Nike

Introduction

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. Knight had the idea to sell a low cost shoe with a 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

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 their products appearance and durability. Nike infested their market with bright colors, new styles, and technology 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 80’s 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

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

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 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

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 University of North Carolina colors and apparel very popular as well.

Conclusion

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.

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