Price Skimming Strategy Of Nike

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Nike Inc, is an American sportswear company. The company was founded in 1964 as Blue Ribbon Sport by student Phil Knight and his coach Bill Bowerman. Knight was a middle-distance runner for Oregon University team and Bowerman coached local team. Both of them felt the lack of good equipment for the competition at an affordable price. In fact, the only serious brand in this area was then Adidas, but, unfortunately, their athletic shoes were highly priced and the products of local companies for professional sports did not fit. In those years, athletes almost did not have a choice in sports shoes and the remedy to this situation Phil Knight came up with a scheme, to order sneakers in Asian countries and sell them on the American market. …show more content…
Usually, customers are able to purchase Nike products at discounted prices at outlet stores and on big holidays such as Black Friday. Nike uses price skimming techniques, because they introduce the product for the customers who are aware of the brand and the quality and are willing to purchase the product at the high price. Potential buyers tend to believe that high priced items are meant to have better quality and longevity. It helps the company to recoup the cost of goods sold by paying salaries to the factory workers, purchasing supplies and equipment, marketing and advertising expenses. The company uses selective distribution strategy to place their products into specific geographical location and chooses some outlets to distribute their merchandise. This strategy helps to control market and save on …show more content…
Based on socioeconomic segmentation they target specific age groups (range between 15-55), gender (male, female), geographic locations, occupations and generations. Their main concern is for women, young athletes and runners. Based on the Business Insider, Sales of Nike's training and running apparel for women grew by double digits in the last quarter, outpacing the men's business, offering sports bras and leggings for athletic and leisure purposes. Young sports players tend to follow the professional athletes, as NBA and NFL players wear Nike gear. Also, the official website offers promotion “Repp your team” which is offering fan gear to sports enthusiasts. Nike innovative equipment’s to measure and track buyer’s performance using Apple Watch Nike Plus using Nike + Run Club app.
Nike uses geographical segmentation based on the cities, regions and culture. For example, in United States, it focuses on American football and basketball using athletes to promote the products of the sport. In Europe, you are most likely see Soccer based products and athletes and similarly the use of cricket in

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