Nike Market Segmentation PDF

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1.0 INTRODUCTION In this section, Nike has been chosen as the company that going to be studied for their market features which include the company market segmentation, targeting, positioning towards their products and services. Nike is an American multinational corporation that is occupied in designing, developing, manufacturing, and worldwide marketing and sales of footwear, apparel, equipment, accessories, and services. In order to specify the flow of the marketing mix, planning and decisions are made.

The picture above represents Nike’s products. It’s called the Swoosh. Today, it has become one of the most recognizable brand logos in the world, and the most valuable.

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2.0 MARKET SEGMENTATION There are four types of market segmentation that consists of demographic, psychographic, behavioural and geographic.

DEMOGRAPHIC

PSYCHOGRAPHIC

Age

Personality traits

Gender

Activities

Ethnic background

Interests

Family life cycle

Opinions

BEHAVIORAL

GEOGRAPHIC

Frequency of purchase

World region

Loyalty of customers

Country region City Climates

Demographic segmentation Demographic segmentation is a technique that most likely being used universally by Nike because the characteristics are simple to point out. Put together from the segmentation, Nike focuses on mankind according to their gender, age and life cycle stage. The main important thing is Nike targets customers between 11-45 years old, with greater focus for teenagers in creating and maintaining loyal customers. Therefore, during the World Cup in last 2014, Nike launching a campaign that greatly glorified football athletes playing football with teenagers inspiring them to be like their favorite football team idols. 2

Age

Adults 18-45

Teens 11-8y

Tweens 5-10y

Children 1-5y

Figure 1 Furthermore, gender is the next factor that Nike uses to persuade audiences. Even though, Nike is heavily focuses on male customers, recently they invested to attract females customers too. To be specific, Nike has evolved a strategic approach in targeting women by launching a multiple of female sports lines where are expected to develop continuously in the future. However, Nike does focus marketplace segmentation based on ethnic background in order to group consumers.

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Gender

Male

Female

Figure 2

Psychographic segmentation Nike makes use of psychographic segmentation in aiming customers referring to their lifestyle, personality traits, activities and interests. To be specific, Nike focuses on someone that have interests in sports, gym regularly and athletes which tend to be in their life routines. Nike applies sports-centric strategy motivating, inspiring and emotionally connected to all athletes with its products. Nike comes up with the mission statement “To bring inspiration and innovation to every athlete in the world” and not to forget “Run with me” persuades all athletes to follow the loyalty firm with the sense that they are all belong in the same family as they share same interests. However, youngsters tend to purchase Nike products to fulfill their desire needs because it is a well-known brand and somehow it is followed by trend. For example, there is one time in November, 2019, kpop star G-Dragon did a collaboration with Nike and launching his first ever shoe product with the brand which is Air Force 1 Para-noise with a distinct sunflower detailing. The shoes come just in time during holiday season making it the perfect gift for any stylish and hypebeast friend.

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Behavioral segmentation Despite that, Nike aims on making the consumers somehow feel emotionally interacted with the products. To be exact, the company follows the direction “If you have a body, you are an athlete” and “If you are an athlete, Nike’s products make you feel athletic”. On the other point, Nike builds engagement by granting unique quality products to choose in order them to purchase frequently with Nike. After that, Nike gives consumers opportunities and experiences to share within their closed ones including reviewed products gives massive effects and point of views that shows consumer’s behaviors.

Geographic segmentation Nike segment market contributes to the world and country region, city and popularity. As for promotion, we can differentiate the promotion of Nike in United States of America with the other sides such as in Asia, in Europe, in Australia and of course Africa. This is because sports can be differently focused by region and cities to suit the regional customer’s needs. To be clear, commercials in United States are mostly aiming on football and baseball meanwhile in Europe has different kind of advertisement which is mainly focus on soccer. Talking about New Delhi, India, cricket is the main focus there while Sydney and England tend to focus on rugby. However, Nike does not segment the market based on climate conditions even though the company is ecologically conscious.

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3.0 MARKET TARGETING After segmentation, Nike focusing the next step, targeting which they pick the segments to accomplish their objective effectively. Targeting is a significant part of the marketing strategy, particularly when a company is in various businesses. Being available in footwear, sports equipment, attire, and other Nike uses in differentiated targeting. At the point when the company positioning and differentiate a product, it tends to be called a differentiated target marketing strategy. Nike's differentiation strategy is to build up the company standard in athletic wear. Nike assesses their target market based on size, reachability, measurability, and behavioral factors. Specifically, Nike has a specialty market to serve. The company targets professional athletes and energetic people to giving them specialized and innovative items. By focusing on their product offering, they can deliver high-quality products that meet customer assumptions.

Nike's product offerings aren’t wide, but their focus is clear, allowed them to foster effective networks of suppliers and manufacturers that can provide high-quality materials to enchasing its uniqueness and exclusivity. Besides, all items are reachable, even on the web, the unique opportunity for Nike’s consumers to make their custom-designed shoes, which make their brand more recognizable and surprising in differentiation to other footwear brands. It should be noticed that Nike also focuses on the marketplace through psychological tactics by sponsoring great athletes with great achievement.

The most reputable driver for Nike’s success is its particular marketing strategy. Nike has set up itself not for only a main brand for athletes, yet additionally as a leading brand fashion. Another driver of their success is their research and development. Nike should continually develop improved and new tools to assist the athlete to perform. By keeping this level of development, Nike will be continually in front of the competition.

