Critical Analysis of Nike Marketing Strategy

Executive summary

The current report evaluates the marketing strategy of Nike, the biggest athletic footwear company in the world. The first part of the report gives an overview of Nike Inc., including its micro and macro environmental analysis, Nike marketing startegy and its customer and competitor analysis along with a review of the literature. After the literature review, market research approach of the company is presented, followed by the discussion of findings and an evaluation of its marketing mix. In the end, conclusions and recommendations are stated with a reflective statement.

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Organization overview

Having been established as Blue Ribbon Sport initially by a partnership of Phillip H. Knight and William Bowerman, track and field coach at the University of Oregon, Nike is the largest marketer of athletic footwear and apparel in the world (Roach, 2015). Bowerman at that time was looking for better and innovative shoe design, and this pursuit went on to become company’s functional approach (Nike, 2015). Nike is highly aggressive in its marketing strategies. In 1988, Nike launched a TV commercial with the slogan “Just Do It” (Creative Review, 2020). This slogan transformed Nike eternally and became the identity of the company in years to come. Nike starts by finding the target market for a particular item, signs superstar of that sport and then invests heavily in advertisements. It has signed endorsement deals with nearly all global superstars like Michael Jordan, Lebron James and Cristiano Ronaldo (Forbes, 2008). They use Nike products which tempts their fans to buy those products. People feel associated with buying one of the products worn by their favourite player. Along with endorsing best players, Nike excels in using social media for marketing. Nike has shifted from conventional means of marketing to digital ads which are evident from its 122 million Instagram followers (Cole, 2018).

Current marketing strategy

Nike markets its products in an emotional manner. Nike makes ads that promote innovative culture of company and includes emotional stories of athletes, for e.g. Nike launched return campaign for Paul George after his horrific injury (Newport, 2014). In 2017, the company introduced Consumer Direct Offence approach, which aims to double up innovation and reduce the service time.

Nike marketing startegy starts by finding the target market for a particular item, signs superstar of that sport and then invests heavily in advertisements. It has signed endorsement deals with nearly all global superstars like Michael Jordan, Lebron James and Cristiano Ronaldo (Forbes, 2008). They use Nike products which tempts their fans to buy those products. People feel associated with buying one of the products worn by their favourite player. Along with endorsing best players, Nike marketing startegy excels in using social media for marketing. Nike has shifted from conventional means of marketing to digital ads which are evident from its more than 100 million Instagram followers. The 5Ds of digital marketing through which Nike communicates with its customers are illustrated in figure 1 below:

Figure 1:5Ds of Nike’s Digital Marketing (Fioravanti, 2020)

Micro-environmental analysis

SWOT Analysis

Strengths Weaknesses
  • Nike excels at innovation, which is the basic requirement of sports equipment market.
  • Moreover, it has a very low manufacturing cost (Dunne, 2014).
  • It is a global brand and instantly recognizable, which is Nike`s biggest advantage.
  • Nike has outsourced manufacturing of its products and therefore, it is at mercy of suppliers all the time.
  • Nike relies heavily on footwear for its revenues (Business Insider, 2020) and hence, it should diversify other departments as well.
Opportunities Threats
Nike controls north America while Adidas has control over European market (Cheng, 2009). The Asian market is largely unexplored and therefore, Nike can capture Asia by aggressive marketing.
  • Competitors are spending heavily on marketing which forces Nike to increase its marketing budget.
  • Recent trade tensions between U.S. and China, major buyer and manufacturer of Nike, poses threats on company`s future and profitability.

Table 2: SWOT of Nike

Macro-environmental analysis

PESTLE Analysis

Political factors – Stable political environment in major markets such as North America, Western Europe, China, Japan, and Australia bring opportunities to expand further (Radu, 2020).

– Moreover, countries using free trade policies presents huge prospect to penetrate in overseas market.

Economic factors – Currently, China is the biggest manufacturer of Nike’s products and any slump in Chinese economy may hit the company harshly (Soni, 2014).

– Mostly, developing countries produce Nike products and hence, the company’s growth depends largely on economic stability of these countries.

Social factors – Nike has the potential to grow in developing countries by catering to individuals with increasing wealth (Buchholz, 2020).

– Furthermore, it can market safety features of Nike products to attract health conscious communities.

Technological factors – Nike’s business depends largely on innovation. Huge investments in R&D by competing companies pose a threat to Nike that they may take lead in technological department (Green, 2017).

– Moreover, short life of technologies puts Nike under pressure to continually look for new technologies.

Legal factors – Nike has long been accused of exploiting labour (Leibold, 2020), especially in developing countries. Improved labour laws in these countries threaten Nike to increase labour costs.

