A company's marketing communications mix consists of its advertising, sales promotions, personal selling, public relations, and direct marketing. This can and should be different for different companies and should be something that distinctly identifies one company from another. With all these aspects coming together, the goal is to communicate customer value and build customer relationships to strengthen the company (Armstrong and Kotler).
Advertising:
Nike as a whole, does a great job at advertising in my opinion. The swoosh symbol is found on everyone of their products and is recognized worldwide, especially their running shoes. Every Nike running shoe has the swoosh sign front and center and there is usually no questioning of whether it is a Nike shoe or not. And of course, who does not recognize the famous saying, "Just do it." Not only does Nike do a great job with advertising with just its logo and simple saying, they also utilize famous athletes to wear and use their products. Advertising can be broad and general at times, but if Nike sponsors an athlete in a particular sport, people watching that sport will see the products the athlete is displaying. This can allow Nike to advertise some of their products that are more geared to a certain sport to the consumers that are particularly interested in that sport (http://www.nike.com/nikeos/p/nike/en_US/). I am aware that Nike is not the only brand that utilizes this form of advertising, but they have certainly mastered it with athletes such as golf star, Tiger Woods.
Personal selling:
Nike utilizes a personal selling method in every one of their retail stores. The sales associates in these stores have direct contact and interaction with the buyers of Nike products. Because they are the individuals that directly communicate with the consumers who are interested in Nike products, they must be able to aid in the process of a successful sale. They are knowledgable of the brand and should be trained in asking customers the 'right' questions in order to figure out what they are looking for. To ensure optimal performance from the sales teams, Nike will often send Nike representatives to retail stores that sell their sneakers to give little presentations to keep the sales associates up-to-date on the products and the technology behind them. I know this from a first hand experience because of my job at a sneaker retail store. We recently had a Nike representative give us a mini training session on the Nike running shoes and then we discussed what the customers in our store looked for most of the time and then gave feedback on the Nike running shoes as well as some competitor brands.
Personal selling allows sales associates to create a relationship with the customer, though it may be brief. From the time a customer walks in a store until they leave, it is the sales associate's job to try to establish a relationship with that customer and figure out what he or she is looking to purchase. The sales force acts as a bridge between the customers and the company. The company looks for feedback from the sales associates about their customers, and the customers look to the sales associates to relay relevant and useful information about the product (Armstrong and Kotler).
In my opinion, Nike does a good job at their personal selling because they are the only company I have seen so far that has had represenatives travel to retail store locations to hold training sessions on their products. Also, often times Nike places a small insert in the running shoe boxes that gives some information on the particular product as well.
Sales promotions:
As far as sales promotions for Nike, they utilize marking down their prices and putting them on sale. Regularly, the Nike Shox are priced no lower than $100.00. Another tactic they use is to have their regular prices end in zero and then when they mark them down for a sale, the price will change to something like, $89.99. This is definitely a type of consumer promotion. I would also catagorize this method as a cent-off deal because the consumer is buying a product that has reduced the price right on the actual product such as having a sales tag on the actual sneaker (Armstrong and Kotler). Regular consumers of Nike Shox are aware of how expensive they usually are so when they see one on sale, I think they are more likely to make an impulsive purchase just because of the reduced price, whether they really need the sneaker or not.
Public relations:
PR can be used for many purposes and one of the purposes that Nike has used PR for has been to enhance and maintain a responsible corporate image. Nike has been accused in the past decade of paying low wages and running sweat shops in their Asian factories to produce their products (http://www.usatoday.com/news/opinion/editorials/2002-10-13-oplede_x.htm). They took this accusation very seriously and have made it their duty to ensure that these conditions would not happen. They have a written code of ethics called Inside the Lines and this is what all their employees must read, sign, and abide by to ensure ethics are followed at all times. The also have a Nike Code of Conduct in which the contractors who manufacture their products must abide by to ensure the rights of their employees are respected and that they are given a safe and healthy working environment (http://www.nikebiz.com/responsibility/cr_governance.html). Now the world can see that Nike is monitoring its business outside of the country and trying its best to not be accused of unethical working conditions ever again.
Direct Marketing:
Nike as an entire company has recently launched a new way of direct marketing in the past four years or so. They introduced a print catalog specifically geared to females that would be sent to them directly through their mail. Female athletes expressed interest in this catalog and actually brought it to Nike's attention and Nike took it from there. This catalog focuses on athletic footwear and clothing/apparel for running, yoga, and fitness training. Now women who are loyal to the Nike product can have direct and personal access to the products they want through their very own catalog delivered right to their home (http://multichannelmerchant.com/news/marketing_nike_competing_mail/). For some, this offeres great convenience. It appears that the catalog is going over very well and I would imagine so because with a paper catalog, you can take it with you and shop at you leizure. I think nike will continue to get a good response from this particular example of direct marketing.
