INTRO:
NIKE, pronounced NI-KEY, is the winged goddess of victory according to Greek mythology. She sat at the side of Zeus, the ruler of the Olympic pantheon, in
Olympus. A mystical presence, symbolizing victorious encounters, NIKE presided over history's earliest battlefields. A Greek would say, "When we go to battle and win, we say it is NIKE." Synonymous with honored conquest, NIKE is the twentieth century footwear that lifts the world's greatest athletes to new levels of mastery and achievement. The NIKE 'swoosh' embodies the spirit of the winged goddess who inspired the most courageous and chivalrous warriors at the dawn of civilization.
II / NIKE: THE COMPAGNY.
A / NIKE,inc.
• Founders and origins: There are two: Bill Bowerman, the legendary
University of Oregon track & field coach, and Phil Knight, a University of Oregon business student and middle-distance runner under Bowerman. Between them, the seed of the most influential sporting company grew.
- The long-lived business partnership began in 1962 as Blue Ribbon Sports (BRS).
They wanted to dislodge the Germany's domination of the U.S. athletic shoe industry. First-year sales totaled $8,000.
- In 1972 Blue Ribbon Sports officially became Nike and went from $10 million to
$270 million in sales. Actually it’s after that the success came. In 1973 the
American record-holder Steve Prefontaine becomes the first major track athlete to wear Nike brand shoes. He converts many of his fellow competitors to the young brand. And in 1976 At the Olympic Trials, Nike shoes are seen in abundance for the first time worn by young, rising stars in both middle- and long-distance events.
- The 80s and 90s would yield greater and greater profits as Nike began to assume the appearance of athletic juggernaut, rather than the underdog of old.
Its promotion is looked after by great athletes like Tiger Wood or Michael Jordan.
- In November 1996, NikeTown New York opens its 8,500 sq. ft. of innovative retail design and sports heritage. The same year "Advertising Age" named Nike
Marketer of the Year, citing the "ubiquitous swoosh...was more recognized and coveted by consumers than any other sports brand--arguably any brand".
• Revenue: In 1996 Nike's revenues were a staggering $6.74 billion. And in
2003 Nike reported revenues of $10.7 billion, an 8 percent increase from 2002.
It’s the best year of the company's 31-year history.
• Employees: Nowadays Nike is an international enterprise. Nike employs approximately 23,000 people worldwide, from its World Headquarters in Oregon and European Headquarters in The Netherlands, to nearly every region around the globe. Including manufacturers, shippers, retailers and service providers, nearly one million people help bring Nike to people everywhere.
• Headquarters: The 16 buildings at World Headquarters in Oregon are a softspoken testimony to the beauty of sports. Nike employees are typically active people who take full advantage of the fields, trails and gyms that dot the 175-
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acre spread. Each building is named after an athlete who is key to Nike's growth over the years.
• Facilities: Nike owns facilities in Oregon, Tennessee, North Carolina and The
Netherlands, and operates leased facilities for 15 Niketowns, over 80 Nike
Factory Stores, 2 NIKEgoddess boutiques and over 100 sales and administrative offices.
• Retail: The first Niketown opened in Portland, Ore. in 1990, setting the standard for interactive, immersive brand environments. Averaging 30,000 square feet of selling space, Niketowns attract millions of consumers every year and employ 4,000 Nike retail associates in the United States alone. Currently, there are 13 U.S. and four international Niketown stores: Atlanta, Boston,
Chicago, Denver, Honolulu, Las Vegas, Los Angeles, Miami, New York, Orange
County, Portland, San Francisco, Seattle, Berlin, London, Melbourne and Toronto.
In addition, Nike has been operating Nike Factory stores around the world since
1984, with more than 80 stores now in the United States. In October 2001, Nike opened the first of two NIKEgoddess stores, dedicated exclusively to active women.
B/ ACTIVITIES SECTOR.
