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Nike Air Max

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NTU Marketing

on 5 June 2014

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Transcript of Nike Air Max

Conclusion

The factors that consumers take into consideration before purchasing Air Max shoes:
Technical: Athletes
Economic: Consumers go for the shoes that they can afford
Social: University and college students, fashionista
Personal: Consumers who are loyal to the brand
Need to maintain current product portfolio and marketing strategies of Air Max in order to sustain their competitive advantage.

Need to target newer segment to capture a wider market with mass customer base.

Current youthful and fashion image: may hinder older generation market segment penetration.

Nike
brand loyalty
and
innovative designs
will be key success factors when going to the African market.
PLACE
Differentiation: within the Air Max collection there are >50 styles
Product
SINGH, S., SHARMA, S., VASHISTHA, S., KUMAR, M., 2009. Nike Marketing Strategies [online]. Available at: http://www.slideshare.net/shivani2401/nike-marketing-strategies [Accessed 17th November]

BENGSTON, R., WARNETT, G., ENGVALL, N., SCHONBERGER, N., 2012. The 100 Best Nikes of All Time [online]. Available at: http://www.complex.com/sneakers/2012/12/the-100-best-nikes-of-all-time/air-max-1 [Accessed 10th November]

KO, E., TAYLOR, C., SUNG, H., LEE, J., WAGNER, U., NAVARRO, D., and WANG, F., 2012. Global Marketing Segmentation Usefulness in the Sportswear Industry, in Journal of Business Research, 65, pp 1565 – 1575.

NIKEBIZ., 2010. Revenue Distribution [online]. Available at: http://media.corporate-ir.ne/media_iles/irol/10/100529/AnnualReport/nike-sh09-rev2/index.html#select_financials [Accessed 1st November]

BUNCE, B., 2012. Nike: The Digital Experiment [online]. Available at: http://thedigitalexperiment.wordpress.com/2012/05/20/nikes-big-digital-arse-intro-segmentation/?relatedposts_exclude=87 [Accessed ]

PORTER, M., 1998. Competitive Strategy: Techniques for Analysing Industries and Competitors. New York: The Free Press.

SOLOMON, R., MARSHALL, G., STUART, E., MITCHELL, V., and BARNES, B., 2009. Marketing: Real People, Real Decisions. 1st edn. Essex: Pearson Education Limited.

KASANAGOTTUWAR, A., ASHARA, P., KAUSHIK, M., SHRIWASTVA, R., WAMORKAR, V., and DAS, S., 2011. Marketing Strategies [online]. Available at: http://www.slideshare.net/PareshAshara/nike-12906460 [Accessed: 5/12/2013]

VARIER, A., NEELIMA, A., AVISHEK, A., RAHMAN, M., SOH, A., and LEE, C., 2011. Nike: Strategic Analysis [online]. Available at: http://www.slideshare.net/abhishekvarier/nike-6758237 [Accessed 7th December]

ALIAN, S., 2011. Nike Financial Analysis [online]. Available at: http://www.slideshare.net/SarahAlian/nike-financial-analysis [Accessed: 7th December]

NIKE INC., 2013. Annual reports [online]. UK: Nike Inc, Available at: http://investors.nikeinc.com/Investors/Financial-Reports-and-Filings/Annual-Reports/default.aspx [Accessed 05/12/13]

MINTEL., 2006. Sports Fashion UK [online]. Available at: Mintel [Accessed: 11/12/13]
IES Business strategy, 2012. Perceptual Map [online] IES Business strategy. Available at: http://strategicthinker.wordpress.com/perceptual-map/


References
Recommendations
Comfortable and reliable.
Young, trendy and stylish => luxury
One of 5 most ethical brands as perceived by consumers in France and Germany
"Nike Reuse a Shoe"; "Nike Considered"
Sustainable business report [online]
Brand perception
SEGMENTATION
Micro Environment - Porter's Five Forces
Macro Environment - PESTEL
Ranked number 1 best selling trainers based on popularity at retail stores (Mintel, 2006)

Most famous model because of the foam & air
technology placed in the soles of the trainer.

Series include:
Air Max 1
Air Max 90
Air Max 95
Air Max 2011


These have been developed across the years since first launched in 1987 & considered the most ultimate achievement.

Improved performance in searching new designs and styles of Air Max
Well known brand image
More variety available to customers
Latest designs available

(Bengston & Warnett, et al. 2012)
AIR MAX
Endorsement: promotes Nike brand with most popular sports personalities and teams.
Promotion
TARGET MARKET
Nike operates globally in the consumer goods sector and is most popularly known for its trainers with their current marketing activities being the most recommendable in the market at present.

Timeline:
1950 - 1959: When Nike breathed its first breathe, it inhaled the spirit of two men (Phil Knight & Bill Bowerman).
1960 - 1969: Founded on a handshake with $1000 capital investment.
1970 - 1979: The birth of Nike in the market
1980 - 1989: A decade of transition and re - dedication
1990 - 1999: Nike extend its reach and cooperate with world sport.
2000 - Present: Leading new millennium and continues to expand in new ways...







