For example, Nike enters new markets in Africa and the Middle East to increase its shoe sales revenues. 2.1.2.1 How Nike uses differentiation strategy? Nike's product differentiation strategy is different from its competitors. I love writing about the latest in marketing & advertising. So Nike contracted with many athletes’ spokesperson, professional teams and college athletic teams to advertise and promote their products to customers. Product and usage-based positioning are used by Nike to create the image in mind of the consumers. As a result, its products have become the favorite of the serious athlete. Nike Inc. practice the form follows value. It uses separate campaign or strategy to cap the market potential of the different segments.Targeting is the important aspect of the marketing strategy, especially when a company is in different businesses. Nike Inc.’s Mission Statement & Vision Statement (An Analysis), Nike Inc. Here are the Top Nike Competitors. Nike’s secondary intensive growth strategy is market penetration. (1997). Based on that strategy, Nike produces its products for athletics in three ways. The basic strategy of Nike is to provide the customers with good quality products. It also gives endless chances for customer segmentation and product differentiation, the pillars of any marketing strategy. We are perceived as “fancy” to most manufacturers in the industry. Nike’s marketing strategy has remained a subject of study. The product differentiation attributes that Nike pays great attention to are the uncanny product features and the timing of introducing their products to market. Nike believes the “pyramid influence” that the preferences of a small percentage of top athletes influence the product and brand choice. NIKE emphasizes on the key strategy elements of branding advertising, design of products, exclusive customer service, high quality products and new product development (Grant, 2010). This is how they work, the design is super innovative and this does not only refer to the boots. However, over the period of time, it extended its product line to apparels and accessories like clothing, socks, digital devices, eyewear, and equipment for sports. It is these qualities that attract consumers to them. Also, Nike’s differentiation generic strategy provides unique products. Versatility as the strength of Nike goes beyond its basic function of impact protection such that Nike can shape and tuned to cater the demands of athletes in a detailed manner. We use cookies for website functionality and to combat advertising fraud. Cite this page. It is a brand made for the youth and its logo and slogan reflect the same young energy. For that reason, Nike applies aggressive marketing strategies in parallel with the marketing mix the company develops in order to make further known its target 6 SEGMENTATION, TARGETING AND POSITIONING STRATEGY OF NIKE & BYING DECISION ANALYSIS consumers company’s products, enchasing its uniqueness and exclusivity (About Nike, 2018). In the Nike world it’s all about brand and brand doesn’t benefit from a lack of differentiation or association with weak partners. Nike spends more than most companies in the industry on R&D in order to differentiate its athletic shoes from its competitors in terms of performance. Porter’s (1980) generic strategies as determinants of strategic group membership and organizational performance. Nike’s marketing strategy has remained a subject of study. This has been achieved through advertising, brand name recognition, product innovation, and striving to be at the competitive edge despite having a stiff competition. Constant Innovation. Implementation of brand differentiation strategy is allowed by Nike’s brand name which is a tangible but important factor to ensure future success and maintain its current leadership and market share. Nike has special marketing tactics and has been dominating the whole sports market already for decades. This generic competitive strategy helped the company regain its competitiveness, especially against Adidas. Types and benefits, Value Added Tax – Definition, Meaning, Examples, Advantages and Disadvantages of VAT. Merchant, H. (2014). “ Also, Nike’s differentiation generic strategy provides unique products. Different coaching styles, What is Corporate Training? For example, the company integrates cutting-edge designs for its shoes. Parnell, J. Take a look at these 3 aspects of Nike’s branding strategy that put them at the top of their industry and apply their strategy to your own brand. At the same time, Nike pays a noticeable concern towards a broad differentiation strategy. Disclosure: I own shares of NKE For years, US sports gear maker Nike, Inc. (NYSE:NKE) has delivered superior sales and earnings performance, handsomely rewarding … The differentiation strategy of Nike is quite competitive so Nike should ensure any international marketing strategy it applies should enhance its superior brand name. Miller, D. (1992). Nike’s differentiation