Critical Assessment Of Nike’s Marketing Activities Using New York Jets

Overview of Nike

As the world keeps on growing and changing, the love for sports increases in the same measure. The sportswear industry has experienced an increase in a number of consumers. This has made sports marketing a necessity. In sports, there are different levels of consumers. For example, a company can supply footwear to a team and still open stores to sell the same to the public. Similarly, it can decide to sponsor sports events. Sports marketing enable a brand to be known worldwide. It also increases the number of its consumers. Therefore, this paper provides an analysis of Nike’s marketing activities. The focus will be placed on how Nike uses New York Jets to market its products.

Nike is a company that designs, develops and markets footwear, apparel, and equipment and accessory products.  Most of their products are sold through retails accounts and stores that are owned by Nike. The main strategy used by the company is to be able to achieve growth in revenue through providing innovative products and excellent buying experience. The following are the specific areas that the company strives to change;

• Instilling operational discipline through having a competitive supply chain.
• Promoting sustainable and responsible sourcing of materials.
• Provide pocket-friendly prices through sustainable lean manufacturing and product design.
• Creating value for shareholders through using capital effectively.

Through employing the above strategies, Nike targets the following long-term goals:

• Effective management of the complex business structure.
• Increased single-digit revenue growth.
• High returns on invested capital.

Since Nike started implementing the above strategies, it experienced significant growth and development in business. For example, between years 2000 and 2001, Nike’s revenues increased from 9% to 14%. Similarly, return on invested capital increased from 14% to 19%. Although the financial global crisis experienced in 2008 affected the consumers spending trend, Nike’s revenue still increased by 3% (NIKE, 2015,  p. 2). This shows that Nike is an established setup with organizational structures that can withstand pressure- especially during hard economic economics. 

From their website, Nike plans to bring inspiration and innovation to every athlete in the world. The company considers everybody an athlete. Bill Bowerman, Nike co-founder, believes that so long as one has a body; he/she is an athlete.

Up to today, Nike has not created a definite and official vision statement. However, through its corporate social responsibility vision statement, one can deduce that Nike envisions doing the following:

• Promote sustainable economy
• Ensure balance in people, profit,and environment.
• Be of great help to their customers.

Strengths

• Its world’s top shoe designer and maker. This covers a wide range of sports including football, baseball, golf, volleyball, tennis, golf, and football.
• It provides fast service to customers courtesy of ‘Make to Stock’ customer order model.
• It has a market share in more than 180 countries.
• It puts emphasis on research and development. This can be seen by the ever-evolving products range.
• It is a global brand

Weaknesses

• Much of Nike’s income depends on footwear market share. If there is a decline in the footwear market, then it will not be able to stand the test of competitive pressures.
• Nike derives income from distributing products to retailers. Being that the latter provide similar customer experiencewhen a low price competition emerges, the pressure is passed to Nike.

Opportunities

• There are opportunities for Nike to enhance its product development. Although the company keeps insisting that it is not a fashion brand, research has shown that consumers want trendy and fashionable products.
• Also, there is also an opportunity to develop new sportswear products like sunglassesand jewelry.
• Nike could also develop globally through sponsoring other events like the World cup, soccer. This could help in making more people aware of the brand(DoorDash, 2017, p. 2).

Threats

• Being that the company is an international brand, it sells and buys in different currencies. This means that sometimes it ends up making losses instead of profits.
• The sportswear market is also experiencing stiff competition among the big players like Adidas(NIKE, 2015, p. 2). If not controlled, it could affect the company’s market share.

From the SWOT analysis, Nike has weaknesses that be turned into opportunities. For example, to overcome competition, the company could explore further product innovations to fit the taste and preference of consumers. Similarly, to grow the business globally, it could start participating in sports events in developing countries. This is because they have developing markets that promise more profits for Nike since it is a globally known business.

