RESEARCH DEVELOPMENT

MARKETPLACE RESEARCH

The Nike brand has a huge marketplace, always trying to improve on their current products and create more for the consumers to love. Nike markets all kinds of footwear which includes footwear designed for aquatic activities, baseball, cheerleading, football, golf, lacrosse, outdoor activities, skateboarding, tennis, volleyball, walking, wrestling, and other athletic and recreational uses. Nike doesn’t only focus on footwear though, research found that the consumers wanted more than just footwear, so they also market apparel with licensed college and professional teams, and league logos.

Performance equipment can also be found under the Nike brand name, including bags, socks, sport balls, eyewear, timepieces, electronic devices, bats, gloves and protective equipment. It isn’t enough to just wear the shoes, athletes want anything and everything they can find to have the Nike logo attached to it.

Nike differentiates themselves from their competitors because they focus on the technological and scientific side of their footwear. Customers of Nike are not only looking for a fashion statement, they are also looking for performance, technology, fashion and leisure.

MARKET OBSERVATION

Nike conducts both qualitative and quantitative research for gathering vital information for its products and new launches of products. They put focus on the consumer for why, how, or what they do to make a decision when purchasing Nike products. Nike analyses consumer markets, as well as competitor’s markets in order to understating the consumer’s buying behaviors and their buying patterns. Nike uses online surveys and questionnaires to understand what the consumers like or do not like, and what they could do to change the consumer’s attitudes to buy more of their products. Because Nike is so interested in customer feedback, they have gained the loyalty and value they have today. Through market observation Nike has added a special feature to their website where customers can create custom shoes to match their individual style and create a one of a kind pair of shoes.

ONLINE SURVEY ANALYSIS

Nike administers online surveys to their consumers. Doing so gives Nike the opportunity to learn what motivates their customers, uncover what's important to them, and gather other meaningful comments and feedback on Nike's performance and products.

These online survey are more likely to yield honest responses. This is because "respondents are more likely to provide open and honest feedback in a more private survey method. Methods such as online surveys, paper surveys, or mobile surveys are more private and less intimidating than face-to-face survey interviews or telephone surveys," (Wyse 2012). The private environment mixed with the anonymity aspect of  online surveys are what generate honest responses. This is one benefit of many that Nike would use online surveys for gathering data. Other benefits include: cost, decision making, and ability to compare results.

When it comes to cost, online surveys have a "very small cost per respondent... Even if incentives are given to respondents, the cost per response is often far less than the cost of administering a paper survey or phone survey, and the number of potential responses can be in the thousands." Nike does offer incentives for completing one of their surveys with the access code provided on your receipt. The current Nike survey incentive is $5 off your next purchase. Nike saves money by giving out these incentives, and ultimately makes money by doing so in the long run because the respondents answers make for better decision making. 

Using online surveys is an unbiased approach to making better business decisions. This is because unbiased responses are given, which is raw data that can be analyzed. Analyzing these unbiased results will allow Nike to see address certain areas of importance rather than "wasting time and valuable resources on areas of little or no concern." Gathering and analyzing this data over time will allow Nike to learn about their consumers as they use Nike products over time.

After online surveys are taken by Nike consumers, the results are analyzed and decisions are made. These results will always be available for comparison to other results over time. The attitudes, thoughts, comments, and concerns of Nike products could change, or stay the same throughout the years. Either way, online surveys allow Nike to compare results and see where consumers think the business is doing well, and which areas consumers feel need improving.

The Nike store survey mentioned earlier is featured on the receipt with a code to participate. The Nike survey has its own address called mynikevisit-na.com. After completion of the survey, the participant will receive a $5 Nike gift card. There are conditions when using the gift card, which include:

• Must be redeemed in-person at a Nike store
• Cannot be combined with any other offer or discount, including employee discount
• Cannot be redeemed for cash or applied to previous purchases
• Expires 60 days after issued
• One time use only
• Cannot complete more than two surveys within seven days
• Not valid at Nike.com or phone orders (Nike 2016)

So there are conditions with the incentive, but they are not unreasonable by any means. It's just enough for consumers to go online, take the survey, and receive a small reward for helping out the business and providing them with valuable consumer data. 

PRECEDENT STUDIES

ADVERTISING STRATEGIES

Nike advertising is one of the most effective emotional branding examples in the marketing world today. Their customer loyalty is off the charts, all thanks to the Nike brand strategy and masterful application of emotional branding. Today, we look at Nike’s marketing strategy and how they use the centuries-old archetype of Heroism to tell their story.

