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Introduction and Market Audit of Nik Inc - Paper Example

2021-08-25 12:04:50
7 pages
1767 words
University/College: 
Harvey Mudd College
Type of paper: 
Business plan
This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Nik Inc. is ranked as the leading producer of sports footwear and apparel. The companys products mainly target athletes through the sale of shoes, outfits and other sporting equipment. Over the years, the company has gained notable success and modest growth in sports goods manufacturing sector. The companys revenue is projected to grow because of the demand for sporting goods which constantly increases each year. On the other hand, Nicolas Ghesquiere is the creative director of Louis Vuitton Company. The French-born fashion designer has made a name in the fashion industry for more than 20 years, highlighted by his surprise selection to lead the Paris fashion brand, Balenciaga the age of 25 years. Ghesquieres fashion collection is idolized because of their impact and influence on other designers. The marketing plan will delve into the collaboration between Nike and Nicolas Ghesquiere by focusing on the marketing of SS18 shoe brand concept designed by the Ghesquiere. The report will comprehensively provide detail regarding the various components of the collaboration including the proposed product feature, pricing, marketing, and promotion as well as the marketing communications strategy.

An analysis of the internal and external environment shows that the collaboration is likely to encounter stiff competition from Gucci and Balenciaga who have expressed interest in the shoe category by developing their products. It is also expected that young athletes and the middle class aged between 16 and 28 years will be the target market for the new product. The collaboration of both parties has the potential to influence the customer base to through the use of social media platforms to engage the consumers. According to Kearney (2009), such a strategy will promote good relations between the producers and the consumers.

The overall objectives of the collaboration include:

Increment of profit margins by 12% each year

Increment of revenue per share growth annually

Increase of dividends by a 20 to 30 % margin

Increment of return on Investment (ROI) capital

Proposed Segmentation, Targeting, and Positioning

According to Jaworski and Kohli (1993), many companies perform segmentation prior to conducting the actual business plan for launching a new product in the market. Segmentation market of the collaboration between Nike and Nicolas Ghesquiere will focus on three areas namely: psychographic, demographic and geographic segmentation.

Geographic

Inspired by the 90s basketball look and the sci-fi trend, the new product will focus on big cities such as New York and Los Angeles in the USA and Ha Noi Capital and Vietnam in Asia. The love for sport and trend in these areas will attract attention for the new product. Targeting market will be male and female gender between the ages of 15 and 26.

Demographic

Both Louis Vuitton and Nike are synonymous with producing quality and authentic sport product lines for both men and women. The product will focus on individuals of high income between the ages of 16 and 28.

Psychographic

Individual personality, social class, and lifestyle are some of the important factors to consider in psychographic segmentation. The collaboration will focus on a mix of modern lifestyle with a 90s vibe to express a unique and audacious sports trend (Danforth, 2018). The target market will focus on individuals who like sports such as jogging, casual walk, and basketball. It will also focus on people who have no interest in sport but prefer an attractive comfortable shoe product.

The position strategies for the product collaboration include enhancement of athletic lifestyle or fantasy, creating a sense of appeal and attitudes and positioning the product as a premium brand among other high-quality products.

Proposed Product Features

The SS18 sneakers produced by Nicolas Ghesquiere provide an authentic shoe product inspired by the 90s basketball look and a futuristic appearance stemming from sci-fi movies such as Star Wars and Stranger Things (Danforth, 2018). Over the years, the Nike brand has made strides in the shoe industry across the world by providing quality merchandises and experiences for athletes. Nikes collaboration with Nicolas Ghesquiere to develop a product based on the latters concept will surely provide an edge over competitors such as Gucci and Balenciaga who have expressed interest in the shoe category by producing their own chunky footwear trend. The proposed product will have either an all-black or white with some pop color for a modern twist. The design will also comprise of the flowery dresses that are synonymous with Louis Vuitton and Nikes Tick trademark similar to Air Jordan 1 from the Supreme x Louis Vuitton collection (Sajonas, and Stanley, 2018; Squad, n.d ). The Limited edition will comprise of a white upper and contrasting black. It will be complemented by silver accents on the lining of the toes.

29527502066925Figure SEQ Figure \* ARABIC 1: Air Jordan 1 from Supreme x Louis Vuitton collection (Source hypebeast.com)

0Figure SEQ Figure \* ARABIC 1: Air Jordan 1 from Supreme x Louis Vuitton collection (Source hypebeast.com)

left146050028384506350002055495Figure SEQ Figure \* ARABIC 2: Ghesquieres SS18 product (Source: highsnobiety.com)

Figure SEQ Figure \* ARABIC 2: Ghesquieres SS18 product (Source: highsnobiety.com)

 

Proposed Pricing

Marketing of the product merger between Nike and Ghesquiere will likely affect the overall pricing. The pricing strategy should focus on the target customer base as a premium segment. Products from both Nike and Louis Vuitton (LV) normally command an elevated premium. The pricing strategy should also implement vertical integration whereby the companies will participate in a similar channel or simply take a role in the chunky footwear channel to maximize cost and efficiency in product distribution (Danforth, 2018). Since the target customers of both Nike and Louis Vuitton have the financial capability to purchase the product, the inception of a value based or cost based pricing should be considered. Prices for the product will range between $ 1000 and 2000 USD.

