Nike Plus Marketing Plan free essay sample

They did not want to make it too complicated or the average runner would not be interested; they had to keep their target market in mind. The product is simply a chip that fits into your Nike shoe that keeps track of you pace, distance, etc. This chip transfers data to your ipod nano which allows the runner to hear progress made and how far they have to go to reach their goal. The simplicity of the product allowed them to make the price of their product quite low; but now so low to imply poor quality. History In the 1960’s Phil Knight was in university and had a project where he had make a business plan. Along with the business plan he had to make a marketing plan to go along with it. This business plan composed of the idea of producing shoes in Japan and selling them in the United States. We will write a custom essay sample on Nike Plus Marketing Plan or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Later on in 1963 Phil Knight decided to give his business plan a try. He traveled to Japan to speak with a company that manufactures shoes that goes by the name of Tiger. Phil Knight was asked who he represented and he made up the name Blue Ribbon Shoes. Phil convinced them to sell him their ‘Tiger’ shoes for that he could resell them in the US under the name Blue Ribbon Shoes. Over the 8 years the Blue Ribbon Shoes broke 1 million dollars in sales. It was at this 8 year mark (1971) he changed the name to Nike and also included the swoosh to be recognizable characteristic. After this the company grew exponentially and over 10 years sales grew up to $270 million. In 1996 Nike got the marketer of the year award which increased it popularity even more. At this point (1996) Nike had hit $6. 74 billion in sales. Environmental Analysis Social With the rise in obesity there are more and more people becoming self-conscious about their weight. This is resulting in more people going to gyms and pursuing other ways of getting exercise. This will directly result in more people purchasing the Nike plus who which to lose weight by running. People these days are wanting to belong to something more than they did in the past. Examples of this are the huge rise in people using myspace, facebook and other social networking site. Nike took advantage of this trend by creating a networking site only for people who have purchased the Nike plus. Economic Everyone is well aware that right now the economy is doing very poorly and people have less money to spend. This will hurt Nike as a company being as most of their products are at the high end scale of pricing. However, the Nike plus is cheap when compared to similar products. So the downhill economy could in fact help with sales of the Nike plus. Technological The current trend in this information age is everything becoming wireless. This includes cell phones, gaming consoles, blue tooth, etc. Nike took advantage of this trend by having the chip in the shoe communicate wirelessly with the receiver attached to the ipod nano. Competitive Companies are continuously outsourcing production to other countries in order to be profitable while offering the lowest price. Nike has taken advantage of this. Nike has the ability to move production from one country to another (what ever one has cheapest labour) while only incurring a small cost. SWOT Analysis Strengths Nike has no set factory that all or most production takes place in. If the cost of labour raises somewhere, then Nike can move its production to another location where labour is cheaper. This means Nike can produce a high quality product at the lowest possible price. Nike has very good research and development. This is very evident the many innovative product they have come out with. Nike has a global recognition for quality. Almost anywhere if some one sees the Nike swoosh they will recognize it as Nike. Weaknesses Nike does not have its own retailer and retailers are very price sensitive. This means that Nike must sell to retailers a lower price because of the competion from other bands such as Addidas. Opportunities The owners of Nike claim that Nike is not a fashion brand. They claim all of their products serve the purpose assisting people in sports. However, many people buy Nike products simply because of fashion. This is great market Nike could tap into. There are high value items that Nike has still not put into production. This includes jewelry. High value items generally come with a profit. Threats Nike sells internationally. This means that as fluctuations in currency happen Nike risks selling at a loss. This is a threat that faces all international companies. Over the past decade the market for shoes is becoming very competitive. Many more brands are coming into the market which is taking away from Nikes market share. Marketing Objectives and Strategies Being such a large company with an enormous global presence, Nike has lofty objectives to reach. Nike sets the highest standard in the industry of athletics and sports equipment, therefore when they set out In this joint-venture with Apple computers, they intended for the Nike+ brand to hold the largest market share within it’s category. With-in the first year of its launch Nike is striving to promote the Nike+ brand vigorously in an attempt to capture the interest of fitness enthusiasts and recreational runners alike. With this joint-venture, Nike hopes to gain an edge over its competitors, combining a similarly position brand with it’s elite running shoe creates a unique product that will captivate the fitness enthusiasts. The ultimate first year goal is to increase it’s share of the fitness market over it’s competitors with significant room for growth with the Nike+ brand as it looks to promote primarily within North America. The long-term goal of Nike’s marketing plan is to utilize the uniqueness of their product in order to create a commanding strangle hold on the fitness market and expand advertising efforts globally. Nike has numerous strategies that they utilize in order to reach a number of various potential consumer groups. Nike utilizes the market-leader market-product strategy. This is evident in the way in which they advertise the Nike+, using slogans such as â€Å"Run like you’ve never run before† in mixed media such as television and print advertisements. Although the Nike+ is a new product, it is essentially an innovation. Because it is an innovation Nike can draw on, not only it’s brand equity, but Apple’s as well, in order to place it as a premium product with-in the industry all while still maintaining a buzz and newness about it’s product. The primary target market of the Nike+ product are fitness enthusiasts looking to optimize the efficiency of their runs. This is very evident in the advertisements of this product. They depict a runner running against his toughest opponent-himself. The product allows for a juxtaposition of all previous accomplishments