The three main approaches to dealing with cross-cultural factors in international marketing that could be applied to the marketing of a product/service combination are the following:
Hofstede's Dimensions. Geert Hofstede, a Dutch researcher, conducted an interview on a large number of IBM executives in various countries, and the results revealed that cultural differences tended to center around four key dimensions:
* Individualism vs. collectivism: This aspect answers the question: to what extent do people believe in individual responsibility and reward rather than having these measures aimed at the larger group? Contrary to the usual thinking, Japan actually is not as collective as it may as it ranks in the middle of this dimension, while Indonesia and West Africa rank toward the collectivistic side. The U.S., Britain, and the Netherlands rate toward individualism.
* Power distance: To determine power distance, one should ask: To what extent is there a strong separation of individuals based on rank? Power distance seems particularly higher in Arab countries and some Latin American ones, while it is more modest in Northern Europe and the U.S.
* Masculinity vs. femininity involves a somewhat more vague concept. "Masculine" values involve competition and "conquering" nature by means such as large construction projects, while "feminine" values involve harmony and environmental protection. Japan is one of the more masculine countries, while the Netherlands rank relatively low. The U.S. is close to the middle, slightly toward the masculine side.
* Uncertainty avoidance involves the extent to which a "structured" situation with clear rules is preferred to a more ambiguous one; in general, countries with lower uncertainty avoidance tend to be more tolerant of risk. Japan ranks very high. Few countries are very low in any absolute sense, but relatively speaking, Britain and Hong Kong are lower, and the U.S. is in the lower range of the distribution.
One problem with Hofstede's original work was it did not address the fifth dimension of long term vs. short term orientation whichhas been proposed. A concrete example of long-term vs. short-term is in the U.S., managers like to see quick results, while Japanese managers are known for take a long term view, often accepting long periods before profitability is obtained.
Edward T. Hall's High vs. low context cultures: In some cultures, "what you see is what you get"-the speaker is expected to make his or her points clear and limit ambiguity. This is the case in the U.S.-if you have something on your mind, you are expected to say it directly, subject to some reasonable standards of diplomacy.
In Japan, in contrast, facial expressions and what is not said may be an important clue to understanding a speaker's meaning. Thus, it may be very difficult for Japanese speakers to understand another's written communication. The nature of languages may exacerbate this phenomenon-while the German language is very precise, Chinese lacks many grammatical features, and the meaning of words may be somewhat less precise. English ranks somewhere in the middle of this continuum.
Ethnocentrism and the self-reference criterion. The self-reference criterion refers to the tendency of individuals, often unconsciously, to use the standards of one's own culture to evaluate others. For example, Americans may perceive more traditional societies to be "backward" and "unmotivated" because they fail to adopt new technologies or social customs, seeking instead to preserve traditional values. In the 1960s, a supposedly well read American psychology professor referred to India's culture of "sick" because, despite severe food shortages, the Hindu religion did not allow the eating of cows.
The psychologist expressed disgust that the cows were allowed to roam free in villages, although it turns out that they provided valuable functions by offering milk and fertilizing fields. Ethnocentrism is the tendency to view one's culture to be superior to others. The important thing here is to consider how these biases may come in the way in dealing with members of other cultures.
Tuesday, July 31, 2012
Marketing Strategies of Virgin Group: SWOT Analysis
Virgin Group's brand manual says "Our people come first." Virgin realizes the importance of employees in the success of the company. They develop loyalty from their own employees in order to build their reputation.
Environmental and Organizational Strategic Issues
Virgin Group finds new ways to lead the airline industry on environmental issues. The airline's brand new fleet is one of the most fuel and carbon efficient fleets being operated in the world.
The Virgin Group has also plan to reinvest all profits from Virgin-transport related businesses to renewable fuels research and other "green" initiatives that combat climate change. Virgin's current environmental initiatives include: a fleet and flight path analysis program to collect and analyze fuel burn data; operational programs that reduce carbon emissions; employee-focused green incentive efforts; and use of green guidelines in various procurement and operations decisions.
On 9 February 2007, Richard Branson, the owner, announced a new Global science and technology prize-The Virgin Earth Challenge. This is done to encourage technological advancements that will promote sustainability and welfare of mankind.
The Virgin Earth Challenge will award $25 million to the individual or group who are able to demonstrate a commercially viable design which will result in the net removal of anthropogenic, atmospheric greenhouse gases each year for at least ten years without countervailing harmful effects.
The basic condition is the removal must have long term effects and contribute materially to the stability of the Earth's climate. Virgin's environmental and organizational strategies maybe branded as 'maverick' a bit radical even weird at times but are effective.
Their thrust to take into consideration sustainability in their business decisions is truly noble and remarkable. The company should continue in their commitment to engage investors, environmental groups and employees efforts toward the protection and promotion of environment.
SWOT Analysis
Strengths The Virgin Group's strength is a strong brand name. The main advantage for this group is that they are experienced in two different kinds of distribution - in stationary trade and in mail ordering. The group is far less integrated than other big groups which make them more flexible compared to others.
The Virgin Group has a strong brand name which is strongly associated with its billionaire-owner Richard Branson. Branson's experience is multiple particularly in introducing new products in a competitive marketing environment. It has high budget or investment which can pay for quality labor, services or products.
Weaknesses
The irony is that Virgin's strong brand name is also its weakness. This is because Virgin's image used to be that of a rebel and always taking the consumer's side. With the introduction of Virgin Trains and Virgin Credit Card, the image seems diluted now. Consumers are confused as to its identification now. It was also known to be a brand for young people. But with the introduction of Virgin Cars and Virgin Atlantic, the image has changed now.
Virgin's expansion and mixture of different businesses seem to produce image problems to the company. With its services and products ranging from trans-Atlantic flights, records, cola, lingerie, electricity, trains, concerts, holidays and mobile phones, the brand message seems to grow confusing.
Opportunities
Opportunities exist for Virgin in new markets such as in Australia. The Virgin airline can still make headlines as it competes with other established airlines and creates impact in its lower pricing.
Threats
Virgin is not a leading brand in any of its business. In its flights, electricity, music, cola and other ventures Virgin was never the market leader. It maybe internationally recognized but some of its products are not.
Virgin doesn't introduce new innovations. What it usually does is create a product similar to an existing product and sell it at a lesser price or offer a variation to it. Virgin merely follows others but never blaze the trails so to speak. Virgin maybe a strong business but it is not a strong brand.
A strong brand is not brought about a strong business but by a strong name and identity or something which only the brand can offer. This is not so with Virgin Group.
Environmental and Organizational Strategic Issues
Virgin Group finds new ways to lead the airline industry on environmental issues. The airline's brand new fleet is one of the most fuel and carbon efficient fleets being operated in the world.
The Virgin Group has also plan to reinvest all profits from Virgin-transport related businesses to renewable fuels research and other "green" initiatives that combat climate change. Virgin's current environmental initiatives include: a fleet and flight path analysis program to collect and analyze fuel burn data; operational programs that reduce carbon emissions; employee-focused green incentive efforts; and use of green guidelines in various procurement and operations decisions.
On 9 February 2007, Richard Branson, the owner, announced a new Global science and technology prize-The Virgin Earth Challenge. This is done to encourage technological advancements that will promote sustainability and welfare of mankind.
The Virgin Earth Challenge will award $25 million to the individual or group who are able to demonstrate a commercially viable design which will result in the net removal of anthropogenic, atmospheric greenhouse gases each year for at least ten years without countervailing harmful effects.
The basic condition is the removal must have long term effects and contribute materially to the stability of the Earth's climate. Virgin's environmental and organizational strategies maybe branded as 'maverick' a bit radical even weird at times but are effective.
Their thrust to take into consideration sustainability in their business decisions is truly noble and remarkable. The company should continue in their commitment to engage investors, environmental groups and employees efforts toward the protection and promotion of environment.
SWOT Analysis
Strengths The Virgin Group's strength is a strong brand name. The main advantage for this group is that they are experienced in two different kinds of distribution - in stationary trade and in mail ordering. The group is far less integrated than other big groups which make them more flexible compared to others.
The Virgin Group has a strong brand name which is strongly associated with its billionaire-owner Richard Branson. Branson's experience is multiple particularly in introducing new products in a competitive marketing environment. It has high budget or investment which can pay for quality labor, services or products.
