Marketing communication has become an integral part of product and services. The process of incoming current consumers and prospective consumers is among the key competencies’ of any company, a successful marketing communication mix will most likely contribute in boosting sales and revenues (Yeshin,1998. 1-16)
A company’s communication mix may have a lot of elements that all gear effort towards delivering messages to consumers it is therefore important that different 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.
Nevertheless, it is vital that management of any company comes up with a comprehensive plan that will enable the company communicate product attributes effectively to the consumers (Kotler 2003, 88).
It is important that once a company comes up with a product 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 (Hummer 1997, 45).
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.
Ambiguous results from advertisement campaigns have led marketers to consider adopting other facets of promotion in order to realize marketing communication objectives (Kitchen 2005, 13).
Integrated marketing communication model
A good integrated marketing communication program should therefore aim to: identifying target audiences, analyzing the situation, setting marketing communications objectives, developing strategies and tactics, setting a budget and finally evaluating the effectiveness of the campaign (Claudia 2009 4-15)
From the above diagram it is clear that the message sent must be customized specifically to reach the target audience and therefore bring desired results for the sender.
Therefore the aim of the message is it to inform, remind, persuade, instill loyalty, improve on image, or encourage a trial purchase hence, it should be made in such a way that it will identify with the specific target market that includes consumers of the service or product. (Baumol & Alan 2007 46).
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 (Smith, Berry & Pulford 2002, 98).
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. Tactics are the specific details of the strategies and actions are the specific details of tactics (Kourdi 2009 45-60).
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 than 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 (Kotler 2003, 108)
Fig 1: Adopted from Smith Berry & Pulford 2002, p 168.Strategic marketing communications: new ways to build and integrate communication.
The benefits accruing from integrated marketing are numerous and they include the transmission of more consistent, relevant and useful messages that don’t clatter and confuse the mind and perceptions of consumers, thereby promoting the likely hood of loyalty of long consumer relationships (Balmer & Greyser 2006, 730-741).
Furthermore the messages become more consistent and consequently more believable since they are not diluted as they ensure that a unified message comes from within the organization and therefore at the end of the day this may lead to more profits, sales and a better image and reputation.
If an organization decides the final elements that are to be included in their marketing mix t they should keep in mind the overall state of the company in terms of resources competition and overall industry performance, the overall company objectives, marketing objectives (Kotler 2003 p.74).
Nike. Introduction and situational analysis
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 $18 billion and over 30,000 employees worldwide. 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. (Heding et al 2007 45)
According to Wikinvest 2010 Nikes competitors especially Reebok, Puma, Adidas, Converse and K Swiss are not left behind and always offer stiff competition to Nike. In the last financial cycle Adidas AG made revenues of $ 13 billion, a difference of $ 5 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. Current statistics as suggested by Bloomberg Business weekly magazine shows that Nike enjoys a 38% lead on the entire global market share as compared to Adidas’s which enjoys an impressive 34%.
Statistics indicate that the amount of global growth rate experienced by Adidas is much higher than that experience by Nike especially in the Asian markets. The level of competition in this market puts marketing expert 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 (Wheelen and Hunger 2002, 81-90). Nike is said to never own any factories and equipment and therefore it does not have its capital tied up in capital. Furthermore it has a culture of innovation and therefore the company invests a lot in research and design and a highly skilled workforce.
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 11% of its revenue towards marketing activities such as promotion (Wikinvest 2010).
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.
Every business entity has its own objectives as far as marketing communication is concerned Nike on its part has put in place a vigorous and extensive marketing campaign that aims to stimulate sales and boost 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 neutralize and competition resulting from rival advertisement, encourage loyalty, obtain trial purchases and encourage increased product usage among consumers( Yeshin, 2008. 208-210).
It is by meeting these objectives that Nike can realize growth in sales, revenues and market share and maintain its position as the leading global shoe manufacturing company.
Nike has reported revenues of over $ 18 billion in its last business cycle and therefore 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% ( Wikinvest 2010).
Nike aims to do this by initiating a switch among consumers by coming up with unique marketing campaigns that will persuade consumers that Nike is the best athletic performance shoe brand. (Drucker 2006 45)
Nike sells highly differentiated products that are considered premium. Such companies are therefore considered to serve a specific target market and have products targeting this market highly customized to meet the needs, desires and wants of the various consumers within this market (Stewart 2010. 147-174).Nikes main target is athletes who are in need of high performance athletic footwear.
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 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 (Porter 1990, 56)
Marketing communication Strategy
A company’s marketing communication strategy may include using different proportions of advertising, personal selling, sponsorships, celebrity endorsements, direct selling and direct marketing. Nikes main objective is to get the message of superiority and premium performance footwear with an aim of initiating switching and encouraging repeated purchase among targeted users.
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. (Christensen et al ,2009 73).
Nike has recently entered into as partnership with Wieden+Kennedy (W & K) which is an advertising agency. Nike is known for its superior advertisement campaigns that use the best celebrities in society to transmit the message to its consumers. Nike spends a total of around $ 600 million to advertise in North America and a further approximated $ 200 million to pay celebrities who endorse their products.
