NIKE

Company history and description Company Nike was founded by Bill Bowerman and Phil Knight. The business partnership began in 1962 as Blue Ribbon Sports (BRS) and in 1972 BRS changed its name to Nike, named for the Greek winged goddess of victory. History: 1962 - Foundation of the company by Bill Bowerman and Phil Knight. The company was called Blue Ribbon Sports (BRS) 1972 - the name Blue Ribbon Sports is changed to Nike 1974 Nike expands its operations to include Australia. The company now employs 250. Worldwide revenues reach $4.8 million. 1979 - NIKE introduces the Tailwind, the first running shoe with the technologically advanced, patented AIR-SOLE cushioning system. The manufacturing and marketing of the NIKE Apparel line begins. World revenues reach $149 million, and NIKE becomes the most popular running shoe in America with nearly 50 percent of the running shoe market revenues. 1981 - NIKE International Ltd. is formed to service a growing foreign market that reaches into more than 40 countries. NIKE shoes are manufactured in 11 countries and with 3,000 employees, the company watches revenues soar to $457 million. 1985 - Chicago Bulls basketball rookie Michael Jordan endorses NIKE line of AIR JORDAN court shoes and specialized apparel. John McEnroe, dressed in his own exclusively designed NIKE garb, takes his tennis wear on a promotional "Tour Through America" and around the world. 1989 - The Just Do It campaign experiences unprecedented success going into its second year. 1991 - NIKE increases its leadership to become the worlds first sports and fitness company to surpass $3 billion in total revenues 1998 - Nike is the most represented brand in the World Football Championship, where 6 teams plays in Nike suits. In the Winter Olympic Games almost all hockey teams play in Nike suits. 2000 Tiger Woods, the worlds best golfer signs contract with Nike. Description: Infrastructure: The systems of planning, finance, quality control etc. are crucially important to an organizations strategic capability in all primary activities. According to our research, Nike manufactures all their products through subcontracts. Essentially all products are manufactured by independent subcontractors. Mainly footwear products are produced outside the United States.

Nike is mainly engaged in the design, technology development and worldwide marketing of footwear, apparel, equipment and accessory products. Nike is also concern on invention of new technologies, which fulfill special demands and

needs of athletes. For example we can speak about invention of new materials etc. Nike is diverse and creative company in innovative production. The Company is a seller of athletic footwear and athletic apparel worldwide. Inbound logistics, operations and outbound logistics: The products are distributed directly through a distribution net to retailers and Nike stores. The distribution system reminds of a Justin-time system. Marketing and sales: Nike sells its products to approximately 18,000 retail accounts in the United States and through a mix of independent distributors, licensees and subsidiaries in approximately 140 countries worldwide. We can find Nikes markets around the whole world. Main markets are USA, Canada, Europe, Asia (China, Hong Kong, Japan, and Taiwan). Also the location of the Nike company is spread on many places. Main centers (main distributions centers) are situated in the USA Memphis, Portland, Wilsonville. Other centers are in Europe (Austria, Switzerland, Slovenia, Croatia, Sweden, Norway, Finland, Denmark, Belgium, Czech Republic, Poland, Slovakia, France, Spain and Portugal, Germany, Hungary, Italy, United Kingdom, Turkey etc.) Also in Asia (Thailand, Vietnam). The Company utilizes 18 Nike sales offices to solicit sales in the United States. In addition, the Company operates 78 Nike factory stores, four Nike stores, 13 NikeTowns (The Nike flagship store. The first NikeTown was opened in Chicago in 1992) and 61 Cole Haan stores in the United States. The Company designs running, outdoor activities, basketball, baseball children's, cross-training, women's, tennis, golf, soccer, football, bicycling, volleyball, wrestling, aquatic activities etc. To other equipment belong - watches, eyewear, carry gear, even socks and underwear. Nikes wholly subsidiary is Bauer Nike Hockey Inc., which manufactures mainly ice hockey equipment. Another wholly owned subsidiary is Cole Haan Holdings, Inc. which offers casual luxury footwear and accessories. The Company also jointed Hurley International LLC in 2002. Nike employs about 22 000 people worldwide and The Company's primary competitors are Reebok and Adidas. Research problem and background In the beginning of the1980s Nike had o period of crisis, profits were down and some key people left. The most visible cause was the fact that Nike was blindsided by its competitor Reebok. Reebok grew from $35 million in annual sales in 1982 to more than $300 million in 1985 by exploiting the fitness and aerobic craze among women, especially in the USA. In 1986 Nikes

turnover was counted to $ 1 billion, in 2002 sales were $ 9.9 billon. How was this possible, what did management do to achieve such results?

