Nike’s approach to marketing: Then and now
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The leading sports brand we know today as Nike started back in 1964, where it started as Blue Ribbons Sports (BRS). Founded by Philip Knight, a track athlete at the University of Oregon, and his coach Bill Bowerman, the pair distributed running shoes for a Japanese company called Onitsuka Tiger.
By 1971, BRS reached $1 million in sales, but business with Onitsuka was going sideways because of competition, misunderstanding, and sour relationships.
As a result, they moved away from merely acting as distributors and transitioned into designers and manufacturers of their own athletic shoes.
In 1973 BRS became Nike, named after the Greek goddess of victory. A design student, Carolyn Davidson, created the infamous “swoosh” logo for just $35. She later got 500 shares of the company for her work.
From there on, Nike created some of the world’s greatest marketing moments and innovations which put their name on the athletic apparel map forever.
Nike's evolution from a distributor to a leading footwear, marketing, and technological giant shows how much the brand has grown since its inception in 1964. While we'll get into the specifics later, here's a rundown on Nike's major marketing milestones.
1964- BRS was born as a distributor
1971- BRS started designing, and manufacturing shoes for athletes
1973- Re-named to Nike, created the "swoosh" logo, and signed the first endorsement with Tennis star, Ilie Nastase
1979- Innovation debut with air cushioning technology developed by a NASA engineer
1984- Biggest Nike endorsement by Michael Jordan, and launched the "Air Jordan" series
1988- Launched the "Just Do It" tagline
1990- First Nike store opened in Portland, Oregon
2003- Signed Lebron James and Kobe Bryant and acquired Converse for $309 million
2012- Reached the 44,000 worldwide employee mark
2015- Became official apparel supplier for NBA
2018- "Air Jordan" brand reached the first billion-dollar quarter
2021- Annual profits soared by 126%, highest in company history
The early days of Nike
In the mid-1970s, when Nike cut ties with Onitsuka and started working on their own shoes, Bill experimented with his wife's waffle maker to create a better tread (which is the lower part of the shoe which touches the ground).
While the waffle maker didn't see the light after a few days of experimentation, Bill launched from this process to created Nike's first shoe, the "Nike Moon."
This was followed by the creation of the “Waffle trainer” which became the best-selling training shoes in the United States.
Bill researched jogging as exercise and became known as the man who re-invented jogging in America in the 1970s. He saw how jogging could be included as part of a fitness routine and started writing articles about it. He went on to write a 90-page book on jogging with a cardiologist, which was released before the shoes.
Finally, when the shoes were released, Nike saw a massive boom in sales because of the book and jogging education. By then, Bill and Knight were connected with other professional track athletes, which further influenced sales.
While an accidental content marketing strategy initiated Nike’s success journey, today, the brand holds the largest market share in North America at 27.4% and accounts for the highest sales for sneakers among competitors.
Fighting losses and innovation debut
Apart from being the sneaker giant in the mid-1970s, Nike was also leading the innovation sector. They made an innovation debut in 1979 by introducing air cushioning technology for sneakers which significantly enhanced comfort while running.
This innovation in shoes for athletes held up Nike’s revenue for a while, but then started dipping in sales by the mid-80s. The reason: the brand only focused on developing products and technology for running (and completely missed the aerobics boom where competitors had already started making progress).
Following this, Nike sought to expand its business beyond athletic shoes and developed casual shoes for non-athletes. Their functional shoe was funny-looking, but Nike was confident people would buy it.
However, they were wrong. By 1987 Nike sales dropped by almost $200 million, followed by a massive layoff of 280 people in one year.
Despite seeing a negative profit graph, Nike kept a head-on approach to sales and marketing. They realized they were simply focusing on creating a good product, which wasn't enough. The team needed to understand who the consumer was and what the brand represented.
As a result, they did two things:
- Included marketing in their operations, and
- Placed the customer at the center of the brand.
To regain losses and get back their position in the market, Nike executed four major campaigns:
- In 1984, Nike signed the biggest endorsement of all time with Michael Jordan. He had never worn a Nike shoe before and was hoping to collaborate with Adidas, but finally signed a deal after a meeting with Nike. The deal included $500,000 a year for five years, two Mercedes cars, and personalized shoes. This deal was a super success for Nike as Jordan rose to stardom, and the brand Air Jordans hit $100 million in revenue within a year.
- In 1987, Nike introduced the Air Max, which helped absorb bounce while running. They also offered personalization for customers based on their height, weight, and impact usage.
