A Brand - Cult - Consistent Winner

and the world’s largest sportswear company

MKP005N – Brand Equity

By: Mukesh Kumar

Air-sole
Heroes Michael Jordan Cannes-Advertising
Innovation Shox-sole AdvertisingFestival Winner
Endorsement
Figure: 1. Tiger Woods
Foundation of Nike brand’s Success
Breathing Clothes
Source: Adapted from Gavin (2003)
MKP005N - Brand Equity Mukesh Kumar

COMPANY POSITION IN THE MARKETPLACE

“If you have a body, you are an athlete”

(Bill Bowerman, co-founder Nike)

N ike is at the ‘Altar’ of the global sportswear industry where it performs its grand
marketing rituals and innovative practices, so as to leave its spellbound
competitors (Adidas, Puma and others) in awe. In short Nike is the ‘Sports God’
(Victory.....!).

The God had 2 angels on earth, Phil and Bill, who at their will were
athletes. Phil and Bill began promoting Nike’s religion in 1964 for
other athletes (all those who have a body). There it was born, the
Sports Cult who’s Clan, was adamant on worshipping sporting
‘Heroes’....

Nike sponsors ‘Athletes’ and ‘Heroes’ only, and not any sporting events, such a stand is
kind of ‘Anti-establishment’, ‘Cool’, and ‘Irreverent’ but reinforces the cult feeling among
its clan (Katz, 1994).

Being true to its spirit, never had Nike failed to beat its competitors, and its success can be
largely attributed to the ‘Star-Power’ or ‘Coolness’ of Sports Superstars who endorses Nike
products by heart and soul. In fact, most professional sportsmen crave to endorse Nike so as
to become part of the Cult, and be immortalized as a millionaire hero (David et al., 1997).
Evidently, such a ‘Special Relationship’ of Nike with sporting heroes lends an ‘Invincible
Strength’ to its brand, which then leaves an ‘Indelible Impression’ on the mindscape of
spectators and amateurs alike. In totality, such a unique proposition of Nike plainly converts
‘non-users’ into ‘consumers’.

Nike sells an ‘Athletic Lifestyle’ (David et al., 1997) with a mission to “bring inspiration and
innovation to every athlete in the world” (Marilyn, 2009), whereas Nike gear is considered
‘fashionable’, ‘cool’, and ‘innovative’, which is often considered industry benchmark and
brilliantly appeals to the young-at-heart generation.

Moreover, being a ‘Power Brand’ (David et al., 1997) Nike is stretched across multiple
product lines, markets, geographies, and has a few sub-brands that include ‘Cole Haan’
(fashion footwear), ‘Converse’ (sports footwear-basketball), ‘Hurley’ (surf/skating fashion),
and ‘Umbro’ (soccer); where-in 86% of global sales (2008) accounted for by ‘Nike’ brand
only (Datamonitor, 2009).
MKP005N - Brand Equity Mukesh Kumar

EMOTIONAL AND FUNCTIONAL FEATURES OF THE BRAND 1

Table 1: Nike brand features

Personal Style Statement Status Symbol Endorsed by - Heroes

Unconventional - Creative Innovative - Exciting Stylish
Friendly Relaxed Customer Focused
Fun & Lively Trustworthy Dominance in Market
Source: Adapted from Arora and Stoner (2009), and Bhat and Reddy (1998)

Emotional Features:

Hot Favorite – Nike is hot favorite among World Champion Sportsmen, which implies as, if
you don’t wear Nike, you cannot become one.

More than Sportswear – Nike’s ‘Fashionable’ designs are a lifestyle statement; most
consumers wear Nike gear as a ‘Trendy leisurewear’ as opposed to as a sportswear. They
say, “If you are cool you have a Nike or if you want to be cool buy a Nike” (Katz, 1994). One
can even get a ‘Bespoke’ Nike gear at premium price (Direction, 2009).

Who does not own one - Young men and women throng stores to grab the latest
fashionable pair of Nike sportswear before anyone else, as they do not wish to be left out in
the lurch (Katz, 1994). Those who can’t pay for Nike’s premium prices buy counterfeit, but
that too with the Nike logo, and the ‘Swoosh’ embedded on it (Katz, 1994).

Ethically / Socially / Environmentally Responsible – Nike has continuously managed to stay

in news for its social/ethical/environmental endeavors that include ‘The Human Race’ of
2008 Olympics, which raised millions for charities, and the Nike Foundation that works for
charitable causes, and it even has a recycling arm (Nikebiz, 2009).

