Jeff Jensen writing in Advertising Age (1996) notes that Nike is a high profile athletic apparel and footwear company with a market share in excess of 35 percent. Rising into prominence during the late 1970s and early 1980s, Nike dominated its industry until the mid-1990s. In the last few years, Nike experienced difficulties in positioning itself effectively with young consumers -- who are Nike's largest and most important target market. Nike's marketing and promotional programs may focus on younger consumers, but the company makes shoes for anyone of any age and any gender. At one time, Nike shoes were targeted to athletes. Since the late 1980s, Nike has worked to transform itself from a brand of sneakers to a product integral to the sports culture it targets. From pro sports arenas to inner-city basketball courts refurbished, and from Foot Lockers stores to Niketown superstores, the ubiquitous Nike Swoosh this year was more recognized and coveted by consumers than any other sports brand.
Jensen explains that Nike realized that it needed to create specialized footwear in order to maintain its market share, and that even a large company that uses niche marketing must continue to refine and target their product offerings to different buyer groups. Nike reinvigorated a multi-billion dollar company that had plateaued by pursuing a market segmentation strategy. Nike began by designing and marketing athletic shoes for each different sport with specialized models within each sport such as "Air Jordan" basketball shoes. These specialized shoes were very popular and Nike reached peak sales around 1996 with several different specialized lines coming out that year (Jensen, 1996, 2).
Lane Randall explains in Forbes (1996) that changes in the social and economic structure of the country are blurring class lines and that increasing saturation of product categories is leading to fewer physical differences between brands. As a result, Nike ...