Technological:
- Innovation regarding bottle design – differentiate from competitors.
- Keeping up to date with newest machinery – produce more bottles per hour etc.
Legal:
- Minimum wage - Ensure that employees are getting paid the right amount per hour.
- Future legislation – ensure employees are made aware of any new laws.
Environmental:
Ethical:
- Lack of jobs due to rise of machines – machines do the jobs quicker and of better quality than man.
- Pushing out smaller companies.
- Competitors
There are three major competitors in our market.
Major competitors include:
- Pepsi-co – Gatorade
- Coca-Cola – Powerade
- GlaxoSmithKline – Lucozade Sport
In the UK Coca Cola holds a market share of approximately 30% of the soft drinks market (LeatherHeadFoods.com, 2006 [online]). Coca Cola are also the most familiar consumer brand in the world.
Pepsi-co is the number two supplier of soft drinks and second largest soft drinks brand.
GlaxoSmithKline PLC is third in the UK soft drinks sector by market share, although it markets only two major brands: Lucozade and Ribena.
All of our competitors have weaknesses, which we shall exploit and improve upon.
Gatorade is deemed to be gassy and slow to give an energy boost (TogoParts.com, 2004 [online])
All our competitors are also big players in the soft drinks market, where we feel that N✓Sport from Nike would be solely sports.
- Market Research
Primary, quantitative market research was conducted on a sample of 200 people from Fitness First gym in Bangor (see appendix A). The first question asked was simply put as, “Are you between the ages of 16-32”. Anyone who did not fall under this age group did not complete the rest of the questionnaire.
The results of the second question indicate the market share of our major competitors.
- Segmentation and Targeting
Our target market for the UK of people aged between 16-32 is approximately 19.3million people and this represents about 32% of the total population (National Statistics, 2006 [online]). The total population of the UK is 60,600,000.
Research has shown that 89% of those surveyed would be interested in a Nike Sports drink.
This shows that people are willing to welcome a new product and at least try it and if it is at the right price for the consumer but of better quality than the competition then they will more than likely decide to change to this new product.
Geographical – we targeted the consumers of Fitness First, specifically Bangor.
Demographically the age variety of our target market ranges from 16-32. The N✓Sport will appeal to this range because they are the most likely to frequent in sporting activities. However, it is expected to sell either side of these boundaries.
- Positioning Strategy
Due to the high competition in this particular market, the positioning strategy utilised will be Product positioned in relation to competitor (Needham et al, 2003, p.198).
This is because we will be positioning our product in direct competition with other sports drinks from global brands, such as Coca Cola and PepsiCo.
Our product will be different from the others as it will be solely a sports drink whilst our competitors all derived from soft drinks.
A positional map has been drawn up to show where we believe our product would be placed compared to our competitors.
Needham et al (2003, p.41) explain that positional mapping is a useful tool to assist positioning as it sets out customers perceptions and preferences for different products.
Bottled water High Price
Powerade Lucozade Sport
Low Quality High Quality
N✓Sport
Low Price
As you can see the N✓Sport is of high quality with the low cost and this is how we want to position ourselves and this will be explained later in the pricing strategies.
- N-Sport Characteristics
The three levels of a product are shown below. An example of the three levels of a product can be found in Appendix B
- Core Product
Provides target market with a high energy boost to stimulate and support the body during levels of performance.
- Actual Product
N✓Sport will be presented in a 600ml clear plastic, ‘squeezy’ bottle with sports cap.
The gap between the ridges on the bottle represents the area in which the consumer will hold the product. The ridges will provide added traction to prevent the product from slipping during use. The cap on top will have a hinged cover with a security strip to ensure no one tampers with the product before it reaches the end consumer. The label will wrap around the mid section of the bottle and will display aesthetic use of the logo, Nike brand product name (N✓Sport), consumer/product information and barcode.
The dimensions of the unit are: 250mm Y-axis (height) and 75mm X-axis (width) with the capacity already stated at 500ml.