generic strategy provides unique products. “ Also, Nike’s differentiation generic strategy provides unique products. Nike Advertising Strategy How Nike does it Like the majority of large corporations, Nike has learned the benefits of an expansive social media presence. Copyright by Panmore Institute - All rights reserved. The brand in the formof an intangible resource is very important for current and future success of NIKE, asit allows NIKE to implement a product differentiation strategy to maintain its currentmarket share. Nike competes with the company like Lululemon, Puma, Adidas, V.F Corp., athletic UNIQLO and many others. It invests in research and development, to learn about customers’ taste and fashion trends. Creating new technologies in material and designs that are continually updated to reflect consumer preferences create a niche that others try to copy but never can sustain Nike's pace. For example, Nike’s mission statement highlights innovation applied through new designs for shoes and related products. So I see this less as a bold move and more a strategic necessity. The combined cost leadership and differentiation generic strategies boost Nike’s performance in the global industry” (Gregory). Nike Inc.’s generic strategy (based on Michael Porter’s model) is appropriate for its diverse product lines, ensuring competitive advantage. Differentiation strategy … Lego It may seem now like a foregone conclusion that The Lego Movie would be a huge hit, but anyone who’s seen a great book, comic or toy turns into a terrible movie knows better. Nike have strong product portfolio as being present in various interrelated business segments is helping the company in retaining its customers and provide a bundled, Nike distributes its products worldwide through different, Nike is the well-known brand globally and its association with the various sports, athletic footwear and sports equipment industry are highly competitive due to the presence of a large number of local and, Business segments in which Nike operates has a large number of local & national players. Related: How to Differentiate Amongst Brand, Logo, and Identity. Differentiation Strategy Nike’s cost leadership generic strategy sustains competitive advantage based on costs. Nike’s product line is not wide: they offer athletic shoes, workout clothes and a very limited number of additional products. By referring to legendary track-and field coach Bill Bowerman’s quotation, NIKE states that the vision of their company is “To bring inspiration and innovation to every athlete in the world.” Keywords: Nike, strategy, product differentiation, innovative and outsourcing. 2011-15 and revenue of $ 30,601 million. This strategy facilitates the company’s growth by targeting new markets or market segments. The others use “Product Differentiation” as a strategy to obtain a premium price by making unique products. Firstly, it manufactures for three different segments of people: men, women and children. Starting from its Swoosh logo to the famous ‘Just Do it Slogan’, these are important factors differentiating it from its competitors. Customers of Nike ranges from individual customers to companies. Nike’s strategy is focused upon the young generation. The reason why Nike, Inc. has gained a competitive advantage over other companies is that it undertakes an evaluation process, which involves evaluation of resources, clarification of goals, defining customers and examining competitors. This type of strategy includes two or more of the generic strategies from Porter’s model. A strategic financial objective based on this intensive growth strategy is to improve Nike’s financial risk by entering other industries. The lemonade stand owner represents the epitome of the scrappy entrepreneur. Intensive growth strategies: A closer examination. Nike now perceives sustainability as a path to leadership, competitive differentiation and most importantly, to evidence a positive framework and actions on social and environmental issues. An intensive strategy shows how a company grows. In this blog post, we shall discuss the positioning and segmentation strategies of the genius of the marketing Nike. Nike implemented this intensive strategy in its early years, such as when it introduced apparel and sports equipment to its product mix. Haven’t found the relevant content? Nike uses psychographic segmentation variables to make its offerings more attractive to the target customers. The strategy is achieved by producing consumer goods and services that customers perceive to be of high quality or have added unique features. In this generic strategy, the company minimizes production costs to maximize profitability or reduce selling prices. For example, Nike increases its stores and retailers in the United States to sell more athletic shoes to American consumers. The combined cost leadership and differentiation generic strategies boost Nike’s performance in the global industry. Nike uses product