What are you thinking after seeing the swoosh?

1
Introduction
History
In 1962, Phil Knight and Bill Bowerman introduced their new company with the name Bleu
Ribbon Sports. Later in 1978 the company name changed to Nike, which refers to the Greeks
goddess of victory. Nike was a sport shoe importer and exporter. Nike logo was designed for
35 dollar and get the name swoosh during 1971 (see appendix 1, Figure 1). One year later,
the first shoe line was launched, which are characterized by the name Moon Shoe and these
sport shoe were especially because of the lightness. The introduction of the Moon shoe was
followed by the introduction of the first Air shoe in 1979. In that time Nike reached the new
sale record (Nike, 2016).

Marketing
In 1997, Nike was engaged with the tennis player Emma Ballard, who was sponsored by Nike
for using their products. This was the first time Nike used endorsement to increase their
awareness. In 1984, Nike had a commercial contract with Micheal Jordan the famish
American basketball player, who promote the use of Nike shoes. Nowadays, Nikes marketing
is based on many different sponsorships, different famish sporters who promoting Nike as
brand by using it during public situations (Goldman and Papson, 1998).

Current situation
Nike became Nike.inc a company with many different subsidiaries and sub brands. In
addition, Nike.inc is no longer only a shoe importer and exporter but also a sport and daily life
apparel importer and exporter. Nike.inc is estimated by Interbrand (2016) for 25,034-million-
dollar global brand value, which means that Nike.inc had the eighteenth place on the global
brand value rating of 2016 (Interbrand, 2016). With this, Nike.inc has the first place based on
the global brand value of the fast sport shoe/apparel brand in 2016. During the first quarter of
2015 Nike.inc generate 44% of their revenue from their segment in North America and 21.5%
from the segment located in Western Europe, see appendix 1, figure 2 (Market Realist, 2016).

2
Strategic Challenge
In the end of the ninety Nikes sales decreased (Kotler, 2009 & Nike.inc, 2001). The Nike.inc
analysts were feared that Nikes extensive global expansion and Nikes product introduction
in many different sport segments lead to aimlessness. Only the Nike logo, swoosh, was
enough for consumers to recognize Nike as brand (Goldman and Papson, 1998). But in the
end of the ninety, the use of the swoosh was worldwide extremely. Because of this, many
market analysts concluded the reason for the decreasing of the worldwide Nike.inc sales was
the decrease of the brand value (Goldman and Papson, 1998). The more common the swoosh
becomes the less value it has (Goldman and Papson, 1998). The challenge for Nike.inc was to
find the right way to increase their worldwide sales by solving the problem of the
overswooshification.

Strategizing Process
To find out how Nike.inc could increase their worldwide sales Nike.inc marketing team
returned the basics. Nike.inc implemented a new marketing strategy, which has the focus on
the followings: superior quality, innovation and introduction of sub brands (Kotler, 2009).

Nike.inc experimented not only by introducing new sub brands but also by focus more on the
exist sub brands. The jumping-man logo and the ACG, which means All Condition Gear, are
the already exist brands but since 2000 Nike.inc had more marketing focus on these sub
brands and expanded this worldwide (Nike, 2016).

The jumping- man logo stand for the Jordan sub brand. The jumping- man was the
imitation of the fames American basketball player Michael Jeffrey Jordan, also known as Air
Jordan. Air Jordan (based on his extraordinary high jumps) correlated with the sport shoes
which has AIR-soles. The sport shoes as well as the sport apparel of the Jordan line are related
to basketball (Nike, 2016).

The ACG sub brand of Nike.inc is related to outdoor and run sports. The products of this line
are more focused on the quality compared to the design. In opposite of the Jordan sub brand
ACG use the not only the logo of ACG but also the Nike swoosh (Nike, 2016). Nowadays,
consumers can only buy the products of ACG sub brand via other sport website instead of the
online official Nike website. Whit this Nike tried to reach other segment, which associate
these products not strongly with the Nike image (Kotler, 2009).

In 2002, Nike.inc took over the sub brand Hurley international (Nike, 2016). This sub brand
had the focus on the apparel for the daily life. The products are not specific related to one
sport but related to the general sport. Hurley has their logo and is not direct design related to
Nike (Nike, 2016).

Converse started with producing of shoes based on rest rubber in 1908. Because of the public
use of these shoes by famish basketball players Converse becomes a basketball sneaker in the
eyes of the consumer. In the same time Converse was related to the name All Star, (Converse,
2016). Nike.inc purchased the exist brand Converse for $309 million in 2003 (Nike, 2016).