 

Nike brand strategy is to build a powerful brand so powerful that it inspires fervent customer loyalty from people literally all over the world. This is because Nike advertising uses the emotional branding technique of archetypes in its advertising more specifically, the story of the Hero. It’s an age-old tale, a tale of a hero pitted against a great foe, and after a great struggle, emerging triumphant. In a way, you could say that Nike's marketing strategy is thousands of years old, and has been inspiring customer loyalty the entire time.

PRECEDENT STUDIES

Nike advertising isn’t the only group that uses the Hero archetype to inspire customer loyalty. Many other companies use this emotional branding technique to great effect. In most cases, the foe is external. The most common story of the hero is that of a man of humble origins setting out to defeat a great evil – one far more powerful than he and, against all odds, emerging triumphant. This same pattern could apply to, say, a home security system against a house fire, or an antacid against heartburn. As long as there is a clearly identified enemy and a clearly identified hero, the emotional branding can begin.

Nike advertising takes the common hero story and turns it on its head. Instead of inspiring customer loyalty by singling out an external enemy, it pulls out the stops and focuses on an internal foe our laziness. Nike advertising knows just how often we battle with our lazy side. Every morning when that alarm goes off and it’s still totally dark outside, the battle begins. When we choose how long to run, the battle continues. This is how Nike marketing uses emotional marketing to inspire customer loyalty. They know that while some people may identify with an external foe, all people identify with an internal one.

Nike brand strategy is excellent on this end because not only is the internal foe someone we can all hate, the hero is the viewer! In one way or another, we are all the hero of our own story, and Nike marketing has long since identified that feeling and used it to inspire timeless customer loyalty.

MARKETING PROGRAMS AND MARKETING STRATEGIES

ADVERTISING

Nike has named its advertising efforts “demand creation,” spending $3 billion under this label in the 2013-2014 fiscal year. These costs include both media marketing/advertising and its sports endorsements, some of its primary sponsorships. 

 

Nike uses multi million-dollar endorsement deals to supplement media marketing. Spending nearly $1 billion in sports endorsements each year and increasing 10% by the next since 2002, the company is the most prominent spender in the sports advertisement world.

Just Do It, Nike’s most well-known and powerful campaign began as simple 1988 advertising campaign and exploded into one of the company’s two most recognizable trademarks. This campaign urged sedentary people to run that first lap or step onto the court for the first time and increased the company’s revenue by 1,000% in the first decade of its run. Collectively, Nike’s “Swoosh” trademark and the “JUST DO IT.” phrase have an estimated worth of $26 billion.

SALES PROMOTION

Consumer & Trade

Nike has the opportunity to use direct-to-consumer approaches of sales through its factory stores as well as through sports outfitters and shoe stores. Alongside this, Nike uses its unsurpassed advertising and branding initiatives to communicate brand value to consumers. One of the top sportswear providers in the world, Nike has no problem convincing consumers of its worth. Its use of top-tier athletes who simply wear the product ensures consumers can see the products in action.

 

PUBLIC RELATIONS

With Nike being such a big player in the athletic footwear, apparel, and gear industry, it is very important that they have top-notch public relations strategies. Nike knows this all too well from their late 1990s PR nightmare when Nike products "become synonymous with slave wages, forced overtime and arbitrary abuse," (Beder 2016). Due to the bad PR, Nike's reputation dropped along with its sales and share prices. Nike had to change their image and make the company appear to be caring and concerned about working conditions in contractor's factories in China and Indonesia.

During this time, Nike developed a public relations strategy to deal with this problem. Their efforts included " upgrading its own code of conduct and participating in a range of coalitions including the Global Alliance for Workers and Communities aimed at helping workers in third world shoe and clothing factories and other business coalitions that represented social responsibility."  Nike also spent money on philanthropy in countries where its products were made. These public relation strategies were necessary for bringing Nike back to the top and leading in the industry.

Public relations is a very important part of business. PR is like the middleman between the public and the company. Those working in PR for Nike, or any other company, will have to deal with the good publicity, and the bad of course. Public relations and the use of effective strategies is what got Nike products back to being associated with greatness and athleticism instead of with sweatshops.

PERSONAL SELLING

Nike uses personal selling in order to build a relationship with its consumers in order for them to purchase their products. Nike has been reaching out to young audiences by way of a social media campaign that calls on youth to share their own sports story.

The campaign is called “What do you play for?” and its purpose is to get youth excited about their own involvement with sports and to share their stories. This is joint effort between both the athletics brand and Youth Noise which is a social network for teens and social media firm Brickfish (Dilworth, 2009). The purpose of this campaign is to allow Nike to build an online community in the youth demographic so that youths can share their personal stories about sports and to encourage these youths to be creative about telling their stories visually (Dilworth, 2009). Nike’s Jordan brand uses celebrities such as Lebron James.  