Sunday, April 26, 2009
Monday, April 13, 2009
Pricing and Distribution Strategies
Pricing:
The Nike Shox is known to be a higher-end running/athletic sneaker and they are not often priced below $100 for the adults. From experience with buying Nike Shox, they seem to use a little bit of psychological pricing. For one, because the shox are a higher priced sneaker, consumers will think they are of better quality than other sneakers and this is one of the psychological effects this pricing strategy has. If consumers are not that knowledgeable in the sneaker market, they are not going to be able to make comparisons between different sneakers other than based on the price and that is why the price can have such an impact on the buying process. In this case, higher price equates to higher quality and Nike definitely takes advantage and makes use of the psychological pricing strategy (Armstrong and Kotler). Another type of pricing Nike utilizes is segmented pricing. Nike often adjusts their products' prices based on differences in the type of customer they are targeting, the specific product they are trying to market, and the location their products are found. Nike makes Shox for adults and children and the prices are different for each. Although the cost to make an adult sneaker versus a children's sneaker does not vary significantly, the difference in price in which they are sold at can be around thirty dollars. Another example of how Nike utilizes segmented pricing is through the location of their products. Often times, the Nike Shox are priced differently in a Lady Foot Locker versus a regular Foot Locker. I know this from experience because I work in a Lady Foot Locker. Sometimes we have customers approach us saying that they saw the same shoe priced either higher or lower over at the regular Foot Locker. So based on whether the Shox is found in a Lady Foot Locker or a regular Foot Locker, the price can vary. Another strategy I've witnessed from experience is that the Shox have a price ending in zeros, at least in Lady Foot Locker. For example, $115.00. Then, when a particular style goes on sale, you will see the format of the price change to $99.99 as an example. This falls under the psychological strategy of pricing because in consumer's mind, anything ending in ".99" is cheaper than ".00" Overall, Nike uses a price skimming technique for the shox in that it initially sets the price high for these shoes because they are always coming out with something new with different and innovative designs. Eventually, the consumer will see the price decline gradually as the shoe has been on the market for awhile and the next design is getting ready to be released. These strategies seem to be working well for Nike, especially the higher pricing strategy. There is just something about the high price that makes customers feel they are purchasing higher quality and prestige when they buy a Nike Shox.
Distribution:
Nike distributes most of its sneaker products to large chain retailers like Foot Locker. Nike, the shoe company, has to deliver its products to the retailers like Foot Locker. This is major task for Nike because a large majority of their sales is made at these retail locations, so getting product to them is vital to their survival as a company. In order to accomplish this, Nike makes sure it has several distribution centers and computer systems that track inventory, deliveries, and orders in their respected retail stores. From experience, Nike makes use of a POS computer program (point-of-sale) that is integrated into the cash registers and this allows sales to be monitored at the various retail locations. Retailers like Foot Locker and Lady Foot Locker can also order particular products from another retail location for a customer if they are out of their size in a certain product and have it sent directly to their home. Retailers place orders with the shoe companies in order to receive products to sell in the retail stores, usually found in malls (http://premium.hoovers.com.library.cedarcrest.edu:2048/subscribe/ind/fr/profile/basic.xhtml?ID=130). Most often, the type of channel Nike uses is a producer (Nike), then the producer sells to the retailer (Foot Locker), then the retailer sells to the consumer. Nike Shox can also be classified as utilizing selective distribution because they are found in places that match their target markets and positioning. They are found in retail stores that cater to athletic wear, including clothing and shoes. These retail stores are found in shopping malls or freestanding stores where consumers in this market can obtain them when they want to purchase a Nike Shox athletic shoe. It is selective distribution because the Nike Shox are not available everywhere, but they are not exclusive either. They can be found at major retailers catering to the target market of consumers needing athletic footwear but are not exclusive by any means(Armstrong and Kotler). They meet in the middle as far as distribution goes.
