Nikes marketing principles
Marketing is an essential part of any type of business as it identifies, anticipates and satisfies customer requirements profitably. Marketing focuses identifying the particular wants, needs and requirements of a target market of customers, and then going out and satisfying those customers better than the competitors. This involves carrying out market research on customers, analysing their needs and then making strategic decisions about product design, pricing, promotion and distribution. Marketing is really about ‘getting the right product to the right people at the right price at the right time’.
Following are the principles of marketing, which are related to Nike:
Market research must establish whether current products or services satisfy customer expectations. This can be achieved in a number of ways i.e. surveys and questionnaires, customer feedback within stores, annual reports and statistics.
Nike believes that customers should be satisfied when buying their products. They offer a 10-day money back guarantee as a way of showing its customers that Nike’s products are of high quality and that Nike are confident in their products, so when a product does not do what its meant to do or is broken because of a manufacturer fault you can exchange the product for the same thing, something up to the same value or you can receive a full no-hassle refund. This shows that Nike provides a good service and they always want their customers to be satisfied.
Customer perception is the overall image that the customers have on the organisation and its products.
With Nike customers do not necessarily perceive value for money but mainly product quality, fashion being a brand name, reliability etc.
Over the years not only has Nike itself grown as a company but also so has its reputation. Nike has become very popular, particularly amongst its ‘younger’ customers e.g. teenager feel a great loyalty towards Nike. The majority of Nike’s customers are repeat buyers.
Nike is one of the worlds most successful companies because they offer a huge range of products at the highest quality. They also have a company expansion research and development team to improve their products and make the more efficient.
Customer needs and expectations
Anticipating the future and forecasting tomorrow’s customer needs and expectations is the task of marketing research.
This is vital to Nike because as time changes, so does fashion and customer expectations. Nike could bring out a new design in their latest trainers, they could go on to sell as the top product for a few weeks after the launch of the product but then maybe after 6 weeks the sales decrease dramatically as customer needs and expectations change. For Nike to prepare for this type of outcome, they need to forecast sales on their products. Nike needs to stay in touch on a daily basis with what customers want, what’s ‘in’ and what isn’t, latest fashion hypes etc.
For the Nike sports drink I think the best way to find out what the customers would need and expect from the drink is by carrying out a questionnaire as to what athletes and non-athletes would want from the drink. Also secondary research carried out into what needs to be in a sports drink.
Entering new markets or creating new products or both can achieve this. Growth can also occur by expanding in existing markets, or linking with other organisations – mergers, takeovers, joint ventures etc.
Nike was originally known for being the brand name in trainers, from there Nike moved into the clothing market, manufacturing sporting wear, caps, trainers etc.
Today Nike is known worldwide, they are also the big name in sports as well as fashion, sponsors of major sporting events such as football, basketball and even golf. Nike manufacture a popular line in sports watches, again incorporating the latest designs and styles to attract their customers. Nike has expanded in manufacturing sports equipment, i.e. footballs, tennis rackets, sweatbands, drink bottles even socks, gloves and scarves!
You name it, more than likely Nike has sponsored, manufactured or had their name or logo on it.
This is probably the beginning for Nike, as times change, consumers views and needs change, possibly in the next few years we may even see that well know Nike ‘swoosh’ on fridges, televisions and electrical equipment!
Awareness of change
The PEST analysis examines changes in a marketplace caused by Political, Economical, Social and Technological factors. Technology will have a massive impact on all businesses. The Internet is here to stay, as are other interactive ways of doing business. Any business unaware of what is going on in the business world will risk being out manoeuvred.
Nike has made the best move by doing business over the Internet.
It has a number of advantages for its customers:
* Fast – saving time for people who do not have the time to travel to shop
* Convenient – not everyone has a shop selling Nike products nearby
* Variety – enables consumers to purchase goods exclusive to certain countries, i.e. America, where the latest trainers, clothing is launched first.
Co-ordinating Marketing activities
Having a clear plan of action is essential for an organisation, this is where the operating of the business can be broken down and analysed. This involves the principle of careful planning, using a combinations of SWOT analysis, which looks at the Strengths, Weaknesses, Opportunities and Threats facing the business with the Marketing Mix activities, which concentrates on the ‘4 P’s, Product, Price, Promotion and Place. The whole emphasis of the planning process is for the organisation to ‘think customer’ and ‘think marketing’.
Awareness of legal constraints
Changes in the law will add to the uncertainties listed above. Statute Laws like the Consumer Protection Law, and voluntary agreements like the monitoring of advertising by the Advertising Standards Authority, all require organisations to understand their obligations. This is when the way in which you advertise a product is against regulations. In order for this to be understood the company must be aware of all the advertising standards legislation. If they are not then action can be taken in some cases leading to major court cases.
Nike is well used of advertising and they could also advertise both their clothing and their new Nike sports drink together, which will save them some money. For example, a well-known celebrity or athlete wearing a new style of trainers or clothing drinking out of the Nike sports drink.
Analysis of competition
Clearly understanding whom the competition is and what benefits they are offering are essential for an organisation. Marketing Research has a role to play as well. What is sometimes less obvious is what the word ‘competition’ actually means. In its broadest sense, every product competes with every other for the limited resources in your pocket. More specifically, it could be any product satisfying the same customer need. For example, Nike is not the only company who manufactures trainers, clothing, and sports equipment, Nike is not the only company that sponsor various events, and Nike has a number of competitors, Adidas, Reebok etc.
Nike is always one step ahead of its competitors, carrying out extensive research so that they can keep up to date on the changes in the market, maintaining quality on all of its products, providing excellent customer service and after sales service.
Understand customer needs
Carrying out a questionnaire/survey and analysing it can achieve this. The results of the survey can then give me an indication as to what customers want and at what price they are willing to pay. It can also keep me up to date with the latest fashion changes.
Communicate effectively with customers to satisfy their expectations
The way I will communicate my product is promoting it in a way that the customers will be attracted to it. For example offers i.e. Buy One Get One Free, Promotional offers; buy the latest trainers and Get Nike sports drink free.
Understand and keep ahead of competitors
I will develop and maintain relationship with potential customers who will attract them to buy the Nike sports drink and I will make sure that the offers of the sports drink will match if not beat those of my competitors.