Nike Segment Analysis

Apple Watch Nike +: Market Segmentation and Product Strategy

Capella University

Charanjit Singh

A great corporation knows very well that it can succeed only if it can create true value to its customers. Businesses must use a customer-driven marketing strategy to create the right impression and deliver on the promises made. Market segmentation, targeting and positioning are the basic elements of creating a customer-centric marketing strategy, which if applied correctly can bring about success of a product for a company (Sherlekar, 2010).  Nike needs to use this approach to help elevate the Apple Watch Nike + against its competitors.  In order to appeal to a variety of customers, Nike must identify market segments. These segments will allow for proper and successful marketing strategy.  Nike should focus on the following segments: demographic, psychographic, and behavioral (Sherlekar, 2010).  

Market Segmentation Analysis

Information Sources

         Nike is unique in the fact that they have a very general targeted demographic segment.  This is because of their mission statement , “To bring inspiration and innovation to every athlete in the world.”(Nike.com). This mission statement signifies the company’s strategic goal of reaching out to the global sports shoes, apparel and equipment market.  However, this does not mean Nike should limit only using the demographic segment. Nikes sells a wide variety of products and has the most well know athletic brand in the world.  Thus segmenting to more precisely define various market segments is necessary.   Nike sells products that appeal to specific social classes, lifestyles and personal preferences, thus an psychographic segment would be another identified market segment.  Lastly, Nike customers are very loyal customers, therefore a behavioral segmentation would be crucial (Hundekar, 2010).

Effective Targeting

Demographic Segment

        Demographic segmentation is a significant factor to target individuals according to their age, life-cycle stage, gender, occupation, and generation (Sherlekar, 2010).  The Apple Watch Nike + provides value in this market segment because it can be universally used and not limited to any gender, sex, generation, etc.  It can be used by anyone that is dedicated to improve his or her health and fitness.  

The apparel and sports the market can be broad but statistics show the digital fitness tracker watches such as the Apple Watch Nike+ targets mostly women.   A report from a market research firm, showed that 36 percent of people who own fitness trackers in the U.S. are 35 to 54 years old and are predominantly women(Gustafson, 2015).  Statistics also show 20% of Nike’s revenues are based on sales of products targeted at women and this number is expected to grow in the coming years (Malcom, 2015).   Nike is putting an emphasis are targeting women for their products, which will help boost the Apple Watch Nike+.  On the other hand, it Nike should also focus on other key demographics such as men, young adults, and athletes from all sports.  One thing that is limiting the Nike + watch is that it is targets specifically demographics of runners.   Nike is not effectively targeting customers from a variety of sport backgrounds.

Psychographic Segment:

Nike should also use psychographic segmentation to target individuals with specific lifestyles and

personalities that the Apple Watch Nike+ can appeal to.   This a an important segment because the Nike  watch provides tremendous value to this segment.   Nike targets individual who enjoy sports, fitness and or who are generally active.  Thus, the Nike + watch would be a product that can be appealing to these customers.  

Whether it is playing, watching or simply talking about sports, these activities shape

personalities and lifestyles. Nike’s current marketing efforts are targeted at creating a “feeling” that transcends the product. Nike wants to foster an attitude and it develop a lifestyle.  Nike promotes events such as Nike: Run with Me, Sports Improvement Clinics, Social Media contests.  These marketing strategies go a long way to create community and a feeling of “belonging” to the Nike family and ultimately brings customers to buy Nike products(Sanusi, 2014).  This has been and will continue to be an effective marketing strategy for Nike and will help propel the Nike+ watch in sales because customers will feel connected through the Nike+ watch through these environmental events Nike promotes.

Behavioral Segmentation

        The behavioral segmentation is another market segment that is of great importance in identifying effective targets for the Apple Watch Nike +. Targeting based on this attribute is a no brainer for Nike.  The Nike+ watch brings value to this segment because   Nike focuses largely on how their products make consumers feel. The benefit expectations of the Nike products are undoubtedly clear.  These products focuses on that fact that Nike products make you feel athletic and thus makes the consumers feel athletic.

 Furthermore, with behavioral segmentation, Nike seeks to build customer loyalty with the Nike + watches as it does with its other products. When customers develop loyal behaviors towards a specific company, that company reaps rewards by growing sales and market share (Nam, 2011). In such competitive market like the one Nike participates in, it is imperative to gain and retain consumer loyalty.  By providing consumers with quality, choice and innovation the Nike excels in this realm and can pave the way for the Nike + watch to succeed against its competitors.

Targeting and Positioning Strategy Recommendations

        Nike’s current strategy on marketing the Apple Nike + watch is acceptable and successful because it is the foundation of marketing all of its’ products.  Nike targets specific demographies for its variety of products.  Nike also targets individuals individual who enjoy sports, fitness and or who are generally active.  Lastly, Nike’s main and most important market strategy is devolving loyalty.  These are all great strategies that help the Nike+ watch keep up with its competitors, but Nike should look into different strategy to take the Nike+ watch to the next level.

 The first alternative Nike should consider is aligning the Nike + watch to be marketed with all its brands, not just Nike Running.  This includes: basketball, football, action sports, and athletic training.  This is turn will open up new revue streams and customer demographics.  This will also better the Nike + watch to be positioned for the psychographic and behavioral segments.  It will gain customers with lifestyles that already aligned with the functionality of the Nike + watch and loyal customers will buy the Nike digital fitness trackers over other brands because they already have a connection with Nike (Nam, 2011).