Functional Features:

Revolutionary / Innovative - Nike uses special clothing fabric that can withstand cold-snow-
wind-sweat to make aerodynamically crafted suits for athletes (Marilyn, 2009). Moreover,
the ‘Nike Waffle-sole’ (1974), the ‘Nike Air-sole’ (1979), and the ‘Nike Shox-sole’ (2000)
technologies (Nikebiz, 2009) revolutionized the sporting world and remains an industry Gold
Standard till date.

Durable / Improves Athletic Performance – Nike gear is made of innovative materials,

which ensures scientifically proven better athletic performance and prevents injury, and
Nike shoes are considered so durable that once even ‘Michael Jordan’ finished a full season
MKP005N - Brand Equity Mukesh Kumar

of NBA in one pair (Katz, 1994). Nike works closely with athletes to gain an insight so as to
design the best performance innovations across all 28 Olympic sports (Datamonitor, 2009).

SYMBOLIC MEANING - innate talent with brash atti tude is

justi fi ed

Nike symbolizes Heroes, Victory, Irreverence, and Prestige.

Its also an embodiment of ‘Youth’, ‘Perseverance’, ‘Power’, ‘Fashion’, ‘Style’, and ‘Cool’
(Katz, 1994). Its characteristically ‘American’ slogan “Just Do It” further exemplifies the
undeterred spirit for victory, irrespective (Goldman and Papson, 1998).

The notoriously famous denial by Nike’s “Dream Team (led b y Michael Jordan - Basketball)”
during 1992 Olympics to wear the ‘Award ceremony jacket’ that had the emblem of rival
firm Reebok on it, symbolized its values/spirit as outlined above (Katz, 1994). Moreover,
Nike’s association with the winning team further strengthened its brand and paved way for
a revolutionary business model based on “Heroes” and “Hero-Worship”, which still
continues with hysterical levels of fan following and the ever increasing number of Nike
Heroes.

Interestingly, Nike honors its heroes by naming a building on their name, and adding their
names to their endorsed product lines, which further strengthens Nike’s bond with athletes
(Katz, 1994). Evidently, Nike focuses on epitomizing its heroes by discreetly endorsing their
bold sporting behavior on/off field so as to create a highly differentiated and cheeky
sporting cult, which is fanatically enlivened by the Nike Clan.

Nike adverts carry a feel of “American Dream” particularly focused on its target “black
communities” of America (Katsanis, 1994), with a subtle message of ‘rebellion’, ‘inspiration’,
and ‘irreverence’ (Goldman and Papson, 1998). For instance, one of the Nike advertisement
line reads “You don’t win silver – you lose gold”, which is quite symbolic of its accent on
victory irrespective. Moreover, Nike’s hero culture inspires consumers to imitate and
achieve the similar ‘millionaire hero’ status as enjoyed by their ‘Nike heroes’ that helps
promote the clan (Goldman and Papson, 1998).

The slogan “Just Do It” promotes, motivates, and impels one for action, and achieve victory
irrespective, it reflects ‘frivolity’, ‘hipness’, ‘confidence’, ‘energy’, ‘achievement’, and upholds
the definitive emotion of ‘Trust’, which reinforces the feeling that one can do it, irrespective.
Whereas the “Swoosh” emblem tends to justify or approve the ‘irreverent behavior’, as if it
is meant only for winners (Moira, 2004).

These meanings of ‘Nike’, the ‘swoosh’, and ‘Just Do It’ slogan have been co-created by Nike
itself, athletes, amateurs and consumers over a period of time, and are embedded in their
minds (Ramaswamy, 2008); such meanings keep evolving as consumers and non-consumers
interact to give them a new fresh meaning through the process of co-creation via Nike’s
communities (Direction, 2009). Given that it would not be exaggeration to state that Nike is
MKP005N - Brand Equity Mukesh Kumar

a way of life, which symbolizes sports, irreverence, fashion, and cool for many of those co-
creators (Katz, 1994).

BRAND LOYALTY 3

Nike is ‘always talking to its consumers’ (Marilyn, 2009), and has created many communities
for them, which helps define the Nike culture and ensures loyalty by its clan (Ramaswamy,
2008). For instance, during World Cup 2006, Nike set up “Joga.com” with Google, where
users could upload their own soccer-related videos, rate other user’s videos to pick a
monthly winner, and set-up their profile to interact with one another (Direction, 2009).
Furthermore, Nike set-up “Nike+” and “Nike ID” to invite users to log their runs, and vote for
best shoe designs by Nike designers, which also allowed users to create their own designs
online (Ramaswamy, 2008). In short, Nike’s efforts to involve consumers proved highly
beneficial, as it enabled it to co-create the product designs, brand image, and brand
personality whilst lowering the risk of product failure and maintaining customer loyalty
(Direction, 2009). This overall involvement of consumers can be held responsible for Nike’s
continued brand and product success.