We can analyse the different regions of Nike’s activities, in descending order for the revenues.
1. US Region
• Overview: The U.S., namely the Pacific Northwest, is the home of Nike: The company's inception was at the University of Oregon in Eugene, where cofounder Phil Knight went to college and co-founder Bill Bowerman coached track.
Now the company's World Headquarters are in Beaverton, Oregon, a suburb of
Portland. The company also operates distribution centers in Wilsonville, Oregon, and Memphis, Tennessee.
• Employees: There are approximately 12,000 Nike employees in the United
States; 5,850 work in Oregon at the World Headquarters, Wilsonville distribution center, and various retail venues; around 5,100 work in the Memphis distribution center and other retail stores around the country, and 1,000 in a variety of regional locations.
• Revenue 2003: For the full fiscal year, U.S. revenues were $4.7 billion. 44% of Nike revenue was generated by sales in the U.S.
• Manufacturing: There are approximately 109 apparel contract factories and
12 equipment contract factories in the U.S., providing more than 13,000 jobs to local communities. In 2001, approximately 14% of Nike apparel was made in the
U.S. The remainder is manufactured by independent contractors located in 33 countries.
• Distribution: Nike U.S. has three distribution centers: a 540,000-square-foot center in Wilsonville, Oregon, that distributes primarily footwear and some equipment, and two Memphis facilites. In Memphis, one center is 805,000 square feet and handles only footwear, while the other is a 1,216,000-square-foot facility that handles all of the apparel for the U.S., plus some equipment and footwear. On an average day, the Memphis apparel facility ships 500,000 units.
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2. Europe, Middle East, Africa (EMEA) Region
• Overview: Nike first sold footwear in Europe in 1978. Two years later, the first
Nike European Headquarters opened. Then, in 1994, Nike centralized European distribution at the Laakdal [Belgium] Customer Service Center. The current EMEA headquarters opened in 1999 in the Netherlands.
The Middle East has been included in the region since the beginning as a geographical area followed by the Nike Partners organization. Nike Partners was the subsidiary in charge of dealing with local distributors located in Eastern
Europe and Middle East, including Israel. To deal with local distributors make the enter in a foreign market easier. The region's latest addition, Africa, came under the control of the European region in the middle of 2000.
In terms of revenue, the EMEA region is Nike's second largest region after the
U.S.; it is the third largest in terms of manufacturing.
• Employees: At the beginning of 2003, 5,358 employees work in the EMEA region.
• Countries where Nike offices are located: Nike offices are located in 23 countries in the EMEA region: Austria, Belgium, Croatia, Czech Republic,
Denmark, Finland, France, Germany, Hungary, Italy, the Netherlands, Norway,
Israel, Poland, Portugal, Slovakia, Slovenia, South Africa, Spain, Sweden,
Switzerland, Turkey, and United Kingdom.
• Revenue 2003: $3,241,700,000, up 20% from 2002 (constant dollar). 30.3% of Nike revenue was generated by sales in the EMEA region in 2003.
• Retail presence: Niketowns are located in Berlin and London.
• Distribution: Centralized since 1994 at the $138 million Laakdal customer service center.
3. Asia Pacific Region
• Overview: Nike Japan was established in 1981. In 1997, two major customer service centers opened outside Seoul and Tokyo, and China became both a source country and a vital market for Nike. The Asia Pacific region is Nike's third largest in terms of revenue, but number one in terms of manufacturing.
In 2000, Australia played host to the 2000 Olympic Games, and in 2002, Japan and Korea co-hosted the World Cup.
• Employees: About 3,000 employees are based in the Asia Pacific region. 50 employees of the Asia Pacific region work at Nike's World Headquarters in
Beaverton, Oregon.
• Countries where Nike offices are located: Nike has 11 offices in the Asia
Pacific region. Nike offices are located in: Australia, China, Hong Kong, Japan,
Korea, New Zealand, Southeast Asia (Singapore, Malaysia, Philippines, Thailand), and Taiwan. In addition to these offices, Nike also has manufacturing offices in
Vietnam and Indonesia.
