Present Status and Future Development of Marketing at Nike - Assignment Example

Present status and future development of marketing at Nike Nike is currently the largest sports footwear retailer in the world and in considering the growth of Nike, arguably a fundamental aspect of the company’s was success was the strategy of innovation in state of the art athletic shoes, coupled with “guerrilla marketing” tactics (Hill & Jones, 2009, p.200). For example, Hill and Jones highlights that “Nike’s strategy to emphasize the uniqueness of its product obviously paid off as its market share soared” (Hill & Jones, 2009). Nike’s ability to maintain its position as market leader has been the ability to effectively harmonise business strategy objectives with marketing strategy. Additionally, Nike’s marketing strategy has continued to evolve through diversification. For example, when Nike’s sales started to stagnate in 1988, it realised that solely focusing marketing efforts on specific market segments “could only grow sales and profits so far” (Hill & Jones, 2009). As a result, Nike diversified market development into other areas such as aerobics, golf and basketball and implemented the 4Ps marketing mix; namely product, price, place and promotion (Pride & Ferrell, 2008). Furthermore, Nike’s marketing strategy also involved entering new markets through purchasing established footwear companies such as Converse and Cole Haan (Hill & Jones, 2009, p.200). In addition to diversifying, Nike’s marketing strategy has been dramatically redefined in the 21st century as a result of the interrelationship between globalisation and the ecommerce business model (Pride & Ferrell, 2008). The incoming of the second media age and multiple digital platforms has created new societal trends and business opportunities through the multimedia business model, which has challenged pre-existing methods of information dissemination. On one side of the spectrum this has led to increasing commercialisation of the customer, which is further reflected by changing consumer habits and multi-chain retail strategy (Vollmer & Precourt, 2008). On the other side of the spectrum, the digital era has redefined how the people interact with each other, thereby marking a shift in societal relationships and trends, which in turn informs cultural norms and enables innovation in building consumer/business relationships. Appurtenant to the digital revolution has been the radicalisation of communication modes, with the inception of chat rooms, email, instant messaging and blogs. In turn these novel communication modes have reshaped social interaction in the contemporary social framework within the continuous movement towards global homogenous cultural paradigms and international business networks (Vollmer & Precourt, 2008). Indeed, Volmer and Precourt (2008) refer to the comments of a 2007 interview with Nike vice president Trevor Edwards, who commented that “gone are the days of one shoe, one advertising campaign, Now you’ve got to engage consumers on every level” (In Vollmer & Precourt, 2008, p.2). Furthermore, in terms of marketing strategy Nike understands that it is operating in multiple markets with different products and different target markets depending on interest, culture and the territory within which it is operating (Pride & Ferrell, 2009, p.5). To this end, Nike’s contemporary marketing strategy within the globalised business paradigm acknowledges the need to target different markets and Ferrell highlights that Nike applies this strategy through “marketing different types of shoes and apparel to meet specific needs of cross-trainers, rock climbers, basketball players, aerobics enthusiasts, and other athletic shoe buyers” Furthermore, Nike has even developed ethnicity specific products such as the Air Native N7 for American Indians (Pride & Ferrell, 2008, p.5); and adapts product development and marketing to target language and culture. For example, Nike applies localization to its online marketing strategy. On the one hand, Nike has “Nike.com”, which is strongly targeted towards the American audience (Perrault & Gregory, 2000). Additionally it has developed other sites according to interests that fall within the Nike product range such as “Nikefootball.com”, which was developed specifically for football and is available in English, Spanish, Italian, Swedish, German, Portuguese and Dutch. Accordingly, in terms of Nike’s marketing strategy going forward, it continues to study and accommodate changes in consumer behaviour and acknowledges the increased power of consumers (Levy & Weitz, 2008). For example, the empowerment of the consumer as a whole has led to market segmentation and a changing consumer market, forcing retailers to adopt a multi-retailer strategy (Levy & Weitz, 2008, p.27). This in turn has led commentators to recommend the organisational use of customer relationship management strategies to ensure value and address the challenges of the multi-channel retail marketplace (Levy & Weitz, 2008, p.27). As a result, there is clearly a need to increase the perceived value in marketing strategy, which is supported by the arguments of Webster that marketing has become more than about securing sales, but rather instrumental in customer loyalty and corporate branding. Webster asserts that “the business is increasingly likely to be a network of strategic partnerships”, which highlights the point that a brand and corporate strategy is increasingly defined by the customer in the contemporary marketplace. This in turn correlates to the arguments of Nunes and Cespedes (2003) in highlighting the point that the conventional economics based model of marketing has dramatically shifted whereby the customer is increasingly autonomous in determining value. In distinct contrast to the power of retailers in the 1980s and mid 90s, “today’s customers “channel surf with abandon” highlighting the need to implement a new logic for channel strategy; which reiterates the need to be innovative in creating “value” to retain customer loyalty in contemporary marketing strategy. In turn, the relationship between consumers and branding is arguably paramount in determining the centre of how value should be marketed to retain and persuade new customers (Merz, He & Vargo 2009). It is submitted that it is precisely this focus on consumer interests and demand that has enabled Nike to continue to adapt its marketing strategy and apply a multifaceted approach, which matches strategy innovation in product development to targeted marketing geared towards numerous distribution channels in order to maintain its position as market leader. Bibliography Hill, C. & Jones, G. (2009). Strategic Management Theory: An Integrated Approach Nunes, P., & Cespedes, F. (2003) The Customer has escaped. Harvard Business Review Levy, M., & Weitz, B, (2008). Retailing Management. 7th Edition McGraw-Hill Irwin Merz, M., He, T., & Vargo, S. (2009) The evolving brand logic: a service dominant logic perspective. Academy of Marketing Science Nunes, P., & Cespedes, F. (2003) The Customer has escaped. Harvard Business Review Perrault, A. H. & Gregory, V. (2000). Think Global, Act Local: The Challenges of Taking the Website Global. INSPEL, 3/4(2000), pp. 227-237. Retrieved at www.archive.ifla.org accessed December 2010. Pride, W. & O. C. Ferrell, (2008) Marketing. Cengage Brain. Vollmer, C. & Precourt, G. (2008). Always on: advertising, marketing and media in an era of consumer control. McGraw-Hill Professional Read More