This document provides a case study analysis of Nike's marketing activities. It discusses Nike's history and growth, their strong brand image centered around the iconic swoosh logo. Nike pursues an aggressive global marketing strategy using sponsorship and creative campaigns. The analysis examines Nike's marketing mix, strengths, weaknesses, and identifies threats such as criticism over working conditions. It also discusses Nike's use of ambush marketing at events like the Olympics. The document provides recommendations for Nike to expand into new markets like Formula One racing and identifies growth opportunities using Ansoff's matrix. In conclusion, it recognizes Nike as a marketing leader but notes they must address threats to maintain success.

1. MA Sports Management Philip Barnes
Sports Marketing Panoramas
Case Study Analysis
Nike Incorporated
Contents
1. Introduction
Section 1.1: History, Development & Growth of the Company Page No. 2
1.2: Purpose of Case Study Analysis 2
2. Marketing Activity
Section 2.1: Brand Image 2
2.2: Marketing Mix 3
2.3: Strengths & Weaknesses, SWOT, PESTEL Analysis 4
2.4: Ambush Marketing 5
2.5: Awareness of Consumer Preferences 6
3. Recommendations and Conclusion
Section 3.1: Formula One 7
3.2: Ansoff’s Matrix 7
3.3: Conclusion 8
4. Bibliography
Section 4.1: References 9
4.2: Appendix 11
Page No. 1

2. MA Sports Management Philip Barnes
Section 1 - Introduction
1.1. Nike was the ‘Goddess of Victory’ in ancient Greek mythology. Athlete
runner Philip Knight and his coach, Bill Bowerman, were inspired by the myth
and re-named their small sportswear company Nike in 1978. Since then, the
business has grown phenomenally1 pursuing ‘differing advertising strategies
within its various markets, while at the same time striving to communicate an
identical brand identity worldwide (Von Borries 2004, p.19).’ The essence of
the business involves the ‘design, development and worldwide marketing of
high quality footwear, apparel, equipment, and accessory products (Nike Inc
Annual Report (AR) 2008).’
1.2. Nike’s worldwide marketing strategy is pursued in a creative, cyclic,
interactive (Volmer & Precourt 2008) and occasionally aggressive (Mullin,
Hardy & Sutton 2007) way with the slogan ‘Just Do It’ and the iconic
‘Swoosh.’ They have truly evolved into a ‘marketing behemoth (Goldman &
Papson 1998, p.4).’ This study will critically assess their marketing activity
providing recommendations for strategic change to ensure they maintain and
further their success. An interesting question remains; is Nike, the market
leader, also the marketing leader?
Section 2 – Marketing Activities
2.1. Deng (2009) suggests that Nike’s marketing strategy rests on a superior brand
image; according to branding consultancy Interbrand, the Swoosh was the 28th
most popular brand worldwide in 2008, ‘as recognizable as Mickey Mouse
(Mullin, Hardy & Sutton 2007, p.162).’ The author suggests that the image
maintains its prominence due to the Company’s great investment in
advertising and brand promotion. To the customer this distinctive brand
image represents good value and a correlation with high quality modern sports
products whilst the brand presents a barrier to competition and profitability for
Nike.
1
Revenue of $18.627 billion in 2008
Page No. 2

3. MA Sports Management Philip Barnes
Beech & Chadwick (2007, p.231) suggest that a Nike advertisement is
‘immediately recognisable by the Swoosh, and there is no need for the
Company to include the name as well.’ However, Goldman & Papson (1998)
warn of overexposure, ‘overswooshification,’ where the more common the
sign becomes the less value it holds. Nike responded by redesigning their
branding strategy using terms like NikeID, Nike+ and most recently Nike5.
Von Borries (2004) raises another concern using the terms ‘brand sabotage’
and ‘Swooshtika.’ The latter derogatory term represents the powerful
hegemony the business has in global marketing, where an illustrative swastika
made up of brand ‘Swooshes (See Figure 1)’ attempts to conjure an image of a
conditioned consumer society.
Figure 1 - Swooshtika: Just Do it!
2.2. A strong marketing mix is important for an organization to thrive; it will help
match customers’ needs with Nike’s product range, helping create a
competitive advantage. McCarthy’s (1964) framework is undoubtedly the
most popular form of measuring and controlling marketing elements, with four
key strands; product, price, promotion and place.
• Product: As already mentioned, Nike offers a diverse range of high quality
sporting goods. They recently collaborated with Ipod to produce a Nike+
product, a strategic alliance with such high potency that it facilitated the
pooling of marketing skills, consumer preferences, innovation and technology
(Varadarajan & Cunningham 1995; Farrelly & Quester 2005).
Page No. 3

