Evaluation of Nikes IMC Strategy Using the RABOSTIC Planning Framework - Case Study Example

Evaluation of Nike’s IMC Strategy using the RABOSTIC Planning Framework (Name) (University Affiliation) (Date) 1.0 Introduction No organization can survive in the current competitive environment without the use of Integrated Marketing Communication (IMC). IMC is the coordination of all interaction points an organization has with the marketplace. Traditional marketing communication elements or tools such as direct marketing, public relations, the internet, sales promotions advertisings, as well as other forms of new media are no longer isolated functions. Accordingly, an IMC perspective is designed to leverage the cooperation or rather the synergy of combined efforts. In that regard, marketing marketers have came up with a general concept referred to as Integrated Marketing Communications (IMC), aimed at covering the marketing methods that a company uses. Accordingly, Integrated Marketing Communications ensures that all forms and designs of messages are linked together (Rowley, 2001). It involves integrating an organization’s promotional tools thus making them to work in harmony. Moreover, when integrated, these marketing tools will speak consistently and in unison all the time, every time. In the current marketing industry, the marketing communication strategy plays an integral role in delivering brand message (Keller, 2009). For organizations to have a successful brand, it has to develop a strategic marketing communications plan. Thus, strategic marketing communications plan is the organization’s lens to focus on the customers it services as well as the people it seeks to influence. Through an integrated marketing communication approach, an organization can create powerful, focused as well as targeted appeals for impact in order to build its brand. In effect, successful marketing communication plans often relies on a combination of elements call the promotional mix. These elements include public relations, sales promotions, personal selling as well as direct marketing. Moreover, the internet today plays a significant role in reaching certain essential audiences. As such, this paper examines the use IMC by Nike Inc. reviewing literature on the role and characteristics of marketing communications planning. Nikes use of IMC tools is discussed in the context of RABOSTIC approach. Further, the paper will discuss the extent to which Nike Inc. is demonstrating corporate social responsibility through its marketing communication. 1.2 Company Overview Incorporated in 1969, Nike is involved in the design and development of Athletic footwear, equipment, apparel and accessories. The company is also engaged in worldwide marketing and selling of products. The company’s focus product offering is based on seven main categories: Basketball, Soccer, Running, Men’s Training, Women’s Training, Action sports and Nike Sportswear. Similarly, the firm also markets products designed for children as well as for other recreational and athletic uses. Apparently, the company transitioned its activity to E-Business in order to improve its services and added value to customers’ satisfaction. 2.0 Literature Review 2.1 Marketing Communication Strategy Generally, marketing can be found anywhere: individuals are bombarded with direct mail offers, sales call as well as radio and television commercials. Even though marking has four main stages, it is a two-way process: a customer and market organization. The typical four stages often include designing, developing delivering as well as determining the value (Baines et al., 2008). Ideally, these four main stages are often put in place to ensure that the two-way process is successful. A customer has the power to make the final decision and as such, has a strong input. Baines et al. (2008) contend that the marketer often has the challenge of specifying how the organization will satisfy the customer’s needs. In addition, marketing is essentially a process of an exchange where both parties supply as well as receive something (value (Baines et al., 2008). In effect, for marketing to be effective, a marketing communication strategy should be developed. Marketing communication incorporates three main elements: a set of tools, the media as well as he message (Walters, 1986). Thus, the set of tools often constitute to what is referred to ‘promotional mix,’ which include advertising, publicity, sales promotion, sponsorship, internet marketing, direct marketing and personal selling. Accordingly, Nike has adopted the integrated marketing communication, which in effect combines all the ‘promotional mix’ elements. Schultz and Kitchen (2000) posit that Integrated Marketing Communication is usually a strategic that organizations use to plan or design, develop, execute as well as evaluate persuasive brand communication projects or brands overtime. Additionally, Caemmerer (2009) believes that for the program to be successful, it must be well-coordinated measurable and targeted to both the relevant internal and external audience. Thus, the message is not meant for the consumers alone, but for the wider audience. Caemmerer (2009) proposes that the integrated marketing