Category: Nike

Introduction

Nike Inc encounters challenges from a myriad of natural and physical environmental factors, which affect its performance. They include climate change, pollution, and floods among others. According to Esteve-Turrillas and De la Guardia (2017), climate change impacts different facets of Nikes operating model, including production and supply chain. This company relies on cotton for the manufacture of its apparels.

Therefore, shortage of these raw materials might have devastating impacts on the company. Drought in nations that grow cotton results in the prices of this essential commodity going up, thereby affecting textile companies profitability. Variations in weather changes have led to Nike looking for alternative ways of manufacturing its products. This company is now turning to using synthetic materials because they are not affected by climate change (Ali Mahdi, Abass, Mazar, & Shaju, 2015). Nike Inc is also renowned for sourcing organic cotton, which is grown via environmentally friendly methods.

Apart from climate change, floods contribute to Nikes production levels dwindling. For instance, in 2013, the company was forced to momentarily close its Thailand plants due to floods (Esteve-Turrillas & De la Guardia, 2017). Today, the call for environmental conservation has resulted in Nike changing its operations. This company is investing in environmentally friendly sources of energy as a measure to curb greenhouse gas emission.

Moreover, it appreciates the significance of water conservation and is looking for ways to recycle wastewater. Nike has partnered with DyeCoo, a Dutch firm, to establish inventive production procedures that will minimize energy use (Hemphill & White, 2016). Additionally, this partnership will assist Nike to prepare its fabric (dyeing) without using water. The move will see the company save a lot of water since presently it needs between 100 and 150 liters per a kilogram of fabric (Jegatheesan et al., 2016). The company has initiated programs that advocate recycling of used shoes to reduce pollution.

PEST Analysis

Political, economic, social, and technological changes have significant impacts on the apparel industry. The political factors include terrorism and geopolitical stability, which cause ambiguity in the international economy. The present political changes in the United States and the United Kingdom have contributed to poor performance in the textile sector (Ali Mahdi et al., 2015). Moreover, environmental laws and the call for reduction of global warming have led to the apparel industry investing in green sources of energy. Economic volatility has a toll order on the apparel segment (Ali Mahdi et al., 2015).

For instance, slow growth in the Chinese economy has led to a decline in demand for textile products. As the number of globally employed people continues to rise, there are expectations that the demand for apparel will increase, facilitating growth of this industry.

Noteworthy social transformations have happened in the last decade, and have impacted the sales of merchandise. The number of employed millennials has increased tremendously, resulting in the apparel industry considering this generation as its main target. Hall, Towers, and Shaw (2017) allege that millennials are not only sensitive to the prices of merchandise but also quality. Therefore, apparel companies like Nike have embarked on manufacturing quality and inexpensive products.

Technology is a critical factor that has revolutionized the apparel industry. Information technology (IT), globalization, Internet, and increased use of smartphones have changed the way people do their shopping. In return, textile firms have been forced to invest in technology to enable them reach many clients. According to Hall et al. (2017), most millennials prefer online shopping and value tailor-made services. Consequently, apparel companies like Nike have online stores that enable them to target this clientele.

References

Ali Mahdi, H. A., Abass, M., Mazar, T. I., & Shaju, G. A. (2015). A comparative analysis of strategies and business models of Mike Inc. and Adidas Group with special reference to competitive advantage in the context of a dynamic and competitive environment. International Journal of Business Management and Economic Research, 6(3), 167-177.

Esteve-Turrillas, F. A., & De la Guardia, M. (2017). Environmental impact of recover cotton in textile industry. Resources, Conservation and Recycling, 116(1), 107-115.

Hall, A., Towers, N., & Shaw, D. R. (2017). Understanding how millennial shoppers decide what to buy: Digitally connected unseen journeys. International Journal of Retail & Distribution Management, 45(5), 498-517.

Hemphill, T. A., & White, G. O. (2016). The world economic forum and Nike: Emerging shared responsibility and institutional control models for achieving socially responsible global supply chain? Business and Human Rights Journal, 1(2), 307-313.

Jegatheesan, V., Pramanik, B. K., Chen, J., Navaratna, D., Chang, C., & Shu, L. (2016). Treatment of textile wastewater with membrane bioreactor: A critical review. Bioresource Technology, 204(1), 202-212.

Introduction

Nike Incorporation has been successful in designing, developing and marketing diverse products such as apparels, footwear and other accessories. In its operation, the firm contracts manufacturing of most of its products to firms which are located overseas. This has enabled the firm to attain a high bargaining power over its suppliers (Lussier & Kimball, 2009, p. 90).

The firm has effectively positioned itself in marketing its products on a global scale. In the United States, the firm has established a strong distribution network through a number of retail outlets.

For example, the firm runs approximately 20,000 retail accounts around the 110 countries in which it operates. Most of the firms products such as bags, bats, gloves, sports wear and other sports equipment are marketed under the Nike brand name.

Nikes success can be attributed to its efficiency in implementing its internationalization strategy. Findings of a study of 132 organizations conducted by Veronica Wong and Professor Peter Doyle in 1998 revealed that marketing is one of the core drivers in the performance of business entities (Blythe, Coxhead, Lashwood, Partridge, Reed & Simms, n.d, p.23).

The American Marketing Association (AMA) defines marketing as the process which involves a number of elements such as planning, execution, promotion, pricing and distribution of the ideas conceived. Marketing is made up of a number of components such as product development. In addition, marketing must ensure that the businesses and customers needs are met.

Finally, marketing must result into creation of value between the two parties (the business and the customer). Marketing is therefore considered to be a highly invaluable business activity (Kaser & Oelkers, 2007, p.4).This paper is aimed at illustrating the various marketing strategies adopted by Nike Incorporation.

Industry analysis

The United States apparels industry is relatively large. In addition, the industry is in its maturity stage which is evident by the slow growth rate and a high level of fragmentation. Demand for apparels in the US is satisfied by both domestic and international markets. Similarly, the US footwear industry has experienced a significant growth over the past few years as a result of growth in demand.

This has led into the industry reaching its maturity stage. In addition, the market has become very saturated. One of the reasons to explain this is the rise in intensity of competition. Some of the firms core competitors include the recently formed Addidas-Reebok merger, PUMA, Under Armour, Fila and New Balance Athletic. All these firms specialize in the production of sportswear.

The global apparel and footwear market has become flooded with various sportswear brands. This has culminated into an increment in the consumer bargaining power. Consumers can easily switch from one product to another (Lussier & Kimball, 2009, p. 90). However, the firms current strategy has enabled it to attain an effective market position.

The firm has been able to create a relatively high level of customer loyalty. As a result, Nike Incorporation continues to lead in the footwear and apparel industry.

In an effort to enhance its competitiveness, Nike Incorporation management team diversified its operations into the golf industry. This was achieved through the signing Tiger Woods who is a renowned golf personality as its spokesperson (Lussier & Kimball, 2009, p.92).

Competitive advantage

Attaining competitive advantage is one of the ways through which a firm can be able to succeed in the long term as a going concern entity. According to Lussier and Kimball (2009, p.93), competitive advantage entails how a firm delivers unique value to its customers. In addition, competitive advantage is aimed at making a firm distinct from its competitors by enhancing its core competency.

According to Porter (1998, p.70), there are three main strategies which a firm can incorporate in order to attain competitive advantage. These strategies include cost leadership, differentiation and focus strategy. Cost leadership entails ensuring that a firm becomes the leader with regard to low cost production.

As a result, the firm is able to attain price competiveness by selling its products or services at a low price point compared to its competitors. On the other hand, differentiation entails production of unique products which are highly appreciated by the customers.

There are various aspects which a firm can incorporate in an effort to differentiate its products. These include the product, sales, image, distribution and marketing. Focus strategy entails a firm being committed to be the best with regard to a particular product segment.

Over the years it has been in operation, Nikes Incorporation management teams have appreciated the importance of developing the firms competitive advantage. In order to achieve this, the management team incorporated the concept of product differentiation. The resultant effect is that the firm has managed to develop strong brand recognition by ensuring development of high quality products.

In addition, the firm has a strong research and development team which ensures that the products developed meet the market demand. Product differentiation is achieved through effective designing such as by ensuring that the products such as the shoes are of different color. The high quality of the firms products has enhanced its reputation on a global scale.

As a result, Nike as a brand name and the Swoosh logo has increasingly been recognized as status symbols globally. As a result, the firm has been able to increase its sales significantly (Porter, 1998,p. 72). The table below illustrates a competitive profile matrix comparing the firms competitiveness with some of its core competitors on the basis of quality of its product, marketing strength and price. A weighted scale of 10 is used.

