Marketing orientation of nike

Marketing orientation of nike Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably  [1]   In details of this definition, marketing is a management process where all the activities and tasks are coordinated and performed by both individuals and equipment. By identifying a group of customers their needs, interests and helps them to get goods in a reasonable price with good quality. Not only these, expecting them for the next time and which will make business profitable. The definition provided by the Philip Kotler is- Marketing is the social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others  [2]   In this definition Kotler said, marketing is a social process means by researching market identify the consumers how they behave and attitude, consider and think about a product; how a particular product is good enough to satisfy buyer wants and needs; also how it is well enough to feel them grater to make and exchange with good value for the product. From my own definition- Marketing is a managerial and social process where organisation performs or does activities to ensure and identify customer needs and wants are fulfilled, satisfying them by creating products or services with the exchange of value through ensuring the profitability for the organisation. 1. B Marketing Orientation The meaning of marketing concept for an organisation is that, they are aimed all of it efforts to keep closer themselves to the customers for satisfying them by the services or products around the needs and wants and stay always a step ahead from their competitors. Basically the major objective is for the organisation to create a centre of attention of their products to the customers.  [3]   Basically marketing orientation is an approach to business that centres its activities to satisfy the needs and wants of its customers. Marketing orientation is really a good range of activities where it is necessary to make sure that all the marketing researches are about to invent the customer needs and requirements. The marketing orientation concept is based on the following three pillars- Nike are strongly customer-focused, heavily committed and give the superior value for customers. These company shares an absolute dedication to sensing, serving and satisfying the needs of customers in well-defined target markets. They motivate everyone in the organization to deliver high quality and superior value for their customers, leading to high levels of customer satisfaction. These organizations know that if they take care of their customers, market share and profits will follow.  [4]   1. C Selling vs. Marketing concept and which one best describes for Nike Selling orientation is a kind of marketing activities where business tries to influence or persuade customers to buy their product or service. It sees its work as getting the interest of potential customers for their existing products and services Marketing orientation is another part of marketing activities where the company first target a market, then try to discover customer needs and wants, besides some coordinating activities to convince consumers like pricing, design, communication, appropriate delivery, competitive and profitable goods and services. Nike is a market oriented organisation because- Nike has well understanding of its target consumers to construct a greater value for them. Has a good capability to adopt the taste of consumers by time to time. Does research on the competitors to see what strategies are they use to meet the customers need. Has good marketing plans and delivered the promise that they made with customers to give them high quality, appropriate features, design, styles and categories, right price products with availability. By satisfying the consumers needs/wants Nike getting well published in the market place and achieving its objective by making profit. 1. D Implementation of the marketing concept The benefits are: Knowing and understanding the changing needs, wants and desires of athletes and customers to create new innovative products. Look forward to market changes and take action very firstly to those changes. Strong brand image with consistently increase the number of people satisfied. Improve stakeholder benefits and maintain strong share values. Leading the market with advance thought and technology.(Nike+, Nike Free) Market research gives a huge priority of product acceptability.( packaging and attractive fashionable design) Sponsoring various celebrity sports personalities and certified teams who are used to get concentration of customers on Nike products. Easily manage the criticism. Powerful advertising of Nike products are creating better market for the company. The continuous improvement of the companys core competence. The costs of adopting the marketing concept are: Heavy investment in the marketing research and product development.(NSRL) High costs of employing the best people in their specialist areas. Using world best players for advertising products. Sponsoring different celebrities and professional teams in time basis. Huge investment on product advertisement before launching in the market. Different promotional costs TV advert, sales promotion and public relation. Distribution costs serving product in different channels. Communication costs- dealing differently with a range of different market segments. Heavy cost of maintaining large and expensive website. Task-2 2. A Macro and micro environmental factor Macro Environmental factor: Micro environmental factor is an external factor that influences the company externally. Social factor Nike brand and its slogan just do it is very well known to people. Consciousness of people about dieting and fitness. Consumers are changing themselves from sports to fashion oriented. Promotional advertising to get more young customers where internet is using as a primary source of information. Sponsoring sporting events and clinics to make good social image. Motivating womens, young consumers for