You are on page 1of 50

Marketing

Strategy of
NIKE

Published by : www.studymarketing.org

1
Nike is the leading and renowned world supplier of athletic apparel

and shoes. The brand is in control of over 47% of the market for

athletic shoes. The company begun way back in 1962 and it was

founded by Phil Knight and Bill Bower. It was originally known as Blue

Ribbon Support and only in 1978 did it change its name to the

worldwide recognized brand, Nike. Nike provides its products to

more than 100 countries throughout the world.

The legendary position that Nike enjoys today has been achieved

through attractive and innovative design, high quality production and

effective marketing strategies. There are very many marketing

strategies that the company has put in place to make sure that its

products appeal to different segments of the market. Among these

several targeting strategies are; the sponsoring of college athletic

teams, celebrity athletes and professional athletic teams. This specific

strategy has done very well mainly due to the fact that it has been

very easy for it to get a large number of athletes. In the event that an

athletic team manager recommends the use of a certain type of track

shoes manufactured by Nike, the trainees will have no other option

other than to use the recommended track shoes.

Another strategy that Nike has chosen to use to market its products

is product destination designing. This is done by linking the product

with success For instance, anytime a celebrity athlete sponsors a

certain brand of shoes, that brand will be associated with success This

2
psychological effect is often reinforced using advertisements that

serve to affirm the aforementioned [position.

Nike chooses to focus on customers who have a higher likelihood of

developing product intimacy. Simply put, Nikes target market is

mainly customers who have more concern for the quality and utility

of the product than they have for the price at which the product is

being sold. This helps to ensure that pricing never has to be adjusted

downwards in attempts to woo in a larger number of customers.

For any company to achieve success from the marketing strategies

that it has put in place, it has to ensure that its strategy is flexible

enough to keep up with the changing times and to also

accommodate a large variety of customers. So as to do this, it is

imperative that the products being produced by the company be

innovative enough to exceed what is being provided by competitors

in every possible way. Nike chose to take this into deep consideration

and this resulted in it making a few changes on its marketing

strategy. Among the changes that it chose to make are:

It chose to spend more money on TV advertising and reduced

its spending on print media by 40%

It chose to invest a lot in marketing and spend as much as $2.4

billion in marketing its products in one year. In the year 2010,

3
it spent almost $800 million on non-traditional methods of

advertising.

Nike has chosen to target the seventeen year olds more as

research has shown that the 17 years olds spend 20% more on

shoes than the adults.

It has decided to do away with the dependence on the big

budget top-down brand campaigns that usually celebrate just

one hit

Its advertising and marketing campaigns are widely split

between advertising agencies that specialize in recent

technologies and social media

It has chosen to focus more on the production of cool stuff.

To further enhance its marketing attempts, Nike has chosen to go

digital. It has chosen to invest more in the use of digital marketing

techniques and this can be clearly seen from what is given below.

For the first time since it was founded, Nike is not fully relying

on a number of superstars to move its products

After it finished perfecting its branding act, Nike chose to

move onto a world in which its customers want to hear less

talk and see more action

In 2010, it launched a new division that goes by the name Nike

Digital Sport

It has hired a large number of engineers whose job is to

develop technology that resonates with digital communities

4
To add onto all that, Nike launched the Nike+ platform in

2006. This platform was created so as to cater for the ever

changing needs of the customers in this mobile era. Nike+ is a

multi-sensory and multi-channel bringing together of Nike

and Apple technologies that allows one to track individual

performance. This platform necessitates the occurrence of

personal conversations between Nike and its customers. It also

plays the role of a laboratory that allows Nike to study the

patterns and behaviors of its customers.

Nikes Product Strategy


Long gone is the age of abundance. The days when conspicuous

consumption, cheap energy and a wanton waste of natural resources

were strife are nothing but memories today. In the world that we live

in today, resources are scarce and for any business to survive, it is

imperative that it learns how to foster sustainability. Nike is well

aware of this fact and this is the reason as to why it has decided to do

what it takes for it to survive in this world. One of the things that it is

doing is focusing more on materials.

Each and every material that Nike chooses holds environmental

implications down and up the value chain; implications for chemical

use, energy, land and water; solid waste, wastewater discharge and

greenhouse gas emissions. It estimates that materials constitute

approximately 60% of the environmental impacts that a pair of Nike

5
shoes has. The manufacturing process on the other hand is

responsible for approximately 25% of the environmental impact. The

rest is all divided between disposal, use, packaging, office facilities,

retail and transport.

Take leather for instance. Nike designs for product performance and

leather has a good number of performance attributes. It is particularly

flexible and strong. Taking into account the fact that it is a natural

material, it can be assumes that it is environmentally friendly.

However, cows need a large amount of water, feed and land. To

process hides into leather, a large amount of chemicals, water and

energy is required.

In the entire Nike footwear value chain, leather cutting scrap holds

the second position as far as the biggest waste streams go. A large

number of the synthetic leathers have a lower lifecycle impact

compared to natural leather. However, Nike is well aware of the fact

that there are a number of customers who prefer leather to all other

materials. Thus apart from just using synthetic leather where

necessary, Nike is also putting measures in place to encourage the

development of leather with lower lifecycle impacts.

So as to be an active role player in the defining of the materials

future, Nikes innovation agenda concentrates on four areas:

6
The materials that it uses including introduced choices for

s=recyclable and recycled materials

Better processes making use of new processing methods

that use less chemicals, water, energy or produce less waste

Better choices - Developing and applying indexes, restricted

substance lists, policies and enhances ways of operating and

sharing them with suppliers and vendors.

