Nike Advertising and Marketing Strategy: A Company Analysis

Introduction: The Advertising Landscape

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 highways, the person sitting on the side of the road with a flyer, and the familiar radio commercials. There are also the funny messages on television, along with jingles that seem impossible to stop humming. In other words, Americans are simply surrounded by various marketing tools that say "buy this" or "try this."

According to Consumer Reports, the average American is exposed to 247 such messages daily. Other sources, however, offer much higher estimates. For example, Alf Nucifora, an Atlanta-based marketing consultant, states that the average American consumer is exposed to "more than 600" commercial messages per day in various forms. The Union of Concerned Scientists offers an estimate of 3,000 such messages daily, a result of the fact that corporations worldwide spend hundreds of billions of dollars yearly to make their products desirable and visible. Phillips and Rasberry support the higher range, stating 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."

Clearly, the volume of advertisements has increased dramatically over the past century. This is most definitely due to the effectiveness of promoting one's message through advertising. Although estimates vary widely — from roughly 245 exposures per day (broken down as approximately 108 from television, 34 from radio, and 112 from print) to 1,500 or more — the figure is still remarkably high and proves beyond doubt that advertising is highly effective with regard to the American consumer.

For this very reason, this paper examines the advertising and marketing capacities of one company — Nike — and how these relate to consumers. The latter sections closely analyze various perceptions, theories, and impacts upon the American consumer population in order to understand how Nike established itself as one of the foremost sports companies in the United States and the world, and how it might benefit from better serving consumers in the future.

Nike History

Before "Just Do It," and before Adidas, Reebok, and Under Armour, there was Nike — a company founded by two visionary men who pioneered a revolution in athletic footwear and, according to the Nike website, redefined the athletic industry. Nike was built by Bill Bowerman, a track and field coach at the University of Oregon in the 1950s, and Phil Knight, a mid-distance runner from Portland who enrolled at the University in 1955. Bowerman was constantly seeking to give his athletes a competitive advantage, while Knight went on to complete his MBA at Stanford University. When the two men reconnected, combining their respective skills, they made athletic company history.

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 improving the quality of running shoes. Acting on this theory, Knight wrote letters to Japanese manufacturers — which went unanswered — and eventually made a cold call to Kobe, Japan. He persuaded a Japanese running shoe manufacturer, Tiger, to send samples to the United States.

When the first samples arrived, Knight sent a few pairs to Bowerman, hoping his former coach would buy them to distribute to university athletes. Instead, Bowerman offered something better: he proposed to become Knight's partner and provide footwear design ideas to Tiger shoes.

With a handshake and $500, the two men founded Blue Ribbon Sports and placed their first shoe order: 300 pairs for the year. While Knight sold pairs out of his car, Bowerman dissected them to find ways to make them lighter and tested his models on student athletes. Eventually, the team added an accountant and saw profits soar in the following decades. With the help of a graphic designer, in the 1970s they created the "swoosh," which remains Nike's trademark logo to this day.

By the mid-1980s, however, Nike had slipped from its frontrunner position in the industry, due in part to the aerobics boom during the early part of the decade. 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. With Jordan, "Air Max," and the newly introduced slogan "Just Do It," Nike experienced another boom in its image and reputation and entered the 1990s in force.

Nike Philosophy and the Evolution of Marketing

In the new millennium, Nike revitalized itself once again by debuting a new footwear cushioning system, Nike Shox, which demonstrated the brand's fifteen years of "perseverance and dedication." To understand the company's broader success, however, one must examine the marketing strategies it employed from its inception to the present.

According to the Nike 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."

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

The 'Just Do It' Advertising Campaign

Due to the success of the "Just Do It" campaign, the remainder of Part I focuses on it as one of the most excellent and efficient campaigns in advertising history. According to a case study, the slogan — now instantly recognized by millions — was coined at a 1988 meeting of Nike's advertising agency, Wieden+Kennedy, with input from a number of Nike employees. As the company recounts: "Dan Wieden, speaking admiringly of Nike's can-do attitude, said, 'You Nike guys, you just do it.' The rest, as they say, is (advertising) history."

Nike's power to not only achieve but maintain a frontrunner position in the industry is as much due to its creative and useful products as it is to its advertising and marketing innovations. Brand management is one of the company's most significant strengths. It is widely understood in the advertising industry that most customers pay more for brands they perceive as superior in style, reliability, and quality. A company is therefore able, through an efficient brand recognition program, to "expand market share, command higher prices, and generate more revenue than its competitors."

With its "Just Do It" campaign, in addition to its strong product, Nike increased its share of the domestic running shoe market from 18% to 43%, and grew worldwide sales from $877 million to $9.2 billion in the ten years between 1988 and 1998. Nike spent $300 million on overseas advertising alone, most of it centered on the "Just Do It" campaign. The success of the campaign is all the more remarkable when one considers that an estimated 80% of sneakers sold in the United States are never used for the activities for which they were designed. Nike's marketing tactics in the 1980s, and in particular its campaign against Reebok, gambled on the idea that the public would accept sneakers as fashion statements — and Nike was proven right.

Having been correct in that assumption, Nike capitalized on the fitness craze that followed the aerobics boom that had nearly put it out of business. The company positioned itself to appeal not only to men, but also to women and teenagers — capturing both genders and ages ranging from 15 to 40 years old.

Because Nike was under pressure from Reebok at the time, its advertising campaign almost never focused on the actual product, but rather chose to show the person wearing it. The campaign successfully captured corporate ideals while injecting creativity and humor. Previously, Nike advertisements had always been somewhat detached, always portraying determination and cool reserve. Some new ads retained that attitude, but several — especially the Bo Jackson spots — included humor to make the point. As one example describes: Jackson is seen working out across several activities, joking while on a bike machine, "Now when is that Tour de France thing?" And after slam-dunking a basketball, he contemplates "Air Bo," saying, "I like the sound of that."

Though the campaign is now recognized as truly revolutionary, in the late 1980s the "Just Do It" advertisements received mixed reviews, ranging from "instant classic" to "sociopathic." Some critics described the ads as "an impatient, bordering-on-contemptuous exhortation to the masses." No matter what critics said, however, the advertisements were successful in helping Nike bounce back in the face of Reebok's dominance of the aerobics market. Nike responded by essentially persuading people to exercise — by "shaming them," as one analysis put it — and, more importantly, persuading them to exercise in Nikes.

The campaign was also effective in convincing consumers that choosing Nike meant choosing quality. The company communicated this strategy by hiring sports stars to endorse the brand. Bo Jackson, John McEnroe, and later Michael Jordan all contributed to the brand's star power. The logic was straightforward: if Michael Jordan could play an entire NBA season in a pair of Nikes, then certainly the average weekend athlete could trust the shoes' durability.

All of these celebrity endorsements appealed to consumers' desire to identify with the stars they saw on television — perhaps not rich or powerful, but definitely "in style." Nike became the ultimate symbol of coolness, and all who wanted to be cool understood they would need to wear Nikes. According to the Centre for Applied Research's case 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."

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

Conclusion

Nike is one of the top sportswear and sports equipment companies in the world today. A small company that started in Oregon has grown to massive proportions, aided by fantastic advertisements and witty marketing strategies throughout the 1960s and 1970s, and by increasingly innovative strategies from the 1980s onward. The most recent of these have taken advantage of the internet and social networking boom to promote new ways of creating a shoe and communicating the company's goals. Due to Nike's thorough cornering of the market and its comprehensive adoption of virtually every available marketing strategy, the company will very likely remain a dominant force in the industry for a very long time.