Digital Marketing at Nike: From Communication to Dialogue
| Case Code: MKTG297
Case Length: 16 Pages
Pub Date: 2012
Teaching Note: Not Available
| Price: Rs.500
Organization : Nike
Industry : Sportswear and apparel
Countries : Global
Themes: Customer Service, Customer Relationship Management S
Abstract Case Intro 1 Case Intro 2 Excerpts
Nike was founded by a track athlete Philip Knight (Philip) and his coach Bill Bowerman (Bill) in 1964. Philip met Bill in 1957 when he was studying at the University of Oregon where Bill was the athletics coach. Philip and Bill realized the need for a low cost but good quality running shoe. At that time, leading track shoes were being produced by European companies. These shoes were made of leather, had very bad cushioning, and used steel spikes for traction. Philip and Bill started to design shoes that were lighter, better padded, and featured waffle like patterns in their rubber soles. However, these models did not see much commercial success.
Later, when Philip was doing his MBA at Stanford University, he did a marketing research dissertation on the US shoe manufacturing industry. He proposed in his dissertation that low cost, high quality running shoes could be imported from Asian countries like Japan, where labour was available for a cheaper price, and sold in markets like the US. Philip was confident that cheaper shoes of good quality would be highly successful in the US market and could end the domination of German companies in the industry.
While on a world tour, Philip visited the Onitsuka Company (Onitsuka) in Japan which manufactured high quality athletic shoes under the brand name Tiger. He made a deal with Onitsuka to import these shoes to the US and sell them under the brand name 'Blue Ribbon Shoes' (BRS). Philip and Bill formed a partnership with each of them contributing US$ 500 and BRS formally came into being. BRS started selling shoes in the US with an initial shipment of 200 shoes from Onitsuka. BRS did not have the money to spend on setting up a distribution network and to launch advertising campaigns. It therefore started to sell shoes by directly approaching customers. Bill crafted the 'grassroots' philosophy of creating awareness about BRS among the customers and selling shoes. The BRS brand shoes were sold from the basement of Philip's house and from the backs of trucks and cars at local sports events. BRS also made it a point to take feedback from its customers to improve future shoe designs. By 1964, BRS had sold 1,300 pairs of shoes with total revenue of US$ 800.
BRS hired its first full time employee, Jeff Johnson (Jeff), in 1965. Jeff had worked as a salesperson for Adidas AG2 (Adidas) before joining BRS. With Jeff’s help, BRS set up its first exclusive store in 1967 at Santa Monica, California. The sale of shoes started to pick up and Philip resigned from his job at the University of Portland and started to work full time at BRS. In 1971, BRS started manufacturing and selling its own line of shoes apart from the ones imported from Onitsuka. Jeff named the new line of shoes from BRS ‘Nike’ after the Greek goddess of victory. A new symbol for the Nike line of shoes called the 'Swoosh' was also designed in 1971 and registered in 1974. BRS separated from Onistsuka in 1972 over differences regarding distribution. In 1978, BRS was officially renamed Nike Inc. (Nike)...
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