A Complete Overview of Marketing Strategy of Nike
Children’s growth is slow; they learn several things like love, care, support, fear, empathy, prudence, etc. The business ladder also has several stages to go beyond the product life cycle; maintaining the position in a market requires a lot of effort. The well-known American athletic footwear and clothing company Nike has grown through different stages from 1962 to now. When one hears Nike, the first thing that comes to our mind is the slogan, “Bo Knows”, “Just Do it”, and “There Is No Finish Line” Nike products are sold under the two brand names IBM and Coke in America; the company gives meaning to the term Customization. What are the things that made Nike stand out from others? Below is an elaborate view.
Overview of Marketing Strategy of Nike:
- Phil knight (former runner at the University of Oregon) and Bill Bowerman (Phil Knight’s former coach) started Blue Ribbon Sports in 1962; At first, they distributed running shoes to a Japanese company; they started to design the shoes, contracting out to Asia. They created affordable and good-performing running shoes then people started giving more attention to jogging by wearing comfortable shoes.
- 1978- Blue Ribbon Sports has renamed Nike- the corporate; Many famous people wear Nike shoes like John Anderson and Henry Rono have achieved in athletic events; Due to this, the sales and profit of Nike reached a peak.
- At first, Nike thought it was a production-oriented company with more importance given to designing the product; they started spending time on innovation to find a specific product for customers (not finding customers for our products but creating products for our customers). Here is the origin of the word Customization.
- Bill Bowerman and other employees started innovating customized products. The result of one of the innovations is the waffle iron. At that time, it had a unique place in the American market. The manufacturing cost of our shoes is low compared to others. Manufacturing is done in Asia, where the cost value is low.
What About Marketing?
- They haven’t given much time to marketing, because their products are customized for customers; They formulated contracts with great people like Alberto Salazar and Steve Prefontaine to promote our products.
- Their sales got up to $1 billion; As it went up in the sales scale, sales started to decline; then they identified their barricades as Reebok within a blink of an eye; they started dominating this aerobics market. The reason behind this is their sleek and attractive styling in shoes; theirs were bulky and heavy to wear; then their researcher started researching Reebok’s strategy. Their shoe was soft but not durable; they used this durability concept and started to create durable and soft shoes; they regain the market.
- In the early 1980s- They observed their major customers who are wearing their shoes are not athletes but the normal people using them for daily use; they drastically shifted their business to manufacture casual shoes. They manufactured casual shoes which needed, but it extinguished the business; because it is funny looking and no one prefers to buy this.
- The mid-1980s were the black days of Nike; The 1970s were a boom time for the company. But in the mid-1980s sales started falling by $200 million, and profit also reached the bottom; they lost most of the good employees.
- Then they started to analyze their customers and brands. In earlier days they made shoes for runners. As the company widens its branches, it started making shoes for other game players like basketball, tennis, and football. Their research team started to analyze all the players and came up with good shoes with elegance and durability; but still, sales were at the bottom. The problem is their concentration only on the top players and our products are based only on their preferences.
- For example, if Michael Jordan preferred one color, they would manufacture that same product for all; they forget to concentrate on the 60% of core customers who are not actual players. They implemented the plan that they have done to satisfy the top players. They did the same for all our core customers; they went to all the players, amateurs, and street people and did thorough research and collected responses to incorporate their preferences into our product.
- Their casual shoe was a failure. Once they obtain the mass market, they should concentrate on both their brand and core customers; otherwise, people get confused and bedazzled by different things; like in the case of casual shoes.
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Then How Can a Company Widen the Market and Produce a Different Variety of Products?
- To widen the customer market, the company created different brands and released different products by diving into the major chunk of products. This created a clear view of our brands; increases customer preferences toward their product. Before making any changes to the product, thorough research and analysis of the whole background will help them perform better in the business arena.
- An example of the above illustration is the Air Jordan Basketball shoe manufactured using air cushion technology for running shoes; it was so colorful that the NBA- National Basketball Association banned this product. They like this kind of controversy. Despite the Michael Jordan wore this and played fabulously well and sales reached the top.
- Do people after attaining a stable position should continue to do monotonous work? No, air Jordan was suited for a player like Michael Jordan; it was not suitable for all. The same way of doing business will ruin things; customization is the arrow they used to sustain a game. A different variant of basketball shoes they have produced. Air Jordan, Flight, and Force with sub-brands.
- Next, they moved toward tennis players; they created very young, very anti-country, very rebellious club collections. Tennis players don’t like bold and deep colors like Jordan; they decided to give the products what they want; then spread their wings towards fitness. The lesson learned from this was to create different brands for different products and provide complete and clear information to our customers.
