Strategic Sales And Marketing Management For Nike
Additionally, the learning outcomes from the paper will be addressed, the background of the company will be included, the annual figures of Nike will be indicated, and any recommendations that can enhance the performance and sustainability of the company will be explained. Using the theories from the course readings as well as research from other sources and the relevant theories, this report will provide the full analysis of Nike’s sales and marketing management strategies. Introduction The current business environment is more competitive than ever before. Companies have established aggressive methods for marketing and selling their products. The increased competition has also been due to the various marketing strategies that are available. This paper will analyse the sales and marketing management used by Nike Inc.
to establish the reason for its success in the industry. Additionally, the learning outcomes from the paper will be addressed, the background of the company will be included, the annual figures of Nike will be indicated, and any recommendations that can enhance the performance and sustainability of the company will be explained. Using the theories from the course readings as well as research from other sources and the relevant theories, this report will provide the full analysis of Nike’s sales and marketing management strategies. Key Words Triple bottom line Michael Porter Cultural congruence Ethical Marketing mix Standardisation Adoption Obsolescence Background of the Report Hardly any company can survive in the current market without strong and aggressive marketing management strategies. Therefore, reaching a wider market requires more than the product (Cravens, Le Meunier-FitzHugh, & Piercy 2011, 40).
The manufacturer should be able to connect emotionally with the targeted consumer. The report also aims at establishing various learning outcomes with regards to understanding the operations of the company. The History of Nike Inc. The Nike Company is a leading brand in athletic footwear and sports clothing in the world. A year later, the company sponsored a basketball player known as Michael Jordan. This decision turned out to be one of the best business moves in history. The brand created and named after this player was known as the Air Jordan. 1991 was the year that Nike realised 3 billion USD in revenue from the endorsement with Jordan. Michael Jordan became one of the best basketball players in the history of the National Basketball Association (NBA).
It is essential for organizations to evaluate the necessary strategies that will go a long way in ensuring that they increase the revenue generated. Effective strategies are an indication of the likelihood of a company performing better and thus improving the value of the business. Relationship marketing on the other hand refers to a marketing strategy that aims at ensuring that an organization achieves customer retention, satisfaction as well as a lifetime customer value. In the current market situation, organizations are using relationship marketing in ensuring that they improve on customer acquisition by using sales and advertising. Through this, a company ensures that they establish adequate customer loyalty and better long lasting relationship. In 2013, Fast Company nominated Nike as the number 1 most innovative company.
This decision was efficient because, from its inception, Nike has chosen to constantly and regularly revolutionise its products. Its most successful brand, the Air Jordan, has been remodelled over the years from its first success. Currently, new sneaker versions of the shoe which fit all forms of lifestyles are produced annually. Hardly a year goes by without Nike realising a new brand of Air Jordans. In addition to such products, Nike has developed clothing merchandises which have not only sold millions of units globally but are still in high demand. Such items include jumpers, hoodies, sweatpants, and sandals. The fashion trend has allowed for Nike to make huge sales in clothing items which bore the Nike logo. These items have also managed to increase the revenue earned by the company.
Nike also incorporates the aspect of integrated marketing through the incorporation of diversified marketing campaigns that tend to reinforce one another. These platforms allow for customers to browse for the products and also order them online and after payment, the commodity is shipped to them. This method of modernizing their business transaction has enabled the company to keep pace with the changing environment and it continues to make Nike as an advanced company that adapts to the changing environment. Such management features continue to make Nike stand out above its competition (Cravens, Le Meunier-FitzHugh, & Piercy, 2011, 55). Nike’s Annual Reports When it comes to net sales, Nike has had an increase in the amount. The 2017 quarterly financial report indicates how much the company has managed to increase its amount of sales.
Based on these quarterly statistics, Nike earns about 40 billion USD in sales per year. This figure tends to fluctuate depending on the economy since the purchasing power of consumers constantly changes depending on the economic environment. However, Nike continues to hold a strong competitive position in the industry since it surpasses in sales, precisely from its best brand, the Air Jordan. However, even with a strong competitive position, Nike is bound to encounter more competition from other shoe manufacturers due to various issues. One reason is that even though Nike has dominated the footwear industry for decades, several companies are gaining competitive advantage. Currently, the company targets its consumer base using social media and other online platforms. Customers are able to interact with the employees of the company where their questions are answered within a short time.
