Luxury Brand: Nike – Brand Audit
Description of Assignment:
You are to select one luxury brand (existing one, not imaginary or fictitious, any, except from Gucci or De Beers) and write a detailed and evidence-based report auditing the selected brand: analyze the brand and offer your recommendations how to maintain the perception of luxury and to keep the relevancy with customers. To do it well, you are required to conduct extensive desk research (at least 15 credible and reliable references) and in-store observation (posing as a 'mystery shopper' determine how much the sales person knows about the brand’s heritage, provenance, craftsmanship, etc.). Conducting more primary research in the form of interviews with current or potential customers of this luxury brand is highly advisable. Reflect on your personal experiences as well. Be precise, specific, dive deep, show evidence, back up your arguments. And definitely be visual.
In particular, your report should cover (but is not necessarily limited to) the following points:
Describe facets of this luxury brand,
Identify targeted segments and key markets, with a special realization if the brand attracts millennials and Gen Z (and if so, how),
Discuss the attitude of the brand towards sustainability,
Provide an example of latest communication piece that showcases the brand value/message/story,
Discuss at least 1 current trend observed in the industry and explain the response of the brand to it,
Compare and contrast the selected brand with another player in the industry, within at least 2 different themes/categories/areas/strategies.
The written report should be a well-developed and edited 1500-2500 word text (no less than 1500, no more than 2500), using 1.0 vertical line-spacing, in MS Word format with 12 Times New Roman font with 1 inch margins. The word count does not include references nor appendices (if you decide to add any). Make sure you put your name(s), course, assignment name, date, and number of words in the upper left corner of the first page of your submission. A title to signal the luxury brand, that will be the focus of your report, and main recommendation, is highly advised.
Weighting: 70% of final grade
Assignments must be submitted through myCourses. Every student makes submission on their own behalf, this is individual responsibility.
Nike – Brand Audit
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Table of Contents 1. Introduction. 3 2. Discussion. 4 2.1 Brand Facets. 4 2.2 Targeted Segments and Key Markets. 5 2.3 Brand Attitude towards Sustainability. 6 2.4 Nike’s Metaverse Marketing and Brand Value. 7 2.5 Industrial Trend. 8 2.6 Direct Competition Comparison. 9 3. Conclusion. 10 References. 11 Appendices. 14 List of Figures Figure 1: Nike as the Global Market Leader in Footwear 14 Figure 2: Consistent Growth in Nike's Revenue since FY2011. 15 Figure 3: Nike's Famous “Whoosh” Logo. 15 Figure 4: Gender-Based Sales Generated by Nike in the American Marketplace. 16 Figure 5: Nike's Sustainability Targets for FY2025. 16 Figure 6: Outlay of Nike's Metaverse, Web3, & NFTs in Omnichannel 17 Figure 7: Adidas Regional Online Sales. 18 Figure 8: Nike's Online Sales Trends. 19
1. Introduction
Luxury branding is a popular approach in marketing to attract niche customers and generate repeat sales. Luxury brands make selected communication, focus on sustainability, and focus on community building to ensure profitability in the long run (Ding & Legendre, 2022). Nike Inc. (Nike) is a reputed and recognized luxury brand worldwide. Nike designs, develops, markets, and retails athletic footwear, apparel, accessories, equipment, and services. The company has a global reach and sub-brands that cater to different market segments. Nike was founded by William Jay Bowerman and Philip Knight in 1964. Headquartered in Beaverton, Oregon, Nike has more than 79,000 employees working under John Donahoe II, Nike’s Chief Executive Officer (CEO) (Forbes, 2023).
Nike is a global leader in the footwear category, competing with the giants like Adidas, Puma, and Under Armor (UA). Nike generated total revenue of USD29.1 billion, the highest in the global footwear category (See Figure 1 in the Appendices; Richter, 2023). As illustrated in Figure 2 in the Appendices, Nike exhibited continuous growth in revenue since FY2011, having a current market share of 27.4% in the global footwear industry (Tighe, 2022). According to Forbes, Nike ranks 113th position as the “Top Regarded Companies” and holds the 100th position as the “Best Employer for Diversity” (Forbes, 2023). This report aims to conduct a brand audit on Nike as a luxury brand in the footwear and apparel industry.
2. Discussion
2.1 Brand Facets
Brand facets refer to specific features that identify a brand in a marketplace. Luxury brands create brand facets through physique, personality, culture, and relationships to distinguish the image from competitors and retain customers for future interactions (Filho et al., 2021). According to Taecharungroj (2022), facets assist in positioning brands in the market and integrating strategies to achieve sustainable industry locus while competing in a saturated condition. Nike segregates its facets through the four specified categories to sustain its global position as a market leader.
