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MARKETING PRINCIPLES
GROUP ASSIGNMENT

NIKE STRATEGY 4PS

Lecturer: Tran Anh Phuong

Class: MKT1715

Course: MKT101 – Marketing principles

Team Members:

Ngô Việt Hoàng

1. Đỗ Minh Hiếu
Hà Công Quyền

Hà Duy Phúc

Hoàng Khải Bân

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INTRODUCTION
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.

1.1 Description of service packages and development

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 (“all-
conditions gear”), which markets products for extreme sports such as snowboarding and
mountain biking. In the early 21st century Nike began selling sports-technology
accessories, including portable heart-rate monitors and high-altitude wrist compasses.
(Britannica, 2021)[2]
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1.2 Target customer and target market

Target customer:

For Nike, their mission is: BREAKING BARRIERS: "Nike exists to bring inspiration
and innovation to every athlete* in the world. Our Purpose is to move the world
forward through the power of sport – breaking barriers and building community to
change the game for all. *If you have a body, you are an athlete." It can be seen that
the target customer of this market is everyone. (About Nike-Nike,2021) [3]

Target market:
Nike’s target market is for people who regularly exercise and for those who wear
fashion trends as it goes well with modern-day clothing. Nike has classified their
customers mainly into three product groups, men’s product, women’s products and
kid’s product. For men’s products they have different types of shoes and clothes that
consist of lifestyle, running, gym, baseball & softball, tennis, golf or football. For
women’s products, unlike men’s products Nike provides various options for women as
Nike understands that women don’t really play American football therefore they
replace it with yoga. For kid’s products, Nike mainly targets young athletes like how
their mission statements bring inspiration to every athlete. Besides these, Nike
provides
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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
to jog 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
A. Strong Brand Awareness
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]
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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 and
many different sports. Nike stores and other retailers spotlight its ability to
offer something to every customer in the market for performance gear, and its
lines continue to expand based on consumer demand. Nike generated $30.6
billion in revenue worldwide from its major product segments, including
sportswear, running gear, training gear, and specialty sport and footwear lines.
(brandongaille, 2021)[8]

D. Aimed For Sustainability

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 shoes
from 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]

E. Low Manufacturing Cost

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]

F. Multi – Channel Approach

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.
(advergize,2020)[12]. In the fiscal year 2019 and 2020, Nike spent $3.7
billion and $3.5 billion respectively in their marketing (bstrategyhub,2020)[13]
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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]
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Nike’s Opportunities
Though Nike is considered one of the top brands, the retail market, especially
for sports apparel, is highly competitive. Several high-rated brands are
continually struggling their way to the top. Nike must look for opportunities
that can help them to expand their business. The company’s association with
non-profit organizations can allow them to create more products from recycled
goods if one of the top brands takes the initiative to involve its R&D team to
work on recycled products that will surely encourage other small brands. It will
support the environmental cause and also send the right message to the
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]

Nike’s Threats
There is an intense competition in the market by having the players like
puma and adidas. Nike has to maintain competitive pricing in the market and
maintain its position as a market leader.(marketingark,2019)[19]
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(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
for about 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.
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4PS MARKETING STRATEGY

Marketing Mix of Nike analyses the brand/company which covers 4Ps (Product, Price, Place,
Promotion) and explains the Nike marketing strategy. Marketing strategy helps companies
achieve business goals & objectives, and marketing mix (4Ps) is the widely used framework to
define the strategies. Let's see the Marketing strategy of Nike.

Nike Product Strategy

Nike has a wide range of products to offers to its target customers. The
Marketing Mix of Nike consists of products which fall under below three
categories include footwear, apparel, equipment and accessories.
(mbaskool.com)[23]
Nike offers great variety of products including special type of shoes for every
category of sports. For example, it has special quality of shoes for football,
basketball, cricket and other sports. Nike has different products for different
customer segments and over the years have added to the width and depth of its
products basis the changing needs of its customers. (mbaskool.com). Sales data
from 2009 – 2020 highlight that most North American sales are attributed to
athletic footwear. Investment in research and development allows Nike to
leverage existing technological advancements to provide consumers with
innovative product design and functionality. The current brand portfolio
includes the Nike brand, Jordan, Hurley, and Converse. Nike's global branding
is one reason why the company continues to dominate the global footwear
market. (globalmarketingprofessor,2021) [24]

(Source : Statista - Nike's North American revenue from 2009 to 2020, by segment )
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(Source: Statista - Nike Still on Top of the Sneaker World)

