Current promotional practices of sportswear brands

Marketing - Nike: Company Analysis

NIKE:

A Genius World of Advertising and Marketing

The media bombards society with commercial messages daily, both written and spoken. There are, for example, the easily forgettable newspaper ads, the brightly colored billboards on the highway that one can see while driving, or on the side of buildings, the man or woman sitting on the side of the road with a flyer, or the boring radio commercials. There are also, of course, the funny messages on the television, and those jingles and seem not to want to escape constant humming. In other words, American are simply surrounded by these various marketing tools that say "buy this" or "try this."

In fact, according to Consumer Reports, an average American is exposed to 247 such messages daily.[footnoteRef:1] Other sources, however, beg to differ with this estimate and offer much higher ones. For example, Alf Nucifora, who is an Atlanta-based marketing consultant states that the average American consumer is exposed to "more than 600" commercial messages in a day in various forms.[footnoteRef:2] [1: "Advertising in America." Consumer Reports Website. http://www.consumerreports.org/main/detailv2.jsp?CONTENT%3C%3Ecnt_id=18759&FOLDER%3C%3Efolder_id=18151, accessed July 2011. ] [2: "Interview with Alf Nucifora." Business Journal Phoenix Website. http://www.bizjournals.com/phoenix/, accessed July 2011. ]

Further, the Union of Concerned Scientists Website offers the estimate of 3000 such messages daily, a result of the fact that corporations worldwide spend hundreds of billions of dollars yearly to make their products desirable and "viewable."[footnoteRef:3] The thousand message range is supported by Phillips and Rasberry in their book, which states that it is "estimated that each American is exposed to well over 2,500 advertising messages per day, and that children see over 50,000 TV commercials a year."[footnoteRef:4] [3: Union of Concerned Scientists: Citizens and Scientists for Environmental Solutions. http://www.ucsusa.org/publications/, accessed July 2011.] [4: Michael Phillips, Salli Rasberry & Barbara K. Repa. Marketing Without Advertising: Inspire Customers to Rave About Your Business to Create Lasting Success. (Nolo, 4th edition, March 2003), Chapter 1.]

Clearly, the amount of advertisements has increased dramatically since the last century even. This is, most definitely due to the effectiveness of promoting one's message through advertisements. According to a course at Fordham University, "advertising is the most pervasive element of the marketing mix: the average American family of four is exposed to 1,500 messages a day."[footnoteRef:5] Though Fordham seems to rely on the higher figures, The Guru, an established online advertising community, does go "along with one of the best accepted estimates, that there are about 245 ad exposures daily, 108 from TV, 34 radio and 112 print."[footnoteRef:6] [5: Description of Marketing Course. Fordham University. www.fordham.edu, accessed July 2011. ] [6: "AMIC's Media Guru Answers." AMIC. http://www.amic.com/guru/results.asp?words=media+exposure&submit=Search&op=AND, accessed July 2011. ]

No matter if hundreds or thousands of messages bombard us on an any given day, the figure is still remarkably high and proves beyond a doubt that advertising truly is very effective with regards to the American consumer. For this very reason, this paper will examine advertising and marketing capacities of one company, Nike, and how these relate to consumers. In other words, in the latter part of the paper, various perceptions, theories and impacts upon the American consumer population will be closely analyzed in order to draw just how Nike has been able to establish itself as one of the foremost sports companies in the United States and the world, and how it would benefit from better serving consumers in the future.

Nike History

Before "Just Do It," and before Adidas, Reebok, and UnderAmour, there was Nike, a company which was founded by two visionary men who pioneered a revolution in athletic footwear that, according to the Nike website, redefined the athletic industry.[footnoteRef:7] Nike was composed of Bill Bowerman, who was a track and field coach at the University of Oregon in the 1950's, and Phil Knight who was a mid-distance runner from Portland and who enrolled at the University in 1955. Bowerman was constantly looking to give his athletes a competitive advantage, and Knight eventually completed his MBA at Stanford University. When the two men finally reconnected, with these skills, they made athletic company history.[footnoteRef:8] [7: "History and Heritage: When Nike breathed its first breath, it inhaled the spirit of two men." Nike Company Website. http://www.nikebiz.com/company_overview/history/1950s.html, accessed July 2011. ] [8: "History and Heritage: When Nike breathed its first breath, it inhaled the spirit of two men." Nike Company Website. http://www.nikebiz.com/company_overview/history/1950s.html, accessed July 2011. ]

The new company was actually based on a paper Knight had written during his studies, in which he theorized that manufacturing athletic shoes in Japan would increase competition with German-made sneakers, thereby leading to improved quality of running shoes. According to this history, described on the company's site, Knight wrote letters, which went unanswered, and eventually made a cold-call to Kobe, Japan, and persuaded a Japanese running shoe manufacturer, Tiger, to send over some samples to the United States, in an effort to translate his theory into reality.

