Integrated Marketing Communication Plan for Nike Inc - Case Study Example

Introduction This report is based on integrated marketing communication plan for an organization that is looking to raise its profile relating to carbon consciousness among its consumers. The report specifically introduces new products in Nike Inc. Company with an aim of observing the implementation of carbon consciousness aspect in their items by going green. The author has the responsibility of developing an IMC plan for this large sized company which is trying to include ‘green’ products as part of its suite of offerings to current and perspective potentially carbon conscious consumers (Boström and Klintman, p 93). To this effect, the author is to develop an IMC plan for this company as well as the company’s products. It will be important for the author to understand the business and the industry in which the company operates (p 92). The report provides background information of the company in terms of its establishment, its product range, operations and location of business. The report will then give an overview of the products that has been selected for IMC plan and the target audience that has been selected for communication purpose. Further, this report will then outline the creative strategies that will be adopted for Nike Inc. Company and then explain the media plan which will be used to achieve the outlined communication objectives and creative strategies for Nike. The report finally presents a conclusion that summarizes the importance of integrated marketing communication in business. Background of the company Nike Inc. Company is a large sized company that was established early in 1964 but came into being officially in 1978 as cited in Barbara (p 102). The company takes its name from Nike, the Greek goddess of victory as explained by Barbara (p 102) and is headquartered in the United States. Documented reports available indicate that the company is the world’s leading supplier of sportswear particularly athletic shoes and apparel, and a major manufacturer of sporting equipment. Based on this argument, research works by Boström and Klintman (p 100) indicate that Nike is voted as the largest seller of athletic footwear and apparel worldwide by sales. Further reports indicate that Nike markets its products under its own brand name as well as through other subsidiary brand names like Air Jordan, Cole Haan, Hurley International, Umbro and Converse (Klein, p 79). Studies by Berg and Teigen (p 35) indicate that the company employed more than 30,000 people worldwide as of 2008. Although the company specializes in the development and sale of athletic footwear, apparel and equipment, research findings illustrate that footwear is the company’s largest product category, representing about 52% of revenue (p 103). In addition to manufacturing sportswear and equipment, the company operates retail stores under the Niketown name. Studies have shown that Nike sponsors many high profile athletes and sports teams around the world, with the highly recognized trademarks of “Just Do It” and the Swoosh logo (Belch et al, p 28). In fact, the company only matches the Coca-Cola Company in sponsorship strategies for sporting events. Additional works by Kerry (p 67) show that Nike sells its products in over 180 countries worldwide through its company-owned retail stores and internet sites. To effectively access the global market, the company divides its sales into four regions across the globe namely the United States and the EMEA region (Europe, Middle East and Africa). Published works by Klintman and Boström (p 180) indicate that these regions accounted for about 64% combined of Nike’s revenue respectively in 2008. Target audience segment analysis Nike Inc. Company tends to have a multi-faceted target audience owing to the popularity of the market segment the Company serves. The current author of this report intends to focus on the wholesome target audience of the Company. From the outset, Nike Inc. will naturally target diverse groups of individuals such as a family target audience, a single person watching or participating in a game or on a leisure tour, older people, children of all ages and teenagers (Gupta, p 210). Within the different groups, the author realizes that the target audience may segment further to develop more sophisticated marketing programmes. The development of an encompassing brand strategy provides the marketer with a fundamental set of brand values. This encompassing brand strategy can then be layered with specific initiatives to reach distinct target audience segments. This discovery has been taken care of by a highly focused logo design used by Nike. Klein (p 83) explains that in this case of using a highly focused logo, the Company is capable of reaching a far more precise target market. However, there is evidence that a logo design will widen its target market as it reaches a greater level of maturity. A case in point is found in Nike’s attempts to move away from her traditional running heritage and exploit other varied sporting fields. Besides, Nike’s target audience has moved from more masculine towards female and even third agers in recent times (Klein, p 80). Communication objectives For the purposes of this report, the author has come up with three communication objectives that help in developing brand awareness and promoting product and company knowledge as well as influencing consumer attitudes and their purchase behaviour (Berg and Teigen). Firstly, the author’s aim in this report is to attempt and increase consumer awareness of all the products developed and marketed by Nike Inc. Company. Secondly, the author also wishes to drastically change the beliefs and perceptions associated with the field of sports which has remained male dominated for a long time and probably incorporate women in its products (Klein). Since the field of sports is very popular and overcrowded, the third communication objective is for the author to develop