2013
Nike
INTERNET MARKETING PLAN
BECA MARTINEZ, BLAKE ROBERTS, CORY HUBBARD, TYLER ANDREASEN,
PAYAM MODEL
[COMPANY NAME] | [Company address]
Background
Nike, Inc. was founded in 1964 as Blue Ribbon Sports (BRS). Founders Bill Bowerman and Phil Knight
began by distributing shoes for a Japanese shoe maker and made most sales out of the trunks of cars.
Their first store location was located in Santa Monica, California which opened in 1966, which meant
nearly a full two years of sales out of trunks. The following year, sales had expanded so rapidly that they
expanded business to the east coast in Wellesley, Massachusetts. A few years later, in early 1971, BRS
chose to develop its own brand a shoe line and in June of that year began using the now popular Swoosh
logo and began operating under Nike. In 1976 they launched their first ad campaign which, by 1980, gave
them fifty percent of the U.S. athletic shoe sales market share. Nike’s more permanent campaign of “Just
Do It” came about in 1988 and still stands today.
Nike, Inc. as we know it today is far more than a shoe manufacturer though. Nike, Inc. acquired Cole
Haan, Bauer Hockey, Hurley International, Converse, Starter, and Umbro throughout the late 1980s,
1990s, and early 2000s. This gave Nike a stranglehold in the sports world, being seen in nearly every
field, arena, and sports park, and attracting some of the biggest names from all sports to be spokesmen,
including basketball all-time great Michael Jordan, golf legend Tiger Woods, and arguably one of the best
two sport athletes to ever play, Bo Jackson.
Nike, Inc. today has refocused, selling Starter, Bauer Hockey, Umbro, and Cole Haan and only keeping
Converse Inc and Hurley International as subsidiary brands. Nike employs more than 44,000 people
worldwide and is valued near $11 billion which makes it the most valuable sports business brand in the
world. Nike, Inc. is still also still an industry leader in celebrity endorsements (Nike, Inc).
SWOT Analysis (Nike)
Strengths
Brand Recognition: Nike’s brand awareness itself is one of the biggest strengths of the company. It is an
international brand that is known everything by their trademark logo the “swoosh”. They have over 700
stores worldwide and they have been around for almost 35 years making them one of the top competitors
in the footwear market.
Cost-Effective Manufacturing Network: All of Nike’s footwear and apparel is manufactured outside
the United States in the factories of China, Vietnam, Indonesia and Thailand. This allows them to keep
their costs minimal as labour in those countries is very cheap compared to the US.
Effective Marketing Strategy: The strategy that Nike takes pride in is getting the top athletes to wear
and sponsor their products rather than events or competitions as much. The basis of this comes from the
idea that people tend to remember the brand worn by players and not the brand that sponsors the event
that the players perform at. We have seen example of this in many sports like basketball, golf and MMA
with big names such as LeBron James, Tiger Woods and Anderson Silva.
Capacity of Innovation: Nike has proven to be a very innovative company. The Nike and Apple
package which consists of a pair of specially designed NIKE+ shoes, an iPod and a Nike sport kit is
designed to monitor a person’s run by telling them the distance they traveled, the pace, and the calories
burned. This was something many people welcomes with open hands. Another innovative idea is their
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“Design your own shoes” option. This enables customer to customize their shoes to their own liking by
choosing their own colors and mascots to create shoes that define their personality (Nike’s marketing).
Weaknesses
Majority of Nike’s revenue comes from shoes: Although Nike has a lot of different sports products to
offer, they’re highly dependent on their share of the footwear market and this can leave them vulnerable if
the industry went into decline.
Retailers sensitive on pricing: The retail stores are trying to force a lower price of products. Nike does
have its own stores established around the world, but they are still mostly depending on retailers and these
retailers are passing some of the low price competition onto Nike.
Opportunities
Emerging Markets: Nike can take advantage of its global brand awareness to enter growing economies.
Target Health conscious consumers: They can market to consumers by advertising the benefits of
exercising and how their products can help.
Nike, a fashion brand: Even though many of the consumers that wear Nike products claim that Nike is
not a fashion brand, it can be argued that some people, mostly in the youth culture, do buy Nike products
not to participate in any sports, but to look fashionable. This can be an opportunity for Nike to set a place
for them in the high end apparel market (Nike Marketing).
Threats
Better Deal: The retail sector is becoming more and more price competitive. Consumers are starting to
only look for cheaper products to get a better deal and since Nike is a premium brand, consumers will
slowly shift towards lower priced brands.