leisure activities. Technological factor: Effective use of IT in the section of marketing information system in every aspect of products from development to distribution. It has advance technology to develop and research their product. Has a great propensity to take on new technology for the product. Heavy design and shape of athletic footwear. Nike has NSRL (Nike Sports Research Laboratory) which is offer new ways to improve existing products. Micro environmental factor: Profit margin for Nike 5 years average: 46.8% (Gross Margin) 9.3% (Net Margin) Structure- Nike has a matrix structure and there geographical structure consists of with NAFTA (USA, Canada, and Mexico), EU, EMEA and Asia Pacific. Technological development- For developing and executing idea Nike has APE, NSRL and it also has tax expert economists which focus in the reduction of future costs. HRM- Orthopedic Experts, Rubber Technologists, Production Engineers who are Involved to find out the right people and product for the company. Procurement- Nike buys its raw materials in bulk size, use labors and other services in the same countries where manufacturing takes place. Inbound Logistics China, Vietnam, Indonesia and Thailand. Operations Operating their business in more than 160 countries where most of the production is occurred in China, Thailand, Indonesia, Malaysia, Vietnam, Turkey, Sri Lanka, India, Cambodia, Taiwan, Mexico and Israel. Outbound Logistics They sell their product to the retailers, via internet and with 700 contract shops in the whole world. Sales Marketing Secret Tournament campaign approach- TV internet ads, retails, consumers events, public relations.  [5]   6 Value Chain Analysis 2. B Segmentation criteria Geographic Segmentation Geographic segmentation is about dividing the market within diverse geographical part for example- in cities, town, nations, countries and regions. Nike footwear is really famous in the part of EU, EMEA and Asia Pacific currently. The objective is to sell this product in those continents where some particular sports is most popular. For example, football, basketball, rugby is widely popular in Europe now-a-days. It is not much popular in south Asia so basically its footwear is advertised more generally in Europe. (Nike, 2009). Demographic segmentation Demographic segmentation divides on age, gender, race, occupation, income, nationality, family size and also on the level of education. Relating to age and income, they target peoples in variety age from young person to middle-aged adults and the income series is basically from middle to upper class. By depends on race and gender it has broadly expanded itself nationally. They do advertise for both men and women for every single race and nationality. Nike really doesnt show off themselves with families but identify with teams. Teams of different sports in the world are targeted by Nike. It also did run ad campaign called stay in school in 1991. Psychographic Segmentation Psychographic segmentation gives a picture about social class, standards, characteristics, and the life style- opinions, beliefs, interests and values of customers. Nike uses athlete where it influences consumer to be interested on their shoes and footwear. Nike promotes a positive and confident attitude, target always those kinds of people. 2. C Target market Young generation (bachelor stage) between 18-30 years old. Because they want to themselves appear to others to be fit, healthy and athletic Because at this stage of age young people prepare themselves to enter into the job market. They are the generation X, they like fashion, sports. Nike uses their sports celebrity to advertise footwear which is fashionable and that make influences them to buy footwear. just do it, write the future are some of slogan that make these X generation very aggressive to do anything good and make the future bright. People between 30-50 years old, middle-high income social class. These people have already been achieved a bit in his/her life and they are now away from the crisis of economy. They have made their status, position in the society, wants to lead life gorgeously with prestige product like Nike. People can show of their status and ability of leading healthy life. Nike advertises its products by using different ways and it targets a particular groups or types of people by ads. Nike targeted men in a way that appeals to masculine values and to women with appeals to their values. Women today want equality with men, to be seen as just as able bodied and finally, both genders will buy Nike because its expensive and shows that they have the money to buy Nike, just as people buy Mercedes cars when a Fiat does the same job. 2. D Buyer behaviour in marketing activities I am going to mention some marketing activities that should follow Nike to take part on buyer behaviour: Psychological forces Motivation- Nike is a top brand with high quality design, style, price and lasting warranty which motivate people to buy Nike. Perception- World reputation, brand image, high features and quality. Personality- to show off to their friends and neighbours that they are fit, healthy athletic types and able to afford Nikes products. Social groups Culture- produce different design product based on the culture. Subculture- example-Air Jordan shoes specifically makes for basket ball game, popular in North America- USA, Canada. Social class- middle and upper classes. Reference group- Popular celebrities, teams and clubs Nike adopt to convince consumer to buy their footwear. Family- Parents want to see their children are athletes, well fitted and healthy which influence them to buy Nike. Situational Factors World brand and fashionable products. 