– Development of health and safety laws provides Nike an opportunity to market its products in similar way and increase customer base.

Environmental factors – Increased environmental conservation policies put Nike at danger to grow sustainably. Any violation of environmental programs puts company at danger of losing customer. However, Nike has taken steps to reduce carbon footprint and move completely to renewable energy (Nike, 2020a).

Table 3: PESTLE of Nike

STP Analysis


Nike’s customers are divided into several categories. In demographic segmentation, Nike focuses on customers between 11-45 years of age, both males and females. For instance, in 2014 FIFA WC, an advertisement showed footballers playing with teenagers, inspiring kids to become like there idols (Panagiotopoulou, 2017). Nike segments the market on the psychographic basis as well. Apart from athletes and sports enthusiast, Nike makes products for fashion fanatics, who are then motivated to buy the company’s products because wearing Nike means a lifestyle to them (Deng, 2009).


Nike measures target market on various variables, i.e. size, reachability and behaviours etc. It targets professionals and individuals interested in sport, particularly jogging. Moreover, Nike targets marketplace by psychological tactics, i.e. by sponsoring champions of different sports which links Nike and its products to victory ultimately (Lyberger, 2014). Correspondingly, this is because the major customers of Nike are professional football and soccer teams around the globe. For instance, in 2018-2019, Nike spent $355 million on sponsorship of European football clubs and its shirt sales went up by 470% (Forsdick, 2019). Also, Nike focusses on three types of customers, i.e. women, young athletes and runners (Lutz, 2015). To attract female buyers, Nike signed an 8 year deal to become exclusive uniform supplier of women`s NBA (Brown, 2015).


Nike positions itself as a market leader in sports apparel and footwear. It has successfully built an image of the premium supplier of sports products by aggressive promotion which connects the company to the success of professional sports teams. Nike’s “swoosh” and “Just do it” slogan has helped the company massively in becoming a consumer-favourite brand.

Competitor Analysis

Nike competes internationally with various athletic footwear and apparel companies. Adidas and Puma were major suppliers of sports goods in North America before Nike started its operations. Puma lost its market share over the years, and now only Nike and Adidas are two major global forces in the sports goods industry. Both companies compete fiercely to gain sponsoring of significant sports events. Adidas was the FIFA WC 2018 official sponsor; however, it was Nike which was the kit sponsor of both finalists (Becker, 2018). Moreover, in 2015, Adidas lured away NBA superstar James Harden from Nike marketing startegy , and its revenues surged 25% (Rovell, 2015).

Critical literature review

Traditional marketing is the most recognized and widely used technique of marketing globally. It involves four significant mediums, i.e. print, telephone, broadcast, and direct mail (Todor, 2016). With the help of traditional marketing, companies allow their customers with the place, time and possession utility (Durmaz and Efendioglu, 2016). However, with the introduction of television and radio services in the 20th century, TV ads widely replaced print marketing (O`Barr, 2010). TV ads became successful because they reached a greater number of people than print advertisements and people who could not read also got to know about the promotional campaigns of businesses. Such is the impact of ads through TV that a 30 second commercial during the 2012 Super Bowl was sold for $3.5 million (ESPN, 2012).

Nevertheless, besides the benefits that traditional marketing offers, it also has some significant drawbacks. Due to busy schedules, people want commercial-free content on their screens. Masses are subscribing to digital TV channels and streaming companies like Netflix, which charge a premium price for not showing commercials of any kind. This leaves companies with traditional approach only at risk of losing the new generation of buyers (Todor, 2016).

The biggest change in the way humans communicate is due to the recent proliferation of the internet and social media, which has broadened the meaning of digital marketing. The internet has brought real social relations to the virtual world, and this development of digital communities has led companies to market products by digital means (Verissimo & Borges Tiago, 2014). According to Kannan and Li (2017), digital marketing was previously referred to as the marketing of products using digital means but has now become a tool to promote brands, shape customer preferences and boost sales using digital technologies. A major change in marketing techniques came as a result of digital, social media and mobile marketing. Widespread mobile phones and easy internet access has changed the way companies market their products. In 2016, 3.5 billion people used the internet compared to 400million users in 2000; this is 875% growth rate (Roser et al., 2015). This shift in marketing approach happened due to more and more people being online. Companies globally have noticed this shift and responded by building a huge digital presence on different social media platforms, such as Facebook, Instagram and YouTube etc. Most of the companies have shifted to digital advertising due to it being a cost-effective and wide reach, e.g., Air BNB’s marketing consists of user-originated images and videos on social media and its Instagram account had 13 million interactions in 2015 (Siu, 2015).

