BE562-7-SP Marketing Innovation Assignment Sample
BE562-7-SP Marketing Innovation Assignment Sample
1. Introduction
This marketing strategy plan aims to develop a comprehensive marketing plan for NIKE, a global leader in the athletic footwear and apparel industry. NIKE is known for its cutting-edge products and marketing campaigns, and the company’s success is due to its innovative product design and technology. To maintain its position as a market leader, NIKE must continue to innovate and develop new products that meet the evolving needs of consumers.
The target market for NIKE products is wide, consisting of both fashion-conscious customers and athletes and fitness fanatics. In order to reach these target populations, this marketing strategy plan will concentrate on creating a multi-channel marketing strategy that makes use of social media, influencer marketing, and conventional advertising channels. The strategy will also showcase Nike’s aptitude for innovation and its dedication to enhancing sports performance through its goods (Ferreira et al. 2020). NIKE may establish a long-lasting competitive advantage in the industry by concentrating on these advantages and applying them in marketing initiatives.
The product, pricing, place, and promotion will all be included in this marketing strategy plan for Nike. The price plan needs to be in line with the high quality of NIKE’s brand and the worth of its products. The business should make its goods available through a number of channels, such as its own brick-and-mortar stores, an online marketplace, and independent retailers. The company’s inventive capabilities and dedication to enhancing athletic performance should be the focal points of the marketing campaigns.
2. Market Analysis
A multinational corporation called Nike, Inc. focuses on creating, developing, and marketing athletic footwear, clothing, and accessories. With operations in more than 190 countries, Nike was founded in 1964, has grown to become one of the biggest and most well-known brands in the world. However, the COVID-19 pandemic and the ensuing economic crisis have influenced Nike, just like they have on many other businesses.
The divergent economic recovery following the pandemic is cited as a major global risk in the World Economic Forum’s Global Risk Report 2023. This study contends that at a time when cooperation is urgently required to address the COVID-19 pandemic and other global risks, the uneven economic recovery could widen social gaps and obstruct communication (Urbanik and Jao, 2020). This is a significant concern for Nike, which has operations in many countries around the world and relies on a global supply chain to manufacture and distribute its products.
The pandemic has had a significant impact on Nike’s business, with disruptions to its supply chain, retail operations, and consumer demand. The company has had to adapt quickly to changing market conditions and find new ways to engage with customers. For example, Nike has shifted its focus to digital sales channels, which have seen significant growth during the pandemic. The company has also invested in new product categories, such as loungewear and home fitness equipment, to meet changing consumer needs.
However, Nike is not immune to the risks highlighted in the Global Risk Report (Rasmussen et al. 2021). Due to its global operations, the company is susceptible to supply chain disruptions and regional economic downturns. The pandemic has also brought attention to social and environmental issues, which are gaining importance among investors and consumers.
Nike has made efforts to address these issues, including by supporting social justice initiatives, investing in sustainable materials, and manufacturing techniques. To ensure that Nike can manage the intricate and interconnected risks facing the global economy and society, however, there is still much work to be done.
NIKE is a market leader in the athletic footwear and apparel sector, with operations in more than 190 nations, including the UK. Numerous domestic and foreign brands are vying for market share in the fiercely competitive UK athletic footwear and apparel market.
In 2020, the UK sportswear market was estimated to be worth £7.8 billion by Euromonitor International, with footwear holding the greatest market share at 53.6%. The survey also emphasises the rise in athleisure’s appeal, with shoppers increasingly seeking for sportswear that can be worn for both active and non-active events.
NIKE’s main competitors in the UK market include Adidas, Puma, Under Armour, and Reebok. Adidas is NIKE’s main competitor, with a 13.2% share of the UK sportswear market compared to NIKE’s 16.1% (Escamilla-Fajardo et al. 2020). Adidas has a strong presence in the UK market, with a focus on innovative product design and marketing campaigns targeting both athletes and fashion-conscious consumers. Puma is another major competitor in the UK market, with a 4.4% share of the sportswear market.