3
Converse products are more focused on the daily life and indirect related to sport compared to
Hurley (Nike, 2016).

In addition of introduction of the new sub brands Nike.inc invested millions of dollars in
creative advertisement, celebrity endorsement and innovative promotions that increased the
brand equity (Kotler, 2009). The marketing strategy was changed from an aggressive strategy
focused on increasing the recognizing of the brand and being active in most as possible
different markets to a marketing strategy with more focus on innovations and quality. An
example for this is the implementation of a new computer system, which is responsible for the
right amount of sneakers/products at the right place in the world in a faster way (Kotler,
2009). Another example of the innovation focus, was the implementation of a new supply
chain system which solved two problems: the retailers often wait to long for the delivery of
the new products and the high amount of residuals of the exist products. This new system
result to a decrease of the percentage of the produced products without a serious order from
30 to 3 percentage. But in the same time, the time that it takes to introduce a new product
style was reduced from 9 months to 6 months (Kotler, 2009).

Inspiration
The marketing strategy changed of Nike.inc that was conducted from 2000, was especially
based on the introduction of new sub brands without or less marketing associations with Nike
and the swoosh. At that time, Coca Cola company was a big brand and had like Nike.inc a
clear recognizable brand logo. Coca Cola company introduced a new product line and brand,
Fanta in the same soft drink market in 1940. This was the first time for Coca Cola Company
to reach the consumers without emphasizing the association with Coca Cola as brand (Coca
Cola Company, 2016). It is not clear or known if Nike.inc get inspiration from brands like
Coca cola in that time for making the marketing strategy changed but it is also not excluded.
Coca Cola was a big inspiration resource and brand pioneer for many different brands at that
time (Pendergrast, 2013).

Divergence
Nike.inc tried to solve the problems: 1) sales decrease and 2) the overswooshification by
introducing new sub brands, sometimes by taking over others brands, and by investing in
computer and supply chain systems (Kotler, 2009). With these different approaches Nike.inc
tried to increase their worldwide sales as a result of the more marketing focus on the quality
instead of quantity. Also here, it is not clear or known if Nike.inc marketing team had more
ideas/plans to reach their gaol, to solve the two problems, which were not approved before the
implementation stage.

Convergence
Nike.inc started experimenting by using the Jumping-man as logo and symbol for their new
product line. After this, Nike.inc experimented by taking over and introducing sub brands. At
the same time, Nike.inc experimented by investing in new systems to increase the efficiently
and effectively of the Nike.inc production and distribution. Nike.inc did not had the guarantee
of success during taking the strategy decisions. Because of this Nike.inc took one step by one
refers to the sub brands decisions, so Nike.inc restricted the risks of failure effects and could
tested the specific outcomes of their decisions (Kotler, 2009) (Goldman and Papson, 1998).

4
Results
One of the valuable outcomes of the new implemented strategy are the sales revenue on
international markets as consequences of take other brands over, which was difficult and hard
for Nike.inc during the old strategy. The reason for this was Nike.inc pushed and imposed the
other brands/companies their own marketing culture (Kotler, 2009). After the first few sub
brands describe above, Nike.inc introduced few more new sub brands like: Nike Golf,
UMBRO LTD, Starter Official, Bauer and Cole Haan. These are the results of the marketing
strategy change of Nike.inc, which give and gave the sub brands more space to be self-
employed and independent. In 2005 Nike.inc turnover consisted of 13 percentage turnover of
sub brands, which were responsible for a quarter of the sales growth (Nike.inc, 2005).

Another concrete result of the change in strategy of Nike.inc was the increase of the value of
the investments. An investment of 1000 dollar in 1980 changed in 2009 to a value of more
than 64.000 dollar (Kotler, 2009). The return on investment capital based on 1999 increased
by 23 percentages to 2005, see attachment 1, figure 3 (Nike.inc, 2005).

Nowadays, Nike.inc uses still the same strategy and because of this you can compare to find
out the results of the new strategy on the long term (Nike.inc, 2016). Attachment 1 figure 4,
you can see a bar diagraph which shows the different in global revenue of Nike.inc and her
direct competitors (Statista, 2016). In 2015 the global revenue of Nike.inc was 27.83 billion
euros, Adidas group get 16.92 billion euros and Puma 3.39 billion euro, (Statista, 2016).
Which means when the global fast footwear market consists of only those three biggest
players: 1) Nike.inc, 2) Adidas and 3) Puma, Nike.inc should be market leader with 57.8 %,
second player will be Adidas with 35,2% and Puma will be de smallest player with 7% global
revenue (Statista, 2016).

