Product-Nike

The Marketing Mix-Product

This post will relate to the product of the marketing mix and how Nike utilise their product.

The product within the marketing mix is an item that is built or produced to satisfy the needs of a certain group of people. It can be intangible or tangible and be in the form of good or services (District, 2014).

The right type of product must be produced to meet demand of the market. Therefore, during the product development phase, the marketer must do an extensive research on the life cycle of the product they are producing (Tellis, 2006).

Nike-Product

Nike offers an extensive range of sports products including shoes, apparel, equipment and accessories with many being top selling product categories.

Product Mix

The complete range of products present within a company is known as the product mix (Bhasin, 2016).

Nike provides an extensive product mix.

Shoes: Running, basketball, training, tennis, lifestyle, football, walking, basketball and sandals (See image below).

Clothing: T-Shirts, shorts, hoodies, socks, sweatshirts, yoga wear, track pants and joggers.

Equipment: Sunglasses, golf gear, bags, basketball, football, watches, sport monitoring items and sport audio equipment (LLC, 2016).

Product Development

Developing and delivering the right products or services at the right cost with strong marketing support will ensure your competitive. To stay competitive, you will need to keep your offer fresh-that means keeping up with trends in the market, emerging technology and refinements to existing products (The Marketing Mix, 2012).

From their first waffle bottomed running shoe in 1964 to their new self-lacing trainers  Nike provides athletes with some of the most innovative sportswear.

The short video below introduces Nikes latest product the self-lacing trainers.

McAllister (2014) explain that Nike CEO Mark Parker clearly understands his role in innovation. Beginning in 2012 Nike went beyond the swoosh and shoes and successfully launched an innovative electronic device, the fuel band that measures movements.

Nike Fuelband

Nike have also completely reinvented their shoes manufacturing process. Instead of designing a new shoe, they designed a new way of thinking about the manufacturing of athletic shoes. The outcome proved successful with the producing of the ‘Flyknit Racer’ a shoe that ‘is more environmentally friendly and could reduce long term production costs’.

Nike Flyknit Racer Trainer

Product Life Cycle

The product life cycle is the four main stages through which products move: introduction, growth, maturity and decline (Lorette, 2016). Below is the product life cycle for Nike shoes.

-Introduction

When new Nike shoes are being released, there is a lot of television advertisements, posters, billboards and more. They build up awareness to create a desire and demand for the shoes that is at the highest just as the shoes are being released.

-Growth

At this stage sales start to increase as the market has accepted the product. As more and more customers buy this product, the price increases. However, the customers are still willing to pay the price because of the brand they are getting.

-Maturity

In the maturity stage sales reach their peak. The shoes then begin to stay on shelves or in stock for long periods of time as the demand is not as high as it was when they were first introduced.

-Decline

As the shoes remain on the shelves they become ‘old news’ because new shoes are now being released, removing all the hype from this shoe and placing it on the newest shoe that is being released. At this stage the shoe has reached its capacity.

Branding

One of the most important decisions a company can make is branding their product (Fisher, 2014).

Brand Logo

Nike has worldwide recognition for its famous swoosh logo and trademark of ‘just do it’ as seen in the images below.

Brand Recognition

Nike is recognised as one of the most valuable brands in the world. Nike are a global brand this was created by appealing to the runners and athletes who make up their core market along with being one of the earliest companies to outsource most of its manufacturing to Asia (Kasi, 2011).

I feel that Nike is a great manufacturer and provides excellent products. They apply all the correct processes for the product in the marketing mix. From their basic shoes, clothing and equipment to their latest innovations of fuel bands and self lacing shoes they know how to keep up with the market and latest trends by producing the right products.

 

Promotion- Nike

The Marketing Mix-Promotion

Promotion is the business of communicating with customers. It will provide information that will assist them in making a decision to purchase a product or service. The hype, pace and creativity of some promotional activities are almost alien to normal business activities.
The cost associated with promotion or advertising goods and services often represents a sizeable proportion of the overall cost of producing an item. However, successful promotion increases sales so that advertising and other costs are spread over a larger output. Though increased promotional activity is often a sign of a response to a problem such as competitive activity, it enables an organisation to develop and build up a succession of messages and can be extremely cost-effective (Huang and Sarigollu, 2014).

Nike-Promotion

Nikes primary form of promotion is making its swoosh logo prominent on all of its merchandise and adverts. The location of the swoosh generates maximum exposure, which ensures the brand is recognizable worldwide. Nike takes this approach in tandem with using sports stars to promote its products. Below are some of the famous athletes of Nike.

In 1988 Nike sales were at $800 million, by 1998 sales exceeded $9.2 billion. 'Just Do It' was short and sweet but stated everything people felt when they were exercising and people still feel that feeling today (Sharkey, 2015).