Introducing choices to scale enhancing the availability and

scale of new material choices including enabling the recycling

of materials and sharing of intellectual property

The Materials that it uses

A large variety of materials is used in the manufacturing of Nike

products- an annual average of more than 16,000. These materials

constitute everything from natural fibers like wool and cotton to

technical synthetic materials like ethylene vinyl acetate (EVA),

synthetic leather, rubber, nylon and polyester. Just as it is like with

leather, a large number of the natural materials that Nike uses have

an environmental impact that is significantly higher than that of the

synthetics.

Taking into account the wide range of materials that is available, it is

very easy to understand the tough time that Nike might experience

when trying to make informed decisions on the materials that are to

be sued to design a certain product. Over the past ten years, Nike has

7
come up with a method of evaluating the environmental impacts that

the materials that it uses have. It has used the same method to

assess the more than 80,000 materials that could be used in the

making of its products. The department in charge of product design

works to integrate the information from that method in the process

of choosing materials to be used in the manufacture of products.

The materials that are used in the production of the Nike apparel and

footwear are supplied by more than 900 suppliers. Nike does not

directly source these vendors; the vendors are all independent

companies that sell the materials to the contract finished-goods

manufacturers that work with Nike based on the given product

specifications

To ensure that sustainability is enhanced in all materials, Nike

concentrates more on the section of the value chain over which it is

most in control of and that is product design.

A good number of the decisions that are made during the product

design phase determine a significant amount of the environmental

impacts that the product will have. Nike chooses to design products

that have very detailed material specifications and by ensuring that

the proper information is available to allow the selection of the good

materials from the good vendors, it is able to enhance the

sustainability of the products that it provides.

8
To ensure that this sea actually achieved, Nike introduced the

concept of considered design in its firm in 2006. This ethos of design,

together with the developed apparel and footwear evaluation

systems that it has referred to as considered indexes, has allowed the

Nike product creation teams to very easily compare materials and be

able to make sustainable and informed choices as they move through

the design phase.

The considered indexes are a result of years of research and analysis

of various materials and the environmental impacts that they have.

The information from the research and analysis has been

consolidated with the main environmental impacts that result from

manufacturing and this consolidation is what has allowed the

development of a decision-making tool that the teams can use to

come up with brilliant apparel and footwear designs within a very

short time.

The Nike product development teams are extensively trained on the

proper use of the considered indexes and the importance of

concentrating on how sustainable materials are. The teams are

provided with scoring targets for every season of designed products.

The current Considered Indexes version has materials for footwear

constituting 355 of the total score and materials for apparel making

60% of the total score. This makes it very clear to the design teams

9
that concentrating on the materials to be used is a sure way of

attaining their goals.

Despite the fact that the Considered indexes have been primarily

implemented by the Nike brand, the affiliate brands have also started

using them to evaluate the designs for their products and have made

commitments to adopt the indexes by the time FY15 is coming to an

end.

Next-Generation Tools

Nike is now working to move up the considered indexes to the next

level. It has been on a journey for very many years to refine the

apparel and footwear considered indexes based on the feedback that

it is getting from the product design teams. Updates are expected to

be launched soon and there are also indexes for various products

that are being developed.

To add onto that, it has to a very significant level upgraded the tool

used to rate materials embedded in the indexes and this new tool is

being referred to as the Nike Materials Sustainability Index or Nike

MSI for short. The designing of this new tool was completed in 2011

and by 2012; the design team was already using it.

One of the major upgrades that have been included in the Nike MSI

is the rating of the material vendors apart from just rating the

10
materials themselves. This serves as a major incentive to encourage

the vendors to move to become more environmentally sustainable.

Material vendors are scored on criteria such as whether they have

received the ISO 14001 certification, whether they run from buildings

that are certified green, whether they involve themselves in

materials certification processes like the Global Recycle standard and

whether they adhere to the Nike Water Programs requirements and

the Restricted Substance List testing requirements.

Higher rating on these kinds of criteria usually increases the overall

score that the vendor will get on the Nike MSI score. It is Nikes hope

that this new tool will encourage vendors into becoming more

environmentally friendly by developing materials that are

environmentally friendly as this will allow them to score higher on the

indexes.

It has worked together with and trained vendors to allow them to

become familiar with this new tool. By the close of 2011, it had

trained close to 500 vendors.

Measuring Nikes Performance


Nike has set a goal of having each and every newly designed brand

of footwear designed at the world headquarters score at the

Considered Indexs baseline level. This simply means that they will be

11
in line with Nikes baseline sustainability criteria. Nike has done so

well as far as meeting this goal is concerned. It has been able to have

97% of its footwear meet this standard.

When it comes to the brands apparel, Nike is gearing towards

achieving a 100% baseline for the new global apparel designs by

2015. It is also doing quite well as far as achieving this particular goal

is concerned. It is also making such good progress on other specific

equipment product areas like inflatable balls and bags.

You might be wondering what this actually translates to as far as

product sustainability is concerned. The fact of the matter is that it is

a bit difficult to define a clear way of measuring that. Nike has thus

decided to take a different approach. Instead of working towards a

certain percentage of, for instance recycled content in the finished

product, it is working towards enhancing its base materials and are

developing systems that allow it to better assess the impacts of the

finished products.

Taking that approach into account, Nike already has a number of

ways that can be used to measure its success. For instance, over the

past five years it has achieved a 19% decrease in waste linked to the

production of uppers for footwear.

12
Manufacturing process optimization, considered design and a

number of other best practices contributed quite a significant

amount to that gain.

That is practically the same as choosing to not produce any footwear

uppers for that period of time Nikes use of Environmentally

Preferred Materials is another strong indicator of the much progress

that it has made over the years.

