Nike Sustainable Marketing Plan

ABSTRACT

The development of a sustainable marketing plan proposal for Nike is the main topic of this paper. Nike is a global firm that designs, makes, and sells athletic clothes, footwear, and accessories (NIKE COMPANY, 2015). The growing need for sustainable business practices from stakeholders and customers has been cited as Nike’s problem (Vishwavidalaya, 2022). The chance for Nike is to take advantage of the rising demand for eco-friendly products, integrate its brand with sustainability, and respond to the shifting consumer preferences in this area. However, failing to address sustainability issues risks losing market share and consumer confidence. Two theories, Porter’s Five Forces framework, and the Marketing Mix (4Ps) theory, have been selected to analyze the theories and concepts of strategic marketing. The analysis in the study looks at how these theories might direct the design and execution of interventions to deal with Nike’s sustainability issues. Understanding how to optimize product, pricing, promotion, and place for sustainability is possible with the help of the marketing mix theory. In light of the review, Nike is advised to implement a marketing strategy that emphasizes sustainability and incorporates it into all four components of the marketing mix (4Ps). This entails using sustainable resources in the development and manufacture of products, establishing a sustainable supply chain, promoting sustainability in marketing materials, and setting product prices that take sustainability into account. The research also advises Nike to use the Framework of Porter’s Five Forces to recognize and deal with challenges provided by rivals and other external stakeholders who might be more sustainable. By implementing these measures, Nike can improve its brand’s perception and preserve its market advantage.

1.0 INTRODUCTION

A well-known international firm, Nike, focuses on creating, promoting, and selling sports footwear, clothing, and accessories (NIKE COMPANY, 2015). Since its founding in 1964 by Bill Bowerman and Phil Knight, the company has become one of the world’s top manufacturers and distributors of athletic footwear, apparel, and accessories, doing business in more than 190 nations (Encyclopedia Britannica, 2023). Through a wide range of retail channels, including company-owned stores, online marketplaces, and independent retailers, Nike’s products are sold all over the world. The company is renowned for its ground-breaking designs, avant-garde goods, and market-specific marketing approaches.

1.1 Nature of Industry

Nike works in the fast-paced, competitive sportswear sector (Alonso, 2023). Rapid shifts in customer preferences and fashion trends, technological breakthroughs, and fierce competition among the major players define the sector. Along with other well-known sportswear companies like Adidas, Puma, Under Armour, and Reebok, Nike is in competition with them. Nike participates in the retail distribution channel and has online and brick-and-mortar locations (Encyclopedia Britannica, 2023). The corporation bases its pricing approach on premium goods, which can fetch more outstanding prices than many of its rivals.

1.2 Product Portfolio

Nike offers a wide variety of athletic footwear, clothing, and accessories (IvyPanda, 2022). The company’s footwear products are for various sports and activities, including running, basketball, football, and soccer. The apparel goods range from general activewear like hoodies and leggings to sport-specific attire like jerseys and shorts. Among the items Nike offers as accessories are backpacks, hats, and socks.

1.3 Target Market

Nike’s target market comprises passionate athletes and fitness enthusiasts (Start.io, 2022). Although the company caters to people of all ages and genders, its main clientele is young people. Various consumer categories’ unique requirements and preferences are considered while designing Nike’s products. The business frequently uses professional athletes and sports figures to appeal to its target population in its marketing campaigns.

1.4 Target Customers

Nike’s target market is people who live an active lifestyle and are interested in sports and fitness (Start.io, 2022). The brand’s varied customer base is professional athletes, sports aficionados, and fashion-conscious consumers. Nike’s products are made to offer its customers comfort, support, and performance-improving characteristics (IvyPanda, 2020). The target market for the brand is also distinguished by its readiness to spend a higher price on superior and cutting-edge goods. In this article, Nike’s strategic marketing and business sustainability principles will be assessed, and a sustainable marketing plan will be suggested for the company.

2.0 PURPOSE

The Nike brand aims to offer premium athletic and leisurewear products to consumers while making money for the business (HelpMe, 2019). Companies must now consider their impact on society and the environment in addition to their financial performance in the current business environment. This means that Nike, like many other businesses, must consider how its business practices may affect stakeholders going forward. Nike’s problem is the rising demand for sustainable business practices from stakeholders and customers (IvyPanda, 2020). This issue threatens Nike’s long-term viability by affecting market share, profitability, expansion, and customer retention. Failure to address sustainability issues could result in a decline in market share and consumer confidence, ultimately impacting the company’s financial success.