• Revenue 2003: $1,358,000,000, up 19% from 2002. 13% of Nike revenue was generated by sales in the Asia Pacific region in 2003.
4. Americas Region (North and South America excluding the United
States)
• Overview: Canada was Nike's first foreign market: the company started selling shoes there in 1972. Nike expanded its business to South America in 1978.
While the Americas is Nike's smallest region by revenue, it is the second largest in terms of manufacturing. The first Nike shoe ever contracted out was done in
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Mexico in 1971. It was a soccer shoe manufactured by Calzados Canada in
Guadalajara, Mexico.
• Employees: 1,008 Nike employees are based in the Americas region; 86 additional Americas region employees work at Nike's World Headquarters in
Beaverton, Oregon.
• Countries where Nike offices are located: Canada, Mexico, Brazil,
Argentina, and Chile. (All the other countries are managed through partner organizations based in Panama, Equador and Paraguay.)
• Revenue 2003: $527,000,000, down 7% from 2002. 5% of Nike revenue was generated by sales in the Americas region.
III / NIKE’S STRATEGY: RESEARCH AND COMMUNICATION.
The two mainly advantages of Nike is firstly its capacities to innovate and found new prototypes and the second is its communication’s program.
A/ RESEARCH: AFTER 30 YEARS NIKE CONTINUES TO LEAD INNOVATION
IN FOOTWEAR APPAREL AND EQUIPMENT.
That’s how Nike definite its mission: “Our mission has always been to provide a competitive edge, to help athletes perform better. We climb inside the athletic mind. We feel every beat of the athletic heart. We flex, bend, twist and torque every inch of athletic sinew and muscle. It's not easy, but it's natural for us.
We're athletes.” And “In our pursuit to help athletes attain ever greater speeds, we have studied, examined and dissected what makes one thing fast, and another not. We have explored the physics, mechanics and geometry of speed as well as speed's psychology and aesthetics. And we’ve got the innovations,
products and athletes to prove it.”
Nike emanated from two sources, one of these was Bill Bowerman's quest for lighter, more durable racing shoes for his Oregon runners. And Bowerman's desire for better quality running shoes clearly influenced Knight in his search for a marketing strategy. So Nike has always experimented news system. It’s one of the parts of its success.
For instance: In 1970 Bowerman begins experimenting with rubber spikes by pouring a liquid rubber compound into his wife's waffle iron, creating a sole that forever changes the design of running shoes.
- In 1974 The WAFFLE TRAINER is introduced featuring Coach Bowerman's famous Waffle outsole. It quickly becomes the best-selling training shoe in the country.
- In 1979 Frank Rudy, former NASA employee, came to Nike with an idea which
Nike helped refine to create a better shoe. Together, Nike and Rudy engineered the first Air-Sole units: durable bags filled with pressurized gas that compress under impact, then spring back. The result is Nike Air cushioning, the single greatest footwear cushioning innovation ever developed.
The Nike Sport Research Lab (NSRL) became naturally, philosophically and physically the heart of the Nike World Headquarters campus in Oregon. About thirty people collaborate with clusters of designers upstairs to bring to market
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products that take athletic performance beyond the next level. Before these were scientists, they were athletes. Still are. They know what it's like to chase a championship, to push their bodies beyond their limits again and again. For instance: Ian Muir, a researcher who helped create Nike Sphere apparel, grew up playing semi-professional rugby and cricket in England and now spends occasional lunch hours playing soccer near the lab. Gordon Valiant, a researcher who helped create Nike Shox cushioning technology, captained his varsity basketball team, ran track at college, and now competes internationally as a middle-distance racer. Or Mario Lafortune, who runs the whole show, played high-school hockey, raced canoes to the state championship in college, has run
25+ marathons, and is an avid cyclist and golfer.
