Brand Equity Case Study Nike Marketing Essay

Brand Equity Case Study Nike Marketing EssayThe world constantly changes and disparities, however, some top markings seem to keep their leadership position in their industry to this day. Strong steels are amazingly durable and have the ultimate ability to over survey many challenges. Either does Nike. Since its creation in 1971 in the USA, the Nike swoosh is hush one of the worlds most valuable brand despite of the severe crises. Ranked at 26 on the list of Interbrands stovepipe world(prenominal) Brands in 2009 with a brand value at $13.2 billion dollars, up 4% from a value of $12.7 billion last course of study, Nike is the best among sports brand, left the turgid competitors, Adidas and lynx far behind (Interbrand report, 2009).So how has Nike got ahead and stayed ahead?Figure 1 Swoosh = achievement. Source www.nikefootball.com This article will be employed Elliott and Percys geomorphological framework of brand equity synthesis to investigate in four dimensions of Nike b rand equity, namely brand attitude (functional and emotional features), symbolic meaning, brand cognizance and brand commitment to draw the deposit picture of Nike brand equity in the sportswear industry.About NikeIn 1962, inspired by athlete aspiration, burden Bowerman and Phil Knight shook their hand to cofounded Blue Ribbon Sports, precursor of Nike. The initial business then was to distribute low-cost and high quality Japanese gymnastic property to Ameri female genital organ. Today, Nike not tho designs and sells athletic dress at every profitable grocery worldwide, but likewise operates in athletic apparel, sport equipment and subordinate venture including Cole Haan, Converse Inc., Hurley International LLC, Nike Golf and Umbro Ltd (Nike report, 2009). Headquartered at Oregon, united States, Nike has been presented across much than 160 countries around the world targeting its primary market regions United States, Europe, Asia Pacific and the the Statess. Nike employs near 32,500 people as of May 31, 2008 (Datamonitor Research, 2009). By indirect or direct way, Nike touches the lives of cardinals more with its modern products that transform every sport into a winning battle (Superbrands, 2002).Nike customersThe decennium ago, Bill Bowerman, the co-founder of Nike once said If you have a body, you are an athlete (Nike society overview, 2010). This motto transmitted not only the whole brand characteristics but also the main targeted customers. They are athletes and anyone with a body.Nike offers a wide product portfolio of sport-inspired lifestyle apparel, accessories and equipment. Nike provides athletic footwear for runners, trainers and basketball players. The company also offers shoes and equipments specially designed for those addicted tennis and golf players and etcetera. Such diverse product extensions enable the company to satisfy the varied athletic needs of its customers (Datomonitor Research, 2009)Nike and its rivalsSportswear has been a thriving market in recent years. According to the question Global footwear Industry profile releasing by Datomonitor in 2009, the global footwear market generated total revenues of $ 196,617 million in 2008. Thus, Nike has experienced intense competition from the moment its first sporting shoes world introduced to their customers. Globally, this market is dominated by the big three namely Nike, Adidas, and Puma (Sport+Markt Report, 2008 Keynote Report, 2010).AdidasAdidas was truly the first sports company, it was founded in 1920. They once really blew in the decade of 70s and 80s. By the archean 90s, Adidas realized itself forgotten in the back of game. In the 21st century, the brand has steadily affirmed its position and seems on renaissance. Adidas brand change magnitude its value at 6%, ranked 62th on the list of Best Global Brands 2009 and continued to take the second largest sporting goods manufactures behind Nike (Interbrand, 2009)The overall Adidas brand competes rightful(a)ly and closely with Nikes value proposition. Nike aims To bring inspiration and innovation to every athlete in the world, meanwhile, Adidas mission is Improving every athletes performance through innovation. The brand determine of Adidas have been claimed that authenticity, inspiration, honesty and commitment are derived from sport. (Datamonitor research, 2009)PumaFigure 1 the leaping puma symbolizes the combination of speed, power and elegance exhibited by professional athletesset(p) at 97th, Puma brand appeared at the first time on the Interbrand annual report. Interbrand analysts gave the positive compliments for Pumas effort to compete against the big rivals. Through bare-assed design, co-branding and partnerships with celebrities and famous designers such as Alexander McQueen and Hussein Chalayan, Puma refreshes their brand image. The company defines its brand as the mixes of sport, lifestyle and fashion to increase its desirability (Puma report, 2009). The Puma brand differentiates itself from Nike by communicating lifestyle driven style with active lifestyle themes whereas Nike focusing on performance driven style.Nike brand equityHaving and property customers is likely to be a competitive battle which each brand tries all efforts to win. They compete for functional attributes, distinctive services or innovative technologies (Aaker, 1991).So what are emotional and functional benefits which Nike provides for their customers?Functional and emotional features of the brandSince Nike was set up by someone who has a deep passion for athletics and running, it should come no surprise that product is important. Products that are