Digital marketing has transformed businesses worldwide. It makes use of social media marketing, pay-per-click view, search engine optimization techniques, email marketing (Barnhart, 2020). A report by E-marketer in 2018 revealed that companies plan to spend $129 billion on digital marketing through Google, YouTube and Facebook promotions. In comparison, only $109 billion was utilized in traditional marketing (Wagner, 2019). One of the advantages of digital marketing is of high effectiveness because it reaches consumers globally at a minimal cost. The audience can be targeted, and the results are easily measurable (Todor, 2016). However, it requires a high level of skills and is time-consuming. Furthermore, fierce competition exists in digital marketing due to which the content needs to be creative. Also, consumer data security is also at risk (Todor, 2016).

Market research approach

The research was conducted around the pricing levels of Nike, and respondents were asked questions if the products of Nike justify their price tag and if they would buy a similar product of another brand at a lower price than Nike’s?

For this study, a quantitative market research method was used, which utilizes numerical data which is easy to understand and analyze. Moreover, data obtained as a result of the quantitative method can also be compared to historical and industry trends. Furthermore, a quantitative research approach is scientific method and chances of biases in research are also non-existent. Data can be collected easily and in a short time plus having numerical figures makes decision making easy (Almalki, 2016)

Web-based questionnaire method was used for data collection purpose. It is one of the most trusted ways for data collection (van Gelder et al., 2017). One of the reasons for the popularity of Web-based questionnaire method is the wide availability of the internet. Examinees were asked to answer the question on a scale of 1-5, where 1 indicated “strongly disagree”, and 5 referred to “strongly agree”. Moreover, the descriptive data analysis technique was used on SPSS for analyzing the data collected, which gives mean, median and mode of the data and standard deviation can also be calculated using this technique. Standard deviation provides information about the average deviation of results from the mean score (Trochim, 2020).

For sampling, probability technique was used because, in this method, every member of the population has an equal chance of selection. Using this method removes chances of bias. Systematic sampling technique spreads sample evenly over the population. In this method, the first sample is generated randomly, and the respective samples are collected after fixed intervals. Moreover, it reduces the risk of manipulation, and therefore, the sample truly represents the population.


Results obtained from the survey reflected that 80% of the respondents were happy with prices at which they buy Nike products. Moreover, 60% of respondents said that they would buy Nike even if similar products of other brands are available at a lower price. The reason behind the motivation to keep buying Nike by most of the customers was that they feel part of a global family by wearing Nike products and wearing global brand gives them mental satisfaction. Another frequent answer from respondents was that their favourite teams and athletes wear Nike, and that is why they buy Nike products. Some of the answers reflected that Nike swoosh is the reason they buy Nike because everyone recognizes the logo.

Marketing Mix (7Ps) of Nike

Following is the marketing mix of Nike:


Nike has vast range of products ranging from shoes to hand bands and it covers all items of sporting goods. However, its major product to date is footwear. The company has grown from a simple track shoe to smart shoe and other digital products, i.e. Nike+ app and fuel band etc. (FBS, 2017). Nike offers its products to men and women of almost all ages through its different ranges, including running, playing and lifestyle shoes. Furthermore, the company also allows its customers to order personalized shoes with its “Nike By You” initiative (Nike, 2020b).


Nike charges premium prices for its products. It enjoys the luxury of charging premium prices due to the huge popularity of the brand, premium quality of its products and loyal customers. It does not set prices according to market norm yet continued to grow due to incredible marketing strategies which pursue customers to keep buying (Allan, 2019).


Nike sells its products both online and through physical retail shops. It also partners with third-party retail stores for sales. Nikes owns 1096 retail stores worldwide, out of which, 396 operate in the U.S. alone (Bedford, 2020a). Its online store at makes up for 30% of total sales, and the company is planning to take it to 50% by 2020 (Thomas, 2020). Although it is headquartered in Oregon, Nike has global brand divisions which manage sales of the company in each continent.


Nike promotes itself via both traditional and digital mediums through paid and owned media (advertising and digital properties). Nike sponsors sports events and professionals to promote the brand, e.g. both finalists of 2018 soccer world cup wore kits provided by Nike (Gharagozlou, 2018). Moreover, it has adhered to rise of social media by building a huge digital presence on social networking platforms such as Facebook and Instagram. Nike makes excessive use of a push and pull strategy. It pulls the customers via the sign-up section of its website which asks visitors to sign-up for newsletters. Moreover, it also has links to Nike’s social media accounts. It uses hashtags to attract customers and lists the official website at the end of videos (Bailey, 2015). Similarly, Nike uses a push technique in the form of advertisements on the traditional and digital platform.