Environmentally Preferred Materials

Over the past couple of years, Nike has put in every effort in the

development of environmentally preferred alternatives to its most-

used materials like rubber, polyester and cotton. It has steadily

enhanced its use of EPMs with time with the increase from 2005 to

2009 standing at 77%. Its current average stands at 8 EPMs for every

shoe out of an average of 32 total materials.

It assesses its use of EPMs based on the production volume for every

product design. Owing to the fact that contract factories usually

source materials directly from the vendors of these materials, Nike

does not have any direct insight into the materials volume purchased

or everything that the materials have to go through before they are

finally turned into final products.

13
A number of the variables include the amount of waste that is

produced between the purchase of materials and actual

manufacturing.

This is despite the fact that a good amount of the waste that comes

out of factories is either diverted from landfills or recycled. Nikes

ability to assess the sum amount of material in footwear is also still a

bit complicated due to the fact that the current systems do not keep

track of the percentage by weight or volume of that material for

specific styles which are usually different for every season. Due to this

fact, the Footwear Considered Index takes incidents of material used

to be a proxy.

Below are a number of the EPMs that are most frequently used by

Nike.

Organic Cotton

Organic cotton is harvested and grown without the application of any

synthetic chemical pesticides, defoliants or fertilizers. Nike was the

worlds third-biggest user of organic cotton according to a report

released by Textile Exchange. The percentage of the total apparel;

from Nike that contains a minimum of 55 organic cotton has

increased from 47% in the year 2004 to 905 in 2011. Nike makes used

of 7 million kilograms of in 2011 and this represents just ten percent

of the total amount of organic cotton that the company used that

14
year. Despite the fact that Nike is fully committed to increase the

amount of organic cotton used, it is also moving towards using

cotton that is grown according to the standards that have been set

by the Better Cotton Initiative (BCI).

Nike signed onto the BCI - program in the year 2011 and it made the

commitment to look for cotton that is 100% more sustainable. The

BCI puts in place standards for the management of inputs like water,

fertilizers and pesticides.

The BCI also seeks to enhance the stability and livelihood of farmers.

Due to the fact that the BCI is also looking to truly turn cotton into a

mass market commodity, it is looking to make better cotton be sold

at the same price as conventional cotton which will make it easily

affordable to companies such as Nike.

Recycled Polyester

Textiles made from recycled polyester, that can be made using

beverage bottles that have already been used, consuming less

energy, have lower raw materials extraction and produce less waste

compared to the virgin polyester fiber. In 2011, Nike doubled the

amount of recycled polyester that it uses in apparel. This translates to

the equivalent of getting rid of over 280 million plastic bottles from

the waste stream. The amount of garments made by Nike that have

15
some recycled polyester increased from 3000 in 2004 to 31.5 million

in 2011.

Environmentally Preferred Rubber

Close to the end of the 1990s, Nike conducted research on

environmentally researched fiber and used the findings to come up

with formulations that could work for performance footwear It today

has two environmentally preferred rubber solutions that are put in

over 30 finished rubber compounds that are up to standard with a

large number of sport performance requirements In 2011, 80% of the

footwear designs from Nike were made using environmentally prefer

rubber.

Leather

Nike has been working towards ensuring that the leather that it uses

is as sustainable as possible. In 2006, it worked together with other

footwear retailers and brands and tanneries to set up the Leather

Working Group or LWG for short. The LWG came up with a protocol

for assessing the environment that was launched in the year 2007

and later updated in the year 2012.

The LWG protocol puts in place standards for enhanced

environmental management of processing leather Nike has made a

lot of progress in sourcing leather from tanneries that are members

of the LWG and that have ensured their processing facilities are

16
certified according to the LWG protocol. By 2011, all the tanneries

that were providing Nike with leather had been certified by the LWG

and good progress is being made as far as the affiliate brands are

concerned.

Synthetic Leather

Synthetic leather has a large number of qualities but each and every

one of them is made using a textile substrate that is coated with a

polymer. Usually, the process of putting the polymer coating needs

solvents to be used. Nike has been working for more than ten years

with suppliers of synthetic leather to eliminate and decrease the

amount of solvents that are used in the process of manufacturing

and switch to solvents that are more environmentally friendly.

Sharing Tools with the Whole Industry

Nike has made a large number of the scoring tools that it uses

available to the entire industry in a bid to enhance the sustainability

of materials beyond its own value chain. For example, it shared its

Materials Analysis Tool with the Sustainable Apparel Coalition (SAC)

which has made use of it in the evaluation of an approach to an

apparel index that will be used by the entire industry. Nike has also

shared the next generation of the same tool to be name, Nike

Materials Sustainability Index, with SAC.

17
SAC reviewed it and launched a public version of the same that could

very easily be used by the entire industry. Nike also made public,

through SAC, the Environmental Apparel Design Tool.

The tool is simply a simplified version of Nikes Considered Index and

has the ability to help any designer shorted the time that he or she

takes to make design decisions about apparel. It can help the

designer to make decisions that will help him or her develop

products that have reduced environmental impact.

All these efforts are linked to Nikes Commitment to greater

transparency and traceability. Its long-term vision is to come up with

a means of reducing and rating the environmental impact that

various products have that will be accepted and adopted by the

entire industry. This is a vision that Nike shares with SAC. The whole

industry recognizes how complex this vision is and this is the reason

as to why everyone has come together to make it a success.

Thinking of the Future

The corner stone of Nikes sustainability strategy is the belief that

broadly adopted design processes and its considered design ethos.

