Nike Cortez was not the first sneaker to bear the name Nike, but it is evident that it was the first major innovation. It emerged to be the first product that helped Nike, footwear companies realized significant profit and acquired larger market share. It was first unleashed into the market in the 1972 Olympics to help provide the athletes with more comfortable and durable shoe for running and training. From the humble beginnings, the footwear brand has lived numerous lives over the past four decades and is currently most favored shoe across the globe. Nike Cortez is at the maturity stage of the product lifecycle since the manufacturer currently focuses on maintaining the market share built. At the same time, there is tuff competition from other footwear companies hence more investment currently made in the marketing sector. This competition has called for a continuous modification of the production process to maintain their competitive advantage. This product acquired almost immediate popularity due to the initial exposure or endorsement by famous athletes. In the first year alone, the product sales reached $800,000 and had grown over the years to make Nike an independent and iconic footwear brand (Davis 67).
Even after the launch of the product in 1972, the company has continuously developed numerous varieties of Nike Cortez focusing on different colors and changing the leather upper for nylon, the use of retro' version and other materials to impress the buyers. Through the creation of this diversity in the footwear market, the company caught the attention of teenagers in various cities who adopted the Cortez look and embraced it as their own. This made the product acquire significantly larger market share across the globe and higher revenues. The main strength of the product is the link to the hip hop lifestyle, power, and respect. The musicians, racketeers, and dancers identified with the product. At the same time, some color designs afforded those who wore the shoe with significant recognition and esteem. As a result of the high market prices for the product, the company has controlled a premium of the product hence high-profit margins ( Boone and David 26). At the same time, the cost is higher that the competing footwear companies which make the product out of reach for numerous clients around the globe and especially in the emerging markets. This causes a risk in reduced demand when the economy falls into recession. Consumers lower their optional spending to the non-essential products and services.
Nike's brand image has provided a competitive advantage over the existing and emerging companies in the footwear industry. Nike Cortex created a strong image among the teenagers and the athlete's customer base. The brand creates a mentality among the consumers that allow the company to charge a premium price over other companies, maintain a larger market share and generate high revenues (Amariei, Daniel and Alexandru 64). In other words, Nikes brand image has helped advertise its various products with expressions such has Just Do It and Bo knows which has moved beyond the normal expression. The footwear became part of the youth and athletes and renown across the globe just as Coke and Microsoft. In regards to market positioning, Nike is currently the titan in the sports textile and shoe market with a market cap of about $19billion. They dominate the market with 57% share of the running market. "Just do it" has been their brand positioning slogan which means being with the customers and at the same time focusing on what is essentially important to the client.
Nike Cortez gained popularity and were seen by a larger mainstream audience with music icons such as Eazy-E and Whitney Houston embracing the shoes. The perceptual map indicates that the product is both classy and fashionable as compared to the other main competitors in the market. Because of this, a significant number of the customers are athletes and believe the product is more premium as compared to Addidas, Reebok or Puma. It is perceived to be the best option in the footwear industry. The product focuses on young athletes who form a larger part of the sales strategy specifically to categories related to soccer, running and basketball. In the coming years, these young athletes are expected to form a significant percentage of the market.
Marketing Mix
Product: Nike provides comfortable sports shoe added with some value-added features. Their products have been linked to high performance as a result of "air" system made into a regular feature in their models. The air pocket in the shoe helps reduce the shoe and reduce pressure on the buyer's heels. Nike Cortez is comfortable, durable, and lightweight and has a distinct style which has enabled them to market their products effectively.
Place: The product producer and the consumers' form part of the channel of distribution. Zero level or a direct channel allows the customers receive directly the product from the manufacturer. Nike follows a one level channel and an indirect channel whereby the clients buy the products from a middleman (Retailer). They outsource Nike Cortez production to various parts of the world such as Korea who produces the goods then send to retailers. for this case, there is only one channel between the company and the consumer.
Pricing: Nike prices their products on the upper end of the scale and has been perceived as marginally higher than their competing company Adidas. At the same time, they are still commanding the market. Once the manufacturer sets the prices, the dealers have no say in the matter. The retailers make a profit of between 20% to 30% profit from the sale of these products (Ranebi, Kenza, and Leonor 52). There exists an annual and bi-annual discount given at the stores to attract the customers.