Nike's research lab has grown considerably in 30 years. Today it commands nearly 13,000 square feet and is decked out with state-of-the-art research equipment that looks like it should be orbiting some distant star. In simplest terms, the researchers work falls into three primary areas:
 Biomechanics (study of human movement and related forces)
 Physiology (study of the integration of the body's energy systems and responses to environmental stresses)
 Sensory/perception (subjective evaluation of product attributes, usability, and durability)
For each of those, researchers must take into account the nuances of at least four differentiating factors:
 Geography. Runners in the United States often run on hard surfaces while runners in Europe prefer trails. That leads to different cushioning demands and different potential injuries.
 Gender. On average, for any shoe size, women tend to weigh 10% to 50% less than men. That translates into different structural needs.
 Age. Children learning to walk - and the lab has studied even them - have different stability needs than those of a master athlete.
 Skill level. Someone learning to hit their first clean shot off the tee has different needs than Tiger Woods.
To do all this, the scientists have an incredible array of measurement and analysis tools. Their data collection includes virtually every variety of muscle sensor, pressure platform, breath analyzer, foot scanner, and thermal imaging device that has ever fluttered into the sci-fi imaginings of the most psychotic geek researcher.
Here's an abbreviated list of some scientific techniques the researchers use to quantify their finds:
 Motion analysis (kinematics)
 Ground reaction forces and loading rates (kinetics)
 Foot-pressure measurement (in-shoe and external)
 Ankle range of motion (ROM)
 Foot morphology
 Electromyography
 High-speed video
 Metabolic cart
 Heart-rate monitors
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 Skin and core-temperature sensors
 Bloodwork
Innovations have a real impact on the market. It attracts new consumers.
In a first time, innovations are meant for the athletes then in a second step the products are democratized for all.
B / JUST DO IT: THE NIKE SPIRIT. THE STRATEGY OF COMMUNICATION
BY NIKE.
At the moment when all the brands in sportswear sector are goods, when they propose the same quality, the same price there is another fact no commercial which push the consummators to make a choice. This fact is called the emotional economy. The product is not considered only as sport accessory but as a part of style of life. Nike is the first brand which has understood this aspect.
The Nike’s slogan «Just do it» (1988), was a kind of message of encouragement, comprehension of consumers. It became both universal and intensely personal.
It invited dreams. It was a call to action, a refusal to hear excuses, and a license to be eccentric, courageous and exceptional. After that Nike is became very close to its consumers. It’s became a reference for all a generation. Nike's power to sell comes from deep-rooted yearnings for cultural inclusiveness and individual athletic accomplishment. Nike's marketing formula to consist of the integration of the swoosh into the cultural fabric of sports and harnessing of its emotional power.
Nike is became one of the most famous sport brand because of its marketing strategy.
1.
THE BRANCH
The prima facie identity of the company is its logo. The Oxford Dictionary defines a logo as "...a printed design or symbol that a company or an organization uses as its special sign."
Corporate history has shown that a logo is much more than that to a company.
Rarely does one find a piece of corporate identity that can so effectively and quickly transform the perception of the company in the minds of the people as a logo can. The human mind has a tendency to attach personal or humane characteristics to something intangible as an organization image that helps the logo.
Successful logos are able to evoke desired images in the mind of the prospect.
Logos facilitate carrying the desired corporate image to the consumer in the shortest possible time. Whether it is the font type that expresses this or the accompanying graphic and colors, the message that gets across to the audience.
Which company's logo is red and resembles a tick mark?
Most of the people get it right.
( NOTE BAS PAGE When "Advertising Age" named Nike in 1996 the
Marketer of the Year, citing the "ubiquitous swoosh...was more recognized and coveted by consumers than any other sports brand--arguably any brand".