Mission statement

Many authors have written on the growth of the sporting industry and marketing strategies. This has offered more insight on the sports journey and future trends. Nike cannot be excluded from this journey since it is often given credit for changing and contributing to the growth of the sportswear industry. Therefore, this section of the paper focuses on theoretical underpinnings of sports marketing and what other authors have written on sponsors marketing, competition, and Nike’s strategies that make it stand out in the market and challenges the company has faced.

Marketing is a process that makes use of various elements to make the difference between success and failure. For effective marketing, a company offering a service or product has to take considerations of the features of the product, price, place, and promotion (Luca, 2015, p. 2). Additionally, it should take note of these alongside marketing strategies like market penetration, Low-Cost Leadership strategy, product differentiation, market development, partnerships, endorsements, and CSR.

Also, to induce or influence purchase decision among consumers, brands need to apply the strategies while using theories as a point of reference. One theory that is commonly used in marketing is the social marketing theory. It is most useful when using mass media to create brand awareness and loyalty.

The social marketing theory was developed by Philip Kotler and Gerald Zaltman in 1971 (Silva, 2015, p. 95). It is a group of concepts that focus promotion of socially valuable information. Initially, it was mostly used by social and welfare organizations to help encourage or discourage some certain type of behavior. However, it is also being used by brands today to offer guidance when creating mass media messages in the form of advertisement.

The theory is administrative in nature hence looks for ways in which information campaigns can be designed, implemented and evaluated (Silva, 2015, p. 96). The target audience is normally characterized and identified by their information needs after which information is created and transmitted to them using easily accessible to them. The main objective of this theory is to understand ways in which psychological and societal aspects work and lead to effective mass media campaigns (Linda Brennan, 2014, p. 320). Therefore, the theory is directed towards helping identify the various social and psychological barriers that challenge the free flow of information in mass media and suggest ways to overcome the same.

Although the theory has six elements, for the purpose of the scope of this topic, an analysis is only done two elements element; creating awareness and cultivating image /expressions. Usually, the first step in selling an idea, behavior or product is through making people aware of its existence (Silva, 2015, p. 97). This can be done through readily available channels like traditional and electronic media. Having a saturation television has for a long time been preferred as the best way of creating awareness (Silva, 2015, p. 97). However, due to its high nature, people have come to adopt new media like the Internet whose main strength is its wide audience reach. Specifically, seeking the services of the Internet helps to reach young people, who do not use traditional media like television and newspaper frequently.

Vision

Similarly, there are cases when the audience may not like the person, product or idea being promoted. Therefore, it is required of the agents explores the concept of image advertising. This is using familiar and comprehensive images to refer to the idea, product or person being promoted (Luca, 2015, p.320).  Image cultivation helps in establishing a friendly environment conducive to the promotion of the new product or service (Luca, 2015, p. 321). For instance, an advert can have to watch a person reminisce about his college days while using a shoe shine can attach happy emotions to a new shoe shine product hence developing the image.

Sports consumers entail groups that use the services or products of a sports organization. There are so many ways of understanding them. However, research has shown that uncertainty is the main reason why spectators consume sport. Additionally, sport relies on emotion, excitement, stress, and tension. These factors are critical when creating sports marketing strategies.

A sports organization that aspires to be admired and respected needs to create value. It is important to understand that in consumer’s eyes, the sport is a way of life. Therefore, sports marketing should focus on everyday aspects of the target market (Lyberger, 2014, p. 35). One of the ways of creating value in sport is through making products that they can use throughout the day. For example; sportswear and jewelry.

This process entails making the target market aware of the organization’s products (Linda Brennan, 2014, p. 36). The following are ways in which sports value can be communicated:

• Organization’s website
• Merchandising
• Ticket sales
• Advertisement
• Public relations
• Interacting with fans through social media
• Catch-up services
• Live broadcasts

For an organization to deliver sports value, it has to create a market space for it. This involves all activities in service delivery. The organization has to think about who will at the front line in delivering the sports value (Lyberger, 2014, p. 37). For example, Nike uses retail stores, endorsement, and sponsorships to deliver sports value.

