NIKE

The young Phil Knight always wanted to be number one, but as a student at the University of Oregan joinging the track and field team, he only ran good enough to come second. But it is his aggressive will to win that permates the whole company. After a brief spell as an accountant, Phil Knight started selling running shoes from the boot of his car. NIKE, the brand was born in 1971 and was soon known as „the saturday Knight Live“ of the sport business. It was Knight’s college track coach, Bill Bowerman, who designed the famous waffle - shaped sole. Togeter Bill Bowerman and Phill Knight spotted the jogging boom and brought a product called the sneaker to the market. That’s how Bill Bowerman became the father of jogging.

Steve Prefontaine, like Phil Knight, was a middle distance runner. Unlike Knight he won. Steven was a first sportman who was paid for wearing the nike shoes. According to Knight it was Prefontaine who carried the swoosh into the heavens for nike. Prefontaine died in a car crash after a late night party aged 24. The Anuual Prefontaine Track Meet is held in Oregan every year as a memory of the first nike sport star. Today, the company uses Prefontaines image on a posters, T-shirts etc. to evoke memories of past glories and to inspirate the next generation of Nike converts. Carl Lewis and other atletes on the Nike team dominate the meet. But these days athletes no longer represent just a club or country. When brands like Nike pay good slice of their wages, they run for the brand. TV networks buy it, and winning atletes world-wide are seen wearing the Swoosh. - association does the rest. The brand’s success has always been based on innovation and in the beginning, there was the shoe. The key thing in the company for the first 10 years was building a better product, having a better shoe. Innovative ideas were caried out every six months and a lot of money was spent constatly on research and development. Over 350 new designes are brought to the market each year. From the mid 70s, Knight sourced shoes from South Korea and Taiwan. Low labour costs gave him a vital advantage over his european competitors. When labour got too expensive, he moved his operations to China and Indonesia. Nike made over 50 milion pairs of shoes in 1993. Mainly because workers were not paid much over 2 dollars a day. Nike and some other companies were constantly critised for continuing its operations in Indonesia.

Many american companies have pulled out, but Nike stayed in. The thing was, that Nike company didn’t acctualy own the factories. So all that Phil said to the public was: „There are some things that we can control, but there are also some that we can not.“
Nike could easily increase the wage level of many workers. The cost of making the wages of indonesian workers dobled could be recoverd just by showing two less adverts in media per week. Nike sells their shoes for different prices in different places all around the world. The true value of the brand can be determined by how much a mark up costumer will pay for it. People buy it because they want to look different. If they get seen wearing an expensive shoe, they feel like they must be an exclusive person. Mostly young people are really victims in the aggresive marketing campaign of Nike. The 2 main elements towards sucess for Nike have so far been the Shoe and the Manufacturing. The third element in the success of nike’s achievement has been it’s novel approach to Marketing:
Phil Knight once said: „ Nike didn’t have enough money to take out an advertisment on the back page of Sport Illustrated but we do have enough money to get on the cover and that is by getting an athlete good enough to be on the front cover of the magazine wearing the swoosh. That is the best king of ad we can get. During the 1970s the swoosh began to appear on the clothing of top athletes. Using individual sports stars to endorse products was nothing new, but Nike took it to new hights. McEnroe was the perfect Nike guy. He had an attitude. He was anti-establishment and he was briliant. He was a rebel. Eric Cantona was another one. In 1950s the aerobics became in a fashion. This meant a first setback for Nike company. Reebok came up with fashionable footwear that women liked a lot. Nike tried to be flexible and also came up with shoes of this kind. But without the success. Now nike was producing different kinds of shoes, but nothing went right. So Mr. Knight had to decide what was going to be his target market. Phil Knight refocused the brand on pure sport and reorganised the company. The help came in the form of Sonny Vercaro, who was a basketball scout. He introduced Nike to a talented college basketball player by the name of Michal Jordan. Nike saw Jordans potential, so they closed the contract for $500 000. And this contract got worth it.

Michal Jordan soon became a huge backetball player and Nikes Air Jordans were the most popular shoe on the planet, with sales of 200 milion a year. Michal was the savior that Nike company needed. The key was that Fans love heroes. They want to be just like them, they want to wear what the heroes wear. Nike soon created a series of Nike towns, stores part Disneyworld, part sporting schrines. Nike don’t limit their investments to just the proffessional side of sport. Now they are targeting schools. Nike sponsors the Oregan High School girls basketball team, who happen to be the American High School chapions. Nike gives the girls shoes and track suits to wear. To some this is seen as exploitation of the youth. Competition was generated between children to see who could wear the most expensive trainers. One of Phil Knights greatest achievements is not only controlling the sports market but keeping control of his company. A long succession of senior managers have come and gone. Nike is now a public company but Phil Knight still calls the shots. Phil created two classes of stock, when company went public. The A-shares and the B-shares. The a-shares elect most of the board of directors and the b-shares elect the minority. Phil Knight virtually owns all the a-shares so he controls the board very much. The most aggressive marketing campaign by nike company was used at Olympic games in Atlanta in the year 1996. Nike company got into in trouble with the IOC organization even before games started, for trashing the real OG spirit. Nike was using slogans like this in their advertisments:


IF YOU WIN SILVER - YOU LOSE GOLD. DAY ONE - WAVE THE FLAG. DAY TWO - CRUSH THE DREAMS OF OTHERS.
IF YOU ARE NOT HERE TO WIN, YOU ARE JUST A TOURIST. Nike’s message was simple: Just taking part is for wimps! Business is war without bullets. Michal Johnson’s shoes were gold, not silver. Nike likes winners, not losers. Nike sponsored some Olympic athletes but they were not official Olympic sponsors. But nike came up with guerrilla marketing. Within minutes of the race starting, Nike posters started appearing around the televised areas of the race. The posters didn’t display the Nike name, because they couldn’t, they weren’t the official sponsors. But the association was there. Posters displayed words like JUST DO IT USA. In Atlanta, the Olympic officials were sponsored by their rivals, by Reebok. Reebok did everything officially, by the book. Reebok paid a huge money for being the oficial sponsor of OG in Atlanta, but Nike got the best television coverage and they hardly paid a cent for it.

And what can we expect from nike now? The next step is the Nike sports TV network. Nike is the company of the future, because it understands the power of association, the sense of belonging to a family is one of the most powerful effects of branding. And Phil Knight knows how to make people feel like they belong to what they want to belong to.