Our research problem is defined: How have Nike used the Branding instrument, and which roll did it play in the companys world wide success? Analyses To find an answer to our research problem we will concentrate on two major blocks in the branding process, identity and equity. Brand identity J N Kapferer has built a model for the identity of the brand, the Prism theory. He has built this model upon the psychological explanation of a person conscious and mentality. Kapferer is professor at the HEC-university in Paris and has written a large number of books about communication and brand communication.

Externalization

Physique Relationship Reflection

Personality Culture Self-image

Aspect of the reciever

Internalization

Aspect of the Sender

Two dimensions are still left to be explained in the prism, the Relationship and the Culture. The relationship is externalizing the brand from the company outwards, and the culture is an aid for internalizing the brand in the organization and in to the conscious of the customer. The culture is, according to Kapferer, the strongest dimension in the prism. It represents the difference between one brand and another. In our work we have analyzed the Nike company and its strategy for brand identity. Therefore, we have put in some keywords into the model for to analyze the company:
Sports an d fitness Sponsorship, ethics Aggressive, provocative, in-you r-face Like Jordan, Woods Just do It! Cool, I am an Athlete

Brand Equity The goal of the brand leadership paradigm is to create strong brands. D. Aaker et.al defined brand equity, in their book Marketing research from 1997, as a set of assets and liabilities linked to a brand that add to or subtract from the value of a product or service to a company and/or its customers. The assets or liabilities that underlie brand equity must be linked to the name and/or symbol of the brand. The authors also write The assets and liabilities on which brand equity is based will differ from contest to context. Brand equity can be identified through four grouped dimensions and these guide brand development, management and measurement, see fig below.
Brand Equity

Brand Awareness

Perceived Quality

Brand Associations

Brand Loyalty

Brand awareness is affecting perceptions and even taste. People like the familiar and are prepared to ascribe all sorts of good attitudes to the items that are familiar to them. Nike created a tree brand-building program, the endorsement focus strategy, national advertising to create a dominant presence and development of NikeTown stores. The endorsement strategy was to focus on one athlete instead of many. Nike contracted Michael Jordan and created a star endorsement philosophy around his personality. It turned out to be such a success that Nike

followed up their concepts with other stars from different sports markets like Tiger Woods in golf. Secondly, the advertising strategy to create dominant presence in media. Nike created media presence in several trend setting United States cities. TV ads linking Nike to a city was used, but real drivers were huge oversized billboards and murals on buildnings that blanketed cities with messages featuring key Nike-sponsored athletes, not products. The centerpiece of the program was Los Angeles during the 1984 Olympic Games. Nike had captured the eyes of the customers. Nikes campaigns efforts became world famous not only in the advertising world, their advertising posters were popular decorations in younger peoples rums according to the book NO LOGO by Naomi Klein. D. Aaker mentions in Brand leader ship It was through national media advertising that Nike really stepped out of the field in the consumers mind. NikeTown flagship stores were established in bigger citys around the world. There had never been anything like it in brand building. It communicated the essence of Nike by capturing its energy, its Just do it philosophy, and its in-your-face attitude. According to D. Aaker perceived quality, is a special type of association, partly because it influences brand associations in many contexts an d partly because it has been empirically shown to affect profitability as measured by ROI and stock return. We in the group assume that the company works with TQM - top quality management. Which probably is one the reason why Nikes customers gives high ratios on perceived quality in surveys? Brand associations can be anything that connects the consumer to the brand. In our Case we found the words, sports, attitudes and life style. Reason for that is one can relate to or identify one self to Nikes marketing campaigns like Just do it and/or the companies front athletes like Michael Jordan and Tiger Wood. Brand loyalty is at the heart of any brands value. The concept is to strengthen the size and intensity of each loyalty segment. What we can say about this is just Nikes sales 1986 was $ 1 billion and in 2002 sales was $ 9.9 billion. Conclusion and answer to our research problem Question: How have Nike used the branding instrument and which roll did it play in the companys world wide success? Answer: Nike has created a superior identity and equity for their brand, using the techniques and theories for brand-building. Nike has invested in the branding, and that is the determining factor to their success.