However, this difficulty also allows Nike to profit from the expanding market for environmentally friendly goods and to associate its brand with sustainability (IvyPanda, 2020). Nike may draw customers who prioritize sustainability in their purchasing decisions by incorporating sustainable practices into its business model and products. Increased market share, client retention, and profitability may result from this. By doing this, Nike can set itself apart from its rivals, enhance the perception of its brand, and draw in more customers who are becoming more environmentally sensitive. Nike may promote its sustainability objectives and products by utilizing its current supply chain, technologies, and marketing channels.

On the other hand, failing to address sustainability issues risks losing customers’ trust and market share (Lucchini & Moisello, 2019). Consumers and stakeholders concerned about social and environmental issues could criticize Nike and boycott the company. The increased demand for eco-friendly products, growing awareness of how the fashion and sports industries affect the environment, the emergence of social media and environmental activism, and other factors all contribute to Nike’s sustainability problem.

3.0 DISCUSSION OF TWO STRATEGIC MARKETING THEORIES

3.1 Porter’s Five Forces Framework

Porter’s Five Forces framework is a well-known and practical method in strategic management for examining the forces at play in a given industry and determining the variables that affect a company’s profitability (Bruijl & Gerard, 2018). The framework offers a thorough method for comprehending an industry’s competitive dynamics and the primary factors that affect profitability (Porter, 2008). In the case of Nike, the growing demand for sustainable business practices from stakeholders and customers is a substantial challenge that calls for a strategic response. The brand can cope with this difficulty in various ways by applying Porter’s Five Forces theory.

The framework can firstly assist Nike in comprehending the competitive dynamics of the market and the place of the company inside it (Dobbs, 2014). The corporation may be able to differentiate its products and improve the perception of its brand by using this expertise to spot possible prospects for sustainable marketing campaigns. The methodology can also assist Nike in identifying possible risks from rivals that have already embraced sustainable business practices and are increasing their market share due to their sustainability efforts (Dobbs, 2014). Second, Nike can evaluate the bargaining strength of stakeholders and customers urging the company to embrace sustainable business practices by using Porter’s Five Forces framework (MBA Skool Team, 2022). The framework can help determine alternative solutions to address these issues while preserving profitability and comprehending the effect of stakeholder pressure on the company’s profitability. Thirdly, the framework can assist Nike in identifying possible entry barriers for new competitors looking to take advantage of the expanding market for sustainable products (Rowland, 2017). Nike can create long-term marketing strategies that can help to fend off new entrants and maintain its market dominance by analyzing the factors that affect entry into the business.

Given its widespread acceptance and demonstrated efficacy in examining the competitive dynamics of businesses, Porter’s Five Forces theory was chosen as a tool for assessing the difficulties facing Nike (Indiatsy et al., 2014). The idea has been widely used in several sectors, including the sportswear sector, and has offered insightful information on the competitive forces that affect profitability. For instance, Adamkas (2022) used Porter’s Five Forces framework to evaluate the sportswear market. They discovered that the existence of well-known players like Nike and Adidas makes the industry’s competitive intensity high. The survey also found that a critical aspect influencing consumer loyalty and purchase choices is sustainability. Nike’s sustainable marketing techniques were examined in a different study by Eventige (2020), who discovered that the company’s emphasis on sustainability had improved its brand image and boosted customer loyalty. The report also noted the threat of new competitors as a critical obstacle that Nike must consistently overcome to maintain its market dominance.

When Porter’s Five Forces framework is applied to the problems that Nike is facing, it becomes clear that the corporation is under intense competitive pressure from its competitors, suppliers, customers, and new market entrants. Competitive pressure on Nike to enhance its sustainability standards is increased because Nike’s competitors, including Adidas and Under Armour, are also making significant investments in sustainable business methods (Robinson, 2021). If Nike does not take aggressive measures to solve this issue, its suppliers may face increased pressure to enhance their sustainability standards, which could raise Nike’s expenses. In addition, consumers expect more sustainable goods, which could cause Nike to lose market share if the company does not solve this problem (Imran, 2017). Nike can create a sustainable marketing plan that focuses on lowering its environmental impact, enhancing its social and labor practices, and enhancing the sustainability of its products in order to address these issues. To lessen its influence on the environment, Nike may, for instance, invest in environmentally friendly materials and methods like recycled polyester and low-impact dyes.

