Briefly introduce your company. Introduce your new product with a very brief –but clear description of what you will be offering to the Canadian market and what makes your product different (product differentiation). Remember, your new product should be a business-to-consumer product. Include a brief description of the consumer want that your product fills. How does the new product link to the strategic role of the company? What is the positioning of your new product?

QUESTION

Part II –Marketing Strategy

In this section you are building the actual marketing plan for the new product. Remember that the appendix is a great place to place supporting materials. For example, many researchers include in the appendix an image of the product (dimension/packaging),the description of advertisements,numerical calculations, detailed implementation timeline,etc.

ASPECTS TO BE EVALUATED

SECTION 1:MARKETING MIX                                                                                                           5 pages

Product:

•In-depth product description(core benefit, size, colors, warranties, customer service, packaging etc.)•Positioning including positioning map•Differentiation& unique selling proposition of the product•Branding(name, logo)•Product Strategy(e.g.,Does it complete a product line?)•PLC status/ issues

Pricing:

•Price (final price for consumer, price of sale to any intermediary)•Pricing strategy(cost-based, penetration, skimming,etc.)•Pricing adjustments(e.g.,sales promotions)•Product margins•Price chains

Distribution:

•Distribution strategy•Potential channel conflicts (if appropriate)•Where the product is available / number of outlets•How the product is presented/displayed in the outlet

Promotion:

•Communication objectives& key message of communication•Use of an appropriate promotional mix(e.g., advertising, public relations personal selling, sales promotion, direct marketing) for your product with concrete examples; for example, for advertising, remember to include the creative, support for your creative, and media selection (e.g.,Q-92 radio in Montreal during the “Drive at 5”).

SECTION 2; Financial Evaluation:•Break-even units/dollars•Break-even market share•Projected sales in units and dollars, profit(or losses!) for year 1

SECTION 3:Foreign Entry Potential:•Selection of one country for market expansion-excluding the USA. •Justify the foreign entry strategy by considering the factors that make a foreign market attractive.

SECTION 4: Implementation•A specific and detailed sequence and timeline of key marketing plan steps For example,when does your company develop its product? Secure distribution? Launch its product? Run its various advertisements? Introduce a sales promotion? Expand to the new market? Consider all of the important steps in your plan.

ANSWER

Part I –The Consumer and Market Profile

SECTION 1: BRIEF NEW PRODUCT INTRODUCTION

Company Introduction:

Nike is a globally recognized sportswear and athletic footwear company that was founded in 1964. It has become one of the most prominent brands in the sports industry, offering a wide range of products that cater to athletes and sport enthusiasts of all levels. Nike’s mission is to bring inspiration and innovation to every athlete in the world.

New Product Description:

Nike is introducing a new product to the Canadian market called “Nike RunSense.” Nike RunSense is an advanced smart running shoe designed to provide runners with real-time feedback and performance metrics to enhance their running experience. These shoes are equipped with built-in sensors and connectivity features that track various running metrics such as distance, pace, cadence, and calories burned. The data is seamlessly transmitted to a mobile application, allowing runners to monitor their progress, set goals, and analyze their performance.

Product Differentiation:

Nike RunSense stands out in the market due to its integration of advanced sensor technology into running shoes. Unlike traditional running shoes, Nike RunSense offers an interactive and data-driven running experience, empowering runners to monitor and optimize their performance. The combination of high-quality footwear with smart technology sets Nike RunSense apart from competitors, providing a unique value proposition to runners in Canada.

Consumer Want:

Nike RunSense fulfills the consumer want for enhanced performance tracking and personalization in their running routine. With the growing popularity of fitness tracking and data-driven training, runners are seeking innovative solutions to help them improve their running performance and achieve their goals. Nike RunSense addresses this want by providing real-time feedback and personalized insights that enable runners to track their progress, identify areas for improvement, and optimize their training strategies.

Strategic Role and Positioning:

Nike RunSense aligns with Nike’s strategic focus on innovation and technology to deliver superior products and experiences to athletes. The introduction of Nike RunSense reinforces Nike’s commitment to empowering athletes of all levels and enhancing their performance through cutting-edge technology. The positioning of Nike RunSense is to be the leading smart running shoe in the Canadian market, providing runners with an unparalleled running experience that combines comfort, style, and data-driven insights for optimal performance.

By offering Nike RunSense, Nike aims to solidify its position as a leader in the sportswear industry while capitalizing on the growing demand for smart fitness products. The introduction of Nike RunSense showcases Nike’s ability to continuously innovate and meet the evolving needs of its target consumers in Canada.

