Marketing communication is a big contributor to the success of multinational companies, and this is why marketing executives create marketing communication strategies which aim at assisting an organization realize its corporate goals ( Yeshin, 1998, p.13-15).
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Nike is one of the most successful multinational companies in the world, its path towards market dominance hasn’t been an easy one and keeping this in mind, marketing managers in Nike have decided to step up marketing communication efforts with an aim informing, persuading, improving on the image of the company in order to increase the sales and revenue of the company.
The marketing managers intend to run a 12 month marketing communication campaign in order to respond to the needs of various publics who fall under the jurisdiction of their business.
Integrated marketing communication creates an avenue by which customer relationships can be easily managed by managers with the aim of increasing brand value (Smith, Berry & Pulford 2002, p. 134; Sissors, Baron, & Sissors, 2010, p.144-145).
The marketing mix is made of four elements which are very important to the success of products and commercial enterprises who serve a specific target audience. Marketing communication which is also known as promotion is one of the four facets of marketing which also include pricing, product and distribution (Lancaster & Withey, 2006, p.1-10)
The main aim of an integrated marketing communication approach makes sure that organizational communications are always consistent and get across the company’s message in a way that is favorable to the organization in tandem with its values, image and goals.
Marketers always aim to shed good light on their organization with an aim of maximizing sales/revenues while at the same time maintaining a good image of the company.
Marketing communication is an integral part of marketing products and services and many top international companies are dedicating a huge chunk of their revenues to carry out marketing communication strategies ( Kotler, 2003, p.45-47).
The process of communicating messages efficiently with current consumers and the entire target market is among the key competencies’ of a successful company, a successful marketing communication mix will most likely contribute in boosting sales and revenues together with organizational image and reputation (Lancaster & Withey, 2006, p.78).
A company’s communication mix may have a lot of elements but the most important fact is that this all this elements ensure that the right messages are delivered to consumers.
It is hence important that all elements of the marketing mix work together and produce the same net effect that is in line with overall marketing and corporate objectives and therefore for this to happen, the marketing department of any organization must work together and develop these messages carefully (Wheelen & Hunger 2002 p.67-78).
However, it is vital that management of a company comes up with a comprehensive plan that will enable the company communicate product attributes effectively to the consumers.
It is important that once a company comes up with a product as it goes ahead to define its target market and consequently set marketing objectives, communication objectives, creative strategy and media strategy which are relevant tactics that will go into making the strategy a success and an overall control mechanism that will correct any shortcomings as far as marketing communication is concerned (Kotler, 1999, p.99-102).
Therefore, when a company conducts its research and gathers all practical and theoretical data pertaining to the creation of an integrated marketing model then the company can go forward to form channels of communicating better with its clients.
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Ambiguous results from advertisement campaigns have led marketers to consider adopting other facets of promotion in order to realize marketing communication objectives.
Figure 1 A diagrammatic representation representing a communication mix that is used by leading commercial organization.
Nike has recently been faced by stiff competition from its competitors and it seems that its market dominance and market share is being threatened by the efforts of Addidas. According to Wikinvest 2010 Nikes competitors especially Reebok, Puma, Adidas, Converse and K Swiss always offer stiff competition to Nike.
In the last financial cycle Adidas AG made revenues of $ 13.1 billion, a difference of $ 5.3 billion hence showing the tight competition existing within the industry. Adidas is said to spend about 200 million to boost the growth of athletic shoe products.
In the year 2009-2010 business cycle statistics as suggested by Bloomberg Business weekly magazine shows that Nike enjoys a 39% lead on the entire global market share as compared to Adidas’s which enjoys an impressive 35%.
With such facts at hand, the Nike top management and board feel that marketing communication efforts must be stepped up in all quarters (q1, q2, q3, q4) of the 2011-2012 financial calendar.
A situation analysis in marketing communications goes ahead to take a look at the current position that the company is in as far as promotion and marketing communication is concerned by looking at key performance indicators which include sales, brand switching, revenues.
