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SEGMENTATION, TARGETING AND POSITIONING STRATEGY OF NIKE &

BUYING DECISION ANALYSIS

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SEGMENTATION, TARGETING
AND POSITIONING STRATEGY
OF NIKE & BYING DECISION
ANALYSIS
Master in Business Administration (MBA)
Module: MBA 61 | Marketing

Panagiotopoulou Vasiliki
vasiliki.panagiotopoulou@st.ouc.ac.cy
University ID: 000100001411
Coordinator: Nektarios Tzempelikos
Academic Director: Christina Christou
Words: 2226
1 SEGMENTATION, TARGETING AND POSITIONING STRATEGY OF NIKE & BYING DECISION ANALYSIS

Table of Contents
Introduction .................................................................................................... 2
A. Segmentation, Targeting and Positioning ............................................. 2
Segmentation ...................................................................................................... 2
Demographic ........................................................................................................................3
Psychographic .......................................................................................................................4
Behavioral ...............................................................................................................................4
Geographic ...........................................................................................................................4
Socioeconomic .....................................................................................................................5
Benefits ....................................................................................................................................5

Targeting .............................................................................................................. 5
Positioning ............................................................................................................ 6
B. Main factors that can affect the buying decisions of the target
customers for Nike’s products ...................................................................... 6
Psychological factors .......................................................................................... 6
Social factors ....................................................................................................... 6
Cultural factors .................................................................................................... 7
Personal factors ................................................................................................... 7
Conclusion ..................................................................................................... 7
References ..................................................................................................... 8
2 SEGMENTATION, TARGETING AND POSITIONING STRATEGY OF NIKE & BYING DECISION ANALYSIS

Introduction
Marketing choices are crucial components of a strategic marketing process.
At this stage of planning, decisions are made in order to indicate the direction
of the marketing mix not to mention the way products are going to be
perceived in the market place. These marketing choises group consumers
together based on common needs with the ultimate goal to affect the buying
decisions of the target customers for these products, which stands for
segmenting, targeting and positioning strategy. In other words, STP is a
marketing signification that associates the way to evaluate and choose a
target market for specific product or service. Considering the factors related to
this topic, the question of what specific consequences arise when addressing
this topic must be elaborated. This research is particularly outstanding for the
reader because it will analyze the STP strategy of a well-known company that
produces sports equipment, which is Nike.

A. Segmentation, Targeting and Positioning

The perception of mass marketing and behave all customers the same way,
has led to the comprehension of the unique needs of consumer groups, that
has to be segmented for greatest sales opportunities. In particular, all sports
fans differentiate. For instance, a sports company, such Nike, could not market
the extreme sports equipment to elder people. As Michael Porter (1998)
mentions, “You can’t be all things to all people”, explaining that firms, which
specialize in meeting needs of consumers, tends to be more effective.
However, if the first marketing choice is market segmentation, how does Nike
group consumers based on common needs?

Segmentation
In the customary way, there are six interactive bases for market segmentation,
which are demographic variables, psychographic profile, behavioral style,
geographic variables, socioeconomic variables and benefits sought. While
Nike has a general targeted segment “all athletes”, nevertheless precisely
defines various market segments (Shank and Lyberger, 2014).

Demographic Geographic
 Age  World region
 Gender  Country
 Ethnic Background  Country region
 Family life cycle  City
Psychographic  Physical Climate
 Lifestyle Socioeconomic
 Personality  Income
 Activities  Education
 Interests  Occupation
 Opinions Benefits
Behavioral  Consumer needs
 Frequency of purchase  Product features desired
 Loyalty of consumers
3 SEGMENTATION, TARGETING AND POSITIONING STRATEGY OF NIKE & BYING DECISION ANALYSIS

Demographic
Demographic segmentation is the most widely used technique from Nike
because the characteristics are easy to identify and measured, are available
from many sources, such as the government population count and are
associated to sport attitudes such as attending a game or watching sports.
Based on the demographic segmentation, Nike targets individuals according
to their gender, age and life cycle stage. First and most important to be told is
that Nike targets customers between 11-45 years old, with greater weight to
teens in order to build long-term loyal consumers. For instance, in 2014 before
the world Cup, Nike created a promotional campaign that glorified great
football athletes playing football with teenagers inspiring them to become like
their idols.

