Nike Communications Plan for an External Audience

Nike Communications Plan for an External Audience

(e.g. will be presented to media, community, investors and partners, potential employees)

Communications Manager: Sarah Wein

Date: 5th of May 2021

Student ID: 99/SE/01017

The Nike communications plan for May 2021 will be presented in the following, detailing the components of Nike's marketing plan relating to its global expansion offerings and marketing strategies, with the aim of achieving 5% profit growth for the company by the end of the year 2023.

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Abstract

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Abstract

The purpose of this communication plan is to develop a new marketing plan for Nike's products to present to an external audience on the 5th of May 2021. The plan makes reference to existing and new offerings as well as current and potential market entries for the company. Due to globalization, competition is becoming increasingly fierce. Nike’s current competitors are Adidas, Reebok and Puma. Therefore, the company must constantly innovate and enter into new collaborations. Due to bad PR in the past, the firm needs to improve its reputation and develop new concepts. The goal is to show how Nike needs to adjust its strategy to achieve a 5% profit increase by 2023. In order to explore the strategy in-depth, this report conducts an extensive business analysis. Moreover, Nike's current situation will be presented and future direction will be shown to successfully expand its target groups and market entries in the future.

Table of Contents

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Table of Contents

List of Figures .................................................................................................................... IV

1 Company Analysis ....................................................................................................... 1

1.1 The Nike Company History ......................................................................................... 1

1.2 Current Status ............................................................................................................. 1

1.3 Future Orientation ...................................................................................................... 2

1.4 Mission and Vision of Nike .......................................................................................... 2

2 Situation Analysis ........................................................................................................ 3

2.1 Market Overview ........................................................................................................ 3

2.2 Market Development and Competition ...................................................................... 3

2.3 Consumer Behaviour .................................................................................................. 5

2.4 PEST Analysis .............................................................................................................. 5

2.5 SWOT Analysis ............................................................................................................ 6

3 Marketing Strategy ..................................................................................................... 8

3.1 Key Success Factors and Critical Issues ....................................................................... 8

3.2 Objectives ................................................................................................................... 9

3.3 Segmentation, Targeting and Positioning ................................................................. 10

3.4 Strategy Summary .................................................................................................... 11

3.5 Competitive Advantages ........................................................................................... 12

4 Marketing Mix Strategy ............................................................................................. 14

4.1 Product ..................................................................................................................... 14

4.2 Pricing ....................................................................................................................... 15

4.3 Place/Distribution ..................................................................................................... 15

4.4 Promotion and Nike’s Integrated Marketing Communication Strategy ................... 16

4.5 Implementation and Control of the new Marketing Strategy .................................. 17

5 Conclusion and Recommendations ............................................................................ 18

List of Sources .................................................................................................................. 19

List of Figures

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List of Figures

Illustration 1: “Nike's North American revenue from 2009 to 2020, by segment“ (Statista, 2021a) .............................................................................................. 2

Illustration 2: “Revenue from footwear segment Nike, Adidas and Puma from 2010 to 2020“ (Statista, 2021e) ............................................................................... 4

1 Company Analysis

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1 Company Analysis

1.1 The Nike Company History

Nike was founded in 1964 by University of Oregon track and field athlete Phil Knight and his coach Bill Bowerman. The company was first called Blue Ribbon Sports (BRS). The firm initially acted as a distributor for a Japanese shoe manufacturer called Tiger (Meyer, 2019). Within a year after it was founded, BRS had already sold 1,300 pairs of Japanese walking shoes, for a profit of $8,000. After this success, the enterprise opened its first retail store in 1966 in California. Moreover, the company expanded to different regions in the USA, such as Massachusetts (Grant, 2001). However, in 1967 relations between BRS and Tiger deteriorated. Knight claimed that the Japanese company was looking for a way out of its exclusivity contract with the firm. On the other hand, Tiger asserted that it discovered BRS and should accordingly hold rights within the company. Due to ongoing disputes between the two parties, the cooperation was formally severed in 1971 and a lawsuit by Tiger followed. Ultimately, a judge settled the dispute by allowing both companies to sell their own versions of the model. This led to two different shoe companies and the traditional sneaker that is known today, sold as the Nike Cortez model by the company BRS (the firm is today called Nike) and the Tiger Corsair shoe, which is sold under the name of Asics (Meyer, 2019).

1.2 Current Status

(Bajpai, 2020), (Nike, 2021a), (Statista, 2021b), (Statista, 2021a)

• Nike is nowadays one of the world's major provider of sports clothing and casual shoes (diversified and complex global organization).

• The main revenue of the business is generated in North America (41% of revenue share worldwide), but in total the company sells in 170 countries.