Nike has adapted to the changing times are now designing and selling smart
products which have capability of connect to iPod Nano bringing about the
combination of products from Apple Inc. and Nike which measure the
performance of the sportsperson. Besides these NIKEid is an innovative sub
brand of Nike which allows its customers to design and customize the features
of their desired products as per their requirements which attracts the greater
audience. Nike also offers new service of personal trainer to its consumers for
various types of sports. (mbaskool.com)[25]

(Source: Apple.com)
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Nike Price/Pricing Strategy

The company uses Competitive and Skimming pricing strategy for its customer
base and normally targets upper middle class and high-end customers.
Nike is known for its superior quality and world-class shoe designs and
successfully manages to provide value for money to its customers.
For the products which are not run of the mill and are limited edition, Nike
uses Skimming pricing strategy. On the other hand, for the normal products
which are in competition with its competitors like Adidas, Puma, Reebok, Nike
prefers to user competitive pricing strategy to cut competition.
(heartofcodes.com)[26]
Nike influences perceived value by utilizing global sports icons as brand
ambassadors. Although based on the median shoe price, the table below further
supports the claim that Nike can achieve higher pricing for its products
compared to competitors. (globalmarketingprofessor,2021)[27]

(Source: Datafiniti)

Nike has the largest median price, followed by ASICS and Adidas. While
many Nikes are available at a moderate priced, people will pay more for
products from niche markets. Most notable are the basketball shoe collections,
which feature endorsements from stars like LeBron and Kyrie, as well the more
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specialized athletic shoes such as running shoes and sports cleats.

(datafiniti.co)[28]

Nike Place Strategy

Place plays an important role in the Marketing Mix of Nike. Nike uses both
Offline and Online channels for the promotion of its products. For offline
channels, Nike uses its own dedicated Nike outlets and Multi-brand outlets for
distributing their products.
Nike sponsors major football tournaments such as Premier League, World cup,
Error to advertise products to the world with the message that football must
wear Nike shoes.
The company has set up different outlets and partnered with different multi-
brand outlets in different cities of the country to reach out to the mass audience.
For Online channels, Nike uses e-commerce websites like Myntra.com,
Flipkart.com, Amazon.com etc. to promote their products. Nike is using these
channels to sell their new launches in footwear, sportswear etc. (heartofcodes.com)
[29]

Nike Promotion Strategy

Five different statements but they all mean the same thing and have the same
essence – That’s what Nike as a brand promotes through all the promotion that
it does. Nike uses a proper mix of Online and Offline channels for promotion
and creating awareness and is known for creating some world class
advertisements that are inspiring and high on energy quotient.
Apart from Television ads, Nike is big on OOH promotion and sponsors
different sporting events like Football, Basketball, Cycling, Golf etc. Nike also
has some famous sports personalities as its brand ambassadors and successfully
uses them as influencers.
On Digital or Online front, Nike experiences some huge fan following on its
Instagram, Facebook and YouTube channels. Nike successfully leverages these
channels for their brand promotion and for creating awareness about their new
launches. (heartofcodes.com) [30]
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Throughout its marketing campaigns and activities, Nike maintains an

emphasis on its iconic branding. Its 'swoosh' logo and "Just Do It" slogan of 31
years have become synonymous with the uplifting messages its campaigns
convey(startingbusiness.com,2020) [31], contributing to the brand's soaring
value of $39.1bn in 2020 – officially the 13th most valuable brand globally,
according for Forbes.com[32]

(Source: Forbes.com – The World’s Most Valuable

Brands)