Nike’s advertisements are the only company whose advertisement has won The Cannes Advertising Festival award twice moreover, Nike’s advertisement has won an Emmy. Nike customizes its advertisements to send the message of superior high performance among athletes who participate in any type of sports.
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 (Howard 2007).Nike is famously known for it’s “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. (Kourdi 2009 46).
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.
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 on pages in the famous Facebook and Twitter where it can communicate about its products and gather research data that can go into improving its marketing mix and especially its product mix which is known for superiority in design and performance (Irwin, Sutton & McCarthy 2008, 74-99).
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. (Lancaster & Withey 2006 47).
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.
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. (Wheelen & Hunger 2002 75)
Due to Nike being a very large company serving possibly 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.
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 (Holm 2006, 22-31).
Nike offers its biggest distributors discounts and in-house displays together with relevant literature that will be used to assist in selling its products. (Eckbo, 2007 85).
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. These different elements of promotion together, deliver a strong and credible message concerning issues that are related to the company Nike (Kitchen, 2005 64).
Evaluation is the process of measuring results and applying controls in order to rectify any unwanted deviations. Proper evaluation control should be timely, both long -term and short- term, furthermore controls should be able to pinpoint areas that are exceptional. Nike has since 2003 dedicated between 11-13 percent of its total revenues towards marketing and specifically, promotion.
Nike’s revenues in 2006 were $14.95 billion, in 2007 the revenues increase by14% to $15.99 billion in the year 2008 Nike experienced a growth of 14% which saw their revenues increase to $18.6 billion, Nike success and growth in revenues is considered remarkable and this is because of a superior research and design department and also their supreme marketing promotion mix which form part of their core company competencies, in 2009 fiscal year Nikes growth slowed down from 14% to a miniature 3% totaling to $ 19.2 billion the reduced growth rate was partly blamed on the recession and a less active marketing communication campaign ( bNET 2008/09 1-4)
In the previous year Nike had spent 11% of the total revenue on marketing activities therefore it went ahead to announce that it will use 13% of the total revenues obtained in the 2009 fiscal year in order to try and go back to the previous growth path (Wikinvest 2010) The act of reviewing the total marketing budget can be considered as a result of evaluation and control.
Nike is said to have lost its grip in the EMEA (consisting of Europe, the Middle East and Africa) declined 23.9 percent market whereby Adidas AG is assumed to enjoy more growth. Nike intends to re-evaluate and step up its promotion activities in EMEA (which includes Europe, the Middle East and Africa) in order to further its place as the global market leader in athletic shoe wear.
Balmer, J.T.M., & Greyser, A.S., 2006. Corporate Marketing; Integrating Corporate Identity, Corporate Branding, Corporate Communications, Corporate Image And Corporate Reputation. European journal of marketing, vol 40 issue: 7/8 pp. 730-741.
Baumol, W., J. & Alan S. 2007. Economics: Principles and Policy (142). New York, NY: Cengage Learning.
bNET: Wireless news Nike Releases Fiscal 2008/09 and Full Year Results. Web.
Christensen T.L., Firat, A.F. & Cornelisen, J.,2009. New tensions and challenges in integrated communications: corporate communications. An international journal, vol.14.iss; 2, pp.207-219. Emerald Publishing Limited.
Claudia, M., 2009. Anthropology and ethology contribution to intergraded marketing communications marketing intelligence and planning, vol 27, iss: 5, pp. 633-648.Emerald Publishing Group.
Drucker F., 2006. Innovation and Entrepreneurship. New York: Harper Business.
Eckbo, B., 2007., Handbook of corporate finance: empirical corporate finance. Maryland: Elsevier.
Howard, T. USA TODAY. (2007). Nike serves up new ads supporting women. Web.
Heding, W., et al 2007. Brand management: research, theory and practice (27-88). New York, NY: CengageHolm, O., 2006. Intergraded marketing communication: from tactics to strategy corporate communication objectives, An international journal, vol11, iss 1 pp. 22-33, emerald publishing group.
Irwin, R.I., Sutton W.A. & McCarthy L.M., 2008.Sports promotion and sales management. Illinois: Human Kinetics.
Kitchen, P.J.,.2005. A reader in marketing communication. London: Routledge.
Kourdi, J., 2009.Business Strategy: A Guide to Effective Decision Making, 2 edn. New York: Economist books.
Kotler, P., 2003. Marketing Insights from A to Z: 80 concepts every manager needs to know, New Jersey: John Wiley & Sons Inc.
Lancaster, G. & Withey, F., 2006. Marketing Fundamentals: CIM Course book, London: Butterworth-Heimann.
Porter, M.E., 1990. Competitive advantage, illustrated edn, Northampton, MA: Free Press.
Smith, P., Berry C. & Pulford, A., 2002.Strategic Marketing Communication: ways to build and integrated communication. London: Kogan Page Limited.
Stewart A., 2010.Fashion practice: The journal of design, creative process and fashion. Vol 2, pp. 147-174.
Wheelen, T.L., & Hunger J.D., 2002. Strategic Management and Business Policy. New Jersey: Prentice Hall.
Wikinvest: Nike (NKE) Web.
Yeshin, T., 1998. Intergrated marketing communication the holistic approach CIM students’ series. London: Butterman-Heiman.