Moving forward, Nike believes that all the indexes that it will release

in the future will increase the rate at which progress is being realized

in the sustainability of the materials that are used to manufacture

18
products in its entire value chain, especially the Nike MSI, which will

encourage the vendors of the said materials to move towards

environmental sustainability themselves and opt to develop materials

that are more environmentally sustainable.

Nikes vision is that using these efforts, all of its material vendors will

become its sustainable innovation partners in pushing better and

newer materials to scale.

The R&D teams at Nike are also working to increase the rate at which

innovation of new materials is being done and also increase Nikes

palette of available EPMs across all of the brands that are owned by

Nike.

For instance, Nike has come up with definitions for best, better and

good EPMs for its strategic materials Increased research will have to

be conducted before the best and better versions are brought into

the market but they will eventually be brought into the market. Using

innovation in these kinds of materials, Nike aims to cause disruptive

change in the industry and establish better benchmarks for

performance and sustainability.

The entire Nike marketing strategy was based upon a product image

that was favorable and let it develop into one of the biggest multi-

national companies today. The favorable product icon from Nike has

19
also remained optimistic due to the strong relation with the company

logo that is both unique and distinct. The product slogan is also a

good one and has been displayed on commercials for a very long

time now.

The entire Nike marketing strategy consists of a lot of investments m

and commercials. The marketing strategy has also market

segmentation.

Nikes products are mainly targeted at sportsmen. This has been

majorly contributed to the utility that is provided by these products.

A sportsperson or athlete is definitely more likely to purchase

sportswear that is manufactured and marketed by a company that

knows and understands sports than he is to buy from a company that

knows nothing about sports.

Nike chose to reach out to this target market through the use of

agreements between sports teams and itself. It reached out to the

college athletic teams through sponsorship, product support and

eventual endorsements of some of the members of the team.

Through these avenues, Nike was able to reach out to a large number

of clients and customers who had a very high probability of buying.

This is not to say that it is only sportsmen who can buy what Nike is

producing. Nike also targets teenagers who are in love with the hip

20
hop custom and other individuals but it mostly targets the sportsmen

due to the fact that it is well aware that there is a huge market or it

there.

Nike has come up with a large number of targeting strategies that

have been specifically designed to target sportsmen and athletes

These targeting strategies include sponsorship of product by a

famous and professional athletic team, celebrity athletes or college

sports team. This targeting strategy has been particularly successful

owing to the fact that it was easy for it to get to a large number of

athletes.

Pricing Strategies of Nike


Nike was sure about one thing, it wanted to make it in the industry. It

wanted to become a big company and enjoy good profits. This was

factor that it kept in mind as it came up with its price strategies.

From the get go, Nike sought to go after customers that were not

price sensitive; customers who would develop product intimacy and

would love the product for its utility and not anything else. It wanted

to go for customers who once they used the product, could not go

another day without it.

Simply put, it wanted to go for customers who would still be able to

afford its product when the world underwent the most serious

21
economic recession. It would help it to ensure that it had profitable

customer loyalty; loyalty that would not be defined by economic

circumstances but by the need and love of the product. This is

definitely loyalty that guarantees repeat purchases.

This pricing strategy that Nike chose to go with allowed it to increase

the prices of its products without having to worry that its competitors

will outdo it. It could very easily set high prices for its products and

be sure that it will still make sales and maintain a good profit margin.

It opted to go for superior pricing points.

The main reason as to why it opted to go for superior pricing points

is these pricing points allow it to increase the supposed value of the

product. Products with high pricing points are always believed to be

superior, durable and of very high quality.

These are all characteristics that will definitely attract the top layer of

the market segments; people with a lot of disposable income that has

translated to a very high purchasing power.

These strategies that Nike has chosen to use are known as value

based pricing and price leadership strategies. These are all two very

different strategies but Nike has without doubt been able to combine

them in such a way that has brought great success for it in the

industry.

22
When we talk of value-based pricing, we talk of pricing that is done

in accordance with the value that the customer places on the

product.

As was said before, Nike chose to go with high price points as it knew

that these price points would be associated with durability and high

quality.

Customers with high purchasing power are customers with money

that they are willing to spend on products, regardless of the price.

These are mostly high-end customers who love to be associated with

high-end [products.

To these customers, the value of a product is determined by the price

that is set for the product. To them, a low price automatically means

low quality and a high price automatically means high quality. Owing

to the fact that this was the segment that Nike was out to reach for

from the very beginning, it implemented the value-based pricing.

It was sure that with this strategy it would be able to quickly reel in its

target market and also make sales that would allow it to sustain a

very good profit margin.

As far as leadership is concerned, Nike basically took advantage of

the leading position that it holds in the market to set the bar at which

23
prices will be made in the market. Nike is a very strong company, it

has been in business for quite some time now and it has invested

large sums of money in promoting and marketing its brand. It has

become a brand that is recognized the world over.

It has therefore a status that is enjoyed only be leading companies in

the world. This is what has allowed it to gain a very high bargaining

power and be able to successful implement the price leadership

strategy.

Customers choose to go out and buy the Nike products because they

have the symbol of the Nike brand and the brand is recognized all

over the world. They are not really looking at how much it will cost

them; they just want to be associated with the brand because all

through its marketing and advertising, Nike has made it clear that it

has a high brand value.

A pair of Nike shows will usually cost you anything rom between $80

and $400 but they are still bought in large numbers Nike clothes will

also cost you between $20 and $100 but they are still also bought in

large numbers.

Nike always provides a price range that is highly competitive against

what is being offered by its rivals in the industry. Truth be told, Nike

is able to set such prices for its products and still earn good profits

24
due to the simple fact that it carved out a niche for itself early

enough.