comfortable, authentic, functionally innovative and uniquely designed (Nike report, 1985). The innovative technology is considered as one of the defining dimensions of Nikes brand identity and corporate culture.The simple driving concept has led to some impressive innovations which is considered as one of the defining di mensions of Nikes brand identity and corporate culture. The first foreground was Air cushioning, using pressurized gas to cushion impact and new materials such as Urathane, that was used first with the Air Max running shoes (Nike report, 1987). more(prenominal) recently, to obtain maximum performance, Nike Sport Research laboratory has discovered the innovative technology such as Shox, which are made mostly of rubber and fount back adding more power to a runners stride and Total 90 Concept, a range of equipment to help players perform over 90 minutes of a soccer match (Keller, 2008)Such innovative technology which Nike has used has gained the strong hold in consumers perceptions. The research of Ross and Harradine (2004) focusing on relationship between new-made school children and branding, particularly sportswear shoes brands showed that children aged from 4 7 years old believed that these brands could improve their in-person performance. They do very fast shoes. They sort out you run faster. They are also comfortable and look good, they added.Clearly, functional benefit is the fundamental and classical features to communicate with customers. However, if Nike just provided high quality running shoes to levy athletic performance, Nike would not be strong brands. According to Aakers (1991), big brands need to be beyond the purely functional relationships. They should create a more strong emotional attachment with core consumers because emotional benefits add richness and depth to the brand and the experience of owning and using the brand (Aakers, 2009)Figure 2 Nike committal to win Source Nikefootball.comGuinn et al (p219, 2008) stated that Nike offers emotional benefits which are the exhilaration of athletic performance excellence feeling engaged, active, and healthy exhilaration from admiring professional and college athletes as they perform wearing your brand when they win, you win too.Associated brand with the top athletes, Nike tells story of b rands which the main themes is sportsmanship and unrelenting effort. These are the story of Michael Jordan who won a record tenth scoring title and was selected as one of the 50 Greatest Players (NBA history, 2010) in Americans National basketball association championship. Lance Armstrong survived and won a second straight Tour de France while Tiger Woods completed the career Grand Slam, ensuring his place in golf history at the age where most of us are still wondering what we will do when we grow up (Nike report, 2000). The most three prominent athletes has generated the inspiration for young and next generation of athletes. Nike has succeeded to commute their inspirations to every single purchaser. Wearing every pair of Nike shoes is to engage a passion for excellence and encourage to do your own thing. Just do it the tagline could sum up all the greatest values of brand which is (Superbrands case study, 2002).Symbolic meaningProducts are no longer just products, they move beyon d the functional meanings. Nowadays, they are definitely social tools serving as a means of communication between the individual and his significant references (Grubb and Grathwohl, 1967 as cited by balustrade and Hogg, 2003). Products are considered as a symbol of individuality and uniqueness, and also symbol of affiliation and social identification. It is particularly trued with the fashion brands. work brands such as clothes, bags, shoes and etc satisfy opposing functions, both social identification and distinction among individuals (Banister Hogg, 2003)Nike must have understood the recipe well. The Just do It campaign in the early 1990s would be a perfect example. Losing ground to archrival Reebok which was quick initiative on designing style, fashion aerobics shoes in 1980s (Keller, 2008), Nike responded dramatically and forcefully by launching the Just do it campaign which was mainly focused on person wearing on products instead of product itself. buy an athlete-endorsed p roduct is one means of symbolically and publicly demonstrating aspirations to be a part of the group and such behaviors are directly influenced by the extent to which a fan identifies with an athlete endorserCarlson and Donavan (2008)Heroes and hero worship was being built as the main themes of advertising. Celebrity endorsements such as Bo Jackson, John McEnroe and Michael Jordon appealed to the consumers sense of belong and hipness. In other words, Americans consumers were convinced that wearing for every part of your life was smart (the shoes are designed for comfort) and hip (everyone else is wearing them you too can belong to this group) (CFAR, 1998).Just Do It campaign succeeded (Nike increased its share of the domestic sport shoe business after launching this campaign in America from 18 percent to 43 percent, regained the leader position) because it could fascinate customers in both separating ways. Wearing Nike as a self fulfilling image declaration if you are hip, you are probably wearing Nike. But perhaps most importantly, it could create the desirable needs -if you want to be hip, wear Nike (CFAR, 1998).Symbolic meanings of Nike brand are also tracked in the research on Symbolic and functional positioning of brands of Bhat and Reddy (1998). This study showed that Nike scored high on the prestige and personality expression scales (See Appendix). The findings of Hogg