Select multinational organizations describe main line business organizations. Examine ways companies utilizes internet part marketing strategies. Identify current potential problems recommendations improvement.
Multinational enterprises (MNE)s: Nike and Kellogg
Multinational enterprises (MNE)s: Nike and Kellogg
A multinational enterprise (MNE) is defined as a firm that is based in two or more nations. Although they began as iconic American companies, Nike and the Kellogg Corporation have operations all over the globe and have customers in almost all of the developed and much of the developing world. But because of the different types of products they sell, the ways in which they reach their customer base — particularly online — are quite distinct.
The multinational company Nike uses the Internet to both advertise its products as well as to sell its products. Nike markets fashion-forward sportswear that is supposed to fill a functional purpose, but also is noteworthy because of its style. It is most famous for its shoes, but it also sells basketball, football and running gear as well. The website proclaims slogans like “built for speed” and “without mercy” beneath pictures of Nike products. This stresses Nike’s image as a company that sells clothing for serious sports enthusiasts, not casual wearers. Even non-athletes enjoy buying into the Nike ethos of competition and triumph.
The World Wide Web allows Nike to promote its newest products, such as NikeiD. The website can be tailored in a customer-specific fashion to the user’s nationality. Website users can select both the website language and their country of origin, so their experience can suit their personal, country-specific needs. The web thus offers a great advantage to multinational retailers like Nike, in terms of segmented marketing and actual sales. A website surfer from Brazil can read the Nike website in Spanish and have instant access to an impulse purchase of shoes in the colors of his favorite football team.
Nike’s website even allows users to custom-build their actual shoes, including choosing the color of every element of the design, from laces to ‘ Nike swoosh’ to sole. Collections of new items are immediately showcased on the website, so consumers can buy them even before they appear in their local stores. There are also team-specific web ‘show rooms’ which allow users to select the sport and teams that are particularly popular in their home country. This is another advantage for a MNE like Nike, as in the lucrative markets of Latin America and Europe the sport of football (soccer) and its stars and teams are very popular, unlike the U.S., where the very American sports of football and baseball dominate. Nike has made aggressive inroads into the European soccer market: “for the first time, Nike’s share of the soccer shoe market in Europe, 35%, exceeded [German] Adidas, at 31%. Nike has achieved that fast growth in part by using the same outsize marketing tactics that made it big in the U.S. It paid the prestigious Manchester United club an unprecedented $450 million over 14 years to run its merchandising and uniform operation” (Holmes 2004).
Through the use of online marketing, Nike can show a different side of itself to every nationality of fan — promoting Manchester United endorsements to British fans, while using NFL stars to promote its football gear in the U.S. Nike has been praised for adopting a more disciplined marketing strategy in recent years, largely due to its effective use of the online format (as befits a youth-focused company). The old Nike was far more instinctual. “It took a guess as to how many pairs of shoes to churn out and hoped it could cram them all onto retailers’ shelves. Not anymore. Nike has overhauled its computer systems to get the right number of sneakers to more places in the world more quickly” (Holmes 2004). Tracking sales patterns with technology and selling online allowed Nike to address the needs of specific markets more effectively than before, which is particularly important for a company that is selling an image and an attitude as much as a product. “By methodically studying new markets, it has become a powerhouse overseas — and in new market segments that it once scorned, such as soccer and fashion” (Holmes 2004). Using online sales data has resulted in a more efficient company: “Almost complete, it is already contributing to quicker design and manufacturing times, and fatter gross margins — 42.9%…up from 39.9%…Nike says that the percentage of shoes it makes without a firm order from a retailer has fallen from 30% to 3%, while the lead time for getting new sneaker styles to market has been cut to six months from nine” (Holmes 2004).
The Internet has allowed Nike to merge fashion, athleticism, and technology together, as embodied in its customized shoe technology, which allows buyers to select a discipline, a type of shoe, and to use the Internet to customize their design. Buying a shoe becomes an online ‘experience’ rather than a chore through the Nike website. Nike can also refine its image, nation-by-nation, discipline by discipline, on every frame of its website, ensuring that every buyer feels that the company embodies their own particular philosophy and ethos of sport.