From the table above, it is evident that the Addidas-Reebok merger is likely to pose a threat to the firms competitive advantage. This arises from the fact that the merger has culminated into creation of a relatively strong competitor.

In an effort to remain competitive, the firms management team has incorporated the concept of continuous product improvement. To be effective, Nike Incorporation conducts continuous market research in so as to develop a product which meets the customers requirements. In addition, the firm has incorporated emerging technologies in an effort to improve the quality of its footwear, apparel and other equipments.

The management team has also appreciated the importance of creating effective market awareness. One of the ways through which the firm achieves this is by integration of creative marketing campaigns. For example, the firms advertisements are a part of the pop culture.

Its campaigns feature prominent personalities such as Michael Jordan, Bo Jackson and Tiger Woods (Robert, Lussier and Kimball, 2009, p. 92). Through these strategies, the firm has managed to develop a strong competitive advantage thus being effectively positioned in the market.

Pestle Analysis

In order to determine the existing market potential, it is vital for Nike Incorporation to consider evaluating macro environmental factors. One of the ways through which the management can achieve this is by conducting a PESTLE analysis (Worthington & Britton, 2006).

Political Analysis

According to Campbell and Craig (2005, p.123), the actions taken by the political institutions through formulation and implementation of various policies can have significant effect on the operation of businesses.

In an effort to ensure continued economic growth, the US government has relentlessly ensured that there is a stable political environment. The US government has formulated policies which enable Nike Incorporation to effectively produce and market its products.

One of the ways through which the US government supports Nike Incorporation is by ensuring stable macro economic environment by advocating low interest rates, creating an environment which promote international competitiveness through an effective and efficient tax system and ensuring currency stability. This has culminated into formation of a foundation conducive to Nikes growth.

In addition, the US government is committed at forming trading blocs with neighboring countries through economic integration. Some of the countries the US is considering include South Korea, Panama and Colombia. The economic integration is aimed at boosting the countrys apparel and footwear industry.

Economic Analysis

Over the past few years, the US has experienced a relatively high rate of economic growth. This led to an increment in the citizens disposable income and hence their purchasing power. However, the occurrence of the 2007 economic recession adversely affected the countrys rate of economic growth. The recession affected various economic sectors including the apparels and footwear industry.

In an effort to minimize the effects of the recession, organizations adopted various strategies such as laying-off some of their employees so as to minimize their operational cost. To cope with the economic recession, Nikes Incorporation management team came to a consensus to reduce its marketing budget. In addition, the firm reduced 4% of its work force.

Despite these actions, Nike maintained its dominant position with regard to advertising due to its size. The firm only concentrated on sponsoring prominent athletes. In 2008, the firms marketing budget on advertising was $ 143.4 million down from $184 million in 2007 (The New York Times, 2009, para. 1-7).

With the recovery of the global economy, there is a high probability of the firm increasing its sales revenue both in the domestic and the international market. Considering the fact that the firm operates on a global scale, the firm is affected by currency fluctuation.

Social environment

Changes in the social environment can also affect the success of a firm (Baron, 2005, p.87). Currently, there is a trend which is emerging whereby consumers are increasingly becoming health conscious. As a result, a large number of individuals are joining fitness clubs. This trend has led to a rise in demand for fitness products such as footwear and apparels.

This presents a feasible market opportunity for Nike to produce and market its products so as to meet the market demand. In an effort to ensure maximum level of customer satisfaction, Nike Incorporation gives the customers an opportunity to design their own footwear and apparels.

In addition, Nike Incorporation should focus on developing new styles so as to be inline with the market demand. The firm can attain this by undertaking effective research and development.

Technological environment

The high rate of technological innovation with regard to Information Technology has significantly contributed to the success of Nike Incorporation. One of the ways through which the firm has utilized the technology is by improving on its products through research and development. In addition, the firm has also utilized emerging technologies in marketing its products.

This has been achieved through integration of an effective marketing information system. In addition to product innovation, Nike Incorporation also utilizes its MIS in conducting other functions such as market segmentation and product differentiation.

This means that Nikes success is owed to its effectiveness in harnessing Information Technology towards various aspects ranging from product development to its distribution.

Legal environment

The US government has created a suitable legal environment for conducting business. One of the ways through which the government has ensured this is by integration of the Intellectual Property Rights (IPR). The IPRs entail diverse rights and responsibilities which are aimed at protecting a firms innovation, research and development and creativity from being exploited by other individuals.

Some of the IPRs issued by the US government relate to patents, trademarks and designs. Through IPRs firms such as Nike Incorporation are able to invest towards development of brand equity. In an effort to enhance IPRs, Nike Incorporation has continuously worked with diverse policy makers such as governments so as to fight against counterfeiting (Public Policy and Advocacy, n.d, para. 5-6).

Product

In order to remain competitive, the firm conducts continuous product modifications. This ensures that its products are in line with the existing market demand. In addition, the firm ensures that its products promote customer safety by meeting the set safety standards. It is ensured that the various products meet the requirements of the market regions in which they are marketed.

This arises from the fact that different regions have got different product requirements. To be effective in meeting the market requirements, the firm contracts the manufacturing process to firms which are located in the foreign market.

This aids in ensuring that the product manufactured is in line with the existing market demand. Contracting to foreign firms enables Nike Incorporation to enrich the products style more effectively. Through market research, the firm is able to undertake effective product innovation.

Pricing strategy

The global economic recession negatively affected the purchasing power of consumers. For example, the recession led to a rise in the rate of inflation in most economies. This culminated into a decline in the consumers purchasing power due to reduction in their disposable income. The resultant effect has been a rise in the cost of living.

Due to this, consumers have increasingly become price conscious in their purchasing patterns. In an effort to increase their sales revenues, firms in the apparel and footwear industry are increasingly adopting low pricing strategies. This has culminated into price war between firms.

However, there is a high probability of firms with strong brands such as Nike succeeding. This arises from the fact that they can be able to adopt competitive pricing strategies despite the prevailing market conditions.

One of the ways through which the firm is achieving this is by incorporating penetration pricing strategy. According to Lamb, Hair and McDaniel (2008, p. 53), the strategy entails setting the price of its products at a relatively low price point compared to that of its competitors. To be effective in the pricing strategy, the firm conducts competitor and consumer market research.

The competitor market research is aimed at identifying the pricing strategy adopted by other firms in the industry. The resultant effect is that the firm is able to formulate its pricing strategy more effectively.

Through the consumer market research, the firm is able to establish the degree of price sensitivity amongst the consumers. Through the low pricing strategy, the firm is able to appeal to a large number of consumers considering the fact that consumers are price sensitive and their consumption desire is to maximize their level of utility.

In order to attract and retain a large number of customers, Nike Incorporation is integrating the concept of psychological pricing strategy in all its distribution outlets. Psychological pricing plays a significant role in ensuring that the firms products price appeals the emotions of different customers in their purchasing process.

In most cases, Nike Incorporation adopts the psychological pricing strategy when introducing a new product into the market. The firm has also incorporated segmented pricing strategy. This is achieved by adjusting the price of its products depending on the type of consumer being targeted in the global market. Segmented pricing is also incorporated while marketing to different customer categories such as the adult and children.

Communication strategies

Creating effective market awareness is one of the ways through which a firm can be able to succeed in the long term (Lamb, Hair & McDaniel, 2008, p. 34). In addition, market awareness contributes towards a firm attaining an effective market position. Market communication is one of the ways through which a firm can be able to create communication (Koekemoer, & Bird, 2004, p.76).

In its operation, Nikes management team has formulated a comprehensive marketing communication strategy. One of the core communication strategies which the firm has adopted is advertisement. Different languages are used in the firms advertisement campaign depending on the countrys national language.

Over the years, Nike Incorporation has continuously advertised its products through various mediums which include television, print media and bill boards. In addition, the firm has also adopted other methods of market communication which includes sales promotion and public relations.

Example of public relation campaigns which the firm utilizes include organizing fashion shows which are aimed at displaying the latest product offering.

The firms decision to incorporate celebrities such as Tiger Woods has also played a significant role towards improvement of the brands value. In addition, endorsement of the firms brand by celebrities has also contributed towards creation of brand loyalty. For example, by wearing the firms clothes and designs, a firms brand can be improved significantly.

This arises from the fact that consumers intend to associate themselves with successful individuals. In addition, firm also uses celebrities in their advertisement campaigns such as when promoting a specific product.

