Introduction

Nike is the biggest sportswear manufacturer in the world. Based in the United States, the company has branches in more than 150 countries across the globe (Shank, 2014). The company specializes in the production of sportswear with the primary product being shoes which contribute to a significant portion of their sales. Nike is seeking to introduce a new brand of shoes in the market, as such, the marketing team needs to understand how well the company is placed in launching the product.

SWOT Analysis

Strengths

• Nike is the biggest sports shoemaker in the world, as such, it enjoys a significant market share. The company provides sport wear shoes for various sport such as; basketball, golf, football baseball, tennis among others (Brohi, Prithiani, Abbas, Bhutto & Chawla, 2019).
• The popularity of each sport creates an extensive market for the sportswear because the brand will be worn by both the players and the fans (Epstein, Buhovac & Yuthas, 2010).
• The company has an active research and development department, as such, this is evidenced by the continuous evolution of Nike products over the years. Nike has been able to determine market demands way before and come up with products to address these demands (Epstein, Buhovac & Yuthas, 2010).

Weaknesses

• Despite the size of the size of Nike, the company is heavily dependent on sales generated from shoe sales. Shoe sales represent a significant portion of its revenues compared to other revenue streams (Gurel, 2017). Therefore this means that if anything were to happen to the shoe market, the company would be left exposed.
• The majority of Nike sales are driven by the retailer. Retailers are price sensitive hence will squeeze the company for lower margin as they aim to capture the consumer (Gurel, 2017). As a result, this reduces the revenues generated from sales because of the slim margins.

Opportunities

• Nike has invested heavily in its research and development. As a result, the company can exploit new market trends, and its core customers defend it as a sports brand; however, many more people who buy Nike view it as a fashion brand because they do not participate in sports (DeLong, 2009).
• The company has heavily invested in its brand; however, it is heavily dependent on shoes to drive sales (Gurel, 2017). Therefore, Nike could capitalize on diversifying its revenue source through the increased development of other items such as clothing or accessories to leverage on a well-known brand.
• The business should consider capitalizing on its global brand recognition. Nike has a globally recognizable brand, yet it does not have a significant presence in many of these markets (Gurel, 2017). Therefore Nike can capitalize on these markets to expand on its revenue base.

Threats

• Nike faces stiff competition from other sportswear brands such as Puma, Umbro, Under Armor and Adidas for the same market segment (Gurel, 2017). Consequently, these companies are well established, and any slip up in business would be invaded by the rivals.
• Additionally, Nike has operations internationally; therefore, this means that they are subject to market volatility in the foreign markets (Gurel, 2017). The different currencies fluctuations ensure that Nike does not enjoy sustained stable income.

Part 2: Brief Product Description

The marketing team is seeking to introduce a new brand of shoe in the market. Based on the current opportunities available in the market we believe that a shoe that addresses the fashion enthusiasts with an edge of sportswear feel. The shoe should be meant for walking and should be comfortable and classy. Accordingly, the shoe should target the youth from 10 years all the way to 30 years of age.

Current opportunities that make the idea of the shoe realistic:

• The appeal of Nike as a fashion brand
• The high value associated with Nike shoes.
• Medium low markets can afford the shoe in foreign countries.

Part 3: Target Market

Youth

Despite Nike being a global company, North America, its home market contributes to 42% of the overall revenue generated in 2018. Furthermore, the majority of this sales were achieved from selling high end products with 55% of the high-income earners confirming that they own a Nike branded item in their collection (Survey, 2018). The new product Air Steps will be addressing the youth market that is not financially well off to the standards of high income. The shoe will not look to address the various outdoor activities that people within this age group engage. Therefore the shoe will be of the highest quality and should be light enough for short runs, small-time football activities, walking, and hikes. Additionally, the shoe should be appealing and can be comfortably worn as fashion for the appearance sensitive target market. The youths being targeted start from the ages of 15 to 30 because in this segment tend to participate more in outdoor activities than any other age segment. According to research, the number of individuals that participate in outdoor activities in the United States was at an average of 59% of the total population (Survey, 2018). Therefore, this indicates that this target group engages in a range of activities thus creating the need for outdoor sports shoes. However, currently, in the market, no shoe addresses all these activities, and if anyone wants to participate in more than one outdoor activity, he or she will have to carry an extra pair of shoes. As a result, the air steps step in to provide a solution to this and promote the free spirit.