Marketing communication strategy is a comprehensive plan that contains the specific elements that intend to address a company’s intended marketing communication mix and how they will be used to achieve the set goals (Lancaster & Withey, 2006, p.213-219). Tactics are the specific details of the strategies and actions are the specific details of tactics.
When a company creates the overall promotion strategy it should address the, tactics, incremental actions that will be used to fulfill the tactics so that when evaluation and measurement occurs, then the company can go ahead and pin point the weak links of strategy, tactics and actions and therefore enable the process of control become more simple (Katz, 2003, p. 99-104).
Brief overview of the organization
Nike is a publicly listed American company with its headquarters in Oregon. It is the largest supplier of athletic shoes in the world with revenues which are in excess of $19 billion and over 30,000 employees worldwide as of the 2010-2011 business cycle.
Nike is known to market its products under the brand Nike. Some of its known athletic shoe brands include Nike+. Air Jordan, Nike’s athletic shoe brands target track and field athletes in areas of basketball, football, soccer, baseball and cricket as well as many other sporting activities.
Nike’s customers consist of both armature and pro athletes who use the shoes in sporting activities. Nike uses product differentiation, product design, marketing, production efficiency, high quality and supreme air sole technology as the main key competency.
Therefore Nike tries to portray a brand image of quality and performance. It is these qualities that attract consumers to them. Nike is associated with the world’s most successful athletes such as Rafael Nadal and teams such as Brazil whom and which are known to be excellent performers and winners.
According to Wikinvest 2010 Nikes competitors especially Reebok, Puma, Adidas, Converse and K Swiss are always offering stiff competition to Nike. The level of competition in this market puts marketing experts to task so that they can create and come up within strategies that will end up expanding growth and market share.
An internal analysis of Nike gives the public the kind of structure, culture and resource capabilities the company posses. Nike never owns any factories and equipment and therefore it does not have its capital tied up.
Furthermore it has a culture of innovation and therefore the company invests a lot in research and design and a highly skilled workforce (Kotler, 2003, p.115). The top management have natured a culture of innovativeness and superior performance together with ethics that enables the workforce accept and respect Nikes view of business and appreciate it.
Nike also invests in technology that is durable and hard to imitate by its competitors furthermore, the company dedicates over 10% of its revenue towards marketing activities such as promotion.
The value of chains and distributions are vital to the movement and availability of goods and services into the market in time thus, Nike encourages retailers to stock its products by offering benefits such as trade discounts and display assistance therefore encouraging channel members to stock products.
Nike is a multinational organization operating in all continents of the globe; the companies target market consists of high end consumers who wish to have highly differentiated products (Frisch, 2008, p. 1-5) Thus, Nikes sales strategy is to sell to those individuals who are in a higher social stratum of the society, the kind of individuals who have enough money to pay well over $ 100 dollars for a single pair of shoes.
Nikes strategy of targeting consumers who are in the higher end of the market has enabled the company to practice a skimming pricing approach that enables the company maximizes revenue streams by maximizing sales through various layers of the market (Frisch, 2008, p.18).
The company boasts of a highly competent design research and development that tracks the needs and desires of various consumers among the sports elite to develop products that respond directly to the needs of the consumers.
Nikes R&D department has achieved lot to the success of the athletic shoe and gear manufacturing because this department offers products that are ahead of their competitors in terms of technology features enabling sportsmen and women to comfortably compete in various sports (Frisch, 2008, p.27-29).
The competitive environment under which Nike operates is highly competitive for instance, Adidas AG, Reebok and Puma are well known competitors who have narrowed in the recent decade and reduced the market dominance the Nike previously enjoyed.
Nike enjoys only 5% more market share as compared to Addidas, additionally Addidas is known to invest a lot of money in product development and promotion thereby threatening Nikes business performance in the market (Frisch, 2008, p.34).
Nike’s business model is in tandem with the legal and political structures of various regions thereby Nike faces little resistance as far as the political legal environment.
However in the last decade, Nike has rubbed shoulders wrongly with the Government of U.S.A because the company was discovered to use child labor in Pakistan and India but the situation was resolved and Nike signed contracts binding them from repeating the same mistake.