communication concept is often based on the idea of blending different strands of marketing communication ‘promotional mix’ into a cohesive, as well as a seamless entity. Caemmerer also argues that advertising is not the only tool that an organization can use for communication, but other tools such as direct marketing, sales promotion and public relations also play an important role. When blended, these tools ensure a better understanding of the message being delivered, experience and awareness with individuals. Consequently, a well thought-out marketing communications strategy or plan will often support the organization’s mission as well the objective, which are laid out in the strategic plan. For instance, Nikes marketing communication plan is in line with its mission of bringing inspiration and innovation to every athlete across the globe: “if you have a body you are an athlete.” A marketing communication plan allows the organization to focus on its marketing and communication, ensuring that all initiatives work together to support the bigger picture (Shimp, Terence and Shimp, 2000). The strategy in Nike plays an important role as it builds the components of Nike as a brand, identity. Through Nike’s marketing communications plan, the company is in a position to focus on where it is heading, what it needs to say and what channels it needs to interact positively with its audiences. One of Nike’s marketing objectives is to employ various marketing communication tactics that would cater to all its target market depending on their different cultures, ages, gender and nationalities as well. Moreover, the company’s objective is also linked with its innovative and quality products (Pickton & Broderick, 2001). Accordingly, the company develops its products and services based on the customer’s different demands and needs globally. Importantly, an organization cannot develop a marketing communication strategy without looking at the seven important ‘promotional mix.’ First, an organization has to consider using the advertising element (Smith, & Taylor, 2004). The organization has to pay the prime media for its non-personal communication of ideas or rather products. Second, is sales promotion where an organization develops incentives for its consumers such as discounts in order to stimulate purchase. Third is publicity, whereby the organization places information about itself and the products it offers in the media without paying for the time and spaced used directly. The fourth element is sponsorship, which involves the association of the firm’s products and services with an individual, organization or event. Next, is direct marketing whereby the company distributes promotional benefits, information and products to target customers through interactive communication, which allows feedback to be measured. The other element is internet marketing, which has been adopted by a majority of organizations, as it is the current trend in the marketing industry. It involves distributing promotional benefits, products and information t consumers as well as businesses using the internet technologies. Finally yet importantly, is personal selling whereby the company representatives engage potential consumers in oral communication with the intention of selling the products and building the brand reputation (Percy, 1997). All the aforementioned ‘promotional mix’ elements play a significant role in developing a marketing communication plan. Some of the common characteristics of a good marketing strategy include first, the strategy is often participative and interactive. Second, the strategy must be dynamic and motivating to capture the audience. Third, the strategy must be flexible in order to fit all kinds of environments. Fourth, it should be audience-driven thus; it should not suit the marketer’s taste but the audience. Fifth, the strategy must combine both the best of public relations and marketing. Sixth, the plan should contain a mix of strategy as well as tactics. Lastly, the marketing communication strategy must be attainable (Shimp, 1993). Seemingly, Nike communicates strong and consistent messages across its various geographical markets globally through different communication channels which build and strengthens brand value as well brand image simultaneously (kotler, 2000) Conversely, Miller and Berry, (2011) notes that Nike uses brand saliency as a connection between the, product, the athlete as well as the meaning associated with him or her. The meaning is often created in order to elucidate the marketing message thus determining the purchasing factor. However, Wang et al. (2007) and Zaltman, (2003) are of the opinion that storytelling approach, which Nike often uses has a significant effect to consumers as it influences both their conscious levels of thinking. These two authors contend that stories are familiar with and as such, customers can always identify with them as they represent the aspects of human behavior as well as create an understandable context using archetypes. Similarly, Woodside et al (2008) posit that an archetype is an original prototype or pattern, an unconscious primary form in the human mind. Equally, Holt (2003) affirms that the archetype is never