It appears that Wall Street is disgruntled with Nike’s inability to perform according to its long-time mantra: Just Do It. The Nike brand turnaround is apparently taking too long for those who desire immediate financial reward: Just Do It Now.
Nike’s turnaround will not be easy. The company remains a major global brand with a broad portfolio, but the market has changed significantly since the end of COVID-19. Strategies that worked during the pandemic era are no longer enough to drive growth, relevance, or competitive advantage.
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Nike’s CEO, Elliott Hill, indicates that the turnaround will be “multi-year.” The aim is to generate sales, regain market share, and resuscitate Nike’s formidable sports-performance innovation to compete with the popular, fashionable“must-have” brands Hoka and On. Currently, Nike is in its “stabilization” phase of the turnaround, aka, stop the bleeding.
Turnaround experts agree that the first “must-do” turnaround action is to “Stop the bleeding.” This means both stopping the financial bleeding and stopping the bleeding of the core customer base. The immediate goals are business survival and brand revival.
Reports in the online business press highlight key elements of the action plan, such as:
- Refocusing on the brand’s provenance of innovation on behalf of sports performance.
- Organizational restructuring, including re-segmenting by customer sports- performance needs and problems.
- Returning to healthy retail relationships.
- Returning to healthy margins.
- Optimizing inventory control.
All of these actions are critical for a successful turnaround.
One of the key aspects of Nike’s turnaround is needs-based, occasion-driven segmentation of customers. Nike CEO Hill hopes to regenerate brand interest and preference by using segmentation to focus on customers. The main core business must be protected and cultivated. In a turnaround, focus energies on communicating, implementing, nurturing, developing, enhancing, and reinforcing the brand’s core purpose among its core customer base. Be the best at something relevant and differentiated. Never compromise quality in the name of efficiency or availability. Focusing on the customer affects the entire organizational structure.
In a CNBC interview (October 2025), the new CEO, Hill, said that previous Nike leadership, dealing with COVID-19, focused on Nike-to-consumer relationships and lifestyle segments rather than on performance and innovation. Walking away from Nike’s performance heritage scarred the brand. This is why the current segmenting of the core customer by their performance needs and problems is so relevant. Brands gain an incredible understanding of needs and problems through segmentation.
Summarizing the interview, CNBC wrote:
“Hill is also changing the way the business is segmented and returning it to its historical roots. Instead of dividing the company into women’s, men’s, and kids’, (previous CEO) Donahue’s strategy to drive lifestyle sales, Hill is reworking the corporate structure so the company’s departments are focused on individual sports.
“’They have small cross-functional teams in each of those segments, if you will, of business, and the idea is that the consumers in each of those segments and the competition in each of those segments is different, and so by having these small cross-functional teams … that’s really helped us get sharp in a couple of areas,’ said Hill.”
The relatively new competitors, such as On and Hoka, do not have the core performance credibility of Nike. By segmenting on performance problems and needs, as well as the occasions when these problems and needs arise, Nike can modernize its past into an enviable present and future.
If you think market segmentation is old-school, you are wrong. If you think AI can provide the same customer experience with the push of a button, you are jeopardizing the brand. Market segmentation requires creative insight and synthesis.
Market segmentation requires both craft and research skills. Contrary to what many academics, researchers, and consultants say, the output of a segmentation study does not reveal the truth. In fact, segmentation can – and should – raise more questions than you had beforehand.
If analyzed and synthesized with intelligence and creativity, market segmentation can provide insight into the following:
- Superior understanding of the customer so the brand can provide an outstanding competitive advantage
- Strategic focus that is fundamental to effective marketing
- Identifying market priorities; effective market segmentation drives business strategy, not just brand strategy
A proper market segmentation should help you answer these three key questions:
- Who are the prime customers and prospects?
- What are their needs and problems?
- What are the occasions in which these needs and problems occur?
A market segment is a specific group of people who share common needs and problems in a common context. Product categories, channels, and price categories are not market segments. There is no such thing as the granola bar market, for example. There is a market for portable, quick, easy-to-eat nutrition. There is a market for an afternoon pick-me-up. There is a market for a healthy, attractive, fit body. There is a need for portable protein before or after strenuous activities. There is a need for a non-messy, vitamin-enriched gym-bag food.
Needs-based occasion-driven segmentation avoids price, industry, product, and channel segmentation, which provide generic manufacturers’ viewpoints rather than customer-driven realities.
The focus on customer needs was reinforced in the CNBC summary.
“Under Donahoe, Nike faced criticism for falling behind on innovation and losing market share because it was so focused on driving sales of classic styles, like the Air Force 1 and Nike Dunks. Changing the company structure is one of the ways Hill plans to reignite innovation because the teams will be squarely focused on the individual needs of different athletes, allowing them to create and deliver better products for those consumers.”
Whether Nike is actually conducting new research is unclear. However, one can assume that a brand such as Nike has conducted extensive research into its core.
During the 2003-2004 McDonald’s turnaround, which took the 2003 share price of $12 to over $75 a share in a year, global needs-based occasion-driven segmentation was a crucial element of success. No new segmentation study was commissioned. McDonald’s had decades of research on its customers, over 184 studies. All of that research was synthesized into an overarching view of the global marketplace. The new McDonald’s needs-based occasion-driven segmentation affected everything, including new product development, by setting the innovation bar high, beginning all product development with the customer’s problem or need.
Brand should strengthen competitive position, pricing power, and enterprise value. The Blake Project helps make that happen.
For example, in 2003, research indicated that moms with children visited McDonald’s to purchase Happy Meals, but were dissatisfied with the menu items for themselves. These moms bought a cup of coffee. They picked at their kids’ fries. They were not in the mood for a burger. These moms had a problem: there was really nothing that they wanted to eat. Their visits were begrudgingly undertaken to keep their children happy and fed. The 2004 introduction of Chicken Caesar Salad with Paul Newman dressing was the solution.
Marketing is profitably satisfying customer needs. Satisfying customer desires and understanding the occasions when these occur are the key differentiators between marketing and selling. Selling is about convincing customers to buy what we know how to provide. Marketing is about providing what we know customers want or might want, or that satisfies their problems. Superior understanding of consumer needs and occasions provides the basis for outstanding competitive advantage.
To find competitive advantage in our fast-paced, changing world, it is imperative that brands have the clearest understanding of consumers from all angles – what they buy, who they are, why they buy, how, when, and where they use. Great segmentation leverages this understanding.
Wall Street and its analysts, along with the financial finaglers, should understand that Nike is not only focusing on the brand’s short-term financial health but also taking actions that will make the brand a long-term financial play.
Contributed to Branding Strategy Insider by Joan Kiddon, Partner, The Blake Project, Author of The Paradox Planet: Creating Brand Experiences For The Age Of I
At The Blake Project, we help leaders turn brand into a disciplined driver of financial performance — strengthening pricing power, competitive position, and enterprise value. Email us to start a conversation about enduring profitable growth. For The EBITDA.
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