Weaknesses
The irony is that Virgin's strong brand name is also its weakness. This is because Virgin's image used to be that of a rebel and always taking the consumer's side. With the introduction of Virgin Trains and Virgin Credit Card, the image seems diluted now. Consumers are confused as to its identification now. It was also known to be a brand for young people. But with the introduction of Virgin Cars and Virgin Atlantic, the image has changed now.
Virgin's expansion and mixture of different businesses seem to produce image problems to the company. With its services and products ranging from trans-Atlantic flights, records, cola, lingerie, electricity, trains, concerts, holidays and mobile phones, the brand message seems to grow confusing.
Opportunities
Opportunities exist for Virgin in new markets such as in Australia. The Virgin airline can still make headlines as it competes with other established airlines and creates impact in its lower pricing.
Threats
Virgin is not a leading brand in any of its business. In its flights, electricity, music, cola and other ventures Virgin was never the market leader. It maybe internationally recognized but some of its products are not.
Virgin doesn't introduce new innovations. What it usually does is create a product similar to an existing product and sell it at a lesser price or offer a variation to it. Virgin merely follows others but never blaze the trails so to speak. Virgin maybe a strong business but it is not a strong brand.
A strong brand is not brought about a strong business but by a strong name and identity or something which only the brand can offer. This is not so with Virgin Group.
How New Balance Can Increase Market Share: Business Strategies of New Balance
New Balance holds only 3-5% of the market share of the shoe industry. Nike leads the pack with 30.4%. Issues New Balance Need to Address
1. Outsourcing issues. With their major competitors outsourcing to other countries for production, New Balance needs to look into this issue and examine how it can incorporate this in their business strategy. Outsourcing need not be the way to go but they could, for instance, put up New Balance manufacturing plants in Asia which are intended mainly to cater exclusively to Asian customers.
2. "Endorsed By No One" philosophy is another issue which they could look into. Having no identifiable single representative of the product could be a disadvantage because Nike's popularity hinges on its being identified with the best athletes in the world.
3. Their share of the market. A mere 3-5% market share compared to Nike's 30.4% does not appear so impressive. They need to look into ways to increase the number of their customers.
How New Balance Could Increase Market Share
* Multinational customers could potentially increase their market share. In 1995, Nike's international operations accounted for 36.06 of its total sales. New Balance should recognize the fact that the demands from international markets will increase in future.
* The changing US demographics could also be a factor as there is a rising number of Hispanics, Asians, and African Americans. These groups have different shoe preferences that New Balance should be able to satisfy. New Balance should determine the next generation of loyal customers and provide for their needs.
* New Balance marketing efforts seemed focused on sports footwear or athletic lines. There are other venues that can be tapped for increased sales such as casual footwear, women's shoes and children's footwear.
* New Balance should improve their ways of conducting business online. The online market is huge. New Balance could tap into this huge source of customers. They must make their more user-friendly to attract more visitors. More visitors often translate to more sales. Their website should also be more interactive and allow customers to have their say with regards to the shoes, designs and other matters.
* New Balance should also conduct surveys on their customers to know what they really want. Trends and styles change often.
* New Balance could introduce a Loyal Customer Program just like their Nike counterpart. In this program, points are added to an account after a purchase. The points would vary depending on the amount of the purchase. New Balance allows customers to buy products through the points the customers are able to accumulate.
New Balance may not hold the lion share of the shoe industry but it certainly has a lot of potentials. Being one of the more established companies in the footwear industry, New Balance certainly offers a lot of value to the customers.
1. Outsourcing issues. With their major competitors outsourcing to other countries for production, New Balance needs to look into this issue and examine how it can incorporate this in their business strategy. Outsourcing need not be the way to go but they could, for instance, put up New Balance manufacturing plants in Asia which are intended mainly to cater exclusively to Asian customers.
2. "Endorsed By No One" philosophy is another issue which they could look into. Having no identifiable single representative of the product could be a disadvantage because Nike's popularity hinges on its being identified with the best athletes in the world.
3. Their share of the market. A mere 3-5% market share compared to Nike's 30.4% does not appear so impressive. They need to look into ways to increase the number of their customers.
How New Balance Could Increase Market Share
* Multinational customers could potentially increase their market share. In 1995, Nike's international operations accounted for 36.06 of its total sales. New Balance should recognize the fact that the demands from international markets will increase in future.
* The changing US demographics could also be a factor as there is a rising number of Hispanics, Asians, and African Americans. These groups have different shoe preferences that New Balance should be able to satisfy. New Balance should determine the next generation of loyal customers and provide for their needs.
* New Balance marketing efforts seemed focused on sports footwear or athletic lines. There are other venues that can be tapped for increased sales such as casual footwear, women's shoes and children's footwear.
* New Balance should improve their ways of conducting business online. The online market is huge. New Balance could tap into this huge source of customers. They must make their more user-friendly to attract more visitors. More visitors often translate to more sales. Their website should also be more interactive and allow customers to have their say with regards to the shoes, designs and other matters.
* New Balance should also conduct surveys on their customers to know what they really want. Trends and styles change often.
* New Balance could introduce a Loyal Customer Program just like their Nike counterpart. In this program, points are added to an account after a purchase. The points would vary depending on the amount of the purchase. New Balance allows customers to buy products through the points the customers are able to accumulate.
New Balance may not hold the lion share of the shoe industry but it certainly has a lot of potentials. Being one of the more established companies in the footwear industry, New Balance certainly offers a lot of value to the customers.
Marketing Strategies of New Balance
New Balance is one of the leading global athletic products company. They aim to produce superior footwear and athletic apparel for better performance. New Balance shoes are offered in six different widths intended to fit the feet better. The sizes range from small 2A to big 6E. New Balance has 18 different models to accommodate all kinds of shoe sizes. This shoe particularly fits the needs of athletes.
Marketing Strategies of New Balance
World-class athletes play a role in New Balance's aims. The marketing approach and relationship with athletes are particularly observable in their athlete's centers where design, development and testing of products are conducted based on athlete's special needs. Clearly, New Balance is bent on pursuing quality not just quantity. Their shoes are designed and built to fit and withstand the rigors of athletic training.
New Balance promotional efforts are geared towards races, teams, youth sports, tract and field and training programs instead of focusing on one particular sports talent. This is their way to provide support to grassroots athletics. New Balance also sponsors various charitable organizations and programs worldwide.
Global Presence
New Balance employs almost 2,800 people all over the world. Their products are distributed in 120 countries on six continents.
U.S. Manufacturing & Distribution
New Balance is remarkable in fact that it continued its manufacturing function in the United States (as of 2007) as well as in the United Kingdom for the European market unlike its competitors that outsourced its production to low-priced labor in Asian countries. New Balance owns and operates five factories in New England - three in Maine and two in Massachusetts as well as one in Flimby, England.
A seventh factory in CA, owned by one of foreign suppliers, makes New Balance footwear exclusively. It also maintains distribution facilities in Lawrence, MA and Ontario, CA. New Balance undergoes challenges in their decision to maintain domestic manufacturing. With higher costs for labor, they need to remain competitive in the face of still competition.
Their decision not to outsource to other places with cheaper labor is brought about by their need to ensure the best fitting, best performing shoes and apparel through better technology and production methods. It is also to ensure that the standards they uphold for the last 100 years in shoe manufacturing remain the same. New Balance continues to manufacture 25% percent of its shoes in the U.S. and increases the number of pairs produced each year.
They were able to achieve this feat by re-investing in the latest technologies and using lean manufacturing techniques. It is their priority commitment to maintain strong manufacturing base in the U.S. despite the odds. Their determination to do so makes New Balance truly remarkable.
How New Balance Can Increase Market Share: Business Strategies of New Balance
New Balance holds only 3-5% of the market share of the shoe industry. Nike leads the pack with 30.4%. Issues New Balance Need to Address
1. Outsourcing issues. With their major competitors outsourcing to other countries for production, New Balance needs to look into this issue and examine how it can incorporate this in their business strategy. Outsourcing need not be the way to go but they could, for instance, put up New Balance manufacturing plants in Asia which are intended mainly to cater exclusively to Asian customers.
2. "Endorsed By No One" philosophy is another issue which they could look into. Having no identifiable single representative of the product could be a disadvantage because Nike's popularity hinges on its being identified with the best athletes in the world.
3. Their share of the market. A mere 3-5% market share compared to Nike's 30.4% does not appear so impressive. They need to look into ways to increase the number of their customers.
How New Balance Could Increase Market Share
* Multinational customers could potentially increase their market share. In 1995, Nike's international operations accounted for 36.06 of its total sales. New Balance should recognize the fact that the demands from international markets will increase in future.
