Targeting, Positioning and Branding

In the last Marketing group sessions, we went through targeting and the segmentation of target markets; which is the process of defining and subdividing a large homogenous market into clearly identifiable segments having similar needs and wants.

We talked about the aspects of target market, for example who they are, what they are, what they do e.c.t. From this we picked out aspects of the target market and the communications used; we produced posters in groups to display these from selecting images and pictures from magazine articles and newspapers. We worked with Hilton Hotels for this session; their target markets were the professional business individual and the slightly older generation for luxury weekend getaways. So we decided to split the poster into two sections of these target markets and we put the marketing communications that overlapped in the centre. On the business individual side we had images of smart looking businessmen in suits and an image of a boy showing his muscles implicating strength and the strength and success that these business people feel inside. In the centre we had an image of a map and various locations, showing that there is a wide variety of Hotels all over the country, whether for weekend getaways or business individuals. On the right hand side we had images of good quality wine and food implicating an extremely high standard and quality of food.

If we were to do this exercise for our brand Nike then we would have chosen images that portray sports quality. For example athletes, showing sportsmen and women doing a variety of sports, from basketball to running, to golf ect. Seeing as one of the unique ways Nike differentiates themselves from its competitors is the science and technology that goes into the development and production of their footwear, we would have include technical images. We may have included quotes of success and achievement, which is associated with Nike footwear, particularly with the help of high achieving sponsors.  

In the Marketing group session that we had today we learnt about positioning and branding. We look at how companies use product differentiation to position themselves in markets and the combination of name, term, sign, symbol and design to brand themselves with the primary function to identify themselves over and above other competitors.

We looked at ways that Nike differentiates themselves from their competitors and came up with the main point that because Nike is so heavily focused on the technological and scientific side to their footwear they are immediately differentiated. This research and development they go through to come up with quality footwear design is just amazing and there is not a close competitor that we can think of that does this. From this we produced perceptual maps of the industry and close competitors of Nike, looking at the performance, technology, fashion and leisure of products. With this information we can identify possible competitive advantages and selecting overall positioning strategies. We are also able to identify any gaps in the market, however we must see if this is an opportunity or whether there is a reason why there is a gap in the market.

We are now at the final stages of our Nike infographic; we are going to draw up our own perceptual map of the footwear market and place other competing brands where we perceive it to be. This will be slightly different for everyone; it depends on their own perceptions. We are going to gather all our information and make sure that we have all the references and evidence to back up our points. The next stage would be to display it all and produce our final Nike infographic.

Kirstin Ledson and Chelsea Lane

5th March 2013- 7.00pm

TOWS and CSF

NIKE	THREATS 1. Triple dip recession 2.  Negative media and pressure groups 3.  Intense competition eg Adidas; cheaper imported footwear from Asian countries 4. Pollution permits and G8 Summit goal to reduce emissions by 2050.	OPPORTUNITIES 1.  Interest rates- consumers may have more surplus cash, which they are willing to spend on luxury goods. 2. Increase in health awareness with regards to weight loss and benefiting those with problems such as high blood pressure and cancer. 3. Government funding towards sport and large programmes set up by leading companies (Sainsbury’s) 4. Growing opportunities in India- increase in India’s urban middleclass; Indian government has removed restrictions on foreign direct investment, meaning Nike can have full ownership of its Indian operations. 5. General growth of the global footwear market- By 2016 its predicted to increase by 28.9% since 2011. 6. Promotion of sport due to the Olympics.
WEAKNESSES 1. Suppliers- They depend on 3rd party manufactures eg China, so they has little control over the product quality. 2.  Competitors ie Adidas are creating similar products i.e. customization. 3. Limited control over contract manufactures, the contract manufactures of Nike have been criticised for the violation of labour laws. 4. Nike was criticised for the use of child labour, this lead to anti-sweat shop groups campaigning against Nike.	Remedy weaknesses to minimise threats o    Try and move away from totally relying on third parties as this will help to reduce costs and improve quality of the products and reduce the amount of media controversy. o    Because competitors are starting to develop similar products i.e. Adidas, Nike needs to develop new and advanced products and customization which will help them keep their competitive advantage.	Remedy weaknesses to take advantage of opportunities o    By moving into INDIA, Nike can contract out more factories there; this will enable them to have more control over their manufactures. o    They could use large sporting events such as the Olympics and programmes such as the Sainsbury’s sport one to show that they are committed to try and get their reputation back on track after event such as bad press over sponsors and allegations about breaking labour laws.
STRENGTHS 1. Broad distribution network i.e. sells its products globally 2. It’s a worldwide brand leader. 3.  Nike has a large market share. 4. Nike uses new technology to innovate products and to give them a competitive edge e.g. Nikes partnership with Apple. 5. Offers wide variety of footwear products and allows customization as well.	Use strengths to minimise threats o    Due to the current recession and unemployment rates Nike could use its strong research and development and technological advances to develop a range of high quality, yet more affordable shoes. o     Because Nike has increasing profits each year, it can take on board the aims from the G8 and look into creating more efficient production line, creating less emissions and reducing the company’s carbon footprint. o    Nike has been subject to negative media regarding some of its sponsors and also pressure groups for environmental and political issues, so by using the fact that it’s a worldwide brand leader it can invest in sponsoring up and coming sport stars or people who are established, admired. This would help to change their public image and steer away from negative press. In relation to pressure groups Nike could actively show that it is monitoring working conditions in its production line.	Use strengths to capitalise on opportunities o    They can branch into other areas of the world i.e. INDIA because they are brand leaders and have a huge market share and intermediaries and distribution around the world. There is a growing urban middle class and strong demand for international brands and lifestyle products, which Nike can benefit from. o    Nike can use its high status and technological advances to develop products and services that will link into government investment in sport and programmes i.e. Sainsbury’s- kids sports. o    They could also look into using their current position to influence health awareness schemes and the advantages sports has on them

