Nikes Product Mix free essay sample

ConverseIntroduction The increase in the number of companies and the competitive prices that the companies offer has given rise to a competitive situation in the companies (Borden, 1984). Marketing activities in companies are framed based on the ‘marketing mix’ of the company (Borden, 1984). The marketing mix framework consists of 7Ps considering the modern scenario (Booms and Bitner, 1981, cited in Rafiq and Ahmed, 1995). This is an improvement over the original marketing mix of 12 elements (Borden, 1965, cited in Rafiq and Ahmed, 1995). The marketing mix of a company plays a very crucial role in its success. This essay discusses how Nike, Inc. has become a successful brand through the proper use of the marketing mix. Nike, Inc. Nike. Inc. was pioneered by two visionaries Bill Bowerman and Phil Knight (Nike, Inc. a). Bill Bowerman was a famous track and field coach at the University of Oregon and he designed shoes that gave athletes a competitive advantage (Nike, Inc. We will write a custom essay sample on Nikes Product Mix or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page a). When he put forth his ideas, none of the companies were interested in it (Nike, Inc. a). Phil Knight proposed that the quality of running shoes manufactured in Japan could compete with that of a famous German brand (Nike, Inc. a). This initiated Phil Knight and Bill Bowman becoming partners in distributing the Tiger shoes manufactured by Onitsuka Co. in the United States(Nike, Inc. a). Phil Knight and Bill Bowman formed the Blue Ribbon Sports (BRS) and soon Bowman began improvising the Tiger shoes and he started testing them on the athletes (Nike, Inc. a). The name Nike was framed by Jeff Johnson, a full time employee at BRS in 1971 and he also designed many of Nike’s early shoes (Nike, Inc. a). In the meantime the relation between BRS and Onitsuka began to deteriorate and Phil and Knight wanted to create their own brand of athletic shoes, leading to the creation of the brand mark of the ‘Swoosh’ (Nike, Inc. a). The next level of progress came in with the outsole that had waffle type nubs for traction but were lighter than traditional shoes (Nike, Inc. a). In the 1980s, Nike became a publicly traded company but also had a fall from the position of industry leader because of production miscalculation but, the debut of signature shoe for an NBA rookie Michael Jordan helped bolster Nike’s bottom line (Nike, Inc. a). In 1987s Nike tarted a major product and marketing campaign for regaining their position and in 1989, Nike’s cross training business exploded and by end of that decade Nike regained position as the industry leader (Nike, Inc. a). During 1990s, Nike set up its world headquarters in suburban Portland, Oregano and Nike signed up with many ath letes for endorsements during the (Nike, Inc. a). Today, the company seeks innovative ways to communicate with its consumers and strives to satisfy them (Nike, Inc. a). THE MARKETING MIX OF NIKE, INC. PRODUCT MIX â€Å"The perfect product must provide value for a customer† (The Chartered Institute of Marketing, 2009, p. ). The goods or services that a company produces must be with regard to the needs and the wants of the consumers and the company must be clear if they are providing what the consumers want from them (The Chartered Institute of Marketing, 2009). â€Å"The most significant determinant variable for the demand for sports goods, its growth, and size, are: fashion, the use of value of the sports good, its market price, households’ professions and revenues, the population’s use of the equipment(the ‘equipment rate’), and the sports good’s life cycle. † (Andreff, Szymanski, 2006, p. 27). From the beginning Nike has produced its goods in accordance with the preference of the consumers, the changing trends in fashion and the buying power of their target market and innovation has been one of their key motives (Nike, Inc. a). â€Å"In May 2006, Nike launched the Nike + (NikePlus) platform, a collaboration between Nike and Apple, consisting of an Apple iPod music player, a wireless device to connect the music player to running shoes, a pair of Nike shoes with a special pocket to accept the wireless device, and membership in the iTunes and Nike + online communities (itunes. om and nikeplus. com). The Nike + co-creation platform capitalizes on the connection between running and music. The combination of innovative, mobile technology, online communities and athletic gear expands the field for co-creation† (Ramaswamy, 2008, p. 11). This is a good example of how Nike strives to bring innovation into the products. Nike also has different product lines such as Nike Action Sports, Nike Athletic Training, Nike Basketball, Nike football and Nike Running (Nike, Inc. a). Nike has also changed and developed its products and heir range with the developing technology (Nike, Inc. a). â€Å"Hence, innovation enhances business performance because the product of innovative activities makes a firm more competitive and the process of innovation transforms a firm’s internal capabilities† (Neely et al, 1998). Nike can be said to be a product oriented company because Nike delivers goods like sports shoes and sportswear to the customers and not service to its consumers but, according to Levitt (1972) â€Å"There are only industries whose service components are greater or lesser than those of other industries. Everybody is in service. Thus, Nike is a brand that wants to deliver not only goods to it consumers but also wants to instil the passion of sportsmanship in people which is evident from their mission (Nike, Inc. b). Since the product is not differ ent from the service in this case, only 4Ps of Nike have been explained in the essay. PRICE MIX â€Å"A product is only worth when customers are willing to pay for it† (The Chartered Institute of Marketing, 2009, p. 4). It should be carefully determined which means that it should not be really low or too high, but we must also have in mind that