Former University of Oregon track coach and co-founder of Nike Bill Bowerman once said: “If you have a body, you are an athlete!” (NikeBiz) This way of thinking is how Nike conducts every aspect of their business. Every person is a potential athlete or “consumer”. This is a common term when used in the realm of athletics but when Bill Bowerman said this it was in direct reference to the shoe industry. From their marketing strategies to their selling philosophies, Nike has developed one of the most recognizable and demanded name and logo tandems ever.
Nike, which is the Greek Goddess of Victory, was born in 1972 when BRS, Blue Ribbon Sports, launched its first branded shoe at the U.S. Olympic track and field trials. A former University of Oregon track team member Phil Knight created Blue Ribbon Sports. At Oregon, Knight was coached by the legendary Bill Bowerman and then went on to become and alumni of the Stanford School of Business. BRS was crafted in 1962 when Knight made a deal with Onitsuka Tiger Company, a Japanese shoe company, to import their shoe to the United States.
Prices start at $10
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Prices start at $11
Knight had the idea to sell a low-cost shoe with very high quality. Knight had high aspirations of taking Adidas out the top spot in the athletic shoe market. In 1964, Bill Bowerman decided to join Knight as a partner at BRS to create a joint quest to be number one. Bowerman redesigned the Tiger shoes while Knight acted as the accountant/personal seller and went on the road to sell their newly crafted sneakers at track meets and local shoe stores.
By 1966, Blue Ribbon Sports opened their first store in Portland, Oregon. Knight and Bowerman managed the store with the only other employee being a former Stanford runner Jeff Johnson. (story/chrono, 1) Signing First Endorsers During 1971, BRS caught a break when a trading company called Nissho Iwai introduced BRS to important letters of credit.
This credit allowed BRS to subcontract its own shoe line and by 1972 it was selling Nike Brand shoes. Over the next decade, Nike expanded almost double its size each year from the previous year. Nike is officially called Nike in 1978 and has signed on tennis great John McEnroe, New York City marathon champion Alberto Salazar, women’s marathon gold medallist Joan Beniot, and Olympic track star and gold medallist Carl Lewis. (story/chrono, 1-2) Also during this time Nike is opening manufacturing plants all over the U.S. Nike was a household name for most athletes by early 1980s.
Nike’s focus was still on track and field and for the most part track athletes were their target market. One of the first individuals to endorse a Nike product was a man who exemplified their style and way of conducting business, Steve Prefontaine. Prefontaine was a household name in the late seventies and has gone down in history as one of the best American track and field athletes ever. Prefontaine was a friend of Knight and had been coached by Bowerman at the University of Oregon.
Prefontaine embodied what Nike wanted as its differential advantage of other companies due to his brash attitude, high talent level, and cavalier mentality. Nike marketed itself as a new and innovative shoe company that constantly had the athlete’s performance in mind, unlike existing companies who focused on the appearance and durability of their products. Nike infested their market with bright colours, new styles, and technical information pertaining to their products. This is why Steve Prefontaine and Nike were a tremendous tandem in the early years of Nike’s existence.
By 1984 Nike had supplanted Adidas as the number one selling running shoe company in America. But this was not enough for Nike. At this time Nike was known for its attention to the wants and needs of their market, the individual runner. The Nike Brand itself, and while Knight and the employees of the company promoted Nike across the country, the quality, comfort, and design of the shoe were selling the product already. During the period from 1985-1987, Nike dropped back down to number two in the running of the shoe market.
Sales had dropped off because the running boom of the late 70’s and ’80s had begun to diminish. Nike began to notice and entire market that the company had been avoiding, everyday athletic activities. These activities were things done by everyday people and not just the serious athlete. Fortunately for Nike, in 1985 their star was brought to light. A rookie basketball player with amazing talent and a nice smile fell into their lap, his name is Michael Jordan. (story/chrono, 2) Michael Jordan As soon as Nike signed Michael Jordan they began to market a new line of shoes and apparel with the name AIR JORDAN. This was the beginning of the JORDAN Brand and Jordan’s Jumpman23 products.
Featured prominently on each AIR JORDAN product was the Nike insignia, the swoosh, the product mark which the Jumpman23 and the AIR JORDAN label. Jordan came to Nike at a time when the marketability of the NBA was increasing. NBA games were being nationally televised during prime time television hours and weekends. This gave Nike the perfect platform to develop and market their new star and the products that he endorsed.