The threat to Nikes dominance and continued future success emanates from its closest competitors who are becoming more and more aggressive by imitating and duplicating Nikes business model (Porter, 1990, p. 34-38).
Other new companies especially in china are creating look a like substitutes and counterfeit products that are threatening Nike’s business objectives. The worlds emerging market offers new opportunities whereby Nike can develop brands specifically meant to cater for the needs of individuals living within this regions.
All commercial entities have their own objectives and marketing communication plays a big role in ensuring that this objectives and overall vision, mission is achieved. Besides a company having overall objectives marketing communication programs usually have specific objectives ( Christensen, Firat, & Cornelisen, 2009 p.32-35).
Nike on its part has put in place a vigorous and extensive marketing campaign that aims at stimulating sales and boosting revenues, furthermore another objective is to increase on shelf and off shelf stocking among channel members, besides Nike’s communication objective also aims to counter and neutralize competition resulting from rival advertisement, encourage loyalty, obtain trial purchases and encourage increased product usage among consumers (Howard, 2007, 65-68).
Marketing communication strategies are usually put in place to ensure that the target market niche are persuaded, informed, educated and reminded to respond to wishes of a commercial entity such as Nike.
When the marketing department meets these objectives Nike as a brand can realize growth in sales, revenues and market share and maintain its position as the leading global shoe manufacturing company.
Despite the fact that Nike has reported revenues of over $ 19.014 billion in its last business cycle (2009-2010), future success and market dominance is not certain and for that reason the top management aims to surpass these levels in the next financial year this can therefore be achieved by reviewing and stepping up its marketing programs.
Nike also occupies a total of 38% of the total global athletic shoe market but its long term aim is to occupy a total of 50%. Nike aims to do this by initiating a switch among consumers by coming up with unique marketing campaigns that will persuade consumers to acknowledge that Nike is the best athletic performance shoe brand.
It hence becomes the duty and responsibility of Nike’s marketing communication to ensure that all marketing communication is geared towards ensuring that the brand value of Nike sky rockets. This implies that all marketing communication strategies and techniques will be used by the Nike’s marketing communication staff will aim to take the image and reputation of Nike to another new level.
A good image and reputation of Nike will be used to convince consumer and the target market to ensure that these parties purchase products that are developed and marketed by Nike (Frisch, 2008, p.44).
Negative publicity and conflict are part of business and hence it is the objective of marketing communication executives to develop strategies that will be used to ensure that a negative situation is turned into a business opportunity that will be used to improve the market dominance of Nike.
Nike is a multi-million dollar company that is known to have enough resources to fund its strategy. The company usually dedicates approximately 10% of its revenues to fund its marketing communication strategy (Frisch, 2008, p.6).
The company seriously believes that the key to commercial success can be achieved by maintaining a consistent and effective marketing communication strategy therefore, the company spends $1 billion to fund all its marketing communication strategies which run through out the business calendar.
It is important for marketing communication messages to target the right public since Nike’s communication objectives include developing good brand awareness, increase category demand of all its sub-brands, influencing customer belief and attitude, and encourage repeat purchases amongst regular consumers together with increasing customer traffic through improving the brand image.
It is important that Nike channels its marketing communication efforts towards the right Audience (Irwin, Sutton, & McCarthy, 2008 p.105-113). Nike sells highly differentiated products that are considered premium such kind of products are assumed to target high end clients who have disposable income.
Nike takes its brand seriously and the top management believes that the brand is of the highest quality and this message should be clearly communicated to all the relevant public. Nikes targeted public include:
- Current consumers ( end consumers and intermediaries)
- Prospective consumers
- The Media
- Activists and Pressure groups
Nike serves a specific target market and most of its products are highly customized to meet the needs, desires and wants of the various consumers within this market (Frisch, 2008, p.2). Nikes main target is athletes who are in need of high performance athletic footwear.
It is thus necessary to for Nike to spend more effort towards ensuring that the message of high performance in athletics is the dominant message in the marketing communication strategy (Irwin, Sutton, & McCarthy, 2008 p.188).
