International Brand Expansion


Introduction

At the heart of an international operation of any company is the company’s product strategy. There are various factors that companies intend to consider ranging from understanding how to handle different facets of the international business environment to issues such as how to assess potential markets, how to enter those markets, and the challenge of reaching their customers. All these represent what can be characterized as ‘setting the stage.’ The key thing in International brand entry is the product and how the company will present that product to the market. International brand expansion can be best addressed by considering four product-related issues commonly known as the 4Ps. What international customers seek from an organization and its product can often be very different from those in its home market.

The pioneers of Nike Inc were Phil Knight who was an athlete, and Bill Bowerman who was a coach. They were both form the University of Oregon (Carbasho, 2010).The Nike’s operational base is located in Beaverton, Oregon. Originally, NIKE was only operating in the United States, but it gradually penetrated Europe where it is a major player in sports’ kit manufacturing. Nike needs to venture more into other continents such as Asia and Africa. Nike operates in over 180 countries around the world. Nike has offered employment to approximately 1.5 million people around the world including those who are indirectly employed by the company. Nike gets its returns from the markets around the world, which includes United States, which generates approximately $6.7 million to the company, and accounting for almost a half of the total revenues. Europe accounts for $3.9 million, and Central and Eastern Europe accounting for $1.2 million.

“NIKE” originates from a Greek mythical word meaning “a winged goddess of victory” (Carbasho, 2010). The word victory remains to be the backbone of the company. Nike is the world leader in designing manufacturing sport’s footwear, equipments, and fitness equipments among others. The company sponsors athletes who clad in its products in order to advertise its products. The company took pride in Basketball icon Michael Jordan for several years, when he was a household name in United States basketball arenas.

NIKE extends beyond the mere advertising of products or even directly promoting the products, opting instead to engage with the onlooker well past the boundaries of its goods. There are a number of strands to NIKE’s commercials, but the most thought provoking and fascinating are aimed at younger generations. Nike products are identified by the swoosh symbol which is embedded in every product. This is a symbol that unites Nike’s product line. Nike has come up with NIKETOWN stores where an array of 1,200 models of shoes is displayed. Women represent the world’s largest consumer of goods ranging from consumable to sporting items and equipments. They are great participants in fitness walking, aerobics, cycling, swimming and exercising with equipments. Over the decades, Nike has reasserted its leadership in designing, marketing, and distributing sport footwear and apparels, gym-fitness equipments, basketball, tennis, football and running gears. Nike’s products have established themselves as the leading sports brands in the world. NIKE’s customers have ceased to be just customers, but they have also become loyal fans. The strength of the brand makes marketing very easy.

Product

NIKE is an outstanding company. Its range of products is outstanding, and the company’s CEO ensures the highest quality of products is delivered to the customers. There is no doubt that the quality of NIKE’s products is excellent and they sell considerably well. Customers purchase a product because it meets their needs. Making a product stand out from all the others from its competitors is a challenging task. Its brand name, “NIKE” is a household name when it comes to sports wear. The Nike symbol has become a very recognizable brand and it stands for quality of the Company’s products.

Nike is about to release and unveil AIR JORDAN XX8 earlier next year. There were talks about retiring the shoe, but Nike has shown that it is not about to retire the shoe brand. The shoe is the 28 edition of Jordan signed shoes. The shoe will make its appearance in Houston earlier next year, and after that it will be distributed nationally. The shoe will be selling at a price of 250 dollars in retail. Great focus is on AIR JORDAN because there is no other snicker that has transformed the face of athletic and football field than the Air Jordan line of products.  It was the NIKE’s first basketball snicker design that was manufactured by use of environment-friendly raw-materials. AIR JORDAN contract has elevated NIKE to become the most popular basketball sneakers’ manufacturer in the globe and has transformed the world of basketball. Jordan used to be fined by NBA for his failure to clad in shoes similar to the ones clad by his teammates. Nevertheless, Nike always paid the fine, as Jordan continued to clad in Air Jordan. In the marketing mix, this product has captured a mix of good quality, and good pricing that has never been seen previously in the sports business.

The company takes pride in fixing prices for its products due to their demand. The athletes who purchase Nike’s products will make a purchase under any price range because Nike’s products give quality. For example, Air Jordan’s quality is depicted by Michael Jordan. The appeal towards Air Jordan aimed at the young cohort due to a variety of reasons. Air Jordan’s quality has made a great impact in enabling the sneakers to sell above the other competing brands in the market.

Promotion

Promotion is a communication tool that NIKE uses in marketing its products locally and internationally, not only to notify customers but also to interact with them for long-term benefits. The primary purpose of promotion is to communicate with customers. While the physical product covers a wide variety of variables such as brand name, quality of inputs, appearance, and options, the intangible nature of services results in real-time production and consumption. Sales receipts are physical proof of consumer purchases of goods, and a physical communication tool for retailers to use.