4. MA Sports Management Philip Barnes
Price: A premium product commands a premium price, whilst the Company
also compete heavily with their main rival Adidas; according to Beech &
Chadwick (2007, p.231) both companies can impose such cost on the
consumer due to the ‘association of their brands with successful sports or
organisations.’
Promotion: The business has a rich history and bright future using
sponsorship to generate brand authenticity in their markets. Nike sees
advertising as ‘a vehicle for articulating a brand’s sign value (Goldman &
Papson 1998, p.2).’ Currently they sponsor a wide range of elite sporting
players worldwide including Tiger Woods, Ronaldinho and Rafael Nadal;
however one has to question whether poor performance or injury (See Section
2.4) can damage potential marketing success as there is no apparent literature
regarding this impact.
Place: Nike is a truly global corporation seeking to further segment its current
markets and increase its impact in China, Russia, Brazil and India in particular
(AR 2007).
2.3. For a company to realise and achieve their marketing goals and objectives it is
essential they undertake thorough planning (Jobber 2007; Schwarz & Hunter
2008; Kotler 2009). This creates a framework for development, sets
performance expectations and encourages the organisation to plan towards the
future. Prior to even contemplating recommendations, we must further
examine Nike’s marketing strategy in the form of a SWOT and PESTEL
Analysis (Appendix 1 and 2). A legal threat to the Company was identified as
being the ‘Sweat Shop’ working conditions which have been criticised
worldwide (See Figure 2).
Page No. 4

5. MA Sports Management Philip Barnes
Figure 2 – Sweat Shop Internet Campaign
Such campaigns have the potential to damage Nike’s marketing activity and
general business success; however its impact is hard to measure and little
literature is available on the area. For Nike to improve its image, it must
continue to work with the charity ‘No Sweat’ and perhaps inform their
consumers on the changes they have made to create better working conditions.
2.4. According to Tripodi & Sutherland (2000, p.412), ambush marketing is an
Olympic event; ‘perhaps the premier place for companies to showcase their
brand(s).’ Taking the Beijing 2008 Olympic Games as a prime example,
Herbert Hainer said in 2007 ‘the Olympic Games will be an Adidas event;’
Adidas paid an estimated $100 million to win the Beijing Olympics
sponsorship. However in a slightly controversial manner, Nike opened its first
Chinese retail store in Beijing, used high profile Chinese athlete Liu Xiang in
advertisements (both before and after he got injured and withdrew from the
games)2 and made subliminal Olympic references in coloured shoes and
‘innocent’ wishes of good luck to the American Olympic teams (Figure 3).
2
An advert showing Liu Xiang hurdling to 1st place was withdrawn after the athlete got injured and
couldn’t participate. A follow up marketing campaign ensued: Love the Glory, Love the Pain. Nike.
Page No. 5

6. MA Sports Management Philip Barnes
Figure 3 – Olympic ‘Good Luck’ Gesture
Ambush marketing is an attempt by corporations to mislead the public into
believing that they are supporting a sports event (Meenaghan 1994; Retsky
1996; Payne 1998). Nike succeeded in creating a connection in consumers’
minds between its brand and the Beijing Olympics, counteracting their main
rival’s substantial investment. Shani & Sandler (1998) even suggest that
ambush marketers often surpass official sponsors’ marketing impact. Despite
Nike being very creative at ambushing sports events, the unethical aura
surrounding the topic could spread to consumers who could become more
aware of such attempts, whereas their actions may devalue sports sponsorship
as a whole. In addition the UK Government is preparing a law that will
prevent any business making reference to the 2012 Olympics in its
promotions, unless it is an official sponsor, therefore Nike must diversify their
marketing strategy. A threat is also apparent that other companies may
ambush events Nike may sponsor, thus perhaps they should stand up and
pioneer a code of ethics to ensure sports sponsorship remains ‘an international
communication tool of commerce (Wise & Miles 1997, p.418).’
2.5. One threat identified was losing awareness of consumer preferences. ‘Failure
to respond to shifting trends and customer preferences in a timely and
adequate manner could have an adverse effect on our sales and profitability;
Page No. 6