• In North America, the main sales sector is footwear, then clothing and equipment. • The firm's financial revenues are dependent on consumer tastes, growth in developing

markets, and the technologies/resources utilized. • Moreover, the enterprise's goal is to be an innovative organization and therefore

describes itself as a "growth company", which conveys a strong message about its attitude and purpose.

• The organization's net income grew in 2020 to $4 billion versus $1.93 billion in the 2018 fiscal year.

1 Company Analysis

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Illustration 1: “Nike's North American revenue from 2009 to 2020, by segment“ (Statista, 2021a)

1.3 Future Orientation

(Nike, 2021b)

• Nike has developed 29 targets focusing on the topics of “people, planet and play“ to meet changing customer needs and have a sense of corporate social responsibility.

• Therefore, a main goal of the company is to develop environmentally friendly solutions to safeguard the sustainability of sport's future.

• At the moment, the firm amplifies a good working climate and gender rates, with an equal distribution of jobs for women and men in their organisation.

• Furthermore, in terms of long-term financial objectives, the company wants to increase profits by 5% by the end of 2023.

1.4 Mission and Vision of Nike

(Nike, 2021c), (Smithson, 2016)

Nike wants good institutional communication. Therefore, it has developed a well-considered mission and vision for the enterprise:

Corporate Mission of Nike: “BRING INSPIRATION AND INNOVATION TO EVERY ATHLETE IN THE WORLD. IF YOU HAVE A BODY, YOU ARE AN ATHLETE“ (Nike, 2021c).

2 Situation Analysis

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What does this mean for Nike?

Nike’s corporate mission aims to consistently push people forward in their everyday lives. Therefore, the company is dedicated to creating sports innovations, making products more sustainable, building a supportive and diverse global team, and having a positive impact on society and act as a model of inspiration to those who consume its products.

Corporate Vision of Nike: “to remain the most authentic, connected and distinctive brand“ (Smithson, 2016).

What does this mean for Nike?

The firm focuses on the development of its brand. Nike's goal is to continue its legacy of innovative thinking by being authentic and connected to networks and communities. The company wants a strong relationship with its target groups.


2.1 Market Overview

Nike is one of the leading sports footwear and clothing companies in the world (Bain & Banjo, 2015). The firm has 1,096 Nike stores in the world and 75,400 employees (Statista, 2021c). The company mainly targets athletes and sells related products such as shoes, sports equipment and clothing. Consumers are becoming more health conscious, which will appreciate the demand for sports equipment. This athletics industry is highly fragmented and characterized by the high level of competition (UKEssays, 2018). Therefore, Nike uses vertical integration in the supply chain to study consumer trends and implement new innovative technologies. In addition to that, the firm uses an outsourcing strategy to focus on its core competencies. This guarantees high product quality and lean manufacturing (Singh, Amit, 2019). Furthermore, the firm has license agreements to produce and sell Nike products under fair working conditions, e.g., with Georgetown, to ensure their corporate social responsibility. Through these contracts, the company builds relationships and commitment between other organisations (Nike, 2017). Furthermore, Nike has a broad product portfolio by acquiring subsidiaries such as Converse (Team, 2019) or doing collaborations with stars such as with basketball player Michael Jordan, who launched with Nike the Air Jordan product line (Askinasi, 2019). The company has a great brand awareness, with a brand value worth approximately $34.79 billion (Statista, 2021d).

2.2 Market Development and Competition

In order to generate a loyal customer base as well as maintain an emotive bond with the target groups, Nike designs its brand with emotional traits (Willigan, 1992). Therefore, the company


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uses catchy slogans such as "Just do it" (Bostock, 2019) to remind the customer of the brand. The client feels connected to the trademark because of the technique of storytelling. Referring to storytelling, this means that the brand tells a story through their marketing slogans to represent the values and thinking patterns of the customers. As a result, the customer groups feel a strong connection with the brand (Shiao, 2012). Moreover, Nike uses various distribution channels to effectively merchandise the reach of its brand and its sub-brands, such as Converse and Jordan. Current sellers are, for instance, retailers, internet retailers and entire supermarkets. In addition to that, Nike is trying to further expand its digitization strategy and to be more present on the internet (Erkilic, 2018). Therefore, the company has different online training courses for free for internet users, to better share their values with their existing and potential community. With regard to expanding the digital offers, Nike uses social commerce to sell their products (Fioravanti, 2020). Besides that, the enterprise is currently producing different video clips, in which it wants to present the values of equality and strength in connection with its brand (Erkilic, 2018). Nike's target group are athletes such as runners (Lutz, 2018). However, the company wants to broaden its target group and therefore would like to use comprehensive targeting strategies and different advertising campaigns in the future (Erkilic, 2018).

