Nike came into existence in 1962 as Blue Ribbon Sport with a focused of producing high-quality running shoes for athletes. Its founder, Philip Knight established Nik ite with the believed that high-tech running shoes could be manufactured at competitive prices if imported from abroad. Nike’s commitment to design innovative footwear for athletes help it build a cult following among U.S consumers.
Nike marketing philosophy is based on “pyramid of influence” where product and brand choices were influenced by the preferences and behavior of a small percentage of top athletes. Therefore, from start, its campaigns featured winning athletes as spokespeople. Nike’s first spokesperson was a runner, Steve Prefontaine who had an irrelevant attitude that marched the company’s spirit.
In 1985, Nike signed up then- rookie guard Michael Jordan as a spokesperson. Jordan was still an up-and-comer, but he personified superior performance. Nike’s bet paid off, where it’s Air Jordan line of basketball shoes flew off the shelves with revenues reaching over $100 million in the first year alone.
In 1988, Nike aired the first ads in its $20 million”Just Do It” ad campaign. The campaign which ultimately featured 12 TV spots in all, subtly challenged a generation of athletic enthusiasts to chase their goals; it was a natural manifestation of Nike’s attitude of self-empowerment through sports.
As Nike began expanding it’s operations to Europe, it discovered that it’s U.S style ads were seen there as being too aggressive. Nike realized it has to authenticate it’s brand in Europe the way it had in the United States. That meant building credibility and relevance in European sports, especially soccer. Nike became actively involved as a sponsor of youth leagues, local clubs, and national teams.
Authenticity also required that consumers see athletes using the product, especially athletes who won competition. Nike’s big break came in 1994, when the Brazilian team (the only national team for which Nike had any real sponsorship deal) won the World cup. That victory in the world’s most popular sport helped Nike succeed in other international markets like China, where it came to command 10% of the shoe market. By 2003 overseas revenues surpassed U.S. revenues for the first time and by 2006 international divisions generated nearly $7.3 billion in revenue, compared to $5.7 billion from the United States.
In addition to expanding overseas, Nike moved into new athletic footwear, apparel, and equipment product categories. These included the Nike Golf brand of footwear, apparel, and equipment which all endorsed by megastar Tiger Woods. In 2005, Nike introduced an urban-themed collection of retro footwear and apparel bearing the name of the original company, Blue Ribbon Sports. Blue Ribbon Sports designs which included: jeans, belts, sweaters, and woven shirts were sold at high-end retailers like Barney’s and Fred Segal.
Today, Nike dominates athletic footwear market. Swooshes abound on everything from wristwatches to golf clubs to swimming caps. As a result of its expansion across geographic markets and product categories, Nike is the top athletic apparel and footwear manufacturer in the world with corporate 2007 revenues of nearly $16 billion.
Sources: Justin Ewers and Tim Smart, “A Designer Swooshes In,” U.S. News & World Report, January 26, 2004, p. 12; “Corporate Media Executive of the Year,”Delaney Report, January 12, 2004, p.1; “10 Top Nontraditional Campaigns, Advertising Age, December 22, 2003, p. 24; Chris Zook and James Allen, “Growth Outside the Core,” Harvard Business Review 8 (December 2003): 66; Kotler Philip and Keller Kevin Lane, “Breakthrough Marketing,” Marketing Management, Pearson Educational International, 2009, p. 61
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