Physique refers to the physical characteristics of brand facets. Physique allows customers to visualize brands through logos, color palettes, and product presentation. Physique allows brands to formulate personalities and live by the notion while interacting with the customers. (Filho et al., 2021). Nike’s brand physique has a concise visual and tagline. Figure 3 in the Appendices illustrates that Nike has a famous logo with a tagline, “Just Do It.” The physique creates a confident personality for customers and motivates them to embrace challenges. Since Nike positions its brand for athletes and celebrities, making physiques relevant and meaningful for the target audiences.
Similarly, Nike’s facets include culture and relationships that are pivotal in sustaining industrial leadership. Nike creates a brand community to encourage customers to make impulse purchases. Nike formulates a brand culture of embracing challenges and serving as an ambassador for the lifestyle. As a result, Nike continues its brand relationship with leading athletes and celebrities to influence the psychological behaviors of customers according to the brand’s lifestyle, diversity, and inclusion (Nike, 2023).
2.2 Targeted Segments and Key Markets
Target segments are critical aspects of marketing strategies for progressive brands. Target segments guide brands to penetrate the marketplace by organizing resources and focusing on specific customer profiles in marketing messages (Cho et al., 2021). Nike uses demographic, geographical, psychographic, and behavioral segmentations to reach its customers with its proposed product portfolio. The geographical segmentation segregates Nike into regions while distributing products and services to customers. Nike regionally distributes operations in North America, Europe, the Middle East, Africa, Asia Pacific, and Latin America (Forbes, 2023). Demographically, the regions distribute and sell products for customers belonging to the upper class and residing in metropolitan cities. Customers aged between 0 years to 60+ years (Start.IO, 2022). Figure 4 in the Appendices illustrates gender-based sales generated in FY2021 by Nike in the US marketplace.
Subsequently, Nike uses psychographic segmentation to encourage its brand community to make impulse buying decisions. Psychographic segmentation targets customers based on lifestyles and beliefs (Shimul & Phau, 2022). Nike positions the brand as an aspiration and success to align with the psychological facets of customers. Customers would shop at Nike to continue their health-conscious lifestyle and satisfy style requirements by purchasing footwear and apparel offered by the brand (Start.IO, 2022). Behavioral segmentation allows Nike to target customers with brand consciousness, sustainability, impulse buying, and being part of the brand community. Holistically, Nike remains a target-focused brand by reaching Generation Z (Gen-Z) customers with strong sensitivity towards brand status, health consciousness, and environmental friendliness. Customers wearing Nike have high purchasing power and a sense of brand community. The targeting strategy makes Nike a global leader in the luxury footwear and apparel categories.
Nike has a remarkable realization for Gen Z customers while pushing the brand’s products and services in the luxury category. According to Santana and Kish (2023), Nike built an obsession with Gen Z target markets by revamping retail activities and marketing networks. Nike examines the purchasing habits to push Gen Z customers to impulse purchase sneakers and become part of the brand community. The brand offers innovative products with sustainability and accountability of product activities. Nike focuses on young customers aged 18 years and 30 years to become part of the brand community. The company offers vibrant colors and unorthodox designs to relate to the fashion sense of Gen Z customers. Nike claimed that the Air Force category is designed exclusively for Gen Z customers. The product is highly-priced as the brand believes Gen Z customers have minimal mortgage burdens (Santana & Kish, 2023). The marketing strategy denotes Nike’s obsession with Gen Z customers in the global footwear industry.
2.3 Brand Attitude Towards Sustainability
Sustainability is a fundamental notion for modern brands that target Gen Z customers. Gen Z customers have strong sensitivity towards environmental friendliness, transparency in communication, and governance. As a result, luxury brands from different industries use sustainability as a frontier to retain customers and continue dominance through market share (Cais, 2021). Most brands use a triple-bottom-line (TBL) approach to exhibit attitudes toward sustainability while promoting brand dominance in a luxury category (Park et al., 2022). Nike is no exception to sustainability perspectives while pushing the brand as an industry leader in the global footwear and apparel industry. Figure 5 in the Appendices illustrates the Sustainability Targets set by Nike for FY2025.
Nike’s sustainability attitude is defined as “Move to Zero” while managing carbon footprints and waste dispositions. Nike manages sustainability through circularity by engaging cycles from top to bottom. The company focuses on eliminating carbon footprints, greenhouse gas (GHG) emissions, water consumption, and industrial waste to zero by FY2025. The sustainability governance claims that Nike is anticipated to become the world’s first luxury brand to achieve zero emissions by FY2025 (Nike, 2023a). “Nike’s Impact Report 2022” claims the company procures yarns, textiles, and plastics with a reusing feature. M...