Marketing - Nike: Company Analysis Research Paper

Pages: 15 (4320 words)  ·  Bibliography Sources: 20  ·  File: .docx  ·  Level: Doctorate  ·  Topic: Business - Advertising

SAMPLE EXCERPT . . .

" Newsweek. (1998). ]

The power of Nike to not only achieve but maintain such a frontrunner status, twice, in the industry is as much due to its creative, useful and fantastic products as it is to its advertising a marketing innovations. For example, brand management is one of the company's many strengths.

It is widely known in the advertising industry that most customers pay more for brands that they see as superior in style, reliability and quality. A company, therefore, is able, through its efficient brand recognition program, to "expand market share, command higher prices and generate more revenue than its competitors."[footnoteRef:17] [17: "Nike's 'Just do it' Advertising Campaign." Centre for Applied Research. www.cfar.com/Documents/nikecmp.pdf, accessed July 2011. ]

With its "Just Do It" campaign, in addition to its great product, Nike increased its share in the domestic running shoe business "from 18% to 43%, from $877 million in worldwide sales to $9.2 billion in the ten years

between 1988 and 1998," according to the case study.[footnoteRef:18] Further, according to the same source, [18: "Nike's 'Just do it' Advertising Campaign." Centre for Applied Research. www.cfar.com/Documents/nikecmp.pdf, accessed July 2011. ]

"Nike spent $300 million on overseas advertising alone; most of it centered around the "Just Do It" campaign. The success of the campaign is that much more remarkable when one

considers that an estimated 80% of the sneakers sold in the U.S.

are never used for the activities for which they have been designed.

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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."[footnoteRef:19] [19: "Nike's 'Just do it' Advertising Campaign." Centre for Applied Research. www.cfar.com/Documents/nikecmp.pdf, accessed July 2011. ]

TOPIC: Research Paper on Marketing - Nike: Company Analysis Assignment

Eventually, Nike, having been right all along, took in the above strategy to capitalize on the craze that followed the aerobic craze that almost put it out of business. Nike thus cashed it as quickly as possible on jogging and fitness during the later part of the 1980's. During this period, Nike smartly positioned itself to appeal not only to men, but also to women and teenagers, thus taking in both genders and ages ranging from 15-40 years old.

Due to the fact that Nike was under pressure during this time from Reebok, its advertising campaign almost never focused on its actual product, but rather chose to show the person wearing the product. The campaign successfully captured corporate ideals, but also injected a dose of creativity and humor. Heretofore, Nike advertisements had always been somewhat detached and always portrayed determination and cool.

According to the study, some of the new ads retained that attitude, but several advertisements, especially the Bo Jackson ones, included some jokes to make the point.

"Jackson is seen working out at several different activities, joking while on a bike machine, "Now when is that Tour de France thing?" And after slam dunking a basketball contemplates "Air Bo." "I like the sound of that," he says."[footnoteRef:20] [20: "Nike's 'Just do it' Advertising Campaign." Centre for Applied Research. www.cfar.com/Documents/nikecmp.pdf, accessed July 2011. ]

Though now the campaign is known to have been truly revolutionary, back in the late 1980's the "Just Do It" advertisements received mixed reviews, which, according to the case study, ranged from "instant classic" to "sociopathic," leading some critics to describe the ads as "an impatient bordering-

on-contemptuous exhortation to the masses."[footnoteRef:21] [21: "Nike's 'Just do it' Advertising Campaign." Centre for Applied Research. www.cfar.com/Documents/nikecmp.pdf, accessed July 2011. ]

No matter what critics said, however, the advertisements were successful in helping Nike bounce back in the 1980's in spite of Reebok's huge sweep of the aerobics market. Nike responded to Reebok successfully through its campaign that essentially persuaded people into exercising by "shaming them," and more importantly, persuaded them to exercise in Nikes.