The Nike Shox is known to be a higher-end running/athletic sneaker and they are not often priced below $100 for the adults. From experience with buying Nike Shox, they seem to use a little bit of psychological pricing. For one, because the shox are a higher priced sneaker, consumers will think they are of better quality than other sneakers and this is one of the psychological effects this pricing strategy has. If consumers are not that knowledgeable in the sneaker market, they are not going to be able to make comparisons between different sneakers other than based on the price and that is why the price can have such an impact on the buying process. In this case, higher price equates to higher quality and Nike definitely takes advantage and makes use of the psychological pricing strategy (Armstrong and Kotler). Another type of pricing Nike utilizes is segmented pricing. Nike often adjusts their products' prices based on differences in the type of customer they are targeting, the specific product they are trying to market, and the location their products are found. Nike makes Shox for adults and children and the prices are different for each. Although the cost to make an adult sneaker versus a children's sneaker does not vary significantly, the difference in price in which they are sold at can be around thirty dollars. Another example of how Nike utilizes segmented pricing is through the location of their products. Often times, the Nike Shox are priced differently in a Lady Foot Locker versus a regular Foot Locker. I know this from experience because I work in a Lady Foot Locker. Sometimes we have customers approach us saying that they saw the same shoe priced either higher or lower over at the regular Foot Locker. So based on whether the Shox is found in a Lady Foot Locker or a regular Foot Locker, the price can vary. Another strategy I've witnessed from experience is that the Shox have a price ending in zeros, at least in Lady Foot Locker. For example, $115.00. Then, when a particular style goes on sale, you will see the format of the price change to $99.99 as an example. This falls under the psychological strategy of pricing because in consumer's mind, anything ending in ".99" is cheaper than ".00" Overall, Nike uses a price skimming technique for the shox in that it initially sets the price high for these shoes because they are always coming out with something new with different and innovative designs. Eventually, the consumer will see the price decline gradually as the shoe has been on the market for awhile and the next design is getting ready to be released. These strategies seem to be working well for Nike, especially the higher pricing strategy. There is just something about the high price that makes customers feel they are purchasing higher quality and prestige when they buy a Nike Shox.
Distribution:
Nike distributes most of its sneaker products to large chain retailers like Foot Locker. Nike, the shoe company, has to deliver its products to the retailers like Foot Locker. This is major task for Nike because a large majority of their sales is made at these retail locations, so getting product to them is vital to their survival as a company. In order to accomplish this, Nike makes sure it has several distribution centers and computer systems that track inventory, deliveries, and orders in their respected retail stores. From experience, Nike makes use of a POS computer program (point-of-sale) that is integrated into the cash registers and this allows sales to be monitored at the various retail locations. Retailers like Foot Locker and Lady Foot Locker can also order particular products from another retail location for a customer if they are out of their size in a certain product and have it sent directly to their home. Retailers place orders with the shoe companies in order to receive products to sell in the retail stores, usually found in malls (http://premium.hoovers.com.library.cedarcrest.edu:2048/subscribe/ind/fr/profile/basic.xhtml?ID=130). Most often, the type of channel Nike uses is a producer (Nike), then the producer sells to the retailer (Foot Locker), then the retailer sells to the consumer. Nike Shox can also be classified as utilizing selective distribution because they are found in places that match their target markets and positioning. They are found in retail stores that cater to athletic wear, including clothing and shoes. These retail stores are found in shopping malls or freestanding stores where consumers in this market can obtain them when they want to purchase a Nike Shox athletic shoe. It is selective distribution because the Nike Shox are not available everywhere, but they are not exclusive either. They can be found at major retailers catering to the target market of consumers needing athletic footwear but are not exclusive by any means(Armstrong and Kotler). They meet in the middle as far as distribution goes.
Sunday, March 15, 2009
Nike's (Shox) Target Markets
Nike has many target consumer markets but even their individual products can have various target markets as well. The Nike Shox is probably one of the most recognizable sneaker that Nike currently manufactures, especially in their athletic footwear collection. With that in mind, Nike Shox has several different target consumer markets. The entire Nike brand is recognized worldwide and they certainly target markets across the globe. But to bring it down on a smaller scale, it will be easier to concentrate on just the Nike Shox.
The Nike Shox is definitely directed to a particular age group or range of ages. The most targeted age group seems to be mid-teens to mid-thirties. The individuals in this age group tend to be more in tune and up-to-date with the fashion styles available and are more willing to spend the money on these current fashion trends. The shox are definitely eye-catching sneakers whether it is because of the shox design itself, or the bright and vibrant color schemes used. Whatever the case may be, the bold and innovative designs of this sneaker attracts the fashion-forward consumer who is in the market for a high-end athletic sneaker.
Another target market for the Nike Shox would be consumers living an active lifestyle. The individuals in this market segment are ones who enjoy physical activity, whether it be a specific sport, running, or just exercising in general. Nike is known for making products for athletes and the Nike Shox is now a distinct style of running sneakers that they offer. Although it comes down to personal preference on whether someone likes a Nike Shox or not, Nike does a great job at keeping up with the style and technology physically active consumers are looking for in an athletic sneaker.