700 contract shops all over the world where buyer can buy. (Over 18000 shops in USA) To show off people the status and ability to buy Nike. New innovative, fashionable, unique design and attractive footwear make interest and desire of consumers to buy Nike. Nike their information search leaves a buyer with possible alternatives, the evoked set. Nike has different features; design footwears which are specially different and suitable for particular work. (Football, soccer, running, skateboarding, cycling etc.). If the consumers are not satisfied on the previous product then they can try new any other model. Nike has so many stores, different products/models, well packaging system and many convenient ways for consumer to buy. Nike is such kind of brand which is persuading consumer decisions to purchase a Nike product with risk free. Good product, consumer feels superior with their whole satisfactory and tells someone about their satisfaction. Information search Internal search, memory. Providing ample information on Nike official site, internet, You Tube, in stores, on TV, radio, newspaper, magazine and public sources about the product. Task-3 3. A. Competitive Advantages Nike, at the present time ahead from their competitors by achieving some competitive advantages through their products. Nike has cost effective management information system(MIS) and many management layer that helps to reduce the overall product cost.  [7]   Continuous training and development program increase the efficiency of workers. By using advance technology and modern machineries they can produce product in a short time with low cost. They find out lowest price of raw materials and use cheap labour from under developing countries. Setting up business near to the suppliers. Huge scale of operation all over the world and where by finding place they minimize manufacturing costs. Selling product in low price where many competitors are visible. Using cheap transport carriers for product. Huge scale of advertising in those countries them running their business. Brand name, equity, image, recognition and world reputation. Using popular athletes for advertising and recommending their products. Trade mark -just do it, write the future and patents. New product development. Giving chance customer to customize footwear in their own style through online. Strong and genius RD, HRM. These are the sustainable competitive advantages that keeping ahead Nike at top position of the market and helping them to take proper advantages from their competitors and achieving the loyalty from the customers. 3. B. Distribution Strategy In fiscal 2009, Nike produced 100% of their footwear in china, Vietnam, Indonesia and Thailand and they distributed this footwear in their own countries as well as USA+ EMEA and Asia Pacific regions. Nike distributes their footwear to the retailers or whole sellers from straight to the factory or distribution centre all over the world through their own websites, direct mail or over the phone. In the distribution centre they inventory all their footwear and deliver them to different place in the world. Nike also uses agents, sales representative to distribute their product. So, in order to increase sales Nike has tried to wide their distribution channels. Not only this, Nike has used internet to distribute product by using virtual stores. They use containers and ships to deliver their product. Apart from, Nike uses future order program which help them to produce the product on time with lean production method and also help them to deliver just in time. Nike gives a good amount of redu ction on their product if resellers buy in a bulk size. Nike can take those steps in below to improve their distribution strategy. Need to build more small and large distribution centre to make product available. Need another centre in a particular area in case of fire or large number of small centres to spread risks. Back up IT system. Using very modern technology to produce, distribute and provide greater convenience and information. To constraint of time and space disappear should use online retailing. Using door to door service system. Cutting down production cost. Depending on the consumer behaviour, Nike should focus on the price instead of brand. 3.C. Pricing A full understanding of production costs, profit objectives, customers, competition, and other market information will help to determine the pricing strategy that best fits for Nike. With this information, the minimum price Nike can charge to break even and the highest price based on an estimate of customer demand. Here I am giving a demand curves for Nike that will help them to make price depends on the market demand. Price( £) Quantity Demanded Total Revenue 50 1000 50000 100 800 80000 150 400 60000 200 300 60000 First of all, Nike works out on diverse factors like market share, opposition, product uniqueness and perceived value of the product. In certain segments they are charging unique prices cause of quality product. They use the premium pricing strategy-fixed price, where they are enabling by the product to maintain its standard in the market. Nike has uniqueness that gives themselves extra value to the consumer. Nike is a prestige product which is highly demanded, where people shows their ability of buying Nike shoes. The image they made to the consumer about their brand which is influenced them to pay high price. If Nike wants then they can apply value base pricing strategy in certain segments. Sales Innovations Early adaptor early majority late majority laggards 2.5% 13% 31% 35% 18.5% High price less expensive good demand well demand not much expensive Then before good price better price  £70  £65  £60  £50  £40 Consumers (100%) Here, Nike charged high price at the beginning and skimming the profit from the market which is helping them to achieve their objectives. They do huge advertisement to make the price acceptable to the consumers and persuade consumers to buy premium product. 