Mastering the art of international marketing — the trail of NIKE
Nike is an american multinational corporation that is engaged in the design, development, manufacturing and worldwide marketing and sales of footwear, apparel, equipment, accessories and services. The unique example of Nike shows the impact of culture on innovation and change. Product development and innovation are the forces that drive Nike to indulge in market penetration and market development. As MNCs operate in a dynamic global business environment with an immense competition, companies need to adopt proactive strategies to retain their market share and expand into potential markets. The global sportswear industry is slowly tranforming into an oligopolistic market, with Adidas and Nike spending billions to remain competetive. The use of non-price discrimination and product developement is an intrinsic part of this market structure. **
In December 2017, Nike launched a high performance Nike PRO hijab made from sportswear mesh fabric, light-weight polyester, and tiny strtegically placed holes for optimal breathing. This helped Nike to adopt a differentiation strategy and create an USP in the olipolistic market. Through niche marketing, Nike successfully tranformed its product to adhere to the cultural norms in the pursuit of international marketing. Nike skillfully exploited economies of scales and its brand name to indulge in product innovation and gain a competitive-edge over conventional producers like Capsters, Friniggi etc. that offered a range of hijabs for daily life.
The factors that drove Nike to implement this product innovation are market penetration and market development. Nike wanted to diversify its product portfolio, minimise risks and increase its foothold in the middle east by adhering to the cultural norms of the Muslim women. Nike saw a huge market growth potential by examining the increased female participation in sports, favorable tastes and preferences, rising incomes, and tackling the drawbacks of conventional hijabs. The sports technology and quality materials offered huge benefits to muslim women athletes, thus gaining a widespread popularity. Thus, Nike created a blue-ocean and benefited from the lack of competition. Nike implemented an enormous social media marketing strategy, sponsoring social media campaigns, celebrity endorsement to promote the product. It sponsored charity events in Dubai to shows its sontinues commitment to CSR and helped it to enhance its brand image. The collection was made extensively in brick and mortar setups, and also distributed through e-commerce. It adopted a price leadership through maintenace of product quality, focusing on profit maximisation and becoming a market leader.
In 2017, Nike’s market share in middle east was 33% and it aims to achieve a target of greater than 50% by 2020. The product posititoning of Nike has enabled it to reap the benefits from consumers. However, many pressure groups across the globe have criticised Nike, claiming this product to a challenge to their religious sentiments and threatened to boycott this product. Despite the opputunities brought about by globalisation, conutries still have a national identity, culture etc.Hence, Nike successfully identified this threat and turned it into an oppurtunity by adopting a localised strategy in addition to the global marketing strategy.