Illustration 2: “Revenue from footwear segment Nike, Adidas and Puma from 2010 to 2020“ (Statista, 2021e)

Nevertheless, the firm has strong competitors such as Adidas and its subsidiary Reebok. Adidas is pursuing a strong digitalization strategy and is also strongly based in the American footwear market . Furthermore, Adidas uses innovative ideas such as open source to meet ever faster


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changing customer needs and to find creative product developments (Klingelhöfer, 2018). On top of that, Reebok is a strong competitor because the company wants to have a focus on female customers (Schlossberg, 2015). Additionally, Nike is trying to motivate women for their brand. Therefore, the two companies are in direct competition (Umur, 2020). As the statistics from Statista shows, Puma is also a direct rival but the company should be more concerned about Adidas and its subsidiary, as they have significantly more sales (Statista, 2021e).

2.3 Consumer Behaviour

The enterprise is a well-known brand worldwide, with effective advertising campaigns and word of mouth, as customers tend to share their positive experiences both on- and offline. Hence, Nike uses psychological factors to create a strong brand perception (Ugur, 2013). That is why the company uses numerous stimulating slogans for its campaigns to emotionalize the brand. With reference to this strategy, the firm launched in 2020 a campaign on Instagram on the theme of young motherhood to underpin the strength of a woman. To boost brand awareness and the call rate, certain hashtags were used under the images in Instagram (Umur, 2020). Nike recognizes that consumers can be influenced by three perspectives. These include cultural, social and personal factors (Mariadoss, 2017). Referring to this, the enterprise uses these aspects in their marketing campaigns to influence customer behaviour and purchasing processes (Hazard, 2014). By sharing beliefs and attitudes, Nike tries to give people a reason for their buy. Likewise, the company is constantly working on supply chain optimization to guarantee perfect agility. Due to globalization, the company has also begun to pursue a digitalization strategy in order to constantly promote new innovative ideas and stay competitive (Daily Investor’s Business, 2019).

2.4 PEST Analysis

(Eyorekon, 2020), (Gharagozlou, 2018), (Nike, 2021d), (Nike, 2021e), (Nike, 2021f), (Samson, 2016), (Buckner, 2020), (Nike, 2018), (Nike, 2021g)

Political factors:

• The USA is one of the main sales markets for Nike, which gives the company favourable policies in the form of low capital interest rates and a good global tax treaty.

• Due to sanctions in the USA against Iran, Nike (which has his headquarters in the USA) could not produce products for Iran’s national football team.

• Nike created employee rights and labour laws which affects Nike's internal operations. • The company is committed to humane working conditions that protect workers. • Nike‘s Code of Conduct mandates that associates must be at least 16 years old, as the

organisation is opposed to child labour (legal issues are handled by Nike itself).


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• The firm takes the labour law very seriously. Nike's formal policies include accepted standards related to how Nike conducts its business.

Economic factors:

• Nike sells all over the world, fluctuating exchange rates can affect the enterprise’s running expenses and thus the price of import and export goods.

• Due to the economic turndown, e.g., Corona, consumers may be impacted and trust in Nike's products may be decreased.

• Rising material prices and labour costs in manufacturing countries could impact Nike‘s product sales.

• Furthermore, the organisation can achieve economic growth through outsourcing to low-cost manufacturing countries.

Social factors:

• New target groups can increase Nike's brand presence (e.g., more female customers from age 40—65).

• Through social media, the image can be easily ruined, customers have easy access to any kind of information in real time.

• People becoming more health-conscious, which increases the number of people doing sports and thus needing sports equipment.

• Consumers are becoming more brand-conscious, this encourages customer commitment to the brand.

• Moreover, the firm uses diversification as customers have different preferences. Therefore, the company can expand their product portfolio.

Technological factors:

• The Internet of Things is enabling new opportunities for Nike (highly innovative products such as new shoe designs with 3D-printers).

• Through social media, the company can be continuously networked with its customers and can thus build a stronger bond with them.

• Nike has the opportunity to produce more environmentally friendly products (e.g., through Nike Air technology).

• Through the internet, a mobile shopping app can be made available to customers as well as easy online shopping via the website.

2.5 SWOT Analysis

(Apple, 2016), (Perch, 2020), (Statista, 2021b), (Bookboon, 2016), (Profitworks, 2021), (Pratap, 2020), (Business Strategy Hub, 2020), (Harsono, 2021), (Schlossberg, 2016), (Nike, 2021h)


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Internal Analysis

Strengths:

• Nike has a leading market position (700 stores globally in 170 countries) with a good marketing strategy and communication.

• Strong brand awareness because of emotional branding (symbolizes emotional benefit for the customer).