When the first samples arrived, Knight sent a few to Bowerman, and hoped that his former coach would buy them in order to distribute them to athletes at the University. However, Bowerman offered Knight something better: he proposed to become Knight's partner and provide footwear design ideas to Tiger shoes.[footnoteRef:9] [9: "History and Heritage: When Nike breathed its first breath, it inhaled the spirit of two men." Nike Company Website. http://www.nikebiz.com/company_overview/history/1950s.html, accessed July 2011. ]

With a handshake and $500, the two men founded Blue Ribbon Sports, and placed the first shoe order: 300 shoes for the year.[footnoteRef:10] While Knight sold the pairs out of his car, Bowerman ripped them apart to see how they could be made lighter, and tested his models on school athletes. Eventually, the team added an accountant and saw profits soar in the following decades. With the help of a graphic designer, in the 1970's they created the "swoosh" which remains Nike's trademark logo to this day.[footnoteRef:11] [10: "History and Heritage: Founded on a handshake, $500 and mutual trust." Nike Company Website. http://www.nikebiz.com/company_overview/history/1960s.html, accessed July 2011. ] [11: "History and Heritage: The Birth of the Nike brand, and company." Nike Company Website. http://www.nikebiz.com/company_overview/history/1970s.html, accessed July 2011. ]

By the mid-1980s, however, Nike had slipped a bit from its frontrunner position in the industry, according to the history due to, in part, the aerobics boom during the early years of the decade.

However, in 1985, one of the men who would become one of the most famous basketball players in the world helped re-electrify the company's image: Michael Jordan.[footnoteRef:12] With Jordan, "Air Max," and the newly introduced slogan "Just Do It," Nike saw another boom in its image and reputation, and entered the 1990's in force.[footnoteRef:13] [12: "History and Heritage: A decade of transformation and rededication." Nike Company Website. http://www.nikebiz.com/company_overview/history/1980s.html, accessed July 2011. ] [13: "History and Heritage: Nike extends its reach." Nike Company Website. http://www.nikebiz.com/company_overview/history/1990s.html, accessed July 2011. ]

Part I

Nike Philosophy

In the new millennium, Nike once again revitalized itself by debuting with a new footwear cushioning system, Nike Shox, which evidenced the brand's 15 years of "perseverance and dedication."[footnoteRef:14] However, in order to focus on the paper's goal, one must, of course discuss the fantastic marketing strategies that the company has employed, from its incipience until the present. [14: "History and Heritage: Leading a new generation." Nike Company Website. http://www.nikebiz.com/company_overview/history/2000s.html, accessed July 2011. ]

According to the website,

"Just as Nike's products have evolved, so has Nike's approach to marketing. The 2002 "Secret Tournament" campaign was Nike's first truly integrated, global marketing effort. Departing from the traditional "big athlete, big ad, big product" formula, Nike created a multi-faceted consumer experience in support of the World Cup. "Secret Tournament" incorporated advertising, the Internet, public relations, retail and consumer events to create excitement for Nike's soccer products and athletes in a way no single ad could ever achieve. This new integrated approach has become the cornerstone for Nike marketing and communications. Today, Nike continues to seek new and innovative ways to develop superior athletic products, and creative methods to communicate directly with our consumers. Nike Free, Nike+ and Nike Sphere are just three examples of this approach."[footnoteRef:15] [15: "History and Heritage: Leading a new generation." Nike Company Website. http://www.nikebiz.com/company_overview/history/2000s.html, accessed July 2011. ]

Many customers, however, know Nike immediately for its "swoosh" and its slogan. These two elements are truly the genius of the company.

Nike Advertising Message

Due to the success of the "Just Do It" campaign especially, the remainder of the paper will focus on this as one of the most excellent and efficient campaign in advertising history. According to a case study, the slogan, now was instantly recognized by millions, was actually coined at a 1988 meeting of the advertisement agency that Nike employed, Wieden and Kennedy, with the help of a number of Nike employees. According to the company,

"Dan Weiden, speaking admiringly of Nike's can-do attitude, [...] said, "You Nike guys, you just do it." The rest, as they say, is

(advertising) history."[footnoteRef:16] [16: Julie Saloman. "When Nike Goes Cold." Newsweek. (1998). ]

The power of Nike to not only achieve but maintain such a frontrunner status, twice, in the industry is as much due to its creative, useful and fantastic products as it is to its advertising a marketing innovations. For example, brand management is one of the company's many strengths.