SECTION 2: CONSUMER PROFILE

Consumer Segmentation & Targeting

Nike RunSense is primarily targeted towards active individuals who engage in running and are interested in leveraging technology to enhance their running performance. To effectively target the right consumers, it is essential to consider various segmentation variables and consumer behavior characteristics. The following segmentation criteria and target market have been identified for Nike RunSense in the Canadian market:

Demographic Segmentation:

Age: Nike RunSense targets individuals aged 18-45 years who are actively engaged in running and fitness activities.

Gender: Both male and female runners are targeted, as Nike offers a wide range of styles and sizes for all genders.

Income: Nike RunSense is positioned as a premium product, targeting individuals with higher disposable incomes who are willing to invest in their running performance.

Psychographic Segmentation:

Active Lifestyle: The target consumers have an active lifestyle and prioritize physical fitness and health.

Performance-Driven: They are motivated by achieving personal running goals, improving performance, and pushing their limits.

Tech-Savvy: They embrace technology as a tool to enhance their running experience and track their progress.

Behavioral Segmentation:

Frequency of Running: Nike RunSense targets both regular runners and occasional runners who are committed to improving their running performance.

Running Enthusiasts: These individuals are passionate about running, participate in races or marathons, and actively seek ways to enhance their running abilities.

Fitness Trackers Users: Target consumers already use fitness trackers or mobile apps to monitor their physical activity and are likely to be receptive to the integration of smart technology into their running shoes.

Target Market Justification:

The chosen target market for Nike RunSense is active individuals who are passionate about running and are willing to invest in their running performance. This target market has been selected based on several factors:

1. Market Size and Growth: The running market in Canada has experienced significant growth in recent years, with a large number of individuals engaging in running and participating in organized running events.
2. Tech-Savvy Consumer Base: Canadians have a high level of technology adoption and are familiar with using fitness trackers and mobile apps to monitor their fitness activities.
3. Performance-Oriented Mindset: The target market seeks continuous improvement and enjoys setting and achieving running goals, making them more likely to value the benefits of Nike RunSense.
4. Affinity for Premium Brands: Nike is a well-established and respected brand in the sportswear industry, and its target market is willing to invest in high-quality and innovative products.

By targeting active individuals who value performance, embrace technology, and prioritize their running experience, Nike RunSense aims to capture a significant share of the Canadian market and establish itself as the go-to brand for smart running shoes.

SECTION 3: MARKET PROFILE

Situation / Market Analysis:

The market conditions for Nike RunSense in the Canadian market are favorable, with significant growth potential and several factors supporting the success of the proposed new product.

Consumption Rates and Market Size

Running has gained popularity in Canada as a form of exercise and recreational activity. The participation rates in running events, such as marathons and half-marathons, have witnessed steady growth. According to industry reports, the running market in Canada has experienced a compound annual growth rate (CAGR) of X% over the past five years. The market size is estimated to be valued at $X million, indicating a substantial consumer base for running-related products.

Future Growth Potential:

The running market in Canada is expected to continue its growth trajectory in the coming years. Factors such as increasing health awareness, the popularity of fitness tracking devices, and the influence of social media have contributed to the sustained interest in running. The adoption of smart technology in running shoes, like Nike RunSense, aligns with the evolving preferences of consumers, presenting a significant growth opportunity.

Trends Supporting the Success of Nike RunSense:

1. Emphasis on Performance Enhancement: Runners are increasingly seeking ways to improve their performance, track their progress, and achieve personal goals. Nike RunSense, with its integrated smart technology, provides real-time feedback, personalized coaching, and data analysis, thereby catering to the performance-driven mindset of runners.
2. Technological Advancements: The market has witnessed a surge in the popularity of fitness trackers and mobile apps that monitor running activities. The integration of smart technology in running shoes capitalizes on this trend, offering a convenient and holistic solution for runners to monitor their performance without the need for additional devices.

Threats in the Market:

While the market conditions are favorable, there are potential threats that could hinder the success of Nike RunSense:

1. Intense Competition: The sportswear industry is highly competitive, with numerous manufacturers and brands vying for market share. Competitors such as Adidas, Under Armour, and New Balance offer their own range of running shoes, including smart shoe options.
2. Barriers to Entry: Entering the running shoe market requires substantial investments in research and development, manufacturing capabilities, and marketing efforts. New entrants may face challenges in establishing brand reputation, distribution networks, and gaining consumer trust.

Competitor Analysis:

Direct Competitors:

Nike RunSense faces competition from established manufacturers and their brands, including:

– Adidas with its range of smart running shoes, such as Adidas MiCoach.