Medium Low-Income Earners in Foreign Countries

The majority of Nike’s product is targeted to the well-off high-income earners. In the 2nd world and third world countries whereby the average income ranges between $50,000 -20,000 dollars per year. The shoes that Nike sells are price over $100 which mean they are well out of reach which leaves this target market highly un-exploited (Survey, 2018). Quality shoes such as air step will significantly address this target market. Medium and low-income earners in these countries are price sensitive and therefore, would find it hard to purchase items that are over $100. Thus, with the quality and utility of the shoe customers in these markets will not only have a Nike branded piece but also at a lower price. Furthermore, medium and low-income earners make up a considerable portion of the market share in these countries, as such, targeting this market would significantly boost Nike’s revenues. In the recent increase in revenue 2018, Nike only experienced a growth of 5% in emerging countries to indicate that this market is mostly unexploited.

Part 4: Persona Descriptions

Nicole swift is an outdoor enthusiast, who participates in a range of sports activities during the week. Since a high school soccer medalist the now mother of two has continuously engaged in outdoor activities. Nicole is a junior executive, and due to the nature of her work, it requires many hours of sitting which is not healthy. As a result, she has created a family tradition that each month the family has to have weekend whereby the head out and participate in outdoor activities as a family to compensate on the unhealthy lifestyle of her work. She believes that through participating in a range of outdoor activities, it refreshes the body from fatigue and any form of stress. Accordingly, she is keen to install this tradition in her children. However, due to time and financial restrictions she is unable to be as active as she was previously. As such she seeks to do most of the activities within her budget to maintain her current level of fitness.

Welling dynasty is a sports tourists who enjoy learning new outdoor activities played by different people across the world. As a young man who has recently gotten employed, he travels the globe for business-related activities but while at it he likes to explore the different outdoor activities that the locals engage. Therefore, he is always forced to pack an extra pair of shoes that can help him adequately handle the needs of the various sports events in these countries.

Part 5: Objectives/Goals

Increase in revenue

Nike is aiming to increase the revenue that it is generating through the creation of a new product. Currently, the company is generated revenues of more than 34 billion dollars. The second biggest sportswear company enjoys revenues of 21 billion dollars and rising. Given the rate at which Adidas is increasing its revenue, it is paramount that Nike solidifies its spot by increasing revenue streams. An increase in revenue can be achieved through the creation of new products that address different market segments (Brohi, Prithiani, Abbas, Bhutto & Chawla, 2019). Nike focuses on high-income earners, therefore, by diversifying this market through the creation of a new product will help in increasing the revenue to reach 40 billion by 2021.

Expansion in Emerging Markets.

Emerging markets around the world have been left unexploited for the longest time such that in the year ended 2018 the company was able only to generate 5% growth (Brohi, Prithiani, Abbas, Bhutto & Chawla, 2019). Marketing efforts have been primarily focused in the established markets such as North America, and major cities in developed countries. Nike should expand its presence in developing countries beyond franchises to capitalize on the big base of sports fans in these countries.

Brand Awareness

Beyond the home markets and a few established market Nikes brand is not as popular in another market. Nike uses sports people to be brand ambassadors to create brand awareness and relatability to products in various countries (Shank, 2014). However, in developing countries, these strategies are not as effective, and other forms of marketing would be better to increase brand awareness.

Conclusion

Air steps are an innovative product that will prove beneficial to Nike. Consequently, this is because not only does the product diversify Nike’s market but also increases brand awareness in other less developed economies. Accordingly, due to the multiple capabilities of the product, the product is expected to be produced on a mass scale encroaching on the market of competitors. The company can easily leverage its brand power to push the product in its well-established markets and use it to generate brand awareness in less established markets.

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