During the first few years, Nike introduced Jordan to the public and Jordan familiarized himself with the American public. Nike ran a series of ads with Jordan and film director Spike Lee. These ads were aired during prime time television hours and were solely targeted for pre-teen school students. These ads displayed an expressed message to “Stay in School.”(story/mkg_innov, 1) The ads presented kids with a national figure that was selling both school and Nike’s products, how could parents deny their children the shoes of such a virtuous spokesman?
Jordan was a figure that children adored, looked up to and tried to the best of their ability to copy. Nike used this to display a great positive image for their company and to sell their products. The ads were also the first by a company that didn’t use the usual 3 a.m. sport for public service announcements. Nike wanted to be a bold marketer; they aimed for the top promotional sports and developed a pioneering strategy for their industry. Nike continued to promote Michael Jordan through their ads and Jordan continued to promote their products.
The introduction of the AIR JORDAN line helped to create new lines of basketball shoes, including the AIR FORCE and AIR FLIGHT lines of basketball shoes and apparel. Also, a new innovative technology was a layer of air cushioning in their shoes; this was truly a differential factor for Nike when placed in comparison with other shoe companies. Nike’s sales jumped to over $3 Billion in total. Nike’s AIR JORDAN shoe was the best selling and most popular basketball shoe on the market. The AIR JORDAN shoe reached a point in the mid-nineties when a small picture of Michael Jordan at practice wearing different shoes sparked a booming inquiry all over Chicago.
One store alone received over 300 phone calls asking if they had the shoes in stock. (Katz, 72) The Jordan Empire The market Nike in which they wanted to target Jordan towards now was the “athlete of any age.” Nike began to produce sizes from infant on up. Nike created commercials that glorified Jordan and displayed his humbleness. In the commercials, Jordan did things that young and old people alike always dreamed of doing. Most of the commercials included Jordan soaring through the air, seeming to be hung from the sky with the chorus, “If I could be like Mike” playing in the background. Jordan would then drop out of the sky and dunk the basketball.
In one commercial aimed towards younger children, Jordan played the Warner Brothers Loony Toons Characters. For an older generation, Nike created a commercial where Jordan is on a dimmed basketball court and a booming voice comes in and says, “What if my name weren’t in lights? Can you imagine that? . . I can?” This commercial marketed Jordan as a human being and not the untouchable being that he is sometimes projected to be; this was aimed to help the average person relate to Jordan. (Katz, 72).
As much as Nike markets Michael Jordan, Michael Jordan markets himself and the products that he represents. Jordan is always a well-dressed, well-mannered, good-natured, and respectable individual. It is a welcomed change from the tattoo-covered and pierced “bad boys” that other companies have for their spokesman. All of these things draw people to Michael Jordan as a person, but his talent level is what makes Michael Jordan a worldwide icon. Michael Jordan plays at a competitive level of professional athletics that has almost never been matched in any professional sport. This talent alone sells, but when the talent is selling a product, the product is going to sell even better.
The more Jordan played in front of a national audience the more Nike was marketed. Jordan was a human marketing piece. He was and still is a walking, talking billboard that just happens to be a spokesman for Nike. Jordan can get as much air time and publicity as he desires just due to the sheer fact that the demand for him and his products is so great. Everyone wants to see what Jordan is wearing and doing at all times. To the target market, Jordan is everything they hope to be and by buying the product he endorses the consumer feels that they can come that much closer to their hero.
The Jordan Brand Even though Michael Jordan has retired from basketball his success continues. In 1997, Jordan announced the formation of the new signature Jordan brand. The Jordan Brand is a separate business unit from the Nike Brand; it will be able to explode product avenues that would have not necessarily have been explored under Nike’s umbrella. (media/n_jocroconcept, 1-2) Unlike most companies, Jordan Brand doesn’t have to worry as much about marketing strategies or who their target market will be. Jordan Brand can use secondary research from Nike and have most of their information developed for them.