Considering the intensity of competition, Nike Incorporation has adopted emerging Information Communication Technologies (ICT). The core objective is to enhance increase the firms market share by increasing their market share. The firm has achieved this through incorporation of ecommerce.

In marketing its products, the firm is increasingly utilizing the internet. Some of the internet technologies which the firm has incorporated include use of emerging social networking tools such as You Tube, wikis, blogs and Face book.

Distribution strategy

Product distribution is vital in a firms effort to ensure that it succeeds in the market (Kurtz, Mackenzie & Snow, 2009, p. 57). A firms distribution strategy should ensure that the product can be easily accessed in the market. In marketing its products in the global market, Nike Incorporation has adopted a comprehensive product distribution strategy.

The firm distributes its product to large retailers such as supermarkets in the countries in which it operates. Supermarkets form one of the largest points through which the firm distributes its products.

In addition the firm has established a number of distribution centers which ensure that the supermarkets are effectively stocked. The firm has also implemented a computerized point of sales program which enables the firm to track movement of inventories in the various distribution outlets. As a result, the firm is able to restock the stores more effectively.

The role of marketing strategy

Through its differentiation strategy, Nike Incorporation is able to able to position itself more effectively in the market. According to Lussier and Kimball (2009, p.90), attaining an effective market position is one of the defensive strategies that a firm can utilize. The firms Swoosh mark is one of the core selling features. This means that there is a high probability of the firm improving its sales revenue and hence its profitability level.

In addition, adoption of the differentiation strategy will contribute towards the firms product being unique. The uniqueness of the firms products will contribute towards a large number of consumers considering purchasing the products relative to those of the competitors.

In addition, product differentiation will enable the firm to address the diverse market needs (Morrison, 2006, p. 65). Through its market research activities, the firm will be able to undertake effective product development.

In addition, the firm will be able to develop a high level of customer satisfaction by integrating the customers needs in the process of developing new products. This illustrates that there is a high probability of the firm increasing the size of its global market share. For differentiation strategy to be well undertaken, the firm will be required to conduct continuous market research (Brooks, Weatherston & Wilkinson, 2004, p.54).

This means that the firm will be able to understand the changes in the global market. The resultant effect is that the management team will be effective in the planning process hence its ability to address future changes. In addition, product differentiation strategy will enable the firm to target the market more effectively.

Conclusion

From the analysis above, it is evident that Nike Incorporation has been very successful. This has resulted from its efficiency in formulating and implementing operational strategies. Additionally, the external environment has also provided an environment conducive for Nikes operation. To be successful in the long term, Nike Incorporation should continuously adopt global strategies in its operations.

This will contribute towards the firm attaining a high market share and at the same time retain its leadership. However, the firms management team should act locally in the various markets it penetrates. This will contribute towards the firms products being widely accepted in the market.

Reference List

Baron, D.P., 2005. Business and its environment. New York: Prentice Hall.

Blythe, J., Coxhead, H., Lashwood, M., Partridge, L., Reed, P. & Simms, H., n.d. Strategic marketing. London: Select Knowledge Limited.

Brooks, I., Weatherston, J. & Wilkinson, G., 2004. The international business environment. London: FT Prentice Hall.

Campbell, D. & Craig, T., 2005. Organisations and the business environment. New York: Butterworh  Heinemann.

Kaser, K. & Oelkers, D., 2007. Sports and entertainment marketing. New York: Cengage Learning.

Koekemoer, L. & Bird, S. 2004. Marketing communications. New York: Juta and Company Limited.

Kurtz, D., MacKenzie, H. & Snow, K., 2009. Contemporary marketing. New York: Cengage Learning.

Lamb, C., Hair, J. & McDaniel, C., 2008. Marketing. New York: Cengage Learning.

Lussier, R. & Kimball, D., 2009. Applied sport management skills. New York: Human Kinetics.

Morrison, J., 2006. international business environment: global and local marketplaces in a changing world: the international business environment. London: Palgrave Macmillan.

Porter, M., 1998. Competitive advantage: creating and sustaining superior performance: with a new introduction. New York: Simon and Schuster. Public Policy and Advocacy. n.d. Taxation and intellectual property rights. Web.

The New York Times. 2009. In recession, Nike is likely to cut marketing. Web.

Worthington, I., & Britton, C. 2006. The business environment. New York. Prentice Hall.

Introduction

The Nike Company has gone through tremendous criticism regarding the form of labor used by the contractors involved in supplying its products. The criticism affected the reputation of the Nike Company and this was reflected in the reduction of profits. For any organization intending to maintain its high status within the marketplace, it should ensure that ethical standards regarding the workers are highly upheld. The form of labor that any organization adopts should, therefore, be genuine and the laborers need to be recognized as vital assets of the company. Laborers should also be accorded enough respect (Sislin & Murphy, 2009).

The contractors involved in the supply of Nike products used child labor and at times, went to the extent of imposing over time to all the workers to get the maximum benefit from them. The administration of the Nike Company has come up with a mindset strategy that focuses on the improvement of the form of labor employed by the outsourced contractors. Through this, the company has established a system that is concerned with ensuring that the workers rights are not violated and also ensuring that their living standards are upgraded. This has been achieved by using the following strategic mindset.

Training

According to Halbert and Ingulli (2011), lack of adequate programs to enlighten the children has led to most children being left in the streets while others choose to seek cheap employment to sustain their livelihood. Nike Company has established a training program of the children geared towards instilling knowledge to the youngsters which can be very helpful in the future. The under-aged children are trained on the requirements of the job to enable them to provide useful labor.

This training has played a vital role in increasing the effectiveness of the form of labor provided. On the other hand, all workers in the company are also trained regarding their rights in the workplace as well as certain necessities that are required in the footwear industry. Continuous training of the workers enables individuals to have a clear understanding of what is required of them in the workplace.

Health Issues

Poor working conditions present in the workplace reduces the effectiveness of labor provided by the workers. For good health to be achieved, Nike has the responsibility of increasing the number of wages given to the workers to enable them to have decent living standards. Improved living standards ensure that the diet taken by the workers is appropriate hence guarantees the workers a healthy life. Healthy lifestyles have a direct positive influence on the labor provided. Concerning employees health, Nike Company has come up with a strategy where workers are given time to exercise to ensure that they attain a healthy body. Through this, the company has been able to improve the effectiveness of the labor that it gets from the workers (Hill and Jones 2012).

Top Management Involvement

The management of a company has a direct influence on the form of labor within the workplace. The laborers work effectively when they have support from the managing team. A positive attitude from management improves the productivity of the workers. The Nike Company has been at the forefront in the reorganization of the management structure to include only those personnel that are friendly and can, therefore, create a positive attitude to the workers (Jennings, 2011). The management is encouraged to form teamwork which will create a positive attitude for the workers hence leading to effective labor in the workplace.

Forming Individual Tasks

Various organizations adopt a system where workers are assigned duties according to their area of specialization. The Nike Company has followed this system where different duties in the production of the footwear are assigned according to the specialty of the laborer. Through this, the level of effectiveness of the labor in the workplace increases as the employees are motivated to work in their area of specialization.

Formation of a Trade Union

According to Firestein (2009), the formation of a trade union in the workplace is a trusted tactic that improves the welfare of workers. The trade union adopted by the Nike Company ensures that the workers rights are protected and misconducts performed to the workers are highly criticized. The members of the trade union have the responsibility of forwarding all the workers grievances to the top management. Through this, the laborers are provided with suitable working conditions.

Conclusion

Following the issue regarding labor exploitation by the contractors involved in the supply of Nikes products, Nike has come up with a policy that is aimed at ensuring that the labor that the contractors use is legal. The company has enhanced workers protection by forming unions that defend the interest of every single laborer in the working place. Establishing a minimum wage which should be paid to workers has improved the living standards of the laborers. This has had a direct effect on the health of the workers hence increasing the effectiveness of labor delivered in the workplace.

References

Firestein, P. (2009). Crisis of Character: Building Corporate Reputation in the Age of Skepticism. New York: Sterling Publishing Company, Inc.

Halbert, T., & Ingulli, E. (2011). Law & Ethics in the Business Environment. London: Cengage Learning.

Hill, L. W. C., & Jones, R. G. (2012). Strategic Management: An Integrated Approach. NewYork: Cengage Learning.

Jennings, M. M. (2011). Business Ethics: Case Studies and Selected Readings. London: Cengage Learning.