• Great external communication and non-verbal communication, e.g., logo which represents quality and value for the target audience.

• Good distribution channels by having a lot of strategic partnerships (e.g., with Apple) and sponsorships with sporting stars (e.g., with Michael Jordan).

• Low production costs because of outsourcing production, e.g., to Indonesia. • Good internal R&D and rapid innovation processes. • Diversification of high-quality products for different customer groups. • Strong emotionally resonant marketing campaigns on social media. • Well-training marketing department advertising clear marketing messages. • Nike created a Code of Conduct for suppliers because of bad PR in the past.

Weaknesses:

• In general, most of the profit is made in the USA (dependence on the market). • Furthermore, a large part of sales depends strongly on the shoe segment. • Nike received bad PR in the past because of child labour, bad working conditions and

poor payment of workers. • Dependent on corporation partners (e.g., on retailers) to sell their products. • Knowledge can be lost when collaborations fail. • Nike is dependent on sport events (e.g., a lot of losses because of COVID-19 pandemic). • However, the company is not best using opportunities in emerging markets and in the

Middle East.

External Analysis

Opportunities:

• Nike has the money to support different events globally and do more marketing, as done by their competitors (e.g., Adidas).

• Above all, the company should enter into emerging markets and the Middle East (Brazil, India, Russia and China).

• Using the Internet of Things can be innovative (combining smart products with traditional products).

3 Marketing Strategy

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• More intensive knowledge through purchase of Artificial Intelligence start-ups (e.g., like the company Celect).

• In addition, the company should end some unsuccessful partnerships with retailers to create more brand value and have more money for its digital strategy (e.g., like with Fred Meyer, Bob’s Stores).

• At the moment, the trend should be toward digitalization to quickly increase revenues. • Nike can make supply chain optimizations (can acquire manufacturers or produce

themselves if they are too expensive).

Threats:

• Currently more competition because of globalization and new market competitors. • Therefore, customer price sensitivity exists on the selling markets. • Being globally represented on the market can mean floating foreign exchange rates. • Nowadays sustainability is becoming increasingly important, Nike wants to reach their

sustainability goals by 2025. • At the moment, there are no events because of COVID-19 pandemic. • Economic uncertainty (because of COVID-19, sales have decreased). • Less spending for marketing as compared to competitors like Adidas. • Fake products on the market, which weaken the reputation of the company. • Legal disputes (e.g., the patent dispute with Adidas over Primeknit and Flyknit shoes). • Nike is dependent on China and the USA (Nike's sales are threatened if trade disputes

between the two countries escalate).


The following section provides a detailed exploration of Nike’s marketing strategy to achieve the goal of a 5% profit increase by the end of 2023.

3.1 Key Success Factors and Critical Issues

(Apple, 2016), (Perch, 2020), (Statista, 2021b), (Bookboon, 2016), (Profitworks, 2021), (Pratap, 2020), (Business Strategy Hub, 2020), (Harsono, 2021), (Schlossberg, 2016)

Key success factors of Nike:

• Unique products with good quality, as the company has built a strong brand equity. • Nike tries to understand people and their needs and combines these true stories with

their marketing strategy (by understanding cultural, social and personal factors). • Besides that, the firm offers a high accessibility to products, as it uses different

distribution channels and has different cooperation partners all over the world.


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• At the moment, Nike is undertaking a successful corporate expansion in terms of internal and external analysis, business position, competitors, products and organizational structure.

• Nike is trying to improve its reputation by using a Code of Conduct and is increasing its focus on sustainability and fair working conditions.

• Financial sustainability, as Nike has a good internal R&D and strong relationships with partners (e.g., with Apple).

Key critical issues of Nike:

• Nike is represented in many countries around the world; however, the main market is the USA.

• Likewise, the firm has started to establish itself in EMEA countries, but not to its full potential.

• At the moment, the target group are men and women aged 15—40, therefore essential customer groups are not receiving sufficient attention. Negative media attention has severely affected the organisation’s reputation, as it has produced poor working conditions for employees in Indonesia. A main problem of Nike is that it leads and plans without proper management.

• Nike relies on emotionalizing their brand, nevertheless, Nike's products have become synonymous with slave wages through the media (workers get minimum wage, forced to work overtime).

• Existing products may be out of fashion due to high competition (e.g., Air Jordan sneakers).

3.2 Objectives

• The goal is to increase the profit of the company by 5% by the end of 2023. • Provide a unique value proposition (on the design, durability and quality of products). • The production should maintain good quality and allow low production costs. • However, the main focus should be on fair working conditions, in compliance with

Nike‘s Code of Conduct. • Simultaneously, the needs and requirements of the target market needs to be met (for

young and old target groups). • Application of continuous marketing strategies for further market entries. • Sustainable development of the product worldwide (increasing market share in the

Middle East and emerging markets). • Have good corporate social responsibility and a respected reputation.