DIRECT MARKETING

Nike uses direct marketing to directly reach customers and potential customers on a personal basis, or mass-media basis such as with magazine ads, commercials, etc. Nike also is using social media and direct email as another avenue of media to reach its customers By marketing directly to where Nike's target market is, they are more likely to get their message across to who they want to see it. 

References

Beder, S. (2016). Nike Repuation Management. Retrieved March 23, 2016, from http://www.herinst.org/BusinessManagedDemocracy/environment/PR/Nike.html#PR

Conlon, J. (2015). The Brand Brief Behind Nike’s Just Do It Campaign. Branding Strategy Insider. Retrieved from: http://www.brandingstrategyinsider.com/2015/08/behind-nikes-campaign.html#.VvMNv7xw7vM

Dilworth, D. (2009, April 07). Nike targets youth with social campaign. Retrieved March 23, 2016, from http://www.dmnews.com/digital-marketing/nike-targets-youth-with-social-campaign/article/130294/

Kim, S. (2014). Nike may get pickier, but full spending ahead on athlete endorsements. ABC News. Retrieved from: http://abcnews.go.com/Business/nike-pickier-full-spending-ahead-athlete-endorsements/story?id=25764291

Parrish, W. (n.d.). NIKE.COM DIRECT MAIL - THEWKYD. Retrieved March 23, 2016, from http://cargocollective.com/thewkyd/NIKE-COM-DIRECT-MAIL

Wyse, S. E. (2012, June 29). The 4 Main Reasons to Conduct Surveys. Retrieved March 23, 2016, from http://www.snapsurveys.com/blog/4-main-reasons-conduct-surveys/

Wyse, S. E. (2012, August 15). 4 Main Benefits of Survey Research. Retrieved March 23, 2016, from http://www.snapsurveys.com/blog/4-main-benefits-survey-research/

Zanian, M. (2015). Forbes Fab 40: The most valuable brands in sports. Forbes. Retrieved from: http://www.forbes.com/sites/mikeozanian/2015/10/22/the-forbes-fab-40-the-most-valuable-brands-in-sports-2015/#adfd90e2e2aa

CONSUMER AND STAKEHOLDER

CURRENT CONSUMER CHARACTERISTICS

Nike's current consumers have a whole different array of characteristics, ranging from: demographic, psychographic, behavioralistic, and geographic. Although there may be differences in these characteristics, their current consumers also have similarities. They all are usually men and women athletes in need of high performance gear, like shoes, apparel, and gear. Those who wear Nike generally have a passion for sports and/or being active. In addition to their passion for activity and movement is their passion for the Nike brand itself. Nike consumers are loyal to the brand and will choose to wear their gear to perform at their max in whatever they do. Nike wants to capitalize on these types of consumers "with a view to ensuring future growth, young athletes are a big part of its sales strategies, especially in categories such as soccer, basketball, and running," (Soni 2014). Alongside young athletes, Nike is also focusing a good amount of attention on appealing more to women as well.

Currently, "women in their 20s and 30s are largely driving the 'athleisure trend,' in which customers buy leggings with the intent of wearing them to the gym, errands, and brunch," (Lutz 2015). Due to this athleisure trend among Nike's women right now, Nike's "Women's Training segment is growing is faster growing than the Men's Training segment (Soni 2014) and "could add $2 billion in additional sales by 2017," (Lutz 2015).

Nike already has a lot of the athletic community at their side. By focusing on all different consumer characteristics, Nike is able to anticipate many types of needs their consumers may have. One need all current Nike consumers have is the need for high performance gear. Nike delivers this need in all the ways they can, gaining them loyal customers and staying ahead in the industry along the way.

DEMOGRAPHICS

Nike has plans to grow its direct-to-retail business to 15% of total sales, or $3.5 billion, from 12% today. In order for them to accomplish this, Nike will have to increase capital spending to $475 million annually, up from just under $400 million. In the past, the managers at Nike used to consider 18- and 22-year-olds as part of the same demographic target. Now they are treated as separate and distinct markets when it comes to age, interests, and tastes. The reason they are doing this is to tailor products to individual consumers (Holmes, 2007).

Nike is unique due to the fact that they have a very general targeted demographic segment. Anyone that wants to be athletic, are going to receive at least one marketing target no matter what their racial profile, economic status, or other sub-demographic may be. Households that make more money will receive additional targets, of course, but everyone who wants to look good while they’re out playing their preferred sport is supposed to want Nike (Gaille, 2015).

