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Case Study of Nike’s Social Media Marketing Strategy

Info: 10727 words (43 pages) Dissertation
Published: 16th Dec 2019

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Tagged: MarketingSocial MediaBusiness Analysis

Executive Summary

 

This report examines how Nike utilizes their social media sites in an attempt to understand why they are so successful with social media marketing. This is accomplished by evaluating their social media marketing strategy with the N-Rel framework along with metrics and key performance indicators.

The issues associated with social media marketing revolve around a lack of knowledge and understanding of social media networks and social media marketing, resulting in many small business owners not reaping the full potential benefits. Frequently asked questions include ‘How should we be using Facebook for marketing?’ and ‘How should we be using Twitter for marketing?’

To answer these questions and resolve these issues this report analyses and evaluates Nike’s social media actions, as they are having great success on social media and therefore the present an ideal ‘Role model’ for Small businesses and start-ups to learn how to effectively implement a social media marketing strategy. The report looks into Facebook, Twitter and Instagram specifically.

Nikes strongest attributes are their use of each social media site as a small part of a much larger social marketing effort, targeting different audiences, linking platforms to each other and using each site to its strengths. I.e. Facebook as a main hub, Twitter for quick information sharing and updates, and Instagram for HD eye catching photos. They have great use of celebrities and advocates who help spread the Nike name to wider audiences. They run campaigns associated with big global sporting events as a way of extending their reach.

Recommendations.

  • Establish a good presence with fully functioning pages and correct details.
  • Post content at least once a week, ideally at peak times of traffic.
  • Use each platform to its advantages.
  • Track performance with the use of analytic tools

Contents

Executive Summary

Introduction

Identified issues in the report topic

Business contribution of report

Potential benefits

Aim:

Clarification of Theoretical Context

Gratification theory

Uncertainty reduction theory

Language expectation theory

N-REL framework

Representation

Engagement

Listening-in

Representation II

Engagement II

Listening-In II

Metrics and key performance indicators

Representation/ presence

Engagement

Listening- in

Summary of Current situation

Facebook

Instagram

Twitter

Nike’s Current situation

Evaluation and analysis

Representation

Network

Facebook

Instagram

Twitter

Twitter UK

References

Introduction

Social media marketing (SMM) is very much a global phenomenon, but has only recently grasped the attention of researchers and academics. Few studies have surfaces thus far concerning the managerial aspects of SMM. In fact, many business owners are lacking the knowledge and information to overcome the challenges associated with implementation of a successful social media strategy. With marketing being vital to a business success many are diverging from traditional methods of media into SMM due to the effectiveness and efficiency both in time and cost. This report shall be examining Nikes SM behaviour to better understand what a successful SMM strategy looks like through real life examples, focusing on the three largest social media sites to date. I.e. Facebook, Twitter and Instagram.

Identified issues in the report topic

Social media marketing is a fairly new, hot topic for research and discussion. While many studies concerning Social media (SM) have surfaced, they generally focus on social issues. Comparatively there are fewer studies on the managerial and marketing aspects of social media network sites. (Boyd and Ellison 2007; Cha 2009; Kelly, Kerr and Drennan 2010)

A study conducted by Miller in 2010 states that SMM plays a very important role in persuading consumers to buy. Subsequently Eida & Elghoty (2013), inform us that small businesses owners should employ internet marketing to successfully compete in a business environment. Other research also agrees that marketing plays an important role in the success of small firms increasing their chances of survival. (Walsh & Lipinski, 2009; Jasra et al., 2011; Cronin-Gilmore, 2012; Halibi & Lussier, 2014).

The business issue at hand is that small business owners often face challenges with using SMM to promote products and services. (Walsh & Lipinski 2009; O’ Donnel, 2011; Resnick et al., 2011) More specifically, the majority of small business owners Lack the knowledge to develop and implement a SMM strategy. (Resnick et al. 2011; Bharati, and Chaudhury 2012). Mendelsohn (2012) reveals that 53% of small business owners need help with SMM. Some of the most frequently asked questions include ‘How should we be using Twitter for marketing?’, ‘How should we be using Facebook for marketing?’, ‘How should we be using Instagram for marketing?’ (Marketingzen, 2016) Business owners and marketers aren’t seeing any benefits from their SMM efforts because they are lacking the knowledge and experience to implement a successful SMM strategy.