technologically displayed on the computer, allowing the runner to compare themselves against themselves. The secondary target market are casual runners looking to improve, yet may not need to use the product to its full potential to experience a benefit to their runs. Product The product is a little a chip that fits into a Nike shoe (only certain Nike shoes accept the chip). The chip comes with a receiver chip that connects to an ipod nano and the two chips communicate with each other wirelessly. The chip in the shoe records elapsed time, current pace and distance as a person is running/jogging. This data is simultaneously sent to the ipod nano using the receiver chip. Once the person has finished their exercise they can hook their ipod to the computer. The runner can then go to the Nike website and view their data. Nike has branded its self in a way that when one purchases Nike plus one has now become part of a larger community. This community is formed on the Nike website. You can compare your data with other people who have also purchased the Nike plus. You can communicate with other members and set goal for yourself. The Nike website goes another step further and creates little competitions where runners can show off their skills. This is all an effort to make the Nike plus ‘brand personality’ of being some one that promotes being a community. All of Nike products automatically have perceived high equity. Nike attempted to continue this by naming the new product Nike plus. The name creates in a persons mind everything great Nike offers, plus a bit more. People already use Nike shoes for running and now they can keep track of their progress easily. Nike strategically chose Apple’s ipod to communicate with instead of a Microsoft mp3 player. Apple has a reputation of creating higher quality products than Microsoft which is why Nike chose Apple. This helps Nike create stronger brand equity. There are many competitors Nike has for this product. These include Timex Bodylink, Garmin Forerunner, Bones In Motion. All these competitors offer more advanced running statistics than the Nike plus. Their products take the form of a watch or a band the goes around the leg. Things these products can do that the Nike plus can’t are tell the average speed, automatically pausing at an intersection or water fountain, and a few others. Despite these competitors offering more advanced products, Nike has set its self apart by being innovative. No one else other than Nike has come of with a chip that goes in your shoe that tracks your speed and delivers the data to an ipod nano. As mentioned above, Nike took this a step further by making it possible to be part of a community of other runners. Not even Adidas (main competition) has come up a product that does what the Nike plus does. The packaging has been made in a way that makes it stand out whether if the consumer knows about the product or not. It is a piece of grey cardboard with plastic wrapped around it securing the chip and receiver. To make people notice it a red stripe is placed at the top and bottom. In the top right hand corner of the top strip there is Nike’s swoosh and Apple’s logo beside it (an apple). This gets people attention because both Nike and Apple are big companies and have nothing to do with each other in any of the lines of products they sell. Price One would expect the price the Nike plus to be quite high. In fact, the price for the Nike plus is only $29. They have likely been able to do this because the Nike plus is composed of just a chip and a receiver which makes manufacturing cost lower than its competition. Apple also covered a lot of the cost for software programming since the product would result in more sales of the ipod nano. The consumer must also buy a pair of Nike shoes that are compatible with the Nike plus which is where they make most of the profit. Any pair of compatible Nike shoes cost between $80 and $110. Most of Nike market value quality and are more likely to purchase the higher priced shoes. This product is still quite new on the market and has no discount/sale price is available. Since the price is relatively low it is not necessary to offer sales at this point in time, especially since their target market is not price sensitive. Nike’s price gives it a huge advantage over competition. Many of Nikes competitors mentioned in the ‘Product’ section sell for about $300. There are some cheaper alternatives; but then the consumer would be better off just to get the Nike plus. Place In order to insure the success of any of product it carries, Nike, like any other large company, must distribute its product in retail locations most conducive its consumer’s lifestyles. With over 25,000 retailers in the United States alone, Nike already has strong, vast, and established channels willing to carry its products. Nike has its own retailers called â€Å"Niketown†, are currently in over 160 countries worldwide and also distribute their product online at nike. com. Nike+ specifically is now distributed throughout North America and Europe through retailers; however anyone can purchase the Nike+ product online, through nike. com/nikeplus. The intensity of distribution is just as intense as many other running shoes in Nike’s product line and can be found at any typical Nike retailer. Promotion The main usage of promotion done by Nike in order to promote it’s sub-brand Nike+ is advertising. Nike utilizes television advertisements specifically. They do this because it allows them to reach a large amount of potential consumers in order to promote their brand. Nike looks to convey a powerful message about physical fitness as they advertise Nike+. Nike+ advertisements promote a fun and effective way to maximize the potential of your workouts. By doing this they capture the serious runner looking to improve on the effectiveness of his or her workout, but also the casual runner just looking to better enjoy the experience. Evaluation of Marketing Plan Nike has done an excellent job of excecuting their marketing plan. Many people are not aware of the Nike plus. However, Nike succeeded in creating awareness for the people they where targeting. They clearly identified their target market and pushed the advertising on them rather than wasting money on people who will not purchase the product. Because of Nikes already strong customer base they got away with not doing advertising on massive scale. This also adds to why they where able to keep the price low for the product. Nike should have priced the Nike plus higher. Their target market has little price sensitivity and they would have been willing to pay a higher price. Then after 6 months they could have lowered the price to what it is now ($29). Nike branded the product perfectly. Gave it an image of being something that’s bigger than everything else, which is where the online community comes in. 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