* The changing US demographics could also be a factor as there is a rising number of Hispanics, Asians, and African Americans. These groups have different shoe preferences that New Balance should be able to satisfy. New Balance should determine the next generation of loyal customers and provide for their needs.
* New Balance marketing efforts seemed focused on sports footwear or athletic lines. There are other venues that can be tapped for increased sales such as casual footwear, women's shoes and children's footwear.
* New Balance should improve their ways of conducting business online. The online market is huge. New Balance could tap into this huge source of customers. They must make their more user-friendly to attract more visitors. More visitors often translate to more sales. Their website should also be more interactive and allow customers to have their say with regards to the shoes, designs and other matters.
* New Balance should also conduct surveys on their customers to know what they really want. Trends and styles change often.
* New Balance could introduce a Loyal Customer Program just like their Nike counterpart. In this program, points are added to an account after a purchase. The points would vary depending on the amount of the purchase. New Balance allows customers to buy products through the points the customers are able to accumulate.
New Balance may not hold the lion share of the shoe industry but it certainly has a lot of potentials. Being one of the more established companies in the footwear industry, New Balance certainly offers a lot of value to the customers.
Marketing Strategies of New Balance
World-class athletes play a role in New Balance's aims. The marketing approach and relationship with athletes are particularly observable in their athlete's centers where design, development and testing of products are conducted based on athlete's special needs. Clearly, New Balance is bent on pursuing quality not just quantity. Their shoes are designed and built to fit and withstand the rigors of athletic training.
New Balance promotional efforts are geared towards races, teams, youth sports, tract and field and training programs instead of focusing on one particular sports talent. This is their way to provide support to grassroots athletics. New Balance also sponsors various charitable organizations and programs worldwide.
Global Presence
New Balance employs almost 2,800 people all over the world. Their products are distributed in 120 countries on six continents.
U.S. Manufacturing & Distribution
New Balance is remarkable in fact that it continued its manufacturing function in the United States (as of 2007) as well as in the United Kingdom for the European market unlike its competitors that outsourced its production to low-priced labor in Asian countries. New Balance owns and operates five factories in New England - three in Maine and two in Massachusetts as well as one in Flimby, England.
A seventh factory in CA, owned by one of foreign suppliers, makes New Balance footwear exclusively. It also maintains distribution facilities in Lawrence, MA and Ontario, CA. New Balance undergoes challenges in their decision to maintain domestic manufacturing. With higher costs for labor, they need to remain competitive in the face of still competition.
Their decision not to outsource to other places with cheaper labor is brought about by their need to ensure the best fitting, best performing shoes and apparel through better technology and production methods. It is also to ensure that the standards they uphold for the last 100 years in shoe manufacturing remain the same. New Balance continues to manufacture 25% percent of its shoes in the U.S. and increases the number of pairs produced each year.
They were able to achieve this feat by re-investing in the latest technologies and using lean manufacturing techniques. It is their priority commitment to maintain strong manufacturing base in the U.S. despite the odds. Their determination to do so makes New Balance truly remarkable.
How New Balance Can Increase Market Share: Business Strategies of New Balance
New Balance holds only 3-5% of the market share of the shoe industry. Nike leads the pack with 30.4%. Issues New Balance Need to Address
1. Outsourcing issues. With their major competitors outsourcing to other countries for production, New Balance needs to look into this issue and examine how it can incorporate this in their business strategy. Outsourcing need not be the way to go but they could, for instance, put up New Balance manufacturing plants in Asia which are intended mainly to cater exclusively to Asian customers.
2. "Endorsed By No One" philosophy is another issue which they could look into. Having no identifiable single representative of the product could be a disadvantage because Nike's popularity hinges on its being identified with the best athletes in the world.
3. Their share of the market. A mere 3-5% market share compared to Nike's 30.4% does not appear so impressive. They need to look into ways to increase the number of their customers.
How New Balance Could Increase Market Share
* Multinational customers could potentially increase their market share. In 1995, Nike's international operations accounted for 36.06 of its total sales. New Balance should recognize the fact that the demands from international markets will increase in future.
* The changing US demographics could also be a factor as there is a rising number of Hispanics, Asians, and African Americans. These groups have different shoe preferences that New Balance should be able to satisfy. New Balance should determine the next generation of loyal customers and provide for their needs.
* New Balance marketing efforts seemed focused on sports footwear or athletic lines. There are other venues that can be tapped for increased sales such as casual footwear, women's shoes and children's footwear.
* New Balance should improve their ways of conducting business online. The online market is huge. New Balance could tap into this huge source of customers. They must make their more user-friendly to attract more visitors. More visitors often translate to more sales. Their website should also be more interactive and allow customers to have their say with regards to the shoes, designs and other matters.
* New Balance should also conduct surveys on their customers to know what they really want. Trends and styles change often.
* New Balance could introduce a Loyal Customer Program just like their Nike counterpart. In this program, points are added to an account after a purchase. The points would vary depending on the amount of the purchase. New Balance allows customers to buy products through the points the customers are able to accumulate.
New Balance may not hold the lion share of the shoe industry but it certainly has a lot of potentials. Being one of the more established companies in the footwear industry, New Balance certainly offers a lot of value to the customers.
3 Ways to Drive Traffic to Your Website
Learning how to drive traffic to the website is one of the foremost concerns of website owners. After all, the popularity of the website hinges on his/her knowledge on how to drive traffic to the site.
Promoting websites in order to attract visitors is a must. However, this is no easy task. The good news is there are a number of resources that can help you to do just that.
Links
Georgia Institute of Technology (GIT) conducted a study on the most effective way to drive visitors to your site. The results showed that links is one reliable source of traffic. One of the sites that took part in the study reported a whopping number - 84% - of their visitors came through the links.
Trading links is one strategy that you should consider. To do this, you can add a page called “Helpful Links” which will list external links. Keep in mind though that the links you referred to must contain information that can provide additional information to your readers.
The idea behind external links is that if the visitors must leave your site, they should at least go to places that would add value to your site. If you have a personal finance site then linking to a horoscope site may not be such a good idea because the site might not interest your visitors.
Another way to generate links is to add a page for “Testimonials.” This page would list people who have been to your site and are grateful for the information or products you provided. In the same vein, the websites could also post your testimonials together with your name and website address on their sites.
Using Signatures
The same study conducted by Georgia Institute of Technology (GIT) revealed that electronic signatures reel in approximately 35% of the website’s visitors. These signatures are usually found in emails sent by the website owners to their contacts.
A signature is a free feature in all email programs. It usually consists of the name of the sender and other pertinent information such as position and, of course, website address. Add the entire website address starting with “http:/” to be sure that a link to your site will be created.
Another way to add your signature is to post interesting and relevant comments on sites or blogs that are similar to your site. After you posted the comment add your name and your website address. People who read the article will see the comments you posted then click on the link to your site, generating more traffic for you.
Your signature in forums too should have your name and website address. If you post questions or answers to forums that are have similar target audience as your site, people will naturally be curious about your site.
Article Marketing
Write ups about your site from newspapers and magazines are huge help. You can also write press releases to entice readers to come visit.
But one very effective way to draw more audience to your site is article marketing. This is where you submit your articles similar to those found in your site to article directories then add the link to your site at the bottom of these articles.
People who read your articles in directories would naturally be egged on to visit your website for more information. At the end of the article you can add the words “For more information regarding nutrition, click here.” Or, “for more information visit http://....” providing a direct link to your site.
These are but a few of the interesting ways you can promote your site to drive more traffic to it. Of course, the ways and opportunities for website promotions are limitless. Just be resourcefull and creative. Every little thing that you do counts like giving out business cards or mentioning your website in parties or to your friends. These actions will add up. And later, your efforts will be rewarded by more hits and regular visits to your site.
Promoting websites in order to attract visitors is a must. However, this is no easy task. The good news is there are a number of resources that can help you to do just that.
Links
Georgia Institute of Technology (GIT) conducted a study on the most effective way to drive visitors to your site. The results showed that links is one reliable source of traffic. One of the sites that took part in the study reported a whopping number - 84% - of their visitors came through the links.
Trading links is one strategy that you should consider. To do this, you can add a page called “Helpful Links” which will list external links. Keep in mind though that the links you referred to must contain information that can provide additional information to your readers.
The idea behind external links is that if the visitors must leave your site, they should at least go to places that would add value to your site. If you have a personal finance site then linking to a horoscope site may not be such a good idea because the site might not interest your visitors.