Promotion: Nike has over the years focused on sponsorships and advertisement as an approach of promoting Nike Cortez. Brand equity was the center of the promotion with a significant focus on endorsements, development of flagship store and sub-branding.
Promotional Program Situation Analysis
After an organization's marketing plan is reviewed, the marketing department develops a promotional plan to help conduct a simulation analysis. In this program, the situation focuses on factors that are relevant to the development of the creation of a promotional strategy. Just as the overall marketing situation analysis, the promotion program analysis covers both the internal and the external analysis. The company has invested about 1 billion in the last three years for their stores and plans to spend more in future and increase their market share. The company applies electronic media to promote Nike Cortez and other products. At the same time, endorsement and sponsorship are used as their promotional tools with the brand logo playing an essential part as well in the overall promotion approach. The primary competitor is Reebok with 16% market share. Adidas controls about 6 % of the market share with revenue of $500 while Converse has about 3%. The company has a competitive advantage and is famous for the development and research which is evident with a broad range of products and designs. At the same time, the logo makes the product recognizable across the globe and promise high-quality products at significantly reasonable prices. Subsequently, it is globally available in global markets. The major weakness is that the company lacks their own retailers hence the retailers are price sensitive. The sizes are also not available in every design. However, Nike has a larger market share with higher sales observed during the Olympic season.
Marketing strategy
Market penetration is pursued through the campaign and involves a focus on sales of the existing product to acquire a larger market share. This is the best strategy since there is a possibility of lower risks. The strategy entails selling more products to the existing customers and the prospective customers who can be found within the same geographical location. For instance, the current customer base includes teenagers and athletes, and this strategy will include an attempt to sell more of the footwear to the same group and increase revenue.
Target Market for product developing IMC program
Nike has a significant dominance in the athletic apparel with almost $28 billion sales yearly. Over the years they have put more effort to preserve the following customers who are loyal to the brand . Subsequently, the target market is expected to be women and Young athletes. It is expected to sell across the globe to prospective clients with similar lifestyle, values, and fashion in the footwear industry. Regarding the behavioral target of the market, the market will focus on the degree of loyalty to the Nike brand. Through the brand love and brand loyalty, discounted cards will be provided to allow buyers collect points each time they shop and use them for later shopping.
Shoe brand will provide the consumers with an opportunity to sieve numerous items in the market and give them a reason to buy the product. The brand will provide an essential experience related to the product and company that produce and deliver the product. Branding has become a powerful component in the footwear business as it determines the buyer decision of an athlete. For this reason, a footwear brand is a determinant towards the success of any footwear product, and it depends on the customer's perception. The purchase decision is further shaped by functional experience related to shoe design, comfort, prices as well as the emotional experiences such as social status, and improved performance. The promotional plan is expected to focus more on the brand to ensure repeat purchase for the product. This will be acquired when Nike as an organization is promoted across the globe. Through effective brand management, the product will gain a market presence within a short time and high sales volumes.
The market will be segmented into athletes, men, and women. Demographically, the market will be segmented by age, gender, customer occupation, and generation. A significant number of the customers will be between 15-40 years with an equal distribution or production to male and women. With the increasing number of tweens and teenagers, there is a need to build a strong brand loyalty. Geographically, the market will be segmented into regions, cities, and nations. In the US for instance, it will focus on American football and basketball. Regarding the behavioristic aspect of the market, Nike will focus on how the customers feel about the footwear and build customer loyalty through the process. Building a stronger brand loyalty will help lead to increased sales and market share.
Works Cited
Amariei, Daniel Mihai, and Alexandru Victor Amariei. "Study on the Evolution of Weights on the Market of Competitive Products using Markov Chains." Analele Universitatii'Eftimie Murgu' 23.1 (2016).
Boone, Louis E., and David L. Kurtz. Contemporary marketing. Cengage Learning, 2013.
Davis, Robyn E. Word of foot marketing: Nike's marketing efforts prior to the" Just Do It" campaign. Diss. Wichita State University, 2016.
Ranebi, Kenza, and Leonor Thenet. "The consumer behaviour in the sportswear industry." (2015).
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