Sponsorship

Nike pays top athletes in many sports to use their products to promote and advertise their technology and design. Such as Lebron James, Tiger Woods, Rory MCilroy, Serena Wiliams, Lebron James, Kevin Durant, Neymar, Maria Sharapova, Cristiano Ronaldo and many more.

According to Weber (2016) Nike spends $2 billion a year on marketing, spending extravagantly on endorsements from superstar athletes. Nike spends minimally on TV ads as they would rather spend money on advertising at events, like the three minute viral video featuring Brazillian soccer star Ronaldhino which got 35 million hits online (see video below). Also the pre US open fashion show Maria Sharapova put on for reporters revelling her wardrobe for the tournament. Nike holds endorsement deals with the top players in almost every major sport.

Advertising

Nike advertising is one of the most effective emotional branding examples in the marketing world today. Their customer loyalty is off the charts, all thanks to the Nike brand strategy and masterful application of emotional branding (Hall, 2009).

The video below explains how Nike use emotional branding through the story of heroism.

From early on Nikes advertisements have been very successful. With many of their advertisements receiving awards such as 'The morning after ad' below which won an emmy award for the best commercial in 2000.







During the 2016 Rio Olympics opening ceremony Nike aired their brand 'unlimited' campaign which was stated to have went beyond the expected.  

The Nike Unlimited campaign also includes a series of ongoing short films highlighting both everyday and professional athletes who push their limits, as well as profiles on how its premier athletes use the brands latest innovations. See video below.

Nike used 'Short a guy' advertisement which promotes many of their products and equipment in a short video. (see below)

Along with their many successful television advertisements Nike use many strategies to advertise their products. For example their famous posters with 'inspiring' quotes and sayings which they adapted from early on and have continued to produce over the years. Below are some of Nikes famous posters.

         

Personal Selling

Personal selling is described as a sales promotion where a sales representative displays the product to the potential customers by directly visiting them (Surbhi, 2015).

For personal selling Nike really depend on all their employees and all so the persons they gave endorsement deals to. For all their retail stores Nike only wants dedicated and great personalities working for them as a salesperson. A salespersons with a bad attitude and a good one will be the outcome if they get a sell or not. That's the reason why Nike only wants the best for their stores. Another example of personal selling for Nike would be the deal they did with the NFL. Starting from the beginning of this NFL season and years to come, Nike will be the manufacturers of all the NFL uniforms.

Sales Promotion

Sales promotion uses schemes, offers and incentives to boost their sales (Surbhi, 2015).

Nike has a way to attract their customers and save them money. Nike have around 931 store worldwide, this is not enough stores to meet the demands of their consumers so they use franchise stores such as schuch, office, footlocker, JD sports and many other stores to sell their products (Presta, 2015).

Nike also have an online store where they sell their products and has many features such as customising your own footwear. The link below will take you to Nike official online store.

http://www.nike.com/gb/en_gb/?cp=euns_kw_bra!uk!goo!cb!%2Bnike%20%2Bonline!113829471534

Nike has an enormous amount of sales promotion to advertise all their new products. The four main ways Nike uses sales promotion are currently through tv ads, social media, magazine ads, and they use the athletes who represents them (Estevez, 2012).

Direct Marketing

Nike uses direct marketing to promote new products to the target market. These new products are usually advertised heavily. However, to make a bigger impact, the firm uses salespeople to approach certain organizations or individuals in target market segments. For example, the firm approaches sports organizations in colleges to promote its products. Nike’s marketing communications mix uses direct marketing to establish stronger relations with target customers and motivate them to purchase the company’s products (Gregory, 2015).


Overall, I think that Nike promote their products extremely well. By using top athletes in many sports their products are seen by millions. Their advertising is excellent and personally I could sit and watch their video advertisements for hours. They know how to get a message across using their products. Nikes promotion techniques are outstanding. However, the only downfall I feel is they do not produce many television advertisements but this may only be the case for the UK and with or without them they have created a successful global brand.  

Price- Nike

The Marketing Mix-Price

Setting a price point is one of the biggest decisions a business has because, ultimately, customers react to this variable more the any other. Businesses need to be aware of their target market, cost of goods, competitors pricing as well as many other things when deciding on price point. A large majority of companies, mainly manufacturers, will typically calculate their costs and then add a standard mark-up to achieve a specific ROI (MacLeod, 2015).

Nike-Price

Being able to charge higher prices for its products is one of the key differentiators for NIKE. Over the past few years, the company has clocked in selling price increases in most markets and categories as it pushes the boundaries of brand premiums ever further (Soni, 2014).

Selling Prices

The chart below shows Nike selling prices and unit sales increases for footwear and apparel from 2013-2015.