- Until 1987, they didn’t use television for advertising; they want to fit their products on customers’ feet; they print ads in magazines like Runner’s Now, when people think of TV ads, Nike ads are irreplaceable in their minds. They try to incorporate their brand’s name emotionally into customers’ minds. They don’t want to create an ad but an emotion they have felt from the start to now. They planned to release an ad for Visible air to portray air cushion technology. Before advertising, they launched a campaign using Beatles songs; it gives bombastic a hit in the market.
Is Nike’s New Strategy an Advertisement?
- All their competitors followed the same way of endorsement with greater personalities. To always row the boat in a stable position they should create different as well as long-lasting impacts on customers because they are not going to buy the same products for ten years. They started including emotion, excitement, and mooting words like achievement, determination, and fun in their ads.
- Innovation is an arrow of the marketing strategy of Nike. Nike’s ads are a mixture of emotion and innovation. Even though our ads are hits, they feared every time before releasing the advertisement. They waited for a phone call to know a response to the ad. Mostly it was positive, sometimes negative; they are also ready to handle negative comments.
- Wieden & Kennedy is an advertising company. The reason behind the new marketing strategy of Nike, which spends countless time creating ads. Analyzing the customers by focus groups and thinking beyond the release of the ad; if ads created controversies, they would handle it meticulously.
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Are Nike’s Advertising Campaigns Successful?
- Not really. In 1992, the Hare Jordan, Air Jordan commercial, aired during the Super Bowl was funny and attracted the customers; but the National Stutters Association criticized us for using Porky Pig in that ad. Their tho-humor would have a long-lasting impact on their campaigns; one time our ad offended women. They lost some women athletes; to Equate this, they abruptly released an ad that shows the bond between a mother and a child, between physical education and women athletes; this regains our lost market.
Is Advertisement Impact More?
Yes, but the advertisement is like a dessert to the whole main course; without dessert, the palette is not satisfied. Like ads play a crucial role in the Marketing Strategy of Nike, good and satisfactory product production is imperative; then only advertising fulfills fills the customer’s mind.
Does Nike Also Use Athletes for an Endorsement?
Yes, it saves a lot of time. Nike always tries to connect people with emotion. Sportspersons are a good choice to create an emotion; they also use sportspeople in our product promotion. They don’t only include top players. They are trying to create an emotional bond with the customers, so their endorser should be a player at the same time he should emotionally connect with people. Example: Better endorsement with Arnold Palmer instead of top golf player Jack Nicklaus.
Players With Unacceptable Behaviors Affect the Marketing Strategy of Nike:
This is unavoidable in some cases. Endorsement of products with the players has an issue. If players get into illegal activities after endorsement, it will ruin the brand. A thorough examination and preliminary test are mandatory before signing the contract. After the contract, they have to examine them properly and should maintain a better partnership.
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Controversial Ad Creator:
In 2018, Nike created a controversial ad, media boycotted Nike. Its sales shot up to 31% and $129 million, and the stock market shot up to 36 % and earned a market cap of $6 billion.
What Is the Marketing Strategy of Nike Behind This Controversial Ad?
Nike released an iconic commercial with the voice of Colin Kaepernick. 2.7 million people started speaking about this ad on social media; why do people hate Colin Kaepernick? He kneels during the national anthem of America; he explained this was a way to show respect to military veterans; some people support him, some hate him; this thing is related to polarization. Nike used him in their product promotion; after this promotion, 90% of positive responses turned into 40 % and 72% of positive public sentiment ratio turned down to 65%.
How Did the Sales Shoot Up?
One book by Daniel describes two systems of work in human brains; one is the monkey brain, and the other is a mathematical or calculative mind; for example, people don’t buy what you sell, they buy why you sell? The picture of the Dream Crazy Campaign creates a purpose for Nike products; among the whole people of America, how the Nike customers vary.
|Name||Percentage of residents in America||Percentage of Nike users|
42% of the community belongs to the minority. Some white people also support Colin; research done by the best marketing agencies states that purpose-driven marketing is by far the most powerful marketing technique; this technique attracts the Millennials and Gen Z.
- 15% of Americans who buy Nike products are less than 18 years.
- 41% of Americans are between 18 to 24 years.
- 19 % of Americans are between 25 to 34 years.
- 25 % of Americans are beyond 35 years.
- More representatives and celebrities started supporting Nike. It leads to the creation of greater brand perception in people’s miming more than 100 million people have started supporting Nike. As a result of polarization, supporters have started to defend their fav favorite products.
- Due to the controversial advertisement, Nike created a ragging reaction, causing the attraction of the whole national media; Trump reprimanded this action on Twitter, and this popularity creates greater coverage among people. Nike became a benchmark of the 21st
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How Did Nike Obtain the Name of Olympic Sponsor When Adidas Was an Original Sponsor?
