How Brand Equity Has Kept Nike On Top
How did a track and field coach, a collegiate runner and a waffle iron build one of the most powerful sports brands in the world? Most would argue that a good idea combined with hard work and some luck were main factors in Nike’s success but brand equity is the true driver of its continued growth. As defined by David Aaker, brand equity is “the assets and liabilities linked to a brand name and symbol, which add or subtract from the value provided by a product or service”. Brand equity is a multidimensional concept that allows consumers’ to evaluate a brand and determine its perceived benefits. Nike has successfully created a strong brand by fulfilling the pillars of brand equity, which include: brand loyalty, brand awareness, brand associations and perceived quality. Strategic marketing messages, combined with quality products have allowed for Nike to excel in each dimension of brand equity.
Brand Loyalty is arguably the most important dimension of BE and is a function of both consumer behavior and attitudes, that will result in repeat purchases and increase likelihood choice over competition. Nike has developed a loyal base by inspiring their customers and selling a lifestyle. The “Just Do It” slogan and campaign was launched in 1988, featuring an 80-year-old running icon Walt Stack making his way across the Golden Gate Bridge.
This slogan is what propelled Nike forward and allowed consumers to feel a personal connection to the brand. The slogan was memorable, plays on emotion and suggested something more than its literal meaning; which was crucial in that consumers could adapt their own meaning and connection. This made the slogan appeal to a large audience, and invited consumers’ of all backgrounds to dream big with them and find their inner champion. Nike has continued to develop advertising messages that use the common theme of inspiration and heroism to drive customer loyalty. Users see Nike products as something that can help better their life, both in and outside the gym.
The successfulness of the “Just Do It” slogan was also one of the many ways Nike increased their brand awareness. Another was the use of the “swoosh” logo. All across the world people can see the swoosh logo and know it is Nike. You cannot walk down a busy street without seeing a Nike logo somewhere or an advertisement using their tag line. The logo is so well recognized that many of Nike’s commercials never even have to say their name, and consumers will know that the commercial is for the brand because of the logo.
This is fantastic for Nike because of the mere-exposure effect. Mere exposure is a phenomenon where people develop a preference for things because they are familiar with them. Nikes brand equity is so strong because of their successful brand awareness. Every time you see a “swoosh” logo or hear the phrase “Just do it” your liking of Nike goes up, because you are more familiar with it. But brand awareness is not an easy thing to achieve; the company has had to spend millions of dollars on advertising and partnerships to get it where it is today.
Brand Associations is another dimension of brand equity that can help different and create positive attitudes for the brand. Nike created successful brand associations through the use of celebrity endorsements. Celebrity endorsements are affective because of Balance Theory, which states that people dislike unbalanced attitudes and will change to resolve the balance. If you ‘like’ a celebrity and they ‘like’ a product you will begin to change your attitude about this product to match your attitude to the celebrity. Nike has used this method by partnering with some of the greatest athletes of all time so consumers will associate ideas of success, talent, quality and winning with Nike products. Celebrities that the brand has used include Michael Jordan, LeBron James, Maria Sharapova and many more throughout different sporting categories. All of these athletes are well liked and of the best in their field, which allows consumers to feel they can be the best too. These athletes are considered to be of the highest quality, which creates the association that Nike products are high quality as well.
“High perceived quality drives a consumer to choose a brand over competing brands” (Alex, 2012). Nike has championed themselves as and an industry leader in technology development, creating new and better products year after year. The consistency of quality has led for the brand to maintain their position of the greatest sporting goods company in the world. Without high perceived quality a brand will lose market share and customer loyalty. Nike, while successful in this dimension has not been immune to scandal that hurt the brands perceived quality. In 1991 Nike was known for outsourcing production to manufacturers in China and Vietnam where labor conditions were poor and wages low but in 1992 and expose was published that highlighted the severity of these poor conditions. Consumers lost respect and trust of the brand and it has taken the company many years to recover. Nike wasn’t the only company using sweatshops, but because everyone knew, it hurt the brand equity in more ways than one.
In the fast paced world of fashion with ever increasing completion Nike has managed to continue to stand tall above the rest. This is largely due to their perceived brand equity in the minds of their consumers. The brand is ranked 16 on Forbs list of Worlds Most Valuable Brands of 2017 and the only sportswear brand listed. Though impressive this does not mean Nike shouldn’t worry about their. The trend of athleisure has allowed other brands to grow and differentiate their positioning to fit new consumer needs. Adidas and Under Armour have utilized celebrity partnerships to create more awareness and line extensions to reach a larger customer base. Puma has partnered with Rihanna to make sportswear and street wear one in the same.
Athletic apparel has grown past high performance needs; consumers want these products for their style and performance, unwilling to compromise one for the other. Nike has developed a lifestyle and mindset around success and heroism that drives consumers desire to purchase their products, but they must keep up with changing needs to stay on top.