Competition: Competitors such as Adidas, Reebok and New Balance. These companies offer the same
variety of products and most of them offer better prices compared to Nike.
Currency tariffs: Almost any company that competes in the international market is exposed to the risks
that go with it, and that is the Currency exchange rates. This is something that is not stable and can easily
hurt Nike’s Income.
Competitive Analysis
Adidas/Reebok
Adidas is the second largest sportswear manufacturer in the world, and Nike’s number one competitor.
Adidas has been around for over 60 years and has a strong foothold in the European market. In January of
2006 Adidas acquired Reebok, helping the company to compete with Nike in the United States. Over the
past few years Adidas has seen a steady increase in profit, and continues to expand.
Strengths:
Size, with its purchase of Reebok, Adidas is Nike’s closest competitor and the only one that can
compare in size.
Variety, the overall variety of products produced allows Adidas to compete with all of Nike’s
products.
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European market, Adidas holds a firm grip of the number one position for sportswear sales in
Europe.
Price, Adidas is generally cheaper than Nike
Weaknesses:
Endorsements, With the exception of soccer athletes, Adidas hasn’t had the same luck as Nike
with its celebrity endorsements
Quality, Due to Adidas outsourcing the manufacturing of their shoes, questions are sometimes
raised about the quality of their products.
New Balance
New Balance is a steadily growing athletic shoemaker founded in 1906 in Boston Massachusetts. They
are one of the few shoe companies that manufacture in the United States and the United Kingdom. New
Balance generally makes shoes for running and cross training, but they have been acquiring companies
such as Warrior sports, PF flyers and Brine, to help them spread into other sports such as ice hockey,
lacrosse and volleyball.
Strengths:
Made in USA, although this isn’t completely true anymore, 25% of NB shoes are made in the
United States
Price, comparable or cheaper prices than Nike
Worldwide, despite its size, new balance reaches a worldwide market.
Sizes, New Balance offers their products in a range of widths, giving them an edge over most
other shoemakers which only produce shoes in one or two widths.
Weaknesses:
Endorsements, very few celebrity endorsements
Focused on shoes, New Balance has not diversified as much as Nike
Size, Although New Balance is growing, it is simply still too small to pose a large immediate
threat to Nike
(Nike, inc)
Current Internet Marketing Plan
Target customer segment(s)
The target segment for Nike is sports enthusiasts. They target these people because of the design of their
shoes. This is a design that promotes sports activity, thus appealing more towards the sporty type of
person. They have decided to target this type of consumer by sponsoring different sports related events
and teams. On top of this they also have recognizable athletes represent the brand in commercials to help
draw in a more athletic and active appeal (Nike marketing).
Customer retention strategies
Nike uses the strategy of the basic Hero versus Villain to keep its customers coming back. They do this
through an emotional appeal that targets on the consumer's natural laziness, by offering them a solution to
that laziness. This solution is working out, however it’s not just working out, it is working out in their
shoes. This then creates a mind set that in order to get that body and feel that good about themselves they
need Nike shoes in order to do this. This emotion of need for the Hero that Nike creates will keep the
customers loyal and interested in what is coming next (Nike Brand).
Integration into overall marketing strategy
Internet marketing plays a major role in their overall marketing strategy. Their use of their website as well
as various social media platforms allows them to send their messages in an array of communication
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styles, whether it be through video, words or photos. They have various outlets that help them maximize
their different forms of communications. They choose their platform depending on the message they are
trying to get out (Nike marketing).
Internet marketing is a large part of their marketing strategy, that is how their get their new products seen
and showcased to the public. They rely a great deal on their online presence to boost their sales and to
generate conversation about their products. They have used the most popular forms of social media to
target their markets and insure that they have a strong online presence as opposed to their competitors.
Technical infrastructure required
Nike has several technical infrastructures. The first and most abundant is their website. This is where the
customer can go and order their goods, anywhere at anytime. This is Nike’s main focus when it come to
technology infrastructures, however they also use apps to display their products, and social media pages
in order to obtain feedback on their products from their customer base (Nike brand).
Data acquisition, management and use
Nike currently uses Google analytics as one of its major data acquisition software’s. This allows them to
see what sites to promote their brand on. They decide this by seeing what sites are the most visited by the
people coming into their site and leaving their site. This can allow Nike to then later develop a deal with
the associated website to allow their ads to be shown to the customer. An example of this is between Nike
and NFL.com. Nike found that a lot of customers of theirs went to NFL.com or came from NFL.com.
Therefor, Nike decided to develop a relationship with NFL to allow their ads on their site, and vice versa.
