Content area
Nike's marketing tactics in the '80s, and in particular its campaign against Reebok, gambled on the idea that the public would accept sneakers as fashion statements. Nike later cashed in on the jogging/fitness craze of the mid 1980s, during which its "Just Do It" campaign expanded to attract the female and teenage consumers, in addition to the stalwart 18 - 40-year-old male consumers. Nike Inc. is a well-known company that produces branded sport shoes and quality sportswear that has been admired by everybody for their brand. Brand management of Nike Inc. has play an important role to the company as they are successful in capturing brand - minded of consumers in all levels. Although at first Nike Inc. faced tremendous critics from public about their inconsistent attitude through constantly changing their plans as they wanted. Suddenly they realized that they need to come out with something to encounter the perception of public by introducing - 'Just Do It' campaign, which give the spirit of doing something without hesitation. At the time being, Reebok, the biggest competitor of Nike Inc. tried to compete with them in term of sales, but Nike Inc. has proved that their - Just Do It campaign has been successfully implemented. The Just Do It campaign has become one of the advertising methods by the Nike Inc. in order to promote their brands until now.
Abstract
Nike's marketing tactics in the '80s, and in particular its campaign against Reebok, gambled on the idea that the public would accept sneakers as fashion statements. Nike later cashed in on the jogging/fitness craze of the mid 1980s, during which its "Just Do It" campaign expanded to attract the female and teenage consumers, in addition to the stalwart 18 - 40-year-old male consumers. Nike Inc. is a well-known company that produces branded sport shoes and quality sportswear that has been admired by everybody for their brand. Brand management of Nike Inc. has play an important role to the company as they are successful in capturing brand - minded of consumers in all levels. Although at first Nike Inc. faced tremendous critics from public about their inconsistent attitude through constantly changing their plans as they wanted. Suddenly they realized that they need to come out with something to encounter the perception of public by introducing - 'Just Do It' campaign, which give the spirit of doing something without hesitation. At the time being, Reebok, the biggest competitor of Nike Inc. tried to compete with them in term of sales, but Nike Inc. has proved that their - Just Do It campaign has been successfully implemented. The Just Do It campaign has become one of the advertising methods by the Nike Inc. in order to promote their brands until now.
Keywords: Advertising, Brand Promotion, Just Do It Campaign
I.Introduction
The roots of Nike are on a running track at the University of Oregon, which is where the two founders met. Bill Bowerman was the track and field coach there, and during his tenure Oregon produced no fewer than 33 Olympians. He was so determined to help his athletes excel that he made shoes for them by hand in his spare time. Phil Knight was one of his runners. Together they founded Blue Ribbon Sports, the company that became Nike. Initially they each put up $500 to buy some Japanese sports shoes which Knight sold at high school track events out of the back of a car. Their first major athlete endorser was Steve Prefontaine, holder of every US record from 2,000 to 10,000 metres.
The Nike name made its debut in the 1972 Olympic Trials. The company grew steadily until it held half of the booming US running footwear market by 1979. In that year, Nike introduced AIR technology. It became number one in the US sports shoe market in 1981. The company grew rapidly as its basketball business took off and expansion took place in other areas such as tennis and baseball, spearheaded by high-profile athletes such as John McEnroe.
The mid 1980s were awkward times. The company had to overhaul much of its infrastructure and failed to take advantage of the aerobics boom. However it emerged stronger and more competitive. One reason for this was Nike's relationship with a young basketball star called Michael Jordan. His first signature shoe, the Air Jordan, was banned by US basketball authorities and became so prized that an unofficial secondary market developed with prices well above retail. 1987 was a momentous year in which 'Visible Air' was introduced for the first time, seen in a groundbreaking commercial set to the Beatles' song 'Revolution', which somehow caught the spirit of mass enthusiasm for playing sport and being physical. In that year, Nike also introduced the first Cross-Trainers, multi-functional shoes for people with multiple sporting interests.
In order to be a truly global company, however, Nike recognised that most of the rest of the world was in love with football, a sport which wasn't particularly popular in the US. Nike's early football products lacked real advantage, but as they steadily improved, supported by great athletes and good advertising, Nike became a dynamic major brand in football. In the UK, the company's profile was boosted by its association with football stars such as Ian Wright and Eric Cantona. During the 1990s, UK sales grew by 600% and in 1999, London got its own Niketown - a superstore dedicated exclusively to Nike products. Another important development, reflecting the fact that Nike is an athletic brand rather than a youth brand, was the company's expansion into golf. Nike began to work with Tiger Woods in 1996 and he won the US Masters by twelve strokes the following year.