Interestingly, Nike does not offer a specific online community message board for runners and fans of sports, either because of the expense and hassle of monitoring such Internet websites or because it feels that it would not attract much attention from fans of the product, given that there are already many sports-centric websites online. However, the near-cultish fascination for Nike products, particularly amongst running enthusiasts that love its cushioned she technology suggests that exploring such a feature might draw additional traffic to the site, and result in more sales.
In contrast to Nike, companies that cannot perform most of their retailing efforts via a virtual format have been using the web as a promotional venue, like the Kellogg Corporation. Kellogg sells ready-to-eat cereals and other breakfast items internationally. It has an online presence all over the world, as well as a ‘real world’ presence. Like Nike, this allows the company to tailor its marketing efforts to suit the image and preferences of international consumers. However, Kellogg’s use of the web is far more focused upon promoting its products rather than upon selling specific items.
Cartoon characters of its famous sweet cereals are featured on all of the Kellogg websites, spanning from Japan to Mexico to the United States. The delight of surfing the web and reading about iconic characters like Tony the Tiger is combined with interactive features, like being able to read and rate recipes using the product. Recipes on different Kellogg international websites can also be tailored to suit country tastes and needs (such as using the metric system, versus standard measurements, in every country besides the U.S.). Website visitors can obtain more detailed nutritional information (likely to be of particular concern for consumers of Kellogg’s more ‘healthy’ products) if desired, share ideas and suggestions with the company, and also use the product locator to find harder-to-locate items. By signing up for a free newsletter, consumers can gain the ‘privilege’ of being bombarded by Kellogg’s advertising. But unlike Nike’s custom-ordered shoes, there are no online products available exclusively for online readers, although some promotions can only be accessed by using the web.
Few consumers buy groceries over the web, and not directly from a large manufacturer like Kellogg. Instead, the website offers coupons and other incentives to purchase the product. There are some image-based aspects of the website’s promotional campaigns, such as the marketing of ‘health’ with its wholegrain products, but the overall company image is less consistent than that of Nike, as Kellogg offers a wide range of items, spanning from sugary snacks aimed at kids to wholesome foods aimed at adults. For very loyal customers, there are ‘rewards’ programs, like a Pop Tart rewards program that can be exchanged for different items. But overall, the website, unlike Nike, promotes the name and specific company messages rather than sells specific items. And the ‘image’ conveyed by Kellogg is more fun and less coherent than that of Nike. Nike sells an experience and an image that a consumer carries with him or herself, every time he or she wears the product — running, or going to a sports event. Kellogg stresses value, ease, fun, and health rather than luxury or determination. It is a decidedly middlebrow branding strategy — after all, more people eat breakfast cereal than participate in high-intensity sporting competitions.
Both Nike and Kellogg are extremely successful companies, and their use of the web indicates that there is no singular, ‘correct’ way to use the web for marketing purposes. The use must keep the likely needs of the target audience in mind (athletes and want-to-be athletes vs. parents and children) and also the product itself. For Nike, the website promotes its product and a coherent image; for Kellogg the web acts as an informative resource for consumers and a source of potential information about savings, as well as a venue for the company to promote its product lines in a variety of ways. The web has given both companies greater finesse in consumer segmentation, and enabled them to market certain core elements of their brands to different aspects of the international marketplace.
Holmes, Stanley. (2004, September 20) The new Nike. Businessweek. Retrieved March 3, 2011
Kellogg: Promotions. (2011). Homepage. Retrieved March 3, 2011 at http://www2.kelloggs.com/PromotionSearch.aspx?search=
Nike. (2011). Homepage. Retrieved March 3, 2011 at http://www.nike.com/nikeos/p/nike/en_US/?sitesrc=uslp
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