7. MA Sports Management Philip Barnes
this is a continuing risk (AR 2008).’ Nike emphasise the importance of
relationship marketing, exchanges between parties in the marketplace or on
the internet (Grönroos 2000), where the business improves its knowledge on,
develops and strengthens relationships with loyal/new consumers. A good
example of the application of this strategy was through the ‘Nike Human
Race3,’ which was “coincidentally” held seven days after Beijing 2008 to
profit from and re-stimulate the Olympic afterglow. Nike’s strategy made
watching the Olympics a much less exciting prospect than actually
participating in a global sporting event where athletes could join an online
community and compare, compete with and challenge each other; a strategy
that ‘spoke directly to the consumers with whom Nike most wanted to build
relationships, with a precision and intimacy not available in television or print
ads (Vollmer & Precourt 2008, p.3).’
Section 3 - Recommendations
3.1. Formula One draws an incredible estimated 6 billion television viewers per
season as opposed to the Beijing Olympic Games attracting 4.7 billion.
According to global market research group Mintel (2009), the British nation
are gripped by the ‘Lewis Hamilton effect’ with over 55% of women watching
races on the television compared to 75% of men; thus an incredible platform
to target a large mixed population. China has now become the sport's biggest
audience with a total of 119m watching the races during the season, whilst
India and Russia are also strong followers and a move into the sport could help
Nike make an even greater impact in these markets.
3.2. Ansoff’s matrix (1979) is a tool that helps identify five key growth areas for
Nike’s product and market strategic direction (Appendix 3);
 Market Penetration – Increased relationship marketing and
segmentation to maximise consumer satisfaction (Mullin, Hardy &
Sutton 2007)
3
Nike Human Race – 1 Day Event Featuring 1 Million Runners competing in 24 Cities Worldwide.
Page No. 7

8. MA Sports Management Philip Barnes
 Product Development – Relationship marketing can have the most
impact in the market by giving consumers what products they want and
appealing to customers’ physical and psychological needs (Deng 2009)
 New Market – China, Russia, India & Brazil all potential ‘multi
billion dollar markets (AR 2008)
 Market Development – Formula One will increase Nike’s presence in
these new markets with China and Brazil hosting races and India
represented on the grid with Force India Racing Team.
 Diversification – Such diversification into the unknown can constitute
‘real strategic growth by providing entry into a new market (Thompson
2001, p.569).’ An element of high risk exists where a product and
market are unknown thus high quality research is mandatory for
success according to Shank (2009).
3.3. It is no coincidence that Nike, the market leader for sportswear products, is
also the marketing leader in terms of innovation, creativity and brand
awareness. They have an almost impeccable brand image which links a top
product with a high price; however they need to be aware of overexposure, an
ambush marketing backlash and criticisms of their factories’ working
conditions. Apart from these threats, Nike is a perfect example of marketing
best practise, ‘moving from the flash of a brilliant tagline and a memorable
logo to a focus on consumer experiences (Vollmer & Precourt 2008, p.4).’
There are great opportunities for future growth worldwide and Nike have the
capability, motivation and strength to diversify further; as Philip Knight
suggests, ‘we invent markets (AR 2000).’
Page No. 8