• Nikes primary targets are consumers who are between 18-40 years of age.
• They equip teens under the age of 20 with athletic apparel, especially in sports like football and soccer.
• Nike targets households and teens that have a particular desire to look athletic and fashionable at the same time.
• All socioeconomic classes are targeted as part of the segmentation of Nike’s demographics.
• Nike does its marketing mainly in the United States, but this is to increase the market share of their athletic apparel more than it is to advertise their footwear.
• No single customer accounted for more than 10% of Nike’s overall sales in the last year, proving that the company has a very diversified market.
• North American sales for Nike are still 2.5x greater than the next closest market, which is Western Europe (Gaille, 2015).

PHYSIOGRAPHY

Physiological needs can best be described when in reference to Abraham Maslow's hierarchy of needs. "Each level of the pyramid is dependent on the previous level; a person does not feel satisfied until the first level is fulfilled," (Pandya 2014). The first and base level of Maslow's hierarchy of needs happens to be the physiological needs.  He held the belief that "humans strive to reach the highest level of their abilities." In order to reach their highest level of abilities, they must first have their physiological needs met.

Physiological needs include the most basic of all human needs like food, water, and physical well-being. "It pertains to our survival needs and is our most basic motivation because if our physiological needs aren’t met, our bodies will ultimately fail and we will die... As it pertains to marketing, it’s pretty basic. By appealing to a consumer’s primal needs, we encourage them to fulfill their basic psychological motivation," (Lee 2015).  In order for Nike to appeal to a consumer physiological needs, they must sell the brand as a way of keeping you on the track to being physically fit and strong, just as you would need to be for survival. Once Nike markets their products in this sort of way, their consumers are more inclined to purchase because they feel that as a consumer, their most basic physiological needs are being met.

STAKEHOLDER'S CHARACTERISTICS

A stakeholder is a person who has something to gain or lose through the outcomes of a planning process, programme or project. They are affected directly or indirectly in someway by company changes. Not all stakeholders are equal, as some are affected more or have more of an impact than others when decisions are made. Nike has five core stakeholder groups: consumers, shareholders, business partners, employees and the community. Nike stakeholders usually posses a similarcharacteristics and traits, such as:

• Understanding of the apparel and footwear business 
• New and unique perspectives 
• Expertise and reputation in sustainability strategy and/or issue areas ranging from water and energy to labor and chemistry 
• Geographic/nationality, gender and issue diversity (NIKE 2014)

Nike reports stakeholders belonging to several different social groups, including civil society organizations, industry and government, as well as consumers and shareholders. Stakeholder relations are kept through both formal and informal relationships. Nike connects informally through related organizations and connections and formally through stakeholder engagement opportunities and partnership activities.

PRIMARY STAKEHOLDERS

The primary stakeholders of Nike would be individuals or other companies who take interest in Nike and in turn, are affected by the company. These stakeholders include a wide variety of industries and genres such as social society, industry, government, consumers, and shareholders. The strategies and successes of Nike are related to the stakeholders and often Nike relies on their input and feedback on interests and disinterests when introducing new products to the market. One major player for Nike is the Business of Social Responsibility (BSR), which is a non-profit that directs 250 companies on corporate responsibility strategies and practices (Johnson, 2014). This organization gets together with a selection of stakeholders of the company to direct the overall process, lead the stakeholder discussions and to provide feedback, then Nike’s sustainable Business and Innovation team manages the overall reporting process, and participate during the stakeholder engagement as information givers and receivers (Johnson, 2014). Because business starts with the stakeholders, the ones Nike should be more concerned with are individuals like directors, founders, presidents, officers, writers, advisors, and CEO’s.

SECONDARY STAKEHOLDERS

The secondary stakeholders of the company would be the community. Socially responsible organizations like Nike consider the effect of their actions upon all stakeholders, including safety laws, environmental protection and other laws and regulations, and what consumers and the communities want from companies is that they act ethically and socially responsible. When secondary stakeholders become dissatisfied, the reputation of the company could get tarnished. An example of this is when Nike was under the spotlight for their inhumane working conditions in their several sweatshops around the world where their workers were not being treated as they should, the community was not happy with this and Nike saw that through the drop in their sales for a period of time.

STRATEGIC TARGET AUDIENCE

PROPOSED PRIMARY TARGET AUDIENCE

Nike is the world’s leading sports footwear and apparel company. Nike’s high-performance athletic gear is mostly targeted at professional athletes. Nike’s innovations, products, and services seek to develop athletic potential, according to the company.

Right now, Nike is focusing their target audience on young athletes, women, and runners. Nike wants to capitalize on these types of consumers "with a view to ensuring future growth, young athletes are a big part of its sales strategies, especially in categories such as soccer, basketball, and running," (Soni 2014). Alongside young athletes, Nike is also focusing a good amount of attention on appealing more to women as well as the "Women’s Training segment is faster growing than the Men’s Training segment." To handle this growth, Nike is appealing to women by designing more athletic sportswear and gear that can be worn during workouts and doing other "athleisure" activities that are popular with women of this audience.