- Augmented Product
The beneficiaries of our product will be those who participate in a physical level of exercise. This is because they will receive a high energy boost which will improve their level of exercise which will in turn increase their fitness. Another aspect of our product is the image that it portrays on the consumer as being apart of the Nike lifestyle, impulsive and athletic.
Local businesses will also benefit from our product as they can expect high sales of a new and exciting product which will, potentially, increase their revenue
- Packaging
Needham et al (2003, p72) in their book ‘Marketing for Higher Awards’ describe the basic function of any packaging is to protect its contents in transit, in storage and in use.
The products packaging enables identification on the consumer’s behalf e.g.✓, when people see the tick, they automatically think of the Nike brand due to the companies global reach.
Our product packaging for the label will comprise; a red background, a white ✓ (Nike tick) and black writing e.g. product information. We feel this will represent Nike persona as it uses the company colours.
- Branding Strategy
Branding is the process by which companies distinguish their product offerings from the competition (David Jobber, 1995).
When consumers see our product on the shelves they will see quality and a consistency at a low cost. This is due to the brand name due to Nikes extensive history and record for reliability and this makes it easier for Nike to enter into the mainstream sports drink market.
Our products personality is designed to appeal to our target market as being young, energetic and stylish. The adapted Nike logo of “Just Do It” to “Just Drink It” is recognised as being impulsive and part of the Nike ethos.
- Pricing Strategies
- Pricing objectives
Short-Term:
- To create awareness and interest about the new product
- To gain a competitive advantage within the market.
- To discourage new entrants
Long-Term:
- To become the market leader.
- Quality leadership
For our new product the objective is to maximise quantity/market share. To meet this objective we will adopt the Penetration pricing strategy.
- Pricing Strategy
Penetration pricing is suited to quantity maximisation by means of low price. This is the best strategy for our product as it is of the nature of something that can gain mass appeal fairly quickly. We would set the price low, roughly 89-90p, to begin with, as we don’t wish the product to be seen as a luxury drink that will only be consumed on occasion. The brand in itself should do enough to generate sales and depending on the demand we can choose to raise prices.
PROMOTION
High Low
For our product we would use the penetration strategy for launch – low price with high promotion.
- Distribution
We will use two distribution methods for our product. Zero-level channel and single-level channel:
Manufacturer Customer
Manufacturer Retailer Customer
The first one is achievable through the Nike website or at the Nike retail stores. Nike manufacture the product then the consumer can purchase directly of them.
The second method is that the retailer buys of the manufacturer and then sells it on to the customer.
- Logistics
Nike has plenty of experience in logistics as they operate on time constraints on their other product lines. Once N✓Sport has been produced it will be delivered the retailers on a Just in Time basis.
- Number of outlets
We aim to distribute the product to all major supermarkets and convenience stores across the UK. We believe that having the product in all major supermarkets will let us reach the greatest customer basis. Having good distribution is important as it involves meeting customer needs and requirements and in order for our product to gain a competitive advantage we will need to focus our distribution on good customer service.
- Marketing Communications
- Communication objectives
The attention, interest, desire and action (AIDA) model as stated by Ahonen et al (2004, p. 140) ‘Communities and Strategic Partnerships’ has been used for our marketing process.
Attention: A campaign to generate initial interest for N✓Sport during the first few weeks of September, as most people will be getting back into a routine after the holiday period.
The next three stages continue the process runs consistently.
Interest: To promote the features and benefits of N✓Sport as an essential tool in physical activity.
Desire: To persuade the target market that N✓Sport is a ‘way of life’ that all should aspire to.
Action: To present a finished, recognisable product that the consumer will want to buy.
- Advertising
We plan on utilising Nikes already established celebrity clientele and those who endorse the product will be current recognisable sporting names that already receive high media coverage.