Age

Children 1-5y Tweens 5-10y Teens 11-18y Adults 18-45

Furthermore, gender is another significant factor that Nike uses to attract its
audience. Despite the fact that its male purchasing audience is higher,
recently Nike has invested heavily in females. Specifically, Nike has developed
a strategic approach to targeting Women by launching a variety of female
sports lines where revenues are expected to grow significantly in the next years.

GENDER

Female;
45%

Male; 55%
4 SEGMENTATION, TARGETING AND POSITIONING STRATEGY OF NIKE & BYING DECISION ANALYSIS

It must be stressed that Nike does not segment the marketplace based on
ethnic background including nationality, race and religion in order to group
the consumers. Respectively, does not take into account the life cycle to
segment the market (Statista, 2017).

Psychographic
Nike utilizes psychographic segmentation to target customers based on
lifestyle, personality, activities and interests. Specifically, Nike aims to active
individuals who take pleasure in sports, gym regularly, are athletes and
passionate with sports, which tend to be part of their life. Nike does something
exceptional. Associates individuals’ lifestyle with their activities, interests and
behavior creating the unique “feeling” and as a result they buy similar
products. Nike applies sports-centric strategy motivating, inspiring and
connecting emotionally all athletes with its products. Nike’s statement “To bring
inspiration and innovation to every athlete in the world” not to mention “Run
with me” encourages all kind of athletes to follow with loyalty the firm with the
sense that they belong to the same family.

Apart from the sports consumers, Nike approaches a crowd that loves fashion.
There are categories of people who are passionate about the brands and buy
company’s products just to follow fashion trends. These individuals are
convinced that Nike’s products are not ordinary athletic shoes but a fashion
lifestyle (Deng, 2009).

Behavioral
On the one hand, Nike focuses on the way its products make consumers feel.
Clearly, the company follows the direction “If you have a body you are an
athlete” and “If you are an athlete, Nike’s products make you feel athletic”.
On the other hand, Nike builds customers’ engagement by providing them
unique quality as well as various and innovative products to choose in order
them to purchase more frequently company’s products. Furthermore, Nike
gives its consumers the opportunity to share their experiences with their friends
and family including the review products on the internet, which spread to
social networks having a huge effect to purchasing behavior of the customers
(Bilotti, 2011).

Geographic
Geographic is simple, yet powerful segmentation basis. Nike segments market
based on world and country region, city and popularity density in different way.
In particular, Nike promotes different campaigns in the United States of
America, in Europe, in Asia, in Australia as well as in Africa because sports
differentiate by region, even cities. For instance, all the commercials in the
United States are around football and baseball, while in Europe,
advertisements refer to soccer.

Concerning cities segmentation and their fans in New Delhi, the capital of
India, Nike promotes equipment for cricket while in England and Sidney for
rugby. Based on Nike’s statistics, largest market places are North America as
well as Western Europe and China where the company segments more the
market focusing on urban areas with purchase densities. Finally yet importantly,
5 SEGMENTATION, TARGETING AND POSITIONING STRATEGY OF NIKE & BYING DECISION ANALYSIS

Nike does not segment the market based on climatic conditions even though
the company is ecologically conscious (Shank and Lyberger, 2014).

Socioeconomic
Commonly, income, education and occupation are interrelated due to the
fact that people with higher educational level enjoy higher income as well as
most respective status. Thus, Nike segments market in lower, upper middle and
upper class, where in the last group, the company provides sports equipment
in limited editions, which could be bought only from individuals with high
income (Bilotti, 2011).