et al (1998) also support the success of attached the symbolic and emblematic meanings to sportswear brands. The youth showed facility in interpreting the symbolic meanings attached to the sports brands which were associated with the different sports stars (such as footballers, rugby players, athletes and tennis players) and with different sports (e.g. football and rugby.)Brand LoyaltyLuring by good shoe with innovative functionality and athletic aspiration value, Nike has indeed come to object and heart of its customers. By the mid of 1990s, 77 percent of male Americans from the age of 18 to 25 chose Nike as their favourite shoe, according to Rozanski et al (1999). The figure still remains stably despite of that up and down year Nike has been experience, gaining the high score of customer satisfaction at 79 percent rated by The American Customer Satisfaction Index Organization (2009).Figure 3NIKE The American Customer Satisfaction IndexBase-line9798990001020304050607080910 earlierYear%ChangeFirstYear%ChangeAll OthersNM737679797881818379818382831.213.7Athletic Shoes79747476797679798277767979801.31.3NIKE82747373787476767875727578791.3-3.7adidas75747475787376747775787778780.04.0Source American customer satisfaction index organization, 2010It could be said that loyalty to the Nike brand is driven by many external and internal factors such as brands subjective and objective characteristics and loyalty twist programs.One visible example of creating innovative method to start out the strong relationships with Nike users is that creating Joga.com, a social network sit e for foot ball fans. Launching quietly in the early 2006, the site became an instant hit, peaking at 7.5 million viewers when Nike showed Ronaldinho video clips, according to Nike (2006). More than 1 million members from 140 countries signed up by mid July. In this site, fans can create their personal blogs, build communities around favorite teams or players, download video and organize pickup games. By enrolling consumers in building and shaping the content of the website, Nike pulled their loyal customers closer, nurtured deeper bonds of loyalty and advocacy. (Kotler and Amstrong, 2007)Brand AwarenessBrand awareness is the first and crucial stage of consumers preference. It refers to the strength of a brands presence in the consumers mind (Aakers, 1996). Nike has been successful in building awareness. The Swoosh symbol has been appeared everywhere, on shoes, hats, billboards and soccer balls across the globe too remarkably to such extent that one author used the title The Swooshi fication of the creative activity on Sports Illustrated column that imaged a future in which the swoosh could surpass sports to become a letter of the alphabet and the new presidential seal, among other things(Keller, 2008). uncoiled be told, the recognition of the swoosh is extremely high.According to Keller (2008), as of 2000, 97 percent of American citizens recognized the brand logo, as the strong brand penetration. The perusing of Arona and Stoner (2009) on intellect brand personality also assists this fact. The findings indicated that Nike was perceived as a dominant force or authority in the market place, reaching at nearly 90 percent (Figure below)Figure 4 The difference between Nike and Adidas. Source Arora, R. and Stoner, C. (2009) a mixed method approach to reasonableness brand personality, Journal of product and Brand management, 18(4), 272-283.The results of Ross and Harradines research (2004) on brand recognition and awareness on children is also supportive, which showed that Nike could be recognized consistently without identification of brand name, even by the youngest group (aged from 4 to 6 years old). This perhaps may reflect the general level of advertising and promotion that children are exposed to.How has Nike done to build brand awareness?Sponsorships, advertising and experience focused retailing (Nike town) are three vivid channels that Nike has applied to enhance its brand image and awareness. Among these strategies, athlete endorsements could be considered as the most significant success of Nike brand.Nike has been invested millions of dollars to associate their brand names with easily recognizable athletes with the aim of brand image building (1.6 billion dollars is spent on multiyear athlete endorsement by Nike according to Horrow (2007). Athletes at the top of their respective sport such as Micheal Jordan, Tiger Woods, and Lance Armstrong who are well liked and respected by members of the brands target audience are chosen as e ndorsers to associate the Nike brand with the athletes repute image. This strategy has been paid off, for example, since Tiger Woods and Nike cooperated, annual sales for Nike Golf have exceeded to nearly $500 million dollars with an estimated 24 percent growth per year in the first five years of the agreement (Pike, 2006 cited by Carlson and Donavan, 2008).ConclusionSince the Nike name is chosen in 1971 with the concepts of victory, success and speed, Nike has been keeping its great speed in the fierce competitive environment. Building brand image and its associations around a famous person and conducting the two way conversation with power consumers through innovative digital channels, Nike has hold the strong presence in the heart of consumers.REFERENCEAaker, D., 1996. Building strong brands. New York The release PressAaker, David A., 1991. Managing Brand Equity. New York The Free PressElliot, R. and Percy, L., 2007, Strategic brand management, Oxford Oxford University PressGu inn, T., 2008. Advertising and Integrated brand promotion. 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