)
It's Nike! One doesn't have to even specify the product. The recall of a powerful logo is such that the company itself becomes secondary to the logo that's why Nike doesn't need to mention its name on its shoes since 1995 and maintains just the swoosh...
( NOTE BAS PAGE The SWOOSH logo is a graphic design created by Caroline Davidson in 1971. It represents the wing of the Greek Goddess NIKE.
Caroline Davidson was a student at Portland State University in advertising. She met Phil Knight while he was
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teaching accounting classes and she started doing some freelance work for his company. Phil Knight asked
Caroline to design a logo that could be placed on the side of a shoe. She handed him the SWOOSH, he handed her $35.00. In spring of 1972, the first shoe with the NIKE SWOOSH was introduced.....the rest is history!)
Nike has worked hard to create a strong image around its logo and its effective marketing campaigns and advertising stress the logo along with its message.
Both the companies have similar quality standards and performance levels.
Logos are the longest living corporate identity that an organization enjoys, sometimes more than the employees in the company. Though there have been cases where logos change in lesser time than that, the changes are usually evolutionary than sudden in nature. An evolutionary change may be needed in bringing a logo more in tune with changing business conditions but a sudden and drastic change can more often than not affect the company adversely when consumers are not able to adapt to the change thus bringing the company to square one.
Times are changing ... and so are the logos. Logos in earlier times used to be very elaborate and 'detailed'. Nowadays they more simple, minimalist yet elegant and attractive; somewhat a sign of people not having the time to look at detailed logos.
Needless to say there are certain logos that maintain their earlier look but quite a few companies like Nike changed their logo to reflect changing times and even changing cultures.
Nike’s swoosh evolution:
Finally, a good logo like a good product has to be advertised and given due exposure. Some logos even though they are great images do not remain at the top of the mind because they are not advertised as much. Not many companies place a premium on their logos as companies like Nike. We can analyse now the marketing campaigns of Nike.
2. MARKETING STRATEGY: Nike and the Sanctification of Sport.
In 2003 Nike is named "advertiser of the year" by the Cannes Advertising
Festival, the first two-time recipient in the prestigious award's 50-year history.
Nike’s budget for communication is one milliard dollars by year. For instance: a
$100 Nike gym shoe represents $6 of materials and production, $70 of marketing/advertising, and $24 of profit.
Capitalist competition is ratcheting up the sophistication and costs of marketing and distribution. To maintain or increase market share requires firms to employ
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more and more advanced and powerful means for creating ever more tight and lasting identifications between buyer and brand name, and to assume dominant or monopoly positions by drowning out competitors. In doing this-in its perpetual, ever present, no holds barred advertising and self-promotion directed to every consuming segment and invading all of life-Nike is lead and master. Nike's corporate energies and staff time are mostly devoted to shaping culture and consciousness.
Yet Nike suggests more than Coke or Ford ever imagined. Even in standard marketing methods-associating its products to athletes of great drive and accomplishment, to scenes of pleasure and natural beauty-Nike creates deeper links. And Nike now explicitly offers meaning and transcendence, feelings and accomplishment beyond human understanding and the usual limits of human experience. In its images of runners and athletes, individuals and groups, Nike has them undergoing religious transformation, transcendent moments. And Nike is everywhere, always reminding us, reinforcing its message, so confident and so present that it de-emphasizes its products in order to deeper infiltrate consciousness; some of its most expensive and oft repeated ads and promotions are without sign of shoes, designed only to fortify identification between logo and values, needs, ambitions, yearnings, insights.
Nike's marketing campaigns seek to brand the emotion or experience, as so many sports teams and coaches, all the big name college athletic powers, are branded with Nike's swoosh. Nike's goal is an identity deeper and less accessible to rational critique, to become the stuff of consciousness, to become part of the definition of freedom and accomplishment, displacing other definitions and patterns as it must displace Reebok, Converse and New Balance.
