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Introduction
Nike Company is a multinational organization operating in the business of designing, developing, and producing various sports products. Apart from selling shoes and apparel, the firm is known for its performance equipment, including bags, socks, eyewear, and sports balls. It has invested heavily in three key areas, namely, North America, Western European countries such as Germany, and China. The reason for targeting these places is a result of the large market share, demand, and opportunities to satisfy consumers based on their individual preferences. Additionally, many sporting events are held in the regions, for example, the Olympics. Investing in the aforementioned opportunities has allowed the brand to be associated with such values as athleticism, motivation, and success. The paper examines the companys key international marketing strategies and global markets of operation and makes recommendations on how to improve its global strategy.
Key International Marketing Strategies
Nike is a company that is recognized globally not only for the products offered by the corporation but also for the marketing strategies that maximize profit and create new demand. International marketing strategies depict the brands techniques used to advertise the goods and services it offers in the global arena. Certain practices, in particular, are especially effective since the current trends are guiding the frameworks practically applied to address globalization. As a result, Nike uses technology to create innovative products and market to potential customers and consumer segmentation to create links between particular products and specific individuals who are most likely to invest in them.
The Use of Technology
Technology transforms marketing by making campaigns more individualized and immersive for consumers and establishing ecosystems that are more incorporated and targeted for marketers. Nike has been dominant in sports by connecting with almost every athlete at one point in their careers via innovation in product development as well as marketing (Huang and Rust, 2021, p. 35). In the middle of the 2000s, the company entered into the digital realm to expand its shoe ecosystem and be part of the consumers journey (Kim, 2020, p. 1517). Nike introduced a small sole-insertable chip that could enable them to track speed and distances covered by a user. However, the chip was more complex than the mobile apps developed afterward, and the rate of adoption of mobile phones was greater than wearables (Kim et al., 2020, p. 1). Therefore, the experiment of the Fuelband ended in 2014, which marked the start of Nike+ platform development.
It is important to note that the Nike+ platform consisted of various applications, for instance, those checking on how individuals run and train. Through it, the company has been able to evolve into a personal assistant who tracks its customers workouts and creates both physical and digital communities that link different users (Müller et al., 2018, p. 75). It connects them with customized fitness regimes as well as pro-athlete-led functions and events that drive brand awareness (Liu, Liu, and Zhang, 2021, p. 565). In addition to doing all this, the organization gathers information concerning the users interests, preferences, and behavior, giving the company a competitive advantage over other brands that did not have the same detailed information on consumer behavior. Moreover, since the strategy was applied to the global consumer base, the data illustrated patterns aligning with customers from specific areas of operation.
Particular flagship stores currently blur the line between the digital and physical worlds. Large displays take consumers into the digital product test drives, whereas others enable users to ask associates for help or immediate purchasing (Jiang, 2019, p. 86). By utilizing technology, the company is immersing its customers into their international community and automating past human functions to offer them an individualized, on-demand service that provides a peculiar experience. Moreover, it allows the company to market its products internationally while targeting its particular consumer group since young people are most likely to access the online resources provided by Nike.
Customer Segments
It is certain that Nike is a company with distinctive branding that consumers all over the world associate with the products that the organization offers. However, it does not imply that Nike does not have a particular market segmentation technique that allows the corporation to divide the consumer base into groups with different needs and preferences. Demographic segmentation is applied by the company to target people based on their gender, life-cycle stage, age, generation, and occupation (Rogic and Kascelan, 2019, p. 290). Even though with apparel as well as sports, the market can be wide, Nike mainly focuses on consumers between the ages of fifteen and forty years old (Salmani and Partovi, 2021, p. 1). It caters to all athletes without discrimination of sex and targets more teenagers to establish long-lasting brand loyalty.
Nike Company addresses this group by having marketing campaigns concerning the youth aiming to be their athlete idols. For instance, prior to the 2014 World Cup, the company organized a video that starred key sponsored soccer athletes with teen players (Thelin, 2019, p. 112). Recently, Nike has launched womens lines to enable them to enter the rapidly growing female segment, which is expected to grow more in the coming years (Zhu, 2022, p. 468). The company has made it known that it cannot target customers according to their ethnicity, race, social class, or religion. Furthermore, the concept gives Nike a competitive advantage as they are seen as non-discriminatory, and their goods can be enjoyed by a wide variety of people worldwide. Additionally, Nike utilizes psychographic segmentation alongside the above-mentioned one to target people with particular lifestyles as well as personalities. Individuals who like sports are at the core of the consumer base (Zhao, 2020, p. 21). From an international perspective, the design implies that apparel for specific sports is advertised based on its popularity in the country.