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3.3 Segmentation, Targeting and Positioning

Nike has used the following segmentation to create new target groups of consumers and to achieve its long-term objectives:

Segmentation

1. Demographics segmentation: Nike has decided to segment individuals by age and gender. The products will serve males and females aged 15—60 years.

2. Psychographics segmentation: Nike applies this segmentation to answer why the target groups need their products and what the customers interests and buying habits are. In relation to these facts, the firm segments its market as follows:

• Providing products for sports enthusiasts and people with an active lifestyle. • New products for trendy and active men and women from 40—60. • Pushing Converse products for young teenagers, who are passionate about brands and

fashion.

3. Behavioural segmentation: Focus on the feelings of the customers by pushing the emotional branding of Nike and deep-meaning marketing campaigns. The target groups should identify with the brand and share their experiences with a wider community in Nike‘s social media accounts (e.g. on Instagram with #proudtobeover40).

4. Geographic segmentation: The goal is to serve Nike products to every country in the world. At the moment, the major market is in the USA. In the future, this should be changed. The focus should be entering the Middle East and emerging markets like Brazil, India, Russia and China, to generate more profit and to finally use the existing opportunities.

Targeting

To start off the market segmentation, Nike has a niche market to serve. Nike concentrates on the segment of athletes and offers them their desired products, such as shoes and apparel, that have very specific and unique characteristics compared to other products. However, at the same time, the company should also involve other market segments to increase profits. Originally, the focus was on male and female consumers in the age group of 15—40. Moreover, in order to increase the number of possible customer groups, the age range should be extended to 15—60 years. Nike uses an active marketing strategy to make its target consumers aware of its products. In any case, the company needs new and dedicated marketing campaigns developed for the over 40 age groups and for young teenagers.


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Furthermore, targeting strategies include sponsorship of its products by celebrities to enhance Nike’s brand image after bad PR. The company aims to style its product in the target market through psychological tactics by associating victories with clothing, e.g., products are seen as a win if the sponsorship is by prominent sports figures because customers identify with the brand. On top of that, athletes should advertise fair working conditions and focus on the equality of humans in order to improve the image of the brand.

Positioning

Nike has positioned itself as a leader of sporting products among its target athletic customers. The company offers a wide variety of sports products for the niche market. In the future, this should also be achieved for the 40—60 age group. The company equally wants to get a strong market position in the field of casual wear. Furthermore, this goal applies also to the segment of young teenagers. These are to be reached primarily through the Converse brand, in order to position the company strongly in the fashion world. In general, Nike focuses on the emotionalization of its products. This is reflected in their slogans, e.g. "Just do it". The slogan appeals to its target customers to buy the product with a sense of inspiration and confidence. Through the relationship with the target groups and the brand, Nike could become a major competitor in every clothing industry as it already has a high brand value in the market. In the future, these adaptions will be made by expanding its positioning strategy to achieve a 5% increase in profits by 2023. This should secure the company an exclusive market position in the global context. Hence, its positioning statement is: “For each person Nike offers perfect products that give confidence for any type of lifestyle.”

To summarize, the new positioning includes the following positioning strategies:

• Product and marketing should focus more heavily on lifestyle products and fashionable trends tailored to reach all customer lifestyles and sport routines, thus reducing a reliance on footwear for the generation of profits.

• Lively campaigns to capture consumers' imagination and create a bond with the target groups (acquiring various stars for marketing campaigns).

• Position itself as a premium brand with well-designed products. • Appealing quality level and high-quality products for every target segment.

3.4 Strategy Summary

The main focus of the strategy is to hold its prominent position in the global sports market but to also be successful in the everyday consumer landscape and to inspire trendy teenagers in order to increase market share and consequently profit by 5% by 2023.


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The following strategies are used to implement the following factors:

• Value-based pricing strategy: Going forward, Nike will use a value-based pricing strategy to set its prices according to consumers' perceptions of the value of its products. Nike aims to provide the highest quality goods at the right price and place for customers to ensure the best customer journey. Apart from this, the strategy can be used to determine how much consumers are willing to pay for the company's goods. This pricing strategy has the potential to generate higher profits in the future, as the value of the goods are very high among customers due to the emotionalization of the brand.

• Market expansion strategy: Nike's strategy is to expand its distribution channels around the world by constantly improving its product lines and distribution channels. In addition to the main sales market of the USA, a further focus will be placed on the Middle East and emerging markets such as Brazil, India, Russia and China.