In this era of competitive market, businesses are struggling to compete each other in order to be on the top of the world. Advertising is an important tool that can help businesses to be known and remembered by consumers. It has been defined that advertising is a communication tool that activate and attract the consumers to purchase goods and services which it can be informative and persuasive in nature. Businesses and non-businesses organization are using this advertising method to get acknowledgement and attention from their customers. While, according to Kotler and Keller (2016), "Advertising can be cost-effective way to disseminate messages, whether to build a brand preference or to educate people. Even in today's challenging media environment, good ads can pay off." Through advertising, people can be educated by providing the good information and knowledge to be shared for betterment in future. There are several objective of advertising that has been classified by Kotler and Keller (2016), whether they aim to inform, to persuade, to remind, or to reinforce. Advertising can be made through newspapers, television, direct mail, radio, magazines, outdoor, yellow pages, newsletters, brochures and also telephone (Kotler and Keller, 2016).
There are a lot of advantages of implementing the advertising method in order to promote and to market either for business or non-business purposes. For business purpose, some of their advantages are to promote and market the goods or services provided by the business. Remziye (2014) state that, "Advertising helps to publicize and promote their products to the public thereby helping to improve sales. Depending on the nature of the product, advertising uses the right media to get the message across to consumers". Besides that, sales of the goods and services can be increased as "advertisement facilitates mass production to goods and increases the volume of sales. In other words, sales can be increased with additional expenditure on advertising with every increase in sale, selling expenses will decrease." In addition, by advertising, businesses can meet their competition in the market with their competitors that produce the same products. Demand of the goods and services can be determined through advertising because some of the goods and services are seasonal demand and need to be identified so that the producer will allocate enough supply for equivalent demand (Chowdhury, 2011).
NIKE Inc. is a global well-known company producing sports apparel and athletic shoes. They have been in the market for a long time. Nike Inc. also used the advertising method in promoting their products to consumers all over the world. At the critical time of global economic crisis, the company had made huge investments in advertising and brand promotion in order to maintain and sustain their image (Deng, 2009). The most famous advertisement campaign done by Nike Inc. which is "Just Do It" has boomed their sales, and their brand name became one of the top producer of sports apparel and athletic shoes in the world.
II.Business Background
According to official website of NIKE Inc., it was consolidated on September 8, 1969, and has been occupied with the plan, advancement, advertising and offering of athletic footwear, clothing, hardware, accessories and administrations. Their main headquarter is in Beaverton, Oregon and has employed about 62,600 employees as of May 31, 2015. They are operating with the incorporate of North America, Western Europe, Central & Eastern Europe, Greater China, Japan and Emerging Markets. According to the Editors of Encyclopedia Britannica (2016), Nike Inc. was called Blue Ribbon Sports before this in year 1964 to 1978, and has been founded by a track-andfield coach of University of Oregon - Bill Bowerman and his former student Phil Knight. The editors of Encyclopedia Britannica (2016) stated that, "They opened their first retail outlet in 1966 and launched the Nike brand shoe in 1972. The company was renamed Nike Inc., in 1978 and went public two years later."
In addition to that, NIKE Inc.'s brands include: NIKE Brand, Jordan Brand, Hurley and Converse. Nike Inc. mentioned in their 2015 Annual Report (2015) that: "We focus our NIKE Brand product offerings in eight key categories: Running, Basketball, Football (Soccer), Men's Training, Women's Training, Action Sports, Sportswear (our sports-inspired lifestyle products) and Golf. Basketball includes our Jordan Brand product offerings and Men's Training includes our baseball and American football product offerings. We also market products designed for kids, as well as for other athletic and recreational uses such as cricket, lacrosse, tennis, volleyball, wrestling, walking and outdoor activities."
Although Nike Inc. is an athlete footwear product, however, there are large percentages of the Nike Inc. consumers buying the products for leisure and casual purpose. That's how Nike can easily expand their target market to all - aged categories due to the sports casual fashion style. Therefore, Nike Inc.'s product can be easily accepted by all.
III."Just Do It" Campaign By Nike Inc.
Nike is famous for its advertising as well as its athletes. They are the twin pillars of Nike promotion. The company does not hire athletes simply as mobile posters. They are the brand as much as products, advertising, or the people who work at Nike. The Nike personality has received contributions from such diverse characters as Ian Botham, Marion Jones, Steve Ovett, Seb Coe, Ronaldo, Sonia O'Sullivan and the England rugby team. In this way, a multi-faceted brand has been created. Instead of presenting one consistent, manicured proposition, Nike has over time delivered a wide variety of messages and exposed a number of different aspects of its personality. This is true to the athletic experience, and keeps the brand fresh.
