While an undergraduate student at the University of Oregon in the 1960s, Phil Knight, a member of the track team, thought there should be a better running shoe. In his garage in Eugene, Oregon, he began experimenting with shoe design by taking tire tread and gluing it to the bottom of shoes. Meanwhile, his coach (and future partner) was pouring liquid urethane into his wife's waffle iron, creating the first waffle sole. From these humble beginnings, Nike grew from a U.S.-based distributor of imported Japanese shoes from the trunk of Knight's car to a $18.6 billion company whose primary business is the design, development, and worldwide marketing of high quality footwear, apparel, and accessory products. It is not a production company. Virtually all of Nike's products are manufactured under independent contracts with a multitude of manufacturers operating a total 700 factories in 52 countries, employing nearly 800,000 workers.Nike has grown to be the largest marketer of athletic footwear in the world, holding a global market share of 37%. In the US, Nike products are sold in about 22,000 retail outlets, including NikeTown and Nike outlet stores. Globally, Nike retails in over 160 countries.
Nike has established a strong brand portfolio with design and production of over 200 different kinds of athletic shoes and another 200 different items of sportswear. They also have added several wholly owned subsidiaries including Cole Haan, Converse, Inc., Hurley International, NikeGolf and, Umbro Ltd.
Today, Nike focuses on six major product categories: running, basketball, football, men's training, women's training, and sportswear. Each category has a team that is immersed in the culture of the sport and builds strong relationships within the sport community. These relationships provide the source of insights used to create new products. Endorsements have been central to the Nike marketing strategy. One of the first was legendary Michael Jordan.
Nike headquarters is situated on 200 acres just west of Portland, Oregon. There are a total of 17 buildings-each named for a well-known coach or athlete who has long been associated with Nike. The list includes Steve Prefontaine, Michael Jordan, Pete Sampras, Lance Armstrong, and Mia Hamm. Nike's practice of having top-level athletes promoting their products appeals to broad demographics and psychographics as a way to identify with and emulate their athletic heroes.
Corporate sponsorships are also a major part of the Nike marketing strategy with contracts with the Olympic Games, the NHL, the NFL, the NBA, and hundreds of college athletic programs. In 2009, for example, Nike signed a $33.8 million contract with the University of Washington for all athletes to wear the Nike swoosh for the next 10 years.
It was Dan Wieden of the Weiden and Kennedy Advertising firm who convinced Phil Knight that good advertising would create global success. Weiden coined the trademarked slogan "Just Do It!" that reflects a philosophy that is, simultaneously, simple and philosophical.
The Nike swoosh was designed by a Portland State University advertising student, Caroline Davidson in 1971. Phil Knight asked her to design a logo for the side of a shoe. She designed the "swoosh," and Knight paid her the agreed-upon $35. Today, the swoosh is so recognizable that most Nike advertising simply ends with that simple image. For Nike, image and brand have proved to be a sustainable competitive advantage. According to a study by InterBrand, Nike's brand is worth $10.9 billion. Use the following link: http://interbrand.com/best-brands/best-global-brands/2015/
Answer the following questions as completely as possible.
- How would you describe Nike's promotional mix?
- Why would Nike consider a $33.8 million contract with the University of Washington to be a good marketing decision
- Do you think Nike should be concerned about over-swooshing? Is there a danger that the swoosh is overused?
- Why would Interbrand conclude that the Nike brand-most clearly associated with the swoosh-has such tremendous value?