– Under Armour with its HOVR series, which incorporates technology for tracking running metrics.

– New Balance with its Fresh Foam X Tempo and FuelCell series that cater to performance-oriented runners.

Market Share of Direct Competitors:

Market share data for specific competitors may vary, but Adidas, Under Armour, and New Balance are well-recognized brands in the running shoe market, each with a significant market presence and a loyal customer base.

Presence of Indirect Competitors:

Indirect competitors include other running shoe brands, as well as alternative forms of exercise and fitness activities, such as cycling, swimming, and gym workouts.

Competitive Field:

The market for running shoes is fragmented, with several prominent players competing for market share. Nike, as a global leader in sportswear, holds a substantial market share and has a strong brand reputation. However, competitors like Adidas and Under Armour have made significant strides in the market, posing a challenge to Nike’s dominance.

Overall, while there is intense competition in the running shoe market, the growing demand for running-related products, the technological advancements, and Nike’s established brand presence position Nike RunSense for success in the Canadian market.

Part II –Marketing Strategy

SECTION 1: MARKETING MIX

Product:

Nike RunSense is a cutting-edge smart running shoe designed to enhance performance and provide real-time feedback to runners. The product description includes:

Core Benefit: Nike RunSense enables runners to track and analyze their performance metrics, offering personalized coaching and insights to improve their running experience.

Size: Nike RunSense is available in various sizes to cater to a wide range of foot sizes.

Colors: The product is offered in multiple color options, allowing customers to choose their preferred style.

Warranties: Nike RunSense comes with a standard one-year warranty to ensure customer satisfaction and address any potential manufacturing defects.

Customer Service: Nike provides excellent customer service, including dedicated support channels, online resources, and a responsive customer care team.

Packaging: Nike RunSense is packaged in a visually appealing and sturdy shoebox, highlighting the product’s features and benefits. The packaging reflects Nike’s brand identity and commitment to quality.

Positioning and Differentiation:

Nike RunSense is positioned as a high-performance running shoe that integrates smart technology, setting it apart from traditional running shoes. Its unique selling proposition lies in its ability to provide real-time feedback, personalized coaching, and data analysis directly through the shoe, eliminating the need for additional devices or accessories. This differentiation aligns with Nike’s commitment to innovation and pushing the boundaries of athletic footwear.

Branding:

Nike RunSense is branded under the Nike name, leveraging the company’s strong brand equity and association with high-quality athletic products. The Nike logo, known as the “swoosh,” is prominently displayed on the shoe, reinforcing brand recognition and trust.

Product Strategy:

Nike RunSense complements Nike’s existing product line of performance running shoes. It adds value to the product portfolio by offering a technologically advanced option for runners seeking performance enhancement and data-driven insights. This product strategy aligns with Nike’s commitment to delivering innovative products that cater to the evolving needs of athletes.

PLC Status/Issues:

Nike RunSense is positioned in the growth stage of the product life cycle (PLC). While the smart shoe market is still evolving, there is growing consumer interest in fitness tracking and performance-enhancing technologies. As the market matures, Nike will need to continue investing in research and development to stay ahead of competitors and address evolving customer preferences.

Pricing:

Price for Consumers: The final price for consumers for Nike RunSense is set at $X, positioning it as a premium product that reflects its advanced features and technological integration.

Price to Intermediaries: Nike sells the product to intermediaries, such as retail stores, at a wholesale price of $Y, ensuring a reasonable margin for intermediaries while maintaining profitability.

Pricing Strategy: Nike adopts a penetration pricing strategy for Nike RunSense to gain market share and stimulate demand. By setting the initial price relatively lower than competitors, Nike aims to attract a larger customer base and build brand loyalty.

Pricing Adjustments: Nike may periodically offer sales promotions, such as limited-time discounts or bundle offers, to incentivize purchase and create excitement around the product. These promotions can help drive sales and increase market penetration.

Product Margins: Nike aims to maintain a healthy product margin of approximately Z%, considering the production costs, distribution expenses, and desired profitability.

Price Chains: Nike follows a direct-to-consumer distribution model, selling Nike RunSense through its official website, Nike retail stores, and select authorized retailers. This ensures control over pricing and brand presentation, providing a seamless shopping experience for customers.

Distribution:

Distribution Strategy: Nike employs a selective distribution strategy, focusing on strategic partnerships with established retailers that cater to the target market. This ensures the availability of Nike RunSense in key locations and aligns with Nike’s commitment to maintaining brand exclusivity and premium positioning.

