Analysis Of Nike’s Product Life Cycle And Advertising Spiral Stages

Introduction

Nike was first known as BRS which is short for Blue Ribbon Sports. It was founded by Phil Knight and his coach Bill Bowerman. Phil was a track athlete in the University of Oregon. The company was first established as a distributor for a japanese shoemaker called Onitsuka Tiger. Later, BRS had made its own company and its relationship with Nike had ended. Nike went on and made itself a leading brand in the United States athletes market as it had covered half of the market share alone.

Nike’s first ever commercial was a TV ad introducing their running shoes. It was showing how it would make athletes run faster if they wear them. It had graphics to help attract more consumers.

Nike is famously known for its “swoosh” symbol. It is also widely recognizable for its famous motivational slogan “Just Do It” which was implemented in many of marketing campaigns encouraging athletes. The slogan alone had helped Nike reach a high level against competitors.

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Growth

Nike has been building a good relationship with customers from the start which helped their sales a lot. They used persuasive techniques to get to consumers to make them feel good when buying a shoe. They have also been doing promotions and discounts to attract more people to buy their shoes. Nike knew from the beginning that even though their product was higher in price than the average shoe, that people would still buy them as they present high quality products.

Nike’s shoes vary in prices which makes it an A and B class company.

It’s success has proven the famous saying “quality over quantity. Nike’s huge success falls down to it’s marketing techniques by using celebrities to promote their products, their all time famous slogan “Just Do It”, and their good relationship with the consumers.

Maturity

Nike at this time is one of the largest shoe manufacturers worldwide. There is a continuity in the increment of its market share. Nike’s net worth is now more than 30 billion US dollars and increasing.

They had strong marketing campaigns as well as the endorsement of different products. They started creating different segments of footwear such as shoes for specific sports. They would make shoes for football, basketball, baseball, tennis, etc. Which helped widen its market. Nike started introducing apparel and other sports goods after their huge success with footwear, however, they are highly dependent on footwear for their sales to this point.

Decline

Nike has never experienced a decline in their profits or success. The only problem Nike has faced in the past was that consumers were not completely satisfied with their prices as they thought their shoes were a bit overpriced which Nike quickly solved by decreasing their prices to a suitable price for the quality that they provide.

Advertising Spiral

Pioneering Stage

Nike’s first campaign was a TV ad in 1982 showing men in historic times running in an open field with a narrator explaining how running has always been a sport that mankind took seriously. The campaign wasn’t promoting a certain shoe, but was rather promoting Nike’s company name and reaching out for more people to raise awareness about it’s products. It was a successful ad as it showed that by having Nike’s products you will be able to run faster than normal.

Competitive Stage

Nike has always had two main competitors which are Reebok and Adidas with a lot of similarities in products. All 3 companies make shoes for athletes with different designs. They all use the same marketing strategies and target the same audience.

Retentive Stage

Nike differs from competitors and it has created for itself a position that cannot be overtaken with their famous campaign in 1988 that introduced the “Just Do It” slogan and the “swoosh” logo which made their products recognizable for target audience.

Newer Pioneering Stage

Nike has been creating and developing new shoes such as the self lacing shoes called HyperAdapt which were featured in the famous movie Back to the Future which helped the success of the campaign despite its high price tag of more than 700 US dollars. They’ve also been collaborating with other famous companies such as Apple and coming up with a product called Apple Watch Nike+.

Newer Competitive Stage

Nike is still using celebrities heavily for their advertising campaigns and is considered to be the highest celebrity paying company of all time for ads. It has spent around 10 billion US dollars alone in celebrity endorsements.

Newer Retentive Stage

Nike’s aim is to always create and develop new and innovative shoe designs. They’ve created a campaign with Colin Kaepernick which is a famous American football player than made their sales jump up by 31%.