Nike - Brand equity

Introduction
The world constantly changes and disparities, however, some top brands seem
to keep their leadership position in their industry to this day. Strong brands are
amazingly durable and have the ultimate ability to overcome many challenges.
Either does Nike. Since its creation in 1971 in the USA, the Nike swoosh is still
one of the world's most valuable brand despite of the severe crises. Ranked at 26
on the list of Interbrand's "Best Global Brands" in 2009 with a brand value at
$13.2 billion dollars, up 4% from a value of $12.7 billion last year, Nike is the
best among sports brand, left the big competitors, Adidas and Puma far behind
(Interbrand report, 2009).
So how has Nike "got ahead and stayed ahead"?
This article will be employed Elliott and Percy's structural framework of brand
equity synthesis to investigate in four dimensions of Nike brand equity, namely:
brand attitude (functional and emotional features), symbolic meaning, brand
awareness and brand loyalty to draw the deposit picture of Nike brand equity in
the sportswear industry.

About Nike
In 1962, inspired by athlete aspiration, Bill Bowerman and Phil Knight shook their
hand to cofounded Blue Ribbon Sports, precursor of Nike. The initial business
then was to distribute low-cost and high quality Japanese athletic shoes to
American. Today, Nike not only designs and sells athletic shoes at every
profitable market worldwide, but also operates in athletic apparel, sport
equipment and subsidiary venture including Cole Haan, Converse Inc., Hurley
International LLC, Nike Golf and Umbro Ltd (Nike report, 2009). Headquartered at
Oregon, United States, Nike has been presented across more than 160 countries
around the world targeting its primary market regions: United States, Europe,
Asia Pacific and the Americas. Nike employs about 32,500 people as of May 31,
2008 (Datamonitor Research, 2009). By indirect or direct way, Nike touches "the
lives of millions more with its innovative products that transform every sport into
a winning battle" (Superbrands, 2002).

Nike customers
The decade ago, Bill Bowerman, the co-founder of Nike once said "If you have a
body, you are an athlete" (Nike - company overview, 2010). This motto
transmitted not only the whole brand characteristics but also the main targeted
customers. They are athletes and anyone with a body.
Nike offers a wide product portfolio of sport-inspired lifestyle apparel, accessories
and equipment. Nike provides athletic footwear for runners, trainers and
basketball players. The company also offers shoes and equipments specially
designed for those addicted tennis and golf players and etcetera. Such diverse

product extensions enable the company to satisfy the varied athletic needs of its
customers (Datomonitor Research, 2009)

Nike and its rivals

Sportswear has been a thriving market in recent years. According to the research
"Global footwear: Industry profile" releasing by Datomonitor in 2009, the global
footwear market generated total revenues of $ 196,617 million in 2008. Thus,
Nike has experienced intense competition from the moment its first sporting
shoes being introduced to their customers. Globally, this market is dominated by
"the big three" - namely Nike, Adidas, and Puma (Sport+Markt Report, 2008;
Keynote Report, 2010).

Adidas
Adidas was truly the first sports company, it was founded in 1920. They once
really blew in the decade of 70s and 80s. By the early 90s, Adidas realized itself
forgotten in the back of game. In the 21st century, the brand has steadily
affirmed its position and seems on renaissance. Adidas brand increased its value
at 6%, ranked 62th on the list of Best Global Brands 2009 and continued to take
the second largest sporting goods manufactures behind Nike (Interbrand, 2009)
The overall Adidas brand competes straightly and closely with Nike's value
proposition. Nike aims "To bring inspiration and innovation to every athlete in the
world", meanwhile, Adidas mission is "Improving every athlete's performance
through innovation". The brand values of Adidas have been claimed that
"authenticity, inspiration, honesty and commitment - are derived from sport."
(Datamonitor research, 2009)

Puma
Placed at 97th, Puma brand appeared at the first time on the Interbrand annual
report. Interbrand analysts gave the positive compliments for Puma's effort to
compete against the big rivals. Through new design, co-branding and
partnerships with celebrities and famous designers such as Alexander McQueen
and Hussein Chalayan, Puma refreshes their brand image. The company defines
its brand as the mixes of sport, lifestyle and fashion to increase its desirability
(Puma report, 2009). The Puma brand differentiates itself from Nike by
communicating "lifestyle driven style" with "active lifestyle" themes whereas
Nike focusing on "performance driven style".

