Nike Marketing Strategy
Marketing is the process of advertising and creating awareness of aproduct, good or service to meet an individual’s, company’s ororganizations’ goal (Shih, Chen, & Chen, 2013). Nike is themost famous supplier of athletic shoes and sports apparel in thewhole world. Nike uses brand extension strategy as its core marketingstrategy. Brand extension strategy involves using a current brandname to launch a new product in a field or sector considered as newfor the company (Shih, Chen, & Chen, 2013). This strategy has avariety of advantages and disadvantages as discussed below.
The advantages of this strategy include, first, consumer trust theoriginal already established brand assures customers of quality. Thisassurance improves the consumers’ confidence in the new product dueto the famous brand name (Shank, & Lyberger, 2014).
Secondly, brand extension strategy improves brand visibility. When abrand extends to another field, it creates a better platform for thebrand to market itself instead of spending more money on advertising(Shank, & Lyberger, 2014). Further, this enhances the loyalcustomers’ loyalty to the brand. This means that the loyalcustomers will rather use the brand in a different sector instead ofother brands.
Further, brand extension strategy provides a source of energy for thebrand. This means that when the brand faces ‘tough times’, thisapproach enhances its association with high quality and a range ofproducts (Kotler & Keller, 2012). Also, customers can identifythe brand name in a variety of goods thus convincing the customerthat the product is of high quality.
Another advantage of brand extension strategy is, it is a defensivestrategy. This means that extending the brand to other fieldsassociates the brand name with ‘supremacy’ and high quality toprevent competitors from encroaching on the company’s centralbusiness area (Kotler & Keller, 2012).
Despite brand extension strategy being of increased advantage asdiscussed above, it also has some disadvantages. This includesdilution of the existing brand image, which can be caused by afailure of the brand to exhibit the quality expected by the customersin the newly ventured field (Van den Driest, & Weed, 2014). As aresult of this, this incident may water down the brand`s good name,therefore, creating doubt among customers about the brand`s otherproducts in different fields. This translates to the tarnishing ofthe brand name.
Secondly, brand extension strategy can be disadvantageous in thesense that it can bring in the aspect of cannibalization (Van denDriest, & Weed, 2014). This essentially means that the sales ofthe new products, in this case, being the new products of Nikeexhibited a high increase in sales while the original products(running shoes) have declined in sales. This leads to distorting ofthe original brand’s equity.
Also, this strategy of brand extension can be disadvantageous in thecase of a disaster occurring. This entails disasters that are beyondthe company’s ability to control (Van den Driest, & Weed,2014). For instance, in a sports competition like the Olympic gameswhere Nike sponsored football teams complain of Nike soccer shoesgetting torn, this incident may affect the total image of the brandin general even in the other fields. This may affect the sales of thebrand in all other areas as well due to the fact of doubting thequality of the brand in general.
If I were Adidas,to favorably compete with Nike, I would insist on four key areas.First, Product Improvement, which means that Adidas will focus onmeeting the needs of customers of all ages (young, old, man andwoman) this will help improve customer experience and attractcustomers to the product.
Pricing, Adidaswould price its product at a relatively affordable cost as comparedto Nike’s similar products. This strategy although risky and mightcause a decline in profits of the company for a short while it willtranslate to an ultimate increase in sales in the long run.
Placement, this ultimately means increasing the availability of theproduct to customers. This can be done through the expansion ofretail shops selling Adidas products worldwide.
Promotion strategies, this can range from advertisements on massmedia, social media or endorse of famous athletes to use the product.This increases awareness of the product to a large number of people,therefore, increasing its sales.
In conclusion, the brand extension strategy used by Nike is favorableand will support its ultimate goal of improving its sales. Also, thisstrategy is bound to eliminate competition from other companies suchas Adidas by associating Nike as a quality brand in all sectors,therefore, prohibiting encroachment of this other competitor fromNike’s primary business and market. This strategy will also helpcustomers to associate Nike with quality, therefore, preferring theirproducts to others from different companies.
Kotler, P., & Keller, K. L. (2012).Marketing management [VitalSource Bookshelf version] (14th Ed.).Retrieved fromhttps://online.vitalsource.com/#/books/9781323291016
Shank, M. D., &Lyberger, M. R. (2014). Sports marketing: A strategicperspective. Routledge.
Shih, B. Y., Chen, C. Y., & Chen, Z. S. (2013). An empiricalstudy of an internet marketing strategy for search engineoptimization. Human Factors and Ergonomics in Manufacturing &Service Industries, 23(6), 528-540.
Van den Driest, F., & Weed, K. (2014). The ultimate marketingmachine. Harvard Business Review, 92, 54-63.
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