Above is our TOWS analysis and critical success factors, we used macro ideas to create threats and opportunities and micro factors to create weaknesses and strengths.

We now going onto prioritise all of our factors and start to create our infographic.

Kirstin Ledson & Chelsea Lane

5.00pm 1st March 2013

Macro and Micro Factors

We have looked into Nikes various Micro and macro factors which are as follows:

Micro (internal factors that affect your brand)

Competitors-

PUMA AG Rudolf Dassler Sport

K-Swiss Inc.

LaCrosse Footwear, Inc

Dick's Sporting Goods, Inc.

New Balance Athletic Shoe

Adidas AG ---Adidas have currently branched out into customization of footwear products; it is important that Nike are aware of this so Nike can sustain its competitive advantage over them. Adidas’s revenue- $18,580.2 million in financial year end of 2011 fy2011 whereas Nikes revenue= $24,128 million (last financial data given on Marketline).

Collaborations-

Apple and Nike have collaborated together to sell a Nike Ipod sports kit (branching out into new markets).

Suppliers-

Nike outsources almost all of its footwear production to independent third-party suppliers (Asia). As Nike gets its merchandise from foreign manufacturers, it has little control over the product quality. For instance, there have always been concerns over unsafe Chinese consumer products.

Publics-

Many colleges and universities, especially anti-globalization groups as well as several anti-sweatshop groups such as the United Students Against Sweatshops, took campaigns against Nike. These kinds of instances show that Nike has limited control over its contract manufacturers. Thus, any future instances like these could damage the company's reputation.

Intermediaries-

These are companies that also sell Nike footwear: JDSports, ASOS, Sports Direct, Schuh, Office, Footlocker, Very, Amazon.

Company-

These are other brands that Nike own: Converse, Cole Haan, Converse, Chuck Taylor, All Star, One Star, Star Chevron, Jack Purcell, Hurley, Umbro.

Macro (external factors that effect your brand)

Political- 

legislations- China has passed 2 new laws in 2007 to improve workers rights, bans, imports laws in sweat shops, pressure groups, Europe referendum- 50% of UK products go to Europe, so if we break off from Europe it will effect organisations. Vat 20%. In Japan importation of sports shoes requires a submission of notification to the ministry of economy, trade and industry. Pressure groups. There are environmental pressure groups that are against particular aspects of the brand. There was criticism on some of the adverting campaigns, which has some backlash eg T-shirt slogans included ‘dope’ and ‘get high’. There was a huge disputes and criticism over wages and working conditions in the production of Nike shoes in Asia.

Economical- 

Sales tax is added onto the imports of Nike shoes for example in some countries like Ireland it is 23%. Inflation= 2.7% and interest rates are low at the moment, this means that consumers may spend more. The Chinese footwear market is expanding rapidly and its expected to surpass the US in the next decade as the worlds largest consumer market,  unemployment levels in UK fall to 7.7% (2.49million people),  We are going into a triple dip recession.

Social-

Ageing population, obesity- 60.8% of adults and 31.1% of children are overweight (BBC 2009) There is an increased focus on doing physical activity to help control weight loss and even control diseases such as heart disease and cancer. There are also programs/action plans to help raise awareness for sports for example Sainsburys sports for kids. The Government invested £300million funding package into UK Sport and the Olympics

Technological-

There has been growth in technology within the production and development of the footwear products. There has also been developments and growths within advertising using technology for example online media, apps ect. There has been a huge increase in online shopping and new products being brought into the market for example IPads and smart phones which enables buying online or on the move much more efficient and common.

Environmental-

(G8 SUMMIT) - global targets set by 8 richest countries in world; by 2050 they wish to have halved emissions. There are pollution permits in place to regulate the amount of pollution a company can emit eg 100 units of carbon dioxide per year. This is an incentive for firms to cut pollution.

We will now go on to use these to create a TOWS analysis, from this we are able to assess and priorities Critical Success Factors (KSF).

Kirstin Ledson and Chelsea Lane

3.00pm 1st March 2013