Benefits
Benefits segmentation is considered the underlying factor where every
purchase satisfies a need. Nike focuses on “benefits sought” to segment
market place. Company’s products strive to meet elite athletes’ as well as
professional and casual performers’ needs. These needs that consumers
looking forward to fulfill through Nike’s products purchases are the quality, the
duration, the comfort, the style, the innovation, the price and the brand
awareness. Thus, Nike segments the market in three core bases concerning
benefits, which are the Utility in order consumers to accomplish high
performance, the Style where individuals follow the fashion brand statement
and the Technology bases, which gives customers the opportunity to own
innovative shoes such as Air Max.

Although each type of segment defines groups of customers with similar needs,
it is ordinary implementation in marketing to combine segmentation variables,
such as geodemographic segmentation, for more effective approach in
certain circumstances (Ali Mahdi et al, 2015).

Targeting
Target marketing is the next step of segmentation process where the company
systematically chooses the segments that will allow to most effective and
efficiently achieve its goals.

Nike evaluates its target market based on size, reachability, measurability and
behavioral variables. In particular, Nike has niche market to serve. The
company targets professional athletes and sporty individuals providing them
specialized and innovative products. Furthermore, all products are reachable,
even online, with the unique opportunity Nike’s consumers to create their own
custom designed shoes, which makes the brand more identifiable and
remarkable in differentiation to other footwear companies. It should be noted
that Nike also targets the marketplace through psychological tactics by
sponsoring great athletes with tremendous achievements and victories. This
tactic intimately links company’s products with triumph (Shank and Lyberger,
2014).

It is for granted that sustainable innovation is the trigger for revolutionizing the
way the company does business and manufactures its sports equipment. For
that reason, Nike applies aggressive marketing strategies in parallel with the
marketing mix the company develops in order to make further known its target
6 SEGMENTATION, TARGETING AND POSITIONING STRATEGY OF NIKE & BYING DECISION ANALYSIS

consumers company’s products, enchasing its uniqueness and exclusivity

(About Nike, 2018).

Positioning
The final step of STP concerning the market decisions is the positioning. Nike has
positioned its brand as the market leader of sports equipment widely, providing
high quality and innovative technology. Furthermore, Nike has convinced its
consumers that is an ambitious and victorious company through the swoosh
together with the slogan "Just Do It" as well as through the promotional activities
that connect Nike’s brand with magnificent achievements of prominent
athletes. It must be stressed that Nike over the years has shifted from product
focus to attitude. Nike “speaks” in athletes hearts through unique & momentous
feelings, which makes the company exceptional compared to others. Above
all, Nike has established its place in fashion, where company's products define
certain groups' lifestyle (Chang, 2014).

As it seems, positioning is based on the perception or image that Nike expands

and maintains concerning its sports equipment. With this in mind, the company
develops perceptual maps through marketing research techniques in order to
interpret its products position in relation to competition.

B. Main factors that can affect the buying decisions

of the target customers for Nike’s products
Consumer’s buying behavior goes through various stages before the individual
takes the final decision to purchase the product. Several factors can affect the
buying decisions of the target customers for Nike’s products, which are
classified in the following categories such as psychological, social, cultural and
personal factors and will be elaborated below.

Psychological factors
Nike gives its consumers the belief that when they wear its sports equipment,
they can achieve everything without limitations; they can be unbeatable. The
company's advertising campaigns and headlines give a sense of freedom and
victory not to mention that the brand itself gives the motivation, “Just do it”.
Nike affects not only beliefs but also attitudes. It could be said with certainty
that Nike invests on customers perception by the incentive “If anybody can do
it, you can do it”. Consumers are persuaded to purchase company’s products
and take the change to become healthy and good looking like Nike’s top
athletes (Vainikka, 2015).

Social factors
It is for granted that all Nike’s commercials promote exceptional athletes like
Michael Jordan, Cristiano Ronaldo, Carl Lewis and more using company’s
products. In terms of sociology, all consumers tend to choose products that
their idols use and are highly influenced by their status and lifestyle. Therefore,
Nike’s customers are influenced by reference groups, opinion leaders and
family concerning their buying decisions due to their need to fit in based either
on the role they represent or through the social status. For instance, an
7 SEGMENTATION, TARGETING AND POSITIONING STRATEGY OF NIKE & BYING DECISION ANALYSIS

individual who wears Nike’s limited edition indicated that he/she belongs to
the upper class (Otnes & Zayer 2012).

