Marketing - Nike: Company Analysis Nike: A Research Paper

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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.

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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….....

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