This paper aims to review a case study on a sportswear and apparel company, Nike, to analyze its core marketing strategy. The paper will also discuss the main competitors of the company and outline several strategies for outperforming them.
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The athletic footwear and apparel industry has experienced a substantial level of growth during the last five years—2.3 percent (Brandongaille, 2016). The growth can be attributed to the fact that consumers have recently become more aware of their health and wellbeing needs, which drives the market demand in the industry (Heroux, 2017). Also, an ever-increasing level of female participation in sports supports spending in the industry.
Nike’s Core Marketing Strategy
The company has the largest market share in the industry ($26, 286 million) because of the effectiveness of its marketing strategy (Dai & Chen, 2017). Distribution is Nike’s major advantage, which allows the company to deliver the right products at the right time to its large customer base through an innovative website. The superiority of Nike’s marketing strategy is evident in its skillful use of advertising. The company emphasizes on the use of notable athletes for the promotion of its products and strengthening of its brand identity (Bouchet, Doellman, Troilo, & Walkup, 2017; Kornum, Gyrd-Jones, Zagir, & Brandis, 2016).
It also relies on sponsorship to “build authenticity” (Kotler & Keller, 2016, p. 31) among sports audiences and develop customer relationships with its target markets. Vertical price integration is another advantage of the company’s marketing strategy. When it comes to the cons of the strategy, it is overly reliant on the influence of spokespersons and extremely expensive. Also, the marketing strategy is less diverse than that of the company’s competitors. The strategy is associated with the following risks: changes in market trends, shifts in consumer preferences, and a damaged reputation of Nike’s spokespersons (Kalb, 2013).
The top three competitors of Nike are Adidas, Under Armour, and Puma (Green, 2016). These rivals are making significant gains in the company by launching new products that diminish Nike’s market share. For example, an endorsement deal with Steph Curry has helped to promote Under Armour’s basketball shoe line and increase revenue from footwear by 58 percent (Green, 2016). Adidas also has been able to preempt competition by striking a high-profile sponsorship deal with the Italian soccer club Juventus (Bouchet et al., 2017).
Furthermore, the main advantage of the company’s product development is its ability to engage consumers with high-priced footwear lines such as UltraBoost, Zne, and Yeezy. However, athlete strategies of these three competitors are inferior to that of Nike, which is a substantial disadvantage. Also, the companies have produced some unsuccessful designs that damaged their profits (Kell, 2016).
In an attempt to strengthen their growth, Nike’s competitors should stick to their strategies of producing new apparel fabrics (Adidas), developing on-trend silhouettes (Under Armour), and optimizing the quality of distribution (Puma) (Kell, 2016; Puma, 2017). To outperform its top rivals who have recently started exploring growth opportunities, Nike must improve its hero athlete strategy. It has to do with the fact that its sponsorship deals with athletes such as Tiger Woods, Lance Armstrong, and Alex Rodriquez have damaged the company’s reputation (Kalb, 2013). The company is also recommended to use social media for damage control. Moreover, it is important to emphasize sustainable innovation by promoting environment-friendly designs.
The paper has explored Nike’s core marketing strategy and outlined several strategies for outperforming the company’s top rivals. It has been argued that the apparel manufacturer has to improve its endorsement strategy.
Bouchet, A., Doellman, T., Troilo, M., & Walkup, B. (2017). Pre-empting the competition: How do shareholders view sponsorships in the sport apparel industry? Journal of Sport Management, 31(1), 275-287. Web.
Brandongaille. (2016). 39 astonishing sporting goods industry trends. Web.
Dai, X., & Chen, K. (2017). Examining antecedents of brand loyalty on sportswear: An empirical investigation of university students in Hong Kong. International Journal of Social Science Studies, 5(7), 87-96. Web.
Heroux, L. (2017). Sport outfitters’ marketing strategies: A comparative exploratory study in the U.S. and Canada. Advances in Economics and Business, 5(6): 320-327. Web.
Kalb, I. (2013). One of Nike’s core strategies is in danger. Web.
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Kell, J. (2016). Why Adidas is outperforming Nike, Under Armour? Fortune. Web.
Kornum, N., Gyrd-Jones, R., Zagir, N., & Brandis, K. (2016). Interplay between intended brand identity and identities in a Nike related brand community: Co-existing synergies and tensions in a nested system. Journal of Business Research, 24(2), 1-9. Web.
Kotler, P., & Keller, K. L. (2016). Marketing management (15th ed.). Upper Saddle River, NJ: Pearson. Web.
Puma. (2017). Strategy. Web.