Business analysts claim that Nike is a genius for targeting customers according to the behavioristic variable. Whereas it seldom concentrates on praising particular traits, it mostly aims at the way its products influence consumers feelings. The products benefit anticipations are clear and well defined (Zhu, 2022, p. 468). They make an individual think that they are athletic (Zhu, 2022, p. 468). Additionally, with this type of segmentation, Nike aims to establish consumer loyalty (Kamthania, Pawa and Madhavan, 2018, p. 63). Since Nike is associated with a specific lifestyle incorporating both trend and athleticism, the correlation gives the brand a competitive advantage in regards to the consumers associating it with a reliable source of innovative pieces.
International Markets of Operation
Outside of North America, Nike company has invested heavily in Western Europe and China. It targets these places since sports apparel is highly demanded by the people living in them. These areas are known to be homes for the majority of athletes in the world. Furthermore, they host multiple global sports functions, therefore, serving as a great market for the organization. For example, they are renowned for sports such as football, basketball, and track and field events. The firm releases a significant amount of sports merchandise sold to both players and fans. Moreover, the brands focus on West European countries such as Germany, and another emerging market, China, exemplifies effective market segmentation and marketing strategies aligning with individual consumers.
The corporation approached the Chinese market from the perspective of developing a sports culture in order for the goods offered by Nike to become more demanded. From the start of the 21st century, the company began participating in Chinas Olympic bid. As soon as Beijing was announced as the host of the 2008 Olympics, Nike decided to sponsor multiple teams and expand its presence in the nation (Alsaffar, 2020, p.5). It had a significant impact during the games, and its sales surged by fifty-three percent in the quarter that ended in September 2008.
Needless to say, attracting Chinese consumers is among the factors that motivate most global corporations due to the potential profit correlating with success in this particular economy. In order for Chinese consumers to be attracted to Nike products, the company started focusing on more personalized approaches (Alsaffar, 2020). This includes using advertising techniques to appeal to the preferences of the customers, determining trends specific to China, and identifying opportunities to maximize sales. All major cities were treated as separate markets, and customers were able to develop loyalty to the brand.
Despite the growing financial possibilities of the Chinese consumers who are able to invest in more costly products, Nike managed to win over the market by applying personalized marketing techniques. A study comparing Adidas and Nike advertisements has found that the ads and billboards are different, which may be one of the reasons Adidas is not the most influential athletic apparel seller in China (Li, 2019, p. 495). For example, Nike has put emphasis on the facial expression of the illustrated athlete, the bright colors, and the direct message, while Adidas opted for a black and white option. The example, while not the detrimental factor why Adidas cannot reach the same success, highlights the effectiveness of Nikes target marketing techniques.
The German market, on the other hand, is a projection of the general Western European market. Nike divides the regions of marketing not by country but by area of influence, Western Europe being one of them (Marshall and Morreale, 2017, p. 129). By examining the techniques used on the German market, it will be evident that the strategies differ from the aforementioned Chinese ones. It is important to mention that Germany is a particularly difficult platform to operate under due to the fact that this is the national market of the main competitor, Adidas (Jaworek and Karaszewski, 2020). In theory, Adidas is another major corporation operating in most of the countries in the world. This is a limitation in terms of attracting consumers who may be loyal to a brand that aligns with the country and its ideals.
While the task is complex by definition, evidence shows that Nike has managed to implement effective marketing strategies to maximize its success in Germany. The results, as exemplified by the fact that more than 55% of the population would choose Nike over Adidas, highlight the positive results of the marketing techniques (Koptyug, 2018). There are several frameworks that have been implemented and helped the brand overpower the main competitor in its native country.
First, researchers mentioned that Nike and Adidas have different brand personalities. While both specialize in athletic shoes and apparel, research conducted in several German-speaking countries identified a difference in how consumers perceive the companies. Namely, Adidas is commonly associated with style and attractiveness, while Nike with reliability, athleticism, and strengths (Kammerer, Dilger and Ploder, 2020, p. 287). Thus, with the increasing demand for accessories assisting Germans in their aim to maintain a healthy lifestyle through sport, Nike markets itself as the best option.
Another facilitator of market success in Germany is the association with the athletes, either directly or indirectly associated with the brand. Evidence shows that German consumers invest in Nike products at a higher level after an event in which a national football club supported an initiative started in the U.S. Namely, Colin Kaepernick, the American football star, kneeled during the national anthem in protest of police brutality. Nike started advertising the occurrence before the team players of the German club Hertha BSC joined the movement. As a result, German consumers associated the social protest with Nikes advertisement, purchasing more goods than prior to supporting the initiative (Giebe, Löffler and Schneider, 2020, p. 102). Thus, the marketing strategy was centered around two factors, the global movement toward the eradication of police brutality aimed at minorities and popular figures joining the protest.
Recommendations to Improve Global Strategy
Applying a global strategy is a complex task due to the differences among the different markets and consumers within various segments. However, certain trends are evident to impact the overall global platform, which is why several techniques can be used to address the aim to pursue globalization further. As a result, the corporation will not only attract more consumers and increase the revenue but also establish a more solid branding recognized for the companys values and organizational objective. Namely, initiatives aimed toward more sustainable business practices as well as an analytical approach to data gathering and examination of patterns can significantly improve the brands global reach.
