Free Sample: Marketing audit of Nike paper example for writing essay

Marketing audit of Nike - Essay Example

The Company designs, develops and markets athletic footwear, apparel, equipment and accessory products. Former CEO and Pres. Philip Knight co-founded Blue Ribbon Sports with Mr.. Bill Borrower in 1962 which officially became Nikkei in 1978. At first, Nikkei was known to distribute inexpensive, superior-quality Japanese athletic shoes to American consumers to break Germany’s domination of the domestic industry. Today, Nikkei Inc. Manufactures and distributes athletic shoes to a global market and some 40% of sales come from athletic apparel, sports equipment, and subsidiary ventures.

Nikkei maintains traditional and non-traditional distribution channels in more than 110 countries with primary market regions in United States, Europe, Asia Pacific, and the Americas (not including the United States). Nikkei has some over 20,000 retailers worldwide including Nikkei factory stores, Nikkei stores, Nektons, Cole Han stores, and internet-based Web sites sell Nine’s sports and leisure products. Nikkei is leading the sales in the athletic footwear industry with a 33% global market share. Nikkei Inc. Achieved their current status by promoting “quality production, innovative products, and aggressive marketing” in their products.

As a result, for the fiscal year end 1999, Nine’s 20,700 employees generated almost $8. 8 billion in revenue worldwide. ECONOMIC Have changes in the economy impacted the organization or brand? Is it sufficient to respond to Just the domestic economy, or do multinational considerations apply? What adjustments were made? Have they succeeded? What additional adjustments are being contemplated, and why? In economy, the biggest threat for Nikkei is if the economy goes into recession. If recession occurs, Nine’s growth in sales, marketing and promotions will be affected.

Another important factor in economy is the Turing market in athletic shoes. There is also a growing adverse demographic change in the marketplace brought about by the sweatshop expose that Nikkei has not overcome yet. Effects to Nine’s growth are also affected not only by domestic economy but also by the international economy. The continued weak Euro and Asian recession could potentially hurt Mikes international sales and growth. Nine’s extreme sports product line is seen as inferior quality compared to competitors and is hurting sales and brand image. CUSTOMER How do customer view the organization or brand?

Is there a clear understanding of customer wants and needs? Are there different market segments? Are there emerging market segments? What adjustments have been made? Succeeded or not? What other changes are being contemplated? Why? In 1998, Americans spent $38 billion to buy over 1. 1 billion pairs of shoes. Sporting Goods Manufacturers Association revealed that athletic footwear makes up almost 35% of all footwear purchases. The existing domestic industry focus is on casual and comfortable shoes. Demand is up for the “brown shoe” casual footwear with a comfortable and rugged design.

This is because of the increasing number of workplaces allowing casual dress codes. Multinational customers account for a large part of Nine’s sales. In 1995, Nine’s international operations accounted for 36. 06 of its total revenues. The company believes that demands from international markets will increase in future. Nikkei must cater to a large portion of the new generation that demands the latest trends and styles. Nikkei should take into account the changing US demographics due to the rising proportion of Hispanics, Asians, and African Americans.

These groups have different preferences that Nikkei should be able to satisfy. Nikkei should identify the next generation of loyal customers and provide for their needs. COMPETITION Who are the companies or brands with which the organization or brand competes? What are their sales and market share trends? How do their approaches to the market differ from the organizations, and from each other? Are there any specific weaknesses in any competitors that can be turned into opportunities? Are there any specific strength that are major threats? What adjustments have been made?

Succeeded or not? What other changes are being contemplated? Why? Competition is very fierce due to the number of companies competing for sales. Lots of money goes to marketing and promotions using various channels to reach the nouns demographic group of consumers who spend the most money on Nine’s products. Growth is slowing down in the athletic footwear industry. But new markets are emerging with high growth rates. These markets include extreme sports market and the corporate merchandise market. Nine’s global market share was an impressive 30. 4% in 1998.