The sportswear industry is made up of both international and regional players. Nevertheless, the industry remains to be fragmented in particular regions of the industry.  Sportswear brands include Nike, Adidas, Puma, Under Armour and Amer Sports. Apart from these, there are other small sportswear brands like Goose in Canada and Li Ning in China (NIKE, 2015, p. 2). Currently, Nike has the largest market share in the industry as shown in the diagram below:

Figure 1: Competition in the sportswear industry

Since 1990s Adidas has made several attempts to dethrone Nike in the sportswear industry. But because of the latter’s unique marketing strategies, quality products, and powerful branding, their efforts have born no fruits. Up to now, Nike has the largest market share in the sportswear industry.

Nike’s SWOT analysis

There are three main sources of competitive advantage in the sportswear market: People, products/services and value (Ward, 2016, p. 46). The people in a business are the primary source of competitive advantage. This is achieved through recruiting people with the best skills and intelligence. Nike recruits people with a vast experience in marketing, communication, and research. This way, sports products consumers and persuade them to have a partnership with them thus contributing to the growth of the company.

Another source of competitive advantage is the product/service. Because the process of delivering products/services may be similar, the only way for a customer to assess the product/service is through providing quality at a competitive price (Gruyter, 2015, p. 220). Quality varies because of different worldviews. However, a successful company knows how to create balance provide the best service/product to people, regardless of geographical location, culture, and beliefs (Christopher, 2016, p. 65). Hence, it is important for a business to market its products/services based on their benefits from customers’ perspectives. Nike markets its products through promotional activities like advertisement, endorsements, sponsorships and creating partnerships.

The customer is considered to be the arbiter of value in the sportswear market. Meaning, what they consider to be of value in the services is what counts. Services considered to have more benefits to the customer achieve a competitive advantage over competitors. Nike has ensured that their customers rate their services higher by improving the speed at which transactions are made. Services like Android Pay make it easier to pay for orders online.

The sportswear market industry has largely evolved. Its growth has been attributed to factors like technological advancements, stiff competition, evolving consumer preference and new consumer trends. Understanding these factors help in assessing a company’s position in the market and achieve the ability to competitive advantage (NIKE, 2015, p. 2). Also, they can help a business increase its market share. Below are factors in sportswear delivery market which affect its performance.

Technological advancements like the use of apps to make orders and payments. This has been achieved through partnerships with app development companies like Google hence it has become easier for customers to order sports products through owning a Smartphone (Ward, 2016, p. 42).  There are also plans to start making deliveries through driverless vehicles, robots, and drones. Although the plans are still at the pilot stage, if implemented, they can make a difference in sales by sportswear companies through increasing the speed at which products are delivered.

Background

Another factor affecting the performance of online food delivery market is stiff competition. There is so much pressure from alternative companies offering similar services. As consumers move from traditional to modern platforms of accessing sportswear, the latter’s efforts in providing intimate and innovative customer experience. An increase in the number of players in the industry is a double-edged sword (Gruyter, 2015, p. 225). It increases service quality and value in customers. However, it reduces a company’s market share.

The availability of materials for sportswear affects the rate at which consumers will order and make reorders. Buying clothing is an emotional process. Therefore, customers’ preference should be given top priority. This means that sports brand constantly have to carry out research to establish the consumers’ preferred designs and material tactile feel.

Lastly, there is a change in consumer trends based on demographics, culture and segment size. For example, research has shown that the Millennial make up more than a quarter of the population in the U.S (Hubble, 2017). This is a key issue because this generation has a different approach sportswear. Unlike Baby Boomers who are more concerned with comfort and decency in clothing, Millennial prefer fashionable sports clothing that is comfortable. The change in consumer trends has made more sportswear organizations to design products depending on consumer demographics.

