What is the Marketing Mix?
The marketing mix is a marketing model first created by E. Jerome McCarthy in 1960 using 4P’s, and extended by Bernard Booms and Mary Bitner in 1981 to include 3 more P’s.
This model is used to assess where marketing can be applied across a company.
The 7 P’s are:
- Product
- Price
- Place
- Promotion
- Process
- People
- Physical Evidence
Product
First Steps
The first Nike product was the running shoe, a design adapted from the Onitsuka shoes originally imported from Japan under the name ‘Blue Ribbon Sports’.
This shoe was created by Bill Bowerman, who revolutionised the running shoe by fitting it with a rubber tread he created using a waffle iron so that runners didn’t have to use metal spikes on the bottom of their shoes.
The array of Nike designs for athletic shoes, it’s primary product, grows as diverse as Nike’s markets, which are segmented according to demographic, geographic, behavioural and lifestyle factors.
Fig 3. Washington Post (2019)
Nike’s packaging design varies according to shoe design and price point. Branded packaging is an essential part of the product experience.
Fig 4. Sports Examiner (2019)
Product Expansion
Nike expanded their product ranges to include apparel in 1979 (encyclopedia.com, 2021) from shoes to clothing and accessories.
Nike have further diversified their product range as they have targeted new markets, such as women and children.
Fig 5. USA Today (2018)
Technology plays a huge part in Nike’s product development in staying ahead of their competition.
The vaporfly is a recent example of Nike’s innovation causing controversy within the sports world. With claims that it allows runners to improve their times by 4.2% and gives them an unfair advantage(WSJ, 2020, See Fig.6).
Nike has also innovated the self lacing shoe in 2016, called the ‘adapt’ and the ‘Go Flyese’ in 2021 to respond to the need for disabled customers needs to have a ‘hands free’ shoe.
Price
Nike uses a value based pricing model for its standard product ranges. Products are priced according to perceived value by consumers.
Genius branding by Nike places their products at high value because of the quality of design and manufacture and uses psychological selling tactics to promote Nike as fashionable, cool and technologically advanced, compared to their competitors.
Nike apply a price skimming model to keep old stock selling until closeout.
New designs are priced high, and reduced over time.This screenshot of the Nike website(UK) shows their End of Season Sale with a 50% reduction from full price at the top of their website
Fig 8. Nike (2021)
Place
Nike employs many distribution channels to reach its consumers. It wholesales to chain stores, partners with category sport specific retailers and also sells direct to consumers.
Nike’s early business followed the wholesale model, selling Nike goods through other sports retail outlets worldwide.
This image is the JD Sports store, one of the destination category retail stores that Nike partners with (Weekend Edition, 2017, See Fig 9).
In 1990 Nike began expanding its reach with ‘brick-and-mortar’ expansion and opened its first retail store in Portland, Oregon USA.
Niketown stores sold the whole range of Nike products under one roof. From 1992 onwards Nike began opening more Niketown’s domestically, and by 1999 they began international retail domination with a combination of retail partnerships, bricks and mortar stores and e-commerce.
Niketown in London is situated in the heart of the shopping district. They now have 1048 worldwide retail stores (Statista, 2021) where the Nike experience is brought direct to consumers.
Fig 10. Constructure (2020) Niketown London
Nike’s direct to consumers distribution model went online with a ‘bricks and clicks’ strategy in 1999.
Philip H. Knight, chairman and CEO of Nike, was quoted as saying, “With the Internet, we have an opportunity to recapture a level of intimacy with our consumer and simultaneously drive potential buyers to our retail partners.”(ecommercetimes, 1999).
The site is segmented by geography, with different countries having their own version of the homepage relevant to that target market.
The homepage also updated frequently to feature products targeted to specific demographics and seasonal changes (Nike, 2021, See Fig 11).
This video demonstrates Nike adapting to modern consumer expectations of the future. The bricks and clicks model of the future is where both physical and digital experiences are fully integrated
Fig 12. Engadget (2018)Nike Manhattan
This Futuristic store on 5th Avenue Manhattan features the integration of mobile apps and a physical store to create a curated individual consumer experience.
Consumers can find products using a Nike app, order and collect and even try on garments in a changing room specifically fitted with ‘selfies’ in mind.
Nike branded boutiques within department stores will become a thing of the past as Nike severes it’s partnerships with many stores in 2021.
DSW, Urban Outfitters and Macy’s are amongst the casualties of the Consumer Direct strategy.
Fig 13 J.C.PENNEY, n.d. Nike Boutique inside J.C Penney [photograph]
Sam Poser, an analyst stated “Nike is moving fast to increase its brand strength, as well company sales and margins,” (footwearnews.com, 2021)
As well as Nike pulling out of many physical outlets they have also ceased distribution through online retailers such as Amazon. This allows Nike to take more control of their brand, it’s messaging and product prices.
Promotion
Nike have fully harnessed the power of promotion to make them the globally recognised brand they are today.
Nike employ many forms of outbound promotion such as advertising in the traditional mediums of television, print and billboards, and more recently have leaned in heavily into inbound marketing such as social media and using analytics to gain more information of the markets they are targeting. This year Nike spent over $3 billion on advertising and promotion (Statista, 2021)
Their “Just Do It” campaign in 1988 has become the most famous advertising tagline of all time (Campaign, 2020) and has been featured in many campaigns since (Ads Lover, 2020 See Fig 14).
Nike’s outbound marketing channels are still a large part of its strategy to stay culturally front and centre.