Pricing Strategy

As of February 2015, Nike uses a premium pricing strategy in which it continues to raise its prices despite other companies in the market lowering theirs, and it is considered a customer value-driven model. This strong brand is able to use premium price points because customers see its products as dominant in the market. Therefore, customers are willing to pay more for Nike's products because of loyalty to the brand (MacLeod, 2015).

Selling Price

Martin (2014) defines the selling price charged for products and services as important because it is an income source and unlike the other elements of the marketing mix it is not a cost. It determines how much profit a company makes. The challenge is to set the right price for the product and ensure that the price strategy does not lose the company customers.

Footwear Selling Price

Nike’s the global market leader in athletic footwear. Footwear is also Nike’s largest product category, accounting for 58.4% of the company’s revenue (Anthony, 2016).

Nikes strategy has looked at innovative products to drive demand. Nike has several technologies targeting footwear for different sports, including running and basketball (its top two categories). Major technologies include Nike Free, Max Air, Lunar, Zoom Air, and Flyknit.

Nike’s also targeting a push towards premiumization. It’s looking at selling more higher-priced models and marquee, limited-edition brands. This approach creates consumer demand, resulting in both higher unit sales and higher product prices (Barrie, 2014).

The image below displays the most valuable shoes with Nike being number one.

Nikes self lacing trainers (Image below) are their highest price shoe retailing for around $720.

Apparel Selling Price

According to Forbes (2014) apparel is Nike’s second-largest product category, accounting for 29.4% of the company’s revenue. Nike has less pricing power in apparel than it does in footwear. Although Nike is continuing to extend its innovative approach to apparel design, it doesn’t enjoy the dominance in this segment that it does in footwear.


I think that as a global successful brand Nike can basically sell at whatever price they want within reason as people are willing to pay for the brand. After having a look on their online store it is apparent that their prices vary. The average price for trainers is around £60. Although they do have lower prices from around £40 and they can range right up to around £150. It all depends on the individual and what they would be willing to pay. As Nike is a well known brand a lot of people may feel wearing the brand makes them look 'cool' and 'trendy' no matter what the price tag.

People- Nike

The Marketing Mix-People

Though added later to the marketing mix, people are one of the most important elements ever of the marketing mix. This is mainly because of the phenomenal rise of the services industry. Even products are being sold through retail outlets today. If the retail outlets are not handled with the right people, the product will not be sold. Thus, the right people are important in product as well as service marketing mix in the current marketing scenario (Bhasin, 2016).

                  Nikes People










Customer Care-Nike

According to Howlett (2013) with more than 4 million followers on Twitter, to say Nike has a huge social following is an understatement. The company recognizes just how important customer service is, especially on social media. Which is why Nike created a separate Twitter account just for responding to customer inquiries and issues. Nike Support is dedicated to all things customer service, making it easier for customers to reach out when they have a problem or a question they want answered. Nike Support is very active and like other companies with great social media customer service they are very quick to respond. The link below is for Nike twitter support page.

https://twitter.com/nikesupport?lang=en 

Training of staff-Nike

http://media.corporate-ir.net/media_files/irol/10/100529/cg/codeofethics.pdf

The above link will take you to Nikes employee code of ethics and training manual.

In 2011 Nike created Xcelerate, an annual team-based learning program in which 35 employees are selected for high-potential development by their managers and are then given specific, business-relevant group projects by senior leaders that balance both current and future organizational needs. Those who distinguish themselves through this program may then be considered for future placement on the company's corporate leadership team, which is made up of about 200 leaders from a variety of divisions (O'Brien, 2011).

Recognition and Reward-Nike

In 2008 Nike received the American Psychological Associations (APA) Psychologically Healthy Workplace Award (PHWA) for recognition of its workplace practices promoting employee health and well-being. This award was for Nike Tennessee (Nike News, 2008).

After glancing at Nikes employee code of ethics I think that Nike would be a good company to work for. They seem to treat their employees well and provide many benefits and rewards. I also think that they would be a strict and disciplined company when it comes to employees which is not a bad thing. They provide the right training and opportunities. As for customer care like many companies they have good and bad reviews. Having looked at their twitter customer service account they seem to be quick at responding and very helpful to customers. This would encourage me to buy products from them knowing they provide good customer service.

Process-Nike

The Marketing Mix-Process

The systems and processes of an organisation affect the execution of the service.
Therefore, you have to make sure that you have a well-tailored process in place to minimize costs. It could be your entire sales funnel, a pay system, distribution system and other systematic procedures and steps to ensure a working business is running effectively (Zulfikar and Bhutto, 2016).


Process-Nike

In 2015 Nike announced a partnership with Flex (a world class global manufacturer) to accelerate their vision to bring advanced innovation to its manufacturing supply chain. By working together Nike and Flex will deliver footwear innovation that enables product to reach consumers more quickly with customised solutions and increased performance innovation.