• Outsourcing strategy: The outsourcing strategy is being maintained. This means that Nike outsources its product manufacturing in order to focus internally on its core competencies (such as internal R&D). Therefore, there are collaborations with various countries such as China, Japan and Indonesia. However, in the future, fair working conditions should be created in order to prevent more bad press which so negatively affected its reputation and not to upset its new potential customer groups (e.g. in China).

3.5 Competitive Advantages

In the following, a list of Nike’s advantages will be presented, which will help the company to achieve its goal.

Internal and external R&D: Nike is an innovative company that strives to integrate new things into products for the target market. Referring to this, it should be mentioned that the firm has a good internal R&D department. The product development strategy is constantly adjusted in monthly meetings by the top management of the R&D department to keep the value of the brand continuously at a high level. Product plans are prepared, which then go to the marketing department in order to disseminate a coherent message and advertising campaign to the target groups. Nike uses also external R&D in its innovation processes. Accordingly, external resources are included in the innovation strategy in order to be able to use further knowledge.

Intellectual property rights of Nike: To avoid fake or imitation products, the company uses strong patents and copyrights on its goods so that they remain unique in the market. That is why Nike has employed the best lawyers from all over the world in its legal department, who take care of these problems in the future.


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Technology: Nike uses the most advanced technology and the benefits of the Internet of Things. To remain innovative in the market, it combines new technologies with existing products. Therefore, Nike has the opportunity to produce trendy goods, especially with collaborative partners like Apple. Furthermore, partner relationships deepen the company's market position and help the firm to produce competitive items in the future. Currently, a new company project is developing Nike shoes which can connect Apple devices through integrated sensor technology.

Production costs: Nike has an agile supply chain management, which allows the enterprise to use competitive advantages. Moreover, the firm uses a global outsourcing strategy that allows it to maintain low costs in its production. Nike has over 700 contracts with countries all over the world that help it in the supply chain process. In addition to that, the firm generates economies of scale through its efficiency in manufacturing. Accordingly, continuous improvement in its production is enabled by the emergence of low costs with increased levels of production and sales.

Cooperation partners and marketing: Nike has many cooperation partners, such as with famous stars and associations, which strengthen their premium brand. Similarly, the company has a large budget for its marketing campaigns.

Organizational climate: Nike aims to have a good corporate climate. Hence, the company offers many employee advantages to create a good work-life balance. For this reason, associates are rewarded for doing a good job. With regard to the job recognition, employees are evaluated monthly and receive extra payments as well as extra vacation days. On top of that, the management is coached on a monthly basis to further expand their leadership style. Nike wants the top managers to have a strong relation with their employees in order to create great products for their target markets.

Internal communication: Nike has the ability to provide good internal communication within their organization structure. This is especially evident for a balanced relationship and communication between employees and managers. A bottom-up approach prevails to enable more agile business processes. Employees are informed at any time about the latest events and news of the company, as a weekly newsletter is sent to internal employees and managers hold conferences with teams. Vice versa, associates inform the management if they have any issues. An internal blog allows good ideas for product development. If employees do have a problem, they can make an appointment at any time during working hours with the manager via free time slots in teams. The company believes that its success lies in its employees. If they are happy and understand the company's vision and mission, they can also be successful with their products.

External communication: The company has exemplary external communication to communicate with its audience. The organization shares the latest information about their

4 Marketing Mix Strategy

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business every day through social media. These messages are published especially through the company website and other social media channels such as Instagram and Twitter. Before the information goes online, the PR department always makes sure that only correct information goes out to the channels. Any published news is at all times in line with Nike's vision and mission. A clear marketing statement is disseminated. In addition to that, everybody can easily download the latest newsletter, which is published weekly by the marketing manager on the company website. Furthermore, the enterprise maintains good media relations. It has good PR, such as with the trendiest reporters around the world who spread exclusive news for Nike. Moreover, the company organizes special events every month to benefit people in need. On top of that, the company is supported by many famous people for its good causes. Besides that, the firm's managers are excellent speakers who can clearly represent the company's vision and mission at speaking events. To constantly polish up the company image, Nike sponsors different associations and famous stars to maintain good brand recognition.


