Nike

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 пÑ" create demand for Nike cross-training shoes that targets to athletes who played more than one sport пÑ" 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 вЂ"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

Nike 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