For the past few years Nike have been developing new technologies to enhance its manufacturing business model with investments in automation, modernisation, sustainability and innovative new methods of manufacturing. Nikes partnership with Flex advances this work by bringing new capabilities and expertise to create future systems for making products and developing innovation across Nikes global supply chain (Nike News, 2015).

Physical Evidence-Nike

The Marketing Mix-Physical Evidence

According to Bhasin (2016) Physical Evidence is the material part of a service. Services are very intangible when marketing. Although customers tend to rely on physical cues to help them evaluate the product before they buy it. So, marketers develop physical evidence to replace the physical cues in a service. The marketers role is to design and implement the tangible evidence.

In the service interest there needs to be physical evidence that the service was delivered. Physical evidence pertains how a business and its products are perceived in the marketplace (The Marketing Mix, 2015).

Nike-Physical Evidence

Nike try to understand the customers perspective. They do this by providing physical evidence they can see and feel to the customer before they can see the end product

For example they show demonstrations of new products before they are actually out. They provide advertisements and videos of new products to explain what the customer can expect. In most cases this is when they use professional sports athletes to try out the products and demonstrate what they can do.

The video below is an example of this it was created to demonstrate the Nike flyknit trainers before their release this gives the customers a feel of what the product will be like.

Place- Nike

The Marketing Mix-Place

Martin (2014) explains place in the marketing mix refers to the channel, or the route, through which goods move from the source to the final user. Place could be the intermediaries, distributors, wholesalers and retailers.

Place-Nike

Nike sells its sports shoes, apparel and equipment products through a large number of outlets worldwide. This element of the marketing mix outlines the venues where the company’s products are sold, accessed or distributed. The following places/venues form Nike’s distribution strategy, arranged according to significance:

1.      Retailers

2.      Nike’s Official Online Store

3.      Niketown retail outlets

(Bhasin, 2016)

Distribution Channels

Soni (2014) shows how Nike distributes its products through three major channels:

By selling products to wholesalers in the US and international markets.

By direct-to-consumer sales, which include in line, factory retail outlets and online sales.

Sales to global brand divisions.

Most often, the type of channel Nike uses is a producer (Nike), then the producer sells to the retailer (e.g. Foot Locker), then the retailer sells to the consumer.

Nike can also be classified as having a selective distribution because they are found in places that match their target markets and positioning retail stores that cater to athletic wear, including clothing and shoes.


Online Presence

Social Media

Facebook

Like most global brands Nike has separate Facebook pages for each of its product categories. Such as Nike football, Nike golf and Nike fuel bands (see images below). Nike Facebook has around 23,000,000 likes. It provides customised tabs and produces live feeds.

Twitter

As with Facebook, Nike has individual twitter feeds for its subsidiary brands. For each feed the focus is more in responding to @mentions rather than presenting marketing messages. The Nike.com feed has around 6.67 million followers and respond to more than 100 tweets per day regarding order queries, stock information and product details. The link below will take you to Nikes official twitter page.

https://twitter.com/nike

Pinterest

The only account Nike has on Pinterest is Nike Woman this showing they have researched the average Pinterest user. It has around 182,000 followers. However, all of its pins link back to the official Nike web page.

Nike+



Nike have created their own unique social platform through Nike+. Since 2010 Nike has developed a ranges of training products that are digitally linked using the Nike+ Fuelband. Users can then accumulate NikeFuel points and set themselves goals or compete against other users. The following link will take you to Nike+.

http://www.nike.com/gb/en_gb/c/nike-plus/running-app-gps


Retailing

Nike have 1045 stores worldwide that's nearly double the amount they had in 2009 with 674 (Statista, 2016).

Nike also have their own department stores called Niketown with the biggest store located in London it is said to be the best Nike store in the world. The video below will give you a look inside Niketown London.

As of 2014 Nike also own Hurley-International LLC and Converse Inc.
Hurley International LLC markets, distributes and designs apparel and accessories for action sports and youth lifestyle footwear. Footwear, apparel and accessories for athletics are marketed, distributed and designed by Converse Inc (Bustillo, 2015).

Nike also sells through more than 1,000 owned retail stores worldwide, an online site, and to thousands of retail accounts, independent distributors, and licensees.


In my opinion Nike provide numerous ways in which they make their products available. This makes it easy for the customer to know where they can purchase their products. Most sports shops and department stores sell Nike products making them easily accessible. They have also placed themselves in the online world  through social media and with their online store making it hassle free for customers to look at and purchase their products. Niketown stores look incredible and if I ever came across one I would definitely be visiting. Nike have very successfully put their Place in the marketing mix.