A niche within which it would be able to enjoy the best from of

customer loyalty regardless of economic conditions; loyalty will never

be waivered. This is certainly a leaf that each and every business

should borrow from Nike.

Nike Branding Strategy


Across a large number of disciplines, the Nike brand is taken to be a

very effective one Consumers and business [professionals alike all

consider the Nike brand a well-respected and established one.

Long gone are the days when the idea of brand was simply confined

to product packaging. Currently, the word brand is considered part

of the vernacular that is used within all departments in any

progressive company.

Corporate branding has always played a very big role in brand

identity but when it comes to Nike, the visual rhetoric component

played a very huge part. The Nike brand has a number of rhetoric

components which are based on spatial experience, narrative

representation, gender and semiotics.

25
The Nike Logo- Swoosh

A logo is also referred to as a signature or a trademark. Where Nike is

concerned, the swoosh has turned out to be exactly that a

signature.

Whether or not the word Nike has been put it below it, anytime the

general population see the swoosh, they automatically associate it

with Nike.

Despite the fact that the swoosh resembles the check of excellence

or ancient gods, the logos aerodynamic nature has contributed a lot

to the brands business and marketing success. This is simply because

it has imbibed a simple brand mnemonic with meaning. This has

resulted in the brand being more memorable and the usage of the

symbol of the brand more effective. However, the swooshs success

as a visually rhetorical elements takes on a different direction.

The logos rhetorical representation must communicate in one image

everything about the organization that it wants to make public. The

core of an organizations identity lies in the logo.

It will be placed on all publicity materials and products and it is

compulsory for it to become synonymous with the actual name of the

organization. Apart from the above requirements, in order for a logo

to be visually persuasive, it has to take one extra step.

26
Visual rhetoric has just one purpose, to persuade visually.

Simultaneously, the swoosh is a representation of victory,

competition and athleticism.

The swoosh comes with just a solid brush stroke but all who see it

know what its meaning is. The swoosh resembles the wings that are

on the god Hermes feet and the goddess Nikes wing.

It also resembles the American cultures check mark which is usually a

representation of work well done and success. When it comes to

semiotics, these learned and implicit code systems are mainly used

for the creation of certain messages.

Symbols are usually made within the confines of a certain culture and

they carry a shared meaning within the culture. Nike holds pride in

being able to develop state of the art athletic equipment from soccer

balls and running shoes and being able to use a logo that is a

rhetoric representation of success.

It also holds pride in the fact that it has been able to visually tie its

logo to the ancient sports gods to present itself as a recognizable,

simple and successful trademark.

This clear logo is a very good example of blending rhetorical

semiotics with simplicity to develop a rhetorically strong brand basis.

27
It has been said that publicity images are only owned by the moment.

This means that it is imperative for them to be updated continually

and renewed from time to time.

Most of the time they speak of the future and refer to the past Nike

choosing to refer to the Hermes wings and the cultural symbol of a

check successfully communicates its visual argument.

The Nike Slogan - "Just Do It"

Associated with the Nike logo is the tag line Just do it. This tag-line

is usually placed alongside the swoosh logo on both television and

print advertisements.

Together, the tag-line and the logo bring out the significance of the

ideals and goals of the Nike brand victory and athleticism.

The design symbol of the logo together with the tag-line have turned

into a way of life and a motto for an entire generation. People can

make use of environments and objects to develop a sense of who

they are or to openly express their sense of identity. The Nike tag-

line and logo serve to help people create the identity for excellence

and action.

28
When it comes to linking this concept with visual rhetoric, one can

refer to the McCloud, Barthes and Arnhem readings and the

impressive discussions that they had on semiotic surfaces.

According to Arnhem, the terms picture, symbol and sign do not

represent types of images but they instead describe the functions

served by the images.

He goes further to discuss how an image plays the role of a sign to

the extent to which it represents certain content without making a

visual reflection of its characteristics.

The same description can also play the role of written language.

These are all concepts that are fully present in the Nike brand. The

tag-line and the logo both portray a certain slogan and image that

represents certain content without visually reflecting its features.

Fundamentally, the logo is just a 'swoosh'. It resembles a check mark.

It is simple and plain but still unmistakable. It has a more influential,

deeper and intense meaning.

The tag-line is also very similar. Anytime you read some words, the

words are usually describing certain content but they do not visually

reflect the content.

29
There is no denying that words serve as signs and give distinction

and identification.

Despite the fact that the tag line is fundamentally very simple, it has a

very distinct meaning. Just Do It simply tells you not to think about

it, not to ask about it, not to talk about it, not to regret the decision

you make but to just do it! The visual display that accompanies the

motto does coincide with this notion.

General athletes and sports figures are considered to have some kind

of supreme athletic prowess and to always be at the top of their

game.

This slogan appeals to the desire to be independent and free and

overcome all obstacles, physical and social limitations and inhibitions.

It is very clear to see how this would appeal to an athlete or an

athlete to be if not to the general population.

The Nike Print Advertisements

Among the most effective elements of any brand is the use of print

advertisements. Apart from functioning as sales tools, at their core,

these advertisements also serve a rhetorical purpose which is to

persuade the general public.

30
Nike has very well embodied this function in their decision to use

real women advertisements. These advertisements show what

appear to be real women and highlight certain body parts. The

advertisements show a blend of real women and pro athletes

appearing in ads with shots of their arms, hips, butts or thighs.

These fit women are not in any way apologetic about what they refer

to as their thunder thighs or big butt. Nike has said that the ads

attempt to illustrate that not each and every body type is equally

created. As a woman to become strong, fit and a qualified athlete,

you do not need to be of a certain sample size. This is basically the

message that the ads is trying to send.

