How Nike uses Market Segmentation

 How Nike uses Market Segmentation

Nike is a worldwide business that designs and sells sportswear. They are a hugely successful company both commercially and in terms of their cultural impact. Nike takes steps to segment the market, then target specific groups and then finally position itself to attract customers. In this blog I will talk about how Nike segments the market in order to ensure they can target groups of customers to generate revenue.

Psychographic Segmentation

Nike has achieved a large dominion over the sports market with "45% of general athletic footwear and up to 96% of footwear used in basketball" (Wells. T, 2022). One of the main reasons for Nike's success is their use of market segmentation. The four types of market segmentation that is used by companies is geographic, demographic, psychographic and behavioural segmentation. While Nike uses all the types of market segmentation they focus strongly on psychographic segmentation. This means that Nike groups their target audience based on their activities, lifestyles and interests such as those interested in fitness (CB Insights, 2020). Therefore, by using psychographic segmentation Nike can cater to a customer's needs and interests (EdrawMind, 2022).

Image: (Brand Minds, 2021)

The Nike Lifestyle

Nike's marketing strategy is incredibly effective. Not only is its slogan "Just Do It" and logo simple, but Nike focuses on selling its brand to customers rather than its products. Most of Nike's adverts focus on promoting a  lifestyle customers will get by purchasing Nike's products. Nike promotes an active and athletic lifestyle based around gaining success. The idea of success is even cleverly reinforced by the name of the brand being derived from the Greek goddess of victory. With Nike maintaining such a dominant stance over the sportswear industry it ensures that successful athletes wear their products to cement the idea of victory; a message that resonates with their customers. Nike tries to ensure their audience can "put themselves into the athlete's shoes" (Garces. K, 2022) to thus position their brand.

 

Image: (Garces. K, 2022)

Signings and Sponsorships

As previously mentioned, Nike also signs sports players and celebrities to advertise their products. These names include LeBron James, Kanye West and Travis Scott. This has an effect of increasing sales, brand attention and recognition (Rübsteck. N, 2021). One example of this is how Nike are currently, as of 2022, the official sponsor for the England football squad. Nike's  use of sponsorships, stores and adverts ensures that they remain relevant and in the back of customers minds.

Reference List:

Wells, T. (2022) What businesses can learn from nike's positioning segmentation and targeting in marketing. Available at: https://taylorwells.com.au/positioning-segmentation-and-targeting-in-marketing/ (Accessed: 7 December 2022).

CB Insights (2020) What is psychographics? Available at: https://www.cbinsights.com/research/what-is-psychographics/ (Accessed: 7 December 2022)

EdrawMind (2022) Nike market segmentation, targeting and positioning. Available at: https://www.edrawmind.com/article/nike-market-segmentation-targeting-and-positioning.html (Accessed: 7 December 2022)

Garces, K. (2022) Here's why Nike marketing strategy and campaigns work. Available at: https://penji.co/nike-marketing-strategy/ (Accessed: 8 December 2022)

Brand Minds (2021) Nike: the story behind the brand. [Image] Available at:https://brand-minds.medium.com/nike-the-story-behind-the-brand-f3d8e5d9d725 (Accessed: 8 December 2022)

Rübsteck, N. (2021) Are celebrity ambassadors effective in 2022? Available at: https://latana.com/post/celebrity-brand-ambassadors/ (Accessed: 8 December 2022)