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Sustainability

Nike Considered: Getting Traction on Sustainability

Rebecca M. Henderson

Richard M. Locke

Christopher Lyddy

Jan 21, 2019

In 2008, Hannah Jones, Nike’s new VP of Corporate Responsibility, wanted the company to be a leader in creating sustainable footwear, and subsequently developed a strategy for working with the product units to do so. Questions remained about whether Nike was on the right track and if the company was doing enough in the sustainability arena.

Learning Objective

To explore the role of an index tool as a vehicle for making products more sustainable.

Appropriate for the Following Course(s)

sustainability, strategy

Nike Considered: Getting Traction on Sustainability 

Educator Copy*

*An educator (non-watermarked) copy of this case is available only to individuals who hold teaching positions at academic institutions and want to use the case in a course.

Nike Marketing Strategy 2024 - 7 Effective Findings from Case Studies

• 66 Comments
• Published on Sep 20 2023

Table of Contents

Nike marketing strategy: top effective findings from case studies, history of nike, goals and objectives - nike marketing strategy, nike’s target audience, nike marketing strategy: challenges, solutions, and its approaches, how nike’s marketing strategy evolved, how to apply the nike’s marketing strategy to your brand, growth and market reach, what to take.

Nike has taken an image of an athleisure company and an American multinational corporation, but, the brand has taken way the world with inspiration, emotion, diversity, and unity with its simple marketing campaigns.

The core purpose of Nike marketing strategy is to keep moving the world forward. Over the years, it has launched and introduced various stylish and sustainable services from remembering the Swoosh, and the tagline ” Just Do It” which does not only come into our mind.

Enlisting the action of Nike's marketing strategies is remarkable. What makes it so special to get the products?

There are multiple reasons why people buy Nike products in this case study explained, but, one absolutely convincing means is that it is more than a brand that builds communities, planet protection, and makes sports accessible beyond diverse horizons. We have also discussed the top Nike Marketing Strategies that you can learn in 2024.

Purpose of the Article

The main aim of this article by Sprintzeal caters to information as social proof from various case studies about a process, product, or service that can resolve marketing issues.

Known as one of the largest athletic apparel companies,  Nike (Nike, Inc.)  is an American multinational association that deals with the design, development, manufacture, and global marketing and sales of footwear, accessories, apparel, equipment, and services. Began with a mission to, “bring inspiration and innovation to every athlete” in the world It is based in Beaverton, Oregon, NIKE, Inc. includes the Nike, Converse, and Jordan brands, and many more. 

It was founded by Bill Bowerman and his former student Phil Knight in 1964.

Nike plans to build a 3.2 million square foot expansion to its World Headquarters in Beaverton.

The Nike brand strategy focuses on bringing the culture of the invention to today’s athletes while solving issues for the upcoming generation.

Nike has acquired and sold several footwear and apparel companies over the years. It has also acquired Starter, Zodiac, Celect, and Datalogue and purchased RTFKT Studios.

It was founded in 1964 by Bill Bowerman, a track-and-field coach at the University of Oregon, and his former student Phil Knight as Blue Ribbon Sports. The brand was rebranded in the 60s, their company was relaunched as Nike in 1971.

In 1972, Blue Ribbon sports which later became Nike unveils "Moon Shoes

In 1974, the Waffle Trainer was patented, featuring Bill's famous Waffle outsole.

In 1982, introduced the Air Force 1 basketball shoe.

In 1994, Nike signs LeBron James

In 2000, launched Nike Shox in the market.

In 2008, introduced the Flyware shoe and signs Derek Jeter

In 2018, introduced React Element 87. Nike launched a new "Just do it" ad campaign featuring Colin Kaepernick.

In 2020, Nike Air-max 97G "Peace and love" was introduced. It also reveals uniforms for the 2020 Tokyo Olympics.

The main priorities and objectives of Nike marketing strategy,

• It includes promoting diversity, equity, and inclusion.
• Innovations that create sustainable materials and approaches to tackle environmental impact.
• Towards advancing a transparent and responsible supply chain.
• To build community by investing in organizations that pay efforts on economic empowerment, education, and equality.
• Uplifts unity with the current generation through sport and encourages an active lifestyle to reach their potential future.

To truly understand the effectiveness of Nike's marketing strategy, it's crucial to dissect the various segments within their vast target audience. Nike's ability to connect with different consumer groups is a central theme in this Nike marketing strategy case study. Let's delve deeper into these segments:

Athletes, Professionals, and Enthusiasts: Nike casts a wide net, catering to athletes at all levels, from elite professionals to passionate enthusiasts. Their product range is meticulously designed to enhance athletic performance, making Nike the preferred choice for athletes worldwide.

Running Enthusiasts: Nike's dominance in the running domain is unparalleled. They offer an extensive selection of running shoes, apparel, and accessories tailored to the specific needs of runners, whether they're seasoned marathoners or occasional joggers.

