Essay Preview: Nike
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Q1. How would you characterize Nike’s brand image and sources of brand equity in the United State?
Nike has been successful in building a brand image with product features as follows:
Performance
From the early day, Nike has learnt the consumers’ need by listening to the need of athletes, sharing their true passion for running. In doing so, Nike has created a reputation as a provider of high quality running shoes designed especially for athlete. Also, high-tech image has always been associated with Nike products
Innovation
The Nike brands always associate with innovation. For example, in 1987, Nike developed an innovative new cushioning technology that was use with running shoes. In 1988, Nike introduced “Air” technology and it fast created a big advantage over its competitors. Today, innovation always associate with Nike products and it is still strength of Nike.
Product name associates with athlete name:
Air Jordan is a good example for this concept. Nike has been successful in creating relevance among product name, athlete name, the brand, and “Air” technology.
Global Brand with memorable logo
97% Awareness and recognition for Nike brand and logo contribute substantially to the brand image and brand equity.
Good effort in aerobics and fashion segment
In order to compete with Reebok in the US market, Nike had adjusted its marketing strategy toward female group who have tendency of fashion-conscious in aerobic market in the 1980s.
Effective campaigns: The “Revolution in Motion” and “Just Do It”
The Revolution campaign was a powerful brand statement and a massive handshake from Nike to the customers. The campaign successfully communicates to a wide range of people about product technology, Nike’s soul and a deep.
“Just Do It” in 1998, with $20 million month-long blitz, did a good job in urging Americans to participate more active in sport пє create demand for Nike cross-training shoes that targets to athletes who played more than one sport пє Nike focused in functional features of product
Endorsement and Sponsorship with runner, tennis player, and baseball in America
Grass-roots marketing with local sport events
Sponsorships of athletes in track, tennis and baseball
“Trickle-down” marketing
Brand extension
In 1993, Nike decided to put more emphasis on top of line performance wear —uniform and apparel worn in actual competition. These new initiatives did provide halo effect to other apparel line and be consistent with broadening the Nike brand meaning to encompass “performance in sport” and not just shoes
Brand relevance and coherence
Nike did a good job in maintaining the coherence and consistency of brand. In endorsement and sponsorship, Nike just selected top-athletes that match with Nike attributes. For example, in 1990s Nike did drop many low profile endorsers and sponsorships.
Another example is the time when Nike entered Europe market. Because Nike distributors controlled advertising in their local markets, each continued to develop their own interpretation of the Nike brand and identity. When Nike was soon aware of this problem, the company has decided to take greater control of advertising and products strategies in order to keep consistency and coherence for the brand.
Q2. How have Nike’s efforts to become a global corporation affect its sources of brand equity and brand image in the United State, Europe and Asia?
Nike had tried to extend its US reputation of performance and innovation market into Europe market. However, Nike had to face with a lot of obstacle such as competition in Europe market, consumer behavior, and Europe customer perception toward Nike brand:
Nike and competition in Europe market.
Player
Target market
MKT activities
Remark
Adidas
35+ generation
Grassroots marketing
Amateur sponsorship
Endorsement
Branding with loyalty
High-end segment
Young 12-18, 20+
Top athletes, popular sports, endorsement
Performance and Innovation
Reebok
Women fitness
Fashion segment
Bring the success in US women market to EU
Branding with style, fashion, comfort
Distribution system
Distribution is one of the important elements in the marketing mix of Nike. At the beginning, the company adopted a high price strategy that target to high-end segment only. In doing so, Nike had selective distributor system in Europe that would promote the premium image of Nike brand. With the change in distribution strategy, Nike has started to gain a greater control of distribution system. As a result, in 1992, the company had successfully regained control of 90% of Nike European distribution.
In comparing to other competitors, Adidas only controlled 65%, Reebok only controlled 40%, Nike have a competitive advantage in expanding into global market in Europe.
Customer perception
Since, Nike adopted high price strategy and targeted to high-end segment, European consumers had perceived Nike as an aggressive, expensive American brand, viewing the company as arrogant. That is a real dilemma for Nike in progress to grow in Europe market. It is imperative that the company has to find a way to change consumers’ perception about the brand.
Marketing budget and sponsor events
In 1991, Nike spent $150 million for global advertising and promotion
In 1992, Nike did raise overall global advertising and promotion budget to $240 million