It is widely known in the advertising industry that most customers pay more for brands that they see as superior in style, reliability and quality. A company, therefore, is able, through its efficient brand recognition program, to "expand market share, command higher prices and generate more revenue than its competitors."[footnoteRef:17] [17: "Nike's 'Just do it' Advertising Campaign." Centre for Applied Research. www.cfar.com/Documents/nikecmp.pdf, accessed July 2011. ]

With its "Just Do It" campaign, in addition to its great product, Nike increased its share in the domestic running shoe business "from 18% to 43%, from $877 million in worldwide sales to $9.2 billion in the ten years

between 1988 and 1998," according to the case study.[footnoteRef:18] Further, according to the same source, [18: "Nike's 'Just do it' Advertising Campaign." Centre for Applied Research. www.cfar.com/Documents/nikecmp.pdf, accessed July 2011. ]

"Nike spent $300 million on overseas advertising alone; most of it centered around the "Just Do It" campaign. The success of the campaign is that much more remarkable when one

considers that an estimated 80% of the sneakers sold in the U.S.

are never used for the activities for which they have been designed.

Nike's marketing tactics in the '80s, and in particular its campaign against Reebok, gambled on the idea that the public would accept sneakers as fashion statements."[footnoteRef:19] [19: "Nike's 'Just do it' Advertising Campaign." Centre for Applied Research. www.cfar.com/Documents/nikecmp.pdf, accessed July 2011. ]

Eventually, Nike, having been right all along, took in the above strategy to capitalize on the craze that followed the aerobic craze that almost put it out of business. Nike thus cashed it as quickly as possible on jogging and fitness during the later part of the 1980's. During this period, Nike smartly positioned itself to appeal not only to men, but also to women and teenagers, thus taking in both genders and ages ranging from 15-40 years old.

Due to the fact that Nike was under pressure during this time from Reebok, its advertising campaign almost never focused on its actual product, but rather chose to show the person wearing the product. The campaign successfully captured corporate ideals, but also injected a dose of creativity and humor. Heretofore, Nike advertisements had always been somewhat detached and always portrayed determination and cool.

According to the study, some of the new ads retained that attitude, but several advertisements, especially the Bo Jackson ones, included some jokes to make the point.

"Jackson is seen working out at several different activities, joking while on a bike machine, "Now when is that Tour de France thing?" And after slam dunking a basketball contemplates "Air Bo." "I like the sound of that," he says."[footnoteRef:20] [20: "Nike's 'Just do it' Advertising Campaign." Centre for Applied Research. www.cfar.com/Documents/nikecmp.pdf, accessed July 2011. ]

Though now the campaign is known to have been truly revolutionary, back in the late 1980's the "Just Do It" advertisements received mixed reviews, which, according to the case study, ranged from "instant classic" to "sociopathic," leading some critics to describe the ads as "an impatient bordering-

on-contemptuous exhortation to the masses."[footnoteRef:21] [21: "Nike's 'Just do it' Advertising Campaign." Centre for Applied Research. www.cfar.com/Documents/nikecmp.pdf, accessed July 2011. ]

No matter what critics said, however, the advertisements were successful in helping Nike bounce back in the 1980's in spite of Reebok's huge sweep of the aerobics market. Nike responded to Reebok successfully through its campaign that essentially persuaded people into exercising by "shaming them," and more importantly, persuaded them to exercise in Nikes.

The case study further describes that the campaign was effective in encouraging consumers that if they chose Nike, they would receive quality. The company successfully portrayed this strategy by hiring sports stars to do the advertising. Thus, Bo Jackson, John McEnroe and later, Michael

Jordon, who all contributed to the start power of the brand as well. For example, the fact that Michael Jordan can play "an entire NBA season in a pair of Nikes, certainly the average weekend warrior can trust the shoes' durability."[footnoteRef:22] [22: "Nike's 'Just do it' Advertising Campaign." Centre for Applied Research. www.cfar.com/Documents/nikecmp.pdf, accessed July 2011. ]

All these celebrity endorsements appealed to a consumer's sense of being just like the stars seen on television, perhaps not rich or powerful but definitely "in style." Nike became the ultimate symbol for coolness, and all who wanted to be cool knew they would have to wear Nike's. According to the Center for Applied Research's study on the campaign,

"Just Do It' was able to turn sweaty, pain-ridden, time-consuming exercise in Nike sneakers into something sexy and exciting. Perhaps most importantly, even those who were not in fact exercising in Nikes (the vast majority) still wanted to own them. By focusing on the aura and image conveyed by the fitness culture, Nike was able to attract those who wanted the image without incurring the pain."[footnoteRef:23] [23: "Nike's 'Just do it' Advertising Campaign." Centre for Applied Research. www.cfar.com/Documents/nikecmp.pdf, accessed July 2011. ]

The campaign was, therefore successful and the best evidence is the fac that Nike is still one of the top sports brands today. The timing of the campaign, the message of the advertisements and the coupling of these two with some of the most well-known names in the sports industry tapped into the customers' desires for a healthy, cool lifestyle, all of which they could attain if they bought Nike sneakers. Nothing could be simpler, or more effective.