The Jordan Brand not only offers the popular AIR JORDAN shoes but it also offers an apparel line and other shoes under the Jordan Brand. The area where Jordan Brand succeeds, but Nike failed was their pricing system. In terms of product, place, and promotion Nike succeeded, but in terms of price Nike was way above affordable range for most consumers. Nike’s shoes for Jordan cost up to $130 per pair, but Jordan Brand offers comparable products with the JUMPMAN23 logo and Jordan name for considerably less. While this may only be a substitute for the real AIR JORDAN’s, Jordan Brand makes it possible for people with lower incomes to afford to make the purchase and “get closer to their hero.” (Armstrong, G7) Jordan Brand already sponsors such teams as Penn State University, Florida State University and University of North Carolina- Jordan’s alma mater.
Many other NBA players who grew up with Jordan as their idol have followed suit and jumped on the Nike bandwagon. Nike endorses Eddie Jones, Ray Allen, Michael Finley, Scottie Pippen and Kevin Garnett. Jordan Brand has also grown to encompass other sports and sports figures as well. It now includes Football Player Randy Moss, Golfer Tiger Woods, and Boxer Roy Jones, Jr. Every one of these athletes is a well-known and well-respected athletes and supposedly “the best at their sport” just like Jordan is. Many fans already look up to them and idolize them just like Jordan, making the marketability of each one very easy.
The Jordan Brand continues on in the Nike tradition of making shoes and apparel for the athlete and by the athlete. Not only is the quality of Jordan Brand well known but also the name by itself can be a differentiating factor when it comes time to make a purchase. Other companies do not have the name recognition and the creditability that comes with the name that the Jordan Brand possesses.
When the Jordan Brand broke away from the Nike Brand it brought customer loyalty with it. All of these factors helped to ease the introduction of the Jordan Brand into the consumer market place. Jordan Brand skipped over the market penetration stage and went right to the most profitable stage; Jordan is close to its maturity. (Armstrong, 290-292) When Nike has lost a very profitable section of the apparel and shoes sales, Nike is still the top overall seller of shoes and apparel. Even when Michael Jordan decided to retire from basketball they remained true to Michael. They launched a very profitable campaign that became very popular.
This “retro” collection was bringing back Jordan’s past shoes. These throwbacks were very expensive but also sold very well. Nike also began to sell some of Jordan’s college gear, such as shoes, shirts and shorts. This has made the University of North Carolina colors and apparel very popular as well.
Conclusion Nike’s ideals and goals remain the same as those of the feisty Steve Prefontaine and Bill Bowerman. Nike CDO Phil Knight is not slowing down as he continually signs new colleges on as Nike endorsed schools, even purchasing a portion of the NFL’s Dallas Cowboys. Nike has reached a point where they can count on the Nike name promoting itself, and yet they continue to produce innovative ideas like the BOING! Campaign. These ideas have been productive and entertaining promotional tools. Nike continues to market itself towards people of all ages who wish to be active and still comfortable.
Jordan brand looks forward to continuing success in the future with the return of Jordan to the basketball court. With him coming back it exposes him to more people and more often. This has made more people realize the Jordan Brand. With his continued success on the court at an older age has propelled him and his name into the most marketed icon in history and has opened up other doors for athletes to do the same like Tiger Woods. These “lifelong” fans of Jordan have made them loyal to Nike and its products for life.
With Michael Jordan back in basketball and the invested interest by the media and the public this will certain help sales and keep alive the strong traditions of Nike and JORDAN BRAND apparel. With the innovative and entertaining Nike marketing staff and the basketball god that is Jordan, the shoes will sure to be flying off the shelve- like Jordan from the foul line for a successful dunk.
Bibliography Katz, Donald. “Triumph of the Swoosh.” Sports Illustrated. 16 August, 1993: 53-73.
Armstrong, Gary and Kotler, Phillip. Principles of Marketing: Ninth Edition. Upper Saddle, NJ: Prentice Hall, 2000.
ONLINE SOURCES: NikeBiz. “History” (27 November, 2001) http://www.nikebiz.com/story/hist_our.shtml NikeBiz “Our Chronology” (2001) http://www.nikebiz.com/story/chrono.shtml NikeBiz “Shoe Evolution” (2001) http://www.nikebiz.com/story/pr_tech.shtml NikeBiz “Marketing Innovations” (2001) www.nikebiz.com/media/markinnov.shtml NikeBiz “Beyond Shoes” (2001) http://www.nikebiz.com/story/pr_beyond.shtml