Proposed Distribution

Various shoe brand stores and Nike stores concede a majority of Nikes products across the globe. Nike Company has thousands of retail stores in the United States located in prime areas in the US and other parts of the world. Similarly, Louis Vuitton has commercial distributors, warrants, and subsidies, which operate to retail the companys products. The long term plan of the collaboration will result to both Nike and Louis Vuitton opening more stores and franchise as well as increase their customer base.

The distribution strategy of the new product will involve the use of selected independent distributors and subsidiaries from both companies. Some of the distribution outlets in consideration include Nikeid, Nike town shop, and Louis Vuitton boutiques. Since the distribution in markets located in Asia may affect pricing, the collaboration will inception an outsourcing strategy with Asian markets such as Vietnam and China. The product will also rely on online distribution to allow expansion of the appropriate channel. According to Slater and Olson (2001, p.1058), online marketing contributes to the effective distribution of quality products that meet customer satisfaction. It is expected that the use of online advertisements will draw attention and facilitate online purchase through the companies online stores.

Proposed Marketing Communications Strategy

Social Media

Louis Vuitton and Nike are two of the biggest brands in the world today. Moreover, Nicolas Ghesquiere is one of the most influential fashion designers in the apparel industry. Therefore, it is not a surprise that all three have a big presence in social media. Nike will use its sporting brand and social media channels to promote the Louis Vuitton x Nike SS18 shoe brand to create a buzz. On the other hand, Nicolas Ghesquiere will also use his social media accounts to tease the products to create the same effect before its official unveiling. Notably, either LV or Nike has the potential to increase its integrated marketing communications (IMC) strategy to align the company with the consumers appreciation of promoted products

Advertising

The target of the collaboration is to ensure both entities attain the greatest impact on the target audience. Despite the use of adverts becoming expensive each year, its successful implementation has the potential to reap immense rewards and improve consumer demand (De Mooij, 2010). Ideally, celebrities are associated with trendy products to attract consumers who idolize the individuals. Over the years, Nike uses professional athletes to market its products whereas Louis Vuitton uses music celebrities or fashion icons to achieve the same (Egginton, 2018). Consequently, customers are inspired to imitate the dressing of these celebrities.

Marketing of Louis Vuitton x Nike SS18 will use ad figures whereby sport and musical celebrities will be used to market the product through advertisements. The product will also use brand ambassadors from both companies including Ghesquiere through an endorsement strategy to promote the product. It is expected that sales of the product will increase once the product is launched into the market. Television and online advertisements of a 20 to 30 second duration will use the sports and music celebrities to market the product. The adverts will be initiated during sporting events such as the NBA live games and television shows. They will also be used on social media platforms such as Twitter, and Instagram to enhance a global reach. The content campaign for the product should contain the message TRUE TO DO IT to promote the collaboration between the two parties.

 

Sales Promotion

Promotions will include special limited offers and coupons to the target market. The product will be characterized by the provision of discount coupons for buyers which enable the customers to save on costs. Moreover, the strategy will facilitate motivation among target market to purchase more products affiliated with the merger. Since both Nike and LV wish to attract new customers and make a commanding presence in the market, the promotion strategy will be beneficial since it will motivate people to purchase the product on the basis of the expected benefits.

Direct Marketing

The distribution of Louis Vuitton x Nike SS18 will rely on direct marketing as a way of promoting the new product. Thus, the product should be advertised effectively and both online and offline channels. Nonetheless, to make a more meaningful impact will require the use of salespeople to approach specific persons or organizations to promote the product (Cravens and Piercy, 2006). The IMC will use direct marketing as a way to develop strong ties between the collaborating parties and the target market thereby motivating them to purchase future products related to the collaboration. The use of direct marketing will enable provide an avenue for the collaboration to promote other products through intense advertising. However, the parties may use influential personalities or organizations to create a meaningful impact which will directly endorse the product to the target market.

Personal Sales

In this IMC strategy, both Nike and LV will steer personal sale efforts which will facilitate customer support and enable consumers to learn about the collaboration and the products offered. Sales staff from both Nike and Louis Vuitton will provide customers with assistance to promote both brands and their products. In ensuring an excellent customer experience, trained...

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