Runners are being targeted to specifically right now as the sales in this department are not reflecting the recent innovations the company has created for its running shoes. In an effort to increase sales of running shoes, Nike has revamped its Nike+ app for runners. The Nike+ app "lets runners track their route, distance, pace, time, and calories. It also lets them share photos and compare progress with their friends...Nike sponsors grassroots running events around the world to recruit new customers as well," (Lutz 2015).

Young athletes, women, and runners form Nike’s target market in the future.

PROPOSED SECONDARY TARGET AUDIENCE

Nike's current primary target market includes young athletes, women, and runners. However, these aren't these only type of consumers wearing Nike gear. Nike realizes this and tries to appeal to a secondary target audience as well. These secondary consumers wearing Nike products do so to appear fashionable while supporting the largely recognized brand. For example, the Nike Free iD running shoes are also for young adults with a casual lifestyle and a fashionable taste. Nike creates fashionable products for these secondary target audiences to wear and appreciate. Just because these secondary audience members are not as active as the typical primary target audience member, they still have the body that makes them an athlete worthy of wearing the brand.

Digital has been the focus of Nike’s marketing efforts in recent years. The company’s gone hi-tech with its push into digital sport and e-commerce. It introduced the Nike+ running sensor in collaboration with Apple Inc. Other products such as the Nike FuelBand personalize the hi-tech experience for the customer. The FuelBand tracks the intensity of workouts and even motivates the wearers, among its many uses. These products appeal to both athletes as well as non-athletes.

The push into digital gives the company the opportunity to engage directly with the customer. Digital initiatives are especially appealing to younger customers. They also provide invaluable feedback to the company about the overall customer experience.

References

Gaille, B. (2015, April 17). 18 Incredible Nike Demographic Segmentation - BrandonGaille.com. Retrieved March 16, 2016, from   http://brandongaille.com/18-incredible-nike-demographic-segmentation/

Holmes, S. (2007, February 07). Can Nike Do It? Retrieved March 16, 2016, from http://www.bloomberg.com/news/articles/2007-02-07/can-nike-do-it-businessweek-business-news-stock-market-and-financial-advice

Johnson, A. (2014, January 31). Nike- International Activities, Primary Stakeholders, and Charities. Retrieved March 16, 2016, from https://andredjohnson.wordpress.com/2014/01/31/nike-international-activities-primary-stakeholders-and-charities/

Lee, D. (2015, March 10). Maslow's Hierarchy of Needs and Marketing. Retrieved

March 16, 2016, from http://doreydesigngroup.com/blog/maslow’s-hierarchy-needs-and marketing

Lutz, A. (2015, April 07). Nike is Going After 3 Kinds of Customers. Retrieved March 16, 2016, from http://www.businessinsider.com/nike-is-going-after-3-kinds-of-customers-2015-4

NIKE INC. (2014). Nike CR Report. Retrieved March 16, 2016, from http://www.nikeresponsibility.com/report/content/chapter/stakeholder-engagement-reporting

Pandya, D. (2014, March 16). Maslow's Hierarchy of Needs. Retrieved March 16, 2016, from https://prezi.com/-qbhwmcyk42y/maslows-hierarchy-of-needs/

Soni, P. (2014, December 02). Welcome to Market Realist. Retrieved March 09, 2016, from http://marketrealist.com/2014/12/nikes-global-markets-top-revenue-earners/

INDUSTRY AND MARKETPLACE

NIKE INDUSTRY AND ITS DEFINITON

NIKE, Inc., together with its subsidiaries, designs, develops, markets, and sells athletic footwear, apparel, equipment, and accessories for men, women, and kids worldwide. The company offers products in eight categories, including running, basketball, football, men's training, women's training, sportswear, action sports, and golf under the NIKE and Jordan brand names. It also markets products designed for kids, as well as for other athletic and recreational uses, such as cricket, lacrosse, tennis, volleyball, wrestling, walking, and outdoor activities. In addition, the company sells sports apparel and accessories; and markets apparel with licensed college and professional team and league logos. Further, it sells a line of performance equipment, including bags, socks, sport balls, eyewear, timepieces, digital devices, bats, gloves, protective equipment, golf clubs, and other equipment under the NIKE brand name for sports activities; various plastic products to other manufacturers; athletic and casual footwear, apparel, and accessories; casual sneakers, apparel, and accessories under the Converse, Chuck Taylor, All Star, One Star, Star Chevron, and Jack Purcell trademarks; and action sports and youth lifestyle apparel and accessories under the Hurley trademark.

