The development of marketing strategy for any product proceeds on the basis of domino effects obtained from the study of industry and competition. By the revelation of business strengths and weaknesses, for the growth of a wide range of strategic plans for the successful administration of environmental openings and threats is called the Strategy Formulation. It comprises exploratory or redefining the corporate or project mission by indicating attainable goals, emergent strategies, and setting execution procedure. Strategy formulation is germane both for organization’s initiative in general and for individual product.
The formulation of marketing objective of company’s each product depends on its mission and by the help of a marketing objective there are some desired goals that company has to achieve. A company should have a definite idea of introducing a product through which the benefits it plans to achieve. To achieve the targets it is necessary to build up some strategies apart from company’s contribution echelon. The product diversification is also an element of its strategy. In this particular report we are going to discuss the marketing strategy of Nike for its Slingshot golf Irons.
Nike entered into the golf market in 1996 when it signed Tiger Woods, one of the most famous players of golf. In the year 1999 Nike started making equipments for golf. In the year 2000 Tiger woods used golf balls made by Nike and managed to win four tournaments continuously. This turn out to be jackpot for Nike and they easily managed to double their market share.
After that success Nike planned to enter into golf club market. In order to capture this market too, Nike first acquired the services of Stites in 2001. Stites was then working on a project to move the center of gravity of the club from its face to back of the clubhead. He believed that this type of clubs helped the amateur golfers to improve their swing. Stites also added a metal bar on the club to shift some more weight to the rear. This was the Slingshot golf iron. At present Nike’s market share is less than 5 percent in most of the golf equipments (stone, 2004).
Nike loved this idea. According to Mike Kelly, business director for Nike Golf, “We're bringing a little bit of a different attitude to golf, even though we're respecting the game. We're not a traditional company, and we're going to try to stretch boundaries as much as possible for our consumers and our players” (Jung, 2004).
Nike’s marketing strategy for its newly introduced Slingshot Golf iron based on the following pillars:
In order to plan their marketing strategy Nike first tried to recognize their target market. Their Research has shown that majority of the golf club revenue generated from the white males of age 21 or more. White males are chosen as target market because African Americans are less likely to play golf. Almost 95% of the White males have their own golf clubs. The research has also shown that people in income bracket of $ 50,000 are more likely to play golf.
Thus according to the statistics, the target market for Nike Golf Iron is mainly consisted of, white males of age 21 years or more having annual household income of $50,000 or more. This income bracket is also selected because they are more likely to buy expensive golf equipment.
After recognizing their target market, Nike planned to hit the market with the help of best professionals. They have hired Stites for making Slingshot golf Iron and Bridgestone for making golf clubs.
Nike had introduced a unique way for introducing their golf equipments. Instead of presenting equipment, which attracts the golfers, they attracted the expert golfers, like Tiger Woods, themselves to promote and market their products. After Tiger woods they have also hired David Duval, Mark Brooks, John Cook, Glen day, Stewart Cink, Bryce Molder etc. to use the equipment provided by Nike.
Apart from using players to promote their equipment, Nike had used continuous advertising to woo its target market. After recognizing its target market Nike have used every medium like newspapers, sports magazines, radio, television, cable television, network television etc. to reach its desired market. Nike has also used well placed billboards and Internet for capturing its desired market share. It has been observed that its advertising strategy had turned out to be a success and Nike has managed to reach almost 70 percent of its target audience.
Price line is a range of several distinct prices at which merchandise is offered for sale. The general level of the different lines would depend upon the income level and buying desires of target audience. Price lining policy has the advantage of simplifying choice for the target audience and reducing the necessary minimum inventory. The strategy of pricing on the basis of what the traffic will bear can be used only when the seller has little or no competition. Obviously this policy will work for un-standardized products.
Although Nike’s target audience is the people having $50,000 or more annual income, but on order to compete with its competitors, Nike had priced its clubs at mid-level, which is $899 for a set of irons (Christianson, 2004). This price-cutting helped Nike to capture a better market share and will help Nike to compete with its competitors.
Distribution of a product is also an important part of its marketing strategy. In continuous processing flow control is an important part because unsteady flow of finished products will make havoc for the company.
Although Nike had introduced a sound marketing strategy for its slingshot golf iron, it cannot compete its competitors like Callaway Golf where distribution of the product is concerned. For example Callaway golf have a much better access to technology and manufacture and assembles its own equipments while Nike used Bridgestone to manufacture and market its golf clubs and balls. As Bridgestone is also a competitor in the field of Golf Clubs it is very hard for Nike to maintain highest quality and to produce innovative products.
Similarly Nike has a distribution unit, which distribute its products worldwide in bulk quantities, while Callaway Golf distribute almost 40 percent of its products to retailers. The huge distribution of Nike made it very difficult for the company to penetrate into small golf store and to compete its Competitors like Callaway Golf.