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Nike Case Study

Essay by review  •  November 8, 2010  •  Case Study  •  2,431 Words (10 Pages)  •  1,281 Views

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Former University of Oregon track coach and co-founder of Nike Bill Bowerman once said: “If you have a body, you are an athlete!” (NikeBiz) This way of thinking is how Nike conducts every aspect of their business. Every person is a potential athlete or “consumer”. This is a common term when used in the realm of athletics but when Bill Bowerman said this it was in direct reference to the shoe industry. From their marketing strategies to their selling philosophies, Nike has developed one of the most recognizable and demanded name and logo tandems ever.

Nike, which is the Greek Goddess of Victory, was born in 1972 when BRS, Blue Ribbon Sports, launched its first branded shoe at the U.S. Olympic track and field trials. A former University of Oregon track team member Phil Knight created Blue Ribbon Sports. At Oregon, Knight was coached by the legendary Bill Bowerman and then went on to become and alumni of the Stanford School of Business. BRS was crafted in 1962 when Knight made a deal with Onitsuka Tiger Company, a Japanese shoe company, to import their shoe to the United States. Knight had the idea to sell a low cost shoe with a very high quality. Knight had high aspirations of taking Adidas out the top spot in the athletic shoe market. In 1964, Bill Bowerman decided to join Knight as a partner at BRS to create a joint quest to be number one. Bowerman redesigned the Tiger shoes while Knight acted as the accountant/personal seller and went on the road to sell their newly crafted sneakers at track meets and local shoe stores. By 1966, Blue Ribbon Sports opened their first store in Portland, Oregon.

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Signing First Endorsers:

During 1971, BRS caught a break when a trading company called Nissho Iwai introduced BRS to important letters of credit. This credit allowed BRS to subcontract its own shoe line and by 1972 it was selling Nike Brand shoes. Over the next decade Nike expanded almost double its size each year from the previous year. Nike is officially called Nike in 1978 and has signed on tennis great John McEnroe, New York City marathon champion Alberto Salazar, women’s marathon gold medallist Joan Beniot, and Olympic track star and gold medallist Carl Lewis. (story/chrono) Also during this time Nike is opening manufacturing plants all over the U.S. Nike was a household name for most athletes by early 1980’s.

Nike’s focus was still on track and field and for the most part track athletes were their target market. One of the first individuals to endorse a Nike product was a man who exemplified their style and way of conducting business, Steve Prefontaine. Prefontaine was a household name in the late seventies and has gone down in history as one of the best American track and field athletes ever. Prefontaine was a friend of Knight and had been coached by Bowerman at the University of Oregon. Prefontaine embodied what Nike wanted as its differential advantage of other companies due to his brash attitude, high talent level, and cavalier mentality. Nike marketed itself as a new and innovative shoe company that constantly had the athlete’s performance in mind unlike existing companies who focused on their products appearance and durability. Nike infested their market with bright colors, new styles, and technology information pertaining to their products. This is why Steve Prefontaine and Nike were a tremendous tandem in the early years of Nike’s existence.

By 1984 Nike had supplanted Adidas as the number one selling running shoe company in America. But this was not enough for Nike. At this time Nike was known for its attention to the wants and needs of their market, the individual runner. The Nike Brand itself, and while Knight and the employees of the company promoted Nike across the country, the quality, comfort, and design of the shoe were selling the product already. During the period from 1985-1987, Nike dropped back down to number two in the running of the shoe market. Sales had dropped off because the running boom of the late 70’s and 80’s had begun to diminish. Nike began to notice and entire market that the company had been avoiding, everyday athletic activities. These activities were things done by everyday people and not just the serious athlete. Fortunately for Nike, in 1985 their star was brought to light. A rookie basketball player with amazing talent and a nice smile fell into their lap, his name is Michael Jordan. (story/chrono)

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Michael Jordan:

As soon as Nike signed Michael Jordan they began to market a new line of shoes and apparel with the name Air Jordan. This was the beginning of the Jordan Brand and Jordan’s Jumpman23 products. Featured prominently on each Air Jordan product was the Nike insignia, the swoosh, the product mark which the Jumpman23 and the Air Jordan label. Jordan came to Nike at a time when the marketability of the NBA was increasing. NBA games were being nationally televised during prime time television hours and weekends. This gave Nike the perfect platform to develop and market their new star and the products that he endorsed.

During the first few years Nike introduced Jordan to the public and Jordan familiarized himself with the American public. Nike ran a series of ads with Jordan and film director Spike Lee. These ads were aired during prime time television hours and were solely targeted for pre-teen school students. These ads displayed an expressed message to “Stay in School.”( story/mkg_innov) The ads presented kids with a national figure that was selling both school and Nike’s products, how could parents deny their children the shoes of such a virtuous spokesman? Jordan was a figure that children adored, looked up to and tried to the best of their ability to copy. Nike used this to display a great positive image for their company and to sell their products. The ads were also the first by a company that didn’t use the usual 3 a.m. sport for public service announcements. Nike wanted to be a bold marketer; they aimed for the top promotional sports and developed a pioneering strategy for their industry. Nike continued to promote Michael Jordan through their ads and Jordan continued to promote their products.

The introduction of the Air Jordan line helped to create new lines of basketball shoes, including the Air Force and Air Flight lines of basketball shoes and apparel. Also, a new innovative technology was a layer of air cushioning in their shoes; this was truly a differential factor for Nike

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