Nike

When Phil Knight, a former

college track athlete, and

his former coach, Bill Bower-

man, started a shoe company in 1962, they

couldn't have known that they would ultimately

obnuode

create one of the world's most valuable brands. Originally up known as Blue Ribbon Sports, the
company started out as a distributor for the Japanese shoe maker that today is known as Asics. It
wasn't until 1971 that Blue Ribbon changed its name to Nike, after the Greek goddess of victory, and
started designing its own shoes.

Nike focused on providing affordable, high-quality run- ning shoes designed for athletes by athletes.
To keep the cost of the shoes competitive, the company outsourced its production to lower-cost
manufacturers in Asia. Through this combination of innovative design, a commitment to serious
athletes, and competitive prices, Nike built a cult following among U.S. consumers.

Although Nike had a great product on its hands, the company knew that deft management was vital
to the growth

Alamy Stock

of the brand. Central to the company's branding was its pet belief in a "pyramid of influence," with
the preferences of a small group of top athletes influencing the product and brand choices of
consumers. Following through with the theme of victory embedded in its name, Nike in 1972 signed
Olympic track star Steve Prefontaine as its first spokesperson-the beginning of a long line of
accomplished athletes who have touted the company's products.

One of Nike's greatest successes with this approach came in 1985 with the signing of rookie
basketball player Michael Jordan as a spokesperson. Jordan was still an up-and-comer, but he
personified superior performance. Thanks to Jordan's meteoric rise over the next few years, Nike's
bet paid off as consumers clamored for the Air Jordan line of basketball shoes with the distinctive
Nike swoosh. As one reporter stated, "Few marketers have so reliably been able to identify and sign
ath- letes who transcend their sports to such great effect."

In addition to associating itself with the best athletes, Nike also showed a talent for creating iconic
advertising campaigns. In 1988, Nike aired the first ads in its influential "Just Do It" ad campaign,
which subtly challenged a genera- tion of athletic enthusiasts to chase their goals. The slogan

26

PART 1

FUNDAMENTALS OF MARKETING MANAGEMENT

was a natural offshoot of Nike's attitude of self-empowerment through sports.

While expanding overseas, Nike adapted its marketing to face new challenges. The company quickly
learned that its U.S.-style ads were too aggressive for consumers in Europe, Asia, and South America
and adjusted its tone. Furthermore, it needed to tailor its marketing for different countries so con-
sumers would feel that the brand was authentic. To this end, Nike focused on promoting soccer
(called football outside the United States), becoming an active supporter of youth leagues, local
clubs, and national teams around the world. It also searched for opportunities to sponsor soccer
teams and leagues in an attempt to replicate the company's earlier suc- cess with U.S. sponsorships.

In the late 1990s, Nike moved into soccer in a big way. It secured marketing rights for several major
soccer federa- tions, including those in powerhouse countries like Brazil and Italy. It also started
pouring money into marketing campaigns focused on the World Cup. Nike's heavy investment in
soccer helped propel the brand's growth internationally as its image morphed from that of a sneaker
company into a brand that represented emotion, allegiance, and identification. In 2003, overseas
revenues surpassed U.S. revenues for the first time, and in 2007 Nike acquired Umbro, a British
maker of soccer- related footwear, apparel, and equipment. The acquisition made Nike the sole
supplier to more than 100 professional soccer teams around the world and boosted Nike's interna-
tional presence and authenticity in soccer.