How should we be using Twitter for marketing?

How should we be using Facebook for marketing?

How should we be using LinkedIn for marketing?

http://marketingzen.com/60-common-questions-digital-marketing-answered/

Business contribution of report

Researchers have noted that marketing is important to the success of small businesses.  (Walsh & Lipinski, 2009; Jasra et al 2011; O’ Donnell, 2013). SMM is more cost effective compared to traditional media and companies are shifting their marketing budgets to e-marketing.  (Rollins, nickel and Ennis 2013)

As firms continue to relocate their marketing budgets from traditional to digital media in search for more cost-effective solutions, small business owners need to understand how to develop a well formulated SMM strategy. (Rollins et al, 2013)

The implications of this research include the potential to impact any small business by providing guidelines to help small business owners develop a successful SMM strategy, which can increase their competitiveness and survival rates.

Nike was one of the first companies to adopt SMM and have a well-founded, deep understanding of how to utilize each different social media platform to its advantage. (Linkhumans, 2015) The company is way ahead of basically all its competitors (such as Adidas, Reebok) in social media marketing. (Etter, 2015). Nike has a successful social media presence on Facebook, Twitter, YouTube, and Instagram. (Nike, 2016). They have many subcategories of Nike on social media like Nike-women for example. Nike sets a good example as a success story to analyse because of their early adoption of Social media marketing and their effectiveness after perfecting their strategies through real life experiences. Thus, it fits well as to the purpose of providing a success guideline on how to use Facebook, Twitter and Instagram for small businesses that are struggling with their SMM strategies.

Potential benefits

Researchers have cited potential benefits of Internet marketing.  Some of the benefits mentioned in the research apply to enterprises of all sizes, however some authors focused on highlighting the ways marketing online can benefit small and medium sized businesses (Harrigan et al., 2011; Kim et al., 2013). Researchers agreed that the benefits of internet marketing could help small firms become more competitive.

Researchers have demonstrated that the use of the internet may help improve a firm’s operational and marketing efficiency (Hamidi & Safabakhsh 2011; Huang & Tsai, 2011; Eid & El-Kasswawy 2012; Dlodlo & Mafini, 2014). For example, Hamidi and Safabakhsh (2011) cited affordability of online marketing compared to other channels. The internet offers a range of opportunities for firms to achieve marketing and operational efficiency gain by lowering costs (Boyle, 2011; Hanafizadeh et al, 2012). Therefore, internet marketing may have a positive effect on the efficiency of marketing expenditures.

A benefit of SMM is the ability to reach wider audiences and advertise anytime and anywhere (Hamidi & Safabakhsh, 2011; Dehkordi et al., 2012; Fan & Tsai, 2014). Online marketing allows companies to grow internationally and expand to new markets; it also allows reaching audiences across different devices. Small businesses owners can use online marketing to extend their reach and promote their product or service to potential customers outside of their area (Sinkovics & Sinkovics, 2012) The ability to compete with larger organizations and reach more customers is important for small businesses.

Online marketing provides a cheaper and faster way of increasing brand awareness and bran d building. The use of online tools such as websites, e-mail, online advertising, viral marketing and social media allow companies to increase their brand name awareness, loyalty, perceived quality and brand associations (Shanna, 2011; Simmons, Armstrong, & Durkin, 2011).

Understanding of the target audience can help identify appropriate channels and tools for communication with prospective and current customers (Durkin, 2013; Simmons et al., 2011).

The complexity and diversity of Internet technologies often require specialized knowledge and understanding of potential challenges and perils (Bordonaba-Juste, et al., 2012). For this reason, a case study was chosen to exhibit successful SMM strategies through real life situations.

Aim:

The purpose of this research is to evaluate Nikes social media marketing strategies on three Social media sites: Facebook Twitter and Instagram, in order to provide an in depth understanding of how social media is used in a business environment for marketing and to provide a clear picture of a successfully implemented SMM strategy.

