Marketing principles group assignment nike strategy 4ps analysis report

Those who choose to buy Nike products because they feel like it accounted for 75.8%, while the number of people who bought because of the price increase ofthe product in the future accou

Group-Assignment-Group 1-MKT101-MKT101 E

Marketing Principles (MKT101)

MARKETING PRINCIPLES GROUP ASSIGNMENT

NIKE STRATEGY 4PS ANALYSIS REPORT

Lecturer: Bùi Thị Hạnh Thảo

Class: MKT101.E

Course: MKT101 – Marketing principles

Team Members:

1.Nguyễn Quang Huy

4 Đoàn Thị Thu Hiền

5 Trịnh Thế Hoàn

About this assignment

The 4Ps of marketing is a model for enhancing the components of your "marketing mix" –the way in which you take a new product or service to market It helps you to define your marketing options in terms of price, product, promotion, and place so that your offering meets a specific customer need or demand The marketing mix is a good place to start

when you are thinking through your plans for a product or service, and it helps you to

avoid these kinds of mistakes (MindTools, n.d) [1] In this group assignment, the 4Ps

marketing strategy of Nile will be analysed with all the details Along with that is the

demographic survey, which will provide specific metrics to help find the pros or cons of Nike's marketing strategy And at the end of this research, recommendations will be

created for Nike to change or add to the company's marketing strategy to help Nike grow better

Nike, Inc., formerly (1964–78) Blue Ribbon Sports, American sportswear company headquartered in Beaverton, Oregon It was founded in 1964 as Blue Ribbon Sports by Bill Bowerman, a track-and-field coach at the University of Oregon, and his former student Phil Knight They opened their first retail outlet in 1966 and launched the Nike brand shoe in 1972 The company was renamed Nike, Inc., in 1978 and went public two years later By the early 21st century, Nike had retail outlets and distributors in more than

170 countries, and its logo—a curved check mark called the “swoosh”—was recognized

throughout the world (Britannica, 2021)[2]

From the late 1980s Nike steadily expanded its business and diversified its product line through numerous acquisitions, including the shoe companies Cole Haan (1988; sold in 2012) and Converse, Inc (2003), the sports-equipment producer Canstar Sports, Inc (1994; later called Bauer and sold in 2008), and the athletic apparel and equipment

company Umbro (2008; sold in 2012) In 1996 the company created Nike ACG conditions gear”), which markets products for extreme sports such as snowboarding and mountain biking In the early 21st century Nike began selling sports-technology

(“all-accessories, including portable heart-rate monitors and high-altitude wrist compasses

(Britannica, 2021)[2]

1.2 Target customer and target market

their customers with a variety of colors for the shoes so that their targeted customers can find the pair of shoes that suits them the best Moreover, people in the society are achieving healthy lifestyle, they start exercising more and eating healthy, people tend tojog or do sports nowadays Nike noticed the change and produced items that satisfied the needs of their customers, for example, they produce more comfortable clothing and footwear that are able to give customers an enjoyable exercise so that their customers

would prefer the items sold in Nike (gradesfixer, 2019) [4]

ANALYZE THE RESULTS OF THE MARKET

RESEARCH

Nike is the world's largest supplier of athletic shoes and apparel and a major manufacturer of

sports equipment, with sales in excess of US$37.4 billion in fiscal year 2020 (ending 31 May,

2020) As of 2020, it is used by more than 75,400 people worldwide In 2020, Nike's own

brand was valued at over $32 Billion, making it the most valuable of a number of manipulable

businesses Earlier in 2017, Nike brand was valued at 29.6 billion USD Nike ranked 89th on

the 2018 Fortune 500 list of the largest US corporations by total revenue Let’s take a closer

look at its SWOT:

Nike’s Strengths

Nike having a unique name in the world is a brand that is easily recognizable It

is a popular brand and its name is easy to remember and pronounce as well

When it comes to footwear, people think of this brand The Nike logo is easily

understood, and everyone easily recognizes it without any second thought

(managementglossary, 2020) [5] The iconic swoosh and ubiquitous tagline

“Just do it” are powerful status symbols in many social and industry circles,

and the brand has come to represent the pinnacle of sportswear and footwear

for decades Nike’s brand value across the globe was $34.8 billion

(brandongaille, 2021) [6] Nike has captured about 31% of the global athletic

footwear market.(managementglossary, 2020)[5]

B Huge Customer Base

Nike has millions of customer from around the world who loyally follow Nike’s trends, participate in Nike events, and even provide customer feedback Due to its huge customer base, Nike’s market cap has grown to $224 billion as

of Feb 2021 (bstrategyhub,2020) [7]

C Base Product Line Touches Most Part of The Market

Nike isn’t just shoes It maintains a vast line of athletic wear for all seasons andmany different sports Nike stores and other retailers spotlight its ability to offersomething to every customer in the market for performance gear, and its lines continue to expand based on consumer demand Nike generated $30.6 billion inrevenue worldwide from its major product segments, including sportswear, running gear, training gear, and specialty sport and footwear lines