we must have a profit margin (The Chartered Institute of Marketing, 2009). Nike uses the ‘dual pricing’ strategy by which it sells the latest shoe models in premium retail outlets like Footlocker or Niketown and its old shoe models at discounters and outlets (Billington et al, 1998). Dual pricing is less risky than normal pricing of goods but, the company must have an efficient coordination in manufacturing, distribution and marketing of both old and new goods; this is effectively done by Nike making the dual pricing strategy successful (Billington et al, 1998). Nike uses the consumer conception of pricing to influence the price of their products (McConnell, 1968). Nike does this by providing goods in different price ranges and attracts people to different segments (Nike, Inc. a). PLACE (DISTRIBUTION) MIX â€Å"The place where customers buy a product, and the means of distributing your product to that place, must be appropriate and convenient for the customers† (The Chartered Institute of Marketing, 2009, p. 5). Every brand position their products in such a way that they can easily deliver the products to the consumers and this includes that the process of distribution must be ost effective (The Chartered Institute of Marketing, 2009). Nike has gradually developed their distribution channel and expanded their outlets all over the world (Nike, Inc. c). Today Nike has stores in 160 countries and six continents (Nike, Inc. c). All their stores are designed in such a way that it signifies the spirit of sports and implies Nike’s mission, â€Å"To bring inspiration and innovation to every athlete in the world* *If you have a body, you are an athlete†. (Nike, Inc. b) During 2000-2001, Nike encountered huge financial issues which was due to the miscalculation of the future demand by the company, resulting in the mass production of shoes whose models were declining in popularity (Laudon et al, 2004). The company blamed this as a software- i2’s malfunctioning (Laudon et al, 2004). But what both Nike and i2 forgot to see was that if they had had an effective base for the software and done the necessary customizing by using step by step process, Nike could have resolved this issue at an early stage (Laudon et al, 2004). Nike however fixed this problem in 2009 by spending a huge sum of money (Nike, Inc. a). This clearly shows us that though today, Nike has a much systemised channel of distribution, it did have a setback due to its carelessness. However the way they coped up with the setback is what makes them a successful company. PROMOTION MIX â€Å"Promotion is a way the company communicates what it does and what it can offer customers† (The Chartered Institute of Marketing, 2009, p. 5). Promotion includes advertising, sales promotions, trade promotions and personal selling to the consumers (Kotler, 2002, cited in Riaz and Tanveer, 2012). Nike, Inc. as a widespread promotion campaign like sale time discounts and offers (Nike, Inc. a). Apart from this, Nike has been using successful athletes and sports persons from the beginning to endorse their products (Nike, Inc. a). Steve Prefontaine was the first ambassador to Nike when it was BRS (Nike, Inc. a). Later when Nike, Inc. was developed Nike started getting famous athletes as their ambassadors; few of them were Tiger Woods and Michael Jordon (Nike, Inc. a). â€Å"The ads will still capture the corporate philosophy of grit, determination and passion of heroes and hero worship in a humor way by many top athletes† (Deng, 2009, p. 03). In 2002 Nike wanted to go beyond the concept of promoting their products, celebrities and offers so, they started the ‘Secret Tournament’ which was their first global market effort in regard to the World Cup and it’s reach was much more than all the advertisement, and promotions put together (Nike, Inc. a). Nike has expanded a lot in the last few years and it has even become the official sponsor of the Nation Football League [NFL] for the year 2012 (Nike, Inc. a). Nike also sponsor major teams like Manchester United (Anonymous, n. ). It is a general conception that when the fans of a particular team are loyal to that team, they in turn become loyal to the sponsoring brand also (Linnemann, 2007). From this it is seen that when a sports team is endorsing a brand, the fans of the particular teams get attracted to the brand sponsoring them and so they are induced to buy the products of that particular brand. Thus, both the team and the brand get popularity. This can be said to be one of the most famous methods of promotions which Nike has used in a very correct manner. Apart from this, when we look at the advertisements of Nike, â€Å"The ads will rarely focus on the product itself, but on the person wearing the product† (Deng, 2009, p. 103). This kind of advertising can make the consumer feel more drawn towards the product and will influence him to buy it. Promotion can said be an important component of the marketing activities ok Nike, Inc. CONCLUSION The marketing mix strategy of a firm is said to be the base of its success. A company should know how to make proper use of the marketing mix. As seen, Nike had a bad time because to the lack of proper use of the marketing mix. Nike has not been having a perfect marketing mix throughout its existence. It did have setbacks in the channels of distribution. They should focus more on how the products can be delivered to different regions and they must also focus as to what products are to be distributed to the different countries. Nike as a brand has not only sold its products well but has also strongly put forth the idea that anyone can be an athlete. This encourages physical activity among the people and helps them to stay fit and healthy. Nike as a brand is very successful in attracting consumers and retaining them by using many loyalty techniques. This is the main reason for the success of Nike, Inc. Words in essay- 2000 words. REFERENCE: Andreff, W. and Szymanski, S. 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