Sislin, J., & Murphy, K. (2009). Approaches to Reducing the Use of Forced Or Child Labour: Summary of a Workshop on Assessing Practice. New York: National Academies Press.

The relationship between the connotative and denotative meanings

In the recent Nike advertising campaign that was promoting new line of swimwear, the company uses print advertising, among the other means, to endorse its product. For the advertising like this to be effective and to appeal to the audience, it needs not only the visual image but also the meaning and non-linguistic signs behind it.

Nike chose the picture of an athletic, well-built man wearing the swimwear produced by the company. However, it is only one layer of the conception. The denotation, in this context, is evident, and it implies that people who aspire to look like the man in the picture should choose Nike. Nevertheless, the connotative meaning is deeper. The man is pictured on the background of the industrial building in solemn gray colors, which make him look ready for challenges and almost heroic. The connotative meaning implies the ideals of heroism, challenge, masculinity, resistance; and the visual image attempts to awake such associations in the mind of the viewers.

The encoded message and decoded message in Nike campaign

The picture, in Nike print advertisement, is also accompanied by the advertising slogan. It is Your Oxygen Fights Its Hydrogen, and on the surface, it refers to the advertised product, the swimwear that is water resistant. The encoded message is the idea that the creators of a particular text or media tried to incorporate in their creation. In the case of Nike, it was the combination of the resistant clothes with the ideals of love for a challenge, resistance, and success represented by the visual image. The decoded message, in the Nike campaign, is the association of those features embodied in the photo with the qualities of the Nike swimwear. The invoked implication is that having the advertised product brings you closer to the ideal.

The ideological structures invoked on Nike campaign

The campaign conducted by Nike has two main ideological structures incorporated in it. The first one is the ideal of masculine beauty and athleticism, and it refers to body image. It is especially underlined by the fact that the viewer cannot exactly see the face of the model. The second ideological structure is the concept of success and overcoming the challenges. The solemn and deep, but not bright colors together with the angle of the shot looking upwards create the image of confidence, heroism, and masculinity. The pose of the model looks quite athletic, which also brings the attention back to sports, power, and love for a challenge.

The issues with the representation of the product in Nike campaign

The issue concerns a slight concealing the product is that, despite the fact that model in the picture wears swimming shorts and the necessary glasses and swimming hat, there is no immediate association with swimming. The dark and deep colors stand in a way of the recipients perception of the product itself regardless of the strong visual image. The reality of the product is that it is an item of daily use for the people who go to the swimming pools. However, the campaign pays not enough attention to the routine nature of the product.

Gender/class or race stereotypes of the campaign

The only issue that can only be regarded a slightly stereotypical tendency among the sportswear manufacturers is the over-use of the ideal of masculinity. In this particular case, it is justified by the overall conception, but it still strikes as the trivial gender stereotype.

Note: the basic factors of production in the Nike Corporation, are the employees, any decision that affects their wellbeing affects the general productivity of the firm. However, culture has been established to be one major determinant of the type of decisions people make, this mind map, therefore, seeks to find out how the diversity of cultures globally has led to the rise of labor problems within the Nike corporation.

Introduction

Nike Corporation is an American public company. It is a manufacturer of clothing, footwear, sportswear, and equipment among others. Its products are traded in major markets worldwide and it is reputed for the high quality of the products it manufactures. The firm is headquartered in Oregon, Washington County in the United States of America. The fact that is has international presence implies that it produces and sells its products in bulk and to achieve this, the firm has millions of employees both in the United States of America and in other countries within which it has branches.

Just like any other firm with employees, Nike is, compelled to handle its employees as per the employee regulations policies in the countries within which it operates. Given differing demographic, social, political, and economic factors within these countries, the firm has had several labor problems with employees of the firm opting for industrial actions in some of the Asian countries within which the branches of the firm are situated. The discourse below analyzes some of the forces of the business environment that lead to the rise of such diverse labor problems.

Cause of labor problems relationship

• Code of conduct: this is basically how employees are required to carry themselves out while at the workplace (Ollapally, A & Bhatnagar J, 2009). It becomes a source of conflict should employees feel oppressed by the very codes.
• Remuneration: Money is the biggest incentive and motivator to employees, underpaid employees are slow at work and are normally not very productive, this is brought about by lack of appreciation that they feel.
• Social security, an employer that secures the future of her employees will always have the highest levels of productivity. This is normally used by employers as an incentive too.
• Terms of employment: these are the basics upon which one is hired. They encompass all the above and are normally provided by the management. A firm with humane terms offers better working environments and this results in more productivity of the employees.

Alexandria, S. (2008) defines culture as to how people live their lives encompassing such fundamental aspects of life as education, how people dress, worship, and even eat. Culture is, therefore, a very important factor that affects the operations of the Nike Corporation and the source of all the labor-related strives in the firm.

Political factors form the basis within which a countrys economic viability is measured. A politically stable country has peace and sound-minded leaders who would formulate policies that enhance growth and foreign investment. Nike is a foreign investor in several countries; in selecting the countries within which to operate, the firm analyzes the policies of the region and political stability. Instability leads to strife and employees would not work peacefully in such a country. Furthermore, the frequent political riots would lead to complete loss of the investments in case of vandalism. This explains why the Nike Corporation is only found in South Africa in the entire African continent.

Effects of labor problems relationship

The effects of labor problems are severe and depending on how the management responds to them, they can cause a complete stall to the firms operations. some of these effects include:

• Low productivity, is brought about by the fact that lots of productive time are wasted as employees take industrial actions.
• Low revenue, with a reduced level of production, the sale of the firms products is hampered with.
• Low rates of remuneration, the low revenue for the firm would translate into the employees earn less than they had previously earned.
• The slower pace of development, the entire society within which the firm exists depends on the company for survival. When the company performs poorly, the entire communitys economy feels the pinch.

The production of sports apparel and other wares is greatly influenced by culture, certain sports are not appreciated by certain people and this affects the sale of their products. The amount of customers that the firm gets influences its revenue. With more customers, the firm would collect more revenue and with increased revenue collection, the pay that the firm gives its employees would also be increased. Thomas, H, David, and Michael, C. (2001) offers that remuneration is always the cause of either satisfaction or dissatisfaction at workplaces, with satisfying salaries, instances of strife and industrial actions would not occur and the firm would stay productive for longer (OLeary, B. & Weathington, B. 2006).

Conclusion

In retrospect, culture forms the backbone of the society and the survival of every business are consequently pegged on the type of culture that society embraces. Sound cultures result in sound political systems (Bernard, 2007). With peace and tranquility businesses thrive, the businesses directly sustain themselves and the cycle of existence continues.

References

Alexandria, S. (2008). Nike profit up but shares tumble on US concerns. Reuters. Web.

Bernard, K. (2007). Structural Fighting: Strategies and Tactics. New York: Springer.

Ollapally, A &Bhatnagar, J. (2009). The Holistic Approach to Diversity Management: HR Implications, The Indian Journal of Industrial Relations, January, 44(3), 454-472.

OLeary, B. & Weathington, B. (2006). Beyond the Business Case for Diversity in Organisations, Employee Responsibilities and Rights Journal, 18(4), 1-10.

Thomas, H, D. and Michael, C. (2001). Successful Management Projects. Oxford: OUP.

Mind map for NIKE Problems

Nike has been facing labor problems since its conception in 1964. The major labor problems are child labor and low wages that it offers to its employees in third world countries. There are concrete interrelations in Supply chain relationships and action chain. These relationships have either positive or negative effects on the labor problems affecting the company

Supply chain relationship

This relationship involves both external and internal elements of the company. The internal elements are contractors, subcontractors, suppliers of raw materials, and raw materials outsourcing. On the other hand, external elements are product disposal, retailers, customers, warehouses, and store companies.

