Marketing Management - Nike Case Study free essay sample

NIKE maintains traditional and non-traditional distribution channels in more than 100 countries targeting its primary market regions: United States, Europe, Asia Pacific, and the Americas (not including the United States). NIKE utilizes over 20,000 retailers, NIKE factory stores, NIKE stores, NikeTowns, Cole Haan stores, and internet-based websites to sell various sports and leisure products. They dominate sales in the athletic footwear industry with a 33% global market share. They have also been able to attain this premier position through quality production, innovative products, and aggressive marketing. (NIKE 2012) NIKE is now ready to take it to the next level. Over the decades, NIKE has positioned themselves with optional strengths and opportunities, enabling them to enter new market ventures. NIKE has solid brand equity, economies of scale, aggressive marking strategies, and the existing infrastructure to manufacture and distribute. Leveraging these strengths, NIKE will enter a nd dominate the sports drink industry in 2013 with a new product called, â€Å"NIKE Refuel†. We will write a custom essay sample on Marketing Management Nike Case Study or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page This new energy sports drink will target NIKE’s existing natural target market segments. Currently, there are not a lot of competitors who offer energy sports drinks as a premium product. Not to mention the other value propositions of nutrimental, low calorie, great tasting, and made with all natural and quality ingredients. This new sports drink will also enable NIKE to continue to promote their changes in their outlook on social responsibilities and more importantly, improve the bottom line revenue for the company. NIKE Company Description Nike, pronounced NI-KEY, is technically the winged goddess of victory according to Greek mythology. She sat at the side of Zeus, the ruler of the Olympic pantheon, in Olympus. A mystical presence, symbolizing victorious encounters, Nike presided over historys earliest battlefields. A Greek would say, When we go to battle and win, we say it is Nike. Synonymous with honored conquest, NIKE is the twentieth century footwear that lifts the worlds greatest athletes to new levels of mastery and achievement. NIKE’s co-founder Bill Bowerman made an important observation many years ago in 1972; he was defining how he viewed the endless possibilities for human potential in sports. He set the tone and direction for a young company called NIKE, and today those same words inspire a new generation of NIKE employees. Today, NIKE is engaged in the design, development and worldwide marketing and selling of footwear, apparel, equipment, accessories and services. They are also a seller of athletic footwear and athletic apparel worldwide. The Company sells its products to retail accounts, through NIKE-owned retail stores and Internet sales, and through a mix of independent distributors and licensees, in approximately 190 countries around the world (NIKE 2012). The Company focuses its product offerings in seven key categories: Running, Basketball, Football (Soccer), Mens Training, Womens Training, NIKE Sportswear (its sports-inspired products) and Action Sports. It also markets products designed for kids, as well as for other athletic and recreational uses, such as baseball, cricket, golf, lacrosse, outdoor activities, football (American), tennis, volleyball, walking and wrestling. NIKEs athletic footwear products are designed primarily for specific athletic use. It also markets footwear designed for baseball, cheerleading, football, golf, lacrosse, outdoor activities, skateboarding, tennis, volleyball, walking, wrestling, and other athletic and recreational uses. The Company sells sports apparel and accessories, as well as athletic bags and accessory items. It also markets apparel with licensed college and professional team, and league logos. NIKE’s goal is to carry on Bowerman’s legacy of innovative thinking, whether to develop products that help athletes of every level of ability reach their potential, or to create business opportunities that set NIKE apart from the competition and provide value for the shareholders. They and the people they hired have evolved and have grown the company from NIKE, a U. S. -based footwear distributor, to a global marketer of athletic footwear, apparel and equipment that is unrivaled in the world. Along the way, NIKE has established a strong Brand Portfolio with several wholly-owned subsidiaries including Cole Haan, Converse Inc. Hurley International LLC, NIKE Golf, and Umbro Ltd. NIKE’s world headquarters is located near Beaverton, Oregon, a suburb of Portland. So while the Pacific Northwest is the birthplace to NIKE, today the athletic giant operates in more than 190 countries around the globe. Through their suppliers, shippers, retailers and other service providers , NIKE directly or indirectly employs nearly one million people. That includes more than 35,000 NIKE employees across six continents, each of whom make their own contribution to fulfill NIKE’s mission statement: to bring inspiration and innovation to every athlete in the world. Some of NIKE’s recent successes includes in launch of NIKE+ and