Nike wants to ensure strong marketing communication by having a deep connection to its environment and producing meaningful content. Therefore, Nike aims to create a well-structured marketing mix. In particular, the company depends on the pull strategy to operate globally in the world market. The marketing mix is set up as follows to achieve a 5% profit increase by 2023:

4.1 Product

Nike provides a wide range of products for their target groups, including shoes, clothing, accessories and sports equipment. Currently, the best-selling product category is footwear. The most sold type of shoes are running shoes. In sports, Nike currently offers products for athletics, baseball, field hockey, tennis, soccer, lacrosse and basketball and has a wide range of other sportswear. Since Nike already offers a wide range of products for sports, the product scope is to be expanded in the future for casual and trendy clothes, for the free time. Nike will produce clothes, shoes and accessories targeted at men and women over 40 for their everyday life. The products should be comfortable and fashionable at the same time. In addition to that, the Converse trademark will extend their shoe and clothes designs for youth. Besides that, Nike will give customers the opportunity to create their own clothes and bags on their company website. The process is intended to push the target groups to design their own individual products and to have more sales in product categories other than shoes. A selection of product styles (e.g. colours and materials) will be available as well as a selection of ready-made designs to inspire them. Furthermore, the company saves research costs because they will know directly what the customer wants by checking their creative purchase products.


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Moreover, the firm stays creative with such open innovation by manufacturing customer-oriented product ideas.

4.2 Pricing

Nike’s pricing is based on their target customers as a premium segment. The Nike brand demands a high level of premium goods which leads to having higher prices than its rivals. Nike's pricing strategy is justified by the high quality of its products and the emotional attachment to the brand. The Nike logo already stands for exclusivity and the characteristic that one is able to self-identify with it. The pricing strategy uses vertical integration. Because of that, the firm can sell at different channel levels and also take a role in the operating level of more than one channel to perfectly influence cost control and product pricing. By emotionalizing the brand, Nike's customers are willing to pay more money for the goods. In any case, the firm can offer value-based pricing, because Nike’s target consumers are those who are willing to spend their financial capabilities to get the product. In regard to purchasing, the target groups will feel confident with the product which increases their happiness level. All in all, the ultimate price of the products evolves through the customers' willingness to pay, which allows Nike to offer higher prices than its competitors. Thus, Nike can charge premium prices.

4.3 Place/Distribution

Nike’s distribution channels create a worldwide network through which Nike products are sold, e.g., by different retailers and wholesalers. In addition to that, the company has its own exclusive Nike stores. However, its largest sales market is still in the USA. Nevertheless, in the future, the distribution strategy will be changed. Nike's strategy needs to broaden up in context of its key markets. For this reason, the main sales market of the USA will, this year, have a lower marketing focus because the company needs to concentrate on expanding in the Middle East and into emerging markets such as Brazil, India, Russia and China to increase profit by 5% by 2023. First of all, there will be a focus on digitalization, with the aim of conducting more e-commerce and online marketing communication. The Middle East and emerging markets such as Brazil, India, Russia and China are to be firstly reached online in order to save fix costs. Once a significant customer base has been acquired by 2023, the further plan is to open local Nike shops there and gradually start distribution collaborations with local cooperation partners (e.g., franchises). In the USA, third-party distributors, licenses and subsidies will continue to sell Nike's products in the same manner as before. With regard to this, Nike will go on with their outsourcing strategy, to reduce production costs. Manufacturing cooperation partners are located in China, Japan and Indonesia.


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4.4 Promotion and Nike’s Integrated Marketing Communication Strategy

Nike has saved a lot of money to fully exploit its advertising. Therefore, the budget for the different marketing campaigns is $9.5 million. In order to generate an effective marketing communications mix, new customers groups are to be acquired in the Middle East and in emerging markets such as Brazil, India, Russia and China. First of all, the marketing department has to inform itself comprehensively about the cultural differences of the various countries. Once the knowledge base about the different cultural differences has been built, digital marketing campaigns can be perfectly tailored for social media channels (e.g., Facebook, Twitter, Instagram, YouTube and the firm’s page). Hence, to save costs, existing posts will be culturally adapted and scheduled on the different channels. Through advertising, Nike´s target is to achieve the greatest possible impact on large populations of the new target markets and give them the feeling that the company understands what their desires and needs are. On top of that, a recruitment team should do email marketing. Recruitment research will be conducted with a list of sports-minded people from LinkedIn and Xing, who will get well-crafted and personalized emails via the messaging function. In addition to that, the company will do print ads. Billboards will go up near shopping malls to increase brand awareness during the new market entries. Nevertheless, the marketing department should talk to the local government of the respective country beforehand, as each country has different restrictions and customs regarding advertising. Besides that, Nike will place salespeople in the shopping malls, to advertise the brand with flyers and giveaways like free drinks. Through such direct marketing, the company is hoping to build, quickly and strongly, a relationship between the target groups by giving the brand a face. In any case, the vendors will receive cultural training, to learn how to pay special attention to cultural differences (e.g., kinesis system and hand movements). In regard to this, salespeople have to be careful (especially in high-context culture countries such as China) to respect older people. Overall, the budget for all the market entries is planned to cost $2 million.