These images have however been said to embody what is referred to

as the no object advertisements. With these adverts, women are not

allowed agency; they have their identities concealed and they are

objectified. These ads display just certain body parts and they never

at any one time show the entire body.

In these advertisements, the unexpressed woman clearly brings out

the perceptions that she has of herself. Nike was genius in using

these advertisements. It plays on the insecurities that women have

about themselves but it does so in a way that actually empowers the

woman.

31
There is no denying that these ads have gone against the grain and

they are rhetorical in the way that they take on the role of persuasive

liberation. Despite the fact that these ads do not use any new format,

the way the texts have been used to change the ads meanings is a

very significant feature of these advertisements.

Words do have the ability to alter the meaning of a certain image.

Despite the fact that it is not really easy to pinpoint how the words

have altered the images on these ads, they definitely have. The image

is now an illustration of the sentence below it.

If these Nike advertisements did not come with any words, they

would definitely be different. A disjointed body is all that the

advertisement show without the words; a disjointed body that has no

identity.

The words function as the storyteller and explain the part of the

womans body that is being highlighted. The words used in the

advertisements are definitely persuasive in the sense that they try to

make the audience sympathize with the feelings of the woman and

give a context, which on the basis of our culture, are needed to fully

and completely understand the advertisements.

32
The Nike Web site

Developing a website is another way of branding Nikes website gives

the sense of cohesion where everything relates with each other and

flows very well.

The site also subtly and simply presents its argument Nike has

developed a very interactive website. Visitors get to view the site and

can click on any images that interest them. Clicking on the image

brings it to the center of the screen and lets the visitor play a video

that gives an explanation of the image being viewed.

The creators of the Nike website are effectively promoting the Nike

product which is the main purpose that the website is intended to

serve but this is just a tip of the iceberg.

Looking at it more critically, it becomes very clear that Nike has made

attempts to develop a narrative representation. The site tries to tell a

story about the various aspects of the Nike brand with the emphasis

being on making it clear that Nike can provide something for each

and every one. There are a number of horizontal vectors that present

the timelines for the videos that are played on the website to explain

the images.

Nike has developed a website that effectively brand sit. The website is

available in a large number of languages which allows Nike to

33
promote its products throughout the world. For the website to

achieve the results that it was intended to, it is imperative that it

develops a positive effect with each and every visitor to the website.

This website provides the Nike brand with a superiority status. The

website is very simple but it still holds a futuristic look to it which

does not only show Nikes desire to continue on the greatness trend

for a long time to come but also that it will over time coincide with

change.

It is very imperative to note that the website effectively develops a

sense of identification. One can very quickly associate the site with

Nike. This begs the conformity question. Nike does a perfect job of

maintaining originality.

It develops images and organizes the website in a way that is directly

specific to the Nike brand. This makes it much easier for customers to

within a very short time realize that this is the one place to visit on

the internet when looking for anything about or from Nike.

Repetition has been prominently uses all over the website.

This makes navigation much easier to a certain extent and also

attempts to get rid of all kinds of confusion. When it comes to the

looks of the website, Nike has developed something that is different,

creative and new. It tries to set itself apart from all of its competitor

34
brands. Last but definitely not least, the website has done a very

good job at promoting the Nike brand. It is doing very well to

encourage exchange which makes it much easier for the customers

to buy the Nike products.

The Nike Town

The NikeTown, the retail branch of Nike, is a real retail experience.

NikeTown is not just a building or a sporting goods supermarket; it is

a city that has been animated by the Nike spirit.

The stores are full of themes media, high ceilings, dramatic lighting

and multimedia simulations that all come together to develop a

museum-like perception of the Nike Brand The clear link between

museums and the Nike brand makes it very easy to interpret the

NikeTown rhetoric in a fashion that is similar to that of a museum.

It has been said that the object placement in a museum exhibit and

also the emphasis that is placed on a number of the exhibits over

others develops a visual and cultural memory that sets up the

meaning and value of the objects.

In the stores in NikeTown, the way certain products have be placed

i.e. the museum wall of shoes that is featured in every NikeTown

makes a very great emphasis on sneakers as the core of the brand

identity of Nike.

35
The Nike Town stores are real spaces of experience Each and every

visit to a NikeTown store provides the customers with an amazing

experience of the brand identity.

A customer who visits the NikeTown stores immediately turns into a

citizen.

A visit to the NikeTown stores allows the customer to shift his or her

attention from a certain famous sports figure because he or she

becomes one him/herself NikeTown effectively makes use of visual

rhetorics like video displays, interactive models and ambient sound to

place the visitor within the scene and consequently within the brand.

There is no denying that NikeTown has effectively embodied

rhetorical branding. The stores have been able to translate human

beliefs and thoughts into an amazing spatial experience for the

customer. All of the collateral materials owned by Nike such as

products, images and ads are encapsulated in the technological and

dynamic space that is NikeTown.

According to Nike, the main objective was to create a reflection of

the Nike spirit and simultaneously define the stores personality.

36
Nike Advertising and Emotional Branding
Nike also chose to adopt an emotional branding strategy. Nike

advertising is among the most effective emotional branding

examples of the entire current marketing world. The customer loyalty

that Nike is enjoying is nothing but huge and this success can be

attributed to the branding strategy that Nike has used that has

embodied a masterful application of emotional branding.

Nikes branding strategy had just one clear objective to be achieved,

to develop a very powerful brand; a brand so powerful that it inspires

customer loyalty that cannot be waivered by anything from

customers all over the world. This is due to the fact that Nikes

advertising makes use of the archetypes which is an emotional

branding technique.