NIKE, Inc. sells its products to footwear stores; sporting goods stores; athletic specialty stores; department stores; skate, tennis, and golf shops; and other retail accounts through NIKE-owned retail stores and Internet Websites (direct to consumer operations), as well as a mix of independent distributors and licensees. The company was formerly known as Blue Ribbon Sports, Inc. and changed its name to NIKE, Inc. in 1971. NIKE, Inc. was founded in 1964 and is headquartered in Beaverton, Oregon.

SHAPE OF INDUSTRY

The U.S. athletic footwear industry grew by 8 percent in 2015, generating $17.2 billion and marking one of the best performances the industry has had in a number of years; unit sales grew by 3 percent and average selling price by 5 percent, to $61.15 (Cox, 2016). Performance footwear, particularly running and basketball shoe sales slowed down in 2015 and there was a rise in more casual and retro styles. Through research it is said that the more casual and retro style sales will continue to grow throughout 2016. With the merging of outdoor and athletic shoes, hiking shoes will see growth in the coming years as well. With each decade that passes, trends seems to change and often it is a cycle of different styles that are very popular and then lose some of their momentum because another style shoe is becoming the front runner based on fashion and market trends. 

Coinciding with the holiday season, athletic footwear sales peak in December and 2015 saw one of the best months for sales in terms of sales growth for athletic footwear. Total dollar sales grew 13 percent, unit sales by 10 percent, and average selling price by 3 percent compared to December 2014 (Cox, 2016). The top brand for athletic shoes for men in 2015 was the Nike/Jordan brand, with Adidas and New Balance trailing behind. Nike and Jordan Brand claim a solid 62% share of the athletic shoe market, which is 10 times the amount of athletic footwear Adidas sells in the United States.

DEVELOPMENT OF INDUSTRY

The US athletic shoe market is a $13 billion-per-year industry that sells more than 350 million pairs of sports shoes annually. Sports shoes have become a fashion statement and also assist in the everyday task of working.

The driving force of new athletic-shoe design is not just performance. The use of athletic shoes for casual wear as well as for fashion plays a large role in shaping their appearance and features. The youth market is frequently targeted by advertisers and young people’s behaviors are used in selecting shoes. High school students have even been brought into the offices of manufacturers to get a handle on “how cool” contemplated models look. Colors, styles, fashions, and what is likely to be “hot” are important factors in the design of athletic shoes. A few manufacturers have discovered the extensive role that athletic shoes play in the workplace especially for aging boomer population which is a good potential market (Pribut & Ritchie, 2002).

The special role that marketing would play and the sophisticated manner to which it would be taken was presaged when Phil Knight announced with panache that four of the first seven finishers in the 1972 US Olympic trials wore Nikes (Pribut & Ritchie, 2002).

Before the late 1970s, running shoes were not high-tech items. Until the middle of the 19th century, shoes were made on a single straight last and there was no differentiation between left and right shoes. During those years, not many international competitions were held, and the modern Olympics did not appear until 1896. Keds started as a product produced by US Rubber in 1917. Keds was chosen as a name because the desired name, “Peds,” was already trademarked by another company. Keds were the first sneakers, so-called because of the stealth and quiet manner in which you could run up on someone when you wore them. Keds, and later Converse, captured much of the US “Sneaker Market.” Keds was purchased by the Stride Rite Corporation in 1979 (Pribut & Ritchie, 2002).

PF Flyers was named for “Perfect Foundation,” with the intention of making the sneakers appear to have been crafted with the latest scientific ergonomic principles in mind before anyone had even heard of “ergonomic.” Shoes need to be devised to assist the athlete in the specific demands of the sport and to meet the individual biomechanical of the participant (Pribut & Ritchie, 2002).

Today’s running shoes are designed with an eye toward accommodating various types and shapes of feet. Shoes are made that allow for the differences between men and women, light- and heavyweight runners, pronated and supinated feet, and narrow and wide feet. Sport-specific shoes also attempt to meet the diverse needs of differing sports which means that there is a shoe to fit everyone.

Podiatrists first participated in the development of athletic shoe technology in the 1970s. As biomechanical knowledge of foot and leg interactions gained huge momentum in the podiatric medical profession during that decade, the use of corrective devices in shoes achieved widespread popularity. Podiatric medical practitioners commonly added wedges, arch supports, heel cradles, and various cushioning devices to the existing footwear of athletic patients to treat their injuries and enhance their comfort. Soon, some podiatrists offered these technologies to athletic-footwear companies. The subsequent incorporation of such devices into athletic shoes led to monumental success for the manufacturer and redefined the standards within the industry (Pribut & Ritchie, 2002).