NIKEplus. com. This has lead to their opportunity in widening their market by entry into the Digital Sport market. It’s not just about creating the most popular sports gadgets. But rather building more of a personal relationship with the customers. This is part of NIKE’s strategy; to connect and build tighter relationships with the customer, building and enabling online communities for them, and most importantly, allowing NIKE to follow their customers and enter the digital realm. The reason for this shift is simple; NIKE was to go where the customer is. NIKE’s Mission statement Original: To bring inspiration and innovation to every athlete* in the world. *†If you have a body, you are an athlete. † – Bill Bowerman â€Å" Updated: To bring inspiration, innovation, and endurance to every athlete* in the world. *†If you have a body, you are an athlete. † – Bill Bowerman â€Å" NIKE is updating the mission statement to be in better strategic alignment with their mission for all of NIKE’s product offerings. NIKE will soon debut a new energizing all natural sports drink to the mainstream market, known as NIKE Refuel, which will be presented later in more detail. NIKE’s Vision To  carry on his (Bill Bowerman) legacy of innovative thinking, whether  to develop products that help athletes of every level of ability reach their potential or to create business opportunities that set NIKE apart from the competition and provide value for our shareholders. (NIKE 2012) NIKE Goals NIKE recently announced a series of business targets for 2012 that more deeply integrate corporate responsibility goals into the company’s long-term growth and innovation business strategies. The targets set benchmarks to improve labor conditions in contract factories, create a climate neutral company, drive sustainable product design and innovation, and unleash potential by giving youth greater access to the benefits of sport. â€Å"We see corporate responsibility as a catalyst for growth and innovation† said Mark Parker, NIKE’s President and CEO. â€Å"It is an integral part of how we can use the power of our brand, the energy and passion of our people, and the scale of our business to create meaningful change.    The corporate responsibility business targets set by NIKE include: Improve labor conditions by eliminating excessive overtime in NIKE brand contract factories by 2012. Excessive overtime is one of the most serious ongoing labor compliance issues the company and the industry face. NIKE’s priority continues to be improving conditions for the almost 800,000 contract factory workers who make the company’s products. Make all NIKE bran d facilities, retail and business travel climate neutral by 2012. NIKE has exceeded its reduction targets for CO2 emissions over the last two years through the World Wildlife Fund’s Climate Savers program. The company also eliminated fluorinated gases (F-gases) across all NIKE brand products following 14 years of research and development in the company’s NIKE Air cushioning system. Design all NIKE brand footwear (more than 225 million pairs per year) to meet baseline targets by 2012 for waste reduction in product design and packaging, elimination of volatile organic compounds and increased use of environmentally preferred materials. All NIKE brand apparel is targeted to meet baseline standards by 2015, and equipment by 2020. NIKE is designing sustainable innovation solutions into its products that the company anticipates will create benefits throughout its supply chain and support achievement of its targets. Invest in community-based initiatives that use the power of sport to unleash potential and improve the lives of youth. Over the past two years, NIKE has invested $100 million in community-based sport initiatives. The company is targeting a minimum investment of $315 million through 2011. Deliver a new product to market that will compliment and widen NIKE’s current product offering, help improve bottom-line revenues, while brining positive brand recognition amongst new and existing consumer markets. To meet this goal, NIKE will bring to market a new non-carbonated, energizing and all natural sport drink branded as â€Å"NIKE Refuel†. It will be released in 2013, and will be used to advertise and reinforce NIKE’s more recent focus and attention on fair trade practices and ethical working conditions. NIKE’s new â€Å"Refuel† beverage will also be advertised alongside and in harmony with existing NIKE footwear, appeal, equipment, accessories and services. NIKE Core Competency NIKE’s core competencies include their ability to be research and development innovative, maintain strong and influential marketing and brand recognition, and lastly globalization. NIKE recognizes that innovation is most important to staying competitive and in the game. This is also complimentary to their core philosophy with their employees, which is to inspire and challenge their employees on a daily basis. This fosters and promotes a company culture of innovative thinking. Employees at NIKE are encouraged to be curious and open to new ideas, wherever their source. NIKE knows they need to evolve quickly, viewing change as a key source of innovation. This attitude can also easily be observed in the wide range of products that NIKE offers its consumers. It is another