strategies that are capable of positioning Nike Inc. Company vis-à-vis the competition offered by other players like Adidas, Puma and New Balance, just to mention but only a few (Klein). In addition to these three objectives, the author finally wishes to change and reinforce the image of Nike Inc. Company so as to attract a new target audience particularly the female group which has for a long time been left out in the targeting by developers and marketers of sporting items. Creative strategies In relation to the communication objectives enumerated above targeting particular market segments, the author similarly wishes to develop creative strategies for a particular purpose and requiring a specific consumer response (Waller). As already established, Nike Inc. Company is concerned with the manufacture and sale of sporting items which must be marketed using state of the art technology for the company to have a competitive edge in the highly competitive global market (Warde et al). To this end, research findings show that the company has made stringent measures to strategise on this issue. Three creative strategies are proposed for use in this report particularly to address the first communication objective of increasing consumer awareness. This is proposed to be attained through such media plan like advertising, sponsorships, brand timing, positioning, localisation and price discrimination (Waller). The same media will be critical in achieving the second, third and the fourth communication objectives outlined in this report. Media plan According to the creative strategies developed for use in Nike Inc. Company, the author has to select the media vehicle that will be used for each creative strategy. It is in order to justify the use of specific media based on how it communicates with the selected target audience. Reliable sources report that Nike was the outstanding market leader of the global athletic footwear market in 2007 holding 31% of the sales. Additionally, Nike is also reported to hold substantial market share by region particularly the United States, Europe and Asia with 36%. Her major competitors like Adidas, Puma and New Balance have not been posing any significant threats within their market segment. The four companies are shown to control 71% of the global market for athletic footwear (Klintman and Boström). On the contrary, research indicates that there is more demand for athletic apparel compared for the shoes and the major players in this sector control only 27% of the market. From this percentage, Nike controlled 7% in 2007 making the company yet another global leader in apparel (Klintman and Boström). In line with this illustration, Nike will refresh her strategies by employing the following. First, Nike is positioned as a premium-brand that sells well-designed and expensive products. The company lures customers with a marketing strategy centering on a brand image which is attained by distinctive logo and the advertising slogan dubbed “Just Do It” (Klein, 52). Nike promotes its products by sponsorship agreements with celebrity athletes, professional teams and college athletic teams. Secondly, advertising is fundamental in Nike’s success as illustrated by Klein (p 42) who claims that the company aired its first national television advertisements during the New York Marathon in 1982. This media plan by Nike has placed the company to become a remarkable force to reckon with in the field of advertisement by partnering with major advertising agencies in the world. In view of this, Nike has been named by the Cannes Advertising Festival as its ‘advertiser of the year’ on two separate occasions in 1994 and 2003 according to Waller. More reports indicate that Nike has also earned the Emmy Award for best commercial twice since the award was first created in the 1990s also explained by Waller. Apart from this media plan, Nike sponsorships have been instrumental in the marketing of the company. Reports demonstrate that “Nike pays top athletes in many different sports to use their products in promoting and advertising their technology as well as design” (Belch et al). The company has been the brainchild of this vehicle alongside the Coca-Cola Company. Studies by Belch et al show that Nike has sponsored many other successful track and field athletes including leading tennis players like Serena Williams as well as the successful basketball player Michael Jordan in 1984 (Belch et al). Further claims by Barbara indicate that Nike has also offered to sponsor several leading football clubs in the world as well as the world’s top golf players like Tiger Woods. It is still reported by () that Nike has entered into an agreement with the Indian cricket team to be their official kit sponsor in addition to being the officially recognized major clothing and footwear sponsors for world’s leading sporting events for the past two decades. In the views of the author therefore, the use of this media plan in conjunction with numerous web sites as Nike’s promotional tool in covering sporting events has been demonstrated to largely contribute to the company’s publicity and sales. Brand timing on one hand refers to the creation of a marketing opportunity according to Klein (p 45). Equally it can also be the ability to recognise and exploit a shift of some kind in the views of Warde et al. Moreover, shifts have been reported to result from a number of factors such as technology and consumer changes. International brands are careful in implementing their core business concerns straight away. As a result of this accelerated product development cycle, marketers are advised to maintain competitive advantage for their brands with a rapid roll-out of new developments (Waller). In addition to this, positioning is another crucial vehicle capable of a company’s publicity. This media plan involves ascertaining how a product or a company is perceived in the minds of consumers (Klintman and Boström). Positioning has been attainable through effective use of logos