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4.0 MARKET POSTIONING

Market Positioning is one of the market decisions. Nike has providing a high quality with more innovative technology to positioned its brand widely in sports equipment as the market leader. The Positioning assertion of Nike is "For serious competitors, Nike give confidence that gives the ideal shoe for every sport". Nike positions itself with "Do what needs to be done". The clients who needed to accomplish the best for their activity experience or wanted to get an achievement in their game profession will be affected to purchase items from Nike. There are two mandatories for effectual and competitive brand positioning such as Competitive Frame Reference and Points of Parity. Competitive Frame of Reference is the way to classifications Nike amongst every one of the outcome items in the market. Nike is a sports brand and it competes with other enormous brands that sell sports apparel, accessories and equipment. It has communicated its classification membership by demonstrates the communication on how the brand finds a way to be successful in the sporting arena. Next, for Nike's points of parity is that it is a worldwide games brand playing together with Puma and Adidas etc. To become more aspirational and admired, they are all connected with well-known athletes as a brand ambassador. These brands use individual electronic technology innovation that allows purchasers to track performance. The brand has a quality product line that make individuals to wear Nike branded items in their daily life outside of other exercises. Social status of people also considered as the other external influence on promoting Nike. The price usually higher than the normal brand due to its higher quality shoes. So, the clients perceive it as a high-end product. Nike chooses independent distributors and the Brand essence of Nike as an interesting method of expressing sport in types of performance, whereas its Brand character is seriousness of competitors and worldwide representations.

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5.0 RECOMMENDATIONS AND CONCLUSION

As of now Nike’s product is the most famous and known product worldwide. This is because of their marketing strategy like market segmentation, targeting and positioning. However, even though Nike’s marketing is good, they still face challenges of consumer buying behaviour. Consumer buyer behaviour is the buying behaviour of final consumers like individuals and households that buys goods and services for personal consumption. Factors that influence consumer buyer behaviour are cultural, social, personal and psychological.

Psychological Factors Nike face a challenge when trying to influence their customer psychologically. In my opinion, one of the way to give motivation for customers to buy the product is to advertise the product more creatively. This means that Nike could try to advertise their product to make people feel like winners. The advertisement must make people feel like they could achieve anything with hard work and motivation when using Nike’s product. One of Nike slogan “Just Do It” is a perfect example because it triggers customer drives to buy the product. The slogan is also a cue for customers, so they can know straight away what brand the product is associated with.

Cultural factors Culture is the set of basic values, perception, wants, and behaviours learned by a member of society from family and other important institutions. Culture is an important factor in consumer buyer decision, but at the same time it also a very sensitive issue that Nike need to carefully handle to avoid offending anyone. One way Nike can overcome this problem is by just doing research. Nike need to research their customers carefully by observing and collecting data. For example, in Malaysia many males of various ages like to play football or futsal. So Nike should advertise more football and futsal shoes and equipment’s to Malaysia and also get football idols to advertise their product. This way it can influence the people to buy Nike’s football shoes and equipment. 8

Social factors Nike need to find a way to influence their customer social factors. In my opinion, Nike should use online social networks. Nowadays, many people use social media in their everyday lives for entertainment or work. By using online social network, they can reach many people and advertise their product. Nike has sponsor some big names in sports like Cristiano Ronaldo, Lebron James and many more. This can influence people to buy Nike’s product because they want to follow their idol. Nike could also try to sponsor Influencers, these people are famous mostly in social media like Instagram, tiktok and many more. One of the reason to sponsor these people is because many younger people nowadays likes to follow influencers. By getting influencers to sponsor Nike’s product, many younger people would want to buy it because their favourite influencers use it.

Personal factors Many personal factors influencing customers, buying decision are age and life- cycle stage, occupation, economic situations, lifestyle and personality. To overcome the age factor, Nike should advertise their product so that any age can use it. They can use actors of different age to act in their advertisement to show that any age can use it. For economic situation, Nike should also advertise products of different price, not only the expensive ones. This way various people of different economic situations have options when purchasing a Nike product. Lastly, for personality, Nike should have a brand personality trait so that people could relate to the brand. In my opinion, Nike should be presented as excitement which refers to daring, spirited, imaginative and up-to-date also ruggedness which refers to outdoorsy and tough. These traits seem to reflect the Nike brand the best.

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Conclusion In conclusion, Nike is the biggest brand of sport equipment’s in the world and it is difficult for other sports brand to beat because Nike implement their market segmentation, targeting, positioning to market their products and services very well compare to other sports brand. They also understand the needs of consumers and they also attract big names in the sports world to sponsor their product. Nike should be an example to other companies on how to make a successful marketing strategy.

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REFERENCES 1. . Porter, M., E. 1998. The Competitive Advantage: Creating and Sustaining Superior Performance. NY: Free Press. 2. Deng, Τ., 2009. “Just Done It”--- Nike’s New Advertising Plan Facing Global Economic Crisis. International Journal of Business and Management, 4/3, 102-105. 3. Shank, M., D., Lyberger, M., R. 2014. Sports Marketing: A Strategic Perspective. 5th ed. London & New York: Routledge. 4. Chang, C., Y. 2014. Visualizing brand personality and personal branding: case analysis on Starbucks and Nike's brand value cocreation on Instagram. MA (Master of Arts). United States of America: University of Iowa. 5. Otnes, C., C., Zayer L., T. 2012. Gender, Culture, and Consumer Behavior. 1st ed. New York & London: Routledge. View

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