• Suppliers of Raw Materials: They offer the basic ingredients to the manufacturing of the final products. These local suppliers of raw materials are contracted by NIKE Company in their respective countries. Enhanced supply chain management promotes a constant flow of raw materials which in turn increases revenue thus high wages for employees (Ballinger, 2001).
• Raw Materials Outsourcing: Some raw materials are supplied by contractors and subcontractors. They are supplied from outside home countries.
• Contractors: These are ion charge of the production of the products of the company. Principally, their role is to collect raw materials from the suppliers and the production of the companys products basing on the agreement between them and the organization. Most of these contractors are from countries like Korea, Japan, Indonesia, China, and Vietnam. Nikes labor problem is rampant in these countries and many reports show that these contractors use cheap labor and in some instances, they use the service of underage labor (Ballinger, 2001).
• Subcontractors: These are in charge of the production of NIKE products on behalf of contractors and so they negatively contribute to the labor problems faced by NIKE when they employ unacceptable labor practices such as the use of child labor and underage labor (Mitzberg, 2009).
• Warehouse: Products produced by NIKE, its contractors, and subcontractors are delivered in warehouses for distribution to other chains of distribution.
• Retailers and stores of NIKE: NIKE products from warehouses are received by retailers and stores for distribution to consumers.
• End-users: These are the consumers of the products and are attracted if the products are of high quality. The consumer requires a high ethical standard by the company and in many cases, they boycott products of the organization that does not adhere to best practices such as reasonable wages to employees (Mitzberg, 2009).
• Disposal products: NIKE produces a large number of disposal products that require effective disposal. To avoid pollution, these products should be disposed of safely to avoid hazards to both the employees and the general public. Third world countries have faced risky disposal procedures that have affected the environment of the community near the location of the company or its contractors (Ballinger, 2001).

Action chain involving the legal system

This is a legal system that entails the establishment of efficient and effective codes of conduct and ethics between NIKE, manufacturers, consumers, labor force, and governments. It may involve an appropriate response to employment, environment, and social factors that production of the company and its relationship with other stakeholders. CERES principles are endorsed to ensure that Nike publicly reveals its performance. Furthermore, the creation of the Transparency 101 program may enable Nike to cope with issues related to labor, and report their performance to the relevant communities.

• Nike: This is the main component that offers the strategic, technical, and regulatory directions to its employees and contractors and subcontractors about the manufacture of its products. It ensures quality, ethical, and timely production to satisfy the needs of the consumers. Problems that have arisen from labor practices can be attributed to NIKES inaction against the violation of labor rules by its branches, contractors, and subcontractors. Nike has an established code of conduct to ensure its contractors operate by their working conditions and respect human rights. Moreover, Nike is also able to respond to labor issues affecting their manufacturers through effective implementation of the Transparency 101 program and CERES Principles.
• Code of conduct: Conduct of conduct is an agreement that Nike establishes between manufacturers and the company. It ensures that the manufacturers activities do not pollute the environment, and protects the rights of human beings in the working environment (Ballinger, 2001).
• Labor problems: There are several labor issues that Nike faces from its manufacturers, branches, and contractors and it has to effectively and adequately respond to them to ensure good working relations. The major labor issues are under the payment of workers and employing the services of child labor (Mitzberg, 2009).
• CERES Principles: Basically, CERES is a ten-point code embraced by corporate to regulate the environmental conduct of corporate. This policy is universally endorsed by several companies to effectively respond to environmental issues and enhance accountability. Nike embraced this theory to improve its work on social and environmental issues (CERES Principles, 2009).
• Transparency 101 program: Endorsement of the CERES principles requires Nike to openly discuss their performance with interest groups and the public. Therefore, the establishment of Transparency 101 might enable Nike to effectively monitor its manufacturers and ensure that they follow Nikes code of conduct hence minimizing labor issues (CERES Principles, 2009).

References

Ballinger, J. (2001). Nikes Voice Looms Large. Social Policy 4 (6): 33-39.

CERES Principles. (2009). CERES Principles. Web.

Mitzberg, G. (2009). CERES Principles. Indiana: Pearson Education.

Nike. (2012). About Nike. Oxford: Oxford University Press.

Customer analysis

The target market for this product are individuals who are actively involved in sports. Athletes need this product because it improves visual memory retention. The vapor strobe glasses give a strobe-like experience, which enables them to carry out their practice effectively. In addition, the target market includes police in Anaheim, individuals involved in bowling, and those participating in an airsoft gun. As such, the segmentation profile of the product will be defined by the physical activities of an individual (Doyle 35).

However, the product will be available for other individuals who are not actively involved in sports. Therefore, the packaging of the product will be made in a way that attracts young people as well who are actively involved in sports. Since it will be necessary to obtain customers feedback regarding the product, special feedback coupons will be attached to the product. This will create a room for customers to provide their feedback and place such coupons at collection points.

Competitive market analysis

Nike vapor strobe glasses have one major competitor in the market, which is the Jawbone Company that manufactures strobe eyewear. However, Jawbone will not exhibit stiff competition for this new product since it comes with a new design and brand.

This will ensure that the product enjoys its market without any form of competition from Jawbone Company (Doyle 67). The marketing strategy and positioning of Jawbone Company are focused on athletes and their training institutes. Nike vapor strobe glasses will overcome such a strategy by extending the general market of the product. This will include targeting schools and individuals who have the desire to obtain a better vision.

Jawbone Companys main advantage is that it has already created a market for its products. This indicates that Nike vapor strobe glasses may face tough competition since it is a newly introduced product in the market. Nevertheless, Jawbone Company has a weakness  its target market which is quite rigid. As such, the company is not in a position to market its products to many customers. Consequently, the earnings of the company and sales output are low.

With the introduction of Nike vapor strobe glasses marketing strategy, it is expected that Jawbone Company will react by focusing on developing a counter-strategy. However, such a strategy will not have any impact on the Nike vapor strobe glasses strategy because its strategy will be exclusive and will not be disclosed to any external parties. Nevertheless, Jawbone Companys strategy will be discovered by conducting market research. In this market research, participants will be asked questions about places where they buy their eyewear and about the marketer of the products. These will contribute to a better understanding of the marketing strategy of Jawbone Company.

External market environment

The economic environment is favorable. This indicates that the product will be marketed effectively. However, there are anticipations of price fluctuations, which may affect the sales of the product, but such circumstances are less expected to emerge. The technological environment is a big threat to the product (Campbell and Craig 56). The reason for this is the fast-growing rate of technological development.

This indicates that a new product may be developed, which may affect the sales and marketing operations of Nike vapor strobe glasses. Considering the political and legal environment of the market area where the product is going to be introduced, there are no bureaucratic requirements, which may hamper the marketing of the product. Nevertheless, legal procedures have to be followed as the product is being introduced into the market. Nike vapor strobe glasses are culturally and socially accepted. This indicates that the marketing of these products will occur in an effective and efficient manner, which results in more sales as well as revenues.

SWOT analysis

Strengths

Nike vapor strobe glasses have one major strength that boils down to creating a product, which is technically advanced in terms of improving the vision of the individuals. Further, the market is ready for this product and the inherent competition within the market is not significant to affect the performance of the product in a negative way. In addition, the demand for Nike vapor strobe glasses is high since more and more individuals are being involved in athletics and other sports activities, which require using Nike vapor strobe glasses.

Weaknesses

The major weakness of Nike vapor strobe glasses is that the product may be affected negatively in terms of sales when the economic environment is not favorable. This may occur in cases of unexpected price fluctuations.

Opportunities

Nike vapor strobe glasses have an opportunity of exploiting the existing market, which has not been exhausted by the related products. On the same note, the product has a higher potential of penetrating new markets since the target customers for the products are diverse.

Threats

The major threat to Nike vapor strobe glasses is technological advancements, which may result in the development of new and similar products. Moreover, competing companies may adopt strategies that can result in a tough competition, which in its turn may be a serious threat to the marketing of Nike vapor strobe glasses.

Works Cited

Campbell, Daung, and Craig, Thomas. Organizations and the Business Environment, 2^nd Edition. Jordan Hill, Oxford: Alsevier Butterworth-Heinemann, 2005. Print.

Doyle, Paul. Marketing Management and Strategy, 3^rd Edition, Pearson Education, 2002. Print.

Executive summary

Nike Hong Kong is a private limited company that operates as a subsidiary of Nike Incorporation. The firm is located in Kwun Tong, KLN Hong Kong and specializes in different business activities.

Some of the firms core business activities include importing, wholesaling and retailing various sports apparels, footwear and accessories. Since its inception, the firm has managed to develop sufficient competitive advantage to enable it survive in an environment that is very dynamic.

Some of the factors that have contributed to the firms competitiveness include adherence to quality and innovativeness in its production process. Moreover, the firm has integrated product differentiation as its business level strategy.

One of the ways through which the firm achieves this is by producing high quality products. This has enabled the firm to effectively position its products in the market.

The marketing plan entails a comprehensive evaluation of the firms external and internal business environment. The plan details the prevailing market trends, intensity of competition, strengths, weaknesses, opportunities and threats.

The objective of the plan is to suggest how Nike Hong Kong can maximize its sales revenue by improving its marketing strategies. Additionally, the control and evaluation mechanisms that the firm will adopt in assessing its performance have been discussed.