Consumer Reactions

After having analyzed all aspects of the Nike advertising campaign, it is important to see just how such things link with theories of learning, memory and consumer decision-making, in order to see why the company was so successful and how it could potentially attain a presence in new target market segments.

Advertising theories focus on audience and communication as a rule. The reason for this is to understand how to be keep a customer's attention in order to present the product, and how best to communicate to him or her to induce the person to buy a certain product. In order to accomplish the former, Nike utilized attention grabbers, such as celebrities and a strong product. Humor, in this case, also worked.

In order to accomplish the latter, however, inducing a person to actually buy, which is the hardest part, Nike the resources it had to teach the customers about the product, implant it in the customers' memory and enable them to make a decision in buy the product, due to the fact that Nike was "cool." In the Nike campaign, memory was definitely a big trigger, as the campaign focused on keeping itself in a person's mind through its various attention getting techniques, the most efficient of which were humor and the star factor, as aforementioned.

The audience, thus experienced not only learning of the product, but Nike successfully placed this product in the consumer memory, utilizing its tools to not only implant the idea but also foster its growth through constant bombardment in the media. The basic necessities of an advertising campaign are to enable people to experience an emotion, to help them understand and remember a product, and to hopefully enable them to take action and buy that product.[footnoteRef:24] [24: Steven L. McNamara. "Persuasive Advertising Theories." Ad Cracker. http://www.adcracker.com/theory/Persuasive_Advertising_Theories.htm, accessed July 2011. ]

As afore-described, Nike did these three things by brand-building (Nike is cool), utilizing celebrities to help people remember the product, and thus leading a person to want to be like the celebrities, have the best quality product, and want to be cool, therefore, also leading a person to buy the product presented. The latter elements were done through direct marketing and direct response advertising.

This paper focuses on the campaign due to the fact that it was incredibly efficient in securing Nike's slipping number one spot in the sports equipment market. This allowed the company to continue to grow to gargantuan proportions. However, with the advent of new technology other brand continued to grow as well, and many times, sneakers are worn for the "cool factor" rather than to be comfortable, especially given the young generation who relies on Jack Purcell's shoes for example. Nike could utilize a revamping of its sneaker, which some youth regard as being worn by soccer moms or the older generation in general.

In order to do so, Nike could once again analyze the design of its shoe, and see how best it could make it look "cool" once again, while retaining its comfort, lightness, and other Nike-like capacities a la 1980's "Just do it" advertisements. It seems, however, that the company has taken to the online market to do so, which is quite smart, and has a big social networking presence. Furthermore, it has opened a website, Nike ID, which allows customers to personalize footwear both in color, with initials, and other such things that make a shoe completely unique.[footnoteRef:25] Some of the suggestions above, it seems, have already been incorporated by the company; however, it could benefit from greater media presence it this aspect. [25: "Nike ID" Nike Website. http://nikeid.nike.com/nikeid/index.jsp#home, accessed July 2011. ]

Part II

Nike Marketing

After having analyzed Nike's advertising strategy and finding it successful, one must also analyze the company's marketing techniques, especially in the media. In order to accomplish this feat, a short summary of media strategies will be offered, after which Nike's marketing techniques in the media will be analyzed.

Media strategies are utilized to inform customers about various projects or items through media such as newspapers, magazines, television, radio, and other advertising means. These strategies, however, take a variety of form in any given medium. The simplest instances are, for example, "fliers about projects within a corridor (a targeted market area)" or "variable message signs on highways that inform motorists (a targeted market) of delays ahead or of alternate routes."[footnoteRef:26] More complex instances are television advertisements or briefing of reporters that can then disseminate a certain message. [26: "Media Strategies." U.S. Department of Transportation. http://www.fhwa.dot.gov/reports/pittd/media.htm, accessed July 2011. ]

The way media strategies work, however, is by a business framing a certain message rather than allowing media to take control of it. Effective strategies will always deliver the same message (i.e. Nike cool), in order to avoid misinformation. However, strategies are often styled to peak interest and this can be done in different ways (i.e. Nike utilizing celebrities). One of the obvious reasons as to why media coverage of various products is so vital and effective is because coverage generates interest in an item, especially if a campaign, such as seen above, is well-conducted.[footnoteRef:27] [27: " Media Strategies." U.S. Department of Transportation. http://www.fhwa.dot.gov/reports/pittd/media.htm, accessed July 2011. ]

In some instances, however, media coverage is not necessary. This is true of smaller ideas or products, however in Nike's case, the following applied, which was why the company utilized a media-centered marketing strategy: