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The Nike Company Market’s Audit Term Paper

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Updated: Jan 16th, 2020

Executive Summary

The Nike+ Sportwatch GPS is a wearable technology developed by Nike. Nike is preparing to launch this product to the Australian market. The potential market for the product is 11 million users. The country has a well-developed transport infrastructure that can support a countrywide distribution network.

This market is also very culturally diverse. The main avenue for communication with the target market is via television and the internet. To enter the Australian market successfully, it is important to get information from the Australian Bureau of Statistics and the Australian Stock Exchange.

Market Audit and Competitive Market Analysis

The Nike+ Sportwatch GPS is a piece of wearable technology launched by Nike as the successor to the Nike+ app for smartphones. Nike would like to market this product to the Australian market. This paper presents various facets of the Australian market relevant to the marketing of this product.

Product Analysis of the Nike+ Sportwatch GPS

Nike+ Sportwatch GPS is a unique product in the Australian market. The table below analyses various aspects of the product about the target market.

Product Characteristic Analysis
Relative Advantage The Nike+ Sportwatch GPS has a unique collection of features that is ideal for personal training. These features include GPS, calorie counter, various pace counters, a watch, a heart rate monitor, among others . Very few products have all these features.
Compatibility The target market is already using portable devices such as iPods, and mobile phones as sports accessories. The Nike+ Sportwatch GPS will fit easily into this lifestyle.
Complexity The Nike+ Sportwatch GPS has features that are familiar to the target market. The training needed by users to use the product is minimal because it employs controls familiar to users.
Trialability The Nike+ Sportwatch GPS is easy to wear. This gives it high trialability. Potential customers can try the watch in shops while running or walking on a treadmill, or they can try it outdoors during their regular workouts.
Observability The Nike+ Sportwatch GPS is a wristwatch. This makes it visible when running and when participating in exercises of any kind. In this regard, users can observe its performance as they exercise.

Table 1: Analysis of the Nike+ Sportwatch GPS

The first problem associated with the product is that the market already has access to the features it provides in various forms. Some potential customers may choose to stick to what they already have. Secondly, the device lacks music. Many people enjoy running and exercising as they listen to music. This may lead to resistance in the uptake of the gadget.

Analysis of the Australian Market

The target area for the Nike+ Sportwatch GPS is the Australian Market. Australia is a unique market because it is the only country found on a single continent. The country has a population of 22 million people found mainly in cities (ABS, 2014). Australia is the most urbanized country in the world, with more than 85% of its population found in cities (ABS, 2014).

Australia has a well-developed transport and communication infrastructure linking its main population centers. The country has several categories of roads linking various population centers. The country also has a rail network, which serves mining communities. Also, the country has a well-developed air transport system.

The Australian market is very complex because of cultural diversity (Forsyth, 2005). This affects the buying behavior of many consumers. Many residents from the middle and upper classes have a strong consumer culture. Those from lower economic classes do not have sufficient disposable income to support a consumer culture.

The product preference in the Australian market about the Nike+ Sportwatch GPS is mainly its health benefits. Many Australians are keen on healthy living because of robust health campaigns by the federal and state governments. The shopping habits of Australian residents also vary widely. At a national level, people spend more on recreational items during the holiday seasons.

The typically retain outlets in Australia resemble many of the retail outlets found in the Western World. Australia is also becoming entrenched in the mall culture. Malls and large shopping complexes made up of a variety of stores are a defining feature of many Australian cities (Kull, 2003).

The Nike+ Sportwatch GPS can sell well in exclusive stores or in stores that deal with electronics. In particular, the watch can sell well in outlets selling phones and computers. However, the health benefits of the watch and its application to sports means that vendors and retail outlets selling sports gear and gym equipment can also distribute the watch.

Television is still a very influential medium for reaching any target market in Australia. However, online marketing methods such as the use of email marketing, paid up ads as well as dedicated websites is gaining traction as a marketing platform in Australia (Kull, 2003).

