Nike-Channel Strategy, And Conflicts: Nike: Channel Strategy And Conflicts

2564 Words 11 Pages
Register to read the introduction… The distribution, in addition, was tremendously compound. Monthly 300,000 pairs of shoes might engage 50 different models being shipped to 100 different locations. The company had created “in-house-power” which had been selling their products in specialty athletic department store retailers, multi-sport general athletic department stores and general-purpose shoe stores. NIKE also had many own individual shops which were more deliberated on brand-building instead of selling products. Those were called NIKETowns which in 1999 they were 13 overall in comparison with NIKE 53 outlet stores. The powerful firm which had gained over 40% market share in the United States was giving them additional influence on merchants. The product lifecycle could take more than a year and a half. On the other hand, the market life for a NIKE shoe was half a year. The firm decided that it is inappropriate to attempt equivalent the demand for a model with the supply. Imperfect information concerning retailers’ inventory levels was a main NIKE’s issue in the past and they were hoping that improved methods of inventory monitoring can be discovered. In order to meet its certain prospect sales, the company was capable of planning manufacturing and distribution far in advance. After $1 billion investment in a few bulky local distribution centres to replace its numerous smaller centres, NIKE started providing …show more content…
Online retailers took advantage when Internet business became popular. Online and mail-order retailing could be equivalent of ordering and distributing. As company were incredibly experienced with direct selling they are expected to have higher competitive advantage in online distribution. From logistics perspective, the investment to build up and maintain online channel is inferior. The Internet gives a chance for consumers to search for information. As known from practice two thirds of the customers go online to search for information. While the relevance of multi-channel retailing is enhancing, channel choice became as a main segmentation criteria (Mehdi Khosrow-Pour, 2007, p.173). Even though NIKE’s retail partners were anxious to expand into online sales, this strategy was successful. In order for NIKE to develop the distribution channel it had to comprehend the customer segmentation which is being targeted. NIKE’s targeting audience is focused on athletes and sportsmen. Their channel segmentation, on the other hand is anchored in high-quality, low-cost retailers which will provide efficiently and fast production process. NIKE has been sponsorship for many football teams, tennis, volleyball and many others among the field of sport. Thus, their main message is “sport”. Targeting sportspeople is a good marketing approach especially when a celebrity sponsors them this will give the consumers the perception …show more content…
It established its brand so good that it is recognisable for people with just its sign. The company efficiently targeted and distributed all its products by being able to generate the right service and output. However, it is highly recommended for NIKE to focus on new strategy in order to keep its significant success. In order for the company to continue achieving its goals it needs to create more stores where people are able to “touch and feel the product”. There is no further desire to continue investing in Internet activities because it has already been efficient enough. Moreover, there are many geographical gaps where people need to see, feel, try and experience the process of buying their shoes after trying them on. This will increase their revenue and brand

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