The brand has a strong reputation for product design and innovation, particularly in the area of running shoes. Under Armour is a relatively new entrant to the UK market, but the brand has gained traction with its focus on innovative product design and technology. Reebok, which is owned by Adidas, has a 1.9% share of the UK sportswear market. The company focuses on fitness and has just introduced a line of goods geared towards the CrossFit market (Ratten, 2019).
With a 16.1% market share in sportswear in the UK, NIKE enjoys a dominant position. The company is known for its cutting-edge product design and technology, especially in the field of athletic footwear. Inspiring and motivating athletes and fitness fanatics is a priority of NIKE’s marketing initiatives, which is another significant strength.
In terms of distribution, NIKE operates several retail stores in the UK, as well as an online marketplace. The company also distributes its products through a range of third-party retailers, including JD Sports, Foot Locker, and Sports Direct. The retail locations of NIKE in the UK provide customers with an immersive brand experience, highlighting the company’s cutting-edge goods and technology (Kulwanich, 2023).
Customers can quickly browse and buy products on the company’s online marketplace, which offers a variety of delivery and payment options. With its products being sold in a variety of places all around the UK, NIKE is able to reach a larger audience thanks to its collaboration with independent merchants. With this strategy, Nike can also make the most of the marketing and advertising initiatives of its retail partners to boost sales and brand recognition.
Overall, while the UK athletic footwear and apparel market is highly competitive, NIKE has a strong market position due to its reputation for innovative product design and marketing campaigns (González-Serrano et al. 2020). The brand’s focus on inspiring and motivating athletes and fitness enthusiasts is a key strength, and NIKE’s diverse product portfolio allows it to appeal to a range of consumers in the UK market.
3. Market Segmentation, Targeting and Positioning
Market Segmentation: NIKE targets multiple segments in the UK market, based on various factors such as demographics, psychographics, and behaviour. The following are the main target markets for NIKE in the UK:
Athletes and Sports Enthusiasts: This section consists of people who play sports frequently or who are passionate about them. Sports shoes, clothing, and accessories are just a few of the items that NIKE has to offer that are specifically geared towards this market (Escamilla-Fajardo et al. 2019). The market for athletic footwear in the UK was estimated to be worth £2.5 billion in 2020 by Statista, with NIKE holding the top spot with a 35.4% market share.
Fashion-conscious Consumers: Consumers that prioritise fashion and style while purchasing clothing and footwear make up this market sector. This market is drawn to NIKE’s lifestyle products, including streetwear and trainers. The UK apparel and footwear market was estimated to be worth £68.1 billion in 2020 by Statista, with NIKE ranking among the top 10 clothing brands in terms of revenue.
Health and Fitness enthusiasts: This group consists of people who place a high value on fitness and health, with a particular emphasis on exercises like yoga, running, and working out in the gym (Keshkar et al. 2021). Running shoes, workout gear, and fitness accessories are just a few of the things that NIKE has designed specifically for this market. The UK’s $5 billion fitness market is estimated to rise by 3.5% yearly between 2021 and 2025, according to Statista.
In the UK market, NIKE has effectively applied several segmentation tactics. One of the main strategies the organisation uses to segment its target markets is demographic segmentation. From children to adults, NIKE has goods for all demographics. The business offers gender-specific items to meet the various needs of men and women. Another strategy NIKE use to divide up its markets into segments is psychographic segmentation.
NIKE has developed customer personas because of its understanding of its customers’ mentalities. By creating goods and marketing initiatives that appeal to this thinking, the company aims to capture the “Just Do It” attitude (Yang et al. 2020). NIKE uses behavioural segmentation as a significant strategy to divide up its markets. The company targets consumers who regularly participate in sports or fitness activities and those who value fashion and style.