- The Air Max commercial featured the Beatles' Revolution as the soundtrack—the first time a Beatles song was used in a TV advertisement—and led to massive sales of the new shoes.
- Riding on this success, a year later, Nike launched a series of campaigns to advance the tagline "Just do it" featuring sportsman Bo Jackson.
These developments from the mid-1980s to the 90s were significant for Nike and helped them create a distinct space for themselves in the market. But, after a point, these developments failed to engage and retain customers.
Building a distinct brand: The 2000’s
Nike realized they had to do something different—something that could largely set them apart in the long run.
The intersection of shoes and technology
In 2006, Nike entered the tech industry by introducing Nike + iPods sports kit. The focus now was less on products and more on what athletes needed. This gadget measured the distance and speed of a run or walk and was the most technologically advanced portable device for athletes. A small electronic chip was inserted in the shoe, serving as a wireless connection device for the iPod.
Following the massive popularity and buzz around this innovation, the brand released an upgrade: the Nike + Sportband kit in 2008. Now, the iPod was not needed; the chip could be directly connected with the computer to download results.
There was also a Nike+ Sportwatch combination which was again an enhancement of the original concept.
In 2010, Nike introduced a running application for iPhones that removed the need for an in-shoe chip. Instead, the app used the phone's accelerometer to track results.
Thanks to this tech, Nike built a community of six million users that set the brand miles ahead of its competitors. Apart from dressing up athletes, they provided provisions for aspiring or passionate athletes to stay healthy and kept iterating on their devices.
With these developments, Nike came closer to its customers than ever with enhanced connectivity, accessibility to data, and analysis.
Consumer-centric approach, and defining the brand “Nike”
After the mid-80's, Nike started placing the consumer at the center in its efforts around product design, positioning, and messaging.
One example is the 2012 "Find your greatness" campaign which highlighted average individuals and athletes stretching their limits and finding their greatness. The campaign encouraged consumers to go beyond stereotypes and push boundaries.
Another great example is the campaign featuring athlete Colin Kaepernick, "Dream Crazy." Released by Nike as part of their "Just do it" series on their 30th anniversary. The campaign had a very powerful message and included impactful lines like, "If people say your dreams are crazy, if they laugh at what you think you can do, good. Stay that way."
Even though the campaign was controversial because of the protests around Colin Kapernic and the NFL, it was widely successful in garnering attention.
As time went on, however, despite great products and advertising campaigns, sales were low. The only solution was to kick up the consumer factor and put their needs back in front.To understand consumers and study need patterns, Nike decision-makers went to amateur sports events, spent time in the gym and on tennis courts, and spoke to many people.
They also took market research to another level through observation: spending time in stores to see what's happening across the counter, tracking responses to ads, and studying reports from dealers.
They understood that apart from the consumer, it was also important to define what the brand meant and stood for...which slowly became consistent with their messaging and campaigns.
With the end of the fourth quarter and full year on May 31st, 2021, Nike reported a 19% increase in annual revenue at $44.5 billion. Digital traffic soared, too: Nike had an impressive 152 million website visitors in June 2021 with an average visit duration of around seven minutes across four to five pages.
There's no doubt Nike is evolving and growing every year—it’s also selling a huge number of shoes by the second. Back in 2016, Mat Powell, a sports industry analyst, concluded Nike sold almost 26 pairs of shoes every second.
Today, with a transition to fewer stores and more online strategies because of the pandemic, direct-to-consumer sales are largely powered by the brand’s innovation, consumer-centric campaigns, and personalization.
But how exactly does Nike achieve those numbers?
Let's break down some strategies that significantly work for the brand:
- Benefit-based marketing
Benefit-based marketing advocates the benefits of a product's features rather than directly advocating the features. It promotes the utility factor of the product, so consumers understand how the product will help them.
As for Nike, they've always focused on helping their consumers become better athletes. Apart from ease of use and innovation, they also empower and motivate consumers through their campaigns.
This can be seen as an indicator of what the brand stands for: empowering, swift and athletic. And that's exactly what the consumers feel upon purchasing and using Nike products, thus ensuring all-around consistency.
Nike's goal is less about selling shoes than it is for helping athletes stay healthy and fit. Through this benefit-driven goal, they make sales and have become a people-loved brand over the years.
Most Nike campaigns have a similar arc: a protagonist or multiple common people face and overcome some challenge, incidentally while using Nike products. So while it doesn't explicitly promote the products, it promotes the feeling and the story related to the brand.