Another way to generate links is to add a page for “Testimonials.” This page would list people who have been to your site and are grateful for the information or products you provided. In the same vein, the websites could also post your testimonials together with your name and website address on their sites.
Using Signatures
The same study conducted by Georgia Institute of Technology (GIT) revealed that electronic signatures reel in approximately 35% of the website’s visitors. These signatures are usually found in emails sent by the website owners to their contacts.
A signature is a free feature in all email programs. It usually consists of the name of the sender and other pertinent information such as position and, of course, website address. Add the entire website address starting with “http:/” to be sure that a link to your site will be created.
Another way to add your signature is to post interesting and relevant comments on sites or blogs that are similar to your site. After you posted the comment add your name and your website address. People who read the article will see the comments you posted then click on the link to your site, generating more traffic for you.
Your signature in forums too should have your name and website address. If you post questions or answers to forums that are have similar target audience as your site, people will naturally be curious about your site.
Article Marketing
Write ups about your site from newspapers and magazines are huge help. You can also write press releases to entice readers to come visit.
But one very effective way to draw more audience to your site is article marketing. This is where you submit your articles similar to those found in your site to article directories then add the link to your site at the bottom of these articles.
People who read your articles in directories would naturally be egged on to visit your website for more information. At the end of the article you can add the words “For more information regarding nutrition, click here.” Or, “for more information visit http://....” providing a direct link to your site.
These are but a few of the interesting ways you can promote your site to drive more traffic to it. Of course, the ways and opportunities for website promotions are limitless. Just be resourcefull and creative. Every little thing that you do counts like giving out business cards or mentioning your website in parties or to your friends. These actions will add up. And later, your efforts will be rewarded by more hits and regular visits to your site.
Strategies for Retail Management: The Importance of Store Layout and Design
A retail store requires visible help to tantalize shoppers or customers. This falls under "visual merchandising" which is the art of attracting patrons using visual signs. This is essential to help the retailer generate sales.
Visual Merchandising began at the turn of the century when department stores in the past used theatrical set design and lighting to create eye-catching displays. Making the store attractive is an important strategy to keep shoppers coming back.
There are two essential elements in a good store plan : store design and store layout. Store design focuses on the atmosphere of the store, its image, interior and exterior design factors. Store layout includes the internal arrangements of each department, selling and sales support allocation, and the evaluation of space productivity.
Merchandise Display
Retailers believe that if one "displays it, they will buy." Experienced retailers know for certain that women, from all ages and income levels, refer to in-store displays, first and foremost to get fashion ideas. Display of merchandise is important because the design could serve as a come-on for shoppers. The more merchandise customers see, the more they will be tempted to buy.
The design of the store should attract the customers to investigate all the departments or at least to see what the store offers. This way they will return another time. This is accomplished by providing strategic location of signs, special values, escalators, stairs, dressing rooms and certain merchandise.
Many supermarkets place convenience items such as bread and milk at the far end part of the store because these items are necessities and customers would be forced to explore the entire store as they search for these products.
When it comes to clothing, customers prefer to be up close and personal with clothes. Nothing can compete with the feeling the texture of the fabric, trying on the skirt or pants, sweater or blouse in influencing consumers' decision to buy. Even big-budgeted fashion show or advertisement cannot convince customers as much as the personal touch.
Lifestyle MonitorTM says that more than 60 percent of all women said that they get their clothing ideas from store displays.
Department Locations
Location is very important. It should be designed in such a way that heavy traffic would be sent to the most profitable items. For instance, high-markup items such as expensive jewelries or cosmetics and impulse items such as lipstick or eyebrows should be very visible.
Related lines should be located close to each other. For instance, ties should be put right next to dress shirts, printers should be placed next to computers, vases next to flowers, and so many others.
Related departments should also be located next to each other. Fashion departments complement each other. Cosmetics, accessories and jewelry often go well together. Cookbooks and gourmet utensils stimulate interest in one another.
Departments and merchandise categories should be coordinated as much as possible for customer convenience and cross-selling. Give the most important lines the best locations in your store. Play the winners. Anything that is moving fast should be exploited in every way.
Addressing Shoplifting
The best way for department stores to discourage theft in a store is by preventing or taking away opportunities to steal. A well-designed store layout may not totally eliminate shoplifting but will help lessen it. Keep small, expensive items under lock and key.
Convex mirrors should be used where blind spots cannot be eliminated. Video monitors should also be installed. By keeping everything wide open, salespeople can observe everyone in the store.
Use of Fixture
Changes in layout and merchandise displays are facilitated by using fixtures that are movable and adjustable such as cabinets, shelving, lighting and other furnishings. The visual concepts are essential in creating a store environment that evokes feelings of spaciousness, aesthetic pleasures, a sense of wellness and a residential feeling.
Visual Merchandising began at the turn of the century when department stores in the past used theatrical set design and lighting to create eye-catching displays. Making the store attractive is an important strategy to keep shoppers coming back.
There are two essential elements in a good store plan : store design and store layout. Store design focuses on the atmosphere of the store, its image, interior and exterior design factors. Store layout includes the internal arrangements of each department, selling and sales support allocation, and the evaluation of space productivity.
Merchandise Display
Retailers believe that if one "displays it, they will buy." Experienced retailers know for certain that women, from all ages and income levels, refer to in-store displays, first and foremost to get fashion ideas. Display of merchandise is important because the design could serve as a come-on for shoppers. The more merchandise customers see, the more they will be tempted to buy.
The design of the store should attract the customers to investigate all the departments or at least to see what the store offers. This way they will return another time. This is accomplished by providing strategic location of signs, special values, escalators, stairs, dressing rooms and certain merchandise.
Many supermarkets place convenience items such as bread and milk at the far end part of the store because these items are necessities and customers would be forced to explore the entire store as they search for these products.
When it comes to clothing, customers prefer to be up close and personal with clothes. Nothing can compete with the feeling the texture of the fabric, trying on the skirt or pants, sweater or blouse in influencing consumers' decision to buy. Even big-budgeted fashion show or advertisement cannot convince customers as much as the personal touch.
Lifestyle MonitorTM says that more than 60 percent of all women said that they get their clothing ideas from store displays.
Department Locations
Location is very important. It should be designed in such a way that heavy traffic would be sent to the most profitable items. For instance, high-markup items such as expensive jewelries or cosmetics and impulse items such as lipstick or eyebrows should be very visible.
Related lines should be located close to each other. For instance, ties should be put right next to dress shirts, printers should be placed next to computers, vases next to flowers, and so many others.
Related departments should also be located next to each other. Fashion departments complement each other. Cosmetics, accessories and jewelry often go well together. Cookbooks and gourmet utensils stimulate interest in one another.
Departments and merchandise categories should be coordinated as much as possible for customer convenience and cross-selling. Give the most important lines the best locations in your store. Play the winners. Anything that is moving fast should be exploited in every way.
Addressing Shoplifting
The best way for department stores to discourage theft in a store is by preventing or taking away opportunities to steal. A well-designed store layout may not totally eliminate shoplifting but will help lessen it. Keep small, expensive items under lock and key.
Convex mirrors should be used where blind spots cannot be eliminated. Video monitors should also be installed. By keeping everything wide open, salespeople can observe everyone in the store.
Use of Fixture
Changes in layout and merchandise displays are facilitated by using fixtures that are movable and adjustable such as cabinets, shelving, lighting and other furnishings. The visual concepts are essential in creating a store environment that evokes feelings of spaciousness, aesthetic pleasures, a sense of wellness and a residential feeling.
Marketing Audit of Nike
Nike is an incorporated company that primarily carries footwear products. The Company designs, develops and markets athletic footwear, apparel, equipment and accessory products. Former CEO and Pres. Philip Knight co-founded Blue Ribbon Sports with Mr. Bill Bowerman in 1962 which officially became Nike in 1978.
At first, Nike was known to distribute inexpensive, superior-quality Japanese athletic shoes to American consumers to break Germany’s domination of the domestic industry. Today, Nike Inc. manufactures and distributes athletic shoes to a global market and some 40% of sales come from athletic apparel, sports equipment, and subsidiary ventures.
