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Copy of analysis of marketing plan of nike and michael jordan

  1. 1. Analysis of Marketing Plan of Nike and Michael JordanFormer University of Oregon track coach and co-founder of Nike Bill Bowermanonce said: "If you have a body, you are an athlete!" (NikeBiz) This way of thinkingis how Nike conducts every aspect of their business. Every person is a potentialathlete or "consumer". This is a common term when used in the realm of athleticsbut when Bill Bowerman said this it was in direct reference to the shoe industry.From their marketing strategies to their selling philosophies, Nike has developedone of the most recognizable and demanded name and logo tandems ever.Nike, which is the Greek Goddess of Victory, was born in 1972 when BRS, BlueRibbon Sports, launched its first branded shoe at the U.S. Olympic track and fieldtrials. A former University of Oregon track team member Phil Knight created BlueRibbon Sports. At Oregon, Knight was coached by the legendary Bill Bowermanand then went on to become and alumni of the Stanford School of Business.BRS was crafted in 1962 when Knight made a deal with Onitsuka TigerCompany, a Japanese shoe company, to import their shoe to the United States.Knight had the idea to sell a low cost shoe with a very high quality. Knight hadhigh aspirations of taking Adidas out the top spot in the athletic shoe market. In1964, Bill Bowerman decided to join Knight as a partner at BRS to create a jointquest to be number one. Bowerman redesigned the Tiger shoes while Knightacted as the accountant/personal seller and went on the road to sell their newlycrafted sneakers at track meets and local shoe stores. By 1966, Blue RibbonSports opened their first store in Portland, Oregon. Knight and Bowermanmanaged the store with the only other employee being a former Stanford runnerJeff Johnson. (story/chrono, 1) Signing First Endorsers During 1971, BRS caughta break when a trading company called Nissho Iwai introduced BRS to importantletters of credit. This credit allowed BRS to subcontract its own shoe line and by1972 it was selling Nike Brand shoes. Over the next decade Nike expandedalmost double its size each year from the previous year. Nike is officially calledNike in 1978 and has signed on tennis great John McEnroe, New York Citymarathon champion Alberto Salazar, womens marathon gold medallist JoanBeniot, and Olympic track star and gold medallist Carl Lewis. (story/chrono, 1-2)Also during this time Nike is opening manufacturing plants all over the U.S. Nikewas a household name for most athletes by early 1980s.Nikes focus was still on track and field and for the most part track athletes weretheir target market. One of the first individuals to endorse a Nike product was aman who exemplified their style and way of conducting business, StevePrefontaine. Prefontaine was a household name in the late seventies and hasgone down in history as one of the best American track and field athletes ever.Prefontaine was a friend of Knight and had been coached by Bowerman at theUniversity of Oregon. Prefontaine embodied what Nike wanted as its differentialadvantage of other companies due to his brash attitude, high talent level, andcavalier mentality. Nike marketed itself as a new and innovative shoe companythat constantly had the athletes performance in mind unlike existing companieswho focused on their products appearance and durability. Nike infested their
  2. 2. market with bright colors, new styles, and technology information pertaining totheir products. This is why Steve Prefontaine and Nike were a tremendoustandem in the early years of Nikes existence.By 1984 Nike had supplanted Adidas as the number one selling running shoecompany in America. But this was not enough for Nike. At this time Nike wasknown for its attention to the wants and needs of their market, the individualrunner. The Nike Brand itself, and while Knight and the employees of thecompany promoted Nike across the country, the quality, comfort, and design ofthe shoe were selling the product already. During the period from 1985-1987,Nike dropped back down to number two in the running of the shoe market. Saleshad dropped off because the running boom of the late 70s and 80s had begunto diminish. Nike began to notice and entire market that the company had beenavoiding, everyday athletic activities. These activities were things done byeveryday people and not just the serious athlete. Fortunately for Nike, in 1985their star was brought to light. A rookie basketball player with amazing talent anda nice smile fell into their lap, his name is Michael Jordan. (story/chrono, 2)Michael Jordan As soon as Nike signed Michael Jordan they began to market anew line of shoes and apparel with the name AIR JORDAN. This was thebeginning of the JORDAN Brand and Jordans Jumpman23 products. Featuredprominently on each AIR