The case study further describes that the campaign was effective in encouraging consumers that if they chose Nike, they would receive quality. The company successfully portrayed this strategy by hiring sports stars to do the advertising. Thus, Bo Jackson, John McEnroe and later, Michael

Jordon, who all contributed to the start power of the brand as well. For example, the fact that Michael Jordan can play "an entire NBA season in a pair of Nikes, certainly the average weekend warrior can trust the shoes' durability."[footnoteRef:22] [22: "Nike's 'Just do it' Advertising Campaign." Centre for Applied Research. www.cfar.com/Documents/nikecmp.pdf, accessed July 2011. ]

All these celebrity endorsements appealed to a consumer's sense of being just like the stars seen on television, perhaps not rich or powerful but definitely "in style." Nike became the ultimate symbol for coolness, and all who wanted to be cool knew they would have to wear Nike's. According to the Center for Applied Research's study on the campaign,

"Just Do It' 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."[footnoteRef:23] [23: "Nike's 'Just do it' Advertising Campaign." Centre for Applied Research. www.cfar.com/Documents/nikecmp.pdf, accessed July 2011. ]

The campaign was, therefore successful and the best evidence is the fac that Nike is still one of the top sports brands today. The timing of the campaign, the message of the advertisements and the coupling of these two with some of the most well-known names in the sports industry tapped into the customers' desires for a healthy, cool lifestyle, all of which they could attain if they bought Nike sneakers. Nothing could be simpler, or more effective.

Consumer Reactions

After having analyzed all aspects of the Nike advertising campaign, it is important to see just how such things link with theories of learning, memory and consumer decision-making, in order to see why the company was so successful and how it could potentially attain a presence in new target market segments.

Advertising theories focus on audience and communication as a rule. The reason for this is to understand how to be keep a customer's attention in order to present the product, and how best to communicate to him or her to induce the person to buy a certain product. In order to accomplish the former, Nike utilized attention grabbers, such as celebrities and a strong product. Humor, in this case, also worked.

In order to accomplish the latter, however, inducing a person to actually buy, which is the hardest part, Nike the resources it had to teach the customers about the product, implant it in the customers' memory and enable them to make a decision in buy the product, due to the fact that Nike was "cool." In the Nike campaign, memory was definitely a big trigger, as the campaign focused on keeping itself in a person's mind through its various attention getting techniques, the most efficient of which were humor and the star factor, as aforementioned.

The audience, thus experienced not only learning of the product, but Nike successfully placed this product in the consumer memory, utilizing its tools to not only implant the idea but also foster its growth through constant bombardment in the media. The basic necessities of an advertising campaign are to enable people to experience an emotion, to help them understand and remember a product, and to hopefully enable them to take action and buy that product.[footnoteRef:24] [24: Steven L. McNamara. "Persuasive Advertising Theories." Ad Cracker. http://www.adcracker.com/theory/Persuasive_Advertising_Theories.htm, accessed July 2011. ]

As afore-described, Nike did these three things by brand-building (Nike is cool), utilizing celebrities to help people remember the product, and thus leading a person to want to be like the celebrities, have the best quality product, and want to be cool, therefore, also leading a person to buy the product presented. The latter elements were done through direct marketing and direct response advertising.

This paper focuses on the campaign due to the fact that it was incredibly efficient in securing Nike's slipping number one spot in the sports equipment market. This allowed the company to continue to grow to gargantuan proportions. However, with the advent of new technology other brand continued to grow as well, and many times, sneakers are worn for the "cool factor" rather than to be comfortable, especially given the young generation who relies on Jack Purcell's shoes for example. Nike could utilize a revamping of its sneaker, which some youth regard as being worn by soccer moms or the older generation in general.

In order to do so, Nike could once again analyze the design of its shoe, and see how best it could make it look "cool" once again, while retaining its comfort, lightness, and other Nike-like capacities a la 1980's "Just do it" advertisements. It seems, however, that the company has taken to the online market to do so, which is quite smart, and has a big social networking presence. Furthermore,… [END OF PREVIEW] . . . READ MORE

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