To be more specific, it uses the story of a Hero to advertise itself. It is

a very old tale; the tale of a hero who is expected to fight of a great

foe and emerges triumphant following such a great struggle. There is

no denying that you could label Nikes strategy as very old but it has

been inspiring loyalty in customer throughout this time.

Nike strategy takes the frequently used hero story and completely

overturns it. As opposed to choosing to inspire customer loyalty

through the singling out of an external enemy, Nike has chosen to

take a whole different approach and concentrate on an internal

37
enemy-our laziness. Nike is well aware of how hard human beings

have to battle with their lazy sides.

Each and every morning when the alarm rings and the light has not

yet come out outside, the battle starts! When we finally decide the

distance that we would like to run, the battle goes on.

This is exactly how Nike has chosen to use emotional branding to

inspire loyalty in its customers. They are well aware of the fact that

there are people who have to battle with external foes but there are

those that are struggling very hard with internal ones.

Nikes brand strategy is perfect as far as this approach is concerned

because apart from the internal foe being someone that can be easily

hated by everyone; the viewer gets to become the hero. In one way

or another, each of us gets to be the hero of our personal stories.

Nike marketing has been well aware of this feeling for quite a long

time now and has taken advantage of it to inspire loyalty in its

customers.

Nikes Vanity Marketing Branding Strategy


This is one very critical choice that each and every brand must make

whether or not the brand will grow the egos of the customers.

38
When it comes to the building of a great brand, all sings show that

Nike knows exactly what it is doing.

Nike has worked really hard to create a brand that resonates with

customers all over the world and that people want to be identified

with and there is no denying that they have successful achieved that.

Nikes branding strategy is among the pinnacles of all advertising

strategies all over the world.

All advertising that Nike has put out there concentrates more on

building its brand otherwise referred to as ego focused branding.

This advertising strategy is completely focused on developing the

ego of the customer and positioning the brand as one that is used by

people who achieve great things in this life.

The product itself hardly features in this entire branding strategy. This

is simply because Nike is looking to position its brand to be

something that goes beyond the brand. The branding strategy is not

designed to make the customer think that they need Nike apparel to

success but that they want the Nike apparel because they do

succeed.

The Nike branding strategy makes use of a tried-and-true formula to

boost their customers egos This is one branding strategy that Nike

has been able to successfully implement and it has helped it to

39
become one of the most powerful and effective brands the world

over.

Nikes Brand Identity


Is it really important to brand a company? Is it really important to

come up with an effective branding strategy?

Is it really necessary to come up with a brand identity that customers

all over the world can resonate with?

In the event that you are asking yourself any of the above questions,

here is your answer; yes it is if you are looking to make it in the

business world and become like the successful companies that are

recognized all over the world, it is important that you develop a good

brand.

Nike was well aware of this fact and from the get go, it decided to

come up with a branding strategy that would take it to the top. It

strived to create a brand identity that would set it apart in the market

and put it on a pedestal.

Brand identity, brand positioning, brand image, brand value, brand

visibility; all these are factors pertaining to branding that are very

crucial to the success of a company.

40
There is no denying that the 'swoosh', the Nike Logo, is recognized

all over the world. As a matter of fact, it is one of the most

recognized logos in the whole world Nike has managed to refine

itself as fitness and athletic company and not just an ordinary shoe

company.

Truth be told, Nike itself is just shy of being defined as the sports

themselves Believe it or not; the 'swoosh' has managed to make Nike

one of the most successful and highly recognized brands in the

whole world. If you are looking for the perfect example of how a

company can translate the importance of maintaining, protecting and

creating a brand, you should definitely turn to Nike.

Branding is among the most crucial aspects of the defining and

creating of the identity of a company. By developing a brand, a

company is choosing to take a series of calculated steps to develop

brand visibility, brand value and ultimately brand identity; a brand

identity that will in turn make its products desirable.

A brand ought to encompass a lifestyle and provide customers with

something that they can identify with and also provide the product

with meaning and substance.

If you are still not sure about this, just look at Nike. Its dominance

and success in the world of sports has all come from its ability to

41
develop the visibility and image of its brand which has in turn

rewarded the company logo with a very high value.

Nike has been able to develop superior value for its brand by making

use of celebrity endorsers like Michael Jordan to be representatives

of its brand.

The concept behind this is that the image of the celebrity will be

embedded in the mind of the customer and this will in turn cause the

customer to associate the endorser with the products made by Nike.

This will ultimately result in the Nike brand being valuable and

desirable. The sports celebrities put across the idea of athleticism and

turn into this almost iconic and heroic symbol that the ordinary

people strive to also turn into. Every time the customers translate

Jordans iconic stance and all these other ideologies into the swoosh

the brand value of Nike greatly increases.

There are three major ways in which Nike has worked very hard to

become the very definition of the sports themselves. These are;

selling parts of its brand as if it were the Berlin Wall, destroying all of

its competition and the creation of sports celebrities.

The glossy and extravagant stores belonging to Nike popularly

referred to as NikeTown serve the purpose of making customers have

42
the notion that the Nike brand is a high end one that provides

customers with a cool user experience.

In NikeTown, the swoosh is worshipped like a heroic symbol and a

piece of art; is a definition of teamwork, victory, honour, courage,

athleticism and every other aspect that is sports correlated. This from

of branding is effective due to the fact that we are all language-

based animals which in turn means that we have the ability to make

connections through creativity and culture.

The swoosh has been turned into the cultural dissemination that

stands for fitness, power, athleticism and each and every aspect that

Nike attempts to include in the image of its brand.

Through its advertising, Nike has been able to establish the 'swoosh'

as one of the worlds most recognizable logos that symbolized a

playful self-awareness, hip authenticity, a spirit of determination and

athletic excellence.

