Exam 2- Nike Case Study
Nike is one of the most well-known brands in the world. Their branding and advertising have propelled them as the most recognizable athletic shoe/clothes brand in the world. This means Nike is a great candidate to do a case study on as their methods with DTC distribution, the 4 P’s, key persona, etc., have all been very successful. The brand today shows strong performance financially as well. Nike’s global revenue surpassed $46.71 billion dollars in 2022. This is an increase of over 2 billion dollars from 2021. This shows a very positive trend for Nike.
Nike is super active with their social media sentiment and engagement. Nike has several accounts on each social media platform dedicated to individual parts/sports of their brand. However, Nike does extremely well in making their social media sentiment feel much more than just a shoe or athletic brand. Their accounts push for an overall healthy lifestyle, motivate their consumers to be healthy, and build confidence in the consumers. Consumers thus feel confidence from Nike’s product and will purchase their products. Nike uses short, strong, and passionate campaign slogans to inspire their consumers. This graph below shows the reach from all of their advertisement efforts as well.
They also are very active with their advertisements pertaining to current world issues like racism. This also allows the consumers to feel like Nike is not only trying to sell them an item but also be a voice for their consumers. Nike also produces advertisement videos which show off their products usually in a captivating, aggressive, and motivating sports video. Nike also has deals with some of the most iconic athletes currently playing like Lebron James and Cristiano Ronaldo. All of this shows just how extensive and how far Nike has committed to get brand recognition and social media engagement in all ways possible. While Nike has an extensive reach on every platform, they do not bombard their consumers with several advertisements every day. Rather they periodically release a captivating advertisement video every few weeks or so in order to give these commercials a feeling of “high class” as well. One of Nike’s biggest competitors is Under Armour. Under Armour is a very well-known brand as well but has always been seen as the “little brother” to Nike. Under Armour’s revenue was up 27% in 2021 but this only equates to $5.7 dollars compared to Nike’s $46.71 billion dollars in 2022 and roughly $44 billion in 2021. Under Armour is engaged in every social media platform as well, but their advertisement is not as extensive. Under Armour also has deal with superstars in the athletic world, but Nike has always been seen by most as the epitome of “athletic brand” sponsorship deals. While Under Armour is prospering and profitable brand, Nike continues to be “strides” ahead of all of their competition and shows no signs of that changing anytime soon.
This chart above helps capture Nike’s key persona perfectly in my mind. Nike’s strives to achieve the “cool, trendy, athletic” lifestyle persona and I think this is their key persona. Nike aims their products at 16–30-year-old consumers in middle-upper to upper class. Nike’s name typically carries a more expensive price tag but from viewing their financial reports, this is no issue for sales. Nike targets this range and typically consumers who are involved in sports or exercise/fitness. Nike’s persona portrays excellence, quality, and performance; all three things an athletic individual is looking for. Nike’s shoppers are learning about the brand through several various funnels of advertisements. They are largely learning from social media advertisement. Instagram is where Nike has received the most interactions with shoppers. However, other social media platforms like YouTube, Twitter, Snapchat, and Facebook also generate significant traffic for Nike. As mentioned before, Nike has several individual accounts dedicated to certain parts of their brand to allow user to feel more included and “chosen.” They also gain attention from short TV advertisements and YouTube video advertisements that usually inspire shoppers to get involved with the “athletic” lifestyle. Nike’s slogan “Just Do It” is probably one of the most well-known slogans of any brand in the world. Nike feeds off short, influential, and simple slogans like this. Social media continues to become more and more influential for almost every brand as TV advertisements are second place when it comes to Nike’s advertising success.
Nike is highly developed in the DTC distribution. While Nike products can be found in Dick’s, on Amazon, and several other retailers’ locations/websites, Nike has an extensive website where you can purchase any other their products through them. I would say Nike is more of a blended distribution overall however though due to the reasons listed above. However, as trends suggest Nike is slowly focusing more on their retail stores and personal website rather than retailers, as their name no longer needs any help to be recognizable to shoppers. Nike has 1,046 retail stores and has steadily increased their retail store presence across the world each year except the past 4 years. Nike has plateaued off of adding new stores, but this likely due to covid related issues as I see Nike opening more stores in future years. Below is the graph showing the number of stores for Nike.
This graph shows Nike has a huge retail store, DTC, and blended distribution channels to serve their shopper’s needs. With Nike having a “hand” in every possible outlet of distribution, this allows their brand to be seen everywhere by all potential shoppers, regardless of if that is in-store, online, or through a third-party retailer. The brand gets free publicity in third-party retailers, they have a solid and trusted name for online shoppers, and they have exciting/intriguing retail stores to draw in shoppers. All of this together bodes for great success and Nike’s financial statements help back this claim.
Nike has done an excellent job promoting their brand through the major for P’s. However, we have continuously seen a change in shopper behavior but sustainably more since the covid pandemic. Buyer behavior changes quickly and can be detrimental to a company if they do not adapt. For the product P, Nike needs to continue to evolve their shoes, apparel, and equipment to keep in touch with the new trends in the athletic/fitness industry. The athletic industry is always rapidly changing however with new football helmets, baseball bats, basketball shoes, etc., so Nike should have no issue to with continuing to stay innovative. For the price P, Nike definitely has to be weary of their prices in response to the current financial situation of the US and the rest of the world. For most shoppers, this current time has seen higher prices and a lower budget. This means luxury athletic apparel and gear that Nike sell, will not be considered a necessity to most shoppers. Nike must be extremely sensitive to the market and make sure they can provide products and a price point that allows consumer to still afford them, but also get the same quality one expects from Nike. For the third p, Nike has been great at expanding into every market for distribution for their product. In order to stay a relevant product, they must make sure their product is accessible in every distribution method that may come up with changing trends. For the fourth P, Nike in my opinion, does a fantastic job of promotion. Nike’s advertisements are captivating, and they also include advertisements that revolve around current trends or issues in the world. Nike must stay engaged on all of their social media platforms, forming “timely” advertisements, and engaging with shoppers through social media especially.
Overall Nike is a very mature and prosperous company. This makes them a great candidate to do research on as it provides us with a framework that is proven to succeed over for over half a century. Nike’s brand, name recognition, marketing, and products are a staple of what has made Nike the most successful athletic/fitness brand in the world.
Sources
https://www.statista.com/statistics/241683/nikes-sales-worldwide-since-2004/
https://brand24.com/blog/nike-social-media-strategy/
https://www.statista.com/statistics/250287/total-number-of-nike-retail-stores-worldwide/
Disclaimer:
Part of this article was created using an AI writing tool. The content was directed and edited by me as part of the writing process. We are learning to use emerging marketing toolsets as part of our class.
This is for BUS 465 at NCSU (Fall 2022)