Nike - brand equity

Having and holding customers is likely to be a competitive battle which each

brand tries all efforts to win. They compete for functional attributes, distinctive
services or innovative technologies (Aaker, 1991).
So what are emotional and functional benefits which Nike provides for their
customers?

Functional and emotional features of the brand

Since Nike was set up by someone who has "a deep passion for athletics and
running", it should come no surprise that product is important. Products that are
comfortable, "authentic, functionally innovative and uniquely designed" (Nike
report, 1985). The innovative technology is considered as one of the defining
dimensions of Nike's brand identity and corporate culture.
The simple driving concept has led to some impressive innovations which is
considered as one of the defining dimensions of Nike's brand identity and
corporate culture. The first highlight was Air cushioning, using pressurized gas to
cushion impact and new materials such as Urathane, that was used first with the
Air Max running shoes (Nike report, 1987). More recently, to obtain maximum
performance, Nike Sport Research laboratory has discovered the innovative
technology such as Shox, which are made mostly of rubber and "spring back
adding more power to a runner's stride" and Total 90 Concept, a range of
equipment to help players perform over 90 minutes of a soccer match (Keller,
2008)
Such innovative technology which Nike has used has gained the strong hold in
consumers' perceptions. The research of Ross and Harradine (2004) focusing on
relationship between young school children and branding, particularly sportswear
shoes brands showed that children aged from 4 - 7 years old believed that these
brands could improve their personal performance. "They do very fast shoes.
They make you run faster". They are also "comfortable and look good", they
added.
Clearly, functional benefit is the fundamental and classical features to
communicate with customers. However, if Nike just provided high quality running
shoes to enhance athletic performance", Nike would not be strong brands.
According to Aakers (1991), big brands need to be beyond the purely functional
relationships. They should create a more strong emotional attachment with core
consumers because "emotional benefits add richness and depth to the brand
and the experience of owning and using the brand" (Aakers, 2009)
Guinn et al (p219, 2008) stated that Nike offers emotional benefits which are
"the exhilaration of athletic performance excellence; feeling engaged, active, and
healthy; exhilaration from admiring professional and college athletes as they
perform wearing "your brand" - when they win, you win too".
Associated brand with the top athletes, Nike tells story of brands which the main
themes is "sportsmanship and unrelenting effort". These are the story of Michael

Jordan who won a record 10th scoring title and was selected as one of the 50
Greatest Players (NBA history, 2010) in American's National basketball
association championship. Lance Armstrong survived and won a second straight
Tour de France while Tiger Woods completed the career Grand Slam, "ensuring
his place in golf history at the age where most of us are still wondering what we
will do when we grow up" (Nike report, 2000). The most three prominent athletes
has generated the inspiration for young and next generation of athletes. Nike has
succeeded to transfer their inspirations to every single purchaser. Wearing every
pair of Nike shoes is to engage a passion for excellence and encourage to "do
your own thing". "Just do it" - the tagline could sum up all the greatest values of
brand which is (Superbrands case study, 2002).

Symbolic meaning
Products are no longer just products, they move beyond the functional meanings.
Nowadays, they are definitely social tools "serving as a means of communication
between the individual and his significant references" (Grubb and Grathwohl,
1967 as cited by Banister and Hogg, 2003). Products are considered as a symbol
of individuality and uniqueness, and also symbol of affiliation and social
identification. It is particularly trued with the fashion brands. Fashion brands such
as clothes, bags, shoes and etc satisfy opposing functions, both social
identification and distinction among individuals (Banister & Hogg, 2003)
Nike must have understood the recipe well. The "Just do It" campaign in the early
1990s would be a perfect example. Losing ground to archrival Reebok which was
quick initiative on designing "style", "fashion" aerobics shoes in 1980s (Keller,
2008), Nike responded dramatically and forcefully by launching the "Just do it"
campaign which was mainly focused on person wearing on products instead of
product itself.
Heroes and hero worship was being built as the main themes of advertising.
Celebrity endorsements such as Bo Jackson, John McEnroe and Michael Jordon
appealed to the consumers' sense of belonging and "hipness". In other words,
Americans consumers were convinced that "wearing for every part of your life
was smart (the shoes are designed for comfort) and hip (everyone else is
wearing them; you too can belong to this group)" (CFAR, 1998).
"Just Do It" campaign succeeded (Nike increased its share of the domestic sport
shoe business after launching this campaign in America from 18 percent to 43
percent, regained the leader position) because it could fascinate customers in
both separating ways. Wearing Nike as a self fulfilling image declaration - "if you
are hip, you are probably wearing Nike". But perhaps most importantly, it could
create the desirable needs -"if you want to be hip, wear Nike" (CFAR, 1998).
Symbolic meanings of Nike brand are also tracked in the research on "Symbolic
and functional positioning of brands" of Bhat and Reddy (1998). This study
showed that Nike scored high on the prestige and personality expression scales
(See Appendix). The findings of Hogg et al (1998) also support the success of
attached the symbolic and emblematic meanings to sportswear brands. The