Situation analysis

Baron (2005) asserts that organizations do not exist in a vacuum but rather exist, co-exist and compete in an environment characterized by a high level of complexity (p. 1).

Consequently, marketers must develop a comprehensive understanding of their current and potential business environments in which they operate (Lamb, Hair & McDaniel 2008).

Brooks, Weatherston and Wilkinson (2004) further asserts that understanding the current and future business environment is fundamental in business strategy formulation, strategic planning and decision making processes.

External and internal business analysis enables firms management teams to determine their organizations direction and how to accomplish the set mission.

Market trends

Nike Hong Kong is likely to benefit from changes occurring in the sporting goods industry. One of these changes has arisen from growth in internet technology that has made consumers to be more knowledgeable in their consumption patterns.

According to Hong Kong Trade Development Council (2013), most customers in Hong Kong have become more knowledgeable about health and beauty. This has in turn led to the growth in popularity of various indoor and outdoor sporting activities such as Yoga, aqua fitness and rock climbing in an effort to keep fit.

This trend has led to growth in demand for various sports accessories, apparels and footwear. In Hong Kong, the trend is mainly evident amongst the youth who are increasingly taking sport classes.

Additionally, more women are participating in sports. In an effort to maximise its profitability, Nike Hong Kong will focus on increasing its clientele base by developing products that meet diverse customer needs.

The market for sporting goods such as footwear, sports equipments, apparels and other accessories has increased significantly over the past decade (Stevens, Loudon & Wrenn 2006).

The growth is as a result of increment in the rate at which firms within the industry are venturing the international market through exportation. In 2012, the United States and the European Union were the largest importers of sportswear products from Hong Kong.

The two countries accounted for 29% and 27% of the total volume of sports products exported (Hong Kong Trade Development Council 2013).

Another trend that is evident in Hong Kong is that consumers are increasingly crossing-over from casual-wear designs to athletic designs. This presents a unique business opportunity for Nike Hong Kong to increase its sales revenue.

The Hong Kong sportswear and footwear industry is undergoing rampant expansion as a result of growth in the rate at which consumers are embracing leisure and health benefits associated with physical activities (Hong Kong Trade Development Council 2013).

Sports fans are also demanding fashionable footwear and sports apparels. The Hong Kong Trade Development Council (2013) asserts that modern technology, new applications and organic fabrics are increasingly being integrated in the production of sports products.

To align itself with market changes, Nike Hong Kong will be required to invest in modern designing technology.

Competition analysis

The intensity of competition in Hong Kong sportswear and footwear industry is very high. The fierce competition has emanated from the large number of domestic and international sportswear and footwear companies that ventured the industry.

Some of the firms that have established their base in Hong Kong include Umbro, Puma, Li & Fung, Li Ning, Addidas, Quiksilver, Reebok, Fila and Timberland. The large number of industry players is an indicator of the lucrative nature of the industry.

However, the firms have to develop effective business, corporate and operational level strategies in order to successfully exploit the industrys profitability potential.

Most of these firms have invested heavily in research and development (Campbell & Craig 2005). As a result, they are able to produce high quality sports apparels and footwear products thus creating a high level of brand loyalty amongst customers.

Investment in research and development enables the industry players to launch new product lines hence gaining more market share.

According to Jobber and Fahy (2009), it is important for firms in the in the industry to invest in research and development. This will increase brand loyalty hence minimizing the probability of customers switching to competing products.

In an effort to develop a high level of competitiveness in their production processes, most firms in the industry have shifted their production bases to China.

Currently, the Hong Kong sports apparel and footwear industry is experiencing a competitive challenge emanating from firms that specialize in the production of luxury brands (Kaser & Oelkers 2007).

These firms are increasingly venturing into the production of various sports products such as sneakers and other accessories (Hong Kong Trade Development Council 2013). Consequently, the likelihood of Nike Hong Kong experience an increment in the intensity of competition is high.

SWOT Analysis model

SWOT analysis is one of the models that firms management teams can use to evaluate their organizations internal and external business environment. The chart below illustrates Nike Hong Kong strengths, weaknesses, opportunities and threats.

Strengths

1. Product diversification The firms management team is cognisant of the fact that product diversification is a catalyst for developing competitive advantage (Porter 1998). Consequently, Nike Hong Kong has integrated product diversification as one of its marketing strategies. Customers can access diverse product categories from the store. This has played a significant role in Nikes effort to nurture long-term growth.
2. Effective pricing strategy In their quest to maximize profit, firms management teams must take into account the element of pricing. This arises from the fact that consumers are price sensitive in their purchasing processes (Worthington & Britton 2006). In the course of its operation, Nike Hong Kong ensures that its products are effectively priced. The firm attains this by setting the price of its products at a relatively low price point. This enables its customers to save approximately 30% to 50% of the prevailing retail price (Hong Kong Trade Development Council 2013).
3. Strong brand recognition Developing strong brand recognition is one of the most effective ways through which firms can increase their sales revenue (Trehan &Trehan 2008). This arises from the fact that consumers develop a high level of product awareness that enables them prioritize the firms products in their decision making process. In the course of its operation, Nike Hong Kong has developed strong brand recognition amongst its customers by offering high quality products. Consequently, consumers associate the firms brand with value for money.
4. High quality products In line with its lean manufacturing philosophy, the firms management team ensures that the products produced are of high quality.

Weaknesses

1. High production cost  One of the major challenges that Nike Hong Kong is experiencing is the high cost of production. The firm outsources the necessary raw materials from the international market. The 2008/2009 economic recession adversely affected the cost of production in most sportswear and footwear producing companies. Despite countries experiencing substantial economic recovery over the past few years, full recovery is yet to be attained.

Opportunities

1. Increase in demand for sportswear and leisurewear products- There has been an emergence of a new market trend in Hong Kong whereby consumers are shifting to sportswear products. According to Hong Kong Trade Development Council (2013), sportswear products have become a popular category especially amongst the youth. This trend has emanated from the fact that the youth are increasingly associating sportswear products with comfort, versatility and a relaxed lifestyle. Euromonitor International (2013) asserts that consumers are wearing sports apparels at home and during their leisure time. This presents a considerable market opportunity for Nike Hong Kong to exploit. One of the ways through which the firm can achieve this is by investing in its marketing activities.
2. Integration of fashion brand and sportswear Hong Kong Trade Development Council (2013) asserts that Hong Kong has been a centre of fashion industry (p. 1). Despite the large number of fashion houses in Hong Kong, Nike should consider developing a new product concept. One of the ways through which the firm can achieve this is by integrating fashion and sportswear apparels.
3. Product line extension To improve the probability of attaining its profit maximisation objective, Nike Hong Kong will invest in product line extension. The firm should invest in research and development in order to be effective in product line extension.

Threats

1. Intense competition Nike Hong Kong faces intense competition from other companies that deal with sportswear products. Some of these companies include Fila, Li Ning and Addidas. Additionally, the firm also faces intense competition from fashion designing companies that have ventured into production of sporting sneakers and accessories (Hong Kong Trade Development Council 2013).
2. Changes in economic environment The 2008 global economic recession had adverse effects on consumers purchasing power. The recession led significant transformation in consumers purchasing behaviour. Most consumers concentrated on purchasing necessities rather than luxuries. In 2011, the level of consumer confidence in Hong Kong increased to 103 (Euromonitor International 2013). Despite numerous efforts by governments to restore their countries economy, the global economic environment remains volatile. This presents a threat to the firm in its quest to market its products.
3. Counterfeit products Counterfeit fashion and sportswear products are very prevalent in Asia and Europe. One of the greatest challenges that Nike faces in Hong Kong is the existence of counterfeit products. It is estimated that there is 1 counterfeit Nike product for every 2 genuine products.

Marketing objectives

In the process of marketing its sports apparel and footwear products in Hong Kong, the firm intends to achieve a number of objectives as outlined below.

1. To increase the firms market share to 35% by 2015.
2. To increase the level of customer satisfaction by investing in continuous product development.
3. By marketing its products in Hong Kong, the firm intends to grow its sales revenue by 60% within 1 year.

Segmentation, targeting and positioning

To achieve the above objectives, Nike Hong Kong will be required to ensure that it develops a comprehensive understanding of its customers needs and wants. In order to achieve this, the firm will incorporate the concepts of segmentation, targeting and positioning.

In the process of segmenting its market, the firm will adopt demographic and psychographic market segmentation variables. Age and gender are the core demographic variables that the firm will integrate in its production process.