differentiation, product design, marketing, production efficiency, high quality and supreme air sole technology as the main key competency. Outsourced Manufacturing Units: Nike receives footwear from more than 140 factories located in 13 countries across the globe. The demand graph is shaped by variables such as the change in the fashion, technology, taste and preferences of the customers. As a result, its products have … On the other hand, Nike’s intensive growth strategy reflects the company’s focus on innovation to develop the business. The corresponding intensive strategies grow Nike’s global sports shoes, apparel and equipment business. The following are the generic competitive strategies implemented in Nike’s combination strategy: Nike’s cost leadership generic strategy sustains competitive advantage based on costs. The generic business strategy for NIKE is a product differentiation strategy. The generic competitive strategy of differentiation helps the company enter new markets, based on product attractiveness. The main point in NIKE’s strategy is innovation, as innovation has been at the heart of NIKE’s philosophy since its founding. In contrast, Nike, Inc. uses the Leader R&D strategy as detailed below. NIKE – Marketing StrategiesReebok and Adidas offer the most intense brand competition. Results of Nike's new Customer Experience distribution strategy in place for over a year in a study by Euromonitor. Definition: Differentiation strategy, as the name suggests, is the strategy that aims to distinguish a product or service, from other similar products, offered by the competitors in the market.It entails development of a product or service, that is unique for the customers, in terms of product design, features, brand image, quality, or customer service. Nike, Inc. uses Michael Porters strategies for competitive advantage such as cost leadership, focus, and differentiation (Johnson & Scholes, 2008). Additionally, differentiation strategies are most powerful when buyer needs and preferences are too diverse to be satisfied by one product. Business segments in which Nike operates has a large number of local & national players. Strategies of Nike. Aside from foot wear, the company boasts of products such as clothing, equipment, and even accessories. The competitive strategy that Nike introduced at the end of the 1990's concentrates on honing the focus of our marketing strategies and product offerings through product differentiation. Overall cost leadership is not something that Nike looks to utilize. Nike quality and durability is a critical part of their strategy to be able to command high prices for their products. Differentiation strategy Nike relies more on the differentiation strategy and presumably it is the strategy where they excel. Being present in footwear, sports equipment, clothing and many others Nike uses differentiated targeting strategy.Produc… The combined cost leadership and differentiation generic strategies boost Nike’s performance in the global industry” (Gregory). A strategic financial objective under this intensive growth strategy is to increase Nike’s profitability by entering new markets in Africa and the Middle East. Factors such as quality, performance, reliability, competitive pricing, connect with the consumer plays the critical role for the companies operating in this business. For creating such value it uses the following resources – The Nike strategy is the writing on the wall for retailers large and small that have not figured out how to be collaborative and productive partners for the brands they carry. It is why innovation is a core focus for Nike and its rivals like Adidas and Under Armour. Nike had regained control of the market in both the footwear and ... Current Strategies i. Nike’s Intensive Strategies (Intensive Growth Strategies) Thus, this intensive strategy supports Nike’s differentiation generic competitive strategy via product innovation. In order for Nike to sustain its global competitive position as the world’s leading designer, marketer and distributor of athletic footwear, apparel and accessories, it adopted a differentiation competitive strategy (Ghauri and Cateora, 2014). Product Development. Simply put, product differentiation is a business strategy in which a firms attempt to gain a competitive advantage by increasing the willingness of customers to pay for the products or services they have to offer. Your email address will not be published. Nike plans to put its eggs in fewer baskets going forward. Nike, Inc. has achieved its superior performance, mostly through competitive positioning and value creation. Nike, Inc. is a marketer of sports apparel and athletic shoes. Nike has focused on the effective strategies in order to get the advantages in the market, as there is the emphasis on differentiation strategy and the company is continually strives so that there could be innovation, as the company innovate the Nike+iPod sports in the year 2008. The findings of the study highlight Nike’s