Nike maintains traditional and non-traditional distribution channels in more than 110 countries with primary market regions in United States, Europe, Asia Pacific, and the Americas (not including the United States). Nike has some over 20,000 retailers worldwide including Nike factory stores, Nike stores, NikeTowns, Cole Haan stores, and internet-based Web sites sell Nike’s sports and leisure products. Nike is leading the sales in the athletic footwear industry with a 33% global market share. Nike Inc. achieved their current status by promoting “quality production, innovative products, and aggressive marketing” in their products. As a result, for the fiscal year end 1999, Nike’s 20,700 employees generated almost $8.8 billion in revenue worldwide.
ENVIRONMENTAL ASPECTS
ECONOMICS
Have changes in the economy impacted the organization or brand? Is it sufficient to respond to just the domestic economy, or do multinational considerations apply? What adjustments were made? Have they succeeded? What additional adjustments are being contemplated, and why?
In economy, the biggest threat for Nike is if the economy goes into recession. If recession occurs, Nike’s growth in sales, marketing and promotions will be affected.
Another important factor in economy is the maturing market in athletic shoes. There is also a growing adverse demographic change in the marketplace brought about by the sweatshop expose that Nike has not overcome yet.
Effects to Nike’s growth are also affected not only by domestic economy but also by the international economy. The continued weak Euro and Asian recession could potentially hurt Nikes international sales and growth. Nike’s extreme sports product line is seen as inferior quality compared to competitors and is hurting sales and brand image.
CUSTOMERS
How do customer view the organization or brand? Is there a clear understanding of customer wants and needs? Are there different market segments? Are there emerging market segments? What adjustments have been made? Succeeded or not? What other changes are being contemplated? Why?
In 1998, Americans spent $38 billion to buy over 1.1 billion pairs of shoes. Sporting Goods Manufacturers Association revealed that athletic footwear makes up almost 35% of all footwear purchases.
The existing domestic industry focus is on casual and comfortable shoes. Demand is up for the “brown shoe” casual footwear with a comfortable and rugged design. This is because of the increasing number of workplaces allowing casual dress codes.
Multinational customers account for a large part of Nike’s sales. In 1995, Nike’s international operations accounted for 36.06 of its total revenues. The company believes that demands from international markets will increase in future.
Nike must cater to a large portion of the new generation that demands the latest trends and styles. Nike should take into account the changing US demographics due to the rising proportion of Hispanics, Asians, and African Americans. These groups have different preferences that Nike should be able to satisfy. Nike should identify the next generation of loyal customers and provide for their needs.
COMPETITION
Who are the companies or brands with which the organization or brand competes? What are their sales and market share trends? How do their approaches to the market differ from the organizations, and from each other? Are there any specific weaknesses in any competitors that can be turned into opportunities? Are there any specific strength that are major threats? What adjustments have been made? Succeeded or not? What other changes are being contemplated? Why?
Competition is very fierce due to the number of companies competing for sales. Lots of money goes to marketing and promotions using various channels to reach the young demographic group of consumers who spend the most money on Nike’s products. Growth is slowing down in the athletic footwear industry. But new markets are emerging with high growth rates. These markets include extreme sports market and the corporate merchandise market.
Nike’s global market share was an impressive 30.4% in 1998. The closest competitor, Adidas, held 15.5% of the market share while Reebok held 11.2%. The remaining competitors, including Fila, Timberland, Asics, Converse, and New Balance, among others, each hold approximately 3-5% of the remaining market share.
MARKETING ASPECTS
OBJECTIVES
Are there clearly defined marketing objectives? Are they consistent with corporate mission statement and objectives? Are they measurable, attainable? How close to meeting marketing objectives was the organization or brand in the most recent complete year? Should the marketing objectives be modified? Why?
Nikebiz.com stated that Nike’s mission statement is “Through the adoption of business practices Nike is committed to securing intergenerational quality of life, restoring environment and increasing value for our customers, shareholders and business partners.”
Nike shows passion for their company, products, and athletes. They are determined to provide consumers with comfort and assurance. They also find ways to innovate and create. They adhere to their five brand principles namely: inspire, innovate, focus, connect, and care.
Another Nike’s objective is “to be the world’s leading sports and fitness company.”
Nike’s mission statement is similar to a vision statement and is potentially a weakness. The mission identifies the sports and fitness industry business they are in, it does not specify as to what products and services they provide. The mission statement does not mention distribution channels and customers. However, it portrays management’s beliefs and the desire to be number one and remain in the leading position in sports and fitness shoe and apparel industry.
STRATEGIES
Strategies Nike uses for reach each objective? Should they be modified? Why?
Corporate Strategies
The past two decades saw a change in economy from “standardized” to flexible”. Having a strict corporate organization used to be the rule, now it is common to have a flexible organization that uses subcontracting.
The main reason Nike succeeded in competing in the footwear industry for a long time is because they remain flexible in an unpredictable market by subcontracting overseas in countries with low labor-cost.
Another reason for Nike’s strength in competition is their product differentiation. Aside from athletic shoes, Nike’s product line now offers a broad range of clothing, equipment and accessories.
TACTICS
Are there defined tactics for each strategy? Are they innovative, or a repeat of prior tactics? Are the tactics fully integrated? Are there any mixed messages? Should they be modified, why?
Nike’s distinctive tactics are found in the area of marketing, specifically in consumer brand awareness and brand power. Nike’s catch phrases like, “Just Do It,” and symbols like the Nike “Swoosh,” are reminders of the Nike empire.
This tactic is effective because it could not be easily replicated and it offers value or benefit to consumers. Nike is becoming a part of American and world culture, the brand power becomes more difficult to replicate. The trademark and a slogan serves as the company’s fingerprints. Nike is able to capitalize the unique identity due because of its financial strength. Nike reaches millions of consumers through large-scale marketing campaigns. The public benefits from the strength of Nike’s image when they make a purchase. Consumers often associate Nike image with quality products. By associating star athletes and motivational slogans like, “Just Do It,” consumers identify their purchases with the prospect of achieving greatness. This image they create forms a tactic that competing companies can not easily duplicate by simply improving their products.
4 Ps-
PRODUCT
Is the current product line appropriate? What changes should be made in how products are being handled?
Nike sells a huge variety of products, including shoes for running, basketball, cross training, women and children. All of which are currently its top-selling product categories.
Nike also sells shoes for outdoor activities such as tennis, golf, soccer, baseball, football, bicycling, volleyball, wrestling, cheerleading, aquatic activities, auto racing and other athletic and recreational uses.
Nike began selling active sports apparel in 1979 as well as athletic bags and accessory items. The company sells a line of performance equipment under the Nike brand name, such as sport balls, timepieces, eyewear, skates, bats and other equipment. They also sell a line of dress and casual footwear and accessories for men, women and children under the brand name Cole Haan. The company markets headwear under the brand name Sports Specialties, through Nike Team Sports, Inc. They also sell small amounts of various plastic products to other manufacturers through Nike IHM, Inc.
Bauer Nike Hockey Inc. manufactures and distributes ice skates, skate blades, in-roller skates, protective gear, hockey sticks and hockey jerseys and accessories under the Bauer and Nike brand names.
PRICE
Pricing strategies
Nike uses vertical integration in pricing wherein they own participants at differing channel levels or engage in more than one channel level operations. This is also an attempt to control costs and influence pricing practices.
PLACE
Distribution channels and policy. Should additional channels be added, why?
Nike sells its product to about 20,000 retail accounts in the U.S. and in approximately 110 countries around the world. Nike sells its products in international markets through independent distributors, licensees and subsidiaries. Independent distributors has little or no pressure for local adaptation because the 4Ps of marketing are managed by distributors.
PROMOTION
Are both advertising and promotion strategies in place? Succeeded?
Nike has been one of the top retail industries for quite along time. This is because they sell quality products, customer loyalty, but most of all, its great marketing techniques.
Nike has a number of famous athletes to create a great deal of attention to their products. Nike has signed the top athletes in many different sports such as the Brazilian Soccer Team (especially Ronaldino, Renaldo, and Roberto Carlos), Lebron James and Jermane O’Neal for basketball, Lance Armstrong for cycling, and Tiger Woods for Golf.
Sponsoring of events is another great promotional technique for Nike. It brings attention Nike’s products. Web sites are a great promotional tool as they cover these events. Such events include Hoop It Up and The Golden West Invitational. Nike also personalizes websites. They make the websites exclusively for a sport such as www.nikebasketball.com, www.nikefootball.com, and www.nikegolf.com.
MARKETING INFORMATION SYSTEMS
Is accurate information being obtained and distributed in a timely fashion? Is market research being conducted effectively and being used for decision making? Should any changes be made, why?