 

 

Clarification of Theoretical Context

Social media is a fairly new concept, advertisers and companies now utilize SMM as a major aspect of their showcasing procedure. Nonetheless, the use of SMM has only just gained attention in the field of research.

A lot of the success in SMM can be explained by different communication theories. Communication theories are used to explain the behaviours of people. This information can then be used to make SMM strategy decisions, in order to appeal to people.

Gratification theory

This theory is an approach to understanding why and how people actively seek out specific media to satisfy specific needs.

Mark Levy and Swen Windahl (1984) provide a good definition of an ‘active user’. The term audience activity postulates a voluntarist and selective orientation by audiences towards the communication process. It suggests that media use is motivated by needs and goals that are defined by audience members themselves, and that active participation in the communication process may facilitate, limit or otherwise influence the gratifications and effects of exposure. For example, entry into a contest for a prize by liking or following the media page, gives people a reason to seek out the SM page.

Uncertainty reduction theory

The uncertainty reduction theory was developed by Charles Berger and Richard Calabrese in 1975. It is one of the only communication theories that specifically considers the initial interaction between people prior to the actual communication process. The theory asserts the notion that, when interacting, people need information about the other party to reduce their uncertainty. In gaining this information people can predict the counterpart’s behaviour and resulting actions, all of which according to the theory is crucial in the development of any relationship.

Consumers can tell a lot about how a business treats its customers by how they act on SM. For example, if someone sees that many customer inquiries are ignored or handled unprofessionally, it might put them off.

Language expectation theory

Developed by Burgoon and Miller (1971), also known as the theory of persuasion, this theory assumes that language has a specific set of rules that are developed by the context and situation in communication. Businesses need to make sure they are using the right tone for the context. For example, it should be more formal on SM but not too informal that it’s not taken seriously. By using the correct language and the expected patterns, customers are happy and at ease with the company.

N-REL framework

Due to SMM still being in its early stages a framework has been established by analysing the different concepts and theories relating to Marketing, business and SM.

The N-REL framework on SMM strategies was approached by Ananda, Hernández-García, and Lamberti (2016) and is heavily influenced by the work of Constantinides (2009) and Mergel (2013). This framework is still limited by the fact that it does not cover B2B marketing.

One of the first decisions to be made for SMM tactics is the choice of SM platform to be used. Each SM platform promote different functions, features and characteristics. Therefore, companies should choose their platforms according to the tactics the wish to employ. Some SM sites are more adequate for particular types of content compared to others.eg Instagram for graphic content. Some SM sites are more appropriate for specific audiences within a network. (Falkow, 2011).

When choosing which SM site to use, companies must consider the different applications and capabilities each site features. The design and structure of the social networks hence characterize the roles and relative impact of every actor. (Peters, Chen, Kaplan, Ognibeni, & Pauwels, 2013) propose that the accompanying system measurements portray the network structure of a social platform.

  1. Size e.g. Number of actors
  2. Associations/connections
  3. Distributions
  4. Segmentation

After the planning and decisions phase there are three types of actions for a company to implement.

Representation

This encompasses the SM actions associated with the delivery of marketing content i.e. Information about the company and products.

Engagement

This include the activities that enhance interactions with customers.

  • Customer relationship management
  • One to one marketing
  • Customer empowerment
  • Customer support
  • Product customization
  • Loyalty programs

(Muller-Lankenu; wehymeyer & klers (2006)

For B2B, ‘engagement’ involves relations along the supply chain.  (Jussila, Kärkkäinen & Aramo-Immonen, 2006)

Listening-in

This is a passive approach to SM engagement aimed for research and intelligence. Eg. Identification of relevant actors of influence.

The above-mentioned categories have been further divided into 10 actions.