Nike's advertising has been as diverse as its athletes. Much of it has featured top names, but not all. One of the commercials that launched 'Just Do It' featured an elderly runner in his 80s with false teeth. Ordinary athletes, people who might not even describe themselves as athletes, have found direct inspiration from Nike advertising. Nike adverts have featured celebrities as diverse as Dennis Hopper, Spike Lee and Bugs Bunny. A famous basketball star, Penny Hardaway, was given a puppet as an alter ego. The Brazilian football team was famously let loose in an airport during the 1998 World Cup.
Much Nike advertising appears to have been created without reference to marketing textbooks or batteries of research data. It frequently lacks an explicit product message, even a consistent endline, and has encompassed a wide variety of different advertising ideas. But the resulting 'postadvertising' has certainly struck a chord with a generation highly attuned to the tricks of the marketing trade.
In the UK, Nike has run advertising developed for a variety of intended markets, from London right through to global campaigns. Highlights have included some famously provocative posters, the 'Parklife' commercial celebrating the world of Sunday League football and the transformation of a Tube station into a tennis court for Wimbledon 1997. A year later, after England's traumatic exit from the World Cup, the company caught the mood of a shell-shocked nation with its 'Condolence' television advertisement.
"Just Do It" advertising campaign implemented by NIKE Inc. has changed the brand perception of NIKE where people valued the brand even more, and consumers are willing to pay more in order to own the products by NIKE due to their quality, style and reliability. Center for Applied Research (n.d.) states that after the "Just Do It" campaign, the NIKE brand become stronger compared to other giant company such as CocaCola, Gillette and Proctor & Gamble. The "Just Do It" campaign was named after a meeting of Nike s advertising agency, Dan Weiden and Kennedy with the employees of NIKE. As they are having the meeting, Den Weiden admiringly told the NIKE's employees like, "You Nike guys, you just do it.", as reported by the Center of Applied Research (n.d.). Odimp (2012) explained that the logo 'just do it' is an important message that gives the ideology that whatever people want to do, they can just do that without having to consider the effects on others, whether it is good or bad.
As reported in 2015 Annual Report by Nike Inc., (2015):
"Because NIKE is a consumer products company, the relative popularity of various sports and fitness activities and changing design trends affect the demand for our products. We must, therefore, respond to trends and shifts in consumer preferences by adjusting the mix of existing product offerings, developing new products, styles and categories and influencing sports and fitness preferences through extensive marketing."
As they (Nike Inc.) realized that their consumers are demanding design that follow the trends and always updated in term of styles, Nike Inc. decide to introduce the slogan of "Just Do It" as a campaign that advertise more on their brands and products with the help of hiring some famous top athletes to exhibit the "Nike looks". Some of top athletes that been chosen by Nike are Cristiano Ronaldo, Neymar Jr., EldrickTont Woods (Tiger Woods) and many more.
Previously, Deng (2009) mention that Nike Inc. are using professional athletes to increase their demand and popularity, through word-of-mouth of the public figures, about their products. As their initial product advertising strategy in late 1970s and in 1980s, Nike. Inc. is moving towards expanding their target market to the teenagers instead of focusing only for athletes and sportsman. When Nike brand become stronger than before, Nike Inc. observed that not only teenagers and sportsman as their target market, but also young and middle-aged people who become more preferred to the sports - world, since economy nowadays became much tougher and thus they need sports as their stress-reliever. Through the development of expanding the target market, Nike Inc's. advertising strategy become much easier, as they have their brand name known worldwide. The marketing campaign for this product was supported by a memorable TV ad in which the Beatles' Revolution was the soundtrack. It was for the first time that a Beatles song was being used in a TV ad. Riding on the success of this campaign, Nike a year later, launched an even more empowering series of ads with the tag line "Just do it".
The series had three ads featuring young sportsman Bo Jackson who campaigned on the benefits of a new cross-training pair of Nike shoes. Almost every year after Nike launched its air cushioning technology, it released new versions of Air Max. Currently, Nike has nearly 40 models under this brand name.
Linking the Campaign to Consumer Needs
Through its "Just Do It" campaign, Nike was able to tap into the fitness craze of the 1980s. Reebok was sweeping the aerobics race and gaining huge market share in the sneaker business. Nike responded to that by releasing a tough, take-noprisoners ad campaign that practically shamed people into exercising, and more importantly, to exercising in Nikes.
