Nike Marketing Communications Plan
Nike + iPod [pic] Integrated Marketing Communications Plan Introduction Nike is a seller of athletic footwear and apparel with retail stores and distributors in over 160 countries around the world. Nike creates goods for a wide range of sports, and so they have competition from every sports brand there is, like Reebok and Adidas. With revenue of $15 billion in 2006 and the largest market share in the footwear industry, Nike, Inc. (Nike) is the leading company in the sports and fitness industry. Our Product (Nike+iPod)Nike and Apple formed branding alliances, hoping to utilize each other’s popularity and reputation to increase the sales of their own products. (Proudfoot, 2006) The first product launched by the companies is Nike+ iPod Sport Kit (Sport Kit), which is a wireless system that allows certain designated Nike shoes, Nike+, to send data to an iPod Nano.
As the users begin exercising, information on time, distance, calories burned and pace is stored on the Nano (Mossberg & Boehret, 2006).
This co-branding effort generates several benefits for both parties.Firstly, this ground-breaking product will reinforce each company’s image as innovative and increase their brand equity. Also, the Sport Kit can invigorate and stimulate sales in the mature market for both companies (Anonymous, 2006). This report is a strategy statement that offers a general overview on the dynamics of the industry regarding Nike + iPod’s target market, positioning, competition, SWOT analysis, big idea, and the media used to assist the company increase its’ market share and sales through the product of Nike+ iPod Sport Kit and Nike+ shoes by the end of 2008.Purpose Our campaign is designed to announce the launch of our new product Nike+iPod (Sport Kit), which is a wireless system that allows certain designated Nike shoes, Nike+, to send data to an iPod Nano. Nike is committed to bring inspiration and innovation to athletes.
It positions itself as having cutting-edge technology while enhancing athlete’s competitiveness. Target Market The current target market for the product Nike + iPod are elite runners, who are more likely to purchase shoes from the running brand, such as New Balance and Asics.Therefore, it is a narrow target market, in which Nike may confront barriers as most of its sales are generated from the general sports market instead of professional athletes. Therefore, the current target segment is not large enough to generate sales or potential future growth. As a result, we believe that the current target segment of elite runners should be redefined and expanded to include sport fashionistas, technology savvy footwear customers, and people who are interested in sports in general. This would make the product appeal to a broader general public and increase sales potential.This new target market would be defined as sportive adolescents to early boomers of both genders living in the United Arab Emirates, who love music and love anything that incorporates music into their daily life.
These people’s new best friend is their iPod; they carry it with them everywhere, love to escape boredom by listening to music. They love to show off their gizmos. They are laidback and like to look or be “cool” and have a great outlook for what is “in style”. These people watch MTV and are up to date with the charts and read teen magazines (for females) and sport magazines (males).Product Positioning Due to the size and diversity of the products, the company deals with; Nike has to rely on various marketing strategies. Much of initial Nike success was due to local grass-roots marketing. Nike uses differentiated marketing for majority of the product ranges.
This marketing strategy provides for products that have like-for-like products provided by competitors such as Adidas and Reebok. These market segments have substantially matured, due to which Nike does not need to focus on positioning these products in innovative and newer ways.Niche marketing is applied to certain product categories and geographic segments. Niche is specifically used when new product ranges are introduced. Nike has created a handful of tightly focused collections of shoes, apparel, and accessories, each targeted to a unique consumer segment and attitude. Some of Nike’s original collections were Force, Flight, Jordan, Air Raid, Challenge Court, and Supreme Court. Each collection had its own design, pricing, promotion and advertising strategy, but was connected to Nike and its brand values.
(Nike+ iPod positioning):The target market is oblivious to the new advances Apple has built-in to the new Nike Shoe, for there has been no efficient marketing effort to promote the shoe or build awareness around it. This is a new technology that no other sports/apparel industry has tackled before which created a big opportunity for increasing sales for Nike Middle East. Nike already accumulated revenue of $15 billion in 2006 and has the largest market share in the footwear industry, so it is indisputable that a technological advance like this would result in a stream of its’ market’s attention.The target market is indeed brand loyal, and are extrinsic value buyers who focus more on the product’s attributes and the solution a particular product can provide. Also, considering that the majority of the target (adolescents to early boomers in the UAE) have secured jobs and live in middle-to-high class, are not necessarily price aware. Message Strategy As mentioned previously, Nike is a seller of athletic footwear and apparel. By delivering our message using a cognitive approach, our message will convey the attributes that our product can provide as well as impacting our consumers’ buyers decision process.
In addition, with the presence of many competitors in the market, it is in our best interest to focus on the experience for Nike+, including the software that supports data transfer from iTunes to the nikeplus. com site. A sensor in Nike+ running shoes tracks data and transmits it to a runner’s iPod, which is automatically uploaded to nikeplus. com when the iPod is synched. Runs in the real world then become meaningful assets in the digital world, allowing runners to compare runs, track their progress, set and manage goals, and issue individual or team challenges to other Nike+ runners around the world.Nike+ is reinventing running by revolutionizing how a brand reaches its audience through meaningful personal experiences, invaluable data brought to life online, and brand-enhancing two-way communication. Campaign Objectives • Increasing market share and sales through the product of Nike+ iPod Sport Kit and Nike+ shoes by the end of 2008.