JORDAN product was the Nike insignia, the swoosh,the product mark which the Jumpman23 and the AIR JORDAN label. Jordancame to Nike at a time when the marketability of the NBA was increasing. NBAgames were being nationally televised during prime time television hours andweekends. This gave Nike the perfect platform to develop and market their newstar and the products that he endorsed.During the first few years Nike introduced Jordan to the public and Jordanfamiliarized himself with the American public. Nike ran a series of ads withJordan and film director Spike Lee. These ads were aired during prime timetelevision hours and were solely targeted for pre-teen school students. Theseads displayed an expressed message to "Stay in School."(story/mkg_innov, 1)The ads presented kids with a national figure that was selling both school andNikes products, how could parents deny their children the shoes of such avirtuous spokesman? Jordan was a figure that children adored, looked up to andtried to the best of their ability to copy. Nike used this to display a great positiveimage for their company and to sell their products. The ads were also the first bya company that didnt use the usual 3 a.m. sport for public serviceannouncements. Nike wanted to be a bold marketer; they aimed for the toppromotional sports and developed a pioneering strategy for their industry. Nikecontinued to promote Michael Jordan through their ads and Jordan continued topromote their products.The introduction of the AIR JORDAN line helped to create new lines of basketballshoes, including the AIR FORCE and AIR FLIGHT lines of basketball shoes andapparel. Also, a new innovative technology was a layer of air cushioning in their
  3. 3. shoes; this was truly a differential factor for Nike when placed in comparison withother shoe companies. Nikes sales jumped to over $3 Billion in total. Nikes AIRJORDAN shoe was the best selling and most popular basketball shoe on themarket. The AIR JORDAN shoe reached a point in the mid-nineties when a smallpicture of Michael Jordan at practice wearing different shoes sparked a boominginquiry all over Chicago. One store alone received over 300 phone calls asking ifthey had the shoes in stock. (Katz, 72) The Jordan Empire The market Nike inwhich they wanted to target Jordan towards now was the "athlete of any age."Nike began to produce sizes from infant on up. Nike created commercials thatglorified Jordan and displayed his humbleness. In the commercials Jordan didthings that young and old people alike always dreamed of doing. Most of thecommercials included Jordan soaring through the air, seeming to be hung formthe sky with the chorus, "If I could be like Mike" playing in the background.Jordan would then drop out of the sky and dunk the basketball. In onecommercial aimed towards younger children, Jordan played the Warner BrothersLoony Toons Characters. For an older generation Nike created a commercialwhere Jordan is on a dimmed basketball court and a booming voice comes inand says, "What if my name werent in lights? Can you imagine that? . . I can?"This commercial marketed Jordan as human being and not the untouchablebeing that he is sometimes projected to be; this was aimed to help the averageperson relate to Jordan. (Katz, 72).As much as Nike markets Michael Jordan, Michael Jordan markets himself andthe products that he represents. Jordan is always a well-dressed, well-mannered,good natured, and respectable individual. It is a welcomed change from thetattoo covered and pierced "bad boys" that other companies have for theirspokesman. All of these things draw people to Michael Jordan as a person, buthis talent level is what makes Michael Jordan a worldwide icon. Michael Jordanplays at a competitive level of professional athletics that has almost never beenmatched in any professional sport. This talent alone sells, but when the talent isselling a product, the product is going to sell even better. The more Jordanplayed in front of national audience the more Nike was marketed. Jordan was ahuman marketing piece. He was and still is a walking, talking billboard that justhappens to be a spokesman for Nike. Jordan can get as much air time andpublicity as he desires just due to the sheer fact that the demand for him and hisproducts is so great. Everyone wants to see what Jordan is wearing and doing atall times. To the target market, Jordan is everything they hope to be and bybuying the product he endorses the consumer feels that they can come thatmuch closer to their hero.The Jordan Brand Even though Michael Jordan has retired from basketball hissuccess continues. In 1997, Jordan announced the formation of the newsignature Jordan brand. The Jordan Brand is a separate business unit from theNike Brand; it will be able to explode product avenues that would have notnecessarily have been explored under Nikes umbrella. (media/n_jocroconcept,1-2) Unlike most companies, Jordan Brand doesnt have to worry as much about