Sports Enthusiasts: Beyond athletes, Nike appeals to anyone with a fervent passion for sports. Their marketing efforts invite individuals to adopt the mindset of an athlete, whether they actively engage in sports or simply lead an active lifestyle.

Women in Sports: Recognizing the growing influence of women in sports, Nike has dedicated a significant portion of their marketing efforts to empower female athletes and sports enthusiasts.

Young Athletes: Nike understands the importance of cultivating brand loyalty from a young age. Their marketing strategies are crafted to inspire and engage young athletes, nurturing a lifelong connection to the brand.

Sustainability Advocates: In recent years, Nike has expanded its reach to consumers who prioritize sustainability and ethical practices. Their marketing seamlessly integrates these values, resonating with the environmentally conscious audience.

This diverse and inclusive approach to their target audience has been a pivotal factor in the success of Nike's marketing strategy. It showcases their ability to resonate with a wide range of consumers, from professional athletes to environmentally conscious individuals.

Striving to create more eco-friendly materials as possible, bioplastic for their sneakers is used as a replacement for plastic, leather, and other materials.

Well known for the fact that Nike promotes its products through sponsorship agreements with influencing athletes, professional teams, and athletic teams.

- High level competition of Nike with Adidas and Reebok and other companies with the closely similar product line and common target markets. 

- Limited exports of Nike products due to legal restrictions can be one reason for fewer sales or revenues.

- The economic and political situation of those countries manufacturing Nike products is also one main challenge.

- Being a global brand, controversies are sensitive to the company image.

Hence, these is some of the reasons why strategies are relevant for Nike.

The questions still arise, why do people go after Nike products even if several brands apply the same approach? Does Nike market segmentation do it differently?

With being able to pull effective  Nike marketing plan  guidelines over past years; the other part also had faced consequences and drove up on solutions-making with,

1) Advertising

One of the key parts of the  Nike advertising strategy  is advertising through television ads and other social media forms with affiliate marketing.

In 1982, Nike aired its first three national television ads during the broadcast of the New York Marathon.

2) New Media Marketing

Having to understand the importance of having different mediums along with display advertising, content marketing, and social media promotions, boosts Nike global marketing strategy in the right direction.

Nike is risk-taker, with the way to early application of internet marketing, email management technologies, narrowcast communication technologies, and broadcast to build multimedia marketing campaigns.

3) Emotional Branding

How undeniable that Nike always puts powerful emotions through the brand! The advertisement seldomly briefs on its products and services.

A few of the best ads and commercials from Nike quotes for motivation, inspiration, and greatness can be:

“We gave up giving up”,

“All you have to do is pick up your feet.”

“My better is better than your better.”

“Don’t believe you have to be like anybody to be somebody.”

The building of the right emotions by Nike effortlessly comes through curated content and narrative that again narrates a story; a tale of inspiration applicable to anyone to combat their challenges and meet their victory.

Instead, Nike emotional branding has been impactive followed as an effective strategy in the world of marketing at present. It inturns invokes emotions related to success, morale, victory, and self-improvement which makes it a powerful product.

4) Nike Target Market Segmentation

One thing marketers should learn from  nike segmentation targeting and positioning 

is understanding their customer.

And, Nike focuses very well on their main target markets for their product and services i.e., athletes, runners, and sports enthusiasts.

In the running years, it enlarges strategies to lead precise market segments for runners, women, and young athletes. 

An observation is taken into action to create that meets the custom interests as per customer requirements.

5) Convey a Story

To have been accompanied by a global audience, another marketing strategy applies by conveying the story in simple and effective points rather than using descriptive or jargon with their brand voice.

In this way, they connect and try to encourage the masses to chase their dreams and “Just do it”.

An instance as shown in the above image; another excellent technique is their tagline which builds an emotional marketing story that relates to anyone to catch their dream and build customer loyalty,

6) Newsworthiness

This brand strategy uses newsworthiness to impact and appeal to a story. In most cases, it uses recent events or happenings about what people need or want to know.

It is also tricky to decide what stories to cover, but Nike evaluates and continues with newsworthy stories before the release to avoid controversies or false information.

This pattern could be applied based on events that impact your readers all over the world

7) Invest in Customer Loyalty

In Nike, it associates with diverse masses apart from the target audience. Does it have good customer loyalty? Yes. 

With less loyal customers, the challenge to come up with anticipatory decisions and effectively plan your finances can be scary.

One of the reasons the brand is irresistible globally till current which is less surprising is sole because of customer loyalty. The precise, well-executed product and service not only attract new customers but retain customers with good profit margins.

- Nike is releasing “No Finish Line,” a new book that celebrates and figures Nike’s 50 years of game-changing design and innovation in the favor of athletes and sports. It lay down a design vision for the next 50 years.