Sustainability
Nike can recover after the COVID-19 pandemic by continuing with its efforts in sustainability. By reducing the environmental footprint, bettering product innovation, and changing manufacturing, the firm is repositioning its supply chain to utilize sustainability principles as a driver of its growth. Several improvements have already been implemented in the business processes, factors that illustrate the brands ethical practices. As a result, Nike is not only reducing environmental damage but also attracting conscious consumers. For example, before the emergence of the COVID-19 pandemic, Nike declared the launch of Nike Flyleather, which is unique super material consisting of 50% recyclable leather fibers, 80% lower carbon footprint, and 90% less water used (Nike, 2022). The creation of the product was aimed to maximize performance as it is five times more durable and forty percent lighter than regular leather. By introducing it into their material portfolio, production waste and cost reduction will be greatly influenced.
In manufacturing, the company aims to minimize damage to the landfill as well as the use of non-renewable energy. In 2014, the company reached a milestone by introducing a water-free dyeing facility in Taiwan. The factory has high-technology equipment targeted to remove the utilization of water and process substances from fabric dyeing. This innovation has been referred to by the firm as ColorDry (Ertekin and Atik, 2020, p. 362). Water is outpacing the growth in population, and over the next ten years, two-thirds of the world population could live in water-stressed places (Farrar et al., 2022). The investment in ColorDry marks the organizations commitment to adopting a future outlook and minimizing its dependence on limited resources.
Based on the current interest in the brand, Nike has managed to effectively implement sustainability practices and advertise itself as a brand willing to invest in eco-friendly options. By doing this, the initiatives have established a solid basis to cope with the pressures of climate change. The company needs to now use the same principles and apply them to the dot-com business. The growth will increase the number of packages transported every day and, therefore, integrating sustainability practices in its packaging process and shipping would facilitate sustainable practices.
Nike was motivated to reduce waste and plastic by redesigning the packaging and finding more sustainable ways. Less than three years ago, it hired a design organization to assist in rethinking the packaging. However, the ideas have not been completely realized in the mainstream (Fu, 2022, p. 1018). It is important that Nike chooses to advance the innovation to empower its next growth wave (Fadillah, Hao and Long 2021, p. 350). As mentioned above, the firm has been great at integrating synthetic fabrics to handle supply shortages of water and cotton (Conlon and Morris, 2019, p. 90). However, synthetic fibers contain microplastics, which are harmful to the environment since they are difficult to recycle and often end up in water sources (Carney Almroth et al., 2017, p. 1191). Thus, further investment in research and development of sustainable materials is needed.
The Use of Data
Nike brand can improve its global strategy to ensure success post-pandemic by continuing with its obtaining and using data efforts. The company utilizes its applications, such as Nike SNEAKRS, Nike app, and Nike Training Club, to gather information (Araujo, Caldwell and DeFanti, 2018, p.111). The data can then be transformed into meaningful consumer insights and used in helping the brand choose which design to produce and items to stock in certain places (Almiya et al., 2020, p.65). The information can therefore be applied to customize what a customer sees in their user interface to encourage engagement and individualize as much experience as possible (Bose, 2018, p. 2354). The focus on data is an indication of a particular shift in the companys business model over recent times.
For many years, the firm has operated a retail-first structure whereby most of its revenue is produced wholesale. This has not changed as wholesale still represents the majority of the sales. Nevertheless, Nike Direct, the organizations direct-to-consumer program, contributed ten billion dollars in sales in 2018. The figure was projected to stand at sixteen billion dollars or even more in 2023 (Childs and Jin, 2018, p. 85). Its success with this initiative is a testament to the way the firm is utilizing analytics to deliver an improved customer experience.
For instance, the Nike application enables users to access the Nike+ premium program, which in turn gives individualized exclusives to every member. In addition to that, one is eligible for advance access to novel products, tailored workouts, and priority access to functions (Christy et al., 2021, p. 1256). Apps such as the Nike Training Club can assist users in their workouts and allow them to track their progress as well as access available training programs on the platform (Adamakis, 2017). The additional value that the innovations bring to the experience solidifies the companys relationships with its users and encourages them to purchase from Nike directly (Childs and Jin, 2018, p. 85). Moreover, it promotes a healthy lifestyle, which is at the core of the marketing strategies of Nike as a brand.
Conclusion
The paper has examined Nikes key international marketing strategies, namely, the use of technology and customer segmentation. Technology has enabled the firm to transform marketing by making the campaigns to be more personalized. It helps in gathering information, which is key to improving the products and having successful solutions to current trends. Data has been described as an essential resource in an organization and can offer a competitive edge. However, sustainability and further maximization of data analytics have to be addressed for future development.
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