  4. 4. marketing strategies or who their target market will be. Jordan Brand can usesecondary research from Nike and have most of their information developed forthem.The Jordan Brand not only offers the popular AIR JORDAN shoes but it alsooffers an apparel line and other shoes under the Jordan Brand. The area whereJordan Brand succeeds, but Nike failed was their pricing system. In terms ofproduct, place, and promotion Nike succeeded, but in terms of price Nike wasway above affordable range for most consumers. Nikes shoes for Jordan cost upto $130 per pair, but Jordan Brand offers comparable products with theJUMPMAN23 logo and Jordan name for considerably less. While this may onlybe a substitute for the real AIR JORDANs, Jordan Brand makes it possible forpeople with lower incomes to afford to make the purchase and "get closer to theirhero." (Armstrong, G7) Jordan Brand already sponsors such teams as PennState University, Florida State University and University of North Carolina-Jordans alma mater. Many other NBA players who grew up with Jordan as theiridol have followed suit and jumped on the Nike bandwagon. Nike endorses EddieJones, Ray Allen, Michael Finley, Scottie Pippen and Kevin Garnett. JordanBrand has also grown to encompass other sports and sports figures as well. Itnow includes Football Player Randy Moss, Golfer Tiger Woods, and Boxer RoyJones, Jr. Every one of these athletes is a well-known and well-respectedathletes and supposedly "the best at their sport" just like Jordan is. Many fansalready look up to them and idolize them just like Jordan, making themarketability of each one very easy.The Jordan Brand continues on in the Nike tradition of making shoes and apparelfor the athlete and by the athlete. Not only is the quality of Jordan Brand wellknown but also the name by itself can be a differentiating factor when it comestime to make a purchase. Other companies do not have the name recognitionand the creditability that comes with the name that the Jordan Brand possesses.When the Jordan Brand broke away from the Nike Brand it brought customerloyalty with it. All of these factors helped to ease the introduction of the JordanBrand into the consumer market place. Jordan Brand skipped over the marketpenetration stage and went right to the most profitable stage; Jordan is close toits maturity. (Armstrong, 290-292) When Nike has lost a very profitable section ofthe apparel and shoes sales, Nike is still the top overall seller of shoes andapparel. Even when Michael Jordan decided to retire from basketball theyremained true to Michael. They launched a very profitable campaign that becamevery popular. This "retro" collection was bringing back Jordans past shoes.These throwbacks were very expensive, but also sold very well. Nike also beganto sell some of Jordans college gear, such as shoes, shirts and shorts. This hasmade University of North Carolina colors and apparel very popular as well.Conclusion Nikes ideals and goals remain the same as those of the feisty StevePrefontaine and Bill Bowerman. Nike CDO Phil Knight is not slowing down as hecontinually signs new colleges on as Nike endorsed schools, even purchasing
  5. 5. portion of the NFLs Dallas Cowboys. Nike has reached a point where they cancount on the Nike name promoting itself, and yet they continue to produceinnovative ideas like the BOING! Campaign. These ideas have been productiveand entertaining promotional tools. Nike continues to market itself towardspeople of all ages who wish to be active and still comfortable.Jordan brand looks forward to continuing success in the future with the return ofJordan to the basketball court. With him coming back it exposes him to morepeople and more often. This has made more people realize the Jordan Brand.With his continued success on the court at an older age has propelled him andhis name into the most marketed icon in history and has opened up other doorsfor athletes to do the same like Tiger Woods. These "lifelong" fans of Jordanhave made them loyal to Nike and its products for life.With Michael Jordan back in basketball and the invested interest by the mediaand the public this will certain help sales and keep alive the strong traditions ofNike and JORDAN BRAND apparel. With the innovative and entertaining Nikemarketing staff and the basketball god that is Jordan, the shoes will sure to beflying off the shelve- like Jordan from the foul line for a successful dunk.Bibliography Katz, Donald. "Triumph of the Swoosh." Sports Illustrated. 16August, 1993: 53-73.Armstrong, Gary and Kotler, Phillip. Principles of Marketing: Ninth Edition. UpperSaddle, NJ: Prentice Hall, 2000.ONLINE SOURCES: NikeBiz. "History" (27 November, 2001) NikeBiz "Our Chronology" (2001) NikeBiz "Shoe Evolution" (2001) NikeBiz "Marketing Innovations"(2001) NikeBiz "Beyond Shoes" (2001)