as claimed by Klein. Accordingly, the successful application of logo designs has been able to translate and adapt a central guiding theme brand roll-out. This can attested by the results observed overtime from the use of Nike’s “Just Do It” and Coca-Cola’s “Always” logo designs. Finally, localisation of products has to come into play as is the case in recent times. Observation of a greater degree of localisation whereby a logo design conforms to a central strategy but one that can be adapted locally is evident in today’s business world. This tends to be more efficient and responds to local market opportunities and needs where brand consumption goes local (Kerry). To embrace localisation, Nike must have more products tailored to local tastes while maintaining the primary offer unchanged (Gupta). Success in this area has been witnessed in sports logo designs by Nike and Adidas with a strong presence in the local market. This is most visible through the sponsorship of local athletes and events by the two companies (Barbara). Coupled with price discrimination, the company in perspective must embrace viable communications and distribution channel diversity for effective marketing as argued by Barbara. Due to the numerous numbers of competitors present in this field, the issue of pricing is not a problem because of the elasticity put in place. Developing an Integrated Marketing Communication Plan for Nike Inc. Company An Integrated Marketing Communication plan usually encompasses certain activities like advertising, direct marketing, internet marketing, sales promotion, publicity and personal selling according to Belch et al. Interestingly, published research works indicate that Nike has been lauded as a great example of a company that has fully embraced the concept of integrated marketing. In the views of Klintman and Boström, their integrated approach includes “traditional advertising through the use of billboard, magazine, and television; sponsoring sporting events and players as earlier indicated in the foregoing text; and engaging in online marketing initiatives by allowing consumers to customize their Nike shoes”. Studies have also shown that Nike spend a great deal of money in search of marketing. Thus, Nike’s approach allows them to communicate their message consistently across all media outlets and at the same time share that message at every customer touch point by using the catch phrase “use Nike products and you will increase your performance regardless of what sport you are involved in” (Gupta). Consequently, documented evidence has shown that Nike has made landmark breakthroughs in trying to adopt green marketing. This is a very new concept which is often taken to mean the use of raw materials in industries that are environmentally friendly (Boström and Klintman). The idea is to reduce the emission of harmful substances that are not injurious to the environment. In this regard, going green for any forward looking company is a must and is necessitated by the current climate change witnessed worldwide. The much hyped climate change is responsible for the rampart flash flooding and the unbearable global warming experienced the world over. True, the ice caps are melting and the polar bears are drowning because the ice is thinning as explained by Boström and Klintman. To survive in this volatile situation, companies are bound to deal with a customer base that is already receptive to a green message. Otherwise as illustrated by Boström and Klintman, attitude change towards green becomes mandatory in influencing potential customer purchase behaviour. But since changing any type of attitudes is an uphill task, Nike has found it necessary to pump a lot of funds in this endeavour. Nike has joined other leading companies that have attempted to go green including those in the computer industry and the service industry. The approach used here according to the author primarily abides in building public awareness amongst the identified target audience. Barbara said that “if a company can create public awareness and effectively generate an attitude towards conservation, then the said company is capable of changing the behaviour of its target audience”. This argument is found to be economically valid because researchers have variously explained that “it is more effective and efficient to target consumers that have already changed their attitudes rather than investing in those who haven’t” (Belch et al). Research shows that consumer expectations are forever changing and as such companies must turn to green so as to offer greener products than their competitors and have a competitive edge (Boström and Klintman). It is therefore the author’s recommendations that Nike concentrates on changing attitudes of its target audience primarily through the art of persuasion. This is based on convincing the local consumers that the enduring benefits of the community are pegged on the sustainable utilization of its natural endowments (Berg and Teigen). Psychologically, the locals are found to be highly receptive to this kind of message touching on their survival as long as they use their natural endowments sustainably. In view of this approach, various findings have indicated that Nike has been successful in achieving change in the grassroots at all levels of livelihood in the world (Warde et al). This success can be attributed to spirited media advertising and worldwide celebrity and general sponsorship drives that has seen large scale shaping of consumer attitudes. The driving force has been attempting to make sure that everybody becomes aware of any Nike product, get interested in it and get the opportunity to access and try it (Kerry) and probably ensure that the customer remain hooked to the brand forever. To effectively illustrate that Nike Inc. Company has made stringent steps in going green, available research findings indicate that the company has reduced its carbon (IV) oxide emissions in an effort to protect the environment. From studies