3D. Promotional strategy Nike has great marketing communication techniques with high quality products and loyal consumers which helps them to keep stay in the top position from a long time. By doing campaign about the ability of men, women with new fashion, using famous celebrates athletes and teams for advertising which are such outstanding steps they have taken to keep good communication between them and consumers. They have signed top athletes from different background of sports like soccer- Ronaldho, Ronaldinho, basket ball- Michael Jordan, tennis- Rafael Nadal , golf- Tiger Woods, cycling and some of the other sports. Not only these they sponsor local college students also. Nike uses new geographical area to promote their new product. Advertising on the TV- write the future, just do it contains slogan, internet- YouTube and other sites, broadcast which helps them to break the geographical barriers and increase the ability to reach people on the other part of the world. Sponsoring in different social activities where people or players wear Nike logo contains dresses; sales promotions like discounts, coupons and to keep good relation with the public they release their own press and magazine and take part on the events. Apart from, different tactics they use in advertising on TV which diverts consumer to visit internet to Nike website to see the finial ends. All those things are integrated Nike to meet its specific objectives in an efficient way. The objectives are included- new customers, new geographical areas, retaining the regular customers and bringing back the lapsed customers. Task-4 4. A. Marketing mix Nike is mainly footwear company but they also produce other apparels and stuffs as well. So for this section my choice is Nike footwear. The two marketing mixes that I have chosen for Nike they are- Sponsoring events Exhibitions or Fashion shows Sponsoring events- Nike might sponsors different community events like as local sports team, by doing music concerts or sports quiz in the city centre, school sports days, boys scouts and girls guide events or local community events for kids to show off their products while advertising the events as Sponsored by Nike. They could contribute some money there to make those events great to the people. Here, Nike aimed to target local communities and familiar themselves with Nike footwear, to make feel people price is not always a matter where brand, quality is visible and Nike is always with them in everywhere. Not only that, by doing this they can do some free publicity, can bring the attention and also can get opinions from different people. Fashion shows- Here, I am suggesting Nike to arrange 250-400 Nike fashion shows in posh restaurants to show and sell their fashions to the kind of people who can afford them. The restaurant wouldnt charge for entrance because it would bring them loads of new people who had never been there before and they could sell food and refreshments. But Nike could charge a small entrance fee and give the money to a sports charity thereby getting extra free publicity. Nike would of course advertise these fashion shows in banners or newspapers or in the posters. By doing these Nike can target richer class of people and can make influence to buy Nike prestige footwear to show their personality, ability to buy such brand and expensive footwear like Nike. 4.B. Marketing excellence is a key success factor in virtually any industry or company focused on consumer products or services. Defining what marketing excellence really means and how to mobilize the organization to achieve that goal, however, can be extremely challenging. Marketing products and services to organization has some good differences between them. For organization, marketing products are those activities that is related with products and a company does those activities until sell product to the end users. For Nike, they buy their raw materials from different manufacturer in a bulk size. For example they produced shoes, in the perspective of organization they need to count its ownership for the product which includes with product delivery costs, holding costs in stock and other costs like research and development etc. Not on these, they think about the quality as well. On this section organization buy product in bulk size in a very cheap price which is necessary. If unnecessary things bought by company which might affect the whole company in financially. On the other hand, marketing services are those work that company does to sell its product to actual consumer. On here, organization try to find out the way which will be useful to get/attract more consumers where it is imperceptible for marketing products. This is a common divergence between marketing a product and service. Here, organization puts lots of attempt to make desirability of its consumer. 4.C. In shortly, international marketing is a kind of marketing where a company setup his business in different foreign environment, consumer, laws and regulations. On the other hand, domestic marketing is all about running the business in the local/domestic market. In the aspect of Nike, there has many differences between those two markets. Cultural differences- Diverse and multicultural people who has different religion, taste, fashion, ideology and living standard. Different from social, economical, political and methods of doing business. Suppose Nike in China is completely different form Nike USA from the policies and ways of doing business. Market- Wide market with a number of competitors, challenges, risks, complexities and expensive. Different currencies which can varies time to time. The rate of customs duty, VAT or sales tax charged on the product. Changes to the products because of standards, voltages or average sizes of the population. Different language- Due to a language barrier it is more difficult to obtain and understand research data in international marketing. Promotional messages need to consider dozens of cultural differences between different countries. For example, for advertisement Nike uses different athletes depends on the country. By considering the differences in languages, expressions, habits, gestures, ideologies Nike develops their promotional messages. Those are some of the areas that makes difference between the international and domestic market for Nike.