Furthermore, the Nike heroes help build trust in the Nike brand and re-assure the
consumers about its ‘quality’, ‘performance’ and “fashionability” (Katz, 1994). For the young
generation or the core target segment of Nike, such an endorsement by heroes is ‘pleasing’
and ‘inspiring’, which further impels them to shell out any money on those envied fashion
objects for their feet. As a result, the “Mtv” or “iPod” generation finds it difficult to part
away from the Nike cult as well. As a result, as much as 12 pairs of sports shoes are owned
by every teenager in America (Katz, 1994). Most consumers buy Nike gear as a ‘must have’
and fashionable collectibles. In response, Nike’s advertising and marketing impetus is on
emphasizing the ‘must have’ features of its gear (Nike, 2009) in order to ensures seasonal
and repeat purchases by youngsters especially during the holidays around Christmas and
after school terms (Nike, 2009).

BRAND AWARENESS

In 1988, the ‘Just Do It’ campaign catapulted Nike to such an envied position in the market
that rivals Reebok and Adidas soon became second rung brands (Keynote, 2009), and the
1992 Olympic furor by “Michael Jordan” and team, instantly roused awareness for Nike
among 600 million television viewers across 193 countries watching the ceremony (Katz,
1994). Since then, Nike’s brand awareness has increased manifold with its increasing
associations with celebrity sports superstars in every sport globally. To spread awareness of
its brand globally, Nike spent $ 2.35 Billion on marketing and advertising for the year ending
MKP005N - Brand Equity Mukesh Kumar

May 31, 2009, which is about 12% of 2009 annual revenues, and the biggest amount among
all its competitors (Nike, 2009).

In most advertisements, Nike advertises the ‘Swoosh’ emblem more than its name. The
Swoosh symbolizes the Nike culture, and consumers instantaneously understand what it
means to them individually. Moreover, Nike is known world-over, as it sells sportswear in
about 25,000 stores in 180 countries (Datamonitor, 2009); as a result hardly anyone fails to
identify the Swoosh across these 180 countries. Furthermore, ‘Nike heroes’ always flash the 4
‘Swoosh’ prominently on their sporting gear in every sports event and championship, which
generates huge fanfare for heroes and Nike as well (Goldman and Papson, 1998). On
Interbrand best global brands ranking, Nike is ranked ‘26’ with brand equity of $ 13,179
Million with an increase of 4% over previous year; this is despite the recession that Nike has
been able to grow unlike competitors solely due to its stronger brand (Interbrand, 2009),
given that, it can be said that demand for Nike is quite inelastic.

Nike captured American market through Basketball, and reached out to the world mass
markets through soccer (football), while Golf gave Nike access to the wealthiest of sports on
the planet (Keynote, 2009). Nike sponsors many sports teams including the Brazilian
National Football team and Manchester United Club Team (Keynote, 2009), both of which
are top teams in the world of football, which gives Nike an image of being associated with
top winning teams and sportsmen in football, as if Nike products are ‘made for winners
only’. Every other match involving Nike teams and heroes exposes Nike ‘Swoosh’ logo to
millions of die-hard fans around the world. Even spectators crave to wear the replica shirts
similar to those worn by their iconic players bearing the famous ‘Swoosh’ logo (Goldman
and Papson, 1998). The ‘Swoosh’ has created such a powerful image and awareness for
Nike that it is revered as a symbol of victory among the sports enthusiasts.

OTHER UNIQUE BRAND ASSETS

‘Niketown’ stores (only 15 world-over) (Nike, 2009) are another important asset in the Nike
arsenal, which are a mesmerizing portrayal of Nike spirit and values alongside being a
unique platform that is used to amplify the interactive customer experience (Kozinets et al.,
2002). Niketown’s superlative display of light, sound, and visuals along with interactive
models allows consumers to experience Nike’s personality in all its grandeur. In short,
Niketown can be summed up as the fantasy-filled exposition of sports where enthused
consumers can play and interact with their fashionable objects of desire whilst co-creating
the brand meaning (Arvidsson, 2005). Evidently, Niketown is a place where ‘visitors’ are
converted into ‘fans’ and acceded to the Nike Cult.
MKP005N - Brand Equity Mukesh Kumar

5
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