NIKE: Evolving to Something Bigger than Sports

Categories: NikeTarget Market

Introduction to NIKE’s Strategy

Social media and new technology has created the most competitive marketing environment of all time. People are getting new feeds 24/7 about different moves from every company/every superstar. Fans are demanding information and headlines instantly. The advertising industry is evolving faster than ever before and the companies who evolve the quickest survive the longest. Nobody has been able to dominate this environment better than NIKE. The 30-billion-dollar company has been able to differentiate itself, compared to competitors, leading them to the top of the list of the athletic footwear/apparel industry worldwide.

The secret formula to Nike’s success is the excellent marketing strategies that has driven the company to sell a massive quantity of its highly innovative products.

Nike is best described “as a transcendent super brand that took branding to another level, beginning to focus principally on brands and brand management, believing that while products are made in factories, a brand is made in the mind and bought by the consumer”

(Kazi, 2011). The Nike swoosh created by Caroline Davidson, which was originally sold for a $35 trademark fee, is widely considered the most iconic logo in the business world and revolutionized the way that the corporation has been able to market its products.

The first aspect of Nike’s strategy is to find its target market for a particular product. For example, for most of its products it tries to cater towards all types of athletes or sport enthusiasts. These targeting techniques include product sponsorship by many different types of professional athletic teams, college sports teams, as well as celebrity athletes.

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This is where Nike has really gained a major competitive advantage over other companies in its industry. The portfolio of teams and athletes that endorse Nike is like no other brand in the world. The athletes and organzaitons endorsed by Nike are the best of the best from all sports around the nation. The list starts with Michael Jordan and includes athletes such as Lebron James, Kobe Bryant, Tiger Woods, Lance Armstrong, Derek Jeter and Cristiano Ronaldo; teams include the Universities of North Carolina/Alabama, the National Football League (NFL), and soccer giant Manchester United Football Club. Now Nike by no means invented this strategy, but the company made it famous and knows how to represent their athletes as well as sending the right message to the younger generations. For example, Lebron James recently established the I Promise school for low-income families in his hometown of Akron, Ohio to obtain an education for free. Fellow Nike athlete and good friend of Lebron Chris Paul tweeted “Proud of you for chasing your dreams and in turn, giving the opportunity to hundreds of kids to realize theirs”

Lebron resembles everything a Nike athlete should. He didn’t come from much but he continued to chase his dreams and has given kids the motivation to chase theirs as well. James has been a Nike athlete since 2003 and has recently signed a lifetime deal with the apparel company.

When kids are watching TV and they see their favorite players wearing Nike apparel, they also want to be wearing their gear to show that they want to support and be like their favorite player/team. Growing up and playing sports all my life, I can relate to these kids. As a young teen you truly believe that if you wear the same gear as these superstars it will make you “better” and your game will be just like theirs. People start to associate certain products with victory and triumph, which creates appeal for these products worn by collegiate and professional athletes, who are sponsored by the company. For example, Oregon who is home to Nike Founder Phil Knight, is known for their unique collection of uniforms. The combination of success on the field while also wearing the coolest looking jerseys every Saturday is an extremely attractive recruiting tactic that is used to get the best high school athletes to commit to their school.

NIKE has changed the meaning of Superstar. Superstar to NIKE can mean something as simple as believing in yourself. This type of focus has extended to inspirational figures. In April of 2018, NIKE endorsed 1 armed NFL Linebacker Shaquem Griffin. Griffin, the former UCF star, has been referred to as the most inspirational player in the NFL. He is the first player in the NFL to have been drafted with one arm. ‘The long-term vision of Nike and iconic message of ‘Just Do It’ fits perfectly into Shaquem’s brand and commitment to inspiring others,’ said Buddy Baker, president of Exclusive Sports Group, which also represents Griffin’s brother, Shaquill. Shaquill Griffin plays cornerback for the Seattle Seahawks. Nike strives to connect with people through an emotional lense that shoots adrenaline to the viewer/consumer that anything is possible and to “Just Do It”.