across the globe, it has been shown that the consistently growing textile industry to meet the ever expanding demand for clothing has had adverse negative impacts on the environment (). Experts have indicated that the fast expanding textile industry have placed a lot of strain on global water sources, raw materials and petroleum products resulting in unfavourable climate change and pollution thereby affecting the environment (Klintman and Boström). Besides this, studies show that the current use of state of the art technology in textile plants is capable of producing excess cheap clothing particularly for fast fashion while at the same time spending significant amounts of energy (Klintman and Boström). Similarly, Nike has also been found to be a key contributor to the purported negative effects on the environment owing to the fact that the company is another large participant in this manufacturing sector. Observers have been keen to notice that Nike has attempted to mitigate these combined negative effects on the environment by developing different projects that are regarded as organic with greatly reduced emissions. The main objective of this programme is to minimize solid waste to the environment as well as green house gases that are responsible for depleting the ozone layer. According to claims by Boström and Klintman, Nike has been ranked in the top three slots among fifty six companies that are considered to be climate-friendly. One major contributor to this classification is indicated as the company’s ability to offer quality recycled products. Take for instance the company’s iconic ‘waffle’ outsole designs praised for their effective grip on the running track as explained by Klein. Accordingly, this was Nike’s first self-designed athletic shoe which is popular even to date. Additionally, Nike has been reported to have recently invented a high performance basketball shoe dubbed the Air Jordan (Klintman and Boström) which is regarded to be environmentally compliant. The successful growth of these two products is claimed to have been through what Belch et al call ‘word-of-foot’ advertising rather than electronic advertising. In addition to the iconic type of advertisement mentioned in the foregoing paragraph, Barbara argues that Nike’s life long slogan “Just Do It” accompanied by the swoosh sign on virtually all its products has been instrumental for the company’s monumental growth. Moreover, Nike has also been commended for her continued programme of recycling wastes to produce quality products. According to research works by Berg and Teigen and Boström and Klintman, Nike is indicated as having made a shoe in early 2008 from waste leather and artificial leather waste obtained from the factory floor. This invention led to the emergence of the “trash talk shoe” that sported a sole made from grounded rubber obtained from recycled discarded shoe remains. It is in record that this became the first performance basketball shoe to have been developed from manufacturing waste materials to rid the environment of solid wastes. Finally, Nike is involved in a “clean the environment” programme in which the local community benefits economically. In this programme, Nike contracts the locals to collect all old athletic shoes of any type which are then processed and recycled into new modified running shoes (Klintman and Boström). The programme is indicated to have started sometime in 1993 under the name of Nike’s Reuse-A-Shoe programme (Klein). In this programme, nothing is left to waste because the resultant of the recycled shoes is effectively incorporated in other sports amenities particularly floor surfaces in basketball courts, running tracks, and playgrounds (Kerry). When all is said and done, Nike has been trying very hard in put all her operations within the confines of the requirements of human rights concerns. Claims from activist groups show that Nike has wantonly violated human rights in her endeavours to defend her global market share segment. According to the findings of Klein, it is indicated that major producing plants involved with Nike’s products flout human rights laws in regards to minimum wage and overtime requirements with careless abandon. In addition, the company has been greatly criticised for subjecting the poorly remunerated employees to deplorable working conditions (Klein). These employees are variously suggested to be cheap slaves from poor countries, a claim that has had most hurting effects on the public image of the company. As regards the issue of gender equity, Nike has been highly criticised for applying double standards. It is reported that while the company announced in publicity advertisements that it is engaged in empowering women in the U.S. and other superpowers, the reality on the ground in third world indicated the contrary (Klein). A landmark criticism in this area of disempowering women and children is found in the claims that Nike has been using child labour in her factories located in countries where steps have not been put in place to curb the vice (Klein). Reports indicate that this practice continues unabated in such regions with the victims working unnaturally long hours under most deplorable conditions with poor pay. Nike has been strongly on the defensive but all in all smarting from a seriously bruised image. Market Analysis From the discourse presented above in this report, it has been established that Nike Inc. Company is the largest manufacturer of athletic footwear and apparel worldwide by sales (Boström and Klintman). According to financial reports for the year ending 2008, the company’s total revenue for the year amounted close to over $18.6 billion (Berg and Teigen). This revenue is attributed to have come from the company’s four regions in which it has business interests namely the United States and the EMEA region representing about 64% of the company’s global collections (Berg and Teigen). In the recent economic downturn of 2007 to 2009, it is documented that Nike has been