By taking into account age as one of the marketing variables, Nike Hong Kong will be able to meet its customers needs.

On the other hand, psychographic market segmentation will enable Nike Hong Kong to meet the customers needs with regard to personality, value perception, lifestyle, and self-image. This will improve the probability of the firm developing a high level of customer satisfaction.

To improve its sales revenue and level of profitability, Nike Hong Kong will focus on marketing its products to youthful and elderly customers. The decision to target these customer groups arises from the social transformation that is currently being experienced in Hong Kong.

The market analysis conducted reveals that consumers are increasingly embracing different sports in an effort to stay healthy. By marketing its products to these customer groups, Nike Hong Kong will increase the probability of maximizing its sales revenue and hence its profitability.

In the course of its operation, Nike Hong Kong will be committed in developing and maintaining positive product image amongst its customers. The firm will achieve this by ensuring that customers attain a high level of versatility, comfort and a relaxed lifestyle.

Marketing strategies

To successfully market its products in Hong Kong, Nike will adopt the 4P marketing concept. The firm will focus on four main marketing variables which include product, pricing, promotion and place. The marketing strategies will enable the firm to attain its marketing objectives.

Product strategy

Nike Hong Kong will ensure that its products are of high quality. This will be attained by investing in modern product designing technology.

In order to meet diverse customer products needs and expectations, Nike Hong Kong will ensure that a substantial amount of money is allocated for research and development in its marketing budget. Market research will enable the firm to develop products that result in a level of customer satisfaction.

The firm will also ensure that its store is stocked with a wide range of sports apparels and footwear products. This will contribute towards development of store loyalty amongst the target customers.

Pricing strategy

The firm will be marketing its products in an environment characterised by fierce competition. Consequently, Nike Hong Kong will ensure that it incorporates effective pricing strategy. The firms marketing department will conduct a comprehensive competitive market analysis in order to determine their pricing strategy.

This will enable the firm to adopt a pricing strategy that effectively counters the prevailing price war. To appeal to customers emotions in the process of making their purchase decision, the firm will incorporate psychological pricing strategy.

Promotion strategy

To achieve the aforementioned marketing objectives, the firm will ensure that sufficient market awareness is created. This will be attained by integrating a comprehensive promotion strategy. Some of the marketing communication methods that will be used include advertising, public relations, and sales promotion.

The firm will employ both traditional and emerging marketing communication mediums. The traditional mediums that will be used include radio, television, outdoor mediums such as billboards and posters (Koekemoer & Bird 2004).

In its outdoor advertising process, the firm will enter into contracts with outdoor advertising companies that have their billboards strategically located. On the other hand, the firm will also post its adverts on various print mediums such as sports magazines and newspapers (Kurtz, MacKenzie & Snow 2009).

Nike Hong Kong will also exploit emerging marketing communication mediums such as the internet. The firm will post the various products it offers on its website. The firm will also use various social networking tools such as Facebook, Wikis, Blogs and YouTube to create market awareness.

Using social media will enable the firm to transform its marketing communication into a more interactive process. Additionally, using diverse mediums will enable the firm to create sufficient level market awareness regarding its products in Hong Kong.

Consequently, the probability of the firm maximising its profitability will be improved (OGuinn, Allen & Semenik 2008).

To nurture a high level of customer loyalty, the firm will enter into contracts with leading sports celebrities in Hong Kong. Additionally, the firm will sponsor various sporting events in order to interact with sports enthusiasts.

Endorsement by such personalities and sponsoring such events will contribute towards a large number of customers associating with the firms products. In an effort to develop store loyalty amongst customers, the firm will incorporate sales promotion by offering cash and quantity discounts.

Distribution strategy

Product distribution is one of the fundamental components in firms marketing processes (Lussier & Kimball 2009). Distribution enables customers to easily access products from the market (Pickton& Broderick 2005). The firms management team will ensure that its products are easily accessible in Hong Kong.

This will be attained by adopting both direct and indirect distribution methods. The firm will establish retail outlets in different parts of Hong Kong. To increase the ease with which its customers access its products, the firm will enter into distribution contracts with major supermarkets and hypermarkets in Hong Kong.

The contract will ensure that these stores carry the firms products, hence increasing their accessibility (Milne 2008).

Evaluation and control

According to Stapleton and Thomas (2007), it is important for firms management teams to ensure that their marketing activities are effectively controlled and evaluated. Evaluation and control increases the likelihood of a firm attaining the set marketing objectives by minimizing possible deviations.

To determine the success of its marketing plan, the firm will engage in a comprehensive evaluation and control process. Various parameters will be utilized in determining the success of the marketing plan.

Firstly, the firm will analyze its sales revenue in order to determine the percentage change. The margin of change obtained from the analysis will enable the firm to determine the effectiveness of its marketing strategies.

Nike Hong Kong will also conduct a market survey in order to determine customers perception towards the firms products. This will play a significant role in assessing customers perception towards its products (Morrison 2006).

Furthermore, the market survey will aid in the determination of the level of customer satisfaction. The firm will also evaluate the percentage change of its market share in Hong Kong.

Considering the competitive nature of the industry, the firm will assess the effectiveness of the marketing plan by evaluating its performance in comparison with competing firms.

Reflexive account

The process of undertaking this project has been of great significance to me as a marketer. This arises from the fact that it has contributed to a greater appreciation on the importance of conducting a comprehensive market research prior to developing a marketing plan.

Market research enables a marketer to gain a comprehensive understanding of the prevailing market trends. Knowledge on customers product needs increases the likelihood of developing products that meet the target customers needs and expectations.

Therefore, the project has led to recognition of the fact that the society within which an organization operates is a fundamental component in its marketing processes. This arises from the fact that its customers come from the society.

Secondly, the project has also contributed to the development of a greater appreciation on the importance of evaluating the competitive environment in organizations effort to develop competitiveness. By conducting a comprehensive competitor analysis, a marketer can be able to formulate effective marketing strategies.

This emanates from the fact that he or she is able to identify gaps that have been left by competitors in the course of their operation. By exploiting such gaps, marketers enable their organisations to gain a higher competitive edge.

Despite the fact that market research contributes to the development of a comprehensive understanding of prevailing market trends and the competitive environment, the entire process is complex.

Consequently, it is fundamental for organisations to develop a strong market research team in order to achieve the desired objective.

In addition to evaluating a firms external environment, the project has contributed to develop to a better understanding of the importance of developing a comprehensive understanding of an organizations internal environment.

By conducting an internal organisational analysis, the marketer is able to understand a firms strengths and weaknesses.

On the other hand, external analysis enables the marketer the identify market opportunities and threats. Thus, greater insight on areas that the marketer should focus on in the course of formulating the marketing strategies to be adopted is developed.

As a marketer, I have also gained insight on the importance of creating sufficient market awareness in firms marketing processes. As a result, this has adequately prepared me in the course of undertaking marketing activities in the future.

Firstly, I will be able to incorporate diverse marketing communication methods and mediums in an effort to develop a high level of market awareness.

In addition to traditional marketing communication mediums, I will ensure that the process is interactive by incorporating emerging marketing communication mediums such as social networking tools. The importance of ensuring that customers easily access the product from the market has also been highlighted.

In summary, the project has been of great significance to me as a marketer in a number of ways. Firstly, I have gained insight on the most important marketing elements that firms should take into account in their marketing processes.

Some of the main aspects that I have appreciated relate to ensuring effective market segmentation, targeting and positioning.

Moreover, marketers should develop marketing strategies that are aligned with their target customers needs. It is also important for marketers to continuously review the formulated marketing strategies in order to determine their effectiveness.

Reference List

Baron, D 2005, Business and its environment, Prentice Hall, New York.

Brooks, I, Weatherston, J & Wilkinson, G 2004, The international business Environment, FT Prentice Hall, London.

Campbell, D & Craig, T 2005, Organisations and the business environment, Butterworth-Heinemann, New York.

Euromonitor International: Apparel in Hong Kong, China 2013. Web.

Hong Kong Trade Development Council: the sporting goods industry 2013. Web.

Jobber, D & Fahy, J 2009, Foundations of marketing. McGraw-Hill International (UK) Ltd, London.

Kaser, K & Oelkers, D 2007, Sports and entertainment marketing, Cengage Learning, New York.

Koekemoer, L & Bird, S 2004, Marketing communications, Juta and Company Limited, New York.

Kurtz, D, MacKenzie, H & Snow, K 2009, Contemporary marketing, Cengage Learning, New York.

Lamb, C, Hair, J & McDaniel, C 2008, Marketing, Cengage Learning, New York.