The brand has evolved from ‘being an importer and distributor of Japanese specialty running shoes to becoming the world leader in the design, distribution and marketing of athletic footwear’ (Singh & Sharma et al., 2009)
THE RISE FOR EXCELLENCE…
"TO BRING INSPIRATION AND INNOVATION TO EVERY ATHLETE* IN THE WORLD"

*If you have a body, you are an athlete

Air Max prices are adjusted based on differences of target markets and location.

Prices in different retailers may differ.

Air Max price varies for adults and children.
Price
Price
Air Max 2014
Air Max 1
Air Max 2013
Air Max 360
Air Max 95
Air Max most suitable for casual wear and sportswear.

Sport shoes are quite competitive within the sportswear products.

Air Max strength is mainly performance and design factors (colour, style)
POSITIONING
The Marketing Mix
STP Analysis
External Environment
Introduction and Company Background
Consumer Behaviour
Created by:
Baljinder Bassi,
Keyur Desai,
Linh Nguyen,
Hsiang-Yueh Liu,
Junyi Jin,

(Source: Porter, 1998 & Das et al. 2007)
(Source: IES business strategy, 2013)

Air Max -> Cash cows
(High market share,
medium market growth)
Product

Air Max -> Maturity stage
(Slowed growth,
mostly saturated market)
Recommendations

Product differentiation tailored at international marketing strategies to attain a greater competitive advantage : unique characteristics for each market to gain dominance over rivals (Das et al., 2007).


Reach out to the African continent with the use of strategical marketing to develop new markets for increase in global recognition.
Nike ID
Detail customization (colour, material, shoe width) of Air Max trainers
Online or at NikeID Studio
+£50 and 45 days for delivery.
Promotion
PRODUCT
PRICE
PROMOTION
Competitive advantage - efficiently maintained (Varier et al., 2011)
Political
Foreign nations
Rates of tariff in Foreign Direct Investments (FDI's)
Economical
Recession
Increase in currency exchange rates, interest & inflation rates
Low cost outsourced manufacturers
Social
Brand conscious
Lifestyle - demand for sports products
Corporate Social Responsibility (CSR)
Technological
Market innovations & change in fashion/products
Specialists
Lean manufacturing
Environmental
Recycle, reuse
Reliability & sustainability of materials used
Legal
Ethical issues: child labour & working conditions
Patents of design & products
(Varier et al., 2011 & Alian, 2011)
Direct marketing:
Mass media marketing:
Advertisement: focus on emotional branding strategy
Nike+:
Sport watches, Fuel bands and running application:
Integrates with Apple devices to track and record activity.
Criticised for lack of security.

Retailers (JD Sports, Foot Locker, Footasylum & Sportsdirect) in form of licensees, subsidiaries and distributors are present in 200 countries worldwide.
Indirect channel:

Direct channel:
B2C
Newest product features:
Max air cushion
=> flexible and softer ride
Lightweight hyperfuse construction
=> comfort and breathability
Flywire cables
=> adaptive, supportive fit
Ansoff matrix: Product development stage
BCG matrix
Product Life Cycle:
Too expensive (vs competitors, vs production costs)
Unethical
Sweatshops problems: unsafe working condition, low wage, child labour, workers abuse (1996 - 2011).
Refused responsibility
Cover up?
Good
Bad
Product
Popularity amongst celebs and famous people:

Nike flagship stores
Online (Nike.com, Asos) – free delivery
Recommendations
Additional suggestions:
Improve the distribution of Nike ID to decrease the lead time for delivery.

Provide direct distribution : help decrease the price so product can be positioned to customers with limited expenditure range.

Improve on technology and performance ideas of each of the new series of Air Max produced to market a wider audience.
Target the older generation with innovative initiatives and the use of global media to stay healthy : demographically, life expectancy is likely to rise from 2012 – 2020 (Euromonitor, 2012).
Place
Product
Nike Air Max uses price leadership strategy and value based strategy,
consumers tend to purchase because of HIGH-ADDED VALUE

Compare by brand

Compare by Nike and main retailers in UK

Nike Air Max shoes focus on
Bowman's Strategy Clock: Nike Air Max falls into categories “3” (Hybrid) and “4” (Differentiation), where they set different pricing strategies for different segments of age groups.
Source: Bowman (2008)
1. Male : Female = 5.25 : 4
2. 16-55 years of age range
3. Higher income group
4. Asia Pacific, Western Europe, North America
(source: Euromonitor, 2013 & Nike Inc., 2013)
(Source: Euromonitor, 2013)
“Segmented Pricing” :
Psychographic
Lifestyle --> Sport-lover
Fashion
Latest Technology

Geographic --> Global Footwear Market
Profile
Full transcript