 Representation II

  1. Public relations: communications in marketing aimed at gaining public understanding and acceptance. (Hollensen, 2010)
  2. Sales and promotions (Ananda et al, 2016)

Engagement II

  1. Engaging with SM personalities or advocates. (Constantinides 2009,2014)
  2. Personalizing user experience/products to strengthen relationships between consumer and brand. (Constantinides, 2009,2014)
  3. Product development through personalized products. The companies can gain valuable feedback and offer personalized products to other customers.
  4. Participatory promotions: Providing incentives for consumers to share feedback and reviews on products (Parent, Plangger and Bal 2011)
  5. Engaging with the competition. The main goal for this is competitive analysis (Bianchi and Andrews, 2015)
  6. Customer support: Proactive engagement with consumers to post concerns or feedback. (Andzulis, 2012; Ananda et al., 2014) Engage with suppliers and business partners for B2B context (Michaelidou et al., 2011; Ananda et al., 2014)

Listening-In II

  1. Market research for the selection of target markets and monitoring the voice of the consumer (Slater & Olsen 2001; Ananda et al., 2014)

For the most part, representation actions involve posting success stories on SM, (Andzulis et al., 2012) SM advertising (Curran, Graham & Temple 2011) or consumer appreciation posts. (He et al., 2013)

On the other hand, Engagement-situated SMM activities aim to set up long term relations with consumers by drawing in online influencers, (Saravanakumar2012) Connecting with consumers to share brand encounters (Ananda et al., 2014)

Listening-in mostly includes the firm’s use of market sensing to learn about customers and competition. Allowing constant identification of occasions and patterns in present and forthcoming markets (Day, 1994)

Entities that approach a transactional marketing approach will likely lean on representation actions, whereas relationship based marketing will focus greatly on engagement actions to take the most out of SM opportunities. (Ananda et al., 2014)

Metrics and key performance indicators

For the purposes of this report both Quantitative and Qualitative secondary data has been collected for analysis and evaluation.

Three SM sites have been chosen due to their size and success on the SM arena. These are Facebook, Twitter and Instagram. The three sites are to be evaluated by how the company utilizes each for their applications and features, using key performance indicators to assess the level of success from the actions performed.

 Representation/ presence

The first step to assessing a company’s presence is to confirm the existence of their official page the SM sites in question.

Representation can then be measured by followers/ fans of the page, since the SM page is the initial connection for public understanding and acceptance. Presentation and stream lining of the page is very important. For example, high definition pictures and videos are more likely to catch the user’s attention. In the case of stream lining, content should be uploaded directly to the SM site rather than posting a link to a different page. This enhances the consumers experience by making content viewing easier and faster.

The number of inbound links can also be considered in evaluating presence. Inbound links are web-links on the SM site that redirect the user to the company’s official website. Using inbound link statistics, a conversion rate can be calculated. Conversion rate is defined by the amount of purchases made from an official website after redirection from a SM site. [  ]

The followers and fans statistics can be cross examined with sales and promotion periods to evaluate correlations. [   ]

 Engagement

Engagement can be measured through six categories:

  • Likes – number of times someone clicked the ‘Like’ button.
  • Comments and replies.
  • Video views.
  • Shares/ retweets- how many times a post is forwarded.
  • Clicks – average clicks per post.
  • Mentions- number of times tagged on a comment.
  • Reach – metric to determine the potential size of an audience any given message could reach.
  • Share of voice- social media mentions compared to competition.

From these six features, we can calculate day to day or monthly growth rates. Total engagement can then be calculated along with engagement per post and engagement per follower.

The growth and fluctuations of this data can be analysed against campaign ads, promotions, product personalization campaigns and content produced with celebrities, SM personalities and advocates.

 Listening- in

A company’s listening- in potential can be assessed by the speed of issue resolution on SM, how quickly consumer queries are attended to. This also ties into the uncertainty reduction theory. This can also be influenced by the post rate per day which can control exposure. The time of day in which content is released must show consideration of peak traffic times.

Following the language expectation theory, we can consider the type of language that is used whether it be slang, motivational or informative according to the content it portrays.

Summary of Current situation

Facebook

Facebook currently has over 1.94 billion monthly active users as of March 2017, with 44 million in the UK alone. This is an 18% increase from last year. (Aslam S. 2017) There are 1.28 billion daily active users worldwide with 25-34-year olds covering 30% of all users. (Aslam S. 2017). Highest traffic occurs midweek between 1-3 pm with engagement increasing significantly in the evenings. (Asano, E. 2017; Aslam S. 2017) On Thursdays and Fridays engagement is 18% higher than during the week and an average user will spend around 20-35 minutes per visit. (Asano, E. 2017)

Facebook is a SM site that allows users to create a profile and connect with friends and likeminded people with the availability of posting content in the form of pictures, videos or text offers a range of features to its users.