Interbrand (2016) determined and predicted Nike.inc global brand value from 2000 to 2016,
which is an increase from 8 million dollars in 2000 to 25 million dollars in 2016. This means
an increase of the global brand value of 17 million dollars, see attachment 1 figure 5
(Interbrand, 2016).

Did Nike.inc solve the problem?

The financial positive outcomes proved Nike.inc solved their sales problem. It also showed
the success consequences of using the new marketing strategy on the long term. This is not
only based on the long term evidence of the financial results described above but also on what
Kotler (2009) described about the way how Nike.inc take other brands/companies over by
using the new strategy. With this Nike.inc solved their problems in differs ways.

According to Kotler (2009) it will always be an area of tension for Nike.inc. Nike.inc will
always be care to find the balance between creating awareness refers to Nike and the swoosh,
and the protection and avoiding the overswooshification (Kotler, 2009).
There is no number or explicit rule to determine when Nike.inc will have
overswooshification problem, because of this Nike.inc need to be always careful and seeking
for feedback and reflection of their proposition and marketing experiences, to avoid the
overswooshifiaction as well as decrease of their sales and awareness.

5
Appendix

App. 1 Figures

Figure 1, Nike logo over the time (Jetline, 2016)

Figure 2, Nikes Revenue Break-Down by geography, first quarter 2015 (Market Realist,
2016)

6
Figure 3, Nike.inc financial report 2005 (Nike.inc, 2005)

7
Figure 4, Global revenue of Adidas, Nike and Puma from 2006 to 2015 (Statista, 2016)

Figure 5, Global brand value of Nike.inc from 2000 to 2016 (Interbrands, 2016)

8
App. 2 References

Adidas, Puma, Nike, & Statista. (2016). Global revenue of Adidas, Nike and Puma from 2006
to 2015 (in billion euros). Geraadpleegd van
https://www.statista.com/statistics/269599/net-sales-of-adidas-and-puma-worldwide/
Goldman, R., & Papson, S. (1998). Nike Culture. London, England: SAGE Publications Ltd.
Interbrand. (2016). Best Global Brands 2016 (Rankings). Geraadpleegd van
http://interbrand.com/best-brands/best-global-brands/2016/ranking/
Jetline. (2016). 10 Iconic Branding Wins to Learn From. Geraadpleegd van
http://jetline.co.za/trends/633-20-iconic-brands
Kotler, P. (2009). Principles of marketing (5e ed.). Amsterdam, The Netherlands: Pearson
Education Benelux.
Lefton, T. (1996). Nike Uber Alles. Brandweek, pp. 25-36. Geraadpleegd van
http://search.proquest.com.eur.idm.oclc.org/docview/218041823/fulltextPDF/B83CC9
2FA9BD40C0PQ/1?accountid=13598
Market Realist. (2016). Traditionally innovative: A must-know investors guide to NIKE.
Geraadpleegd van http://marketrealist.com/2014/12/nikes-global-markets-top-revenue-
earners/
Nike.inc. (2001). Financial History 2001. Geraadpleegd van
http://s1.q4cdn.com/806093406/files/doc_financials/2001/pdfs/fhistory.pdf
Nike.inc. (2004). Annual Report 2004. Geraadpleegd van
http://s1.q4cdn.com/806093406/files/doc_financials/2004/index.html
Nike.inc. (2015). Annual Report 2015. Geraadpleegd van
http://s1.q4cdn.com/806093406/files/doc_financials/2005/docs/2005_annual_report.pd
f
Pendergrast, M. (2013). For God, Country, & Coca-cola (3e ed.). New York, United
States of America: Basic Books member of the perseus books group.
Thomas, J. R. (2007). Can Nike "Just Do It?". Geraadpleegd van
http://web.b.ebscohost.com.eur.idm.oclc.org/ehost/detail/detail?sid=f744736d-c205-
42fa-b303-
fe0699dcc7e4%40sessionmgr107&vid=1&hid=101&bdata=JnNpdGU9ZWhvc3QtbGl
2ZQ%3d%3d#AN=24769794&db=buh

9
10