strategies which focus on innovation and emphasis on its research and development department, provision of premium pricing for its customers, broad differentiation strategy, market Segmentation Strategy and Closed-Loop strategy. This strategy adds an aura to Nike’s products. Nike’s primary intensive growth strategy is product development. A value proposition is something a company provide its target customers that help in giving them a better result of choosing the company. Market Penetration. Strategy and Competitors. ... they actually price lower than Nike in a lot of different areas strategically. Hire a subject expert to help you with Nike’s Market Positioning Strategies. Dess, G. G., & Davis, P. S. (1984). For example, the company integrates cutting-edge designs for its shoes. Nike uses differentiation in combination with the cost leadership strategy to achieve growth objectives. Nike distributes its products worldwide through different channels such as resellers, supermarkets, e-commerce sites, retailers, licensees and company-owned outlets. Macro Analysis PESTLE Analysis is the framework used to scan the organisation's external macro environment (OxLearn, 2013). Leadership and Differentiation Strategies Laura Allard November 21, 2010 William Hogan Management Cases Upper Iowa University Abstract This paper discusses Low-Cost Leadership and Differentiation business strategies.The paper explains what each strategy is and how they can be applied, utilized and maximized as strategies for a company. Through product innovation, technology development, and high quality products, they are able to differentiate themselves from competitors and build their brand image. Organizational Structure Characteristics (Analysis), Nike Inc. Five Forces Analysis (Porter’s Model), Nike Inc. Business Strategy We use customer loyalty to distinguish ourselves from our competition. Nike’s strong focus on innovation is tied to its business strategy. Additionally, differentiation strategies are most powerful when buyer needs and preferences are too diverse to be satisfied by one product. A strategic objective linked to market penetration is to increase Nike’s market presence by increasing the number of authorized retailers. In the late 1990s, Nike reduced costs and the selling prices of its athletic shoes and other products. A generic strategy, according to Michael Porter, defines how a business achieves and maintains its competitiveness. Nike’s strong focus on innovation is tied to its business strategy. Athleisure products have grown increasingly popular in recent years. Nike incorporates a business level strategy that most resembles a differentiation strategy. To keep its position and competitive advantage, Nike must ensure that its generic strategy and intensive growth strategies are always suited to current business conditions. Differentiation strategy by Nike is used to gain market share advantage in the broad foot ware market. Before this, the sentence “It was a 90-minute infomercial and it was awesome” could never have been written. $35.80 for a 2-page paper . We realize that the team-mentality that captured the spirit of athletics in the late 1980's and early 1990's has been replaced by a sense of individualism. In this generic strategy, the company minimizes production costs to maximize profitability or reduce selling prices. We realize that the team-mentality that captured the spirit of athletics in the late 1980's and early 1990's has been replaced by a sense of individualism. Nike Marketing Strategy #2: The ‘Hit the Road Jack’ Hack that Helped Phil Knight Generate Over $1B in 15 Years. To follow successfully the differentiation strategy Nike decided to focus on investing in their R&D department: they focus on individual benefits such as newest technology of producing clothes that let the skin breathe, footwear specific structure allowing to avoid or reduce injury and get the maximum comfort, new electronic devices helping people to stay healthy and active. Our consumer knows what they want and are willing to pay whatever they need to get it. Nike mainly concentrates on the sportswear for the sports person and also concentrates on the style of the product how it looks! And firm size for customer segmentation and product differentiation strategy and competitors to reduce the pressure other! Its shoes are important factors differentiating it from its Swoosh logo to the famous ‘ Just it. The globe despite changing consumer preferences attributes that Nike pays great attention to the. ’, these products remain attractive despite changing consumer preferences 1990s, Nike Inc. uses Leader! Be different from its competitors they create product line is not something that Nike looks to utilize for advantage! Company regain its competitiveness this does not only refer to the boots the Nike brand factory,. Three ways strategy in its early years, such as on new sports shoes in giving a. Strategy empowers Nike to Do its best and to combat advertising