Cultural factors
Culture is an important factor in consumers’ buying decision but at the same
time, it is also a very delicate issue for companies that use it with the aim of
influence. Nike segments the marketplace by location, and then, having
researched consumer interests based on cultural attributes, affects the buying
audience through commercials. An illustration of the above written is India’s
official sport. Due to India’s culture, there are more cricket fans than any other
sport. Therefore, Nike through cricket idols affects fans to buy the sports
equipment that provides.

Personal factors
Many personal factors affect the buying decision of the consumers, which are
the age, the economic condition, the occupation, the lifestyle, the personality,
the quality of the product, the availability, even the price. Nike influences its
consumers through the one of a kind fashion styles and trendy sports
equipment that address to different ages, the comfort that athletes feel
wearing company’s products, the innovation and quality that is proved by
product duration as well as the price escalation where every athlete could buy,
wear and feel unique. Finally yet importantly, Nike’s products are available
almost everywhere, even online, where consumers’ could purchase
company’s products instantly (Vainikka, 2015).

Conclusion
In conclusion, it would be wise for business world to consider these factors when
addressing this issue. In my opinion, Nike is the leader in sports equipment
creating a fortress in the sports market that is difficult to conquer. The company
excels because is the first that brought innovation to sports shoes through the R
& D department. At the same time, Nike constantly attracts the best athletes
from all sports and signs contracts that bring enormous profitability to the
business by associating the products with triumph and victory, creating the
consumers’ the need to acquire the product. Clearly, the company has
applied the STP strategy correctly, as well as having understood the needs of
consumers affects their buying decisions with a tremendous success. I feel very
strongly that this topic will be discussed and researched further in order to help
marketing plans be more productive as well as innovative.
 8 SEGMENTATION, TARGETING AND POSITIONING STRATEGY OF NIKE & BYING DECISION ANALYSIS

References
[1]. Porter, M., E. 1998. The Competitive Advantage: Creating and
Sustaining Superior Performance. NY: Free Press.
[2]. Shank, M., D., Lyberger, M., R. 2014. Sports Marketing: A Strategic
Perspective. 5th ed. London & New York: Routledge.
[3]. Statista: The statistical portal. 2017. Statista dossier about Nike. [ONLINE]
Available at: https://www.statista.com/study/12870/nike-statista-
dossier/. [Accessed 3 January 2018].
[4]. Deng, Τ., 2009. “Just Done It”--- Nike’s New Advertising Plan Facing
Global Economic Crisis. International Journal of Business and
Management, 4/3, 102-105.
[5]. Bilotti, K. 2011. Emotional Brand Attachment: Marketing Strategies for
Successful Generation. [ONLINE] Available
at: http://scholarship.claremont.edu/cgi/viewcontent.cgi?article=1257
&context=cmc_theses. [Accessed 6 January 2018].
[6]. Ali Mahdi, H., A., Abbas, M., Mazar, T. I. et al, 2015. A Comparative
Analysis of Strategies and Business Models of Nike, Inc. and Adidas
Group with special reference to Competitive Advantage in the context
of a Dynamic and Competitive Environment. International Journal of
Business Management and Economic Research(IJBMER), 6/3, 167-177.
[7]. About Nike. 2018. Sustainable Innovation. [ONLINE] Available
at: https://about.nike.com/pages/sustainable-innovation. [Accessed
10 January 2018].
[8]. Chang, C., Y. 2014. Visualizing brand personality and personal branding:
case analysis on Starbucks and Nike's brand value co-creation on
Instagram. MA (Master of Arts). United States of America: University of
Iowa.
[9]. Vainikka, B. 2015. PSYCHOLOGICAL FACTORS INFLUENCING CONSUMER
BEHAVIOUR. Bachelor’s Thesis. Finland: Centria University of Applied
Sciences.
[10]. Otnes, C., C., Zayer L., T. 2012. Gender, Culture, and Consumer
Behavior. 1st ed. New York & London: Routledge.

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