CONCLUSION AND RECOMMENDATIONS

Conclusion and Recommendations about 4Ps

Marketing Strategy
Analyzing the marketing mix is a fundamental step towards an effective
strategy. Where another analysis is related to the environment and
feasibility analysis, the four P's of marketing including the product itself,
price, placement and promotion are the four wheels of the vehicle on which
people The road to an organization's marketing success really depends on
the image of the Nike brand, the Nike name and trademark rustling,…
making it one of the most recognizable brands in the world. The strength of
the Nike brand is one of the reasons for the high sales. Nike is the product
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of quality, its loyal customer base, and its excellent marketing techniques
all contributing to the Nike shoe empire a resounding success.
Thus, it can be clearly seen that Nike's main brand strategy in this period
focused on three main directions, namely: building a brand around sports
superstars, using international advertising networks to create Nike's
overwhelming presence in every corner of the world and ultimately the
development of a "Nike neighborhood" system based on the idea of
providing customers with a unique and highly focused experience: "living
in the Nike space, hear Nike sound, See Nike everywhere”.
To achieve such success, Nike has been very smart in its business marketing
strategy, using a variety of flexible methods such as innovative
breakthroughs, using sponsorship relationships as a useful means. media, as
well as the enthusiasm and hard work of all members in a large corporation
like Nike.
In order to be even more successful in the not-too-distant future, Nike
needs to continue to find ways to connect athletes and loyal fans, but it also
needs to balance production costs with costs. media advertisement. Must
know how to effectively use resources and develop more effective financial
management policies. Hold regular meetings with employees or their
representatives to resolve lingering issues… Constantly exploring new ways
of doing business and continuing to develop their existing business model
for better and more efficient.

END
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REFERENCE
[1] MindTools, n.d. The Marketing Mix and the 4Ps of Marketing.
[Online].Available at: < https://www.mindtools.com/pages/article/newSTR_94.htm?
fbclid=IwAR00el4t2eD3khT%20YOuHyP2LLRFK-VsFcLFI0KuRwXtitSAw8-
GR7y8Pwyjo >

[2] britannica.com 2021. Nike-Inc American company. [Online]. Available at:

< https://www.britannica.com/topic/Nike-Inc >

[3] Nike.com.2021. About nike-Nike[Online]. Available at: https://about.nike.com/

[4] Gradefixer.com.Market Segmentation, Market Target and Market Positioning

of Nike Company[Online]. Available at: < https://gradesfixer.com/free-essay-
examples/market-segmentation-market-target-and-market-positioning-of-nike-
company/ >

[5] Managementglossary,2020, SWOT Analysis of Nike in 2020,[online] Available at

< https://managementglossary.com/swot-analysis-of-nike/ >

[6][8] brandongaille,2021, Nike SWOT Analysis (2021), [online] Available at

< https://brandongaille.com/nike-swot-analysis/ >

[7][9] bstrategyhub,2020, SWOT Analysis of Nike, [online] Available at

< https://bstrategyhub.com/swot-analysis-of-nike-nike-swot-analysis/ >

[10][19] marketingark, 2019, Nike SWOT Analysis, [online] Available at

< https://www.marketingark.com/nike-swot-analysis.html >

[11][13][15][16] bstrategyhub, 2020, SWOT Analysis of Nike, [online] Available at

< https://bstrategyhub.com/swot-analysis-of-nike-nike-swot-analysis/ >

[12][14] advergize, 2020, SWOT Analysis of Nike: An Iconic Brand, [online]

Available at < https://www.advergize.com/marketing/swot-analysis-of-nike-an-in-
depth-analysis/ >

[17] edrawmax, 2020, Nike SWOT Analysis, [online] Available at

< https://www.edrawmax.com/article/nike-swot-analysis.html >

[18] The Motley Fool,2020, 3 Growth Opportunities for Nike, [online] Available at
< https://www.fool.com/investing/2020/07/02/3-growth-opportunities-for-nike.aspx
>

[20] M. Lv. Industry weekly report of KaiYuan securities: Nike FY2020Q4

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Greater China revenue turned positive, continue to be optimistic about the sports
apparel industry chain.

[23][25] mbaskool.com,2021, Nike Marketing Mix (4Ps) Strategy, [online] Available

at < https://www.mbaskool.com/marketing-mix/products/16893-nike.html >

[24][27] globalmarketingprofessor,2021, Global Branding Strategy: Nike Analysis

using 4 Ps, [online] Available at < https://globalmarketingprofessor.com/nike-
global- branding-strategy/ >

[26][29][30] heartofcodes.com,2018, Nike’s 4Ps of Marketing Mix, [online]

Available at < http://heartofcodes.com/marketing-mix-of-nike/ >

[28] datafiniti.co, How Shoe Brands Change Prices Depending on Gender, [online]
Available at < https://datafiniti.co/shoe-brands-change-prices-depending-gender/ >

[31] startingbusiness.com,2020, What Can Your Company Learn From

Nike’s Marketing Strategy?, [online] Available at <
https://www.startingbusiness.com/blog/marketing-strategy-nike >

[32] Forbes.com, The World’s Most Valuable Brands, [online] Available at

< https://www.forbes.com/the-worlds-most-valuable-brands/#4132a51a119c
>
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