9. MA Sports Management Philip Barnes
References
Ansoff, H.I. (1979) Strategic Issue Management. Strategic Management Journal,
1(2):131-148
Beech, J.G., Chadwick, S. (2007) The Marketing of Sport. London: Pearson.
Beech, J.G., Chadwick, S. (2007) The Marketing of Sport. London: Pearson.
Deng, T. (2009) “Just Done It” – Nikes New Advertising Plan Facing Global
Economic Crisis. International Journal of Business and Management, 4(3):102-105)
Farrelly, F., Quester, P. (2005) Investigating Large-Scale Sponsorship Relationships
as Co-Marketing Alliances. Business Horizons, 48(1):55-62
Goldman, R., Papson, S. (1998) Nike Culture. London: SAGE.
Grönroos, C. (2000) Service Management and Marketing, Chichester: John Wiley &
Sons
Interbrand. (2008) Best Global Brands. [Online]. Available:
http://www.interbrand.com/best_global-brands.aspx. [15th March 2009]
Jobber, D. (2007) Principles and Practice of Marketing. Maidenhead: McGraw-Hill.
Kotler, P. (2009) Marketing Management. London: Prentice Hall.
McCarthy, E.J. (1964) Basic Marketing: A Managerial Approach. Homewood:
Richard Irwin Inc.
Meenaghan, T. (1994) Ambush Marketing: Immoral or Imaginative Practice? Journal
of Advertising Research, 34(5):77-88
Mintel. (2009) Nation Gripped By “The Lewis Hamilton Effect.” [Online]. Available:
http://www.mintel.com/press-release/Nation-gripped-by-the-Lewis-Hamilton-effect?
id=337. [24th March 2009]
Mullin, B.J., Hardy, S., Sutton, W.A. (2007) Sport Marketing. Leeds: Human
Kinetics.
Nike Inc. (Various Years) Annual Reports. Oregon: NIKE Inc.
Payne, M. (1998) Ambush Marketing: The Undeserved Advantage. Psychology and
Marketing, 15(4):323-331
Retsky, M.L. (1996) One Person’s ambush is Another’s Free Speech. Marketing
News, 30(14):14-25
Schwarz, E., Hunter, J. (2008) Advanced Theory and Practice in Sport Marketing.
Oxford: Butterworth-Heinemann.
Page No. 9

10. MA Sports Management Philip Barnes
Shani, D., Sandler, D.M. (1998) Ambush Marketing: Is Confusion to Blame for the
Flickering of the Flame? Psychology & Marketing, 15(4):367-383
Shank, M.D. (2009) Sports Marketing: A Strategic Perspective. New Jersey: Prentice
Hall.
Toolness. (2009) Sweatshops. [Online]. Available: http://www.toolness.com/nike/.
[24th March 2009]
Varadarajan, P.R., Cunningham, M.H. (1995) Strategic Alliances: A Synthesis of
Conceptual Foundations. Journal of the Academy of Marketing Science,
23(4):282-296
Vollmer, C., Precourt, G. (2008) Always On. Maidenhead: McGraw-Hill Professional.
Von Borries, F. (2004) Who’s Afraid of Niketown? Rotterdam: Episode Publishers.
Wise, S.L., Miles, M.P. (1997) Corporate Sponsorship of Events and Tax
Implications: Is there an Opportunity for Global Co-ordination? International
Marketing Review, 14(3):183-195
Page No. 10

11. MA Sports Management Philip Barnes
Appendix
Appendix 1 – SWOT Analysis
Strengths Weaknesses
• Innovative Design & • Overexposure
Technology • Reliant on Retail Stores?
• Market Leader • Reputation – Sweat Shops
• High Quality Products • Underperformance of Sponsored Stars
• Strong Sponsorships
• Long History
• Ambush Marketing
• Strong Subsidiaries & Staff
• Distribution Proficiency
Opportunities Threats
• Motorsport • Competitors
• Research & Innovation • Fashion Trends
• Nike ID in Shops • Losing Awareness of Consumer
• Ultra Global Preferences
• Ambush Marketing • Ambush Marketing
• South Africa 2010, London 2012 • Intellectual Property – Mimic/Copy
Appendix 2 – PESTEL Analysis
Political Economic Socio-Cultural
• Striking Workforce • ‘Credit Crunch’ • Fashion Trends
• Political Unrest Global Recession • Increase in Female
• Terrorism • Consumer Choice – Participation
• Work Conditions Limited to Value • Diverse Range to
• Increased Suit Consumer’s
Manufacturing Costs Style
Technological Environmental/Ethical Legal
• Perishable Product in a • Recycling? • ‘Sweat Shop’
Time of Constant • Sustainable Business Employment
Innovation • Climate Change • Ambush Marketing
• Research Capabilities
• Contemporary Marketing
Campaigns
Page No. 11

12. MA Sports Management Philip Barnes
Appendix 3 – Ansoff Matrix (1979)
Page No. 12