The closest competitor, Ideas, held 15. 5% of the market share while Rebook held 1 1. 2%. The remaining competitors, including Fill, Timberland, Acacias, Converse, and New Balance, among others, each hold approximately 3-5% of the remaining market share. OBJECTIVES Are there clearly defined marketing objectives? Are they consistent with corporate mission statement and objectives? Are they measurable, attainable? How close to meeting marketing objectives was the organization or brand in the most recent complete year? Should the marketing objectives be modified? Why? Minimize. Mom stated that Nine’s mission statement is “Through the adoption of business practices Nikkei is committed to securing intergenerational quality of life, restoring environment and increasing value for our customers, shareholders and business partners. ” Nikkei shows passion for their company, products, and athletes. They are determined to provide consumers with comfort and assurance. They also find ways to innovate and create. They adhere to their five brand principles namely: inspire, innovate, focus, connect, and care. Another Nine’s objective is “to be the world’s leading sports and fitness company. Nine’s mission statement is similar to a vision statement and is potentially a weakness. The mission identifies the sports and fitness industry business they are in, it does not specify as to what products and services they provide. The mission statement does not mention distribution channels and customers. However, it portrays management’s beliefs and the desire to be number one and remain in the eating position in sports and fitness shoe and apparel industry. STRATEGIES The past two decades saw a change in economy from “standardized” to flexible”.

Having a strict corporate organization used to be the rule, now it is common to have a flexible organization that uses subcontracting. The main reason Nikkei succeeded in competing in the footwear industry for a long time is because they remain flexible in an unpredictable market by subcontracting overseas in countries with low labor-cost. Another reason for Nine’s strength in competition is their product differentiation. Aside from athletic shoes, Nine’s product nine now offers a broad range of clothing, equipment and accessories.

The factor that makes Nikkei so strong strategically is that it brings out changes and advancements in its products all the time by reviewing the past reports it can be noted that Nikkei has successfully been a trend setter in the sports wear industry by providing unique positioning to its products . The management changes which are periodically brought about in Nikkei keep the firm on the edge and give it a new direction each time a new change is brought about in the company. TACTICS Are there defined tactics for each strategy? Are they innovative, or a repeat of prior static?

Are the tactics fully integrated? Are there any mixed messages? Should they be modified, why? Nine’s distinctive tactics are found in the area of marketing, specifically in consumer brand awareness and brand power. Nine’s catch phrases like, “Just Do It,” and symbols like the Nikkei “Swoosh,” are reminders of the Nikkei empire. This tactic is effective because it could not be easily replicated and it offers value or benefit to consumers. Nikkei is becoming a part of American and world culture, the brand power becomes more difficult to replicate. The trademark and a slogan serves as the company’s fingerprints.

Nikkei is able to capitalize the unique identity due because of its financial strength. Nikkei reaches millions of consumers through large- scale marketing campaigns. The public benefits from the strength of Nine’s image when they make a purchase. Consumers often associate Nikkei image with quality products. By associating star athletes and motivational slogans like, “Just Do It,” consumers identify their purchases with the prospect of achieving greatness. This image they create forms a tactic that competing companies can not easily duplicate by simply improving their products. As OF NIKKEI – PRODUCT Is the current product line appropriate? What changes should be made in how products are being handled? Nikkei sells a huge variety of products, including shoes for running, basketball, cross training, women and children. All of which are currently its top-selling product categories. Nikkei also sells shoes for outdoor activities such as tennis, golf, soccer, baseball, football, bicycling, volleyball, wrestling, cheerleaders, aquatic activities, auto racing and other athletic and recreational uses.

Nikkei began selling active sports apparel in 1979 as well as athletic bags and accessory items. The company sells a line of performance equipment under the Nikkei brand name, such as port balls, timepieces, aware, skates, bats and other equipment. They also sell a line of dress and casual footwear and accessories for men, women and children under the brand name Cole Han. The company markets headwater under the brand name Sports Specialties, through Nikkei Team Sports, Inc. They also sell small amounts of various plastic products to other manufacturers through Nikkei MIM, Inc. Bauer Nikkei Hockey Inc. Manufactures and distributes ice skates, skate blades, in- roller skates, protective gear, hockey sticks and hockey Jerseys and accessories under the Bauer and Nikkei brand names. PRICE Nikkei uses vertical integration in pricing wherein they own participants at differing channel levels or engage in more than one channel level operations. This is also an attempt to control costs and influence pricing practices. Along with this various different pricing strategies are adopted given the continent and the market in which the products are being sold. PLACE Distribution channels and policy. Should additional channels be added, why?