A strategy helps in forming comprehensive and inclusive plans that which will help an organization reach its objectives and goals. It also helps a business increase competitive advantage and reduces competitive disadvantage. Nike is divided into business units that have steered the business to success.  However, this may not have been possible without having a strategy. In this section, we shall focus on the Low-Cost leadership, product differentiation strategy and other methods applied by Nike and how they have helped in evaluation and control.

The Low-Cost helps a business achieve competitive advantage through providing products and services at a lower cost compared to rivals. Therefore, a business is able to achieve competitive advantage when it is charging products at market prices and making more profits than its competitors. If implemented well, this strategy could bring significant changes.

Nike operates in a market dominated by different players who also applying different strategies to achieve competitive advantage. For example, Puma is known for its strategies in attaining customer loyalty. Similarly, Adidas is known for partnering with big chains in sports events.  For Nike, it prioritizes value in sportswear. This is found in pricing.

Theoretical framework for sport marketing

To achieve Low-Cost leadership strategy, Nike offers retailers with realistic prices. Also, it partners with big businesses to improve efficiency in delivery. However, Nike has been keen in ensuring that its initiatives are kept at a level that does not interfere with its prices (DoorDash, 2017, p. 2). This way, it is able to provide meals from customers’ favorite restaurants, at affordable prices.

Similarly, Nike uses product differentiation to position its products in the sportswear industry. This has been made possible through emphasizing on design in the manufacturing companies and creating a brand image in consumers’ minds. Nevertheless, Nike has managed to stay unique by understanding sports consumers.

The sports consumers are divided into Spectators as consumers, segmentation, target and positioning, and relationship marketing and new consumption patterns.  Further, the company has effectively participated in community development initiatives, advertising, social media marketing, and ambush marketing. All these efforts are channeled towards ensuring that the consumer understands and chooses Nike’s footwear and apparel; instead of competitors. Apart from product differentiation and Low-Cost Leadership strategy, Nike has also used sponsorships and endorsements to increase the brand’s popularity. For example, it signs prominent athletes. Additionally, it signs young upcoming promising athletes.

The first challenge facing Nike is the lack of control over athletes whom they have signed. For example, When Tiger was surrounded with scandals related to infidelity; the company was put in a compromising situation since Woods was a representative of their brand. Consequently, they dropped him since the public was not only lashing out at him but at the brand for continuing to make him their representatives.

Secondly, Nike has been accused before of actively participating in environmental pollution and paying low wages to their factory workers. In 2012, a documentary aired on one TV station showing how Nike was treating factory workers in Indonesia. From the video, Nike was taking part in polluting the environment, putting the lives of their employees at risk and giving workers low pay. For example, remains of rubber used to make shoes disposed of where the worker resides. Also, workers were being forced to share rooms and bathrooms, which were in poor condition. This is dangerous, especially to children and it can lead to chronic diseases like cholera (Kolk, 2016). Moreover, the wages paid to the sub-contractor employees were so low that after paying bills, they were left with nothing to survive on.

Also, when the management was approached to offer explanations, they declined. From the video,  the company’s CEO  could be heard denying that there exists any form of malpractice in the company and being rude to the interviewer who was just trying to know if he was aware the conditions of the employees working in the company’s factory in Indonesia. This showed how far the company would go to ensure that no one knew how they were mistreating their employees.

Understanding sport consumer

To redeem its image in the public, Nike tried to change its corporate culture. It became more open and transparent in their operations unlike before. This reduced employee turnover and increased morale to work for the company. For example, within a year after the documentary emerged, Nike made more than 150 reports on an inspection conducted by independent institutions. This showed that they have taken responsibility for what happened and are making working conditions conducive for employees and this was proved by the third party bodies that inspected the company and published the reports on the Fair Labor Association website (Birch, 2012, p.).Judging by the company’s performance after the scandal in 2011, it seems the public forgave them and continue to use their sportswear.

This study utilized the case study research design method. This involved analyzing Nike’s internal and external environment. The main data collection methods were content analysis, interviews, and observations. Literature available on the company’s marketing activities was reviewed and recorded. Similarly, Nike’s marketing Director and 5 salespeople in New York offices were interviewed. Additionally, the daily company’s marketing activities were for five days were recorded. 

