive products while others, including Starbucks, have adopted tough recycling programs that minimize environmental waste. Consider the organizational goals at Nike and determine in which direction the product development strategy should proceed.

This activity is important because effective marketing management begins with an understanding of the fundamentals of marketing and the forces that are influencing the future of marketing.

The goal of this exercise is to demonstrate an understanding of the role that both core concepts in marketing and key change drivers can have on the marketing strategies and tactics of companies such as Nike.

One challenge for manufacturers around the world is to transform environmentally harmful products into environmentally friendly products. In some industries, making products more environmentally safe has been relatively straightforward. In other situations, it is more difficult to create environmentally sensitive products. Changes in products have an impact on both consumers perception of a company and their concept of the value of the product.

Read the case and answer the following questions.

Nike built its running shoe business through outstanding products and creative marketing communications. A key product feature for Nike has been a small pocket of air in its Nike Air shoes. The extra cushion was a significant product innovation when it was introduced and proved to be a major market differentiator for the company. However, the pocket of "air" was not just air; it also contained a small amount of sulfur hexafluoride, or SF6, a gas that damages the ozone layer. In 1992, questions about Nike's use of SF6 gas became public. While the Nike air cushion was a key factor in the company's success, Nike realized that continued use of SF6 posed an environmental problem. Unfortunately, replacing SF6 with a solution that minimized environmental damage while providing the same product benefits (long-lasting cushion and support) proved challenging. After millions of dollars and 14 years, a team of 60 Nike engineers replaced the old product with a new, greener solution using sophisticated manufacturing techniques to replace the SF6 with nitrogen. The AirMax 360 was the first shoe to incorporate the new technology.

As part of the product development process, Nike kept environmental groups informed of the progress.

Question:

Consider a consumer who is particularly concerned with the environmental impact products have when making a purchase. When Nike changes the product, assuming the price stays the same, what core marketing concept is Nike increasing in regards to that consumer?

Multiple Choice

• Value
• Exchange
• Customer Orientation
• Product Orientation
• Promotion