Nikkei sells its product to about 20,000 retail accounts in the U. S. And in approximately 110 countries around the world. Nikkei sells its products in international markets wrought independent distributors, licensees and subsidiaries. Independent distributors has little or no pressure for local adaptation because the APS of marketing are managed by distributors. PROMOTION Are both advertising and promotion strategies in place? Succeeded? Nikkei has been one of the top retail industries for quite along time. This is because they sell quality products, customer loyalty, but most of all, its great marketing techniques.

Nikkei has a number of famous athletes to create a great deal of attention to their products. Nikkei has signed the top athletes in many different sports such as the Brazilian Soccer Team (especially Ronald, Renamed, and Roberto Carols), Lebanon James and Germane O’Neal for basketball, Lance Armstrong for cycling, and Tiger Woods for Golf. Sponsoring of events is another great promotional technique for Nikkei. It brings attention Nine’s products. Web sites are a great promotional tool as they cover these events. Such events include Hoop It Up and The Golden West Invitational. Nikkei also personalizes websites.

They make the websites exclusively for a sport such as www. Installable. Com, www. Nonnegotiable. Com, and www. Negligee. Com. MARKETING INFORMATION SYSTEMS Is accurate information being obtained and distributed in a timely fashion? Is market research being conducted effectively and being used for decision making? Should any changes be made, why? Currently Nikkei utilizes IT in its marketing information systems in a very effective manner. Nikkei makes use of marketing information systems and apply it to the economics of innovation, segmentation and differentiation for most businesses.

Nikkei has financially emerged as the leader of its industry because of the use of extremely valuable Information Technology, and applying it to every aspect of there development through their distribution of products. In 1999 Nikkei signed a five year agreement with Lockheed Martin Integrated Business Solutions Co. (BIBS) in its bid to develop further its marketing information systems and stay ahead of competition. This enables Nikkei to focus on its core competencies. Environmental Analysis ; Internal – Strength Nine’s management makes analysis on its internal environment and based their decisions on that analysis.

Due to Nine’s marketing research, the company made its apparel division to be more fashion savvy. Product and pricing research, made Nikkei decide to continue its focus on the high end market at the same time increasing its racket share in the middle and low price ranges to broaden Nine’s product spectrum. ; External – Weakness Nikkei fail to foresee problems due to labor and factory conditions at production locations. This resulted in bad publicity and declining sales as society and consumers call for more “socially responsible” companies.

Marketing ; Market Share – Strength Nine’s global market share was an impressive 30. 4% in 1998. Ideas, held 15. 5% of the market share while Rebook held 1 1. 2%. Fill, Timberland, Acacias, Converse, and New Balance, among others, each hold approximately 3-5% of the remaining market hare. Nine’s market share is expected to rise due to summer Olympics in 2000 in Sydney, Australia, the 2002 World Cup in Japan and Korea, and the U. S. Exasperating team in the 2002 Winter Olympics in Salt Lake City, Utah. It also was a main sponsor of London 2012 Olympics endorsing the maximum sportsperson . Distribution through E-commerce – Strength Nikkei is first to market with its e-commerce web-site through the launch of its e- commerce site in April 1999 by offering 65 styles of shoes to the U. S. Market. Nikkei improved its e-commerce presence by launching Nikkei in November 1999. Nikkei enables online consumers to make design for the shoes they purchase. Being the first to market, Nikkei enables itself to become established. ; Advertising and Promotion – Strength Nine’s brand images, including the Nikkei name and the trademark Swoosh, are one of the most recognizable brands in the world. This brand power is one reason for its revenues.

The trademarks coupled with aggressive advertising campaigns, celebrity endorsements,and quality products comprise the brand. Nine’s brand presence was evident at the 1999 NCAA Basketball tournament when 42 of the 64 teams participating wore shoes provided. Nine’s brand-building endeavors are focused on strengthening association with women’s sports. Some examples are sponsorship of the 1999 Women’s World Cup Soccer Tournament and U. S. Exasperating team in the 2002 Winter Olympics. ; Products – Strength Increase emphasis by consumers on sportswear fashion enables Nikkei to make strides to appeal to a fashion savvy market.

Nine’s apparel line does not only experience stiff competition from its typical industry competitors such as Ideas and Rebook, but also by clothing and accessories retailers such as Old Navy and Firebombed & Fitch. Continuous marketing research is the key in assessing the market. Nikkei is planning on starting five structures within its current apparel division to focus on the following areas: o Women o Men o Kids o sports graphics and caps o strategic response independently Nikkei currently spends more time on developing programs to gain a better understanding of what customers truly want. Products – Weakness Nikkei may have much success as a result of collaborating with other companies within the sports and fitness industry. But at other times, Nikkei expanded into markets for which it is not strategically suited. An example of this is the decrease in brands made available due to decrease in demand of in-line skating and roller hockey products at Bauer Nikkei Hockey. Consequently, Nikkei had to cease two manufacturing operations at the Bauer Nikkei subsidiary and was forced to terminate 51 employees.