(brandongaille, 2021)[8]

Nike’s CEO Mark Parker has addressed that they will continue to acknowledge the environmental issues in the communities The CEO ensures that Nike will help to contribute in finding a solution against these environmental issues

(bstrategyhub,2020)[9] Nike is ranked in the top three amongst the climate

friendly companies in the world in 2007 In 2019 nike has started making shoesfrom the threads made up of the waste plastic from the ocean Which is need of

the hour to eliminate plastics to go into the ocean (marketingark, 2019)[10]

Most of Nike’s footwear is manufactured in foreign countries In the fiscal year

2020, Vietnam produced 50%, China produced 22%, and Indonesia produced 24% of total Nike’s footwear Other operations are in Argentina, Brazil, India,

Italy, and Mexico (bstrategyhub, 2020)[11]

Nike distributes its merchandise via retail stores using various physical and online channels Nike owns several retail stores around the world and also distributes its products through independent licensees and distributors This multi-channel approach has allowed Nike to increase their customer base

Nike’s Weakness

A Lack of Diversification

Despite being one of the most well-known brands in the world, Nike is heavily dependent on its footwear business to generate revenue In today’s ever-so-predictable world, a business should not be heavily dependent on only one

segment (advergize,2020) [14]

(Source: Saga , PHÂN TÍCH SWOT VÀ PESTLE CỦA NIKE)

B Dependency on US Market

Even after having established itself globally, Nike still relies on the U.S Market

in terms of sales and revenue In the fiscal year 2020, about 41% of Nike’s sales came from the U.S, while the rest of 59% came globally Despite its fame,

Nike depends on the U.S for substantial sales and growth (bstrategyhub,2020)

[15]

C Poor Labor Conditions in Foreign Countries

In the last 20 years, Nike has been consistently targeted regarding their poor labor conditions These issues include forced labor, child labor, low wages, and

horrific working conditions that were deemed “Unsafe” (bstrategyhub,2020)

[16]

customers Nike should seize an opportunity by standing firm against any accusations about upper management The high number of controversies related

to the higher authority is harming their image Nike should take steps against labor treatment and sexual harassment, helping them develop a more dedicated workforce Since Nike has a successful online business, it can create more AR/VR-related products Nike has an association with many celebrated

athletes, so they have a better chance of growth if they bring in sports

sunglasses, accessories, or other fashion lines Nike should try to look for more expansion in the global market while controlling product quality

(edrawmax,2020)[17] Acording to " The Motley Fool ", the Jordan Brand

generated $3.6 billion of wholesale equivalent revenue in fiscal 2020 Air Jordan sneakers remain a hot item in the footwear market, even after more than

20 years since Michael Jordan wore a Chicago Bulls uniform Nike's wholesale revenue from the Jordan Brand has risen sharply from $2.3 billion in fiscal

2015 Despite the recent store closures around COVID-19, the Jordan Brand finished fiscal 2020 with revenue up 16% year over year by far Nike's fastest-

growing category.(The Motley Fool,2020)[18]

(Source: Saga , PHÂN TÍCH SWOT VÀ PESTLE CỦA NIKE)

Moreover, the negative impact of the epidemic on business performance should

be considered According to the research which is carried by Ming Lv (Deputy General Manager of Risk Management Dept at China Development Bank Hong Kong) [20] it mentions that due to the impact of the epidemic, in the fourth quarter of 2020, about 90% of Nike's self-operated stores were closed forabout 8 weeks, which significantly affected the company's 2020 What is more, due to the suspension of the company's wholesale partners, the wholesale quantity decreased by nearly 50%, which reduced quarter4 revenue and

increased inventory Although stores are gradually resumed operation since mid-May, it is still a challenge for NIKE to quickly adjust itself to normal business patterns and prepare to face the second outbreak of the COVID-19

Primary Research

Demographic analysis, the statistical description of human populations, is a tool used by government agencies, political parties, and manufacturers of consumer goods Polls conducted

on every topic imaginable, from age to toothpaste preference, give the government and

corporations an idea of who the public is and what it needs and wants The government's census, which is conducted every ten years, is the largest demographic survey of all

Today demographic is also being used as a noun; so, for example, TV advertisers are

constantly worrying about how to appeal to "the 18-to-24-year-old demographic"

(Merriam-webster, 2020) [21] Demographic segmentation isn’t just a one-time task Different kinds of

segmentation may be useful for different brands and products, and you may find yourself

segmenting your audience in different ways at different times (Qualtrics.com) [22].

From the above information, you have a simple understanding of the concept of demographics, demographic size Survey about the brand Nike was participated by

165 people

Overall, survey respondents are those aged between 16 and 20 with 64.2%,

while the figure for age over 30 accounts for only 17% Moreover, those who are still students, students account for 77% This is a young group with no high income, but they like Nike's designs

Those who choose to buy Nike products because they feel like it accounted for 75.8%, while the number of people who bought because of the price increase ofthe product in the future accounted for only 4.2% The rest of the population tend to choose to buy Nike products when they see a discount or promotion with 29.7% or are influenced by fashion trends they see in people around with 30.9%.

