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UNDERSTANDING MARKETING MANAGEMENT
ing concept, the marketing concept, and the holistic
marketing concept. The first three are of limited use
today.
6. The holistic marketing concept is based on the development, design, and implementation of marketing programs, processes, and activities that recognize their
breadth and interdependencies. Holistic marketing recognizes that everything matters in marketing and that a
broad, integrated perspective is often necessary. Four
components of holistic marketing are relationship marketing, integrated marketing, internal marketing, and
performance marketing.
7. The set of tasks necessary for successful marketing
management includes developing marketing strategies
and plans, capturing marketing insights, connecting
with customers, building strong brands, creating, delivering, and communicating value, and creating long-term
growth.
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Marketing Debate
Does Marketing Create or Satisfy
Needs?
Marketing has often been defined in terms of satisfying
customers’ needs and wants. Critics, however, maintain
that marketing goes beyond that and creates needs and
wants that did not exist before. They feel marketers encourage consumers to spend more money than they should on
goods and services they do not really need.
Marketing Discussion
Shifts in Marketing
Consider the three key forces driving the new marketing
realities. How are they likely to change in the future? What
other major trends or forces might affect marketing?
Take a position: Marketing shapes consumer needs
and wants versus Marketing merely reflects the needs
and wants of consumers.
Marketing Excellence
>> Nike
Nike hit the ground running in 1962. Originally known as
Blue Ribbon Sports, the company focused on providing
high-quality running shoes designed for athletes by athletes. Founder Philip Knight believed high-tech shoes
for runners could be manufactured at competitive prices
if imported from abroad. Nike’s commitment to designing innovative footwear for serious athletes helped build
a cult following among U.S. consumers.
Nike believed in a “pyramid of influence” where the
preferences of a small percentage of top athletes influenced the product and brand choices of others. Nike’s
marketing campaigns have always featured accomplished athletes. For example, runner Steve Prefontaine,
the company’s first spokesperson, had an irreverent
attitude that matched Nike’s spirit.
In 1985, Nike signed up then-rookie guard Michael
Jordan as a spokesperson. Jordan was still an up-andcomer, but he personified superior performance. Nike’s
bet paid off—the Air Jordan line of basketball shoes flew
off the shelves and revenues hit more than $100 million in the first year alone. As one reporter stated, “Few
marketers have so reliably been able to identify and
sign athletes who transcend their sports to such great
effect.”
In 1988, Nike aired the first ads in its $20 million “Just
Do It” ad campaign. The campaign, which ultimately featured 12 TV spots in all, subtly challenged a generation of
athletic enthusiasts to chase their goals. It was a natural
manifestation of Nike’s attitude of self-empowerment
through sports.
DEFINING MARKETING FOR THE NEW REALITIES
As Nike began expanding overseas, the company learned that its U.S.-style ads were seen as
too aggressive in Europe, Asia, and South America.
Nike realized it had to “authenticate” its brand in other
countries, so it focused on soccer (called football
outside the United States) and became active as a
sponsor of youth leagues, local clubs, and national
teams. However, for Nike to build authenticity among the
soccer audience, consumers had to see professional athletes using its product, especially athletes who won.
Nike’s big break came in 1994 when the Brazilian
team (the only national team for which Nike had any real
sponsorship) won the World Cup. That victory transformed
Nike’s international image from a sneaker company into a
brand that represented emotion, allegiance, and identification. Nike’s new alliance with soccer helped propel the
brand’s growth internationally. In 2003, overseas revenues
surpassed U.S. revenues for the first time, and in 2007,
Nike acquired Umbro, a British maker of soccer-related
footwear, apparel, and equipment. The acquisition made
Nike the sole supplier to more than 100 professional soccer teams around the world and boosted Nike’s international presence and authenticity in soccer. The company
sold Umbro in 2012 for $225 million.
In recent years, Nike’s international efforts have been
focused on emerging markets. During the 2008 Summer
Olympics in Beijing, Nike honed in on China and developed an aggressive marketing strategy that countered
Adidas’s sponsorship of the Olympic Games. Nike received special permission from the International Olympic
Committee to run Nike ads featuring Olympic athletes
during the games. In addition, Nike sponsored several
teams and athletes, including most of the Chinese teams.
This aggressive sponsorship strategy helped ignite sales
in the Asian region by 15 percent.
In addition to expanding overseas, Nike has successfully expanded its brand into many sports and athletic
categories, including footwear, apparel, and equipment.
Nike continues to partner with high-profile and influential
athletes, coaches, teams, and leagues to build credibility
in these categories. For example, Nike aligned with tennis
stars Maria Sharapova, Roger Federer, and Rafael Nadal
to push its line of tennis clothing and gear. Some called the
famous 2008 Wimbledon match between Roger Federer
and Rafael Nadal—both dressed in swooshes from head to
toe—a five-hour Nike commercial valued at $10.6 million.
To promote its line of basketball shoes and apparel,
Nike has partnered with basketball superstars such as
Kobe Bryant and LeBron James. In golf, Nike’s swoosh
appears on many golfers but most famously on Tiger
Woods. In the years since Nike first partnered with
Woods, Nike Golf has grown into a $523 million business and literally changed the way golfers dress and
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play today. Tiger’s powerful influence on the game and
his Nike-emblazoned style has turned the greens at the
majors into “golf’s fashion runway.”
Nike is the biggest sponsor of athletes in the world
and plans to spend more than $3 billion in athletic
endorsements between 2012 and 2017. The company also has a history of standing by its athletes,
such as Tiger Woods and Kobe Bryant, even as they
struggle with personal problems. It severed its relationship with Lance Armstrong in 2012, however, after
strong evidence showed that the cyclist doped during
his time as an athlete and while competing during all
Tour de Frances. Nike released a statement explaining, “Nike does not condone the use of illegal performance enhancing drugs in any manner.” Prior to the
scandal, the company had helped develop Armstrong’s
LIVESTRONG campaign to raise funds for cancer. It
designed, manufactured, and sold more than 80 million
yellow LIVESTRONG bracelets, netting $500 million for
the Lance Armstrong Foundation.
While Nike’s athletic endorsements help inspire
and reach consumers, its most recent innovations in
technology have resulted in more loyal and emotionally connected consumers. For example, Nike’s lead in
the running category has grown to 60 percent market
share thanks to its revolutionary running application and
community called Nike+ (plus). Nike+ allows runners
to engage in the ultimate running experience by seeing
their real-time pace, distance, and route and by giving them coaching tips and online sharing capabilities.
Nike expanded Nike+ to focus on key growth areas like
basketball and exercise and recently launched Nike+
Basketball, Nike+ Kinect, and Nike+Fuelband, a bracelet/
app that tracks daily activities.
Like many companies, Nike is trying to make its company and products more eco-friendly. However, unlike
many companies, it does not promote these efforts. One
brand consultant explained, “Nike has always been about
winning. How is sustainability relevant to its brand?” Nike
executives agree that promoting an eco-friendly message
would distract from its slick high-tech image, so efforts
like recycling old shoes into new shoes are kept quiet.
As a result of its successful expansion across geographic markets and product categories, Nike is the top
athletic apparel and footwear manufacturer in the world. In
2014, revenues exceeded $27 billion, and Nike dominated
the athletic footwear market with 31 percent market share
globally and 50 percent market share in the United States.
Swooshes abound on everything from wristwatches to
skateboards to swimming caps. The firm’s long-term strategy, however, is focused on running, basketball, football/soccer, men’s training, women’s training, and action
sports.
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