II. Nike

Read and translate the text:

IN 1964, phil knight and his former track coach, William Bowerman, began selling shoes made by a Japanese company, Onitsuka Tiger Co., out of the back seat of Knight's car. To gain more control of their marketing efforts, Knight and Bower­man developed the Nike brand, named after the Greek goddess of victory. A Portland State University design student created the famous "swoosh" for $35. It represents a wing, to "embody the spirit of the winged goddess who inspired the most courageous and chivalrous warriors." From the onset, Knight's philosophy has been that people root for a favorite team or athlete, not a prod­uct. So Knight sold "the athletic ideals of determination, individ­uality, self-sacrifice, and winning." Beginning in 1973 with track star Steve Prefontaine, Nike has actively sponsored athletes with these attributes. Today, it invests hundreds of millions annually to gain sponsorship of world-class teams and players.

According to CEO Knight, 1997, Nike's 25th year, was the jest year yet. Profitability hit record highs, and revenues were up 42%—to $9.2 billion. Sales were so strong that Nike's increase equaled the total annual sales of the number three company in the industry. Knight attributes success to a number of factors.

• The company is based on one brand, which has a genuine, and distinct personality, and tangible, emotional connections to customers the world over.

• It is rooted in sports, the fastest growing culture, growing so fast that it is becoming the one, true international language.

• Nike has been around 25 years and has grown each year because "our horizon is more than 12 months away."

• It is made up of 17,000 teammates who "stood this in­dustry on its head."

• They include the brightest, most committed, most sought-after people in the industry.

• Nike returns have been 10 times the Standard & Poor's 500 index average over the last ten years. Just $100 invested in Nike in 1987 would be worth $3,094 today!

The company Web site claimed that 1997 "was about doing a lot of things right in a lot of different places: in the research lab and in the warehouse, on billboards in Atlanta and on 57th and Fifth in New York, on the soccer pitch in Germany and in the paint on the playgrounds of Chicago." Moreover, Nike's abil­ity to coordinate integrated marketing communications that really connect with customers is outstanding. For example, the "swoosh" is so familiar that the name no longer needs to appear along with it.

Nike strategically coordinates its television and print ads, sponsorships, Web site, an 800 number, billboards, and other me­dia to form an effective mix of communications. The athletes who deliver its message, are a major factor. For example, Michael Jor­dan is generally considered to be the best basketball player in history. At a time when Nike profits were sinking, Knight selected Jordan to reestablish the company's image. Spike Lee filmed spots depicting Jordan as the basketball player whose talent (and Nike shoes) enabled him to fly. Approximately 35 ads later, Jordan was the most popular athlete in the country, according to New York - based Marketing Evaluations.

A number of other famous athletes have elicited a tremen­dous response from customers, including tennis players John McEnroe and Andre Agassi, baseball player Nolan Ryan, football's Deion Sanders, track stars Carl Lewis and Alberto Salazar, and basketball players like Charles Barkley and Scottie Pippen. And not to be forgotten is the young Tiger Woods, who has a $40 mil­lion contract with Nike. The charisma, talent, expertise, and personality of such athletes delivers Nike's message. According to its I Web site, "Nike exists to be the best sports and fitness company if in the world. We are here to inspire and motivate the athlete in all of us and advocate the love of sports. We live in the heart of sports and the athletes who play them."

And Nike is expanding its total market with integrated mar­keting communications. It is founder of P.L.A.Y. (Participate in the Lives of America's Youth), a multimillion-dollar program to promote healthy, active lifestyles among young people. There's also Niketown, a retailing effort to make a more personal con­nection with customers. Niketown stores feature basketball courts where customers can try out shoes, multiscreen televisions to dis­play Nike promotions, and apparel autographed by Nike athletes.

Nike's June 1996 to May 1997 fiscal year was an amazing year for women's sports, beginning with Olympic gold for the U.S. women's soccer, basketball, and softball teams. Nike was at the forefront in sponsorships and involvement. When the company was launched 25 years ago, a mere one in 30 school-aged girls were involved in sports. Today that number has jumped to one in five. In 1996, Nike spent an estimated $15 million on com­munications directed at women, featuring tennis stars Mary Pierce and Monica Seles and volleyball player Gabrielle Reece. In 1997 its focus on women's sports reached new levels, including sponsorship of the WNBA and multimillion dollar contracts for such players as Lisa Leslie and Rebecca Lobo.

With a marketing budget of more than $250 million, Nike reaches consumers globally with events like Hoop Heroes, where

Michael Jordan, Charles Barkley, and other Nike athletes help raise basketball consciousness in places like Shanghai, Melbourne, and Seoul. In the United Kingdom, Nike has begun expansion of a Customer Service Center, while in Brazil it has formed a part­nership with Confedercao Brasileira de Futbol to sponsor the na­tional soccer team. For World Cup 1998, Nike plans an array of media campaigns, product launches, and team endorsements. The telecasts are expected to draw an audience of 375 billion.

• CEO - Chief Executive Officer (the USA) = managing director (the U.K.)

Assignments:

1. Discuss how Nike uses IMC to position the company in a manner consistent

with its strategy. Give examples.

2. How does Nike use athletes to influence the communication process? What

characteristics of message senders do you think Mike considers the most

important? Why?