Television/media –This fits in with our target age because when it comes to the advertising they are going to pick Wayne Rooney over Teddy Sheringham or Jamie Murray over Pete Sampras.
Magazines – Football Magazines, Mens Magazines and Health and fitness.
Internet – Nike.com
- Monitoring of Marketing
To assess the success of our marketing strategy we will carry out a marketing/sales review after the first four months of the products release. Customer feedback will also be sought through surveys.
- Review and Control
The product/sales evaluation will be accessed by our staff through product recognition surveys from the general public. Actual sales figures and profit/demand
- References
JOBBER, D. (1995) Principles and Practice of Marketing. McGraw-Hill. England. P.246.
JUST-DRINKS (2006) UK soft drinks market shows strength in adversity [online]
Available at:
[Accessed 4th December 2007]
LEATHERHEADFOOD (2006) The Soft Drinks Market - Global Trends and Developments [online]
Available at:
[Accessed 4th December 2007]
MARKETINGTEACHER.COM (2000) Three Levels of a Product [online]
Available at:
[Accessed 6th December 2007]
NATIONALSTATISTICSONLINE (2006) Latest on Ageing [online]
Available at:
[Accessed 6th December 2007]
NEEDHAM, D. and DRANSFIELD, R. (1995) Marketing: Everybody’s Business. 2nd edition. Heinemann Publishers. Oxford. p.18
NEEDHAM, D. and DRANSFIELD, R. and GUY, P. and SHAW, M. and DOOLEY, D. (2003) Marketing for Higher Awards. p.41
NEEDHAM, D. and DRANSFIELD, R. and GUY, P. and SHAW, M. and DOOLEY, D. (2003) Marketing for Higher Awards. p.72
NEEDHAM, D. and DRANSFIELD, R. and GUY, P. and SHAW, M. and DOOLEY, D. (2003) Marketing for Higher Awards. p.198
PHILLIPS, L (1993) Marketing for first year degree students. BPP Publishing Limited. London.
TOGOPARTS (2004) Isotonic drinks [online]
Available at:
[Accessed 3rd December 2007]
- Appendices
- Appendix A
- Are you between the ages of 16-32?
Yes (200)
No (0)
2. Do you purchase sports drinks?
Yes ( 200)
No (0 )
3. Which of the following would you consume?
Gatorade (0 )
Powerade (54 )
Lucozade (70 )
Sports bottled water (76 )
4. If a new brand of sports drink was marketed, would you try it?
Yes (124 )
No (14 )
Maybe (62 )
- Would you be inclined to purchase a Nike branded sports drink?
Yes (178 )
No (22 )
- Where do you purchase your sports drinks?
Convenience store eg. Garage (78)
Vending Machines (116 )
Supermarket (6 )
- Appendix B
- Reflections on Learning
- Peter Curran
David Kolb developed a model called the learning circle.
The learning style that I feel most suited me was the Diverger and the learning characteristics that this follows is concrete evidence (feeling) and reflective observation (watching) . I believe that I was imaginative and creative in my thinking and saw many ideas from different perspectives.
I am very much a visual and verbal learner as I remember things better when I see pictures, diagrams, charts and demonstrations. Therefore when I am working on assignments I like to include visual charts to show certain points rather than just talking about them. I feel that this also helps the reader stay focused as reading a lot of writing all at one time can be very boring and the reader may become uninterested.
I also enjoy working in a group as I feel I can bounce of a lot of ideas on the other members. Getting the opinions from my peers is important to me because it lets me know if I am on the right track. I feel I can also learn of the other members in my group as they may have ideas that I would not have thought off. Being the observer at a couple of our meetings also gave me the chance to look in on how groups develop from the Forming stage, of Tuckmans five stages, to the norming and performing stages so quickly. This is helped by the fact that our group are all friends and have had experience with each other in group work before so we all knew each others strengths and weakness. This helped us to delegate work out among ourselves as we would know who would be capable to handle certain areas of this assignment.
- William Gilpin
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