• Increase awareness of the new launch of product (Nike+) in the UAE end of October 2008. • Build a fun music-filled (Nike) brand perception by incorporating dance and music into sports. • Drive the target audience’s attention towards the brand’s (Nike) technological development and support of new trends. Note: The key issues faced by Nike in marketing this product are narrow target segment and inappropriate buzz promotional strategy, therefore, we find a potential opportunity in the creation of this campaign. Competition With Adidas as Nike’s biggest competitor, the merger of Adidas and Reebok in January 2006 has significantly strengthened Adidas presence in the US. The acquisition has made Adidas now holding a market share of 22% in the US shoe industry compared to Nike’s 36%. Nike is now facing a tough competition in maintaining its position as the industry leader.
Moreover, as Nike would have loyal customers, there are also people who are brand loyal to other competitors’ brands such as Adidas or New Balance. It will be hard for Nike to attract and gain these customers in expanding its market share. Lastly, there is the rapid change in technology. This trend has asserted further pressure for Nike to be innovative because in the athletic apparel and footwear industry, advances in technology can help a brand gain and retain new customers. If Nike’s research and development does not keep up with this trend, it might run the risks of losing the brands image and sales volume.Competition Positioning One of the major rivals for Nike is the German-based Adidas AG, which has the second largest market share of the athletic footwear industry in the US market (Anonymous, 2006). In fall 2006, Adidas has launched a complete integrated training system for runners in partnership with Polar Electro called Project Fusion.
The system integrates Adidas adiStar Fusion apparel and shoes with Polar’s running computer products. As a result, the system enables the runners to have instant feedback and monitoring of heart rate and other information. This poses a significant threat to the Sports kit.However, the Adidas Project Fusion cost more than the Sports Kit. The whole set of system price at a range of 660 dollars and above whereas Sports Kit set costs around 300 to 500 dollars. Strengths/ Weaknesses (What are the strengths/weaknesses of the product The competition? ) Strengths One of the major strength is Nike’s strong brand image in innovation and technological advancement. The newly launched Sports Kit would help Nike in gaining more reputation as a pioneer of developing cutting-edge technology.
Secondly, Nike has a large scale of expansion in the worldwide market.As of fiscal year 2005, Nike has a presence in over 160 countries and operates 370 retail stores (Anonymous, 2006). Moreover, with Nike’s strong brand image, many of the customers are brand loyal to Nike. These loyal customers are more willing to adopt Nike’s new products and are more often engaged in repetitive purchase. Lastly, the introduction of the Sport Kit also brings convenience and a new experience of running to the consumers. People are now able to have an analysis of their workout regardless of where they want to exercise. Weakness Since 1996, Nike has been accused of labor abuse in Vietnam and other Asian countries (Nguyen, 1997).
Although Nike has taken actions in dealing with these accusations, Nike’s brand and corporate image have suffered. Some customers may refuse to purchase Nike’s products due to its malpractice from manufacturing, and there are also campaigns that gather people to boycott Nike in tempering Nike’s sales and brand image. Moreover, the Sport Kit has the weaknesses of limited functionality and low profit margin which hinders the potential for product growth. The kit has no measurement of heart rate, and problems of accuracy and irreplaceable batteries.The manufacturing cost of a 30 dollars kit is around 7 dollars, so the profit margin is 20 dollars per unit (Carey, 2006). This profit margin is far lower than selling a pair of Nike shoes which usually have a price range of at least 100 dollars. The “Big Idea” The big idea of the campaign is to use the force of the media to create a fresh Nike universe that infuses the world of sports and the world of music together.
This will be achieved by using a raw and edgy tone to fit the new technological side of the product, as well as a comedic twist that the audience is sure to appreciate.The tagline of the whole campaign will be “Nike+: Tune into your steps” which translates as a metaphorical statement for the capabilities of the new Nike+ shoe. Why will the ‘big idea’ achieve the objects? Because it is a new product, it is important to grab the attention of the audience using humor and also focusing on the instructions for using the shoes and showing the iPod with the shoes because of its’ new launch along with the catchphrase to let the title grab the audience’s desire to know more. Media StrategyIn order to increase awareness of the new launch of the product (Nike+) in the UAE, it is essential to choose media vehicles that best represent our product. The media that will be used to advertise for our product will consist of: • Television • Out door • Magazines • Cinema projection: • Radio • Internet Television: The age of the audience we’re targeting is 18-25; therefore we will be advertising our product in the channels that are mostly viewed by our target. We will use MBC 2, MBC 4and Dubai one TV.Since our product is combining the worlds of music and sports together, we chose to advertise in melody Arabia, and also in sports channels such as Al-Jazeera Sports and Extreme sports channels.
The channels we chose are both Arabic and English channels which will allow us to reach our target audience (people in the UAE) who are from a diverse nationalities. Outdoor: We chose to use outdoor advertising as it is one of the most effective media vehicles. Outdoor advertising cuts through the clutter and in most cases grab people’s attention. In addition, it is cost efficient because of its high frequency.We will place our billboards of our product Nike+iPod in places with high level of congestion sheikh Zaid, Garhoud bridge and Maktoum bridge. Moreover, we decided to place lamp posts in Jumeriah and in bus stops. Magazines: We are going to place our ads in magazines that are read by our target audience, after doing researches and surveys we found that the most appropriate magazines for our product would be Super magazine, PC magazine and AHLAN magazine.
Cinema projection: Cinema projection is a non-traditional and an interesting vehicle that we decided to use as a part of our campaign as it will strengthen our campaign.