Question 2 Nike’s vulnerabilities

Nike Case Study

Introduction

Since its creation in 1962, Nike was completely focused on designing and manufacturing high-quality and innovative running shoes for athletes. In order to sell their products, the company developed an effective marketing strategy based on a “pyramid of influence”. Nike features famous athletes, e.g. Michael Jordan, Tiger Woods, Maria Sharapova, etc., in company’s ads because even few top athletes can influence the brand choice of millions regular consumers (Kotler & Keller, 2016). Additionally, Nike successfully expanded overseas transformed their international image from just a company that produces top-notch running shoes to a brand that represents victory itself.

Strategic Issues

Strategic issues

 

· Nike wants to promote more effectively and get more profit.

· Nike wants to expand globally.

Key problems

· The manner of Nike’s ads was too aggressive for a typical European, Asian or South American customer.

Key issues

· Nike needed to find a solution of how to adapt their marketing strategy to perform successfully on European, Asian, and South American markets.

Analysis and Evaluation

Question 1 The key success factors for Nike

The case shows that the most important success factors for Nike were:

1. Outstanding quality of their production. The company concentrated on creating running sneakers made by athletes and specially for athletes. Moreover, Philip Knight, the founder of Nike, strived to manufacture high-quality shoes at competitive prices. This combination of good design and affordable price became a key factor of Nike’s success.

2. Smart and captivating advertising campaigns. Nike believes in a “pyramid of influence” which shows that even a small percentage of famous athletes can have an impact on the choice of others. Nike’s marketing campaigns are built on featuring of accomplished athletes that promote the brand’s product. In essence, Nike uses so-called “influencer marketing” that is becoming more and more popular. People no longer trust brands and can’t be influenced by traditional ads. However, they can be influenced by people they respect, e.g. their friends, family, colleagues or celebrities. According to Adweek, nearly 49% of people rely on influencers opinion when make the product or brand choice (M. Swant, 2016).

3. Ability to adapt. Once Nike started expanding overseas, they found out their US ad style was too aggressive for Europe, Asia, and South America. The company decided to “authenticate” the brand and became a sponsor of local leagues, clubs and teams. In particular, Nike focused on soccer. The company sponsored the Brazilian team, and soon after Brazilians won the World Cup, international community accepted Nike as a brand that represented emotions and allegiance. Additionally, Nike acquired Ubmro (a British maker of soccer-related products). This decision boosted company’s presence and influence in soccer.

4. Sponsorship. To promote their products, Nike often sponsors teams or athletes. Wimbledon 2008 is a good example of this. The famous match between Roger Federer and Rafael Nadal was called five-hour Nike commercial since both sportsmen were dressed in Nike’s clothes and shoes.

Question 2 Nike’s vulnerabilities

The case revealed following Nike’s vulnerabilities:

· Their marketing campaigns focused only on the US customers. Since European and Asian markets demand completely different approach, Nike has to recreate their ads again and again adjusting them to local cultures and clients.

· Sometimes the company chooses wrong athletes to support. Even though Nike is famous for standing by its athletes, the company had to severe relationship with Lance Armstrong after doping scandal in 2012 (Kotler & Keller, 2016).

· Nike doesn’t promote their efforts in making products eco-friendly. The company recycles old shoes into new ones but keeps this information secret.