The benefits of a Nike Shox running shoe is also another means of targeting consumers. The technology behind the shox is important when considering an active sneaker. The shox themselves act as impact absorbers. Instead of your joints, such as the knees, absorbing a majority of the impact from physical activity, the shox help alleviate some of that impact. When a customer can actually pick up a Nike Shox and hold it in their hand, they are able to see the slight spring action in the shox. An active individual has to take the technological aspect of their running shoes into consideration when searching for the best sneaker out there. Many people may think that the Shox look too heavy and bulky for an active shoe, but if you were to try them on, you would find this to be untrue. Most of the shox are made out of light, breathable mesh and the cushioning is air. But again, it is about personal preference. Another benefit about the Nike Shox, or Nike in general is that if a problem ever occurs with the structure or make of the shoe that is abnormal for the usual wear and tear, Nike will most likely replace the defected pair with a brand new pair if you contact and send them the defected shoe. These are just some of the important benefits a consumer would be looking for and taking into consideration when in the market for a pair of athletic sneakers.
These are a few of the major target markets that Nike Shox focuses on and they are always looking for new ways to improve their products to meet their consumers' demands and needs for an athletic sneaker.
The Nike Shox is definitely directed to a particular age group or range of ages. The most targeted age group seems to be mid-teens to mid-thirties. The individuals in this age group tend to be more in tune and up-to-date with the fashion styles available and are more willing to spend the money on these current fashion trends. The shox are definitely eye-catching sneakers whether it is because of the shox design itself, or the bright and vibrant color schemes used. Whatever the case may be, the bold and innovative designs of this sneaker attracts the fashion-forward consumer who is in the market for a high-end athletic sneaker.
Another target market for the Nike Shox would be consumers living an active lifestyle. The individuals in this market segment are ones who enjoy physical activity, whether it be a specific sport, running, or just exercising in general. Nike is known for making products for athletes and the Nike Shox is now a distinct style of running sneakers that they offer. Although it comes down to personal preference on whether someone likes a Nike Shox or not, Nike does a great job at keeping up with the style and technology physically active consumers are looking for in an athletic sneaker.
The benefits of a Nike Shox running shoe is also another means of targeting consumers. The technology behind the shox is important when considering an active sneaker. The shox themselves act as impact absorbers. Instead of your joints, such as the knees, absorbing a majority of the impact from physical activity, the shox help alleviate some of that impact. When a customer can actually pick up a Nike Shox and hold it in their hand, they are able to see the slight spring action in the shox. An active individual has to take the technological aspect of their running shoes into consideration when searching for the best sneaker out there. Many people may think that the Shox look too heavy and bulky for an active shoe, but if you were to try them on, you would find this to be untrue. Most of the shox are made out of light, breathable mesh and the cushioning is air. But again, it is about personal preference. Another benefit about the Nike Shox, or Nike in general is that if a problem ever occurs with the structure or make of the shoe that is abnormal for the usual wear and tear, Nike will most likely replace the defected pair with a brand new pair if you contact and send them the defected shoe. These are just some of the important benefits a consumer would be looking for and taking into consideration when in the market for a pair of athletic sneakers.
These are a few of the major target markets that Nike Shox focuses on and they are always looking for new ways to improve their products to meet their consumers' demands and needs for an athletic sneaker.
Thursday, February 12, 2009
Nike's Environment(s)
The major environments affecting any business are its micro and macro environments. In order to be a successful company, the company must proactively and efficiently deal with these two types of environment. Nike is doing a great job with this so far and it seems that they can only get better.
Although Nike is a household name, and holds a strong stance in the market of athletic footwear, it still pays close attention to the needs of its customers. Customers are a major portion of the micro environment. Without customers, there would be no business. For example, Nike is always looking and researching ways to improve their most popular running shoe, the Shox. They even provide a program on the Internet where you can create your own running shoe by being able to choose the color layout of the shoe. Nike is known for its higher quality and therefore, higher pricing, but they are increasing their market share in the middle and lower price ranges to not exclude any potential customers. Nike also does a great job at making their products appeal to younger, fashion savvy market as well as remaining appealing to the more conservative and function-oriented market. They satisfy the needs of customers who repeatedly purchase the same products and those who are constantly searching for the newest product out there.
Nike holds the position as leader in athletic footwear so it is managing competing brands efficiently in order to remain on top. It always appears that Nike is two steps ahead of their competing brands like Adidas and New Balance.
