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Hanxiao

Feng, Ariel Siyuan Guo, Zephyr Zhifei He


Cassie Xinyu Liu, Amanda McLaughlin


I.

Situation and Context Analysis

As a well-established brand founded in 1964 with a mature business model and a growing digital ecosystem
(Graph 1.1), Nike is currently looking for opportunities for further growth potentials. Seeing the unbalanced
demand-and-supply relationship between female customers awakening needs of health and fitness digital
services and the underdeveloped female sporting market, Nike is suggested to tap into this emergent tension and
to grasp the opportunity to boost female customer engagement.
Nikes Major Opportunity: to build deep connections to female consumers with digital services (branded
apps) and online communities to driving rapid expansion of Nikes female sporting goods business.
To illustrate how Nike can tailor its strengths to meet its opportunities and avoid possible threats based on
its current historic and current situation and context, a SWOT analysis is conducted as below:
Strengths
1. Strong brand recognition (G1.2)
2. Leading market share and
increasing revenues (G1.3)
3. Large and cohesive
customer/user community
4. Efficient and effective R&D
5. Remarkable marketing and
consumer engagement

Weaknesses
1. High prices of products
2. Large advertising and marketing
expenses
3. Gender bias perceptually (G1.4;
G1.5)
4. High dependency on footwear
sector

Opportunities
1. Build on digital/mobile trend
2. Increasing needs towards
healthcare via mobile devices:
77% of US smartphone owners
aged 18-29 and 68% of those
aged 30-49 use their phone to get
information about health
conditions. (G1.6)
3. Enormous growth potential for
female health and fitness apps:
Women account for 68% of
fitness fanatics.

Opportunity-Strength Strategies
1. Develop branded apps and digital
platforms to accumulate existing
and new users.
2. Focus on CRM, incl. educating
consumers, integrating online
communities and better
communicating on the topic of
health and sports.
3. Target female segment and offer
customized functions and
products to expand female
sporting goods market

Opportunity-Weakness Strategies
1. Offer incentives according to
consumers activeness in branded
apps or online communities to
lower prices but improve
engagement and volumes.
2. Use branded apps as owned
media to advertise and
communicate with consumers to
lower advertising expenses.
3. Cater to womens need and put
more efforts on developing
apparel and equipment sectors.

Threats
1. Industry Rivalry: e.g., Adidas,
Reebok, Asics, Puma, etc.
2. Substitute Services and Products:
wearable devices such as Apple
rd
Watch and 3 party health and
fitness apps
3. New Entrants: Fashion brands or
High Tech companies entering
sporting goods business.

Threat-Strength Strategies

1. Reposition Nike to better
differentiate it from competitors
by means of R&D and Marcom.
2. Cooperate with popular 3rd party
apps to achieve win-win situation.

II. Consumer research and observations


Based on secondary data, observation and
first-hand experience using branded apps of
a wide range of sporting goods brands, we
find that currently Nike is in the middle of a
bunch of competitors who mainly focus on
male customers and is just slightly better in
digitalizing than others. Therefore, in order
to jump out of the red sea and to be the first
entering the blue ocean, Nike should move
both upward and rightward (on the
perceptual map) to build on the trend of
digitalization and be more unisex by catering
more to women customer.

(Perceptual Map)

As for consumer behavior towards mobile


apps, 45% of U.S people use health and
fitness apps in a daily routine, and almost two thirds of people have been using these apps for more than six
months, which shows a great opportunity for loyalty.
Three most popular uses for health and fitness apps are tracking caloric intake, monitoring weight and tracking
exercises, which shall be taken into considerations while designing our branded app. However, there are still one
third of people who stop using health and fitness apps mainly because I forget, It takes too much time or
Its too hard. Nike should establish an incentive system and use gamification to avoid those obstacles.
(Data taken from mobiquity)

III. Overall Marketing Objective
The overall marketing objective is to increase revenue by 7% through 2016 and to increase the target sales
of Women's training from $740 million in 2015 to $800 million in 2016.
It is expected that the apparel and footwear industrys overall revenue growth will remain at a moderate
rate of 4%-6% through 2016. Nike, however, as the industry leader, we believe that it will achieve a higher-thanindustry growth rate in total revenue by driving the demand of women fitness products through NIKE+U
campaign and increasing online exposure and brand awareness.