Additionally, Nike might collaborate with its suppliers to enhance their sustainability initiatives and ensure they adhere to the criteria set by the business. Nike might also collaborate with organizations and advocacy groups to promote sustainable practices and inform customers about the advantages of sustainable products. According to earlier studies, sustainability can potentially be a significant driver of competitive advantage in the sportswear sector. According to a report by the Carbon Trust, businesses may boost consumer loyalty, cut expenses, and improve their brand reputation by investing in sustainability. According to a different Cone Communications study, 90% of consumers are likelier to trust and stick with businesses that practice social and environmental responsibility (Cone Communications, 2017). These studies highlight the significance of sustainability in the sportswear sector and the possible rewards of pursuing sustainable business strategies.

3.2 The Marketing Mix (4Ps) Theory

The Marketing Mix (4Ps) idea is exceptionally pertinent to Nike since it offers a foundation for creating a long-term marketing plan (Gregory, 2022). Nike must use a strategic marketing approach to meet the need for sustainable products, which is rising, while also addressing shifting consumer tastes. The 4Ps philosophy emphasizes product, pricing, promotion, and place and offers a methodical approach to matching marketing initiatives with client demands (Madhani, 2017). Nike can create a sustainable marketing plan by utilizing the 4Ps framework, which considers the environmental impact of its products, the customers’ price sensitivity, the most successful promotional channels, and the best distribution routes. One of the most popular marketing ideas, the Marketing Mix (4Ps) hypothesis, has been effectively implemented in various industries. Because the theory is adaptable and can be applied to various contexts and locations, Nike may benefit from it. Additionally, the 4Ps framework strongly emphasizes customer requirements and preferences, which is crucial for Nike’s effort to address the demand for environmentally friendly products that are on the rise (Ahmed et al., 2016).

Nike has already started moving in the direction of sustainability by introducing product lines like the “Move to Zero” (Novelship, 2020) and the “Space Hippie” (GORSLER, 2020) collections. Nike may further expand its sustainable marketing strategy using the 4Ps framework as follows:

• Product: Nike can create sustainable products that satisfy shifting consumer preferences for sustainability by using the 4Ps approach. For instance, Nike might produce their goods with recycled polyester, a sustainable material. Customers who care about the environment will find this strategy appealing, and the brand’s reputation as a sustainable business will grow.
• Price: Nike can set their product prices using the 4Ps framework to consider customer sensitivity to environmental issues. According to research, consumers are willing to pay more for sustainable items, but the cost must be fair (STAFF WRITER, 2022). Nike may profit by pricing its eco-friendly items competitively using the information in this article.
• Promotion: Nike may advertise its sustainable products through various channels using the 4Ps framework. The business may promote its commitment to sustainability by showcasing its sustainable products on social media channels like Instagram and Twitter. Nike can also collaborate with environmental groups to advance sustainable business practices and build up its reputation as a sustainable brand. Finally, Nike may interact with customers by launching programs and advertising that promote sustainable behavior.
• Place: Nike may use this idea to determine the optimal routes for distributing its sustainable products. For instance, Nike can sell sustainable goods to clients directly through its website and other online shopping platforms like Amazon. To expand the accessibility of its sustainable products, the corporation might also collaborate with eco-friendly merchants.

According to prior research, utilizing the 4Ps framework can boost the efficacy of marketing tactics. Using the 4Ps framework, for instance, has been found to assist businesses in improving their product design, pricing tactics, promotional efforts, and distribution channels, according to a study by LANGAT (2016). According to a study by Arseculeratne and Yazdanifard. (2014), the 4Ps framework aided businesses in creating sustainable products that satisfied consumer demands. These studies back up the application of the 4Ps framework in creating Nike’s sustainable marketing plan. Additionally, brand loyalty and customer behavior can be significantly influenced by sustainability, especially among younger consumers who are becoming more aware of the environmental impact of their purchases. For instance, a Nielsen survey discovered that 73% of millennials are prepared to pay more for sustainable items (Nguyen et al., 2020), while a Cone Communications study discovered that 87% of customers would buy a product because a brand supported a cause they care about (Lee & Cho, 2019). Nike can solve its sustainability issues while enhancing its brand image and market position by implementing a sustainable marketing plan.

4.0 DEVELOPMENT OF A MARKET STRATEGY

In the 21st century, sustainability has emerged as a critical component of company operations (Horrigan, 2007). People all across the world are becoming more and more conscious of how business activities affect society and the environment. Customers are putting pressure on businesses to address how they affect society and the environment. Nike, a major sporting goods manufacturer, has come under increasing pressure from customers and other stakeholders to adopt sustainable business practices.