Nike is one of the biggest employers of sports goods industry with almost 75,400 employees around the world (Bedford, 2020b). Nike also gives equal career opportunity to everyone, which is evident by 39% and 21% concentration of women and underrepresented communities, respectively of the total workforce (Nike, 2020a). Moreover, Nike gives equal importance to the work of every employee and does not make differentiations on gender base, which is evident from the fact that it pays men and women equally. It offers them training programs to increase their skills (Nike, 2020a).


Nike’s products are made in 42 countries at over 550 factories, which are then shipped to Nike’s warehouses and sent to the respective retail stores (Harris, 2019). On the other hand, the online orders are shipped through independent couriers.

Physical evidence:

Nike is globally recognized by its famous swoosh and “Just Do It” slogan. Greyser has described swoosh as a living, vibrant symbol of Nike (HBS, 2011). Its physical environment is very much evident from Nike stores which are not filled with its logo printed everywhere, but there is one big logo which differentiates from other shops. Moreover, Nike store is busy with its products, music is sporty, and the store is always full of colours.

Conclusions and recommendations

Based on the above discussion, it can be concluded that Nike is highly efficient in marketing its products. The company has continued to enjoy consistent growth for a good part of the century despite the emergence of new challenges and strong competitors. The company has transitioned successfully to the digital age. Moreover, Nike a customer base which is loyal and will prefer Nike over other brands mostly. The success Nike has achieved over the decades is down to the effort they put in making new and better products.

Following are the recommendations to Nike for improvement in its different marketing elements:

  • Nike should invest in digital sports. Although the company has already been present at major physical sports events, i.e. FIFA World Cup 2020, Rio Olympics 2016 etc. (Brand Channel, 2016), digital sports are the future and highly popular among new generations of sports enthusiasts. For instance, 4.3 million copies of video games FIFA 19 were sold within a week (D’Angelo, 2019), hence illustrating an opportunity for Nike to upgrade its product mix.
  • Nike should look out for sports with huge marketing capacity but are largely unexplored. One good example of such sport is cricket which is watched by over 2 billion people in the world (ICC, 2019). Cricket market is vacant of major sports goods providers such as Nike and has extraordinary room for growth.
  • Another recommendation for Nike is to improve its promotional mix by collaborating with other fashion and lifestyle brands like Zara, Louis Vuitton, and Levis etc. This partnership marketing will allow the company to increase its customer base, thereby leading to increased market share.
  • Although the company already allows its customers to order customized shoes, Nike can adopt open innovation through crowdsourcing (Schenk & Guittard, 2011). This will allow Nike to enhance its employee and customer engagement (Troll, Blohm & Leimeister, 2016), hence leading to improved “people” element of the marketing mix.

Figure 2: Recommendations for Nike

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Reflective statement

The module was a breath of fresh air for me because I have always been enthusiastic about marketing and was too excited even before the module started. Besides, I have always been a keen observer of how companies set up their promotional campaigns and tempt us to buy their products. Therefore, I was highly motivated to study the processes that an advertisement goes through before reaching our eyes. My teachers’ help was highly beneficial in understanding the marketing process as some of the ideas such as strategic marketing were raw to me, and I was having difficulty in understanding them.

I always thought of marketing as advertisements and promotional campaigns, but now I understood that there is a whole lot to marketing than commercials only. The fact that it takes into consideration factors such as distribution, pricing, and physical evidence of the marketing firm was utterly different and new to my concept of marketing. Furthermore, I got to know about various forms of marketing, i.e. internet marketing, social media marketing, email marketing and the most widely used traditional marketing.

Moreover, before this module, I was unable to analyze situations critically, but my instructors helped me overcome these problems as well. The fact that importance of customer preferences while promoting the products holds a key position in decision making was unknown to me. Impacts of events occurring inside and outside entity environment on marketing also came into my knowledge. For instance, how political and social factors impact the marketing approach of an organization. I also became aware of the framework of marketing, i.e. process starting from the collection of data to the final product of marketing, which is TV commercials, advertisements etc.

Another aspect of marketing I came to know about was data collection and analysis. Data holds utmost importance in making any decision. In marketing, before a product is released, its target market is identified to acknowledge the demand for the products. Data obtained as a result of the research is later analyzed. The analysis is carried considering various factors such as the age of the intended user, geography of target market, social and cultural impacts of product and competitor strength in the market. Results of the analysis are compiled together, and marketing decisions are then taken based on these results. For instance, if a product is designed for young people, marketing it through the internet might be the best approach. Similarly, if the target market of a product is not technologically advanced, promoting the product via social media will not bring results. I also realized different elements of marketing and how, despite being different, they are interrelated, e.g. distribution holds supreme importance when promoting a product. A product will eventually fail if the distribution network does not exist, regardless of the excellent promotional campaigns. What good advertisements will bring if the customer does not know where to buy the product from or if the product is not readily available?


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