Targeting: NIKE uses a differentiated targeting strategy to cater to the different needs and wants of its target markets. The company tailors its products and marketing messages to appeal to each segment. For instance, NIKE’s advertising campaigns for sports shoes and apparel focus on the performance and functionality of the products, while its campaigns for lifestyle products focus on fashion and style.
The Targeting Strategies of Nike: NIKE targets various market segments with a differentiated targeting approach. The business concentrates on creating items that meet the specific demands and preferences of each market niche (Nadikattu, 2020). NIKE targets each sector with a “product, price, place, and promotion” strategy.
For instance, the business offers several product lines for customers that are fashion-conscious, are health and fitness aficionados, and are athletes and sports fanatics. Each market segment is considered in NIKE’s pricing strategy. The corporation charges a higher price for its high-end products and a lesser price for its entry-level items.
Positioning: With its inventive and high-quality products, NIKE presents itself as a premium sports and lifestyle brand. The company’s branding and marketing initiatives highlight its attention to sustainability, innovation, and performance. When compared to its rivals, NIKE charges a higher price for its products because they are marketed as premium offerings (Arenas-Jal et al. 2020). Consumers are prepared to pay more for NIKE products because of the brand’s reputation and image, which justifies the higher price.
NIKE’s Positioning Strategies
NIKE has a strong brand positioning strategy in the UK market. The company positions itself as a premium sports and lifestyle brand that offers innovative and high-quality products to its consumers. NIKE has been able to position itself as an innovative and performance-driven brand by investing heavily in research and development. NIKE’s branding and marketing campaigns emphasize its focus on performance, innovation, and sustainability.
The company’s products are positioned as premium offerings, and the company charges a premium price for its products compared to its competitors. However, NIKE’s brand image and reputation justify the premium price, and consumers are willing to pay a premium for the brand’s products (Labanauskaitė et al. 2020). NIKE’s sustainability efforts also add to the brand’s positioning as a socially responsible company, which appeals to a broad range of consumers.
Even a large, international corporation like Nike faces problems like digital inequality and cyber failures. The company’s operations, supply chain, customer data, reputation, and brand value are all significantly at risk as a result of these problems (Healey and Hoogkamer, 2022). As a result, Nike has been putting various strategies into practise to reduce these risks and seize the opportunities brought about by digital innovation.
By funding digital infrastructure and education initiatives, Nike is addressing digital inequality in one of the most important ways possible. For instance, the business has been offering training and resources to assist its suppliers in enhancing their digital skills and implementing more environmentally friendly manufacturing techniques. Nike has also been utilising digital tools and platforms to interact with customers and offer tailored experiences regardless of their location or device.
Nike has concentrated on enhancing its cybersecurity measures in order to address cyber failures. This entails putting in place multi-layered security protocols and regularly conducting audits and risk assessments to find any potential weaknesses (Bahrainwala and O’Connor, 2022). The business has also been spending money on training programmes to inform partners and staff of cybersecurity and data protection best practises.
Nike has also benefited from technological advancement to gain a competitive edge. To enhance product design and manufacturing procedures, the company has been investing in technologies such as artificial intelligence and machine learning. Nike has also been using consumer insights and data analytics to develop personalised experiences and boost sales.
Overall, Nike’s digital strategies demonstrate a commitment to addressing the challenges of digital inequality and cyber failures while also leveraging digital innovation to gain a competitive advantage. Still, there is room for improvement, especially in the area of digital accessibility (Standaert, 2022). By stepping up its efforts to make its digital experiences and products accessible to everyone, regardless of their technological capabilities or location, Nike could further address the UN SDGs.
Nike’s initiatives to combat digital inequality and cyber failures show that the company is aware of the dangers presented by these issues and that it is dedicated to utilising digital innovation to spur growth and competitive advantage. The company is taking significant steps to develop a more resilient and sustainable business model by concentrating on digital infrastructure, educational initiatives, and cybersecurity measures.