4.1 Feasible Recommendations

The following suggestions are doable and pertinent in light of the problem mentioned for Nike, which is the growing stakeholder and consumer pressure for sustainable business practices, and the chance to profit from the expanding demand for sustainable products:

1. Implement a thorough sustainability plan: A thorough sustainability strategy that aligns with Nike’s brand values and long-term goals should be created and implemented. This plan should cover every step along the value chain, including sourcing, manufacturing, distribution, and end-of-life disposal. Nike’s activities should be run with less environmental impact, and there should be more openness and a focus on ethical corporate practices.
2. Accentuate sustainable product innovation: To address shifting consumer attitudes toward sustainability, they should emphasize sustainable product innovation. To lessen the influence on the environment, this could entail creating new sustainable materials, utilizing renewable energy sources, cutting waste, and enhancing the durability of products. This will lessen the brand’s environmental effect and make it more appealing to customers who care about the environment. Nike can gain a competitive edge in the market by setting itself apart from rivals and implementing sustainable innovation.
3. Strengthen stakeholder engagement: The business should interact with stakeholders, especially clients, consumers, and investors, to learn about their expectations and worries regarding sustainability. The business should collaborate with its suppliers to adopt sustainable behaviors, like cutting waste and turning to renewable energy sources. There should be open communication throughout this engagement as well as regular reporting and updates on Nike’s sustainable progress. This can assist in establishing trust with stakeholders and improve Nike’s standing as an ethical company. It should also inform its stakeholders and customers about its sustainability initiatives. The business should promote its dedication to sustainability using a variety of platforms, including social media, its website, and advertising campaigns. This will improve consumer trust in the brand and make it more appealing to those who care about the environment.
4. Establishing collaborations with groups and activities that advance sustainability in the sector is something Nike should do. This could be working with suppliers to enhance their sustainability practices, engaging with non-profit organizations to create sustainable projects that benefit the environment and neighborhood communities, or joining sector-wide sustainability initiatives to bring about change on a bigger scale.
5. Nike should spend money on employee education and training to ensure sustainability is included in the company’s operations and culture. This could entail educating staff members about sustainable practices, establishing sustainable goals for them to work toward, and developing rewards for sustainable performance.
6. Measure and report sustainability performance: It needs to monitor and update its stakeholders on its sustainability performance. The business should monitor its sustainability performance using sustainability metrics, including carbon emissions, water use, and trash generation. Nike should additionally detail its sustainability record in its annual reports, sustainability reports, and other communications. By doing this, the brand will be able to show its dedication to sustainability and be held responsible for its sustainability performance.
7. Nike can handle the issue of increased stakeholder and consumer pressure for sustainable business practices, take advantage of the rising demand for sustainable products, and reduce the risk of losing customer trust and market share by putting these ideas into practice. Ultimately, Nike can create long-term value for all stakeholders and secure its market success by implementing a robust sustainability plan.

4.2 Why the feasible recommendations are suitable to deal with Nike’s challenges.

The suggestions made in response to the difficulty identified by Nike are appropriate for resolving the difficulties faced by Nike for several reasons:

First, establishing a thorough sustainability strategy is appropriate since it tackles the mounting stakeholder and consumer pressure for sustainable corporate practices. Nike can show its dedication to sustainability, improve transparency, and support ethical business practices by creating and adopting a sustainability strategy. This is consistent with the idea of corporate social responsibility (CSR) in strategic management, which calls for businesses to shoulder responsibility for the effects of their actions on society and the environment in addition to their financial commitments (Carroll & Shabana, 2010). This will also ensure that Nike stays relevant in a market where customers are placing an increased emphasis on sustainability, in addition to assisting Nike in meeting the sustainability requirements of its stakeholders. Second, the suggestion to focus on sustainable product creation is appropriate since it takes advantage of the chance to capitalize on the expanding market for sustainable goods and link Nike’s brand to sustainability. Nike can set itself apart from rivals and get a market advantage by concentrating on sustainable product innovation. This is consistent with the idea of product differentiation in strategic marketing, where businesses aim to develop distinctive and worthwhile products that distinguish themselves from rivals and satisfy the needs of their target market (CAROL, 2007). Nike can better satisfy the demands and desires of customers who are becoming more interested in sustainable products by focusing on sustainable product innovation.