Potential Channel Conflicts: Nike strives to maintain positive relationships with its retail partners and minimize potential channel conflicts. Clear communication, effective inventory management, and collaborative marketing efforts help mitigate conflicts and ensure a mutually beneficial partnership.

Availability and Number of Outlets: Nike RunSense is available in Nike-branded retail stores across major cities in Canada, as well as through authorized sporting goods retailers and online channels. The number of outlets will be strategically determined to ensure widespread availability while maintaining brand exclusivity.

Product Presentation and Display: Nike RunSense is prominently displayed in dedicated sections within Nike retail stores and authorized retailers. The product is showcased alongside other Nike running shoes, emphasizing its technological features and benefits. Visual merchandising elements, such as signage and interactive displays, are utilized to attract customers’ attention and educate them about the product’s unique capabilities.

Promotion:

Communication Objectives and Key Message: The communication objectives for Nike RunSense are to create awareness, generate interest, and position the product as the ultimate running companion for performance-driven athletes. The key message revolves around the product’s integration of smart technology, real-time feedback, and personalized coaching, enabling runners to unlock their full potential.

Promotional Mix:

1. Advertising: Nike will employ a mix of digital and traditional advertising channels to reach the target audience. This includes online banner ads, social media promotions, and partnerships with fitness influencers. Print media, such as running magazines and lifestyle publications, will also feature Nike RunSense advertisements. The creative will showcase the product’s features and benefits, emphasizing its technological innovation and performance enhancement capabilities.
2. Public Relations: Nike will collaborate with running event organizers and fitness communities to generate buzz and garner media coverage for Nike RunSense. Press releases, product reviews, and endorsements from professional athletes will be leveraged to enhance credibility and establish Nike RunSense as the go-to choice for serious runners.
3. Personal Selling: Trained sales representatives in Nike retail stores will engage with customers, providing in-depth product knowledge, and highlighting the unique features of Nike RunSense. They will offer personalized recommendations based on customers’ running goals and preferences, facilitating a one-on-one sales experience.
4. Sales Promotion: Nike may implement sales promotions, such as limited-time discounts or buy-one-get-one offers, to incentivize purchase and create a sense of urgency. These promotions will be communicated through various channels, including in-store signage, email marketing, and social media.
5. Direct Marketing: Nike will leverage its customer database to implement targeted email marketing campaigns. These campaigns will include personalized messages, exclusive offers, and relevant content to nurture customer relationships and encourage repeat purchases.

Media Selection: Nike will employ a mix of media channels to maximize reach and effectiveness. This includes digital platforms like social media (Facebook, Instagram), online display ads, and video streaming services. Traditional media such as television, radio, and print publications will also be utilized strategically to reach a broader audience. Media selection will be based on the target market’s media consumption habits, ensuring optimal exposure for the Nike RunSense campaign.

SECTION 2: Financial Evaluation

Break-even Units/Dollars:

To determine the break-even point, we need to consider the fixed costs, variable costs per unit, and the selling price of Nike RunSense.

Fixed Costs: $500,000 (including product development, marketing expenses, overhead costs, etc.)

Variable Costs per Unit: $50 (production costs, packaging, etc.)

Selling Price per Unit: $200

Break-even Units = Fixed Costs / (Selling Price per Unit – Variable Costs per Unit)

Break-even Units = $500,000 / ($200 – $50) = 3,333.33 units

Break-even Dollars = Break-even Units * Selling Price per Unit

Break-even Dollars = 3,333.33 units * $200 = $666,666.67

Therefore, Nike needs to sell approximately 3,333 units of Nike RunSense to break even, generating $666,666.67 in revenue.

Break-even Market Share:

To determine the break-even market share, we need to compare Nike’s projected sales to the total market size. Let’s assume the total market size is 100,000 units.

Break-even Market Share = Break-even Units / Total Market Size

Break-even Market Share = 3,333 units / 100,000 units = 0.0333 or 3.33%

Nike needs to capture at least a 3.33% market share to break even.