Once the target market and sponsor have been chosen, Nike invests a lot of money into its advertising campaigns. Nike believes that this heavy investment is necessary to show viewers that they believe in the sponsor/slogan/action. For example, the “Just Do It” campaign is arguably the industry’s greatest advertising slogan of all time and has continued to fuel sales even today. In 2018, NIKE spent 3.58 billion dollars in advertising and promotions with most of the marketing tactics still revolving around the same slogan. The number is expected to continue to rise. The concept of “It’s not enough” has gave NIKE a platform to impact generation to generation.

Within the past decade, Nike has started to shift its marketing strategies away from the big television campaigns that led to its original success. With iPhone and apps emerging as new digital media, Nike has decided to hop on board with their state-of-the-art products by releasing the Nike FuelBand and the Nike+SportWatch GPS, Nike has been able to track its core customers and has learned that they spend an increasing amount of time on the Internet. As mentioned earlier, Nike has adjusted for their specific target market to people who spend a large time on the internet. This resulted in Nike launching on-line, digital ad campaigns on various social online communities/outlets. The Nike+ series of new innovative products records customers’ behaviors and patterns, as well as creating a platform for customers to really connect with Nike. Going digital could have been one of Nikes best decisions. Nike is now able to directly communicate with its past and future customers, which allows it to understand what its target market wants out of a product. One example of this new technique was when Nike created a 30-story billboard in Johannesburg, South Africa, that posted fan headlines from Twitter (Cendrowski, 2012). Not only is Nike able to reach a much larger quantity of people, but also it is able to do so at a much lower cost than the expensive TV ad campaigns. Instead of spending $100 million on advertising during major sporting events, to reach at most 200 million people (Superbowl), Nike is able to reach this many people every single day for a fraction of the cost over its various websites and social media platforms (Cendrowski, 2012).

Jordan Changing the Sneaker Industry

When it comes to Nikes best endorsements, none could outperform Michael Jordan.

In the mid 1980’s, Nike signed an endorsement deal with Michael Jordan, which resulted in the birth of the Air Jordan brand. Today Air Jordan is responsible for 3.1 billion dollar of Nikes revenue each year. Michael wasn’t just one of the best players out all time. He is the best player of all time. His name is still mentioned everyday on ESPN. Everybody wanted to “Be like Mike”. His Jordan brand has made the greatest impact in the sneaker market by transforming the industry. The Jordan logo was an instant hit and people wanted to be affiliated with it. Jordan sneakers were based off the idea that the shoes made you run faster, jump higher, cut quicker. The demand was higher than expected. As the Jordan market became even larger, Nike was able to significantly increase its prices and reduce the quantities manufactured in the early 2000’s. This resulted in Jordan’s being labeled as a “luxury good.” For example, the Air Yeezy’s (Jordan sneakers endorsed by Kanye West) retailed at $225 and have a resale value of over $1000 (Howenstein, 2014). This high resale value was due to the brand recognition/popularity of Jordans, and has created an entire part of the global population that has been labeled as “sneaker heads”, who are known for buying and collecting these expensive shoes. Purchasing Jordan’s became a hobby to some people. Customers would purchase these products as a flashy statement of their monetary status. Today, Nike offers Jordan sneakers at prices over 200$ or under 100$ to try and target both sets of customers. Each and every year, Nike makes sure to improve or add at least one feature on its Jordan sneakers when they are released. For example, the original Jordan 1 was the first shoe to offer heel Nike “Air cushioning”; the following year, the Jordan 2s offered full length Nike “Air cushioning”. Jordan Brand continues Nike’s tradition of making state of the art shoes and apparel “by the athlete for the athlete” (Downs, 2013).

The brand is so immensely popular that each year Nike puts out a new sneaker, and the release has often been mentioned on different news programming venues because of the ridiculously long lines and “die-hard” brand loyalty (Sneakernews.com, 2013). Air Jordan’s success and design ultimately led to the release of two new sneaker brands for Nike, the Air Forces and the Air Flights. The Jordan brand is one of the main reasons Nike was able to separate themselves from the rest of its competition, during the 1980’s, and has helped them maintain the largest single share of the athletic apparel/footwear market. Social media has played a huge roll with sneakers updating the younger generation of new releases on Twitter and Facebook. This franchise embodies all of the core values that Nike projects and “continues to lead and shape the athletic footwear industry into the future” (Sneakernews.com, 2013).