This is because three-quarters of all Australians have access to the internet (ABS, 2014). The Nike+ Sportwatch GPS is a new product, and it may not fit easily into a traditional sales promotion model. The best sales promotion method is allowing consumers to try the product and to make a decision to buy based on their experience.

The average markup for clothes and shoes in Australia is 145% (ABS, 2014). The average markup for electrical and electronic goods is 85%. The Nike+ Sportwatch GPS is both a wearable electronic device. Therefore the markup for the product will lie somewhere between 85% and 145% (ABS, 2014).

Trade discounts are available for customers that buy the product within a specified period after its release. Quantity discounts will accrue to vendors who want to stock large quantities of the watch for resale.

Competitor Analysis

The main competitor for Nike+ Sportwatch GPS is the Garmin Forerunner and the myriad Smartphone apps that have the same features. The Garmin Forerunner has a heart rate monitoring function as an accessory, vibration alerts, and easy navigation systems. The watch is also compatible with other wearable sports devices. A Garmin Forerunner unit costs AUD 449 (Garmin, 2014). This unit does not come with the premium heart rate monitor.

The addition of the monitor pushes the price to AUD 499 (Garmin, 2014). A complete Garmin Forerunner package contains the following accessories. The box has a Forerunner 910 XT, USB ANT Stick™, AC charger, charging clip, expander strap, and a manual (Garmin, 2014).

The advertising model used to market the Garmin Forerunner includes online marketing strategies, use of electronic media adverts, and advertising in technology magazines. Consumers buy the Garmin Forerunner in high-end luxury stores, sportswear stores, and in electronics shops.

Also, consumers can buy the watch online. The online distribution model is the most effective way of selling the product (Moisander & Valtonen, 2006). Statistics show that 75% of Australians who have access to the internet do some of their shopping online (ABS, 2014).

Market Size

The total population of Australia is 22 million (ABS, 2014). The target group for the product is adults aged 25-65 (ABS, 2014). This group is not only health conscious but also has the requisite buying power to purchase the product. Therefore, the absolute size of the potential market is 54% of the Australian population (ABS, 2014). The target sale for the next year is 500,000 units. This is 40% of the expected industry sales in the next year.

Most of the products from the competitors have already been in the market. It will not be easy to usurp their market share. However, the trend in the wearable technology industry is that products that are more recent tend to have greater market share until usurped by newer products (Dalic, 2007).

Government Participation in the Market Place

The agencies that can help in the process of getting a marketing plan for the Nike+ Sportwatch GPS include the following. First, the Australian Bureau of Statistics is an ideal source of information on demographics, which can help in the determination of market trends. Secondly, the stock market is also a very important source of information on the Australian market.

A fair view of the technology counters is important in assessing the prevailing market conditions as well as the long-term prospects of investing in this sector (Donaldson, 1986). The third agencies of importance are the regional chamber of commerce in various parts of the country.

The regulations that must guide this venture include the following. First, it is important to observe the Australian competition regulations, as well as the advertising laws. Also, it is important to check on the rules that govern the sale and marketing of the international product. The product must meet health and safety standards in the country. Also, the product must get quality assurance certificates from the Australian Bureau of Standards.


ABS. (2014). Australia Bureau of Statistics. Web.

Dalic, T. (2007). Globalisation of Marketing Strategies in Light of Segmentation and Cultural Diversity. Norderstedt: GRIN Verlag.

Donaldson, B. (1986). Customer Service: The Missing Dimension in Marketing Management. Journal of Marketing, 2(1), 133-144.

Forsyth, P. (2005). Competition Versus Predation in Aviation Markets: A Survey of Experience in North America, Europe and Australia. Hampshire: Ashgate Publishing.

Garmin. (2014). . Web.

Kull, K. (2003). The Model of Internet-Based Marketing Communication. Tallinn: Tallinn Technical University.

Moisander, J., & Valtonen, A. (2006). Qualitative Marketing Research: A Cultural Approach. London: Sage.

Nike. (2014). Nike+ Sportwatch GPRS. Web.

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