Place

Nike is a multi-national corporation with 858 stores worldwide in 45 different countries. The brand caters to people with higher wealth levels and hence restricts itself to these 45 countries that could be considered to be wealthier. When travelling, I came across various Nike stores within several European countries. I found these stores to be located in significantly more up market, affluent areas, such as top end shopping centres, or in the case of Vienna, in the centre of the fashion district. Nike's dominant position in the sports apparel market has enabled it to align itself with the worlds biggest traditional fashion brands despite being in a very different niche of the market.

When looking at place, it must also be recognised where Nike sources its products from. Many of Nike's products are produced in Asian countries, such as Bangladesh. Although Nike come under scrutiny at times over a violation of workers rights, the outsourcing of work to these places is financially viable for a company such as this. The reason for this is that the lack of regulation with regards to a national minimum wage enables Nike to pay workers at a lower rate. Moreover, this will lower costs of production meaning increased profit margins are easier to acquire.

Promotion

Nike makes use of a significant annual promotional budget. With this budget, they are able to promote their brand using various different advertising platforms, including television, the internet and print campaigns. Moreover, the use of company sponsored events further promotes the Nike brand image.

Whilst studying Media at my previous school, I was analysing advertisements as part of my coursework. I came across a Nike football advertisement. The advert used many different footballing stars. Not only did it use these stars, it also used Nike sponsored athletes from other sports as well. By doing this, they were promoting the brand to a wider demographic, who would appreciate the products on offer. Nike made this advertisement as part of a multi-media advertising campaign. It was designed for the television as well as the internet. The advert would be screened on programmes designed for a mass audience along with sporting programmes. Moreover, the advert was also aired on you tube. This further broadened the viewing potential of this movie and hence would only promote the brand further.

Pricing

·       each entry should illustrate your personal experience and appreciation of a different marketing mix element to which you have been exposed

A brand such as Nike have a different pricing mechanism to many other brands. This is the case as they have developed a significant market share in the shoe industry that enables them to have pricing power and influence the prices of other competitive firms. Their brand image and popularity has meant that they are able to set their prices high for their shoes. When shopping online recently for a new pair of shoes, I saw that the prices of shoes had risen. The average pair of shoes goes for at least £80 on their website. Nike potentially used market orientated pricing when setting their prices for their shoes, which looks at 10 different factors. Given their products high quality or perceived high quality, they are able to increase the price as the consumer believes that they are buying a high quality product worthy of the extra investment. The costs of production however do not justify their high prices. Production costs are minimal, especially in light of recent revelations of near sweat shop working conditions overseas in their factories. Their's and Adidas' joint dominance over the market place has however given them the ability to price highly as the lack of quality alternatives with a similar brand image gives them control and assurance that consumer demand for their product will remain high. If Nike didn't have this dominance, then they would have to abide by the market clearing price, or else face the danger of being competed out by competitors, however there dominance has given them the ability to set the market price.

When deciding how to price their good, a brand has several factors that they have to consider. Tghe first of these is where the market clearing price is. If they set their price above this price, then they are likely to make minimal profits as people will source their goods from elsewhere. Similarly, if they price too low, then they could also see diminishing returns, as the returns for their sales will not bring about sufficient profits for the company to function.

Market orientated pricing looks at 10 different factors when setting their price for a new product. These include the value of the product to the customer, marketing strategy, price-quality relationship, product line pricing, negotiating margins, political factors, costs, effect on distributors/ retailers, competition explicability. When looking to set a price for a new product, or altering the price of an existing one, a brand such as Nike must take these factors into account. If they fail to do so, then they will fail to gain demand for their product and this could have impacts on their profit margins

Product

The brand that will be focussed on in this post is Nike and the product area in specification is shoes.

Nike have remained a dominant force in the footwear industry for years now. They have been able to maintain this market dominance through release of new products.Whilst many brnads within the fashion industry go through an eventual decline in their brand or a demand for a specific product as seen in the product life cycle, Nike have managed to maintain a position at the growth/ maturity stage of this life cycle. An example of a brand in a similar industry that saw a decline in their product demand and hence their product life cycle was Florsheim shoes. Although the brand was founded earlier than Nike, they saw a rapid rise in popularity, however their lack of transitional development in alignment with peoples changing requirements and fashions saw their companies value and demand drastically decrease. This continuation of growth on the product life cycle  for Nike can be held largely as a result of their development of existing products and bringing out new ones. For example, over the christmas period, Nike released a twist on the already existing Nike Jordan range, by bringing out their Christmas edition as can be seen below.

By doing this, Nike is able to appeal to larger groups of consumers who want the newest fashion trends.