Thirdly, the suggestion to increase stakeholder participation is appropriate since it fosters stakeholder trust and strengthens Nike’s standing as a socially conscious company. Nike can show its commitment to sustainability and earn the trust of customers, investors, and other stakeholders through interacting with stakeholders and systematically reporting on sustainability performance. This is consistent with the strategic management idea of stakeholder management, in which businesses try to comprehend and respond to the wants and worries of their stakeholders (Morsing & Schultz, 2006). Fourth, the suggestion to create partnerships for sustainable impact is appropriate since it enables Nike to work with other groups and projects that advance sustainability in the business world. Nike can influence change at a greater level and build a more sustainable supply chain by collaborating with vendors, NGOs, and other groups. This is consistent with the idea of strategic alliances in strategic management when businesses develop alliances to achieve shared objectives and generate mutually beneficial outcomes (Kale et al., 2000). These collaborations can facilitate the sharing of information and resources, allowing Nike to move more quickly toward its sustainability objectives.

Lastly, the suggestion to spend money on employee education and training is sound since it guarantees that sustainability is incorporated into the operations and culture of the business. Nike can ensure that its employees support the organization’s sustainability objectives by offering training on sustainable practices and developing rewards for sustainable performance. This is consistent with the idea of human resource management in strategic management, where businesses attempt to recruit, train, and retain talented individuals to help them meet their strategic goals by making sure that sustainable principles are applied to every aspect of their business (Lewis & Heckman, 2006). The practical suggestions offered, in light of their alignment with the fundamental ideas of strategic marketing and corporate sustainability, are appropriate for addressing the problems that Nike is currently confronting. Nike can build long-term value for all stakeholders and assure its ongoing success in the market by putting these suggestions into practice.

 4.3 How to implement the feasible recommendations

Nike must take the following actions in order to implement the suggested sustainable marketing strategy:

1. Conduct a sustainability audit: The first step for Nike would be to carry out a sustainability audit to find areas where their operations, goods, and supply chain may be improved. Analyses of the company’s operations’ effects on the environment, society, and supply chain sustainability should all be included in this audit. The business will be able to prioritize areas for improvement and better understand the gaps in its sustainability initiatives as a result.
2. Make sustainability objectives: Nike should establish precise, quantifiable, and time-bound targets for its sustainability initiatives based on the findings of the sustainability assessment. These objectives should take into account the worries of stakeholders and customers while also being in line with the company’s overall business strategy.
3. Create a sustainability strategy: Nike should create a sustainability plan outlining its short- and long-term sustainability objectives based on the findings of the sustainability audit. This strategy should specify timeframes and goals for lowering the company’s environmental impact and raising social standards within its supply chain.
4. Sustainability should be emphasized in brand messaging: This helps them appeal to customers who are more and more concerned about the environmental and social effects of the things they buy by tying their brand to sustainability. This message ought to be sincere and open, and it ought to show how committed the business is to sustainability.
5. Engage stakeholders: In order to get feedback and insights on its sustainability initiatives, Nike should interact with its stakeholders, which include its consumers, suppliers, employees, and investors. By doing this, the business will be better able to comprehend the needs and expectations of its stakeholders and make sure that its sustainability activities meet those demands.
6. Invest in sustainable innovation to create new products and technologies that are more environmentally and socially responsible. Nike should do this. This entails utilizing environmentally friendly materials, cutting down on waste, and increasing the energy effectiveness of their activities.
7. Nike should routinely evaluate and track its advancement toward its sustainability objectives, making necessary adjustments. This will guarantee that the business stays on course and enhances its sustainability initiatives over time.

5.0 CONCLUSION

In conclusion, this paper has looked at the strategic marketing and business sustainability issues that Nike, a major brand active in the sports sector, needs to deal with. The recognized issue is the rising demand for sustainable business practices from stakeholders and customers, which offers Nike both a chance and a threat. Failure to address sustainability issues could result in a decline in market share and consumer confidence. Therefore, two strategic marketing theories that are pertinent to Nike and its opportunity/threat have been analyzed in this report: the Marketing Mix (4Ps) theory and the Porter’s Five Forces framework. The paper has supported the selection of these theories and shown how they have been used to address the problems that Nike has encountered. A sustainable marketing plan proposal for Nike has also been prepared in this research, along with workable suggestions to address the problems that have been highlighted. The suggested solutions are suitable for addressing the issues unique to each brand and promoting sustainability through the Nike brand. How Nike can put these suggestions into practice in order to meet its goals for sustainable marketing has also been covered in the report. Overall, this research has shown how fundamental theories and concepts of strategic management and business sustainability may be used practically in the context of a real-world brand. In order to match the shifting demands and preferences of its target customers, Nike can use the suggested sustainable marketing approach to address its sustainability difficulties and achieve its long-term sustainability goals.

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