Nike - The 'Goddess of Marketing'

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Case Details:

Case Code : MKTG088
Case Length : 13 Pages
Period : 1957-2003
Pub Date : 2001
Teaching Note : Available
Organization : NIKE Inc.
Industry : Shoe Manufacturing
Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"For years, we thought of ourselves as a production-oriented company, meaning we put all our emphasis on designing and manufacturing the product. But now we understand that the most important thing we do is market the product. We've come around to saying that Nike is a marketing oriented company and the product is our most important marketing tool."

- Phil Knight, CEO of Nike in the late 1980s1.

"Nike is a manufacturer, but really it's just a marketing company."

- John Shanley, Securities analyst at Wells Fargo's Shanley in 20032.

Advertiser of the Year

In June 2003, Phil Knight (Knight), the founder and CEO of Nike Inc., (Nike), received the "Advertiser of the Year" award, at the 50th Cannes International Advertising Festival, one of the major annual advertising events in the world.

It was a historical moment because Knight was the first person to win the award twice (He had received the award in 1994 also).

Speaking on the occasion, Knight said, "It's the most prestigious award in the world advertising industry and I feel pretty good about it. Especially, winning it for the second time. It is a huge honor for the company."3

Marketing Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

Analysts said that Nike had come a long way since it began operations in the 1960s. In the early years of the business, Knight did not believe in advertising or marketing. He preferred instead, to rely on word-of-mouth publicity among athletes. This served Nike well enough for some years.

However, in the late-1980s, Nike was overtaken in sales by competitor Reebok4, which introduced training shoes designed specially for women (who had become more fitness conscious by that time).

In a bid to recapture market share, Nike introduced several new models of shoes designed for different sports. In addition to introducing new shoes, Knight also realized the importance of marketing and began to set aside a significant part of corporate revenues for advertising and marketing. By the 1990s, Nike was one of the best advertisers in the world, Nike was well known for its unique soulful advertisements (ads), which, analysts said, appealed to viewers' emotions rather than their rationality.

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2] Larry Barrett and Sean Gallagher, New Balance: Shoe Fits, Baseline, November 1, 2003.

3] Stefano Hatfield, What makes Nike's advertising tick, The Guardian, June 17, 2003.

4] A major manufacturer of athletic shoes in the US, Reebok was started by Paul Fireman in the late 1970s. Reebok was a major competitor of Nike.

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