Lussier, R & Kimball, D 2009, Applied sport management skills, Human Kinetics, New York.

Milne, G 2008, Implementing your marketing plan. Web.

OGuinn, T, Allen, C & Semenik, R 2008, Advertising and integrated brand promotion, Cengage Learning, New Jersey.

Morrison, J 2006, international business environment: global and local marketplaces in a changing world: the international business environment, Palgrave Macmillan, London.

Pickton, D & Broderick, A 2005, Integrated marketing communications, FT Prentice Hall, New York.

Porter, M 1998, Competitive advantage: creating and sustaining superior performance: with a new introduction, Simon and Schuster, New York.

Stapleton, J & Thomas, M 2007, How to prepare a marketing plan: a guide to reaching the consumer market, Gower Publishing Ltd, New York.

Stevens, R, Loudon, D & Wrenn, B 2006, Marketing planning guide, Routledge. New York.

Trehan, M & Trehan, R 2008, Advertising and sales management, EK Publication, London.

Worthington, I & Britton, C 2006, The business environment, Prentice Hall, New York.

History of the company

Nike is the market leader in the sports and athletic shoes market segment. Named after Nike, the Greek Goddess for victory, the company was formed in 1964 by Bill Bowerman and Phil Knight. It began manufacturing and selling athletic shoes in 1970. The company sells it shoes through franchise shops, retailers and partnership programs. It uses the slogan Just Do It and the whoosh logo to market its products. The company went public in 1972. For the year ending 2006, the turnover was 15 billion USD and it has about 26700 employees. It has contracted manufacturing activities in Asia, South America and other places and there are about 650,000 people who are indirectly employed by Nike (About Nike, 2007).

Product description

Nike has a wide range of products that are categorised as general use and Sports. General use items are available for Women, Men, Kids and Sports and include products under categories such as Footwear, Apparel, Equipment and Accessories. Kids wear include items for girls and boys. Sports products are the main products that Nike is famous for and it makes products for specific sports such as football, action sports, baseball, basketball, cycling, running and many more. Products for each sport includes items such as shoes, shorts, cycling tights, gloves, basketball and many more. Shoes and other apparel are available in all possible sizes. The product portfolio is designed to cover all aspects of different sports. The company has many well-known and patented brands such as Air Jordan, Nike Air and holds the patent for the concept of the air shoes (Nike Store, 2007).

Competitors

Nike has a number of competitors for different products it makes. Some of them are Addidas, Reebok and a few other leading brands. The company currently has a leadership position and has 32% of the market share (Koch Christopher, 2004). The company has faced increasing pressure from counterfeit products that are made to resemble its leading products. These spurious products are either available as cheap versions of the product and are clearly seen as counterfeits and also as expensive counterfeits that are sold to genuine customers by large retailers also. This illegal trade has caused tremendous loss to Nike and other companies (Cagey, 2006).

Pricing Strategies

The company has placed its products in the premium category and the products are priced higher than its competitors. It uses extreme and fast paced advertisements and promotions to boost the sale of its products. It has no factories but gets the products manufactured at very competitive prices from developing countries where labour is cheap. This provides it with a healthy margin that is partly used in advertising campaigns (SWOT Nike, 2007).

Marketing campaigns

Nike has used many leading sports persons to endorse different products and run marketing campaigns with them. TV, Print and Online media has been used in the campaigns (Nike TV Commercials, 2007). These people have lent the products a lot of credibility (Kleinman Katie, 2007). Some of the people are Lance Armstrong, Tiger Woods, Michael Schumacher, Paul Rodriguez Jr, Michael Jordan and many others (John, 2007).

References

About Nike, 2007, Nike Company Overview.

Cagey, U.S. police bust counterfeit Nike shoe smugglers. Web.

John, 2007, Classic Nike Advertisements. Web.

Koch Christopher, 2004, How and why Nike Recovered from its supply chain Disaster. Web.

Kleinman Katie, 2007, Actual Nike Advertisements.

Nike Store, 2007, Shop Online.

Nike TV Commercials, 2007, VIDEO: The Best Of The Swoosh  Nikes 20 Greatest Commercials. Web.

SWOT Nike, 2007, SWOT Analysis of Nike. Web.

Nikes organizational initiatives to strengthen the firms business design have been superior. The firm has constantly searched for the right balance between its creative and business sides, heavily relying on new innovations in managerial and financial disciplines to drive its growth. Contrary to the past, the firms top management has developed ability in managing the creative process, thus bringing it to the bottom line. The companys move to sponsor athletics across the globe has worked positively to the firms success. Global sports marketing, for example, signing up to become an official US Olympic sponsor in 4 years in Beijing and the move in soccer that show the signing of top players as endorsers has been very resourceful in the companys success. These have given the firm a global face making customers across the globe seek their products.

Embracing modern technology through the use of computer systems (e.g. in getting the right number of sneakers to various regions in the world in a quick manner) has been a strong move in improving the firms competitiveness. With the current dynamism in the world of business, sales promotion has now adopted a new face (Schutz, 2000). Marketers at Nike are practicing sales promotion using the latest computer technology with most successful firms promoting their products online. This has enabled Nike to communicate with a good number of people all over the world within the shortest time possible. The company has been rejigging sales hence increased production and profitability.

The companys well organized management team has seen its ability to manage its brands, such as hockey skate, more efficiently thus gaining an advantage over its competitors. This has enabled Nike to add to its range of brands a well calculated financial gain that has achieved the investors confidence. Acquisitions has seen the firm acquire more market power, source of cost reduction as a result of the large economies of scale enjoyed, enhancement on revenue, and changing capital requirements (Alan, 2000).

The move by Knight of coming up with a new management structure was in the right direction since it was meant to solve the firms weaknesses. Introduction of the matrix structure where Nikes headquarters determines the products to push and how to do it, (though the regional managers are allowed to make some contribution or modification of the same) have really worked for the company. Diversification in brands has helped the firm in lessening its dependence on sleek shoes, thus helping the company turn in a more consistent performance. The firm has been able to build its empire through transforming the design and technology of its high performance sports gear into high fashion, consequently expanding its customer base. The idea of cutting costs through outsourcing daycare, security and janitorial services is a noble one

Segmentation, Targeting and Positioning (STP) of Nike Inc

Segmentation

Nike has managed to divide its market into diverse groups of consumers with related needs. On market segmentation, the company has successfully studied new markets, thus leveraging the scarce resources. This has been achieved through market partitioning with the aim of choosing one or more segments which the firm has targeted via specific marketing mixes  development adapting to specific market needs. The company has managed to select those segments in which it is well suited to serve through holding competitive advantages as compared to its competitors in these segments (Frank, 1998). As a result, Nike has managed to reduce the adaptation costs thus gaining a niche of its own. Through market segmentation, Nike has made possible the provision of high quality products to its clientele through establishing a market mix that focuses on the specific concerns and needs of the chosen segment. In its STP strategies, the firm has applied mass customization where it has manufactured individually designed products on a large scale. The firm is also practicing concentrated marketing whereby it selects one segment, for instance, the streets and designs products mainly for this segment. Other strategies include individual marketing, where the company has been offering products and marketing mix to individual consumers, among others. Through market segmentation, the company ensures that the elements of the marketing mix are intended to meet definite needs of diverse customer groups

Targeting

Nike is also seen to have applied target marketing satisfactorily. Through target marketing the firm has managed to point out and profile different groups of buyers who could need separate marketing mixes or products, for example, the realization that millions of kids in the world play casual pickup soccer games in the street have seen the company develop the shoe especially for them (Stanley, 2006).

Positioning

Correct product positioning has made a noteworthy difference in the success of Nikes marketing campaign. The companys efforts to influence customers views of their products comparative to the opinions of competing products have been very fruitful, a thing that has led to increased sales volume. In market positioning, Nike appears to make good progress since after target market selection, the firm appears to have devised a well developed positioning objectives that are developed into a detailed marketing mix (Cravens & Piercy, 2009).

References

Alan, J. (2000), Corporate Takeovers: Causes and Consequences. Chicago: University of Chicago Press.

Cravens, D. & Piercy, N. (2009), Strategic Marketing, 9th edn. Boston. McGraw-Hill Irwin.

Frank V. (1998): Concurrent Marketing, Boston, Havard Business Scholl Press.

Schutz A. (2000) Sales Promotion Essentials, New York, McGraw-Hill.

Stanley, H.(2006), Inside the Coup at Nike, Business Week, February 6, 2006, 34-37.