example of the company’s use of emergent strategy to good effect. NIKE is a globally known brand. The Swoosh logo is instantly recognizable around the world, just like the Disneyland Magical Castle. NIKE sees this as the symbol of its global leadership. NIKE has successfully built a strong foundation of a brand promise and value proposition. There were some recent changes thanks to Steve Jobs that has now made NIKE marketing independent on the handful of superstars to move merchandise. Instead, they have moved into the Digital Sport market. This platform allows NIKE to have more of a personal relationship with its customers. It also is able to help track trends to better understand the customer’s behaviors and patterns to forecast future firm initiatives. Lastly is NIKE’s ability to penetrate and be a leader in the global market. Not only have they been able to expand the manufacturing into other countries, but they are also recognized and sought out by customers in other countries. NIKE Sustainable Competitive Edge NIKE notes that an important part of a competitive edge is its Sustainability. â€Å"Sustainable Business at NIKE, Inc. It’s not just about getting better at what they do – addressing impacts throughout our supply chain – it’s about striving for the best, creating value for the business and innovating for a better world. (NIKE 2012) Some of NIKE’s key success factors include their distinctive marketing activities, extensive research and development effort to design premium athletic products, and the way they differentiate their product and manufacture it. Stellar performances in some or all of these areas create a lot of value for their customer. SWOT Analysis Strengths Global br and recognition. One of the greatest things about the NIKE is that everyone knows it. Anyone can go anywhere in the world with the NIKE symbol and most people would recognize the brand. Its famous ‘Swoosh’ is instantly recognizable, and Phil Knight, founder and CEO, even has it tattooed on his ankle. This company also has strong international presence and sales their product worldwide. Based on recent analysis from Google Finance, NIKE sells its products throughout the US and in over 190 countries around the world. Fortune 500 ranks them as #135 of America’s largest corporations list as of the May 2011 analysis. NIKE also has market capital of over $43 billion, a well established corporation. NIKE was even rated #41 out of the â€Å"Top 100 Brand Corporations Worldwide† (Rankings 2012). Dealing with competition. NIKE is a very professionally competitive organization. Phil Knight is often quoted as saying that â€Å"Business is war without bullets. † NIKE has a healthy dislike of its competitors. At the Atlanta Olympics, Reebok went to the expense of sponsoring the games. NIKE did not. However NIKE sponsored the top athletes and gained valuable coverage. Operations and distributions. NIKE has ownership of no physical factories so production can be moved to a more cost effective location when necessary. It does not tie up cash in buildings and manufacturing workers. This makes a very lean organization. NIKE is strong at research and development, as is evidenced by its evolving and innovative product range. They then manufacture wherever they can produce a high quality product at the lowest possible price. If prices rise, and products can be made more cheaply elsewhere (to the same or better specification), NIKE moves their production. NIKE distribution within the U. S. alone includes around 18,000 retail accounts, and outside the U. S. there are around 30,000 international retail outlets that sell NIKE products (Watts 2009). NIKE also operates a â€Å"futures† program, wherein retailers can order up to six months in advance. Strong marketing campaign. NIKE is great at expanding their product. The company that started out making just sneakers now makes items from sports equipment to apparel. They always have the hottest celebrity athletes in all sports promoting their product. NIKE definitely knows how to expand well into the athletic market. This goes to show that NIKE is strong at research and development, as is evidenced by its evolving and innovative product range. NIKE’s latest strategy has now enabled them to penetrate more market share with less focus on expensive mass media advertising, and more focused on engaging at the customer level through social media and digital marketing. Weaknesses Price. The retail sector is very price sensitive. In general, NIKE’s products are considered to be of higher quality and as a result have higher prices relative to competitors. While the prices are realistic given the nature of the products offered, at times the consumer may not agree. This presents a weakness. There is much potential in the lower price point for the current market, in addition to new product development in a lower price point market which will be further explored in this plan. Global operations and work environment. NIKE’s facilities are located throughout Asia and South America. The production facilities are located close to raw materials and cheap labor sources. Facilities abroad have attracted bad publicity in recent years. Though NIKE states the facilities comply with local labor standards, generally, they have not met U. S. standards. In 