Nike marketing activities through the New York Jets. In the 1980s, Nike made a big endorsement deal with Michael Jordan. Consequently, the Air Jordan brand came to be (Keller, 2009, p. 135).  The Sneakers line brought both Nike and Jordan success that it had not anticipated. Consequently, the company focussed more resources and funds towards marketing activities. Consequently, in 2012, Nike struck a deal that saw it become NFL’s official uniforms provider (NIKE, 2015, p. 2). In a statement to the Press, Charlie Denson, president of Nike said that the opportunity would enhance and provide great opportunities for growth in the industry. Therefore, this section provides an analysis of Nike marketing activities through New York Jets.

This is a professional football team in New York. They compete in the NFL as a member club of the American Football Conference. The team’s logo and uniforms are green  and white. Currently, Nike provides uniforms to the Jets. This is considered to be one of Nike’s marketing activities. The following is one of sportswear designed by Nike for the team:

One thing that Nike is known for; is being innovative. This is implied in its strategic goals, mission statement, and vision. Nike promotes its products through making constant improvements to them. For example, the design your shoe platforms allow customers to solely customize their shoes. Nike takes part in offering guidance and ensuring that the customer’s design has been implemented (NIKE, 2015).The following is an image of a shoe designed by Nike for New York Jets team.

Creating sport value

Another Nike marketing activity is sponsorships and endorsements. This is done to establish the target market of particular Nike products. The list of celebrity athletes who have endorsed Nike is endless.  It starts with Michael Jordan, Lebron James, Kobe Bryant, Tiger Woods, Lance Armstrong, Derek Jeter and Cristiano Ronaldo e.t.c. There are also teams that have endorsed Nike (NIKE, 2015, p. 2). They include the National Football League (NFL) Universities of North Carolina/Alabama, and soccer giant Manchester United Football Club (NIKE, 2015, p. 2). As a result, the breadth and quantity of consumers have expanded. The following is a Jets Jersey for a player who has signed an endorsement deal with Nike.

Additionally, Nike uses different forms of advertising like TV and billboards. For example, the ‘Just Do It’ TV campaign ad gained the company a lot of popularity. It inspired people to be committed to working on their dreams with hope and assurance that they will succeed. As a result, more people identified with Nike for pushing people to feel better.

However, for the last five years,  some change has been noted in Nike’s marketing strategy. For example, instead of investing so much in TV ad campaigns and sports events, Nike now uses more social media and billboards. Nike FuelBand and the Nike+SportWatch GPS enabled Nike to track its consumers (NIKE, 2015, p. 2). The results showed that most Nike customers use the Internet for the better part of the day. Thus the company launched a series of online and digital campaigns. For example, in 2012, Nike put a huge billboard in South Africa containing what one of the consumers in Twitter had written about Nike products.

The following are the recommendations based on the analysis of Nike marketing activities through New York Jets.

• The company should focus on sponsoring sports events. Although it is relatively expensive, it reaches more people compared to billboards.
• Nike should increase the range of products to provide consumers with a large range to choose from. Currently, it is providing footwear, jewelry, and accessories. In addition to these, it could provide glasses and clothing.
• Nike should increase efforts in sustainability. It should ensure that all its activities support the environment-instead of bringing destruction.

In conclusion, this research was based on the marketing activities of Nike in New York Jets . Nike deals in sportswear like footwear, accessories, and apparels. This involved analyzing the company and competitors in the sporting industry. From this, it was clear that Nike holds the largest market share in the sports market. This is mainly attributed to strategic marketing activities that have led to more brand awareness and growth in profits. Nike constantly innovates its products to accommodate the change in trends, customer preferences, and  fashion. Therefore, this study recommends that Nike expands to developing markets, especially in developing countries whose sports markets are not  as saturated compared developed countries.

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