Currently Nike utilizes IT in its marketing information systems in a very effective manner. Nike makes use of marketing information systems and apply it to the economics of innovation, segmentation and differentiation for most businesses. Nike has financially emerged as the leader of its industry because of the use of extremely valuable Information Technology, and applying it to every aspect of there development through
their distribution of products. In 1999 Nike signed a five year agreement with Lockheed Martin Integrated Business Solutions Co. (IBS) in its bid to develop further its marketing information systems and stay ahead of competition. This enables Nike to focus on its core competencies.
SUMMARY CONCLUSION
Nike, Inc. is a company rooted in competition. From equipping athletes with the finest sports equipment in the world to continuously improving financial performance, Nike dominates its competitors. Phil Knight and Bill Bowerman vision has become a huge reality in the 20th century. Product quality and innovation have carried them on this far. Despite a changing marketplace for athletic footwear, Nike continues to expand product lines and marketing reach to become a more powerful global brand. Nike should continue their strides in making advances in the athletic shoes technology in order to maintain their current leading position in the industry.
Environmental Analysis
• Internal – Strength
Nike’s management makes analysis on its internal environment and based their decisions on that analysis. Due to Nike’s marketing research, the company made its apparel division to be more fashion savvy. Product and pricing research, made Nike decide to continue its focus on the high end market at the same time increasing its market share in the middle and low price ranges to broaden Nike’s product spectrum.
• External – Weakness
Nike fail to foresee problems due to labor and factory conditions at production locations. This resulted in bad publicity and declining sales as society and consumers call for more “socially responsible” companies.
Marketing
• Market Share – Strength
Nike’s global market share was an impressive 30.4% in 1998. Adidas, held 15.5% of the market share while Reebok held 11.2%. Fila, Timberland, Asics, Converse, and New Balance, among others, each hold approximately 3-5% of the remaining market share. Nike’s market share is expected to rise due to summer Olympics in 2000 in Sydney, Australia, the 2002 World Cup in Japan and Korea, and the U.S. Speedskating team in the 2002 Winter Olympics in Salt Lake City, Utah.
• Distribution through E-commerce – Strength
Nike is first to market with its e-commerce web-site through the launch of its e-commerce site in April 1999 by offering 65 styles of shoes to the U.S. market. Nike improved its e-commerce presence by launching NIKEiD in November 1999. NIKEiD enables online consumers to make design for the shoes they purchase. Being the first to market, Nike enables itself to become established.
• Advertising and Promotion – Strength
Nike’s brand images, including the Nike name and the trademark Swoosh, are one of the most recognizable brands in the world. This brand power is one reason for its revenues. The trademarks coupled with aggressive advertising campaigns, celebrity endorsements,and quality products comprise the brand. Nike’s brand presence was evident at the 1999 NCAA Basketball tournament when 42 of the 64 teams participating wore shoes provided. Nike’s brand-building endeavors are focused on strengthening association with women’s sports. Some examples are sponsorship of the 1999 Women’s World Cup Soccer Tournament and U.S. Speedskating team in the 2002 Winter Olympics.
• Products – Strength
Increase emphasis by consumers on sportswear fashion enables Nike to make strides to appeal to a fashion savvy market. Nike’s apparel line does not only experience stiff competition from its typical industry competitors such as Adidas and Reebok, but also by clothing and accessories retailers such as Old Navy and Abercrombie & Fitch. Continuous marketing research is the key in assessing the market. Nike is planning on starting five structures within its current apparel division to focus on the following areas:
o Women
o Men
o Kids
o sports graphics and caps
o strategic response independently
Nike currently spends more time on developing programs to gain a better understanding of what customers truly want.
• Products – Weakness
Nike may have much success as a result of collaborating with other companies within the sports and fitness industry. But at other times, Nike expanded into markets for which it is not strategically suited. An example of this is the decrease in brands made available due to decrease in demand of in-line skating and roller hockey products at Bauer Nike Hockey. Consequently, Nike had to cease two manufacturing operations at the Bauer Nike subsidiary and was forced to terminate 51 employees. If Nike was able to anticipate the decline earlier, perhaps gradual changes could have been adopted to prevent such kind of limitation. The desire to prevent situations such as these from continuing to occur, Nike has realized to initiate more aggressive program to review product partnerships that are outside of its core basis of products.
• Pricing – Weakness
Nike’s products are viewed to be of higher quality and command higher prices than its competitors. Sometimes though consumers do not agree to this line of thinking. This could be a potential weakness. To substantiate its high quality/high price lines, Nike is placing emphasis on the latest technology and applying innovation towards the development of new products, particularly the Nike Alpha Project which is a new line of athletic shoes. In the past, Nike has overlooked the mid- to lower-price-point products, which could be a possible weakness too. Recently, it is pouring time and money to better develop competitive position at all price points to build strengths at each of these levels. There is a lot of sales potential in the lower price points and plan to meet the needs of those markets.
• Marketing Research – Strength
Nike focuses and relies on marketing research on a continual basis to aid in maintaining the company’s position as the leader in the athletic footwear and apparel industry. The result of such research efforts enables Nike to make decisions regarding its different divisions. It aids in their decision to revamp the apparel division, an area in which offers a number of possibilities. Nike will be organizing the internal business by gender instead of the sport category they are using now. They also intend to carry out more researches focusing in the buying habits of men, who oftentimes are item-driven, and women, who are more collection-driven, with product lines intended to suit specifcally their demographics.
RECOMMENDATIONS
Based on findings, the following recommendations are being made for Nike, Inc.:
• Since Nike’s All Condition’s Gear (ACG) for extreme sports product line has been experiencing a diminishing quality and brand image, it is highly recommended that Nike spend more money and resources to promote the product in turn generating more sales for the line. The ACG line may also require a better product design, materials and manufacturing processes.
• Nike should use its money efficiently. This could be done by including entertainment and other non-sports venues in their promotions. This is effective because there is a thin line between entertainment sports nowadays.
• Nike is currently gearing most of their marketing efforts for the sports footwear lines. To increase sales, Nike should go to other avenues such as expanding their line to casual footwear.
• Nike’s main strategy is in its differentiation. Therefore, they need to maintain their position as the leading brand of the athletic footwear technology. Providing cutting edge design through innovation and application of modern technology enable them to come up with new types of shoes and other products, adding to their growing list of product lines.
• Nike’s business is growing more and more reliant on the internet to conduct business. Nike has developed a new technology that will allow their customers to create their own shoes design online. They must take particular care in improving their website to make it more user-friendly. As of the moment, customers often find the too long to download.
• Nike should also increase their international marketing efforts in order to maximize their product sales. International market is laden with untapped opportunities which Nike should look into.
• Nike must continue to improve technology in order to remain the leader in athletic shoes. This is their competitive edge in order to prevent any potential threatening entrants.
• Nike should also conduct survey on their customers after their purchase on-line to know what the consumers really want. Trends and styles often change. This is why we On-line surveys could save Nike a great deal of time. Nike would be able to gather the information real-time and track it into a database instead of taking surveys on the street or sending them out to mailing lists which is time-consuming.
• Loyal Customer Program is also another program that Nike could look into. In this program, points are added to an account after a purchase. The points would vary depending on the amount of the purchase. Nike could make a catalog of things that customers could buy with the points they are able to accumulate. Nike could also make these points credits. After gathering so many credits, the customer is entitled to receive a pair of shoes. Or, if not, customers could avail of discounts on their purchase whether online or off.
Bibliography
Enderle, K., Hirsch, D., Micka, L., Saving, B., Shah, S., Szerwinski, T. (2000, March 14). Strategic Analysis of Nike, Inc. Retrieved on December 14, 2005, from
http://condor.depaul.edu/~aalmaney/StrategicAnalysisofNike.htm
Johnson, E., Isom, C., Hudrlik, K., St. Arnaud, D. (2000). Nike. Retrieved on December 14, 2005, from http://www.scs.unr.edu/~isom/nikepaper.doc
Pribula, D., Quinlan, Br., Sanchez, L., Schultz, D., Shim, C. (2004, April 26). An Analysis of the Retail Industry and Nike Inc. Retrieved on December 14, 2005, from
http://web.syr.edu/~cshim/Report.html
At first, Nike was known to distribute inexpensive, superior-quality Japanese athletic shoes to American consumers to break Germany’s domination of the domestic industry. Today, Nike Inc. manufactures and distributes athletic shoes to a global market and some 40% of sales come from athletic apparel, sports equipment, and subsidiary ventures.