Nike asked NFL players to work with their high school's respective football teams in a marketing campaign. The video mostly highlights the importance of pushing yourself, not giving up, and getting to the next level with little to no mention of the brand.
This theme of overcoming and facing the challenge remains constant and tells the consumer how Nike products will make them feel.
- Selling stories more than products – Emotional branding
If you've ever seen a Nike advertisement firsthand, you know they go heavy on inspiration and emotions. Rather than directly advertising the brand and product, they have a powerful message relayed through an impactful storyline.
This separates Nike from a huge number of brands, because it has been mastering storytelling for years now. Each of their advertisements evokes emotions and feelings that can only be satisfied through Nike products.
Whether it's the "Find your greatness" campaign or the "Dream Crazy" campaign, Nike always highlights self-limiting or society-led beliefs that bring us down. When you and the world say, "Can't do it," Nike says, "Just do it."
Emotional branding is powerful, and Nike has woven their entire marketing model in a storytelling format that inspires people to get over fears and take action—through Nike products.
An excellent example of this is the 2017-commercial released by Nike on Youtube, called "What are girls made of?" It showcases a young girl singing on the stage about what girls are made of. Initially, she starts by saying they're made of flowers, marmalades, and gossip, but slowly tells the truth—girls are made of power, punches, battle, pain, and whatever they wish to be.
This campaign was a powerful narrative that highlighted some painful aspects of what girls are thought to be.
- Solid social media game
Nike is not only consistent with its messaging on commercials and campaigns, but is a standout social media brand too. With over 164 million followers on Instagram and 8.6 million followers on Twitter, Nike has an engaged audience with corresponding voices and actions across platforms.
Here’s what they’re doing best on social media:
- Leveraging user-generated-content (UGC)
UGC is the content created by consumers and followers of a brand to express their feelings or opinions around the products or the brand in general. Nike often posts user-generated content on their profile as part of a campaign,
Nike's "Better for it" campaign was a women empowerment campaign that encouraged women to share their health and fitness goals with the hashtag (#betterforit). This campaign was a mix of stories from female ambassadors and customers worldwide and was shared by Nike across their platforms.
The theme of this campaign was to encourage women to take on new challenges and conquer them with confidence while taking care of their bodies.
- Appearing in and engaging with customer conversations
Customers want to be heard, and Nike practices this with heart through their social media profiles. They engage with customers and even initiate a conversation through brand mentions on Twitter.
Since Nike places customers at the center of the brand, these conversations are important for connecting with consumers and getting authentic feedback. This social listening further allows them to create targeted campaigns and products directly powered by social conversations with customers.
- Unique influencer marketing strategy
Unlike traditional influencer marketing, Nike's strategy includes unique ways of carrying out influencer collaborations that stand at the core of their marketing mix. Their campaigns highlight high-profile celebrities and professional athletes like Michael Jordan, Cristiano Ronaldo, and Serena Williams.
The best part about the role of influencers in Nike's marketing approach is how each post or commercial with them has a story around the brand. This story stays true to the authentic composition of the brand, and its voice, and messaging.
Apart from collaborations for commercials, Nike has also engaged in event sponsorships as well as collaborations with hip hop musicians like Kanye West and fashion designers like Tinker Hatfield.
- Becoming a marketing and technology-based business
Today, no one can say Nike only sells shoes. They sell experiences through their product, marketing, and technology.
Technological innovations like self-lacing shoes—which mold the shoe to your foot shape when you step in—as well as flyknit technology—which keep the shoe soft from the bottom and snug from the upper—are some of the greatest apparel innovations in history.
Beyond such innovations, Nike frequently creates fun and engaging commercials to connect with consumers and bind them closer to the brand.
Nike's "Winner stays" campaign is a great example. It featured credible football professionals like Ronaldo and Neymar Jr. battle on the field, which garnered over 107 million views on YouTube.
Safe to say: Nike rules the commercial world with their unique and story-backed campaigns to create an evergreen positioning for the brand in the market.
Nike: A marketing leader
From waffle-inspired shoes to Michael Jordan-inspired shoes, Nike has surpassed significant controversies, losses, and backlash to build an incredible brand. It owns a majority in the sports apparel industry and is the go-to choice for both athletes and common people to stay fit and healthy.
By selling a lifestyle more than products, Nike has created a unique positioning in the market with its creative marketing approach and inspiring messaging.
Today, Nike has a distinctive brand revolving around user-generated content, social media conversations with customers, benefit-based marketing, and innovative technology in products.
It’s a splendid example of putting customers at the center of your brand to experiment with strategies and do something unique without changing your entire business model.