1996 NIKE was exposed for child labor in Pakistan. This led to lots of bad publicity which hurt the company in sales. NIKE has had several years of battling this bad reputation and negative criticism by the anti-globalization groups. â€Å"During the last three years, NIKE has continued to treat the sweatshop issue as a public relations inconvenience rather than as a serious human rights matter,† said Leila Salazar, corporate accountability director for Global Exchange. This continues to be an area of challenge for NIKE as they are the constant focal point for negative criticism by anti-globalization groups (â€Å"Bloomberg† 2004). Product Sector Limitations. Profits are largely dependent on the footwear product while other branded products are not as strong. Most of NIKE’s income is still heavily dependent upon its share of the footwear market. This may leave it vulnerable if for any reason its market share erodes. Opportunities Product development offers NIKE many opportunities. The brand is fiercely defended by its owners whom truly believe that NIKE is not a fashion brand however consumers that wear NIKE product do not always buy it to participate in sport. In youth culture especially, NIKE is a fashion brand. This creates its own opportunities. One great opportunity for the NIKE Company is to promote their brand as fashion forward, as well as athletic wear. This is something that NIKE as a company has been deterring from so that they may be taken seriously in the athletic field. However there are more consumers who see NIKE this way and wear their sneakers for that purpose instead of just athletic wear. Market expansion. There is also the opportunity to develop new products and new markets. NIKE will expand their brand into the sports drink, energy, and health nutrition industry, through the new â€Å"NIKE Refuel† line. Men’s Health magazine author, Laura Roberson commented that â€Å"Energy drink sales have more than doubled in the past 5 years† (Robertson 2012). There is a definite opportunity for NIKE to enter this new market industry, using their established brand to quickly and successfully launch this new beverage product. There is also potential in other industries that can be explored, developed, and also complimentary, such as sport wear, jewelry, and sunglasses. Social responsibility and fair trade practices. Reducing controversy surrounding NIKE’s trade and production practices continues to be an area for opportunity. In response to accusations by consumer groups over unfair labor practices, NIKE has developed a Corporate Responsibility Policy that discusses how they will improve working conditions for international employees. They are also stepping into the line of economy boosting projects that will encourage recycling. NIKE is striving to be a leader and set a responsible corporate example for other businesses to follow. (â€Å"NIKE† 2012) Threats Competition. This includes threats from their competitors with lower costs products. NIKE is about the highest priced athletic brand which puts them at risk for losing many of their customers. Also, competitors are becoming more aggressive and creating high quality products, thus taking from the profits of NIKE. The market for sports shoes and garments is very competitive. Competitors are developing alternative brands that may take away NIKE’s market share. Market Saturation. In terms of market saturation, many of the key manufacturers in this industry have been around for many years. Consumers may be scanning the market for new and different footwear and apparel products. The industry has reached a level of maturity. While style and technology in athletic apparel and footwear has reached a leveling-off point, the important aspect now is for companies to differentiate their existing lines. Responding to consumer activists groups. Not responding to these consumer activist groups poses a threat to NIKE. The negative publicity that NIKE has received thus far has lowered its image to that of being an ethical company. Such publicity has the potential to ruin any company permanently. By disregarding the voice of concerned citizens, NIKE is disregarding their customers, one of their most important stakeholders. Currency exchange. NIKE is exposed to the international nature of trade. It buys and sells in different currencies and so costs and margins are not stable over long periods of time. Such an exposure could mean that NIKE may be manufacturing and/or selling at a loss. This is an issue that faces all global brands. Operating business internationally opens them to the possibilities of currency value fluctuations that can lead to losses. Economic factors. The U. S. economy and the economy around the world continues struggle, which means continued cutbacks in consumer spending. Consumers are becoming savvier and may lean towards discounted items. Managing the financial conditions in the economy today is remains a threat (Bartash 2012). Industry Analysis It is noted there is an increasing number of businesses catering to the recent rise of a new target market: the health-conscious consumer. At NIKE, the goal has always been to give consumers what they want now, as well as to anticipate their future needs, and to thus tailor a strategy to accommodate those needs. NIKE