- In the 2012 Summer Olympics, Adidas became a title sponsor. It paid $ 150 million to get sponsorship. Nike lost the chance. Is sponsoring the games going to help to increase sales? Vivo sponsored IPL 2018-19, sponsorship boost its sales from 2.1 million units sales to 4.5 lion units sales, obtaining more than 100% growth in sales. Now it is one of the largest mobile producers.
- As same here, Adidas thought it will obtain a major part of sales after getting the sponsorship. But the plate turns towards Nike, there were around 16000 tweets for Nike with Olympics and 57000 followers on social media but Adidas had only 9000 tweets and 12000 followers on social media.
- Survey groups asked people a question. The question is who do you think is responsible for the title of the Olympics? 21% said Adidas whereas 37% responded Nike.
How Is It Possible? What Marketing Strategy of Nike Imparts This?
- Nike uses shrewdness to use the existing loopholes of the system. Athletes were free to choose the brand to wear in the Summer Olympics. Nike hired 400 Olympians as the brand ambassadors and made them wear Nike’s product the volt quirky (yellow-green lineup) which was in contrast to Olympic track.
- Other than main London, Nike used London word in commercials legally. When brands like Adidas, and Puma use athletes for endorsement Nike used average teenagers other than Olympians; Nike created an ad with the word inspiration. This ad delivers the story of every single individual who strives to become a better version of themselves.
- Social media platforms like YouTube grab around 4.5 million viewers, whereas Adidas had only 2.9 million views; without any sponsorship, Nike made a name among millions of people. The marketing strategy of Nike is how to become extraordinary instead of being ordinary like other brands.
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Corporate Social Responsibility of Nike:
- Nike created a favorable and aesthetic work environment for all employees. No discrimination; no racial disparity among the employees. Its employment inclusion program is beneficial for all and it makes the employees learn new things and get pace with customers’ preferences.
- Nike spent $89 million in 2020 for creating sports training programs for children with around 10000 coaches for facilitation. It also spent $100 million on girls’ training programs by incorporating digital tools and girls’ coaches to bring equality.
- During Covid 19, it created a safe atmosphere for its workers; donated $30 million for food and $ 5.7 million in footwear and other apparel. It helps in the upliftment of many poor people who are devastated by this furious virus.
- Nike started eco-friendly production to bring back the wasted natural resources. It tries to reuse and recycle the products. Through the Supplier Climate Action Program, Nike’s suppliers and manufacturers are committed to bringing carbon equality by 2025.
- This social responsibility works of Nike helps to sustain its competitive advantage, the creation of sustainable and eco-friendly products helps in brand expansion; increases customer value.
Frequently Asked Questions:
1. Why is Nike at the top of the aerobics market?
Nike has several brands with a wide market. It produces highly customer-oriented products to obtain greater customer value, Nike Sport Research Laboratory is used to produce products with very little harm to the environment at the same time, that product is suitable for the potential of the athletes.
2. How does the marketing strategy of Nike help other companies?
All market products are produced in the view of the ultimate users, and customers in mind; most brands are trying to create products for their potential customers; but at some point, they fail to cover their target market. The marketing strategy of Nike is its sustainability in obtaining customer value by creating customized products.
3. What are the failures and disadvantages of its marketing strategy of Nike?
One of the biggest failures is Nike’s shoe ripped apart in the stadium. In 2019, Duke Basketball player Zion Williamson who was endorsing the shoes suffered from a severe knee injury due to the breaking of a Nike shoe. In addition to this, shoes are highly costly and the celebrities who endorse Nike products get into unethical things, which directly impacts Nike’s products.
4. How does the marketing information perform an important role in the marketing strategy of Nike?
Nike uses focus groups, questionnaires, training groups, and apps that collect customers’ preferences and feedback on the products. It requires a lot of time to collect and analyze the information; the capability of Nike’s Research and Development team is the reason for the creation of higher customer value; this information helps Nike Sport Research Laboratory create customer-driven products.
5. What are the ways to compete in the highly competitive market?
- Don’t run towards sales, market the customer’s required product, and stand out from others in the market.
- Make a separate department for analyzing the customers. Like the marketing, production, and finance departments in the organization.
- Try to read and analyze the failure strategies, markets, and companies that give you an idea about the creation of your strategy.
- Find your greatness, do remarkable things, and make customers feel your products.
From the marketing strategy of Nike, it is clear that 21st-century branding is not about sales but about standing out from the market. Always grasping consumer psychology towards the brand or product, behavioral economics, and human-centered design will help to sustain the market; controversial advertisement is a double-edged sword. If we succeed, we can obtain the top place while it will fail our existing market also got ruined.