Although initially Nike did not consider serving the needs of youth who wear Nike as a symbol of fashion, they have found themselves also targeting this market to boost their sales and revenues in order to sustain their market dominance.
Nike would thereby also be required to design marketing communication that will send a message to the youth indicating that besides Nike being high performance footwear the shoes are also be used for purposes of fashion.
Nike therefore considers itself the world leading manufacturer of high performance athletic footwear and therefore targets consumers within its market who demand highly differentiated products which give Nike a competitive edge among athletic shoe producers (Frisch, 2008, p.8).
The media is a useful target audience due to its ability to disseminate messages to the masses the media can be used for advertisement of public relation purposes especially when responding to negative publicity.
Marketing communication Strategy
Fig 1: Marketing communication Strategy
Nikes marketing communication strategy includes using different proportions of advertising, personal selling, direct selling and direct marketing together with Public relations. Nikes main objective is to get out the message of superiority and premium performance footwear with an aim of initiating switching and encouraging repeated purchase among targeted users (Donnelly, 1996, p. 212).
Nike dedicates around 11% of its total revenue towards ensuring that a perfect marketing mix that will enable it emerge as a top industry performer. The 11% roughly translates to about $1.7 billion dollars annually, which goes into funding marketing communication strategies with an aim of achieving marketing communication objectives that are very vital towards receiving overall corporate goal.
The above marketing communication is then appropriately used with the aim of reaching out to all the relevant publics with the aim of realizing that marketing communication objectives are successfully realized (Surmanek, 1996, p.88-89).
Nike has many on many occasions partnered up with one of the nations largest marketing agencies Wieden+Kennedy (W & K) in order to design and develop superior advertisement campaigns. Nikes advertisement campaigns have won accolades and even a Grammy due to the unique way that marketers design their advertisements in order to communicate with consumers and respond to competitors.
Additionally Nikes web advertisements are well appreciated by the consumer market worldwide because of the high number of hits the advertisements get in You-Tube. It is thus true to conclude that Nikes superior developed advertisements contribute a lot in the success of the company and hence in meeting the marketing communication objectives.
It furthermore uses celebrity endorsements using celebrities in society to transmit Nikes message to its consumers. Nike spends a total of around $ 600 million to advertise in North America and Europe where its primary market is and a further approximated $ 200 million to pay celebrities who endorse their products.
Nike’s advertisements are the only one whose advertisement has won The Cannes Advertising Festival award twice. Nike customizes its advertisements to send the message of superior high performance among athletes who participate in any type of sports (Claudia, 2009, p.640).
Nike goes further to address both athletes of female and male gender in its advertisements by using celebrities like Rafael Nadal, Tiger woods’, LeBron James, Serena Williams Picabo Street and Gabby Reece. In these advertisements, the subliminal message is that all the most successful athletes in the world must be associated with Nike.
Nike is famously known for its “swoosh” and “just do it” slogan which is part of its marketing communication. The swoosh sign is used in many marketing communication events because it is highly associated with Nike. (bNET: Wireless news 2010)
Furthermore Nike also uses world sporting teams such as Brazil to endorse their products many people therefore, end up purchasing their products because they associate success with Nike.
Nike has gone a step further as far as to form a social website for all football fanatics called joga.com which is in over 140 countries and available in over 13 languages. The website enables Nike communicate with its customers and also do some direct marketing because it is easy to order products online (Frisch, 2008, p.18-23).
Nike has known the importance of expanding its internet marketing mix in order to further its message of superior athletic performance to a wider section of its target market. By forming such a site where consumers of Nike, football celebrities like Ronaldinho and fans can communicate and exchange information relating to Nike products then Nike hopes to further its position as the number one high performance athletic shoe provider.
Furthermore, Nike has its pages in social sites such as Face book and Twitter where it can communicate about its products and gather research data that can go into improving its marketing mix especially its product mix which is known for superiority in design and performance (Holm, 2006, p 23-25).