Nike shoes in 1991 and the continued market dominance of the brand, clearly
Nike exerts a significant social and psychological force on the consumer. Nike appeals to a buying public that treats fitness as a worthy individual goal which simultaneously imparts social identification. The question remains, how? Through semiotic analysis of a number of Nike American advertisements, we can try to uncover at least the clues to Nike's pull on public imagination. Nike's ads, like any other business's, require interpretation. Some of this reading goes on at the conscious level, some unconsciously. Ads work on a variety of different levels including, but not limited to, sign typology, paradigmatic meaning, psychological appeals, emotion, roles, values/beliefs, and knowledge. Again, the impact of an ad comes from the interplay between these various aspects of make-up and the reader's own notions about him/herself and the world.
So, taking the "Test Your
Faith" ad as our first example:
Straight off, the reader finds him/herself thrust into the schema of religious worship.
Not only must the viewer literally look up to the runner, but he/she receives the
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imperative to "Test your faith." The runner has no identity beyond his role in the ad. That is, we cannot see his face, giving him an added element of the unknown divine. The reader feels cowed looking from a subordinate position at the figure of the runner in his element. The text implies a direct connection between exercising (in this case, running) and religious questioning. For the runner in the ad, exercise is the object of sanctity. Yet the reader might inhabit a different role by placing themselves as the runner in the ad itself. Transported from reading a magazine to the middle of a run, filled with the sensual pleasure of using one's body, the reader identifies him/herself as the 'tester of faith.' And finding the purity of exercise within the soul, the reader can accept a measure of hearty self-congratulation.
The measure of the individual in contemporary society rests upon the extent to which they exercise their body. Seeing the runner engaged in a long run should impel the reader to imagine their own set of values and desires. How important is exercise to that person? The ad places fitness as a top priority and suggests that the reader must acknowledge the fitness culture, even if they do not take an active part. Finally, the gritty gray and white tones of the advertisement insinuate a harsh world in which running becomes an escape. Reading the ad, perhaps themselves members of such a life, viewers will immediately seek the release and redemption that running and exercise offer.
Moving on to another example of running advertising, we look at "You either
ran...": Again placed in the dichotomy between athletes and spectators, the reader need only answer one question. Have I run today? Identification and affiliation with others, approval, self-worth, and pride all spring from the answer 'yes.'
Meanwhile, shame and ostracization answering 'no.' for those
During the late 1980s, Nike attained a relative saturation of the U.S. market for athletic goods and apparel, leaving Nike executives wondering 'where do we go from here?' Appealing to a higher sense of excellence, Nike hoped to inculcate a sense of individual accomplishment possible in sport as well as play into that very same sense already budding in the breasts of consumers.
According to the words of Nike's founder, a sense of mythology and mystery surrounds sport. Knight believes "superior athletic ability speaks to everyone's belief in some primordial capacity for a kind of true greatness that has been obscured over time by...the general clutter of contemporary life". Through Nike's vision, the American public has been privy to a conception of athletes as gods, games as ritual life, and the entire galaxy of sport as an Elysian Field, promising sound minds in sound bodies. Nike wants to package this idea, get it into the
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minds of the consumers, and keep it there until the time comes to buy sport apparel. Nike's products stand as the bridge between the ideological apotheosis of Sport and the common man.
Sport has defined a new pantheon of deities and presented new roads to redemption. Nike, for its part, has played a crucial role in that shift and made a mint in the process. It is not a coincidence that Nike became Nike during the decades marked by significant economic and political shifts, whose corresponding cultural emphases were on fitness, health, addiction, and individual responsibility.
Through a complex web of political and social changes, Americans' value systems after the Second World War began to include fitness as a morally upstanding activity because of its sacred connotations and self-bettering ethos.
Its vision telegraphs a desire to "create covenants between customers and a special company cast as a haven for people who identify completely with athletes and sports". This statement from Phil Knight exemplifies the religiosity, interconnectivity, and economics of the fitness culture and Nike's unique relation thereto.
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