P1: describe how marketing techniques areused to market products in two organizations. For this essay, I will be discussing how market techniquesare used to market products in both of my organizations which are Nike and BurgerKing. Nike is a multinational corporation that specializes indesign of sports apparel.
It was founded by Phil Knight and Bill Bowerman in1964 and has been a crucial player in the sports industry. Burger King is an international Fast Food establishment startedin 1953 by James Mclamore and David Edgerton. The fast food chain has over15,000 locations worldwide, making it one of the largest Fast Food chains inthe world. Nike & Burger King both use various marketing strategieswhen marketing their products such as diversification, market penetration,product development or market development. These strategies are more commonlyknown as growth strategies.
Growth strategies are any marketing strategy withthe purpose of building a larger market share. Market Penetration: Nike uses market penetration to achieve growth with theircurrent products in their existing market segment, with hopes of increasingtheir market share. Nike would use this to market specific products, such asthe Air Jordan. The Air Jordans is a brand of basketball shoes produced by Nike,it was first created for legendary basketball player, Michael Jordan. The Air Jordans were introduced 1984 and have been a hugesuccess since. Nike would use market penetration when aiming to get a largermarket share with their Air Jordans. The reason for penetrating into newmarkets is to increase customers and profits. To penetrate a market, Nike wouldincrease manufacturing and promotion on the product they wish to sell, allowingthem to appeal to a larger number of consumers.
It is unnecessary that Nikemust change their product when penetrating a new market, instead the product iseither sold cheaper or further endorsed. The Air Jordans were in immense demand due to the fact thatit was endorsed by Michael Jordan, it became available to the market but wassold at extremely high prices. Soon, demand dropped, and Nike decided to usethe strategy, market penetration, to sell more. They dropped the prices andimmediately sales went right back up and profits increased. Burger King would also use market penetration in a similarmanner, a lot of their products are heavily endorsed by celebrities in movieswhich has immensely helped them grow their shares in the market and increaseprofits. Burger King used Market penetration as a means of marketing theWhopper. The whopper is a signature sandwich, introduced in 1957. Their burgers were in heavy demand due to their immenseadvertising and endorsements.
Their main competitor at the time was McDonald’sMcDLT, which was also in rising demand, and they had to do something to be ableto remain profitable. To increase their sales and attract customers, theWhopper reduced in price and was able to penetrate the competitive market. Diversification Nike uses diversification to achieve growth with newerproducts in new markets. It is a form of expansion, as a new product line andmarket are added. The sports market has a wide variety of interests and needsthat major corporations have to cater to.
An example of this is Nike’s TanjunShoes, these shoes were initially released to cater to a whole new market. The shoes incorporate a more casual style and feel comparedto Nike’s lineup prior to its release. It was also made as premium wear, thatbrought both casual wear and sports-wear closer to each other.
The reason behind diversifying product lines, is simply tocater to a whole new market. By doing this, Nike are able to grow theircustomer base, which upturns their overall profits too. Burger king also uses diversification in a similar fashionto help them achieve growth and increase their customer base. The fast foodmarket keeps evolving to cater to the consumer’s needs. It is considered one ofthe most competitive markets due to its constant evolution. Diversification is one of the mostsuitable marketing techniques to gaining a larger customer base. When BurgerKing announced their Veggie Royal they immediately saw a shift in the responsefrom consumers.
Through the announcement of the Veggie Royal they were able toprovide options for the vegetarian consumers which saw a huge increase in theirconsumer base as well as their profits. Market Development: Market development is used by Nike to target existingproducts to new market segments or untapped markets. This marketing strategyhelps organizations significantly expand their market share.
Businesses likeNike split the market into 4 criteria; existing customers, competitor’s customers,non-buying customers in their current segment, as well as new segments These 4 criteria help Nike focus on the separate groups theywish to cater to. To target existing customers, they provide a wider variety ofshoes according to customers’ needs and demands, this keeps existing customersloyal to their business. To target competitor’s customers, Nike offerpromotions or discounts on products to improve their sales against companies likeAdidas. To target Non-Buying customers and segments, they improve their pricingpolicies as a means to attract their untapped customers to their existingproducts. The strategy is also used by Burger King in a similarmanner.
To target their existing customers Burger King would offer a differentset of menus, similar to Nike, this helps build customer loyalty, as customersare given more variety to choose from. To target their competitor’s customers,they offer discounted menus such as the Value Menu or similar products tocompete with competition, an example of this would be the BK fusion an icecream created to compete with McDonald’s Desert Menu, specifically their McFlurry.To target Non-buying customers and New segments, they take part in a lot ofmarket research to understand lifestyle changes or trends to help cater to. Anexample of this would be in the UAE, portions are preferred relatively smallerthan the large portions offered in places like the USA. Burger King had reducedtheir portions and offered less patty or smaller buns in their burgers to caterto the new segments or non-buying customers in the UAE. ProductDevelopment Product development is the process or steps of creating anew product, this includes conceptualization of the product, its design, aswell as the marketing steps.
Nike are constantly developing products as it isessential that they maintain their reach and consumer base. By constantlydeveloping new products, Nike are able to have a more loyal consumer base,hence it is considered a crucial business process. Product development also includes the process of improvingtheir existing products, Nike are constantly looking for ways to improve theirproduct line. Air Jordans are a pair of shoes that are constantly revamped andimproved for the target market. The Air Jordans are released almost yearly,each with a new and improved look.
From the Air Jordan 1 to the latest AirJordans, it is easy to notice that this product is being constantly remade tofit the demands. Nike also use productdevelopment to target untapped markets within the sectors they already operatein, without having to come out with completely new products. It is a simplermethod of growing the consumer base, yet it allows Nike to spend less time ondeveloping a whole new product from scratch.
Burger King have only operated within the food sector, yetthey always develop new products or improve their existing products to helpcater to their consumer’s needs. The whopper has been recreated many times, andis now a part of a wider variety as opposed to remaining solely a burger.