Nike maintains traditional and non-traditional distribution channels in more than 110 countries with primary market regions in United States, Europe, Asia Pacific, and the Americas (not including the United States). Nike has some over 20,000 retailers worldwide including Nike factory stores, Nike stores, NikeTowns, Cole Haan stores, and internet-based Web sites sell Nike’s sports and leisure products. Nike is leading the sales in the athletic footwear industry with a 33% global market share. Nike Inc. achieved their current status by promoting “quality production, innovative products, and aggressive marketing” in their products. As a result, for the fiscal year end 1999, Nike’s 20,700 employees generated almost $8.8 billion in revenue worldwide.
ENVIRONMENTAL ASPECTS
ECONOMICS
Have changes in the economy impacted the organization or brand? Is it sufficient to respond to just the domestic economy, or do multinational considerations apply? What adjustments were made? Have they succeeded? What additional adjustments are being contemplated, and why?
In economy, the biggest threat for Nike is if the economy goes into recession. If recession occurs, Nike’s growth in sales, marketing and promotions will be affected.
Another important factor in economy is the maturing market in athletic shoes. There is also a growing adverse demographic change in the marketplace brought about by the sweatshop expose that Nike has not overcome yet.
Effects to Nike’s growth are also affected not only by domestic economy but also by the international economy. The continued weak Euro and Asian recession could potentially hurt Nikes international sales and growth. Nike’s extreme sports product line is seen as inferior quality compared to competitors and is hurting sales and brand image.
CUSTOMERS
How do customer view the organization or brand? Is there a clear understanding of customer wants and needs? Are there different market segments? Are there emerging market segments? What adjustments have been made? Succeeded or not? What other changes are being contemplated? Why?
In 1998, Americans spent $38 billion to buy over 1.1 billion pairs of shoes. Sporting Goods Manufacturers Association revealed that athletic footwear makes up almost 35% of all footwear purchases.
The existing domestic industry focus is on casual and comfortable shoes. Demand is up for the “brown shoe” casual footwear with a comfortable and rugged design. This is because of the increasing number of workplaces allowing casual dress codes.
Multinational customers account for a large part of Nike’s sales. In 1995, Nike’s international operations accounted for 36.06 of its total revenues. The company believes that demands from international markets will increase in future.
Nike must cater to a large portion of the new generation that demands the latest trends and styles. Nike should take into account the changing US demographics due to the rising proportion of Hispanics, Asians, and African Americans. These groups have different preferences that Nike should be able to satisfy. Nike should identify the next generation of loyal customers and provide for their needs.
COMPETITION
Who are the companies or brands with which the organization or brand competes? What are their sales and market share trends? How do their approaches to the market differ from the organizations, and from each other? Are there any specific weaknesses in any competitors that can be turned into opportunities? Are there any specific strength that are major threats? What adjustments have been made? Succeeded or not? What other changes are being contemplated? Why?
Competition is very fierce due to the number of companies competing for sales. Lots of money goes to marketing and promotions using various channels to reach the young demographic group of consumers who spend the most money on Nike’s products. Growth is slowing down in the athletic footwear industry. But new markets are emerging with high growth rates. These markets include extreme sports market and the corporate merchandise market.
Nike’s global market share was an impressive 30.4% in 1998. The closest competitor, Adidas, held 15.5% of the market share while Reebok held 11.2%. The remaining competitors, including Fila, Timberland, Asics, Converse, and New Balance, among others, each hold approximately 3-5% of the remaining market share.
MARKETING ASPECTS
OBJECTIVES
Are there clearly defined marketing objectives? Are they consistent with corporate mission statement and objectives? Are they measurable, attainable? How close to meeting marketing objectives was the organization or brand in the most recent complete year? Should the marketing objectives be modified? Why?
Nikebiz.com stated that Nike’s mission statement is “Through the adoption of business practices Nike is committed to securing intergenerational quality of life, restoring environment and increasing value for our customers, shareholders and business partners.”
Nike shows passion for their company, products, and athletes. They are determined to provide consumers with comfort and assurance. They also find ways to innovate and create. They adhere to their five brand principles namely: inspire, innovate, focus, connect, and care.
Another Nike’s objective is “to be the world’s leading sports and fitness company.”
Nike’s mission statement is similar to a vision statement and is potentially a weakness. The mission identifies the sports and fitness industry business they are in, it does not specify as to what products and services they provide. The mission statement does not mention distribution channels and customers. However, it portrays management’s beliefs and the desire to be number one and remain in the leading position in sports and fitness shoe and apparel industry.
STRATEGIES
Strategies Nike uses for reach each objective? Should they be modified? Why?
Corporate Strategies
The past two decades saw a change in economy from “standardized” to flexible”. Having a strict corporate organization used to be the rule, now it is common to have a flexible organization that uses subcontracting.
The main reason Nike succeeded in competing in the footwear industry for a long time is because they remain flexible in an unpredictable market by subcontracting overseas in countries with low labor-cost.
Another reason for Nike’s strength in competition is their product differentiation. Aside from athletic shoes, Nike’s product line now offers a broad range of clothing, equipment and accessories.
TACTICS
Are there defined tactics for each strategy? Are they innovative, or a repeat of prior tactics? Are the tactics fully integrated? Are there any mixed messages? Should they be modified, why?
Nike’s distinctive tactics are found in the area of marketing, specifically in consumer brand awareness and brand power. Nike’s catch phrases like, “Just Do It,” and symbols like the Nike “Swoosh,” are reminders of the Nike empire.
This tactic is effective because it could not be easily replicated and it offers value or benefit to consumers. Nike is becoming a part of American and world culture, the brand power becomes more difficult to replicate. The trademark and a slogan serves as the company’s fingerprints. Nike is able to capitalize the unique identity due because of its financial strength. Nike reaches millions of consumers through large-scale marketing campaigns. The public benefits from the strength of Nike’s image when they make a purchase. Consumers often associate Nike image with quality products. By associating star athletes and motivational slogans like, “Just Do It,” consumers identify their purchases with the prospect of achieving greatness. This image they create forms a tactic that competing companies can not easily duplicate by simply improving their products.
4 Ps-
PRODUCT
Is the current product line appropriate? What changes should be made in how products are being handled?
Nike sells a huge variety of products, including shoes for running, basketball, cross training, women and children. All of which are currently its top-selling product categories.
Nike also sells shoes for outdoor activities such as tennis, golf, soccer, baseball, football, bicycling, volleyball, wrestling, cheerleading, aquatic activities, auto racing and other athletic and recreational uses.
Nike began selling active sports apparel in 1979 as well as athletic bags and accessory items. The company sells a line of performance equipment under the Nike brand name, such as sport balls, timepieces, eyewear, skates, bats and other equipment. They also sell a line of dress and casual footwear and accessories for men, women and children under the brand name Cole Haan. The company markets headwear under the brand name Sports Specialties, through Nike Team Sports, Inc. They also sell small amounts of various plastic products to other manufacturers through Nike IHM, Inc.
Bauer Nike Hockey Inc. manufactures and distributes ice skates, skate blades, in-roller skates, protective gear, hockey sticks and hockey jerseys and accessories under the Bauer and Nike brand names.
PRICE
Pricing strategies
Nike uses vertical integration in pricing wherein they own participants at differing channel levels or engage in more than one channel level operations. This is also an attempt to control costs and influence pricing practices.
PLACE
Distribution channels and policy. Should additional channels be added, why?
Nike sells its product to about 20,000 retail accounts in the U.S. and in approximately 110 countries around the world. Nike sells its products in international markets through independent distributors, licensees and subsidiaries. Independent distributors has little or no pressure for local adaptation because the 4Ps of marketing are managed by distributors.
PROMOTION
Are both advertising and promotion strategies in place? Succeeded?
Nike has been one of the top retail industries for quite along time. This is because they sell quality products, customer loyalty, but most of all, its great marketing techniques.
Nike has a number of famous athletes to create a great deal of attention to their products. Nike has signed the top athletes in many different sports such as the Brazilian Soccer Team (especially Ronaldino, Renaldo, and Roberto Carlos), Lebron James and Jermane O’Neal for basketball, Lance Armstrong for cycling, and Tiger Woods for Golf.
Sponsoring of events is another great promotional technique for Nike. It brings attention Nike’s products. Web sites are a great promotional tool as they cover these events. Such events include Hoop It Up and The Golden West Invitational. Nike also personalizes websites. They make the websites exclusively for a sport such as www.nikebasketball.com, www.nikefootball.com, and www.nikegolf.com.