 The number of people who choose to buy Nike products is largely because they like the company's designs and are not too concerned aboutthe price of the product that can be resold later

Frequency of buying Nike products, 55.2% of people choose to buy Nike products 1-5 times/year, while this number of people who buy products 5-10 times/year only accounts for 9.1 % Not only that, customers who choose to

buy products more than once every 2 years accounted for 24.8%, on the other hand, those who buy products 4-7 times a month only accounted for 1.2%.

 Although the majority of 16-20 year olds choose to buy Nike products, the frequency of purchases is quite low

Most survey participants tend to buy Nike shoes and sandals with 85.5%, whilethe number of sports equipment accounts for only 15.2% In addition, 33% of survey respondents choose to buy Nike fashion clothes while those who buy sports clothes make up only 18.8%

 Nike footwear products are the first choice of customers when buying atNike Moreover, Nike also affirms its position in fashion, not just a brand specializing in selling sportswear

According to data research, the number of people who routinely buy more things that mix with the products they buy accounted for 63 percent, 16.4 percent of people who usually buy, and 20.6% of people who never buy."

 As can be observed, the number of frequent purchasers is the largest, so Nike should diversify items that can work together to raise the number ofregular buyers

According to the pie chart, buyers spending less than 1,000,000 made up 36.4 percent, 1,000,000-2,000,000 made up 35.2 percent, 2,000,000-3,000,000 made

up 14.5 percent, and over 3,000,000 made up 13.9 percent

 As a result, Nike could offer a variety of discount schemes, provide discounts to frequent shoppers, and implement a program that allows customers to redeem points for presents in order to grow the number of customers

According to the survey, customers consider the price of Nike products to be medium to high, with 1.2 percent believing the price is low, 7.9 percent

believing the average price is low, and 43 percent believing the price is not too expensive In terms of pricing, 40% believe it is fairly high, while 7.9% believe

it is high

 As a result, Nike should offer regular discounts and various types of promotions in order to increase customer loyalty

Customers believe that the frequency with which they view Nike commercials

is mostly frequent, according to the survey, accounting for 49.7% Meanwhile,

43 percent of people say they see it occasionally, while 7.3 percent say they seldom see it

 Therefore, Nike needs to expand online advertising on electronic

channels and major social networking sites such as Facebook, Instagram,and Twitter to reach more customers

Customers report they see Nike commercials on social media on a regular basis

in 53.9 percent of cases, 26.1 percent on a regular basis in 26.1 percent of cases, and 20% of cases do not see ads at all

 As a result, Nike still has to develop social networking site interaction and promote advertising in a variety of other ways

According to the survey, 78.8% of customers said they had never participated

in a Nike-related activity, while participants accounted for only 6.1% and 15.2% for occasional participants

 Therefore, Nike should promote the brand by organizing activities on a large scale and in accessible places such as schools or annual fairs

Most survey respondents expect Nike to apply a product discount promotion with 67.9%, besides, 41.8% of customers want Nike to apply a buy one get one free policy and 32.1 % of customers like to receive a gift on every order when buying Nike products The number of customers who like to be in a

sweepstakes and receive a voucher together accounted for 23%

 Therefore, Nike should understand the desire of customers to buy goods,and at the same time make promotional policies in the most reasonable way

According to research, the majority of customers choose to buy Nike products

on the website or through communication channels such as Facebook,

connecting with sellers with 52.7%, while this number is only 46, 7% for customers who come to buy directly at Nike stores Moreover, only 24.8% of

 Therefore, as the demand for online shopping of customers is increasing,the number of customers coming to buy directly decreases Nike should focus on where there is a greater shopping need Moreover, not many customers decide to buy Nike products but have to find out first.

According to survey statistics, 54.5% of customers feel that Nike stores do not provide enough products as shown on the website, while the number of

customers who feel Nike has enough products only accounts for 37.6%

 From here it can be seen that Nike's products are offered in a variety of stores but are still not as complete as on the website This can partly explain the percentage of customers who choose to buy with online images more than customers who buy offline

According to the survey, 58.8% of customers are not too concerned about whether Nike's store location is convenient for their needs to buy products at the store While the percentage of customers who feel that the location of

Nike's products is very convenient for their needs to buy products accounts for 35.2%.

 Nike's location has ensured convenience for customers with only 6.1%

of customers disagreeing with this view On the other hand, most

customers are not too interested in the location of Nike's stores

According to a consumer satisfaction survey about Nike items, customers in general highly value design, quality, specifically as follows:

When it comes to the variety of models, the most satisfied clients make up 24.24 percent of the total, which is a rather high rate of 32.12 percent The average number of reviewers is 36.36 percent and 5.45 percent, respectively, indicating that customers believe the design is below average and that 1.83 percent of individuals are dissatisfied with the product's design