IV. Segmentation and Target Audience
Since #Nike+U# Campaign targets female consumers only, we accordingly narrow down our population and
only segment the female market. Two key drivers for potential engagers of the IMC Campaign are female
consumers health condition and concerns, and their attitudes towards and habits of using mobile/digital
devices. We thereby categorize the market into four segmentation, which are Healthy and Engaged (aka
Fitness Fanatics), Challenged but Mindful, Unhealthy and Denial, and Young and Indifferent to find out
our champion customers.

Segment

Healthy & Engaged


2
Fitness Fanatics

Attributes

Age: Across all ages, but


predominantly mothers
age 25 to 54 who are
sports fans and lead
healthy lifestyles.
Number: ~43 Million
(26% of U.S female pop.)
Health
This segment is health
Conditions conscious and does not
and
have chronic health.
Concerns They regularly exercise
and eat fresh fruits and
vegetables.
Attitudes This segment offers the
towards
greatest market
health and potential for digital
fitness
health products.
apps

Challenged but mindful


Age: Primarily older
consumers age over 35.

Number: ~42 Million
(25% of U.S female pop.)

Unhealthy & denial

Age: Older consumers


age over 35 who have
lower income levels and
mostly live in the U.S
Midwest and South.
Number: ~46 Million
(28% of U.S female pop.)
This segment of
Consumers have chronic
consumers is also health health problems and are
conscious, but has
not health conscious.
chronic health problems. They do not habitually
They also regularly
exercise or eat healthy.
exercise and eat healthy.
This segment offers the Nonchalant to health
second-greatest market and fitness apps.
potential for digital
health products.

Young & Indifferent


Age: Youngest segment,
primarily Millennials with
low income levels.
Number: ~35 Million
(21% of U.S female pop.)

This group is not health


conscious, does not have
chronic health problems,
but do not habitually
exercise or eat healthy.
Contrary to existing
stereotype, this segment
is actually least likely to
be receptive to digital
health solutions.


We find it advantageous to both target Healthy and Engaged and Challenged but mindful segments.
Both groups show an increasing need of health and nutrients information, a promising attitude toward health
and fitness apps and a much higher income level and consumption level. To our surprise, young and healthy
people, thought by many to be prime candidates for digital health programs as they are the most interested in
new technologies, are actually the least likely to be receptive to digital health solutions based on the research
conducted by C3i. Therefore, we will focus on females who are among 25 to 54. The sum of these two targeted
segments occupy more than a half of the entire U.S female population, approximately 85 million, which is a huge
profitable market.
V. Behavioral Objective
Increase purchase rate of fitness products by healthy and engaged female customers by 10% in 2016.
Increase trial rate of fitness products by challenged but mindful female customers by 5% in 2016.

VI. Mental Objective

The mental objective is to be perceived as the closest-to-female brand among healthy and engaged and
challenged but mindful female customers in the sporting apparel and footwear industry by 2018.
By providing a professional fitness app especially designed for women, Nike will build on customer intimacy with
female target and increase women's awareness on health and sports by educating them on knowledge of health.
In this way, Nike will be in the position to gain more share in the female market and boost its total revenue.

VII. Brand Positioning Statement

1
2

http://www.c3ihc.com/blog/patient-segmentation-research-provides-insights-into-digital-healths-future/
http://flurrymobile.tumblr.com/post/115192181465/health-and-fitness-apps-finally-take-off-fueled

To fitness fanatics and challenged but mindful females in North America, NIKE is the healthy lifestyle
promoter that offers the most customized fitness content for women, because it offers
the most professional workouts plans coached by trainers from IDEA Health and Fitness Association and
NIKE sponsored athletes, customized nutrition and diet plans designed by certified nutritionists from American
Nutrition Association, period recordings and medicine tracker specialized to users current health status and
concerns, and an interactive social network for users to communicate with each other and post their own
workout plans and healthy diets.

APPENDIX

Graph 1.1 - Nikes Brand Ecosystem

Graph 1.2 Best Global Brand 2015 via Interbrand


Graph 1.3 Sporting goods companies revenue in 2014

Graph 1.4 Nikes Revenues Statement


Graph 1.5 Wholesale equivalent revenue

Graph 1.6 US consumer smartphone usage by purpose and group age