The most notable technologies developed by podiatrists in the 1970s were the Dynamic Heel Cradle, for Etonic, by Rob Roy McGregor, DPM, and the varus “kinetic” midsole wedges for Brooks, by Steve Subotnick, DPM. In the 1980s, Nike incorporated Dr. Harry Hlavac’s cobra pad into the company’s highly successful running shoe, the Equator. Also, Howard Dannenberg, DPM, developed and patented the Kinetic Wedge® addition to the midsole and outsole of a line of Brooks running shoes that became very successful for several years and that formed the foundation of the entire Brooks running-shoe line (Pribut & Ritchie, 2002).

In l981, Joe Ellis, DPM, of La Jolla, California, working closely with Asics, developed the first midsole technology that incorporated medial posting in the midsole section of the running shoe. During the 1990s, William Olson, DPM, worked closely with many major athletic-shoe manufacturers who wanted to incorporate his TL composite invention into various athletic shoes, including running, basketball, and in-line skating shoes. The TL composite was a proven success in the orthotic marketplace and had great credibility and appeal as a high-performance material for use in constructing athletic shoes. The device was first used in the “Air Jordan 12” basketball shoe during the middle of the 1990s and has been used in every Air Jordan model since (Pribut & Ritchie, 2002). With the important role that feet and athletic shoes play for the millions of people who exercise, podiatrists and podiatric medical students must carefully study the sciences of biomechanics and sports medicine. Enhancing knowledge in these areas will add a good deal of variety, interest, and even patients to a practice.

THE MARKETPLACE

Currently, Nike sells their goods on the global marketplace. Their operations within the marketplace consist of "the design, development, marketing, and selling of athletic footwear, apparel, and equipment. Sales are seasonal and depend on geography... Nike has seven reporting segments:

• North America
• Western Europe
• Emerging Markets
• Greater China
• Central and Eastern Europe
• Japan
• Converse

In the marketplace, Nike has remained an industry leader against competitors because they are always anticipating customer's current and future needs of those in the market. Nike does this for customers all over the global marketplace, as some needs are different than others. Nike describes that:

As Nike has evolved, so has the consumer. They connect and collaborate with each other all over the world. As retail evolves to meet these changing needs – from athletic specialty to department stores – old, predictable formats tend to blur the line among products and brands. So we ask tougher questions. What kind of choices does a consumer have? What type of experiences does a consumer respond to best? We see this as opportunity for Nike and our retail partners.

As the industry leader, we have the ability and the responsibility to take the industry and our partners someplace new. Our retailers want Nike to lead and that’s exactly what we’re doing – driving innovative product and brand presentation into the stores of our wholesale partners.

We do this by working with our wholesale partners to create differentiated retail destinations and product assortments that are tailored to their consumers. We do it by investing in direct retail concepts that elevate our products and our brands online and in store. And we tightly manage the distribution of our products to balance supply and demand, maintain the strength of our brands and the profitability of our business.

(Nike 2016)

CURRENT CONDITION OF THE MARKETPLACE

Currently, Nike generates most of its revenue from the North American segment. In 2015, the North America segment was responsible for 44% of the company's total revenue. Nike's competitors have similar results in this way. " Under Armour Inc. (UA), derives over 90% of its revenues from North America. Other NIKE competitors, VFC Corporation (VF) and Lululemon Athletica Inc. (LULU), also have a much higher dependence on North American sales," (Soni 2014).

Currently, Nike's "hopes to grow its North American segment by high single digits each year through fiscal year 2017 (Soni 2014).

Nike recognizes that in order to stay ahead as an industry leader within the markets they operate in, they need to make sure their products and brands stay in demand with their consumers. "Nike is now strategizing on how to widen the gap with its nearest competitors, or increase the degree of separation," (Soni 2014). Nike plans on doing this through:

·       Innovation

·       Providing the customer with premium, must-have products, and a premium experience

·       Transforming the marketplace and expanding its direct-to-consumer footprint

It is NIKE’s "consumer-focused category strategy that will be driving growth through increased market place capacity and penetration... Our consumer focused strategy enhances our ability to deliver great product and elevated consumer experiences which will help grow the NIKE Brand to approximately $23 billion by the end of fiscal 2015," (Nike 2010).

It is clear that no matter how Nike is doing in the market, the consumer will always be their number one priority. Being so customer focused is what keeps Nike in operation across all its markets.  

CHANGES IN THE MARKETPLACE

Nothing ever stays the same what was once a fringe group of fanatics is now changing the way sportswear giants Nike and Adidas both do business, and redefining the sneaker business (Tomaszewski, 2014). The rise of "sneakerheads" is causing a growing populace of consumers following these companies' every move like a tabloid photographer follows the latest celebrity train-wreck. That level of brand awareness is driving sales and even creating new markets.