Apart from using social sites in its marketing mix, Nike also uses internet advertisements that are available in its own website Nike dot.com and other websites whereby, Nike pays advertisers to make their advertisements pop up to consumers all over the world
Furthermore, Nike uses public relation exercises to announce the launch of its latest products and to fight any negative publicity for example, when Nike was accused of operating sweat shops in 2005 that allegedly claimed that Nike had exploited children and therefore used child labor to manufacture soccer balls in Pakistan.
The Nike corporate leaders came out clearly through its public relations department and stated that that was clearly not the decision of their company, but instead it was the manufacturer who was subcontracted who had broken the ethics code (Frisch, 2008, p.33).
Nike therefore said that they would personally terminate the contract of that manufacturer and will not tolerate any manufacturer who produces their product without following the stipulated ethics. This concept of marketing is known as viral marketing that involves the use of internet, social sites and famous internet sites to communicate with consumers (Irwin, Sutton, & McCarthy, 2008 p.43).
Due to Nike being a very large company serving millions of consumers, it rarely uses personal selling as a part of its communications when dealing with end consumers. Instead the company uses personal selling in its wholesale business transactions that involve selling directly to its biggest distributers (Charles et al, 2002, p.23-25).
However, Nike has tried recently to introduce a price catalogue that tries to personally speak to female clients by sending them emails encouraging them to purchase from the company high performance athletic shoes.
Personal selling is a high contact type of service delivery which can be expensive to companies besides, personal selling can result to long queues and consequently customer dissatisfaction (Kelley & Jugenheimer 2008 p.66-67). Nike offers its biggest distributors discounts and in-house displays together with relevant literature that will be used to assist in selling its products.
Therefore Nike has successfully used different marketing communication fronts to successfully drive its message to the public with aim of meeting its overall marketing and corporate objectives which are high sales revenues and dominance in the athletic shoe market (Lancaster & Withey, 2006, p. 78).
These different elements of promotion together, deliver a strong and credible message concerning issues that are related to the company Nike.
Billions of individuals worldwide watch sports and every region/country usually has a national sport. Nike’s desire as the leading shoe and athletic wear designer is to assist each and every sportsman or sports fanatic increase his capability as a player while engaging in sporting activities.
Previous scholars like the world’s father of psychology Sigmund Freud made it quite clear through his experiments that in order to appeal to the inner desires of individual’s marketers must understand the motives that govern purchases and consumer behavior.
Nike thus has fully taken into consideration the motives of people and has decided to strongly associate its products with the most successful athletes of this era with an aim of arousing consumer passions in order for them to purchase their products. (Kourdi, 2009 p.56)
|Website and social site |
Table 1: Gantt chart Media planning of the various marketing communication strategies that will be used by Nike.
Marketing communication activities are not cheap especially sales promotions and advertisement and they hence affect the profitability and cost structure of a company this is therefore why these two strategies of marketing communication run periodically (Kitchen, 2005, p.113).
Public relation activities are preferred by marketers because they are much cheaper and therefore they can be carried out repeatedly due to their cost friendly nature.
This is therefore why PR is carried out through out the year, furthermore it is hard to predict disaster and thus Nike usually operates with an all year PR strategy so that the company’s image is not put under threat (Goodrich & Sissors, 2001, p.202).
Evaluation is the process of measuring results and applying controls in order to rectify any superfluous deviations. Proper evaluation control should be timely, both long -term and short- term, furthermore controls should be able to pinpoint areas that are exceptional (Balmer & Greyser, 2006, p.56-57).
It is therefore necessary that the marketing communication experts use key performance indicators to set targets which can be compared to the actual results and by doing so they can measure performance and carry out any desired corrections.
Key performance indicators can include quarterly/annual revenue reports, gross sales per region, consumer loyalty reports, number of customer complaints and the overall image of the company.
If any of the forecasted key performance indicators deviates negatively when compared to the actual performance, then marketing communication executives will be required to carry out adjustments after their audits.
It is important for commercial enterprises to operate with well planned marketing communication strategies, this way business executives can more effectively plan the objectives of marketing communication and work with specific goals in mind.
The failure to plan marketing communication can prohibit an organization from achieving corporate goals. Nike is hence a good example of a company which used marketing communication strategy to create a competitive advantage for the company within its industry.
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