Newsfeed

This is the initial system that facilitates exposure to the user. (Backstrom, 2013; Robinson, 2014) This feature is common across most sites.

Timeline

The timeline can be described as a virtual space where content from users is organized and presented according to the time period in which it was uploaded or created. (Cartridge, 2016)

Likes and reactions

The ‘like’ and ‘reaction’ buttons allow users to interact directly with posts, comments, pictures or videos and click according to whether they like the content or not. (Kincaid, 2009) Five reactions have been available as ‘Love’, ‘Haha’, ‘Wow’, ‘Sad’, or ‘Angry’. These are also available for comments.  (Garun, 2017; Cohen, 2017)

Shares

Shares allow the user to essentially forward public content onto their network of friends and followers. (Facebook, 2017)

Comments

Comments allow the users to speak their mind and share their experiences directly onto a post, picture, video or even another comment. (Facebook, 2017)

Notifications

Notifications are alerts that inform users of updates on posts they have liked, commented on or shared. Users can also subscribe to pages or events without having to be friends with the counterpart in order to receive updates and reminders. (Darwell, 2012; Facebook, 2017)

Photos and pictures

The SM site provide users with the capability to upload photos and pictures. (Kincaid, 2010) and in 2016 they started accepting 360-degree photos as well. (Statt, 2016; Bell, 2016)

Video

A video platform has also been added where, similarly to photos, users can tag, comment, share and react to videos posted (Cashmore, 2007). Video uploads also include a view count (Constine, 2014). Video content can also be live streamed with real time comments and discussions. (Gartenberg, 2017; Constine, 2017)

Facebook have also created a ‘Call to action button’ which is customizable in order to enable page administrators to add external links (outbound links) to their official website (Facebook, 2017).

Instagram

Instagram currently has 700 million users globally (Instagram, 2017; Aslam S. 2017; Statista 2017) of which 400million are in active every day (Aslam S. 2017; Statista 2017). 300million users are in the UK alone with an average of 14 million monthly active users. (Aslam S. 2017 Statista 2017) The majority of Instagram users are between the ages of 18 and 29 (Aslam S. 2017; Asano, 2017). On average the highest traffic for engagement occurs at 5 pm on a Wednesday and the average time spent on the SM site per visit is 15-20 minutes.  (Asano, 2017)

Instagram’s main features are for uploading pictures, videos and following other users’ feeds (Gilbertson, 2012). Photos can be geotagged with a location (Long, 2012). Instagram accounts can also be linked with other SM sites i.e. Facebook, providing ease of access and enabling users to upload content to other SM sites through Instagram. (Instagram, 2017)

The SM site offers a wide variety of filters for photo editing directly on the site (Huang, 2013; Ulanoff, 2013). They also allow high definition and full-size landscape photos (Yeung, 2013) to the point where one can upload up to 10 pictures in one post (Ha, 2015; Lopes, 2014; Instagram, 2017). The site also supports widescreen videos of up to 60 seconds (Instagram, 2017) with a further capability of also uploading 10 videos per post (Instagram, 2017; Lopes, 2014; Ha, 2015).

Twitter

Twitter has 328 million monthly active users worldwide as of June 2017(Aslam S. 2017; Statista, 2017) with around 20 million in the UK. 64% of users are between the ages of 18-29 (Statista, 2017; Asano, 2017) with peak traffic times on average occurring between 11am to 3pm and at 1 am. (Asano, 2017) The average time spent on twitter is 1-10 minutes (Asano, 2017; Statista, 2017).

Twitter is characterized as a microblog allowing users to post short tweets (text messages) up to 140 characters long. Users can then follow others and read their tweets. (Kwak, Changhyun, Hosung & Moon 2010) Hashtags are used to categorize content (Kwak et al., 2010). Twitter offers verified accounts for official pages, celebrities and social personalities. The SM site has video streaming capabilities and photo uploading features although inferior to Instagram’s. Users are still able to interact directly with the content by liking, commenting or sharing. (Kwak et al., 2010) Twitters main application is the speed of which short tweets can be released conveying powerful messages or vital information. Also, great for customer support and queries.