4. Innovation in Marketing
NIKE has been known for its innovation in product design and marketing strategies that have helped the company gain a competitive edge in the athletic footwear and apparel industry. The company has been able to maintain its market position through a number of innovation drivers including product innovation, service innovation, and business model innovation.
Product Innovation:
NIKE’s product innovation has been a major contributor to its SCA. The company invests heavily in research and development to create innovative products that meet the changing needs of consumers. NIKE has been able to create innovative products by using advanced materials and technologies (Keiningham et al. 2019). As an example, the company introduced Flywire technology, which uses lightweight and high-strength fibres in the construction of shoes to provide better support and reduce weight. In addition, the company’s product innovation is also focused on sustainability.
NIKE’s “Move to Zero” initiative is an example of the company’s product innovation towards sustainability. The initiative aims to reduce the environmental impact of the company’s products and operations. The company has launched a range of sustainable products, such as the Flyknit shoe, which is made from recycled materials. The creation of Flyknit technology, which enables a more precise and environmentally friendly method of producing shoes, is a prime example of Nike’s product innovation.
Flyknit creates products that are both high-performing and considerate of the environment by using a special knitting technique that reduces waste and increases productivity (Thukral, 2021). Nike was able to set itself apart from rivals thanks to its innovation, giving it a market advantage.
Utilising recycled materials in its products, such as the Nike Grind material made from used manufacturing scrap and recycled shoes, is another illustration of Nike’s product innovation. This not only lessens waste and its impact on the environment, but it also appeals to customers who are becoming more concerned with sustainability.
Innovation in Services:
Service innovation has helped NIKE accomplish SCA as well. The business has concentrated on providing exceptional customer service through cutting-edge services. Customers can customise their products and receive personalised product recommendations through the NIKE app, for instance. Additionally, the business has launched NIKE, which enables customers to create custom shoes. By offering first-rate after-sales services, Nike has also been able to improve the consumer experience (Yuldashev, 2021).
The company provides a 30-day trial period for its products as well as free returns and simple exchanges. These offerings have improved client retention and loyalty. Nike has achieved considerable progress in terms of service innovation by enhancing its customers’ experiences with the use of digital technology. The firm has made significant investments in the Nike App, which provides simple access to merchandise, unique content, and personalised recommendations.
In addition, Nike has developed several online communities, including Nike Training Club and Nike Run Club, which give users access to training schedules, coaches, and tracking tools. These services not only give clients more for their money, but they also foster customer loyalty and retention (Escamilla-Fajardo et al. 2020).
5. Strategic marketing
NIKE has also achieved SCA through business model innovation. The company has been able to develop new business models that have helped it to enter new markets and reach new customers (Wei et al. 2023). For instance, the company has introduced a direct-to-consumer (DTC) business model that enables it to sell its products directly to consumers through its online marketplace and retail stores. The company has also entered new markets through strategic partnerships and acquisitions.
For example, NIKE acquired Converse in 2003 to expand its product portfolio and enter the lifestyle footwear market. In addition, the company has formed strategic partnerships with other companies, such as Apple, to launch innovative products like the NIKE+iPod Sport Kit.
Nike’s transition to a direct-to-consumer (DTC) sales strategy is an example of its innovative business model. To provide clients with a seamless and integrated shopping experience, the company has made investments in both its physical retail outlets and its online marketplace (González-Serrano et al. 2020).
6. Conclusion
Hence, it can be concluded that Nike has more control over its brand image, pricing, and customer data by selling directly to consumers, which enables more efficient marketing and targeted advertising. Nike has been able to obtain a competitive edge in the market and lessen its dependency on independent shops as a result.
Overall, Nike’s innovation-driven success and ability to hold a dominant market position are directly related to these factors. Nike has been able to set itself apart from rivals, satisfy changing consumer demands and wants, and eventually secure a durable competitive edge by constantly developing its goods, services, and business model.
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