has recognized an unfilled market potential in the non-carbonated energizing sports drink arena, thus developing an entirely new product category. The branding strategy is to enter the market by carving a new niche sports, energy, and health nutrition industry. The objective is to educate consumers about the new drink, as well as to make a profit and gain new market share in the industry. NIKE hopes that by being market leaders, their name will become synonymous with the new drink category, and will aid in them sustaining a competitive advantage over the copy-cats that are sure to flock the market after the new products’ introduction and subsequent success. Competitor Analysis Nike is the world’s largest sports company, 30% bigger than nearest rivals Adidas. Digital marketing has valuable in maintaining this market position for NIKE. Scott Cendrowski  has scribed an insightful article on CNN parchment exploring how the legendary brand blew up its single-slogan approach and drafted a new playbook for the digital era. Cendrowski 2012) When analyzing Nike’s competitors in the sports, energy, and health nutrition industry, the goal is to assess the strengths and weaknesses of current and future companies. Although Gatorade is the largest company in the industry with a strong brand image, maintaining that against its competitors is vital to their com pany. Effective marketing is critical for Gatorade because this is where the majority of their profits generate from. The main competitors in the sports, energy, and health nutrition industry are The Coca-Cola Company, Energy Brands Inc. nd Red Bull GmbH. PowerAde is owned by the Coca-Cola Company. The target market for PowerAde is essentially the same market for Gatorade. Perhaps one of PowerAde’s biggest strengths is that it is owned by Coca-Cola which is the world’s largest beverage distributor. Although the products seem to be alike, they are different in content. PowerAde contains less sodium for hydration and more sugar than Gatorade. PowerAde justifies this by saying their product has a better taste because of the extra sugar. This helps PowerAde establish where they stand in the market. Another rising competitor that shares the market is Energy Brands Inc. , which is also known as Glaceau. Glaceau is a subsidiary of the Coca Cola Company which brands consist of Vitamin Water, Vitamin Energy and Smart Water. All of these water enhanced products pose a threat to competitors in the sports drink industry. These beverages are different in content containing numerous vitamins, minerals and natural caffeine. A main advantage of Glaceau is focusing on innovating new formulas with new nutrients that are backed by scientific and clinical trials. The company aims to connect with its consumers by adding different commentary to each of their products. From an operational standpoint Glaceau strives to compete with their competitors with a strong distribution output. Glaceau considers their distributors as partners rather than customers (Landi 2007). The final competitor that will be analyzed will be Red Bull GmbH. Red Bull is the world’s leading energy drink and although is somewhat different than sports drinks, still poses threats in the soft drink manufacturing industry. As of today Red Bull holds a 40% share of the market for energy drinks, dominating the fastest-growing segment of the industry (Google Finance 2012). Although the company is privately held, it has annual sales that are around a billion cans. The company is able to do this by their well-targeted marketing campaign which puts heavyweight on the expansion of their brand image. To increase the consumer brand awareness they use attractive slogans which differentiates them from competitors (â€Å"Red Bull† 2004). Company Analysis Upon careful analysis of NIKE’s strengths, weaknesses, opportunities and threats, NIKE will focus on developing strategies that would strengthen marketing, distribution, and the management of the new non-carbonated energizing sports drink. Marketing NIKE will develop marketing strategies that would further push its products to its diverse target market and capitalize on existing markets. The marketing approach will focus on the existing customers, in addition to new focused marketing to children, their parents, and women. This will be accomplished through NIKE sponsorships promoting the new drink, in addition to internet and social media marketing. Internet users and their usage have continuously increased due to advancements in technology. NIKE will be more aggressive in advertising through the internet and social sites (both exclusive and external networks) to promote this new product. They will continue to invest more time and effort into Twitter and Facebook; continuing to cultivate social communities excited about sports, enabling NIKE consumers who feel compelled to share them across numerous platforms. NIKE will also place a new priority on the quality of online advertising; making video commercials that provide enough value, through entertainment or education. This would also cater to the target markets of each division especially to the emerging fashion scene to pair up with NIKE apparel customers. The internet marketing strategy also aligns with NIKE’s strategic objectives to follow the