The study focuses on Nike’s pricing strategy for their sneakers in the US markets. The shoes are designed for use in a variety of sports. This shoe offers the wearer a high level of comfort and efficiency in their tasks. Nike has remained a world leader in footwear for many years, particularly sneakers for sporting. This company has created many patterns that correspond to other sports throughout the US, and with its high demand, this product has effectively become a monopoly.
Product Description
Regardless of the sports, Nike sneakers offer cool and efficient designs. The company designs the shoes to be suitable for sporting activities, and the shoes also provide a fashionable aesthetic. An excellent sneaker design helps a sportsperson be comfortable and improves performance (Bouredji et al., 2020). The range of colors in the shoe creates a beautiful contrast with the items worn. Every time, Nike sneakers are updated with a fresh, exciting design. Typically, the brand creates plans based on the sport and incorporates certain traits to aid the athlete’s performance.
Life Cycle
Nike is in the growth stage of its life cycle, enabling the establishment of value generation abilities that allow firms to obtain more resources. To gain a competitive edge, the corporation might strengthen the division of work at this stage (Bouredji et al., 2020). Nike sneakers are built to last; they are made of long-lasting materials. In any athletic shoes, durability is an essential factor to consider. The more lasting a shoe is, the further likely it is to be accepted by even persons with financial difficulties.
Pricing Goals
Nike’s primary goal is to provide the consumer with quality sneakers at lower prices than their competitors in the United States. Nike employs value-based pricing, which is when a corporation determines its price based on the perceived worth of a product by the buyer (Bouredji et al., 2020). Most firms assume that selling things at the lowest price would result in more sales. Nike focuses on providing the highest customer value, and it will imply the highest-quality, most exquisitely designed, and most inventive goods at an affordable price.
Key Determinants of Price
Price is a critical part of any business since it is the primary predictor of the profit to be made following the sale of a product and hence determines the company’s success. Establishing the price of the sneakers determines what a company will get in return for its goods. The manufacturing cost, competition, market location, condition, and design of the shoes are all elements that influence the price (Choo et al., 2021). Consumers’ perceived value of the product must also be considered when choosing pricing to guarantee that clients pay the price comparable to the value received.
Pricing Methods to Choose a Pricing Strategy
Cost-plus, markup, and demand pricing are some of the most well-known pricing approaches. Markup is the pricing that is identical to that of the rivals. Cost-plus is when a product’s producer sells at retail. Competitive pricing may be thought of as a kind of Markup Pricing, and this approach is used when a specified percentage (Amalia et al., 2020). It may differ depending on the product. In demand pricing, merchants leverage their understanding of consumer demand and potential value to determine the highest price that customers are ready to pay.
Fine Tuning
Price is an integral part of any company’s business plan—price influences the client, purchasing habits, the firm, and the economy. Customers consider pricing a primary signal of high-quality goods and an essential consideration in making a purchasing choice (Choo et al., 2021). As a result, price strategy is the most crucial aspect of marketing strategy; therefore, to determine the pricing nature, the company must find the type of competition in the industry, the elasticity for that specific product, and the manufacturing cost present in the market.
References
Amalia, M. M., Marviana, R. D., & Sumekar, A. (2020). Analisis perhitungan harga pokok Produksi Dengan Metode Full Costing Dan Penentuan Harga Jual Dengan Pendekatan Cost-Plus Pricing (Studi Kasus Pada Rumah Produksi Wan Tempeh). Jurnal Mutiara Akuntansi, 5(1), 33-45.
Bouredji, K., Gupta, R., & Jester, G. (2020). EveryWear Marketing Plan.
Cho, S., Brison, N., Brown, K., & Quinn, K. (2021). A theoretical explanation of sport Trademark Litigation: Already v. Nike and Forever 21 v. Adidas. Journal of Global Sport Management, 1-25.