A sneakerhead is a devotee of athletic footwear and at one time they were an underground community of fanatics, now they are a semi-mainstream collection of enthusiasts whose demographics run the gamut from suburban teens to celebrities like Mark Wahlberg, Jason Sudekis, and Jerry Seinfeld. According to Forbes, it is estimated that sneakerheads represent about 5% of the $22 billion retail sneaker market in the U.S. That's good for roughly $1.1 billion (Tomaszewski, 2014).

Since companies are aware of the buying power of sneakerheads, they are providing fans with a lot of information regarding upcoming releases. This drives up demand among sneakerheads who famously camp out in advance of a release to get a pair (Tomaszewski, 2014). It is not uncommon for a particularly coveted or limited model release to sell out in minutes.

The big sneaker companies are also adjusting their business models in other ways in an effort to court sneakerheads. Since Michael Jordan entered the NBA and ascended to the top of the sporting world (in many ways he's still on top), Nike released several models of his eponymous shoe, the Air Jordan, every year, each in a different color scheme (Tomaszewski, 2014).

Because of sneakerheads players like LeBron James now sport as many as 10 versions of their signature shoe during the regular season, followed by a completely different model in various color schemes for the post season. Each time a new color scheme or model is debuted on the hardwood, the sneakerheads begin their quest to add them to their collections. A pair of signature shoes can range in cost from $140 to $275 (Tomaszewski, 2014).

This type of devotion to footwear has even led Nike to use social media to offer sneakerheads the ability to purchase shoes that had previously sold out. Because a particularly coveted model will likely sell out within minutes of release online, Nike will sometimes, and without warning, issue what is called a restock (Tomaszewski, 2014).

Creating New Markets

Sneakerheads are creating an entirely new market for athletic footwear, the second-hand market. A sneakerhead will do what he or she has to in order to acquire the latest pair of shoes. Due to the limited inventory released into the retail market and the increasingly high demand for models from the likes of Adidas, Nike, and its high-profile subsidiary Jordan Brand, the only way the vast majority of people who want a particular pair of sneakers is to buy on the secondary market ... at a price that is often two to three times the cost of retail (Tomaszewski, 2014).

Sneakerheads are changing the way companies like Nike, and these changes are here to stay. In the future we can expect changes to the way sneakers are marketed and sold. It won't be long before every 10-year-old is following Nike on Twitter to get release dates, checking out LeBron James' Instagram to see what sneakers he's wearing, and then texting their parents to ask for the latest pair before tapping a "buy now" button embedded in the James photograph (Tomaszewski, 2014).

COMPETITIVE SITUATION 

DIRECT AND INDIRECT COMPETITIORS

Nike has both direct and indirect competitors who they compete with on a daily basis. Some direct competitors that Nike has include Adidas, Reebok, and Converse. Some indirect competitors include Wal-Mart, Target, and other discount stores. 

Nike’s challenge is to gain a strategic advantage by putting a better product above the rest of their competitors. One apparent advantage is the brand name and logo of Nike. The name Nike and the Swoosh logo are known worldwide and are associated with high-quality products. 

Another strategic advantage Nike has is its ability to promote its product through top athletes. When certain athletes like Michael Jordan, Lance Armstrong and Tiger Woods are mentioned, people are familiar with their endorsement relationship with Nike. Consumers relate with these athletes and purchase items based on what they are using or wearing.

References

Marketplace - Nike Inc. A Growth Company. (n.d.). Retrieved March 09, 2016, from http://media.corporate-ir.net/media_files/IROL/10/100529/nike-gs09/marketplace.html

Nike News. (2010, May 05). NIKE, Inc. Introduces 2015 Global Growth Strategy. Retrieved March 09, 2016, from http://news.nike.com/news/nike-inc-introduces-2015-global-growth-strategy

NKE. NKE profile | Nike, Inc. common stock. Yahoo! Finance.           http://finance.yahoo.com/q/pr?s=nke

Pribute, S. M., & Richie, D. H. (2002). Dr. Stephen M. Pribut's Sport Pages. Retrieved March 09, 2016, from http://www.drpribut.com/sports/sneaker_odyssey.html

Soni, P. (2014, December 02). Welcome to Market Realist. Retrieved March 09, 2016, from http://marketrealist.com/2014/12/nikes-global-markets-top-revenue-earners/

Tomaszewski, J. (2014, June 22). How sneakerheads are changing Nike, Addias. Retrieved March 09, 2016, from http://www.usatoday.com/story/money/2014/06/22/how-sneakerheads-are-changing-nike-and-addias/11035771/