The 30th Anniversary ‘Just Do It’ campaign featuring Colin Kaepernick, a former NFL star and political activist brought media criticism, but ultimately led to more sales and soaring stock price (CBS News, 2018).
Fig 15. Getty Images (2018)
Controversy Campaigns
Controversial topics that matter to its consumers and speak to its values has been a core part of Nike’s promotional strategy.
The ‘Dream Crazier’ campaign is overtly femenist. Narrated by Serena Williams, it focuses on exceptional women in sport and concerns the labelling of women in sport (and society) as ‘crazy’ if they push boundaries and fight for their place.
Nike use powerful emotions in their advertising and use cause marketing to connect with the values of their customers.
Celebrity Sponsorship
Nike’s main promotional strategy is the use of celebrity and influencer athletes across a wide range of sports and across genders.
Nike’ most bankable celebrity asset is soccer star Cristiano Ronaldo ). As well as being one of the most watched and photographed sports stars of all time, he has a huge social media influence.
Ronaldo is the most followed account on instagram with over 315 million followers (statista, 2021)
Fig 16. sportytell, (2021)
Social Media
In recent years social media and digital marketing have allowed promotional interaction to take place between Nike and its customer base, and has also fuelled a huge upsurge in consumers and influencers creating original content and marketing to each other.
Micro and specialist influencers across platforms such as Instagram and Youtube create content for their own subscribers.
This is Jaques Slade, looking at the Nike Flyese Go in Feb 2021, which has over a million views to date (Jaques Slade, 2021, See Fig 16).
Process
Bill Bowerman began Nike’s drive to make products that improve athletic performance with his waffle iron in the early 1970’s.
Nike began their business with extensive research built into their product development strategy. They conducted market research alongside performance measurement to improve their shoes.
Nike has extensive research labs to measure athletic performance for numerous sports and use this data to develop new materials, innovative design and improve construction methods
Fig 17. Nike (2013)
Once research and development is complete, products are manufactured, shipped and distributed across the world.
Fig 18. Nike (2021)
Nike runs a lean manufacturing process, concentrating on increasing efficiency, speeding up production and distribution and reducing waste (E.B.Kevin, 2020) so that it can deliver the right product at the right time to the right consumer.
Nike outsourced the manufacturing of its’ products in nearly 800 factories outside the USA in China, Vietnam and Indonesia as well as other countries (Market Realist, 2020).
Finished products are shipped by air and sea from oversea factories to their destination countries and distributed from huge centres such as this one in Memphis which is one of more than 500 distribution centre’s worldwide.
Fig 19. Soletrader (2015)
It demonstrates how Nike considers the whole process of its products from raw material production to ‘end of life’.
With the current consumer desire for transparency and sustainability, Nike make great effort to demonstrate their corporate responsibility.
People
Founders
Nike’s founders Bill Bowerman and Philip Knight were the first salesmen in the companies history.
Bill Bowerman was a renowned track and field coach, and his athletes were the first consumers of the new Nike sports shoes.
(Fig 21. Oprah (n.d) Bill Bowerman and Philip Knight
This personal selling approach was short lived as demand outstripped the supply and Nike evolved to manufacture its own products and distribute them via wholesale and retail models, and eventually direct to worldwide consumers through their online store.
Staff
This image shows Nike’s customer advisers in the retail environment.
Nike see their retail salespeople as “athletes” with expertise and knowledge to direct consumers to the products they need and guide them through to the end of the buyer’s journey.
Customer Service
Digital direct to consumer communication is increasingly important for global companies. Conversations do not transmit through the regular channels of face to face or telephone, but by social media.
Like many global companies Nike deals with customer services and community building through digital platforms such as Twitter and Instagram.
Part of this is in response to customers moving to social media to share their feelings and experiences about companies, and to ask questions and gain inspiration and support.
Fig 23. Twitter (2021)
Physical Evidence
Nike’s World Headquarters in Beaverton Oregon,USA is under constant expansion. The site houses offices, work spaces and research centres and parking (Nike, 2016 See Fig 24).
“Our expanding World Headquarters reflects the best of Nike’s culture — a place where we obsess the athlete and invent future products and experiences for consumers everywhere.” Mark Parker, 2017 (Executive Chairman, Nike)
Nike’s La Roca BIG BOX store in Barcelona demonstrates the use of branding display and a visually appealing layout for an exciting customer experience.
Triplar fitted the store with Nike’s sustainability policy in mind “by diverting waste from landfill with the use of existing fixtures within the new refit”, Oliver Leigh(Triplar 2018)
Fig 25. Triplar (2018)
Nike’s uniform design for the first team of USA skateboarding athletes for the Tokyo 2020 Olympics.
Fig 26. Dezeen (2020)
Nike has been a partner of the Olympic Committee since 2005, and is the most recognised brand associate with the games (The Morning Consultant, 2021).
Nike football kit brochure is just one of specialised product catalogues Nike produces.
Nike uses brochures for it’s specialist sport product ranges feature products from sunglasses to whole team kits. These brochures, previously printed on paper, are now downloadable PDF’s direct from niketeam.nike.com.
Fig 27. Football kits Co ( 2021)
Nike’s website is central to it’s post pandemic marketing mix. It shows products and apps designed to pull consumers into the Nike sales funnel (Nike, 2021 See Fig 28)
Nike’s strong customer base and ‘double down’ strategy in e-commerce helped Nike profit despite closing physical stores during the pandemic. During 2020, Nike grew it’s digital sales by nearly 80% (Fox Business, 2020).
“The consumer shift to digital is permanent”
John Donahoe, Nike’s CEO (Fox Business, 2020)
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