Projected Sales and Profit/Loss for Year 1:

To estimate the projected sales and profit (or losses) for year 1, we need to consider the market potential, competitive landscape, marketing efforts, and customer demand projections. Let’s assume the following:

Market Potential: 200,000 units

Projected Market Share: 10%

Selling Price per Unit: $200

Variable Costs per Unit: $50

Projected Sales in Units = Market Potential * Projected Market Share

Projected Sales in Units = 200,000 units * 10% = 20,000 units

Projected Sales in Dollars = Projected Sales in Units * Selling Price per Unit

Projected Sales in Dollars = 20,000 units * $200 = $4,000,000

Total Variable Costs = Variable Costs per Unit * Projected Sales in Units

Total Variable Costs = $50 * 20,000 units = $1,000,000

Total Fixed Costs = $500,000 (as mentioned earlier)

Total Costs = Total Variable Costs + Total Fixed Costs

Total Costs = $1,000,000 + $500,000 = $1,500,000

Profit/Loss = Projected Sales in Dollars – Total Costs

Profit/Loss = $4,000,000 – $1,500,000 = $2,500,000

Based on the projections, Nike is expected to achieve sales of 20,000 units, generating $4,000,000 in revenue. After accounting for variable and fixed costs, the projected profit for year 1 is $2,500,000.

Note: It’s important to conduct a thorough financial analysis and consider various factors to derive accurate projections. The figures provided here are for illustrative purposes and may vary based on actual market conditions, competitive dynamics, and other variables.

SECTION 3: Foreign Entry Potential

Selection of Country for Market Expansion: Canada

Justification for Foreign Entry Strategy:

1. Proximity and Similarity: Canada is geographically close to the United States, where Nike is already well-established. The proximity allows for efficient supply chain management and easier access to resources. Additionally, Canada shares cultural similarities and a similar consumer mindset with the United States, making it easier to adapt marketing strategies and product offerings.
2. Market Size and Potential: Canada has a sizable market with a population of over 37 million people. The country has a high standard of living and a strong economy, which translates to higher purchasing power and consumer demand. With its stable economic environment, Canada offers growth opportunities for Nike’s expansion.
3. Sports Culture and Lifestyle: Canadians have a strong affinity for sports and outdoor activities. They actively participate in various sports, including hockey, soccer, basketball, and running. Nike, as a sports brand, can leverage the existing sports culture and promote its products tailored to the Canadian market’s preferences and needs.
4. Competitive Landscape: While Canada has existing competitors in the sports apparel and footwear industry, there is still room for Nike to capture a significant market share. By leveraging its strong brand reputation, product innovation, and marketing strategies, Nike can compete effectively and differentiate itself from the competition.
5. Trade Agreements: Canada has favorable trade agreements, such as the Canada-United States-Mexico Agreement (CUSMA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). These agreements reduce trade barriers and facilitate smoother market entry and operations for foreign companies like Nike.
6. Growing Fitness and Wellness Trend: Like many other countries, Canada is witnessing a growing trend towards fitness, health, and wellness. More individuals are adopting active lifestyles and prioritizing their well-being. Nike can align its marketing efforts with this trend and offer products that cater to the needs of health-conscious consumers.
7. Digital Infrastructure: Canada has a well-developed digital infrastructure, with high internet penetration and widespread e-commerce adoption. This provides opportunities for Nike to leverage online channels, engage with consumers through digital marketing, and offer seamless online shopping experiences.

Considering these factors, expanding into Canada presents a promising opportunity for Nike to tap into a new market, leverage its brand strength, and capture a share of the growing sports apparel and footwear industry. With proper localization, marketing strategies, and an understanding of the Canadian consumer preferences, Nike can establish a strong presence and drive growth in Canada.

SECTION 4: Implementation

Key Marketing Plan Steps and Timeline:

Product Development:

Conduct market research and analysis: Month 1-2

Identify consumer needs and preferences: Month 3-4

Design and develop new product offerings: Month 5-8

Test and refine prototypes: Month 9-10

Finalize product features and specifications: Month 11-12

Secure Distribution:

Identify potential distribution partners: Month 13-14

Negotiate and establish distribution agreements: Month 15-16

Set up logistics and supply chain: Month 17-18

Ensure product availability in retail outlets: Month 19-20

Launch:

Develop marketing campaign and messaging: Month 21-22

Create advertising materials and content: Month 23-24

Pre-launch marketing activities (teasers, social media buzz): Month 25-26

Launch event or campaign: Month 27-28

Advertising and Promotion:

Implement advertising campaigns across various media channels: Month 29-34

Run digital marketing campaigns (paid search, social media ads): Month 35-40

Collaborate with influencers and athletes for endorsements: Ongoing

Implement public relations strategies: Ongoing

Introduce sales promotions and discounts: Month 41-46

Market Expansion:

Monitor sales performance and consumer feedback: Ongoing

Evaluate market response and adjust marketing strategies: Ongoing

Assess opportunities for expanding to new regions or cities within Canada: Month 47-48

Plan and execute expansion efforts: Month 49-52

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