The "Just Do It" campaign was also effective in reassuring consumers that the brand they picked, Nike was a quality brand. This was most effectively portrayed by celebrity sports figures such as Bo Jackson, John McEnroe and later, Michael Jordon. If Michael Jordan can play an entire NBA season in a pair of Nikes, certainly the average weekend warrior can trust the shoes' durability.
Celebrity endorsements also appealed to the consumers' sense of belonging and "hipness," as Nike became a self-fulfilling image prophecy: if you want to be hip, wear Nike; if you are hip, you are probably wearing Nike. The "Just Do It" campaign was able to turn sweaty, pain-ridden, time-consuming exercise in Nike sneakers into something sexy and exciting. Perhaps most importantly, even those who were not in fact exercising in Nikes (the vast majority) still wanted to own them. By focusing on the aura and image conveyed by the fitness culture, Nike was able to attract those who wanted the image without incurring the pain.
Linking the Campaign to Strategy
Nike was in a tough spot in the late 1970's. It was being swamped by Reebok's quick initiative on designing aerobics shoes and needed to respond dramatically and forcefully. It could be argued that the "Just Do It" campaign was not only about sneakers but about Nike's own renaissance. No longer content to be the choice running shoe of a few thousand marathoners and exercise nuts, Nike wanted to expand its operation to target every American, regardless of age, gender or physicalfitness level. "Just Do It" succeeded in that it convinced Americans that wearing Nikes 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.). Nike took its own advice and "Just Did It" by directly attacking Reebok in the sport-shoe market.
Why was the Campaign Successful?
The timing of this campaign could not have been better. Americans were buying exercise equipment at a record pace in the mid 1980s, and body worship was at an all time high. Nike tapped into consumers' desire for a healthy lifestyle by packaging it into a pair of $80 sneakers. The ads were often humorous, appealing to the cynic in all of us, while imploring consumers to take charge of their physical fitness. The ads made starting an exercise regime seem like a necessity, and the way to start exercising was to buy Nike merchandise.
More importantly, by owning Nikes you were instantly a member of a desirable group. The campaign was easily identifiable (to the point that Nike eventually did not even bother to display the word "Nike" in commercials - the swoosh was enough) and stayed true to its message.
IV. Competitors Of Nike Inc.
The main competitors for Nike Inc. in sportswear business sector: Adidas, Reebok, Puma, Fila and Under Armour (Mahdi, Abbas and Mazar, 2015). These competitors are also producing good and quality sportswear products which consumers can easily switch to any similar brands due to any factors. But, among those 5 other brands, Adidas was the most biggest competitor for Nike Inc.. As mention by Bhasin (2017), "Adidas is one of the topmost Nike Competitors. One of the key advantages of Adidas is that it operates via boththe Adidas brand and also has a strong subsidiary in Reebok." Bhasin (2017) also added that the combination of both advantages in Adidas gives a strong valuation to Adidas and it contributes as a top competitor of Nike.
V. Objectives Of The Case Study
The objective of this case study is to:
* To observe how Nike Inc. encounter their brand management through advertising.
* To study the practices implemented by Nike Inc. in order to compete with other competitors
* To understand the importance of advertising management in business.
* To acknowledge the advertising technique used by Nike Inc..
* To appreciate the success-fullness of Nike Inc. in advertising their brand name through campaign.
VI. Analysis On Advertising Method For Nike Inc.
Based on the case study, it is found that Nike Inc. has successfully implementing the "Just Do It" campaign, with the increase in number of sales right after the campaign implemented. As has been reported in the NIKE Inc. Sustainable Business Performance Summary, and "NIKE Inc. has recorded revenues of $30,601 million during the financial year ended May 2015 (FY2015), an increase of 10.1% over FY2014. The operating profit of the company was $4,175 million in FY2015, an increase of 13.5% compared to FY2014. The net profit of the company was $3,273 million in FY2015, an increase of 21.5% over FY2014". This has proved that Nike Inc. has been successfully implementing a campaign that gave positive impact to their brands and also indirectly promote their brand through this advertising method.
Furthermore, advertising strategy used by Nike Inc. has won the heart of audiences by promoting their brands by using famous sportspersons as the image of Nike Inc. under the campaign "Just Do It". As we can see, consumers are easily attracted to certain brands by seeing what their idol or public figures wear. This is because consumers tend to buy and get attracted to up-to-date trending fashion and lifestyle. Nike Inc. has used this strategy as a weapon to influence the mind of consumers. Plus, decision of choosing sportspersons like Cristiano Ronaldo, Neymar Jr., EldrickTont Woods (Tiger Woods) to advertise their brands contribute to huge amount of profit invested. These sportsperson grants to the advertising and marketing strategy for Nike Inc. and therefore bring the Nike brands to the eyes of the world.