This analytics system that Nike uses is a requirement for them to be successful since they need a way to
trade their targeted market segment, to further their understanding of the consumer. There are other ways
of going about this that Nike does, such as using like, and + to determine if they are being effective or not
in their marketing campaigns (Nike no.1).
Evaluation metrics used/needed
Nike uses a vast array of metrics in their interment marketing scheme. Fist they use the “traffic to
website”, which displays how many times an ip address accesses their website. They also use “page
views”, this will tell them what pages are being accessed the most on their website, along with what pages
might need more attention to get people to come to them. The last big one that Nike uses is “sales”. This
is the most effective out of the three chosen, because it depicts the effectiveness of the other two. Without
a good solid base that the other two offer, getting someone to stay on your website long enough to
purchase a product would be difficult. On top of that, these sales will be able to tell you exactly how
many items were sold after you started your marketing campaign, which in turn will tell you how
effective the campaign really was (Nike no.1).
Website analysis
Design
The Nike website takes a simplistic approach to their website. Above the fold they feature a slide show of
their newest products that they are selling. Each display offers you an array of choices such as to learn
more, shop now, even such things as a video to see the product in action. As you travel below the fold it
again displays the four products that were displayed in the slideshow offering you the ability to click on
them to learn more. It is a very clean cut approach with a black and white approach, and they only
introduce color to attract your attention throughout (Nike no.1).
Usability
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It is very user friendly, the simplistic approach helps to organize everything and enables the user to find
what they are looking for quickly and efficiently. There is just the right amount of information on the
page that it gives you the feeling of completeness, but there is not an overload of information they
detours you from continuing on within the website. The buttons are clearly labeled which allows for quick
navigation and contrast allows the visitors the ability to skim the page with ease (Nike).
Multimedia
The Nike website uses an array of multimedia aspects to enhance their website. There are an array of
videos that showcase their products as well as their commercials that range from individuals using their
products to stories surrounding their products.
Interactivity
The Nike website allows individuals a very active experience. It allows you the option of customizing the
footwear you are interested in, they offer an array of options to choose from. The website gives you the
option to download the app as well as connect to various social media outlets increasing the level of
interaction between the website and the user.
The ability of customizing their products give the consumer the added benefit of personalization. It allows
the visitors to connect the products and feel that the product of their choice is one of a kind to their needs
and wants (Nike).
Web and other online content
Nike implements an array of web and online content. They not only use their website to display their
products but they use social media platforms such as Facebook, Twitter and YouTube. They use an array
of platforms to maximize their connectivity with their consumers, and insure that their various means of
communication open to consumers.
All of their platforms help to target an array of individuals and enable the word of mouth of their
products. Each platform serves a purpose. The Facebook profile enables consumers to discuss about Nike
products and create a buzz that will continue to spread. While the Twitter profile allows them to get the
word out quickly about their new products and promotions. The twitter account lets them target a large
amount of people with little effort. Their YouTube account is geared toward viral marketing, they make
videos in hopes that it will generate viral marketing which is a great tool when it can be achieved.
Each of these social media contents can all be found within their first webpage when entering their site,
they offer multiple links to each platform that enables visitors the opportunity to choose which offer
works best for them.
Suggested Marketing Plan
Target Customer Segment(s)
As stated before, Nike has targeted the athletic segment of its target market with its online ad’s using an
emotional appeal. We believe that keeping this target segment would be a smart choice, since this goes
along with the entire theme and image that Nike already has. This will keep it simple, creating a new
image will cause confusion amongst the consumers, and could ruin the brands reputation of consistently
great products.
Customer Retention Strategy
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The current retention strategy of Nike is also very good (Hero method), however we would add to this
strategy. We believe that they have set up a good foundation with this appeal to draw in more emotional
marketing. Such as the idea of battling the beast from within, which they have done a variation of in the
past. We believe that this will keep the identity of Nike the same, however adding an old flair that will get
people excited to workout and do so with Nike gear. Another retention strategy that would work
extremely well for Nike, is to use the Hero method, but instead of making Nike the Hero, make Nike the
weapon and the consumer the Hero. This will cause the consumer to feel good about purchasing a Nike
product since it will be associated with defeating their inner laziness, and get them into the desired heroic
shape they have wanted to achieve for so many years.
Integration into overall marketing strategy
Nike already has integrated internet marketing heavily into their overall marketing strategy. That being
said we will continue with the integration methods that are already in place, and will continue to expand
with the new trends in internet marketing.
The integration into the marketing strategy gives Nike an edge that their competitors are still trying to
catch up to.