MARKETING INFORMATION SYSTEMS
Is accurate information being obtained and distributed in a timely fashion? Is market research being conducted effectively and being used for decision making? Should any changes be made, why?
Currently Nike utilizes IT in its marketing information systems in a very effective manner. Nike makes use of marketing information systems and apply it to the economics of innovation, segmentation and differentiation for most businesses. Nike has financially emerged as the leader of its industry because of the use of extremely valuable Information Technology, and applying it to every aspect of there development through
their distribution of products. In 1999 Nike signed a five year agreement with Lockheed Martin Integrated Business Solutions Co. (IBS) in its bid to develop further its marketing information systems and stay ahead of competition. This enables Nike to focus on its core competencies.
SUMMARY CONCLUSION
Nike, Inc. is a company rooted in competition. From equipping athletes with the finest sports equipment in the world to continuously improving financial performance, Nike dominates its competitors. Phil Knight and Bill Bowerman vision has become a huge reality in the 20th century. Product quality and innovation have carried them on this far. Despite a changing marketplace for athletic footwear, Nike continues to expand product lines and marketing reach to become a more powerful global brand. Nike should continue their strides in making advances in the athletic shoes technology in order to maintain their current leading position in the industry.
Environmental Analysis
• Internal – Strength
Nike’s management makes analysis on its internal environment and based their decisions on that analysis. Due to Nike’s marketing research, the company made its apparel division to be more fashion savvy. Product and pricing research, made Nike decide to continue its focus on the high end market at the same time increasing its market share in the middle and low price ranges to broaden Nike’s product spectrum.
• External – Weakness
Nike fail to foresee problems due to labor and factory conditions at production locations. This resulted in bad publicity and declining sales as society and consumers call for more “socially responsible” companies.
Marketing
• Market Share – Strength
Nike’s global market share was an impressive 30.4% in 1998. Adidas, held 15.5% of the market share while Reebok held 11.2%. Fila, Timberland, Asics, Converse, and New Balance, among others, each hold approximately 3-5% of the remaining market share. Nike’s market share is expected to rise due to summer Olympics in 2000 in Sydney, Australia, the 2002 World Cup in Japan and Korea, and the U.S. Speedskating team in the 2002 Winter Olympics in Salt Lake City, Utah.
• Distribution through E-commerce – Strength
Nike is first to market with its e-commerce web-site through the launch of its e-commerce site in April 1999 by offering 65 styles of shoes to the U.S. market. Nike improved its e-commerce presence by launching NIKEiD in November 1999. NIKEiD enables online consumers to make design for the shoes they purchase. Being the first to market, Nike enables itself to become established.
• Advertising and Promotion – Strength
Nike’s brand images, including the Nike name and the trademark Swoosh, are one of the most recognizable brands in the world. This brand power is one reason for its revenues. The trademarks coupled with aggressive advertising campaigns, celebrity endorsements,and quality products comprise the brand. Nike’s brand presence was evident at the 1999 NCAA Basketball tournament when 42 of the 64 teams participating wore shoes provided. Nike’s brand-building endeavors are focused on strengthening association with women’s sports. Some examples are sponsorship of the 1999 Women’s World Cup Soccer Tournament and U.S. Speedskating team in the 2002 Winter Olympics.
• Products – Strength
Increase emphasis by consumers on sportswear fashion enables Nike to make strides to appeal to a fashion savvy market. Nike’s apparel line does not only experience stiff competition from its typical industry competitors such as Adidas and Reebok, but also by clothing and accessories retailers such as Old Navy and Abercrombie & Fitch. Continuous marketing research is the key in assessing the market. Nike is planning on starting five structures within its current apparel division to focus on the following areas:
o Women
o Men
o Kids
o sports graphics and caps
o strategic response independently
Nike currently spends more time on developing programs to gain a better understanding of what customers truly want.
• Products – Weakness
Nike may have much success as a result of collaborating with other companies within the sports and fitness industry. But at other times, Nike expanded into markets for which it is not strategically suited. An example of this is the decrease in brands made available due to decrease in demand of in-line skating and roller hockey products at Bauer Nike Hockey. Consequently, Nike had to cease two manufacturing operations at the Bauer Nike subsidiary and was forced to terminate 51 employees. If Nike was able to anticipate the decline earlier, perhaps gradual changes could have been adopted to prevent such kind of limitation. The desire to prevent situations such as these from continuing to occur, Nike has realized to initiate more aggressive program to review product partnerships that are outside of its core basis of products.
• Pricing – Weakness
Nike’s products are viewed to be of higher quality and command higher prices than its competitors. Sometimes though consumers do not agree to this line of thinking. This could be a potential weakness. To substantiate its high quality/high price lines, Nike is placing emphasis on the latest technology and applying innovation towards the development of new products, particularly the Nike Alpha Project which is a new line of athletic shoes. In the past, Nike has overlooked the mid- to lower-price-point products, which could be a possible weakness too. Recently, it is pouring time and money to better develop competitive position at all price points to build strengths at each of these levels. There is a lot of sales potential in the lower price points and plan to meet the needs of those markets.
• Marketing Research – Strength
Nike focuses and relies on marketing research on a continual basis to aid in maintaining the company’s position as the leader in the athletic footwear and apparel industry. The result of such research efforts enables Nike to make decisions regarding its different divisions. It aids in their decision to revamp the apparel division, an area in which offers a number of possibilities. Nike will be organizing the internal business by gender instead of the sport category they are using now. They also intend to carry out more researches focusing in the buying habits of men, who oftentimes are item-driven, and women, who are more collection-driven, with product lines intended to suit specifcally their demographics.
RECOMMENDATIONS
Based on findings, the following recommendations are being made for Nike, Inc.:
• Since Nike’s All Condition’s Gear (ACG) for extreme sports product line has been experiencing a diminishing quality and brand image, it is highly recommended that Nike spend more money and resources to promote the product in turn generating more sales for the line. The ACG line may also require a better product design, materials and manufacturing processes.
• Nike should use its money efficiently. This could be done by including entertainment and other non-sports venues in their promotions. This is effective because there is a thin line between entertainment sports nowadays.
• Nike is currently gearing most of their marketing efforts for the sports footwear lines. To increase sales, Nike should go to other avenues such as expanding their line to casual footwear.
• Nike’s main strategy is in its differentiation. Therefore, they need to maintain their position as the leading brand of the athletic footwear technology. Providing cutting edge design through innovation and application of modern technology enable them to come up with new types of shoes and other products, adding to their growing list of product lines.
• Nike’s business is growing more and more reliant on the internet to conduct business. Nike has developed a new technology that will allow their customers to create their own shoes design online. They must take particular care in improving their website to make it more user-friendly. As of the moment, customers often find the too long to download.
• Nike should also increase their international marketing efforts in order to maximize their product sales. International market is laden with untapped opportunities which Nike should look into.
• Nike must continue to improve technology in order to remain the leader in athletic shoes. This is their competitive edge in order to prevent any potential threatening entrants.
• Nike should also conduct survey on their customers after their purchase on-line to know what the consumers really want. Trends and styles often change. This is why we On-line surveys could save Nike a great deal of time. Nike would be able to gather the information real-time and track it into a database instead of taking surveys on the street or sending them out to mailing lists which is time-consuming.
• Loyal Customer Program is also another program that Nike could look into. In this program, points are added to an account after a purchase. The points would vary depending on the amount of the purchase. Nike could make a catalog of things that customers could buy with the points they are able to accumulate. Nike could also make these points credits. After gathering so many credits, the customer is entitled to receive a pair of shoes. Or, if not, customers could avail of discounts on their purchase whether online or off.
Bibliography
Enderle, K., Hirsch, D., Micka, L., Saving, B., Shah, S., Szerwinski, T. (2000, March 14). Strategic Analysis of Nike, Inc. Retrieved on December 14, 2005, from
http://condor.depaul.edu/~aalmaney/StrategicAnalysisofNike.htm
Johnson, E., Isom, C., Hudrlik, K., St. Arnaud, D. (2000). Nike. Retrieved on December 14, 2005, from http://www.scs.unr.edu/~isom/nikepaper.doc
Pribula, D., Quinlan, Br., Sanchez, L., Schultz, D., Shim, C. (2004, April 26). An Analysis of the Retail Industry and Nike Inc. Retrieved on December 14, 2005, from
http://web.syr.edu/~cshim/Report.html
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