Nike spends approximately 3% of the revenues that it collects

annually on capital expenditures while approximately 10% of its

annual revenues is spent on promotion and advertising and ensuring

that its brand remains visible.

43
In 1997, approximately $978 million was spent by Nike on promotion,

marketing and advertising. The reason as to why Nike is willing to

spend large sums of money on marketing and advertising is it

understands that maintaining a good brand identity, image and

visibility is key to its driving growth in future earnings.

This clearly shows you how important branding is to any company

that is looking to achieve great success in the industry that it is

operating in.

There is no denying that Nike also has brand visibility in control. It

has really worked hard to enhance the visibility of its brand. It has

been able to re-define the power that a brand image holds and is

one of the most symbolic companies, culturally understood and best

represented companies in the whole of the United States and the

entire sports history.

Nikes brand has been able to encompass a brand that reflects

aspects that people all over strive to have in their daily lives.

These are performance, winning, innovation, authenticity and

dominance Nikes ability to have a brand image that encompasses all

these ideologies lets the Nike customers identify with Nike for the

image that is embodied by its brand and not for the products that it

produces.

44
Nikes Brand Positioning
Nike has been able to develop a brand that is appealing to each and

every demographic all over the world. When it comes to the

positioning of a brand or developing of a marketing plan for a new

product, Nike is clearly very effective.

Nike has been able to build a universal brand It has strived to come

up with advertising campaigns and take advantage of all the current

trends in the marketing world to place it where is it today.

Nike took advantage of a good number of its television

advertisements to make itself one of the most recognized brands all

over the world.

These advertisements have served to show that regardless of where

one is located, Nike has a brand that can suit them. It does not

matter whether you are in the United States and you would like to

get a pair of cleats or you are in Belgium and you would like to get a

pair of childrens soccer shorts, Nike can be able to meet your needs.

This is the general message that it is trying to send using its

television advertisements.

Nike has managed to make its brand into something that is truly

ubiquitous. It has been able to successfully turn its product focus into

an attitude. Current market trends suggest that this is what a

45
significant number of the large international companies are doing

today to position their brands. Bigger brands also have to adapt into

this practice if they have a desire to become known all over the

world. Anytime a product turns into an attitude or a lifestyle all over

the world, it begins to become a brand that is recognized by

everyone all over the world.

Nikes Competitive Analysis


The athletic equipment, apparel and footwear industry is keenly

competitive in the United States and also all over the world.

Nike competes internationally with a large number of big companies

producing diversified lines of leisure and athletic shoes, equipment

and apparel such as Puma and Adidas, leisure and athletic shoe

companies, sports equipment companies and leisure and athletic

apparel companies.

The rapid changes in the preferences of customers and technology

coupled up with the intense competition in the market for athletic

equipment and leisure and athletic apparel and footwear make up

huge risk factors for Nikes operations.

Nike is the biggest seller of athletic apparel and athletic footwear the

world over. The reliability and performance of equipment, apparel

and shoes, customer service and support, product identity through

46
promotion and marketing, price and new product development are

all very critical competition aspects in the athletic equipment, apparel

and footwear industry.

To help them in the marketing of its products, Nike contracts

influential and prominent sports leagues, colleges, teams, coaches

and athletes to endorse its brands and utilize its products. It is also

actively involved in the sponsorship of sporting clinics and events

Nike holds firm the belief that it is competitive in all these aspects.

Biggest Threat Face by Nike

The biggest threat that Nike faces is the inevitable stiff competition

that it continually faces from other sports brands like Adidas. Nike

belongs to the sports garments and shoe industry which happens to

be among the most competitive in the entire world. For a company

to come out at the top in such a competitive place, it needs to

continually develop new products that have higher quality than what

is being produced by its competitors.

The dynamic demands and needs that customers have also pose a

real challenge to the management. Nikes competitors such as Puma

and Adidas are coming up alternative brands to reduce the amount

of market share that Nike enjoys. They compete with Nike in various

aspects like prices, advertising, technology, quality and design.

47
Nikes Five Forces Analysis

Porters five forces of competition framework looks at the profitability

of an industry as a factor that is determined by the five forces of

competitive pressure. This is a very simple yet powerful tool that can

be used to understand where the power is held in any business

situation.

It also helps a firm to understand its current strength in the whole

industry and also helps it to identify its competitors strengths Having

a clear understanding of where its power lies can enable a firm to

stay away from taking the wrong steps, grab all the opportunities

available to it, better a situation of weakness and take proper

advantage of a situation of strength.

This is what makes this tool a very important tool when it comes to

the development of a strategy for any company. The tool can also

help a company to tell whether or not any new services or products

that it plans to bring onto the market have a real potential to be

profitable.

Below is a five forces analysis for Nike

Threat of Entry

48
Threat of entry simply refers to the possibility that newer and better

firms will get into the market and force Nike out. Nikes threat of

entry stands at low to moderate.

Threat of Substitute

Threat of substitute refers to the possibility that customers will stop

using Nikes products and opt for substitutes instead. Nikes threat of

Substitute is low.

Supplier Power

Supplier power takes into account whether or not the suppliers can

have a higher bargaining power than Nike and Nikes supplier power

is low.

Buyer Power

Buying power refers to the power that the consumers have to

continually buy Nikes products. Nikes Buyer power is high.

Rivalry

Rivalry refers to the amount and level of competition that Nike faces

in the industry. Nikes rivalry is high.

Having knowledge of the rivalry it faces in the market, the buying

power that it has, the supplier power that it has and the threat of

49
substitutes and threat of entry that it faces can definitely help Nike to

make decisions that will serve to steer it in the right direction.

50