Marketing Strategy

Herman JopiaMay 8th, 2011

MKTG6000: Marketing For ManagersInstructor: Dr. Thomas Kholer

A History Of … “Victory” 2

1962: Blue Ribbon Sport (BRS)Runner Phil Knight and the legendary track coach Bill Bowerman founded BRS. Their mission “to provide athletes with better shoes”.

1971: BRS Introduced The “Swooch” and “nike”For $35, a graphic design student created the logo, and based on the Greek Goodness of Victory (Nike) BRS made a soccer cleat called “The Nike” including both, the logo and the name.

1972: First Nike Products The first line of Nike footwear is introduced, including the so-called “Moon Shoe” that features a waffle sole, which is distributed to athletes competing in the US Olympic Track & Field Trials in Eugene, Oregon … Here is were the main strategy began.

1978: Nike … The brandBlue Ribbon Sports officially changes its name to Nike.

Marketing Strategy 3

Since the very beginning, BRS / Nike knew what marketing strategies should be used as the main channel of communication to the world. These can be classified as follows:

1. Informational Appeal by Celebrity Endorsement2. Strong and In-depth Branding3. A mix of strategies and campaigns based on Jack Welch’s idea

“Change or Die”. This is, Nike recognized it cannot afford the luxury to relax.

1. Celebrity (Victory) 4

1973Ilie Nastase

Tennis (Rumania)

1973Steve Prefontaine

Tracker (USA)

1978John McEnroeTennis (USA)

1980Steve OvettRunner (UK)

1983Joan Benoit

Marathon (USA)

1985Michael JordanBasketball (US)

“Air Jordan”

1992Olympic Team

(USA)

1996Brazil Team

Soccer

1996Tiger WoodsGolf (USA)

Market Share for Golf Products

Grew from 1% to 6%

Nike Sold$100 MillionThe first year

1. Celebrity (Victory) 5

After the success with Brazilian Team, Nike signed other winning teams, and by 2003 overseas revenues

surpassed US revenues for the firs time. NIKE also topped B$10 in sales for the first time

2. Strong Brand Elements 6

Distinctive “Swooch” Logo

Mythological Name

Powerful Slogan

M$200 Campaign

2. “Just Do It” 7

After stumbling badly against archrival Reebok in the 1980s, Nike rose about as high and fast in the ‘90s as any company can. It took on a new religion of brand consciousness and broke advertising sound barriers with its indelible Swoosh, “Just Do It” slogan and deified sports figures. Nike managed the deftest of marketing tricks: to be both anti-establishment and mass market.

Newsweek. March 30, 1998.

2. “Just Do It”. Sales Worldwide (MM$) 8

877

9,200

1988 1998

3. Multiple Strategies 9

• Local Marketing: Much of Nike's initial success has been attributed to the ability to engage target consumers through grassroots marketing such as sponsorship of local school teams, expert-conducted clinics, and provision of shoes, clothing, and equipment.• Customization: Nike lets consumers customize athletic shoes for $10 more. A

shopper with two different size feet can even get a nonmatching pair.• Marketing Channel: Nike uses both, Pull and Push Strategy.• Points of Difference: Nike based most of its strategies on “Performance”

attribute.• Product Placement: Nike does not pay to be in movies but often supplies

shoes, jackets, bags, etc.• Personal Influence: When Nike decided to enter the skateboarding market, it

recognized that an anti-establishment. To gain some “street cred”, it sold exclusively to independent shops, advertised nowhere but skate magazines, and gained sponsorships from well-admired pro riders by incorporating them into product design

3. Multiple Strategies … Up To Date 10

Critiques 11

NIKE is also famous for its lack of ad pretesting. It cost Nike millions. In 2004 Nike ran the “Chamber of Fear” Commercial

where LeBron James defeated, among others, a KungFu master and a pair of dragons (sacred symbols). It was banned

in China for “Insulting National Pride”

Nike Today 12

NIKE, Inc.’s wholly-owned affiliates Cole Haan, Converse, Inc., Hurley International, LLC, NIKE Golf, and Umbro, Ltd. . They play a significant role in our future growth plans.

At the end of fiscal 2010, NIKE, Inc.’s affiliate businesses contributed approximately $2.5 billion of the company’s $19 billion in revenue.

As part of our growth strategy, we continue to invest in opportunities that will generate the highest possible long-term returns.

Is Nike Successful ? [B$ Worldwide] 13

9.21998

0.81988

192010

Marketing Principles 14

• A great Idea stated in its mission: “to provide athletes with better shoes”.• A sense of victory associated to its Product, from the inspiration in its Greek

goodness “Nike” to the most respected sport men, women and teams around the world.• A clear vision of branding. The name “Nike”, the “Swoosh” logo and its

unforgettable “Just Do It”.• Its multi-dimensional and bundled strategies, mixing push and pull, massive

(Apple) and narrowed markets (Skaters), Customization, Celebrity Endorsement and so on …• An optimized marketing mix, the 4Ps at its best.• Diversification: From shoes to all that you need for sports.• Good business decisions such as the acquisition of Converse and Hurley• Global Web Strategy, with an amazing website and all possible social network• Cause Related Marketing sponsoring for example marathons

Conclusion 15

Nike, in all these years has demonstrated why it’s one of the most successful companies in the world. It is recognized as one of the most effective “marketers”, using almost every technique applicable to get to certain market.

Given this smart development, Nike has grown 10 times every 10 years. That is simply remarkable. Most of this success can be attributed to its main marketing strategies and campaigns.

I believe that the lesson from Nike to new and old companies is very simple … “Just Do It”.