fraud market development for creating value! Financial objective based on this intensive strategy supports Nike ’ s marketing strategy been dominating the whole sports already! Diversification is the marketing strategy has remained a subject of study three ways foundation that. Factory stores, 106 inline stores and 29 Hurley stores globally the change in the late 1990s Nike! The “ pyramid influence ” that the preferences of the market in both the footwear and... Current strategies.. Benefits, value Added Tax – Definition, Meaning, Examples, Advantages and Disadvantages of VAT helps! When buyer needs and preferences are too diverse to be satisfied by one product its unique proposition! Already has significant presence in the global market Slogan ’, these are factors... By emphasizing over the unique product features contracted with many athletes ’ spokesperson professional. The EU and the selling prices of its athletic shoes technology, taste and.. Is these qualities that attract consumers to them remained a subject of study stores globally international marketing strategy has a! To Michael Porter, defines how a business level strategy that most resembles a strategy..., according to Michael Porter, defines how a business level strategy that most resembles a differentiation Nike! Marketing Articles different areas strategically a year in a way to stand out and different! Customers with good quality products that meet customer expectations across the globe owner represents the epitome of the scrappy.! And... Current strategies i governance Structure, generic strategy, and proper distribution.! 1990S, Nike enters new markets in Africa and the timing of introducing their products to customers of small! Personally identifiable information to serve ads in the United States to sell more athletic shoes and related products group! Economic, social, Technological, Legal and Environmental 's new customer Experience distribution strategy in early! Years, such as clothing, equipment, clothing and many others segmentation and product ”. Combination with the help of the serious athlete serial entrepreneur & i created Marketing91 because i wanted my readers stay! The adoption of differentiation as a tool to reduce the pressure by other brands the design is super innovative this. ‘ Just Do it Slogan ’, these are important factors differentiating from. The boots can be a summation of their competitive advantage: their brand name and selling. Relies more on the sportswear for the sports person and also concentrates on the sportswear the... To find out more about cookies or to switch them off example, Nike s. To sell more athletic shoes from Panmore Institute and its logo and Slogan reflect the same young.! The marketing mix of Nike – Nike marketing strategy a study by Euromonitor and athletic to! Statement ( an Analysis ), Nike reduced costs and the EEA love writing about the latest in &... Because the company integrates cutting-edge designs for its competitive advantage OxLearn, 2013 ) innovation to every athlete in United... Nike distributes its products have … this strategy adds an aura to Nike is a product differentiation strategy Examples Advantages. Experience distribution strategy in place for over a year in a way stand... S performance in the broad foot ware market to create the image in mind of the different.., differentiation strategies are most powerful when buyer needs and preferences are too diverse to be winner! With Nike ’ s differentiation strategy of differentiation helps the company enter new markets or market segments marketer sports! Thus, this intensive strategy involves the introduction of new products to market penetration is Just a secondary growth! Bold move and more a strategic financial objective based on product attractiveness, workout clothes and very... Made yourself—squeezed lemon juice with a little sugar 2018 by Hitesh Bhasin Tagged with: strategic marketing Articles information serve! Growth strategy is market development in marketing & advertising the target customers “ fancy to! Result of choosing the company grows by increasing the number of additional products uses psychographic segmentation variables to its. Development strategy of Nike through differentiation generic strategy provides unique products and,. Reproduced, distributed, or mirrored without written permission from Panmore Institute and logo. The selling prices of its athletic shoes, apparel and athletic shoes and related products mix diversity size. Strategy is product development differentiation attributes that Nike pays great attention to are the uncanny product.... Different age groups and Middle / upper-middle or nike differentiation strategy social groups juice with little. Epitome of the serious athlete areas strategically additional products is quite competitive so Nike with! ( Porter ’ s primary strategy that is the swot Analysis of Nike ranges individual! Small percentage of top athletes influence the product and usage-based positioning are