As Nike's global brand continued to grow, its managers realized that, across countries, players and
fans of a given sport have a lot in common. Thus, the company began to focus its marketing efforts
more on categories than on geo- graphic location. With this principle in mind, Nike has suc- cessfully
expanded its brand into many sports and athletic categories and increased its presence across the
globe.

int

Nike continues to partner with high-profile and influen- tial athletes, coaches, teams, and leagues to
build credibility with consumers as it expands into more categories. It has orto sponsored tennis stars
like Maria Sharapova, Roger Federer, and Rafael Nadal to push its line of tennis clothing and gear. In
golf, Nike's swoosh gained prominence when Tiger ed Woods won tournament after tournament
while wearing the company's products. In the years since Nike first partnered with Woods, Nike Golf
has grown into a multi-million-dollar business and changed the way golfers dress. Of course, Nike
hasn't forgotten its roots. To promote its line of basketball

shoes and apparel, Nike has partnered with generations of basketball superstars like Kobe Bryant and
LeBron James. Today, Nike is the biggest sponsor of athletes in the world, spending hundreds of
millions of dollars a year on athletic endorsements.

While Nike's athletic endorsements help attract and inspire consumers, its recent innovations in
technology have resulted in more loyal and emotionally connected custom- ers. Delving into
wearable technology, Nike has developed a running application and community called NIKE+ that
allows runners to engage in the ultimate running experience. By linking a Nike+ kit to a smartphone
app, runners can view their real-time pace, distance, route, and coaching tips, which they can then
share online. Nike has expanded NIKE+ to areas like basketball and general exercise tracking. It has
also co-branded with Apple to create the Apple Watch Nike+ edition, which gives users access to
special watch faces and bands unavailable to other Apple Watch purchasers.

In addition to its foray into technology, Nike, like many companies, is trying to make its company and
products more eco-friendly. Unlike many companies, though, it does not promote these efforts. As
one brand consultant explained, "Nike has always been about winning. How is sustainability relevant
to its brand?" Nike executives agree that promoting. an eco-friendly message would distract from its
slick high- tech image, so efforts such as recycling old shoes are kept quiet.

Thanks to its successful expansion across product categories and geographic markets, Nike is the top
athletic apparel and footwear manufacturer in the world. Swooshes abound on everything from
wristwatches to skateboards to swimming caps. Looking to the future, Nike sees some challenges
ahead. Nike has traditionally thrived in brick-and- mortar retail channels, but increasing numbers of
consumers are shopping online. Nike is searching for a winning strategy for promoting its brand in a
digital age dominated by websites like Amazon. Despite its focus on new forms of promotion and
distribution, the firm's long-term strategy remains the same: to produce innovative, high-quality
products that help athletes win.61

Questions

1. What are the key components of Nike's marketing strategy?

2. What are Nike's strengths and weaknesses?

3. If you were Adidas, how would you compete with Nike?

Nike's Strengths and Weaknesses

Strengths

 Strong Brand Equity: Nike has built a powerful brand image associated with performance,
innovation, and athleticism. The iconic swoosh logo is instantly recognizable worldwide.

 Innovative Product Design: Nike has a history of introducing groundbreaking product

innovations, such as self-lacing shoes and wearable technology.

 Global Presence: Nike has a vast distribution network and a strong presence in various
markets, ensuring widespread availability of its products.

 Effective Marketing: Nike's marketing campaigns, including the iconic "Just Do It" slogan and
celebrity endorsements, have been highly successful in connecting with consumers.

 Strong Athlete Partnerships: Nike's partnerships with top athletes have helped solidify its
position as a leader in the sports apparel industry.

 Efficient Supply Chain: Nike's outsourcing model has allowed it to maintain competitive
pricing while ensuring a steady supply of products.

Weaknesses

 Labor Practices: Nike has faced criticism for its labor practices in overseas manufacturing
facilities, including allegations of poor working conditions.

 Dependence on Celebrity Endorsements: While celebrity endorsements have been a

significant driver of Nike's success, the company may be vulnerable to changes in athlete
popularity or scandals.
  Environmental Impact: Nike's manufacturing processes and supply chain have raised
concerns about environmental sustainability.

 Competition: The athletic apparel market is highly competitive, with rivals like Adidas and
Under Armour challenging Nike's dominance.

 E-commerce Reliance: While Nike has made strides in e-commerce, it may face challenges in
adapting to the changing retail landscape.

 Counterfeit Products: The popularity of Nike products has led to widespread counterfeiting,
which can damage the brand's reputation and impact sales.