learned nor received, but it is in individual minds from their birth. For instance, archetype can be individuals’ association of strength, selflessness and bravery with heroes. As such, organization’s use of the archetypes in advertising often simples the campaign theme since customers will not need explanation of the signs, as they understand them unconsciously. Bagozzi and Natarajan (2000) also affirm Holt’s sentiments stating consumers strive to find happiness and as such, advertising helps them to do so through commercials. In addition, Bagozzi and Natarajan (2000) also argue that through realization, repetition, cognition as well as assimilation with archetypes, people experience happiness and pleasure. People experience happiness when archetypes are used in marketing campaigns and are strengthened by retelling this story. Hiltunen, (2002) seconds this assertion by arguing that when archetypes are used people associate themselves with the company. Thus, forgetting about the business concept and by the time they realise that it is a marketing strategy, they are already brainwashed by the brand. Furthermore, Tuske et al. (2013) is of the opinion this habit is also advantageous for word-of-mouth marketing. 3.0 RABOSTIC model in relation to Nike For an organization to realize its marketing communication strategy, the strategy must go through different phases. To delineate this, the RABOSTIC model developed by Pickton & Broderick (2005) will be discussed. Marketing communication strategy has proved to be of increasing significance in that it influences both the organizational spirit and marketing offering. The RABOSTIC model is a summative process tool that is designed to research, plan as well as implement marketing communication initiatives. The model has eight stages: Research and Analysis, Audiences, Budget, Objectives, Strategies, Tactics, Implementation and Control. The RABOSTIC model operates in a sequential manner and acts as a planning element for the whole course of implementing and evaluating a marketing initiative (Pickton & Broderick, 2005). A significant prerequisite for successful application of RABOSTIC model is synergy between its promotional elements. As such, the planning often generates a product, whereby the value is often greater that its elements (Pickton & Broderick, 2005). In the subsequent section, the RABOSTIC model will be used to investigate Nike marketing communication plan. 3.1 Research and Analysis Research and analysis is a significant evaluation stage in marketing communication planning as it focuses on evaluating as well as analyzing the current position of the brand. Moreover, it analyzes the brand’s current communication environment. As such, a recent market evaluation addresses Nike as the largest company globally with a 2.2% value of share worldwide, as far as the apparel and footwear, industry is concerned (Euromonitor, 2014). In addition, further analysis indicates that Nike is the leading apparel and footwear company globally with sales amounting to $ 37 billion, which is $9 billion more than Adidas Group (Euromonitor, 2014). Nike’s effective positioning statement is “For serious athletes, Nike gives confidence that provides the perfect shoe for everyone.” The company’s effective ‘marketing mix’ initiative supports the brand positioning in its target market. The company has moved from traditional methods of marketing to digital and from product innovation to customer-centric ecosystems: allows for customization of shoes in Nike store. Its products are typically designed for sporting activities, and its products are considered highly effective as well as comfortable to athletes (Euromonitor, 2014). The company has dominated the U.S sports market. Moreover, it is recognized for its quality shoes as it has gained reputation globally. The company uses multiple channels to deliver its marketing messages: email advertising, internal communications website as well as sponsoring of various sport teams (Nike, 2014) 3.2 Audiences Analysis This phase is often charged with identifying the organization’s target group for the marketing communications. Nike considers its patrons as any and every athlete. However, their marketing communication messages target those individuals who love sports and endeavour to do their best in sports. The company markets to individuals who wish to become ‘champions’ in all that they do (Nike, 2014). Moreover, Nike’s marketing messages target the general potential consumers who buy casual apparent and footwear. Nike marketing communication messages target both males, and females aged between fifteen and thirty five years old. More specifically, the company targets males and females of ages 18 to 24 (Nike Inc., 2014). 3.4 Budget Nike often treats their consumers as assets and as such, it spends approximately US$2.7 billion in marketing communications. It sends 15% of its revenues on endorsements. Much of its marketing communication budget is spend on sponsorship. 3.5 Objectives For a marketing communication strategy to be effective, it must be Specific, Measurable, Achievable, Realistic, timely and targeted. In effect, Nike’s objective main objective is to increase leads generated through its website by 30% by the end of 2016. Accordingly, Nike’s goal is to attract new customers outside U.S more so, in Asia and Africa. 