If Nikkei was able to anticipate the decline earlier, perhaps gradual changes could have been adopted to prevent such kind of limitation. The desire to prevent situations such as these from continuing to occur, Nikkei has realized to initiate more aggressive program to review product partnerships that are outside of its core basis of products. Pricing – Weakness Nine’s products are viewed to be of higher quality and command higher prices than its competitors. Sometimes though consumers do not agree to this line of thinking. This could be a potential weakness.

To substantiate its high quality/high price lines, Nikkei is placing emphasis on the latest technology and applying innovation towards the development of new products, particularly the Nikkei Alpha Project which is a new line of athletic shoes. In the past, Nikkei has overlooked the mid- to lower-price-point products, which could be a possible weakness too. Recently, it is pouring time and none to better develop competitive position at all price points to build strengths at each of these levels. There is a lot of sales potential in the lower price points and plan to meet the needs of those markets. Marketing Research – Strength Nikkei focuses and relies on marketing research on a continual basis to aid in maintaining the company’s position as the leader in the athletic footwear and apparel industry. The result of such research efforts enables Nikkei to make decisions regarding its different divisions. It aids in their decision to revamp the apparel division, an area in which offers a number of possibilities. Nikkei will be organizing the internal business by gender instead of the sport category they are using now.

They also intend to carry out more researches focusing in the buying habits of men, who oftentimes are item-driven, and women, who are more collection-driven, with product lines intended to suit specifically their demographics. Nikkei, Inc. Is a company rooted in competition. From equipping athletes with the finest sports equipment in the world to continuously improving financial performance, Nikkei dominates its competitors. Phil Knight and Bill Borrower vision has become a huge reality in the 20th century. Product quality and innovation have carried them on this far.

Despite a changing marketplace for athletic footwear, Nikkei continues to expand product lines and marketing reach to become a more powerful global brand. Nikkei should continue their strides in making advances in the athletic shoes technology in order to maintain their current leading position in the industry. RECOMMENDATIONS Based on findings, the following recommendations are being made for Nikkei, Inc. : ; Since Nine’s All Condition’s Gear (GAG) for extreme sports product line has been experiencing a diminishing quality and brand image, it is highly recommended that

Nikkei spend more money and resources to promote the product in turn generating more sales for the line. The GAG line may also require a better product design, materials and manufacturing processes. ; Nikkei should use its money efficiently. This could be done by including entertainment and other non-sports venues in their promotions. This is effective because there is a thin line between entertainment sports nowadays. ; Nikkei is currently gearing most of their marketing efforts for the sports footwear lines. To increase sales, Nikkei should go to other avenues such as expanding their line to casual footwear. Nine’s main strategy is in its differentiation. Therefore, they need to maintain their position as the leading brand of the athletic footwear technology. Providing cutting edge design through innovation and application of modern technology enable them to come up with new types of shoes and other products, adding to their growing list of product lines. ; Nine’s business is growing more and more reliant on the internet to conduct business. Nikkei has developed a new technology that will allow their customers to create their own shoes design online. They must take particular care in improving heir website to make it more user-friendly.

As of the moment, customers often find the too long to download. ; Nikkei should also increase their international marketing efforts in order to maximize their product sales. International market is laden with untapped opportunities which Nikkei should look into. ; Nikkei must continue to improve technology in order to remain the leader in athletic shoes. This is their competitive edge in order to prevent any potential threatening entrants. ; Nikkei should also conduct survey on their customers after their purchase on-line to now what the consumers really want. Trends and styles often change.

This is why we On-line surveys could save Nikkei a great deal of time. Nikkei would be able to gather the information real-time and track it into a database instead of taking surveys on the street or sending them out to mailing lists which is time-consuming. ; Loyal Customer Program is also another program that Nikkei could look into. In this program, points are added to an account after a purchase. The points would vary depending on the amount of the purchase. Nikkei could make a catalog of things that customers could buy with the points they are able to accumulate.