Nike has a large impact on their macro environment, and in turn, it has a big impact on them as well. It is a known fact that Nike was in a little trouble with the working conditions of the factories overseas. They have publicly apologized and are making huge efforts to ensure the lives of the people working in these factories are given the chance to have the best quality of life. Nike is also big on using their brand power to invest money into grants and product donations as examples. They take corporate responsibility very seriously. They are also making efforts to Go Green and calling the process, The GreenXchange. An example of this is they have begun to use an environmentally friendly rubber on the soles of some of their running shoes and one of them happens to be the Nike Shox Experience.
Overall, Nike has a nice balance of dealing with its micro and macro environments. They are a very open-minded company and always willing to try new ways of doing business that will satisfy the needs of the employees, suppliers, and customers while keeping up with the Go Green attitude this country has so strongly taken part in.
Sunday, February 8, 2009
Nike's Position
For Nike to be the world's leading seller of athletic footwear, they must have a pretty good position in the market of shoes. Over half of Nike's sales are made through their shoe products, especially their athletic footwear. They have shoes for practically every activity from aquatics to auto racing. As a company with such versatility, it is no wonder that they are dominating the industry worldwide. It is kind of hard for consumers to avoid Nike products when shopping for athletic shoes. They are a household name and everyone knows the famous Nike symbol, the swoosh. Nike holds a strong position in this market because it always seems to be ahead in the technology and style of their shoes when compared to competitors such as Adidas and New Balance. In fact, you often see these companies mimicking Nike designs in their own shoes. Adidas has tried to mimic the Nike Shox with their shoe line called, Bounce (Microbounce or Megabounce). Nike's prices are also competitive as well. They have the high-end, high-tech shoes that people are looking to pay a little more money for and then they have shoes such as Converse which start at $44.99. Nike provides obtainable products for people on multiple levels of income so virtually anyone can get their hands on a Nike product. All this together is what allows Nike to be in the firm and stable position they have in the athletic shoe market and will continue to do so as long as they continue to do what they are doing as a company.
Wednesday, February 4, 2009
Core Competencies
As far as Nike's core competencies go, I feel their strongest ones are the very words provided in their mission statement; inspiration and innovation. Nike is known for having some wild designs and color schemes for their shoes. This loudness really attracts people to them, especially their running ones. I have seen this first hand because I work in a sneaker retail store. Nike is our best seller and they are the brand of shoe we have most in our stock by far. Not only are Nike's colors and designs usually different from anything else out on the market, the technology behind their running shoes is advanced as well. The innovation of the Nike Shox brought on a whole new style of a running shoe. No one had seen something like this before and people seemed drawn to them. I still have people today that come into my work asking about the Shox and what they do. It also appears that if a running shoe looks really cool and feels really nice on the foot, people are more likely to feel motivated or inspired to start running or exercising in general. Then there are those customers who just buy the Shox because they like the look of them (me being one of them). Whatever the case may be, Nike is a top seller, if not the top, in athletic footwear and it is due to the innovation and inspiration they put forth in their product. Nike's marketing skills in general a core competency. Almost every sport can be seen with some sort of Nike product, whether on a professional level or not. Endorsing celebrities to advertise for Nike was not a bad marketing move. One of the biggest examples of this that comes to mind is Tiger Woods. Every tournament Tiger is in, he can be seen covered from head to toe in Nike. Talk about great advertising!
Mission Statement
"Our goal is to carry on his legacy of innovative thinking, whether to develop products that help athletes of every level of ability reach their potential, or to create business opportunities that set Nike apart from the competition and provide value for our shareholders."
*"To bring inspiration and innovation to every athlete in the world."*
*"If you have a body, you're an athlete."*
The innovation and inspiration first started with Bill Bowerman, the co-founder of Nike. This is the legacy the mission statement is referring to and the people at Nike strive to keep these important aspects of the company alive by following in Bowerman's footsteps.
I really feel Nike's mission statement accurately represents who they are as a company. First of all, their statement is short and to the point. This is how a mission statement should be.
As a major player in the business of athletic gear, they certainly are known for their different and loud designs. Nike's running shoes are a perfect example of the inspiration and innovation they state in their mission statement. I think it is safe to say that they probably have the most recognizable sneakers in the world.
*"To bring inspiration and innovation to every athlete in the world."*
*"If you have a body, you're an athlete."*
The innovation and inspiration first started with Bill Bowerman, the co-founder of Nike. This is the legacy the mission statement is referring to and the people at Nike strive to keep these important aspects of the company alive by following in Bowerman's footsteps.
I really feel Nike's mission statement accurately represents who they are as a company. First of all, their statement is short and to the point. This is how a mission statement should be.
As a major player in the business of athletic gear, they certainly are known for their different and loud designs. Nike's running shoes are a perfect example of the inspiration and innovation they state in their mission statement. I think it is safe to say that they probably have the most recognizable sneakers in the world.
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