3.6 Strategies and Tactics This planning stage involves the company’s choice of communication tools. As such, Nike has employed various tactics in order to realise this objective. 3.6.1 Advertising Nike’s use of the swoosh symbol on all of its products plays a significant role advertising as consumers associate the symbol with Nike company, which is related to quality. The company brand strategy is to build and maintain a powerful brand. The strong brand is aimed inspiring fervent customers loyalty from individuals all over the world. Nike uses the emotional branding method of archetypes in advertising. It capitalizes on the retelling the story of a hero. 3.6.2 Personal Selling According to Kotler and Armstrong (2010), personal selling is the personal presentation of the firm through an employee for the purpose of making sales as well as building customer relationships. In effect, Nike uses personal selling in all its retail stores. Accordingly, their sales representatives are in direct contact with the consumers as they use word-of-mouth advertising while interacting with the customer. The sales representatives are well trained and have knowledge about Nike products and can respond to customer’s questions promptly. 3.6.3 Sales promotion The company utilizes these aspects through lowering their prices thereby appealing to all consumers despite their financial constraints. Nike’s typical products are often priced no lower than $100. Their normal prices end with zero and will often end with nine when marked down. This is the psychological technique aimed at making the consumer believe that their prices are cheap (cent-off deal). On various occasions, Nike often run promotional campaigns thus, selling their products at reduced price. 3.6.4 Public relations Nike uses public relations approach to maintain as well as enhance a reputable corporate image. For instance, in 2002 Nike was accused of paying its workers low wages for a decade. In effect, the company took the accusation with serious and corrected the negative image through adjusting the employees’ wages. Additionally, the company developed a written code of ethics referred to as Inside the Lines, which employees must read, sign against as well as abide by the ethics while employed (Daymon & Holloway, 2002). 3.6.5 Direct Marketing Recently, the company launched a new method of direct marketing, which involves sending a print catalog through mail, which is specifically meant for females. The introduction of the catalog was because of athlete women, who had had expressed interest in the same. The catalog focuses on athletic apparel and footwear for fitness training, yoga and running. Consequently, females who are loyal to Nike products are in a position to access Nike’s products personally through catalogs delivered to them directly. 3.7 Corporate Social Responsibility According to Babiak and Trendafilova (2011) many businesses, often associate Corporate Social Responsibility (CSR) initiatives with costs thus avoiding them. Conversely, the CSR initiatives have been proved to be cost saving. For example, the cost saving can be achieved through sustainability, energy saving and streamlining. In addition, Babiak and Trendafilova (2011) argue that marketing communication elements or rather tools play a significant role in conveying a company’s corporate social responsibility messages. Moreover, the tools can help in communicating a more socially responsible image. Accordingly, Nike’s corporate social responsibility efforts include making shoeboxes using a 100% recycled materials, realizing the use of total closed-loop system and limiting the use of petroleum-based solvents. Moreover, the company has invested in green energy sources, water purification as well as purification. Equally, the company has also developed a strategy for limiting CO2 emissions. Similarly, the company is engaged in empowering adolescent girls in developing countries. Through the Nike Foundation, the company has an initiative known as the ‘girl effect,’ which aims at unleashing the potential of adolescent girls. Nike is involved in support programs of young people through sports. Ultimately, the company fuels power the power of education through innovation under the Nike School Innovation Fund (Nike Inc., 2014). 3.8 Conclusion Summarily, marketing communication is the practice of alienating brand messages, behaviors, symbols and procedures in a clear and consistent way within the organization’s formal boundaries. For an organization to realize a marketing communication strategy, it has to consider using the RABOSTIC model as it would be useful in evaluating the company’s current position as far as marketing communication is concerned. The organization has to link the marketing communication strategy with a number of fields such as corporate culture, design, public relations and corporate communication. The paper has discussed the current marketing communication strategy of Nike as well as the tools, which the company uses in delivering its promotional messages. 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