VII. Conclusion
In conclusion, advertising practices of Nike Inc. has brought their brands to the higher level compared to other similar brands. In addition, the great representative by Nike Inc. plays strong position in capturing the confidence of consumers towards the brand itself. The perfect timing of implementing the "Just Do It" campaign also is one of the factors of Nike Inc's. successfulness. Based on the observation done, Nike's advertisement rarely focused only on the product itself. But, they are focusing to the person who wears the product with the casual jokes and interesting ads. The clever marketing strategy done by Nike Inc. has proved that business without marketing is just a business without soul. Thus, advertising in marketing strategy does give huge impact that contributes to brand promotion and product acknowledgement that leads to corporate reputation to businesses. It is recommended to every business to learn and observe how Nike Inc. manages their strategy on marketing through the advertising practices in order to be strong and stable brands like them.
References:
* Ali Mahdi, H., Abbas, M., &IlyasMazar, T. (2015). A Comparative Analysis of Strategies and Business Models of Nike, Inc. and Adidas Group with special reference to Competitive Advantage in the context of a Dynamic and Competitive Environment. International Journal of Business Management and Economic Research (IJBMER), Vol 6(3), 167-177. Retrieved from http://www.ijbmer.com/docs/volumes/ vol6issue3/ijbmer2015060302.pdf
* Bhasin, H. (2017). Top 10 Nike competitors - Competitor analysis of Nike. Retrieved from http://www.marketing91.com/top10-nike-competitors/Authers, John. "Bathed in Reserves of Optimism." Financial Times. March 21, 1998.
* Chand, S. (2014). Advantages of Advertising: 12 Major Advantages of Advertising- Explained! April 15, 2017, Retrieved from http:// www.yourarticlelibrary.com/advertising/ advantages-of-advertising-12-majoradvantages-of-advertisingexplained/ 25872/
* Chowdhury, V. (2011). Advertisements: advantages and disadvantages of advertising. Retrieved April 15, 2017, from http://www.indiastudychannel.com/ resources/139778-Advertisementsadvantages-and-disadvantages-ofadvertising.aspx
* Company Profile of Nike. (n.d.). April 19, 2017, Retrieved from http:// about.nike.com/pages/company-profile
* Deng, T. (2009). "Just Done It"- Nike s New Advertising Plan Facing Global Economic Crisis. International Journal of Business and Management, Vol 4 (3).
* Editors of Encyclopedia Britannica (2016, April 10). Nike, Inc., Blue Ribbon Sports. Retrieved from https:// global.britannica.com/topic/Nike-Inc
* Garfield, Bob. "Ad Review." Advertising Age. January 19, 1998.
* Getting Back on its Feet." Los Angeles Times, July 4, 1998.
* Kotler, P., & Keller, K. (2016). Marketing Management (15th ed.). Harlow, England: Pearson Education Limited.
* Kapner, Suzanne. "Market Savvy with Sneaker Glut at Stores Easing, Nike is Slowly
* Mini-case Study: Nikes "Just Do It" Advertising Campaig. (n.d.). Center for Applied Research.https:// time2morph.files.wordpress.com/2012/ 09/nike_just-do-it1.pdf
* Nur Hamizah Ahmad Zawawi, Wan Rasyidah, Abd Razak, International Journal of Business and Management Invention ISSN (Online): 2319 - 8028, ISSN (Print): 2319 - 801X www.ijbmi.org || Volume 6 Issue 5 || May. 2017 || PP-45-47
* Odinmp. (2012, July 25). Textual Analysis on NIKE Advertisement. Retrieved from https://odinmp.wordpress.com/2012/07/ 25/78/ [9]. N. (2015, September 17). 2015 Annual Report and Notice of Annual Meeting (Rep.). Retrievedhttp:// s1.q4cdn.com/806093406 / files/ doc_financials/2015/ar/docs/nike-2015form-10K.pdf
* O'Leary, Noreen and Joan Voight. "Goodby Pitches Ideas for Brand Nike."
* Soloman, Jolie. "When Nike Goes Cold." Newsweek. March 30, 1998
* Terkan, R. (2014). Importance of Creative Advertising and Marketing According to University Students' Perspective. International Review of Management and Marketing, Vol. 4 (3), 239-246.
Copyright Globsyn Business School Jan-Dec 2017