customer. Jesse Stollak, Nike’s Global Digital Brand and Innovation Director, recently commented, â€Å"We began to aggressively grow our communities across all categories, using the most relevant social network in each country. To date, NIKE has active communities around the world engaged with nearly 50 million consumers. † The new energy drink will leverage the existing successful platforms as well as the developed Nike+ campaigns, and market heavily in this existing market space. This will also help keep the new product launch marketing expenses at a minimum. The sponsorship of new kid-friendly programs will be initiated to widen the customer base of the target market of kids-adolescent like after school programs and summer/winter programs. Hurley in summer skateboarding, surfing lessons, and snowboarding lessons in winter, Impact Golf Technologies in golf lessons, and other such subsidiaries in soccer, basketball, baseball, and other programs). Target children and youth to make them lifelong NIKE followers and also influence the buying patterns of the parents. In additional to the targeting the active youth, NIKE will also sponsor women empowerment programs to widen the customer base of active wome n since NIKE is currently concentrating on women. Distribution Strengthen distribution in regions where NIKE is currently losing sales, these include footwear in the U. S. Region; and footwear, apparel, and equipment in Americas region. Along with these, a strategy of penetrating emerging markets in developing countries (e. g China) is also to be implemented. Easy access to NIKE products would result in higher sales and revenues. Build more specialty stores or consignment with other existing local specialty stores catering to specific sporting needs like Stoked, Inc. for skating/wakeboarding/snowboarding, Surfworld Co. or surfing and other water sports, Golfer’s Choice for golf, etc. Providing for different sports needs increases NIKE’s followers and also putting the sports drinks in all of these existing customer retails stores. Give a more aggressive take on online stores and allow consignments with other existing specialty stores in this industry like www. skateboard. com and www. ccs. com for skating (Hurley), and www. iloveyog a. com for yoga and other women dominated activities, etc. Going into e-commerce can increase sales because of increasing internet users. Management Continue to strengthen NIKE office relations by offering after office programs and family social gatherings for the employees (picnics, out of towns, etc) to develop network and good relations among employees. NIKE is committed to maintaining closer observance within manufacturing managements (sweatshops) especially within foreign manufacturing locations. Frequently review the employees’ code of conduct and quickly respond to any change needed by the evolving company culture. This is to ensure that the company is following ethical standards to avoid controversies. This will be important to announce these programs to the public and promote the positive changes NIKE has in their work environments around the world and NIKE’s commitment to ethical and social responsibility. Deliver a quicker response to emerging social, economic, legal and environment issues. This is to be able to be flexible to issues or problems and adapt to an environment that the company cannot control. Customer Analysis Once, aimed more or less exclusively toward the athletic audience, sports drinks are now being targeted at mainstream markets as more and more consumers look to incorporate sporting activities into their lives. Meanwhile, the sports drinks category is becoming increasingly diverse as a result of constant product innovation by suppliers. Sports drinks, once targeted solely at athletes wishing to enhance performance and hydration, are breaking away from their traditional mold. New hybrid drinks, with added functionality, are now being launched to meet the demands of increasingly health and fitness-conscious consumers. Originally, sports drinks comprised of three categories: the hypotonic, isotonic and hypertonic. All of these feature water, electrolytes, and varying levels of arbohydrate (sugar). The hypotonic is a low-level carbohydrate drink which quenches thirst and provides fluid, but not much energy; an example is Lucozade Active, drunk to replace fluids while training. The isotonic drink, with its small amount (usually less than 8%) of carbohydrate is said to fuel muscles; it should be drunk before, during and after exercise. The hypertonic is a high-level carbohydrate drink which repla ces lost energy rather than lost fluid, and is ideal for heavy workouts. However, the sports drink category is now more fragmented. According to the research company, Innova Database, between 2002 and 2006 some 1,608 new global sports drink launches were recorded, peaking in 2005 when 550 new sports drinks entered the world arena, a surge which Natalie Tremellen, insights manager at Innova, attributes to the growth in sports waters on the market. (Farr 2008). Marketing Product Focus NIKE will come to market in 2013 with a new non-carbonated energizing sports drink. This NIKE energizing sports drink will become one of the most sought out sports drinks in the industry. This new product