Nike’s Current situation

Nike being the multinational brand that it is and SM being a global phenomenon, it is no surprise that Nike does not maintain a separate SM page for each country/region they operate in. In fact, they have been very smart in their utilization of SM sites. They have decided to operate their Facebook and Instagram accounts for global audiences, but have separate Twitter accounts depending on the country it covers. This route of operations has been developed around the uses and features of each SM site. As there use of Twitter involves ore informational posts, event details or announcements for new releases it had to be location specific. For this purpose, the report is considering the official Nike pages on Facebook, Instagram and Twitter but also taking into consideration the Nike_UK Twitter account as an example of location specific content.

The official and verified Nike page on Facebook currently has 28,424,624 followers and 28,685,046 Likes. Nike averages 0.13 posts per day and 1.0 average posts per week. Average engagement is 21,000 interactions per day or 156,000 per week. They are experiencing 219 interactions per 1000 followers per day which translates to 509,000 per week. (Facebook.com, 2017; Socialbakers, 2017)

The official and verified Nike page on Instagram currently has 73.4 M followers and 904 posts. They are also following 136 accounts. They have an average of 0.10 posts per day and a 0.75 for posts per week. Average engagement is 21.7k interactions per day and 163k per week. 88.8 interactions per 1000 followers and an average follower growth rate of 5.1k per day or 37.4k per week. (Instagram, 2017; Socialbakers, 2017)

Nike currently have a verified Twitter account as their official Nike page but they also maintain a verified account for the UK i.e. Nike UK.

The global Nike page has 7.11M followers, 5533 Likes and an average of 0.17 posts per day or 1.25 posts per week. They have a total of 32,3k Tweets with an average of 1.6k mentions per day and 11.2k per week. It has an average engagement of 1.7k interactions per day and 12.7k interactions per week. (Twitter 2017; Socialbakers, 2017)

The Nike_UK page has 409k followers, 1573 Likes and an average of 0.43 posts per day or 32.5 posts per week. It has a total of 21.8k tweets with an average of 67.07 mentions per day or 488.5 mentions per week. The follower growth rate is 9,100 followers per day or 6538 followers per week. (Twitter 2017; Socialbakers, 2017)

Evaluation and analysis

Representation

Nike have a multitude of SM accounts on various SM sites, namely Facebook, Twitter, Instagram, YouTube, Linked-In, Pinterest.  They have different accounts for each of the sports they are involved in e.g. Nikebasketball along with separate accounts for the major regions in which they operate e.g. NikeCanada. They even provide a page offering help to athletes from other athletes.

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Figure 1- Extract of Nike search on Twitter, 2017

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Figure 2-Extract of Nike search on Facebook, 2017

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Figure 3- Extract of Nike search on Instagram, 2017

So, as not to overcomplicate matters, this report focuses specifically on the activities presented on Nikes general accounts and their NikeUK Twitter account.

The SM sites Facebook, Twitter and Instagram have been chosen for this report as these are the three largest SM sites. Nikes choice of actions for each SM site correspond the features and characteristics that each site has to offer.

Network

Facebook

Nikes page on Facebook operates much like a hub for their online presence and activities. It functions as a normal fan page but also has customizable tabs that are linked directly to their Instagram page as well as to a support page. Other outbound links direct users to their main website and they even incorporated a ‘Shop now’ button redirecting users to Nikes online store. () Facebook is the most suitable for this strategy as it offers the widest variety of features and has the largest user and follower base compared to other SM sites. Facebook have even dedicated a setup process solely for business allowing greater freedom in customization. ()

C:UsersTinyMightAppDataLocalMicrosoftWindowsINetCacheContent.Wordfbnikepage.png

Instagram

C:UsersTinyMightAppDataLocalMicrosoftWindowsINetCacheContent.WordIG nike.png

Twitter

C:UsersTinyMightAppDataLocalMicrosoftWindowsINetCacheContent.WordTWnikepage.png

Twitter UK

C:UsersTinyMightAppDataLocalMicrosoftWindowsINetCacheContent.WordTW UK nike.png

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