February 20, 2013
Nike Case Analysis
In 1962, Nike started as a US distributor for the Japanese shoe manufacturer Onitsuka under the name of Blue Ribbon Sports selling merchandise out of the back of cars at track meets. It wasn’t long before they realized they wanted to start designing and manufacturing their own brand of athletic footwear. In 1972, they changed their name to Nike and developed their iconic swoosh logo. Their first innovative shoe featured a waffle outsole that was lightweight and provided superior traction. Through quality, innovation, endorsements and strategic decisions the company had captured 50 percent of the US running shoe market by 1979. Since their primary focus had been the running market, by the early 90s Football had only grown to a 40 million dollar business for Nike. The big powerhouse, Adidas, dominated the Football market worldwide. Nike saw the potential in this market, as Football was the most watched and played sport across the globe. Not long after the ‘94 world cup, then CEO Phil Knight made the decision to open a brand new department dedicated solely to Football. Nike had built their company around the idea of innovation and offering athletes the best tools to improve their performance and they wanted to make that the driving force behind the new department. They recognized that the design of boots, balls and jerseys had not changed in many years and they saw this as their opportunity and competitive advantage. They also saw the popularity and individuality of the Brazilian team and their style of play and leveraged them into an endorsement deal to become the face of Nike football. By the 1998 World Cup Nike developed the lightest and most innovative Football Boot ever with the guidance of Brazilian star Ronaldo. They released the “Airport” ad, which featured the Brazil national team in the airport showing off their skills. This ad was immensely effective at combining pop culture into Nike’s brand image to help people identify Nike as a major player in the Football apparel market. Unfortunately, because of the long history with FIFA and deep pockets, Adidas has had exclusive rights to ad time during match play as well as exclusive apparel billboards around the field during the World Cup. This forced Nike to find an alternative way to distribute their marketing resources. They continued to pump out the most innovative shoe just in time for the World Cup and looked to utilize new media such as the Internet as a marketing tool. In 2000, they launched Nikefootball.com and built in an interactive application, the first of its kind, with games and information to engage a youthful audience. The World Cup air rights that Adidas held remained a roadblock for the traditional advertising method so they continued to explore the effectiveness of online marketing methods. Leading up to the 2010 World cup, Nike knew their marketing strategy had to incorporate a lot of social media and online marketing. They wanted to reach the consumer in new ways that built off of their previous projects in online marketing to bring the potential and existing customers the best possible experience and associate the brand with improved performance. They wanted to debut their latest innovation, the Mercurial Vapor Superfly II, in a big way on the world stage. Despite the contract obstacles they were still committed to creating an impactful commercial. Finally they wanted to incorporate sustainability and social responsibility into their marketing campaign. The problem Nike faced was implementing all this effectively while delivering the Nike brand message and reaching its target market. Without being able to air commercials during match play, reaching a large viewership became problematic. In the last World Cup, cumulative TV viewership was over 26 billion over the course of the tournament. Nike needed to find other ways to get these potential customers to see...