hit hard by a global slowdown in retail sales and consumption as cited in (Berg and Teigen). Due to this distabilisation, reports by Berg and Teigen show that Nike’s revenue grew slightly by a paltry 3% to about $19.2 billion indicating a drop in net income by 21% to $1.5 billion. Based on this, the company experts stipulate lower revenues in the first half of the current year. Although Nike is still struggling from the effects of the global economic crisis, there are indications of a bright future with some reported improved demand in most of the company’s target audience segments. Specifically, the company intends to increase her annual marketing budget to recover from the aftermath of the global economic crisis by possibly increasing her global sales. The company aims to accomplish this by shifting from her traditional television and print advertisement but instead concentrate on celebrity sponsorships (Berg and Teigen). From the brief market analysis for Nike, it is evident that the company can grow to greater heights considering her business segments. From the outset, it has been indicated that Nike has curved herself a very strong business niche in the global arena and is poised to remain stable for long. Nike has therefore segmented her business by first and foremost involving herself in footwear that is reported to account for 52% of the company’s revenue (Klein). In this business segment, Nike specializes in sports shoes specifically used in athletics, basketball and soccer for instance as cited in Warde et al including a minute portion of casual footwear. Secondly, Nike is also involved in the manufacture of apparel that is shown to account for 28% of revenue in the fiscal year 2008 (Berg and Teigen). This category of products includes sporting and training apparel that are licensed and printed with logos of college and professional sports teams as indicated by Klein. Apart from these two business segments, reports have also indicated that Nike also sells sports equipment including balls of all types, protective gear as well as equipment for golf clubs (Klein). This category reaped 6% of revenue for the company in 2008 which was a tremendous increase from the previous year (Berg and Teigen). Finally, other business segments have been reported to bring a 14% of revenue to Nike Inc. Company during the mentioned trading period. From published study findings, it is demonstrated that much of the reported increases in the company’s revenue came from the EMEA region probably due increased public awareness in the said region. Another reason could be due to the growing popularity of sports across the globe as explained by Waller. Conclusions Research findings in the area of integrated marketing communication show that any company worth its name should adopt an integrated marketing approach in today’s business world. The world of information is growing at an alarming pace and the world has become more informed than ever before. For companies to remain in business, it is imperative for them to employ effective communication system in order to reach these informed consumers (Berg and Teigen). In the views of Berg and Teigen, marketers need to place their message strategically where the consumers can access it any time. From what has been presented in this report, it has emerged that successful companies have shifted from the traditional way of doing business to implementing an integrated marketing communication plan. Scholars have unanimously defined integrated marketing communications as a term used to describe a holistic approach to marketing communication (Belch et al). In this regard therefore, companies have used “IMC to marshaling in a new era in which marketers blend communication messages across all available media channels into a continuous brand experience” (Barbara). These companies have demonstrated the importance of integrating the marketing mix of product, price, place, and promotion when doing business (Kerry). Nike Inc. Company has constituted the whole of this report and the author has been able to demonstrate how companies in our modern business world are currently integrating all marketing disciplines into one entity to ensure achieving of effective communication of a business message. According to Gupta, harmony between a company and its prospective target audience is fundamental in achieving an effective integration of various marketing messages. Similarly, tactful blending and execution of all promotional tools is instrumental in successful access and impact on every single customer. Not one isolated media has been shown to generate the much needed revenue for companies or even increase market share base but only through embracing an integrated marketing strategy as proffered by Barbara (p 112). List of works cited Barbara, B. “Separating Advertising from Programme Content: The Principle and its Relevance in Communications Practice”. Journal of Communication Management. 2005, Vol. 9 Issue 3, pg. 101-113. Belch, G et al. Advertising and promotion: an integrated marketing communication perspective. McGraw-Hill, New York, 2008, 8th edn. Berg, L and Teigen, M. Gendered consumer competence in households with one vs. two adults. International Journal of Consumers Studies. 2009, 33 (1), 31-41. Boström, M and Klintman, M. Eco-Standards, Product Labeling and Green Consumerism. Palgrave Macmillan, Basingstoke, 2008. Gupta, Sunil. Managing Customers as Investments. Wharton School Publishing, 2005. Kerry, Segrave. Product Placement in Hollywood Films: A History. Jefferson, NC: McFarland, 2004. Klein, Naomi. No logo. Canada: Random House, 2000. Klintman, M and Boström, M. Transparency through Labeling? Layers of Visibility in Environmental Risk Management. Edward Elgar, London, 2008, pg. 178-197. Waller, D. Mountain bike mania - the promotional plan. Irwin/McGraw-Hill, Sydney, 2004, 2nd edn. pg. 26-37. Warde, A et al. Trust in Food: A Comparative and Institutional Analysis. Palgrave Macmillan, Basingstoke, 2007. Read More