NIKE has used popular athletes since its establishment to promote its products. These athletes endorse Nike’s products. Another athlete who entered into an endorsement contract with Nike was Tiger Woods, who entered into contract with Nike long before he became popular in the golf arenas. Other athletes are Venus Williams, Liu Xiang, Cathy Freeman, and Michael Johnson among others. However, Michael Jordan is the most utilized athlete by Nike Inc in promoting its products. Michael Jordan has endorsed shoe designs such as AIR JORDAN 1to AIR JORDAN XX3 to AIR JORDN 2009, and even the most recent one, AIR JORDAN 2010.

Michael Jordan gives the customers the awareness on the merchandise they intend to buy. This has been one of the best promotion tools for this product. Many upcoming stars would definitely desire to be associated with Jordan. In fact, most of them pride in having Michael Jordan as their role model. During the times of Michael Jordan, youngsters used to line up along the exits of arenas just to have Michael Jordan sign their autobiographies. Simply put, promotion is communication. The communication process comprises three elements: the sender, the message, and the receiver. The company as the sender encodes its message and then conveys that message to the target audience (Keillor, 2012). NIKE has taken control of its encoding process for many years. This has made NIKE successful in the international market because it chooses how to construct messages concerning its products and the way to disseminate it to the global market.

Price

Price is the money paid by the customer to buy a product. It also includes the cost in terms of time and effort spent. Since price is a cost to the customer, organizations must understand how customers analyze the price and what they perceive about the value derived from the product. Quality should be the basis for strategic orientation, and that the implementation of quality practices in the whole organization is directly linked to an increase in positive recommendations and a reduction in negative comments of customers.

The company takes pride in fixing prices for its products due to their demand. The athletes who purchase Nike’s products will make a purchase under any price range because Nike’s products give quality. Price has been a critical component of NIKE’s global marketing strategy because 97 percent of its customers are satisfied by the price which largely matches the products’ quality. This is the highest satisfaction level that has ever been realized by any product in the global market. NIKE is one of the global companies that have used high prices to competitively establish its products’ premium image. Ferrell, Lucas, Schembri & Niininen (2012) state that, “by carefully pricing products, companies can provide customers with an indicator of product quality while maximizing profitability.” In this way, price is an indicator of value. As long as the product has a good quality, customers do not pay much attention to the price because they are always ready to pay more for such a product (Randall, 1997).

Place

Place is the location or distribution channel through which the service is delivered. NIKE has been very successful in all places that it has ventured into. To satisfy its customers, an organization must avail their products at the right time and in suitable locations. Although NIKE has operations around the world, it manages to avail its products in all these outlets. NIKE also keeps close watch at its competitors. Umbro was once NIKE’s competitor. Acquisition of Umbro has enabled NIKE to expand its place of operation in the world. This makes NIKE to outperform all its competitors in the global market. The company has also made an announcement that it intends to open over 300 new outlets worldwide by 2015.

NIKE’s global operation and preference for its products is clearly evident. For example, NIKE designed the most technologically advanced football which was used on Saturday 11th May 2013 England’s FA Cup Final between Wigan Athletic and Manchester City. These are strategic activities used by any company that wishes to be successful in expanding its brand in the international market. NIKE has planned, organized, implemented and controlled its strategic activities in order to satisfy the needs of their global customers.

Marketing mix

Marketing includes many interconnected and interdependent activities. The marketing mix is the way in which the organization attempts to mix these actions productively. NIKE should focus more on all the 4Ps in order to deliver quality value and to increase its competitive advantage in the global market. NIKE has also mastered the art of cult marketing. Quality should be the basis for strategic orientation, and that the implementation of quality practices in the whole organization is directly linked to an increase in positive recommendations and a reduction in negative comments of customers.

The impartial of any company should be to deliver a quality product to the market. The company should offers its products and services through online and outlet. The management should keep striving to over perform its competitors, while keeping in mind that there are other new entrants. A company that wishes to expand its operations globally must open many industries in both the developed and developing countries so that it can remain in the market for a long period of time. The benefit of such a market is getting countless consumers, thus making a gigantic profit (Jain 2010).

NIKE has established a friendly environment in the American Region where it has its origin and Europe for a long time. It has developed gigantic stores in these areas that have brought the products near to the customers. However, the company needs to expand its operations widely across Asia and Africa. Additionally, the company should take time to analyse the economic situation in the world.

Kotabe & Helsen (2009) state that “global companies must keep in mind that communication is the only factor that will influence the emerging global culture.” As NIKE continues with its operations, other strong competitors are likely to emerge. Therefore, the company must put more emphasis on full utilization of 4Ps marketing mix. It must keep in mind that, currently, “competition is getting stiffer and may arise from rather unlikely sources” (Kotabe & Helsen, 2009).


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