In order to focus on additional target groups (stylish teenagers and men and women in the 40—60 age bracket), a market research study has been conducted by the company. Through the findings, the desires and needs of these groups were retrieved, to better understand how to win them over. The Converse campaign for the young target group will be a short video and a photoshoot featuring Justin and Hailey Bieber for Instagram, Facebook and YouTube. Since Nike has a good relationship with the couple, the total cost of the commercial, will be $1.5 million. On top of that, Justin and Hailey Bieber will exclusively wear Converse products in their free time. In parallel, well-known Instagram and YouTube influencers from the respective country are to be recruited for cooperation. They will receive the products for free and promote them daily on Instagram and YouTube. Furthermore, an advertising campaign with Eva Longoria and Brad Pitt is to be created in order to win over the new target group over 40. A shooting and short TV clip with the new clothes and accessories are to be made for


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September 2021. The pictures are to be posted on Nike's social media (Twitter, Facebook, LinkedIn and Xing) on Sundays at 3pm. In the campaign, the hashtag #proudtobeover40 will be used. The goal is that the customers – after purchasing the products – will act and take a selfie and post it with this hashtag in the social media channels. In the Nike newsletters, this is to be announced two weeks before the pictures will be uploaded to the internet. In addition, a media tour will be organized. Interviews will be given with the two stars on the radio channels in the USA and Europe (Paris, Milan, Barcelona and Munich), where Eva and Brad will promote Nike and explain the #project. Since Eva Longoria has a close relationship with Vogue, the company has decided to do the photo with Vogue and print them also in the Vogue magazine in September 2021. In addition, the advertisement is to be broadcast in the USA at 8pm on Sunday on the NBC television station. To save costs and to see how the advertisement is received, it will initially only be shown in the USA. It is hoped that this will not only generate the main income in the shoe sector, but also in the clothing and accessories sectors. The cost of the campaign is $3.5 million.

It should also be included that the company will do further campaigns with Michael Jordan to boost the Jordan products again. New photos are to be taken with the star and his product line. To ensure that the different target group marketing strategies do not overlap, the campaign will be posted in June 2021 every Tuesday and Thursday at 8pm on Facebook, Twitter and Instagram. In addition to that, in June 2021 Nike will do a sales promotion including coupons and special offers for the Jordan products. The women's campaigns with Serena Williams will be maintained, as they are very well received by the female target group. No further photo campaigns will be scheduled for this as they are only a month old. They will continue to be disseminated on all social media channels on Saturdays and Sundays around 4pm. For these two campaigns, $1.5 million are planned. In order to fight the competition, Steffi Graf is also to be poached from Adidas for advertising campaigns. Arrangements are currently underway. The company has earmarked $1 million for this. It should be mentioned that all campaigns need to have a focus on fair working conditions and equality in order to further improve the company's image after it received bad PR in the past. The company website should be continuously updated with current information about how Nike is providing fair working conditions. Renewed meetings are to be held in half a year to plan future charity events and PR activities. Due to COVID-19, this is unfortunately not earlier desired by top management.

4.5 Implementation and Control of the new Marketing Strategy

Nike will ensure its new marketing strategy through extensive top management control processes. In parallel, all employees will be educated about the new goals to ensure that the entire organization shares the same vision and mission and is properly communicated with internally. Nike's goals are specific, measurable, achievable and realistic, and aligned to a clear

5 Conclusion and Recommendations

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timeline (by 2023). In the implementation phase, the company's market share, profit, budget and continuous analysis of all departments of the company are continually reviewed. If necessary, changes are applied to the marketing strategy to compensate for errors in an agile manner, so that the adjusted marketing plan can be implemented, and the goals achieved.

Therefore, in half a year, a meeting will be held again by the top management to see if the first milestones for the goal of increasing profits by 5% by 2023 have already been achieved. If all the set standards and controlling procedures do not meet the marketing plan, the execution implementation team needs to be informed to plan an alternative plan.

5 Conclusion and Recommendations

From this market and business analysis, Nike has the potency to achieve its goals, offer new products and expand its market entries. Therefore, with regard to Nike's overall strategies and goals, the following points are suggested:

• The company should expand its product range by producing new products (for example, clothes and accessories for men and women over 40) to overcome its reliance on the sale of mostly footwear products.

• Nike should continue to expand its marketing communication channels, e.g., by using social media, direct marketing, media relations and sales promotions, to enter new markets.

• The organization can work more collaboratively with innovative companies, such as Apple, to integrate new technologies into existing products.

• The business should, above all, have proper management with a good leadership style in control of work issues. Therefore, the management should receive continuous training on crisis and human management.

• Nike could make further collaborations with other companies to expand its business and facilitate its global growth strategy.

• Nike should do research about human management and employer branding to extend their relations with associates and to build employee responsibility.

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Nike Communications Plan for an External Audience

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