will have the NIKE branding, known for the highest quality and international recognition. This will help launch the product into market, easily and measurably hitting NIKE’s natural and existing target markets. The strategy is to excite the market with mass advertising, stimulating the demand, and then saturate the market with the NIKE energizing sports drinks. Other new and innovative product types can be rolled to market at a later date using this new product line, including the introduction of carbonated beverages or energizing edibles which can be later expanded into. NIKE’s new energizing sports drink will be a premium product, using quality ingredients and packaged in a way that is unique and appealing to the consumer. This energizing sports drink will also be categorized as a healthier choice for the consumer. Both lower in overall calorie content, in addition to the all natural ingredients and energy boosting vitamins. The target market for NIKE’s sports drink includes NIKE’s existing markets segmented for their footwear and appeal. To be more specific, this includes the active, and the ‘getting active’ men and women, primarily in the ages 16-30. Consumers who purchase more heath conscious beverage items would also be in NIKE’s new market. Because NIKE is everywhere, they will also focus advertising in a multiethnic approach to promoting the product around the world. NIKE will target a profit margin on this new product at 60%. It is forecasted that the new product line with have an ROI in less than 2 years, and trend into positive revenue earning position within a short period of time. Target Market Digital marketing has made NIKE’s existing customer target market easily accessible and relatively low cost to market to, as they are already NIKE consumers and part of their social network. NIKE’s ideal target customer profile for this product includes athletes of all ages and at all skill levels, and those that would normally choose non-carbonated beverages or drinks such as ice tea or still water to recharge after a workout, competition, or just to enjoy for the added energy benefits. This target market would not only include the target age ranges of 16 to 30, but NIKE would also seek out the younger consumer of kids in the ages of 7 to 15 years old who enjoy playing sports and drink something before, during, or afterwards. The second market segment, are women from 17 to 35 years old who care about the calories in their drink, and also who want all the vitamins necessary in a drink for their kids. Lastly, NIKE would introduce a multiethnic approach to promoting the product since NIKE sports drink will be an international product. Thus, ethnic infusion in advertising will be important. Each of these identified market segments are looking for some kind of non-carbonated sports drink or something to provide an energy booster. Most active or athletic individuals lead a healthier lifestyle, so the â€Å"all natural and low calorie content† would be a great way to diversify the product from other competitors, essentially making NIKE sports drinks the healthier choice for a better quality of living. NIKE is already a leader in the sports industry, the need for replenishing energy and hydration builds a natural and complimentary opportunity to enter the sports drink market. Points of Difference NIKE’s energizing sports drink will be differentiated in the overall market because of its established brand equity, use of high quality ingredients to make the beverage (including fair trade practices), in addition to the clever and attractive packaging. One of NIKE’s strengths creates an automatic competitive advantage and edge to enter this new market because it has already established such strong brand recognition and customer loyalty, both nationally and internationally. The distribution to all market channels for this product will be a logistical dream for this new line since the distribution infrastructure already exists, and is proven to be successful. This new product will be strategically scheduled into the delivery cycles. Only selective and premium all natural ingredients will be used to make the NIKE energizing sports drinks. NIKE will capitalize on the growing health trends in society and will focus some of the advertizing toward the all natural quality ingredients. In addition, the Fair Trade certifications will be proudly displayed and advertised on every bottle label. One of NIKE’s most important promotional strategies is the packaging. Studies have shown that over 70 percent of purchasing decisions are made in the store. This means, you need to have packaging that can sell itself to the consumer when they are debating if they want to purchase the item or not. It takes a customer about 2. 