Nike
Product Extension Strategy
University of Chicago - Booth School of Business
Marketing Strategy - Prof. Berkeley Dietvorst
Team
Ross Brinkman - Industrial Designer, MBA Candidate, Co-Leader
Dasia Shor - Nutritionist, MBA Candidate, Co-Leader
Sixue Liu - Data Analyst, Economics & Computer Science Graduate
Panos Voulgaris - Economics Undergraduate
Brief
As the final project for our Marketing Strategy course, our team was to "create a strategic marketing plan for a new business idea that is a creative extension of an existing brand into a new product that is not new to the world, but is unrelated to any existing product produced by that brand.
Develop a comprehensive analysis of the opportunity and a strategic marketing plan."
Data Source: Mintel
Leverage Interest in Plant-based Diets
Deliver Dual Function
Focus on Protein Quality & Performance
Product & Brand
Align product with Nike brand values and design-centric approach
Price
Stay competitive while signaling a superior product
Promotion
Push Informative promotions early followed by Brand Building
Place & Distribution
Combine existing distribution methods with new channels
Product Strategy
High Protein And Clean
High or added protein claims are on the rise from nearly 1.5% to over 3% of food and drink launches over the past five tears (Mintel).
Power Of Plants
Interest in plant-based proteins is growing as consumers look for healthy and sustainable alternatives to animal-based proteins.
Great Taste
Taste is a very important attribute to consumers when making a purchase decision.
Brand
Nike embraces where consumers are by stating that “if you have a body, you are an athlete.”
Price
Methodology
Using protein-based products as our baseline, we employed a competitor-based pricing method.
Strategy
Taking into account the following market prices we positioned our product between average prices for high protein and plant-based drinks.
Nike Sports Drink: $4.00
Promotion
Digital
Social media platforms where professional athletes are active (Instagram, Twitter, etc) along with Nike digital platforms (Nike app and web suites).
Ad Type: Informative & Reminder
Physical
Physical banners, flyers, handouts, and posters depicting professional athletes and their achievements paired with the challenge of “What’s next?”
Ad Type: Persuasive & Brand Building
TV
Commercials depicting professional athlete using product with product information voice-over.
Ad Type: Informative & Persuasive
Distribution
Strategy
Capitalize on Nike’s current distribution methods while adding new methods required for the beverage category.
Nike Distribution
Sell directly to customers through Nike digital platforms and physical retail and wholesale locations.
Direct Store Delivery
Under a DSD system, Nike will deliver products directly to retail locations.This is highly suitable for products that are restocked often and sensitive to promotions and marketing.
Third Party Distributor Networks
Distribute sports drink product to restaurants, businesses, schools, and stadiums through third party food service and vending partnerships.
What Did We Learn?
The tools and frameworks we utilized during our strategy creation were the key to success. The core of our process was driven by the 3 C's (Customer, Competition, Company) and 4 P's (Product, Price, Promotion, Place) frameworks. Peppering in more focused nuances from our course, such as promotion type and effectiveness, and independent research, such as food and beverage distribution methods, helped flesh out our concept. From that outline we were able to elaborate each component with our individual skills and bring it all together for a cohesive product extension strategy.
While the prospect of Nike introducing a sports drink into the market seems odd, we welcomed the constraints of the challenge to create a realistic and implementable marketing strategy.