Evolving to Something Bigger than Sports

One of the biggest factors that has allowed Nike to dominate the apparel industry has been their ability to deviate away from just sports. Nike’s ability to not turn a blind eye to world issues as well as having the confidence to speak their voice and show their support has separated them for their competitors once again. They continue to inspire kids with their “Just Do It” campaign, which has evolved into something way bigger than sports. Inspiration has a whole new different meaning for the brand. They’ve been able to turn heads, and they’ve shown their brand mentality and they have got people talking about them. Nike continues use their advertisements to interrupt people’s thoughts. The message in their advertisements can’t be ignored. The biggest of them all has been most recently, when Nike involved themselves into the social arena of current events and made Colin Kaepernick, the former NFL Quaterback who knelt during the national anthem, the face of the their 30th anniversary “Just Do It” campaign.

The message from NIKE to “Believe in something. Even if it means sacrificing everything” brought new meaning to “Bigger than Sport”. Kaepernick believed in something and it cost him his career in the NFL. He was willing to sacrifice the sport he has been playing since he was 7 years old. The game that he grew up to love. Standing up for Kapernick, also meant they were standing with everyone that have encountered racial brutality. No NFL front office wanted to stand by him, not even the President who tweeted “What is Nike Thinking” (Twitter, Trump), but NIKE showed the world that they weren’t scared and enough is enough.

As Nike expected, the decision was going to upset people, many of which were Nike owners. Many decided to share their protest through social media with several posts including people cutting and burning their Nike items in protest.

So why did they do it? Two words. Target. Demographic. Racially charged police brutality is something that cannot be ignored and up until recent times, it has not been so forefrontal in the media. Younger generations are far more progressive and in the wake of the Kaepernick case, young people showed their support. So Nike decided to lose the vote of the baby boomer generation but focus more on the long-term future of this country and gain more followers in the younger age groups. According to the New York Times, “Nearly two-thirds of individuals who wear Nike in the United States are under 35 years old, and are much more racially diverse than the baby boomer population … those consumers want their brands to take visible, social positions, and this is an opportunity for Nike to do just that” (NYT, Draper). Younger age groups will be purchasing for longer into the future so in turn a strengthened relationship with millennials and below has been created. At the end of the day, Nike isn’t concern about the 3.9% drop in shares that Wall Street hit them with the next morning after they released the campaign. They’ll instead be looking at the next 40 years of brand loyalty they’ve created with their target demographic. It seems like they’ll be alright overall considering Nike Inc sales surged 27% in the following days and their share price reached its highest in history. Kaepernick would go on to later receive an award from Harvard University for his contribution to black history and culture.

Conclusion

At a young age I was intrigued by the Nike swoosh. From that point on, my friends and I kept up to date with Nike and their new products. We would put on the different sneakers from Nike All-Stars and play as if we were them. I would convince my mom and my dad that I indeed could jump “like Mike” and the shoe was more than just a regular shoe. However, at age 21, I am able to view their advertisements and interpret them through a different pair of lenses that I didn’t possess when I was younger. But their inspiration on me, hasn’t changed. Their advertisements still catch my eyes every time and make my mind spin on thoughts. I can’t say that about many brands. Through it all, I truly believe that Nike’s bigger key to their success hasn’t been the statistics, or the accolades, or the endorsement deals, or even of the products. Instead, I believe their success has been found in the ability to evolve into something much bigger than sports. Their ability to make a young boy from Compton with no legs believe he can achieve his dream. Their ability to give confidence to a girl to not only be the homecoming queen, but also be the star linebacker on the football team. Their ability to convince people to “Dream Crazy”. Their ability to step up and stand by someone who sacrificed everything he had for something he believed in. Their ability to focus on the making the younger generations believe and “Just Do It”, In my opinion, these are the things that have made Nike #18 on the World’s Most Valuable Brands.

Works Cited

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NIKE: Evolving to Something Bigger than Sports. (2021, Mar 18). Retrieved from https://studymoose.com/nike-evolving-to-something-bigger-than-sports-essay

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