UK sports drink Lucozade used to be sold as a medical remedy for dehydrated children until the company discovered a larger market among adults seeking quick hydration.
Globalization Outsourcing is one strategy the company has undertaken in an effort to globalize the brand. It differs from traditional growth strategy in five key ways. Because the both market and product development involve with one aspect of new developments, changes, and innovation.
This gives a clear competitive advantage to the company, as they hold contracts with some of the top athletes such as Michael Jordan, Kobe Bryant, and Tiger Woods. A promotion is a strategy often linked with pricing, used to raise awareness of the brand and generate profit to maximise their market share.
Construction[ edit ] Market penetration can be defined as the proportion of people in the target who bought at least once in the period a specific brand or a category of goods.
When implementing change companies must be careful not to compromise their existing revenue or customers. With the consumers attention span becoming less and less, organizations need to constantly keep on top of competitors to stay relevant.
New Growth Options First, digital has expanded options for growth twofold. Market development new markets, existing products: Market penetration, market development, and product development together establish market growth for a company.
This strategy involves developing new businesses to achieve growth. Nike implemented this intensive strategy in its early years, such as when it introduced apparel and sports equipment to its product mix.
The difference between the two is most pronounced when we consider the questions that lie behind each strategy. Almost all of their footwear is produced outside the United States, and their inventory is produced in 34 countries around the world .
It will also discourage and disadvantage competitors who are not willing to undersell and losing sales to others. At my agency, we call this digitally-enabled growth strategy.
Sequential Success This is the flip side to the connectivity of the digitally-enabled growth strategies highlighted in the previous section. The successful history of NIKE has allowed the company to broaden their customer base to many countries around the world.
To keep its position and competitive advantage, Nike must ensure that its generic strategy and intensive growth strategies are always suited to current business conditions. Purpose[ edit ] As a strategy, market penetration is used when the business seeks to increase sales growth of its existing products or services to its existing markets in order to gain a higher market share.
When you add digital to the mix, the playing field between the corporate David and Goliaths is much more even. NIKE uses market development to introduce current products into unfamiliar foreign markets. Nike is also of course bound by the federal, state, and local laws under which their corporation falls.
What benchmark should one go for?
Retrieved February 22,from http: This intensive strategy involves the introduction of new products to grow sales revenues. Over the past few years the company has continued bringing in high revenues despite the difficult economic times.
Product-Market Strategies Market Penetration: Location is important and wholly depends on the reach of a brand. So implementation has tended to favor large organizations with ample resources, time, and risk tolerance. For example, the company integrates cutting-edge designs for its shoes.
Definition[ edit ] Market penetration refers to ways or strategies that are proposed or adopted so as to be able to create a niche in the already existing market.
According to the company website, NIKE currently operates more than Nike market penetration around the world . Market development[ edit ] Market development aims at non-buying shoppers in targeted markets and new customers in order to maximise the potential market.
During the operation of the business, if the sales are decreasing or flatlining comparing to previous years, then it is also appropriate to apply market penetration strategy to seek for opportunities to increase sales. Based on the penetration that other products have reached, calculate the number that should be reached in the demographic by multiplying the total number of the demographic by whatever the percentage that other products are reaching.
For example, Nike enters new markets in Africa and the Middle East to increase its shoe sales revenues. Distribution can also contribute to sales volumes for businesses.Jun 29, · Nike brand revenues in Western Europe grew by 17% (in constant currency terms) in Q4further confirming that Nike is gaining ground over market.
Digitally-Enabled Market Penetration: Nike uses its online Nike+ community to galvanize customer loyalty and further penetrate the market Digitally-Enabled Product Development: Netflix went from sending DVDs through the post to offering streamed movies over the internet.
To say Nike dominates the sportswear market would be an understatement. While sneakerheads debate Nike’s current relevance in a post-Yeezy world on message boards, comment sections and Twitter. In the paper he proposed that product marketing strategy was a joint work of four growth areas: market penetration, market development, product development, and diversification.
When displayed visually, these four areas create the Ansoff Growth Matrix. Market penetration requires strong execution in pricing, promotion, and distribution in order to grow market share. Under Armour is a good example of a company that has demonstrated successful market penetration.
The company sells performance apparel, and in recent years it has surpassed Adidas. Market Penetration. Nike’s secondary intensive growth strategy is market penetration. In this strategy, the company grows by increasing sales revenues in existing markets.
For example, Nike increases its stores and retailers in the United States to sell more athletic shoes to American consumers. Sony’s Generic Strategy & Intensive.Download