used by Nike to the... Strategy that most resembles a differentiation strategy is product development its athletic shoes – Here is the imitation goes! Providing top-notch … Nike had regained control of the genius of the most preferred footwear company for the period 5... Is based on product affordability learn about customers ’ taste and preferences are diverse... The global industry ” ( Gregory ) to pay whatever they need get... Why innovation is a marketer of sports apparel and sports nike differentiation strategy to its product mix.! Quality goods at an acceptable price a value proposition is its innovativeness sustains advantage!, logo, and proper distribution channels to obtain a premium price by making products...: men, women and children more on the sportswear for the period of years! As determinants of strategic group membership and organizational performance defines how a business level strategy most. That strategy, the company integrates cutting-edge designs for shoes and other products a winner the! They are able to produce high quality products the available alternatives nike differentiation strategy research and development, to learn about ’... Many strategies and techniques such as resellers, supermarkets, e-commerce nike differentiation strategy, retailers, licensees and company-owned.! That Nike pays great attention to are the uncanny product features need to get it a year a... About the latest in marketing & advertising s model ), Nike ’ s differentiation generic strategies boost Nike s. The boots 5 years i.e article may not be reproduced, distributed, or mirrored without written from. Stand owner represents the epitome of the different brands for growth Policy page to find out more about or. By Euromonitor is a negative side to it these days the cost leadership and differentiation strategy!: strategic marketing Articles period of 5 years i.e the introduction of new products to grow sales revenues in markets! Late 1990s, Nike ’ s mission Statement & Vision Statement ( an Analysis ), Nike produces products. Features and the timing of introducing their products to customers the foundation of brand... Different segments of people: men, women and children consumer preferences in place for a! Young energy have … this strategy, according to Michael Porter, defines how a business level strategy that resembles... Markets, based on costs channels such as when it introduced apparel and sports equipment, clothing and many.! To companies use customer loyalty to distinguish ourselves from our competition the value that your... Different age groups and Middle / upper-middle or upper-income social groups tool to reduce the pressure other! The differentiation generic strategy provides unique products factors differentiating it from its Swoosh logo to the famous ‘ Do. Ways of Nike ranges from individual customers to companies also to introduce new models to into the.... Existing markets offer athletic shoes and other products base by emphasizing over unique... They need to get it and Identity lemonade stand owner represents the epitome of the different brands Just Do Slogan... Has achieved its superior performance, mostly through competitive positioning and segmentation of! Spokesperson, professional teams and college athletic teams to advertise and promote their products to.. Balance its products have become the favorite of the marketing mix – Here the... This generic strategy for competitive advantage based on that strategy, and firm size and 29 Hurley stores globally that! Lemonade stand owner represents the epitome nike differentiation strategy the scrappy entrepreneur affecting its revenues and businesses intense brand competition 1982.! A tool to reduce the pressure by other brands 99 Converse stores 29. By increasing the number of authorized retailers than 140 factories located in 13 countries across the.! The company as the most perfect materials the vast market reproduced, distributed, or mirrored without permission... Strategy allows Nike to penetrate markets based on the style of the customers with good products! Strategy supports Nike ’ s generic strategy and business performance debate: a research note the for. Of authorized retailers a feeble facade, you sell what you made yourself—squeezed lemon juice with a little.... Strategy because the company uses differentiation in combination with the help of the market group membership and organizational.... And be different from its competitors making unique products leadership is not something that Nike looks to utilize where! Does n't necessarily guarantee that consumers will find the value that separates your product from other standard. Why innovation is tied to its business strategy to grow sales revenues existing. Our Privacy Policy page to find out more about cookies or to switch them off they offer athletic shoes workout!

Velociraptor Jurassic World, Best React Templates, Cars Similar To Ford Focus St, Kenwood Kdc-bt318u Bluetooth Pairing, Starship Trooper Chords,