This measure ensures that the loyal customers are kept abreast of the new modifications and the latest models that are about to be released. Additionally, the online approach creates the option for internet shopping where the clients can order the new products even before the products have physically reached the local shops. This form of convenience continues to enhance the loyalty of the consumers. Nike uses the functional organizational structure which is usually based on the basic common job functions of the company. The marketers are grouped together in one department, the sales people are in the other while customer service is in a different department. Through the establishment of such a structure, Nike gets the opportunity to ensure that they follow through on the functions of the company at all times.
The structure is essential for the generation of a high degree of specialization of the employees and the scaling is geared towards the enhancement of the growth of the company. However, the downside is that it creates barriers within different functions. Thus, even though the current semi-autonomous structure for the company ensures that it continues earning huge returns while also maintaining a strong competitive position, this structure is unlikely to support the company in the future (Ahmed et al, 2016). Thus, an alternative organizational structure is necessary to ensure the stability of the company as the market environment continues to become more competitive. Thus, without maximising the full benefits from its brands, Nike is likely to be usurped by its main competitors such as Adidas, Reebok, Under Armour, and Umbra (Ahmed et al, 2016).
The suggested global organizational structure for Nike should include more autonomy over the Converse brand. The increased independence for the Converse brand will ensure that the global managers can easily market the product while also solving any challenges that can occur within a short time. This culture of innovation is bound to continue creating more benefits for the company. However, without transformative ideas that are ahead of the competition, Adidas and Reebok will soon catch up and seriously threaten the competitive position of Nike (Ahmed et al, 2016). Challenges for Nike According to Chernerv and Kotler (2014) a company must understand the 4Ps of its marketing strategies. These 4Ps are the product, the price, the promotion, and the place. This method of analysis ensures that the company considers all these aspects in regard to the target market (Chernerv & Kotler, 2014, 20).
Even after the success of using Michael Jordan as a marketing tool, Nike went ahead to continue endorsing more players and athletes who showed great potential and promise. This marketing strategy continued to increase the fame and desire for products with Nike brand, regardless of the sport or athlete it represented. Due to the popularity of the Air Jordan, almost every year Nike releases a new version of the sneakers. The prices always vary to reach various market segments and the strategy works effectively. When it comes to price, the company has to consider the purchasing power of the targeted consumers. Even though the company has grown internationally, it has not been able to effectively tap the emerging markets. These markets are found in South America and Africa.
The prices for the products made by the company are also unattractive to these regions due to lower purchasing power of the people. Thus, Nike should take advantage of such marketing opportunities (Mahdi, 2015). The biggest threat to Nike Inc. Additionally, the company continues to make more profits due to the low cost of production. However, this method does not appeal to human rights activists who know the conditions of the workers in such outsourced plants. Therefore, despite such measures to lower the cost of production, such issues create a problem since the activists can create a negative publicity for the product (Chernerv & Kotler, 2014, 25). Despite the common phrase about publicity, when it comes to corporate products, negative publicity can be fatal for any brand.
Thus, companies must ensure that they comply with the international labour laws regardless of the place where they are operating. Additionally, the opportunity enabled the company to create online stores where they can sell their wares through online sites. These platforms allow for customers to browse for the products and also order them online and after payment, the commodity is shipped to them. This method of modernizing their business transaction has enabled the company to keep pace with the changing environment and it continues to make Nike as an advanced company that adapts to the changing environment. Such management features continue to make Nike stand out above its competition. Impact of marketing strategy on overall organizational strategy A marketing strategy helps you create products and services with the best chances for making a profit.
This move will help the company to maximise profits from the brand. Additionally, Nike has to take more advantage of the emerging markets which are mainly in the developing countries. The ability of the company to use this opportunity by creating low-cost products will strengthen its competitive position. References Ahmed, Rizwan & Brohi, Hina & Hussain Bhutto, Arslan & Prithiani, Joti & Khubchandani, Rabel & Kumar, Sumit & Abbas, Zaheer. Strategic Marketing Plan of Nike. (2014) Marketing Strategy & Management. 5th edn. Basingstoke: Palgrave Macmillan. Brenner, B. , Schlegelmilch, B. (2014) Strategic Marketing Management. 8th edn. Chicago IL: Cerebellum Press. Cravens, D W. , Le Meunier-FitzHugh, K and Piercy, N. Gamble, J. , & Thompson, A. A. Essentials of strategic management. Irwin Mcgraw-Hill. A. A Comparative Analysis of Strategies and Business Models of Nike, Inc.
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