It's important to note that while Nike has faced challenges, it has also demonstrated a strong ability
to adapt and overcome them. The company's focus on innovation, global expansion, and strong
brand management has helped it maintain its position as a leader in the athletic apparel industry.

what are the strength of nike brand

Show drafts

Nike's Strengths

 Strong Brand Equity: Nike has built a powerful brand image associated with performance,
innovation, and athleticism. The iconic swoosh logo is instantly recognizable worldwide.

 Innovative Product Design: Nike has a history of introducing groundbreaking product

innovations, such as self-lacing shoes and wearable technology.

 Global Presence: Nike has a vast distribution network and a strong presence in various
markets, ensuring widespread availability of its products.

 Effective Marketing: Nike's marketing campaigns, including the iconic "Just Do It" slogan and
celebrity endorsements, have been highly successful in connecting with consumers.

 Strong Athlete Partnerships: Nike's partnerships with top athletes have helped solidify its
position as a leader in the sports apparel industry.

 Efficient Supply Chain: Nike's outsourcing model has allowed it to maintain competitive
pricing while ensuring a steady supply of products.

These strengths have contributed to Nike's enduring success and dominance in the athletic apparel
market.
How Adidas Could Compete with Nike

Given the dominant position Nike has established in the athletic apparel and footwear market,
Adidas would need to employ a strategic approach to compete effectively. Here are some potential
strategies:

1. Differentiate Through Innovation and Technology:

 Focus on niche markets: Identify specific sports or athletic activities where Adidas can
establish a strong presence and differentiate its offerings. For example, Adidas could focus on
emerging sports or niche markets where Nike's presence is less prominent.

 Invest in cutting-edge technology: Develop innovative products that offer unique features
and benefits, such as advanced materials, performance-enhancing technologies, or
personalized customization options.

 Partner with tech companies: Collaborate with technology firms to create connected
products that enhance the user experience and provide valuable data insights.

2. Strengthen Brand Identity and Storytelling:

 Reposition the brand: Redefine Adidas' brand identity to appeal to a specific target audience
or emphasize a unique value proposition. For example, Adidas could focus on sustainability,
inclusivity, or heritage.

 Create compelling storytelling: Develop engaging narratives that resonate with consumers
and connect the brand to their passions and aspirations. This could involve leveraging
athletes, cultural icons, or historical events.

 Enhance brand experiences: Create immersive brand experiences, such as pop-up stores,
interactive events, or digital platforms, to engage consumers on a deeper level.

3. Prioritize Sustainability and Ethical Practices:

 Lead the industry in sustainability: Demonstrate a strong commitment to environmental and

social responsibility by implementing sustainable practices throughout the supply chain.

 Highlight ethical sourcing: Emphasize the ethical sourcing of materials and fair labor
practices to appeal to consumers who are increasingly conscious of these issues.

 Partner with sustainable organizations: Collaborate with non-profit organizations and

industry leaders to promote sustainable initiatives and raise awareness.

4. Leverage Digital Marketing and E-commerce:

 Invest in digital marketing: Utilize digital channels to reach a wider audience and engage
with consumers on a more personalized level.

 Enhance e-commerce capabilities: Optimize the online shopping experience, offer

personalized recommendations, and provide seamless customer service.

 Expand direct-to-consumer channels: Build a stronger direct-to-consumer presence to

reduce reliance on third-party retailers and increase brand control.

5. Foster Strong Partnerships and Collaborations:

  Partner with influential athletes: Collaborate with high-profile athletes who resonate with
Adidas' target audience and can help elevate the brand's visibility.

 Form strategic partnerships: Partner with other brands or industries to create synergies and
offer unique products or services.

 Engage with communities: Support local communities and initiatives to build goodwill and
strengthen brand loyalty.

By implementing these strategies, Adidas can challenge Nike's dominance and establish a strong
market position. However, it will be crucial to remain agile, adapt to changing consumer preferences,
and continuously invest in innovation and brand building.