youth showed facility in interpreting the symbolic meanings attached to the

sports brands which were associated with the different sports stars (such as
footballers, rugby players, athletes and tennis players) and with different sports
(e.g. football and rugby.)

Brand Loyalty
Luring by "good shoe with innovative functionality" and athletic aspiration value,
Nike has indeed come to "mind" and "heart" of its customers. By the mid of
1990s, 77 percent of male Americans from the age of 18 to 25 chose Nike as
their "favourite shoe", according to Rozanski et al (1999). The figure still remains
stably despite of that "up" and "down" year Nike has been experience, gaining
the high score of customer satisfaction at 79 percent rated by The American
Customer Satisfaction Index Organization (2009).
It could be said that loyalty to the Nike brand is driven by many external and
internal factors such as brands' subjective and objective characteristics and
loyalty building programs.
One visible example of creating innovative method to capture the strong
relationships with Nike users is that creating Joga.com, a social network site for
foot ball fans. Launching quietly in the early 2006, the site became an instant hit,
peaking at 7.5 million viewers when Nike showed Ronaldinho video clips,
according to Nike (2006). More than 1 million members from 140 countries
signed up by mid July. In this site, fans can create their personal blogs, build
communities around favorite teams or players, download video and organize
pickup games. By enrolling consumers in building and shaping the content of the
website, Nike pulled their loyal customers closer, nurtured deeper bonds of
loyalty and advocacy. (Kotler and Amstrong, 2007)

Brand Awareness
Brand awareness is the first and crucial stage of consumer's preference. It refers
to the strength of a brand's presence in the consumers' mind (Aakers, 1996).
Nike has been successful in building awareness. The "Swoosh" symbol has been
appeared everywhere, on shoes, hats, billboards and soccer balls across the
globe too remarkably to such extent that one author used the title "The
Swooshification of the World" on Sports Illustrated column that imaged a future
in which the swoosh could surpass sports to become "a letter of the alphabet and
the new presidential seal, among other things"(Keller, 2008). True be told, the
recognition of the 'swoosh' is extremely high.
According to Keller (2008), as of 2000, 97 percent of American citizens
recognized the brand logo, as the strong brand penetration. The studying of
Arona and Stoner (2009) on understanding brand personality also assists this
fact. The findings indicated that Nike was perceived as a "dominant force" or
"authority" in the market place, reaching at nearly 90 percent (Figure below)

The results of Ross and Harradine's research (2004) on brand recognition and
awareness on children is also supportive, which showed that Nike could be
recognized consistently without identification of brand name, even by the
youngest group (aged from 4 to 6 years old). This perhaps may reflect the
general level of advertising and promotion that children are exposed to.

How has Nike done to build brand awareness?

Sponsorships, advertising and experience focused retailing (Nike town) are three
vivid channels that Nike has applied to enhance its brand image and awareness.
Among these strategies, athlete endorsements could be considered as the most
significant success of Nike brand.
Nike has been invested millions of dollars to associate their brand names with
easily recognizable athletes with the aim of brand image building (1.6 billion
dollars is spent on multiyear athlete endorsement by Nike according to Horrow
(2007). Athletes at the top of their respective sport such as Micheal Jordan, Tiger
Woods, and Lance Armstrong who are well - liked and respected by members of
the brand's target audience are chosen as endorsers to associate the Nike brand
with the athlete's celebrity image. This strategy has been paid off, for example,
since Tiger Woods and Nike cooperated, annual sales for Nike Golf have
exceeded to nearly $500 million dollars with an estimated 24 percent growth per
year in the first five years of the agreement (Pike, 2006 cited by Carlson and
Donavan, 2008).

Conclusion
Since the Nike name is chosen in 1971 with the concepts of victory, success and
speed, Nike has been keeping its great speed in the fierce competitive
environment. Building brand image and its associations around a famous person
and conducting the two - way conversation with power consumers through
innovative digital channels, Nike has hold the strong presence in the heart of
consumers.

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