Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

NIKE: Associating Athletes, Performance, and the Brand Nike is the largest seller of athletic footwear, athletic apparel, and other athletic gear in the world, with

image text in transcribed
image text in transcribed
NIKE: Associating Athletes, Performance, and the Brand Nike is the largest seller of athletic footwear, athletic apparel, and other athletic gear in the world, with about 30 percent market share worldwide. Nike markets its products under its own brand, as well as Nike Golf, Nike Pro Air Jordan, Team Starter, and subsidiaries, including Bauer, Hurley International, and Converse. In February 2013, it sold its Cole Haan affiliate brand to Apax Partners LLP. As of 2014 the company sells its products through a mix of independent distributors, licens. ees, and subsidiaries in approximately 190 countries worldwide. Nike has grown from an $8,000 company in 1963 to a company with revenue of S25.313 billion for the year ending on May 31, 2013. In 2012, Nike spent an enormous amount of money, more than a billion dollars, on advertising endorsements, social media, and sales promotion. In order to make sure that this money is being spent properly, Nike relies on marketing research. It has shown a history of innovation and inspira- tion in its marketing and is quick to adapt to the changing consumer and the world of sports, Nike has used marketing research in understanding where the future growth lies. A recent example is Nike's shift from marketing toward the more traditional sports (basketball and running to other sports (golf and soccer), where its presence has not been as strong. Marketing research surveys revealed that the awareness of Nike among soccer and golf players was low, and Nike decided to work on increasing these numbers. Nike has decided that the money needed for sales promotion in its strong areas can be better spent in other areas where Nike does not have very high level of brand awareness Today, the Nike Swoosh is recognized around the world. This is the result of about 50 years of work and innovation. It signed the first athletes to wear its shoes in 1973. Early on Nike realized the importance of associating athletes with its products. The partnerships help relate the excellence of the athlete with the perception of the brand. Through focus groups and surveys, Nike discovered the pyramid influence, which shows that the mass market can be influenced by the preferences of a small group of top athletes. After it realized this effect, Nike began to spend millions on celebrity endorsements. The association with the athlete also helps dimensionalize the company and what it believes in. With Nike, this was, and remains, extremely important. It wants to convey a message that the company's goal is to bring innovation to every athlete in the world. Nike also uses the ath- letes to design new products by attempting to meet their individual goals. Explaining Nike's strategy of celebrity endorsements, Trevor Edwards, vice president of U.S. Brand Management, says that the sports figures, such as Ronaldo, Michael Jordan, and Tiger Woods who have endorsed Nike brands, all have represented excellence in some way. Nevertheless, the athletes also have a personal side, such as their drive to win or their ability to remain humble. These qualities speak something about the Nike brand; this not only benefits the brand, but also helps to define what the Nike brand is and what it stands for The company also realized that in order to achieve its lofty growth goals, it must appeal to multiple market segments. Based on marketing research, Nike divided the market into three differ- ent groups: the ultimate athlete, the athletics participant, and the consumer who is influenced by sports culture. The first segment is the professional athletes. The second constituency is the partic- ipants, those who participate in sports and athletic activities but do not see themselves as athletes or as being part of the larger sport. The third segment comprises those who influence others and are influenced by the world of sports. These three different constituencies form three different con- sumer segments, and Nike uses very different strategies for each. Nike has always been an aggressive user of marketing research and this has been shown in its attack on the European market. It decided to concentrate on different sports in order to reach European consumers. Americans love baseball. And football. And basketball. But Europe's favorite game is soccer. Nike placed its focus on major sporting events (World Cups and Olympics) and celebrity athletes that are relevant to the European consumer. Marketing research in the form of focus groups and survey research revealed that the best positioning for Nike shoes was one that enhanced performance in the sport. Through massive advertising campaigns, it has been able to change the perception of its products from fashion to performance and in the process increase sales dramatically Another technique Nike has used is to specifically design a product line for a certain market. Nike uses marketing research to determine the lifestyles and product usage characteristics of a particular market segment and then designs products for that segment. An example is the Presto line, which was designed for a certain youth lifestyle. Nike focused on the lifestyle and designed the products around this group. It also used marketing research to determine the most effective media to communicate with the target market. Nike launched its "Write The Future" Campaign in 2010 that made extensive use of social media in partnerships with YouTube and Facebook. It celebrated soccer's pivotal moments and allowed fans around the world to connect with their heroes. It featured an action-packed film that brought together some of the world's greatest players to inspire soccer lovers and sports fans around the world. Soccer fans could then use this creative to build their own Facebook campaign and be eligible for rewards. Social media remains an integral part of Nike's marketing research and marketing strategy. Because of these methods, the Nike logo is recognized by 97 percent of U.S. citizens, and its sales have soared as a result. However, Nike faces a new concerns that it has lost its traditional im- age of being a smaller, innovative company. It also faces future obstacles in maintaining brand equity and brand meaning. Continued reliance on marketing research will help Nike to meet these challenges, associate its brand with top athletes and performance, and enhance its image. Conclusion Nike used marketing research to build its brand into one of the most well-known and easily rec- ognized brands in the world. Nike's strategy of celebrity endorsements, its expansion into Europe, and the resulting stronger association with soccer are some of the steps taken by Nike to grow its brand. In the coming years, as Nike expands to newer markets and capitalizes newer opportuni- ties, it will have to continue its reliance on marketing research and continue to associate athletes, performance, and the brand. Questions 1. Nike would like to increase its share of the athletic shoe market. Define the management- decision problem. 2. Define an appropriate marketing research problem corresponding to the management- decision problem you have identified. 3. Develop a graphical model explaining consumers' selection of a brand of athletic shoes. 4. How can qualitative research be used to strengthen Nike's image? Which qualitative research technique(s) should be used and why? How can Nike make use of social media in this context

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Theory Contemporary Accounting Issues

Authors: Thomas G. Evans

1st Edition

0324107846, 9780324107845

More Books

Students also viewed these Accounting questions