Nike’s Business in Spain
Target Market Analysis
The first target market for Nike has been women. Nike has been targeting selling their clothes and shoes to more women between 20 years and 40 years. These people form an important group willing to buy the goods for the sports performance and looks. The company is also targeting young athletes to make partnerships with them and help increase the marketing that they can get through partnering with athletes. The company also aims to target runners with its wide range of footwear (Kammerer et al., 2021). Others have outperformed the category, and there is great potential for growth in the area.
The first strength of targeting this market is that women present a large market in Spain and globally. Women represent a large group of people that the sportswear industry has traditionally underserved. Targeting them presents an enormous opportunity for growth and development for sales and revenue. The second strength is that it has a lot of experience dealing with athletes and helping them be successful while wearing their brand. The process has helped the company gain a wide following, and targeting young athletes guarantees continuity for many years to come.
One of the weaknesses of the current target market is that many other brands are competing for the same sales (Liu, 2021). The increased focus by other athletic companies on women is likely to make it much harder to get significant sales for clothing and footwear. Second, targeting younger athletes is a major risk considering that there is a chance that they may fail to live up to their potential. Such a situation may result in the company spending a lot of money on such athletes and getting minimal or no returns. The wide range of athletes that the company deals with only increases this risk.
Target Market Segmentation
When considering Spain, the first group of people that the company needs to target is children, largely between 14 and five years. Sports development starts at an early age in Spain, and there is a huge demand for sportswear for young children involved in various sports. These consumers are largely in schools in all parts across the country where they can get training and education at the same time. Nike should consider partnerships with schools to provide sports ware and sports equipment to facilitate long-term brand recognition.
The second group includes women between the age of 20 years and 35 years. With the rise of a culture of eating healthy and living a healthy lifestyle in general, it is notable that demand for sportswear by women has been on the rise all across Spain. Many other women wear footwear and clothing for looks and fashion (Childs, & Jin, 2018) instead of wearing to be involved in any form of exercise. Women have been historically underserved, and they present a major market that can help Nike increase their sales in Spain.
Lastly, the company should target professional clubs. In Spain, the largest sport is football which is known as soccer in the United States. The sport has a long history in both Spain and Europe, and it is the most popular sport. Football clubs are a major part of society and the communities they operate, thus impacting purchases and brand awareness. Having dealt with these clubs could help make popular the Nike brand and could also help in increasing the level of consumer awareness about the many different products that the company will be selling across several segments.
Global Marketing Mix Strategies
Nike has a product strategy of making many different products across many segments. The company also aims to develop products that include more than just wearing but also the equipment used in playing the different games, such as the balls and helmets (Ennis, 2020). The strategy also calls for the company to be innovative and develop better products than the competitors whenever possible. The products are often identified as high quality compared to competitors and can get used over a long period.
One strength of the strategy is that it has allowed customers to grow to associate the Nike brand with very good products and high quality.
Second, the strategy has allowed the company to introduce some of the most innovative products in the market first, giving the company the first-mover advantage.
The weakness is that it makes some of the products more costly and beyond the reach of some consumers.
It also has the impact of diluting the brand as it may be harder for customers to associate the brand with a few products that the company is very good at.
I recommend that the company should clearly distinguish between sports and fashion ware and market them as two different product areas and not one.
Nike is known to use both premium pricing for its products and a market skimming pricing strategy. It is a strategy that calls for selling goods at a premium, making its products seen as high-end products. An example would be the Air Jordan, which is sold at a premium each year. The skimming pricing also allows for effective pricing change depending on the market forces and how much the customers are willing to pay. The strategy allows prices to change over the life cycle and effectively uses Spain to keep products moving.
The first strength is that it allows the company to have large profit margins for each product they sell.
It facilitates the movement of products even within a lower price range reducing glut in the market.
As for the weaknesses, the premium pricing locks out many customers that would love to buy the products but cannot afford them.
Skimming has the potential of making some customers dissatisfied when they realize they paid more while others paid less for the same product.
I recommend that the company should use competitive pricing to guarantee competitors do not outprice them.
The current promotion strategy calls for the use of sponsorships with athletes and clubs. The company also does emotional sponsorships where they address some social issues in their adverts.
The process has the advantage of having influential athletes that can promote the company and its products just by wearing them.
The promotion strategy uses controversy to spread the message about a product, and this helps the firm gain a lot more publicity that they do not have to pay for.
The downside of the process is that it can lead to some customers feeling offended by some advertisements.
The use of athletes only impacts the people who know the athlete and thus limits getting to the mass media.
I recommend using a mixed marketing method that uses multiple channels at all times to get the message out to potential customers. The use of mass media alongside social media in today’s society is an effective way of reaching out to many of the young people that the company is targeting to increase its sales (Sinha et al., 2020). The company should also use billboards and internet adverts to help them gain even more publicity to improve the long-term effectiveness of their marketing efforts across all the regions in Spain.
Nike products are in major cities worldwide, and in space, its stores are the largest in large cities like Madrid and Barcelona. The other areas get served by independent retailers that sell Nike products alongside others.
The strength is that the company gets access to the largest populations in large urban places.
Its stores are also likely to make large sales due to the high purchasing power in the stores’ areas.
The strategy’s weakness is that it gives other retailers so much power and control in sales made in the majority of the country.
The high-end locations of its stores may discourage consumers with average or low spending power from considering a purchase.
I recommend that the company increase the number of stores it operates by opening more stores in different places across Spain. There are many smaller towns and cities, such as Bilbao and Valencia. The company should have dedicated stores in these areas to help guarantee that they can increase their accessibility. The stores should also be located in the midlevel parts of town to guarantee that they are accessible by all people and not just the very rich.
Nike is a great company with a long history in sportswear and fashion (Araujo et al., 2018). The company already has a good reputation in Spain, but there are opportunities for expansion and growth. The company should target children and schools, women between the ages of 20 and 35, and football clubs from across the country. The pricing strategy should get adjusted to competitive pricing for some goods to guarantee that the brand serves the rich. There should also be some distinguishing between fashion goods and sports goods in the product strategy. Using mixed marketing methods should also be a strategy to help pass the messaging across many different segments of society. Lastly, the company should open more official stores in smaller cities and towns all across Spain to extend their reach to many more consumers from across the country. With these recommendations, Nike can increase its market share and sales even more across the Spanish market.
Araujo, D., Caldwell, H., & DeFanti, M. (2018). Nike’s Utilization of Brand Strategy to Increase Global Competitiveness. In Competition Forum (Vol. 16, No. 1, pp. 109-115). American Society for Competitiveness.
Childs, M., & Jin, B. (2018). Nike: An Innovation Journey. In Product Innovation in the Global Fashion Industry (pp. 79-111). Palgrave Pivot, New York.
Ennis, S. (2020). Formulating and Implementing Sports Marketing Strategy. In Sports Marketing (pp. 129-151). Palgrave Macmillan, Cham.
Kammerer, A., Dilger, T., & Ploder, C. (2021). Emotional Branding—Identifying the Difference Between Nike and Adidas. Global, Regional and Local Perspectives on the Economies of Southeastern Europe, 287-297.
Liu, X. (2021, March). NIKE’s General Company Analysis Based on It 2020 Annual Report. In 6th International Conference on Financial Innovation and Economic Development (ICFIED 2021) (pp. 799-803). Atlantis Press.
Sinha, G. V., Shyam, H. S., & Mehra, S. (2020). USEFULNESS OF GLOBAL MARKETING SEGMENTATION IN THE SPORTSWEAR BUSINESS. Journal of Critical Reviews, 7(1), 746-750.