The overall marketing strategy is very strong and helps Nike reach its goals of increased sales. So due to
the success we will continue down the same path.
Technical infrastructure required
Nike already has a website along with social media accounts, and web search ads to get their information
out to the public. These technical infrastructures are all that is required at the moment for them to be
successful in adding to the area of customer coverage. They could however create specific pages or
websites for specific popular products that they have that have a large following. This will be able to
target the specific target market for that one specific item, however this is costly. It is only costly due to
having to keep up on the page that covers such a narrow array of goods, compared to their main webpage
that covers a vast majority of the goods and services that they offer.
Data acquisition, management and use
Acquiring data on one’s own company is an important process of any company, and therefore should be a
main focus for Nike. They already use tracking methods to determine how their customers get to their
website and go through their website, and even purchase items from their website, however there is a few
extra things they could do to ensure accurate data. They need to understand that ip addresses change
constantly and can cause their data to be larger than it should, causing them to believe that they have more
market share than they actually do. In this case they should use the numbers they get lightly, and figure
out a way to use a hardware ip address instead of an internet ip address. This would allow them to see
how many times an individual computer access their website. This number would be much more accurate
than an ip address counter. They should also use their sales number compared to site views to determine
the effectiveness of different campaigns. They already do this however, they still try out different
campaigns that sometimes do not work. In this case they should stick to what works, use the numbers as
fact and move on from there.
Evaluation metrics used/needed
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Nike already uses the main three metrics that every internet company should use which is, Traffic to web
page, page views, and sales. We would however recommend using an approach that would allow them to
use these three things to optimize the customer web experience. First off, Nike should use the page views
to figure out what pages they could get rid of, in Nikes case it would be a product. This is because their
pages contain products for the consumers. The next thing we recommend for Nike is to use the sales as an
indicator of possible marketing strategies. With this they can determine what approach to selling their
product works the best, and then stick with that. They should run several different campaigns for this
section, such as, humor, rational, and inspirational. Finally, Nike should use the traffic to web page to
determine what source of web page is reaching the customer the best. They should then chose to put the
majority of their focus to get the rest of the customers to get to this page, by advertising this web page
instead of their other ones. This will create a centralized customer base which is much easier to control
than a dispersed group of consumers.
Website analysis
We would continue with the website that is currently in use. The website is very effective in many ways.
The slide show above the fold allows the users to see Nike’s newest products as well as options to go with
them, such as learn more, or the opportunity to view videos.
The website takes a very simplistic approach which creates an ease of use for the consumers, it contains
just the right balance of not too much and not too little. It draws the eye to the important information,
which enables to users to scan and receive their instant gratification that users desire at this point in time.
The font and simple color scheme helps to draw the eyes to the vibrant colors of their products.
It provides a high level of interactivity between the website and the user due to the personalization of their
products within the site. It encourages you to browse around with the easy to use navigation bar where
everything is sorted in an easy to read set up.
We would remain with this site due to its great design and set up that allows for the products to be
successfully showcased.
Web and other online content
Nike has had great exposure online with their Twitter, Facebook and YouTube accounts. It really has had
a great impact on their ability to market their products and to get the word out about what they have to
offer. Their social presence is strong within Facebook, Twitter, and YouTube, and we would continue
with their current use of the three that they have built. They use the platforms in the correct manner and
have a high level of success with them.
However like many other big businesses, Nike has entered into Pinterest. They have not built their
Pinterest page to the level of their other social media pages. The Pinterest page needs to be used to its full
capability to receive the benefits of it. Pinterest is an incredibly useful tool that can impact sales due to
that being another means of communication with consumers.
At the moment Facebook, Twitter and YouTube are all boldly displayed on the Nike.com website, but
their Pinterest Page is not, it is absent from it large display of links to their social media platforms.
Pinterest needs to be given the same level of attention as the other three platforms to benefit the goal of
increase sales.
There has been great success with the other three platforms, and the correct use of Pinterest can help
contribute to the growing success of their internet marketing strategy.
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n.d. Web. 05 Aug. 2013.
Nike, Inc. - History& Heritage." Nike, Inc.. Nike, Inc.. Web. 27 Jul 2013.
<http://nikeinc.com/pages/history-heritage>.
"Nike’s Marketing Strategy." Business. N.p., n.d. Web. 05 Aug. 2013.
"Nike: The No. 1 Most Innovative Company Of 2013 | Fast Company | Business Innovation." Fast
Company. N.p., n.d. Web. 05 Aug. 2013.
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