6 seconds to make a purchasing decision between two different types of packaging. (BKS. com 2010) NIKE’s package must immediately convince the customers to purchase the energy drink the moment they see it. NIKE will need to identify a fitting way to bottle the drink and create a catchy advertising label and name so that it will bring the consumer to want to select the new NIKE drink over all others. Positioning NIKE will place the new energizing sports drink throughout the US and Europe to start; then, later expand the new product into the other 190 countries around the world in which NIKE products are already sold. NIKE’s an established company and has strong international presence and has existing profitable product sales worldwide. This easy access to NIKE’s existing target markets would result in higher sales and revenues for the new product very quickly out the gates, as this new product line and NIKE’s existing product lines are complementary to each other. NIKE would also place this product in stores that are more specialty type sports stores, as well as in gas stations, grocery stores, corner markets, and other retail stores where existing competitor products are sold. Digital sport marketing platforms has already allowed NIKE to build more of a personal relationship with the customers. Nike+ will help introduce this new sports drink directly to the end consumer with consistency and frequently. Nike+ will continue to encourage building and enabling online communities for customers to discuss the product and offer feedback, ideas, suggestions for enhancement on the new product line or future product developments. This stays in line with NIKE’s recent strategic changes to follow their customers and track trends in the digital realm. Of course, pull and push type methods of marketing strategies will be advertised as banners and pops throughout the digital communities. Marketing Program In brining this premium energy sports drink to market, NIKE will focus on these three strategies: Price. NIKE has an excellent quality product at a reasonably competitive price. The total cost of competitor’s product is priced between $1. 29 and 2. 39 depending on the size and the store. NIKE will set their price at the higher end. NIKE will later (post 2013 new product debut) introduce to market the value pack; selling packs of six and twelve for the quantity value savings. An important part to advertising along with price is highlighting that NIKE will manufacture this new product within Fair Trade qualified standards. NIKE has had several years of battling this bad reputation with a lot of negative criticism by the anti-globalization groups. This would be a good opportunity to help change perceptions about NIKE, as NIKE is changing and wants to ensure ethical practices are practiced within their offshore manufacturing facilities. Placement. The costumer will find this product pretty much everywhere. Existing NIKE retail accounts will carry this beverage, including the NIKE-owned retail stores, internet sales, and through a mix of independent distributors and licensees, in over 190 countries around the world. Locations could range from grocery stores, gas stations, pharmacies and supermarkets to hospitals, online, and in vending machines. Promotion. Digital marketing will be a key component in this area. Leveraging the Nike+ website will be an inexpensive and efficient way to launch promotional coupons and advertising banners. This can be accomplished in various social media sites such as Facebook, MySpace, Twitter, and others. Also having interactive ads in magazines and sending coupons over the mail in the Sunday newspaper or through online sources. NIKE will distribute product samples at big sporting event or events that NIKE sponsors where their target market will be in attendance. NIKE will also start to include the NIKE energizing sports drink within their footware and apparel commercials and vice versa. Financial Data and Projections References NIKE, Inc. official website. (2012). Using Web Sources in Writing. Retrieved from http://help-us. NIKE. com/app/answers/detail/a_id/113/~/what-is-NIKEs-mission-statement%3F Cendrowski S. , (2012, February 13). NIKE’s new marketing mojo. Fortune Magazine. Retrieved from http://management. fortune. cnn. com/2012/02/13/NIKE-digital-marketing/ Tyler, J. , (2011). Using Web Sources in Writing. Retrieved from http://www. articlesnatch. com/Article/NIKE-s-Core-Values-And-Business/1287651 Google Finance, (2012, July 29). Using Web Sources in Writing. Retrieved from: http://www. google. com/finance? q=NIKE# Robertson, L. , (2012, March 19). Guzzling energy drinks but more tired than ever? Men’s Health. Retrieved from http://www. msnbc. msn. om/id/46764607/ns/health-mens_health/t/guzzling-energy-drinks-more-tired-ever/ Leftfoot, S. L. , (2012, February 13). Nike’s New Marketing Strategy — The Shift to Digital. Fortune Magazine Article. Using Web Sources in Writing. Retrieved from: http://www. nikeblog. com/2012/02/13/nikes-new-marketing-strategy-the-shift-to-digital-fortune-mag-article Watts, J. , (2009, July 22). What Makes Nike Strong and Weak. Using Web Sources in Writ ing. Retrieved from: http://voices. yahoo. com/swot-analysis-NIKE-company-3843094. html Online Extra. (2004, September 19). Nike’s New Game Plan for Sweatshops. Bloomberg BusinessWeek Magazine. Using Web Sources in Writing. Retrieved from: Using Web Sources in Writing. Retrieved from: Bartash, J. , (2012, August 2). U. S. Hiring in July likely to be a lackluster. The Wall Street Journal. Using Web Sources in Writing. Retrieved from: http://www. marketwatch. com/story/us-hiring-in-july-likely-to-be-lackluster-2012-08-02 Landi, H. , (2012, November 20). The Rise of glaceau. Beverage World 126. 4 2007, 22-26. Business Source Complete. EBSCO. Red bull GmbH SWOT