- It applies measures to create a better future by investing in active and inclusive communities. Nike Community Impact Fund (NCIF), an employee-led and neighborhood-focused approach 

in aid of local community organizations globally for a positive, effective, and making a play for all the kids.

- Nike made about 35% digital and aims to achieve 50% by 2025.

One of the best ephemeral approaches is that a part of Nike’s success goes to influencing and inspirational athletes such as Michael Jordan, Mia Hamm, Roger Federer, Tiger Woods, Kobe Bryant, Lebron James, and many others.

To truly appreciate the efficacy of Nike's marketing strategy, it's essential to trace the evolutionary path it has taken over the years. This retrospective analysis of Nike's marketing strategy is integral to our Nike marketing strategy case study. Here is a comprehensive exploration of the evolution of Nike's marketing approach:

The Early Years: Nike's origins can be traced back to its predecessor, Blue Ribbon Sports, which primarily served as a distributor of Japanese running shoes. During this nascent phase, Nike's strategy was firmly rooted in performance and innovation.

The Birth of Nike: In 1971, Nike emerged as a distinct entity, drawing inspiration from the Greek goddess of victory. This marked the inception of Nike's emphasis on empowerment and achievement, an approach that would become central to their branding.

Celebrities Take Center Stage: The 1980s heralded a new era for Nike, marked by the strategic use of celebrity endorsements, most notably with basketball icon Michael Jordan. These high-profile endorsements solidified a deep emotional connection between Nike and consumers.

The "Just Do It" Era: In 1988, Nike introduced its iconic "Just Do It" slogan, encapsulating the ethos of personal determination and resilience. Swiftly, it became synonymous with the brand's identity and mission.

Digital Transformation: Nike was an early adopter of digital marketing, recognizing the potential of the internet and social media. They harnessed these platforms to engage consumers through multimedia campaigns and create a digital presence that mirrored their innovative spirit.

Emotional Branding: Nike's pivot towards emotional branding represented a pivotal moment in their marketing evolution. Rather than simply showcasing products, they focused on evoking powerful emotions, such as success, motivation, and self-improvement. This shift solidified Nike as a potent and influential brand.

Sustainability and Inclusivity: In recent years, Nike has demonstrated a commitment to sustainability and inclusivity, both in their products and marketing. They aim to create eco-friendly products and promote social responsibility, aligning with the evolving values of today's consumers.

This journey of evolution highlights Nike's remarkable adaptability and capacity to align their strategy with changing consumer landscapes. From their roots in performance and innovation to their current focus on emotional branding, sustainability, and inclusivity, Nike's marketing strategy has continued to resonate with a diverse and ever-changing audience.

To harness the power of Nike's potent marketing strategy for your own brand, it's essential to follow a well-defined blueprint. This section of our Nike marketing strategy case study provides a step-by-step guide on how to apply Nike's principles to your brand effectively:

Know Your Audience Inside Out: Much like Nike, start by conducting thorough market research to understand your target audience's specific needs, preferences, and aspirations. Tailor your products and marketing strategies accordingly.

Forge an Emotional Connection: Take a page from Nike's playbook and aim to create profound emotional connections with your audience. Share compelling stories that resonate with your brand's mission and values, inspiring and motivating your customers.

Embrace the Digital Realm: Leverage the expansive digital landscape, including social media, content marketing, and multimedia campaigns, to amplify your brand's reach. Follow Nike's lead in utilizing these platforms effectively to engage and captivate your audience.

Champion Sustainability and Social Responsibility: If your brand aligns with sustainability and social causes, make them integral to your strategy. Showcase your commitment to positive change through sustainable practices and support for relevant social issues.

Consistency is Key: Maintain a consistent brand image and message across all marketing channels. This consistency not only reinforces your brand identity but also leaves a lasting impression on your audience.

Prioritize Innovation: Continuous innovation should be at the heart of your strategy, much like Nike's dedication to pushing the boundaries. Innovate your products and marketing strategies to stay relevant and capture the full attention of your audience.

Leverage Influencers and Celebrities: Collaborate with influencers or celebrities whose values align seamlessly with your brand's mission. This partnership can help expand your reach and enhance your brand's credibility, similar to Nike's successful partnerships with iconic athletes.

By following these steps, you can effectively incorporate the power of Nike's marketing strategy into your own brand. Building a successful brand, as exemplified in this Nike marketing strategy case study, requires a strategic approach, unwavering dedication, and a profound understanding of your audience's aspirations and needs.

Don't Wait, Just Do It

In the ever-changing field of marketing, the key to success is action. Much like Nike urges you to take action; we encourage you to propel your digital marketing career forward by enrolling in Sprintzeal's Digital Marketing Course. Don’t let your hesitation cost you your opportunities.

Equip yourself with the skills, knowledge, and confidence excel in the digital marketing domain. We curate and design our courseware to ensure you're well-prepared for the dynamic world of digital marketing. So, why delay? Enroll now , and allow us to help you make your career in digital marketing.

As per  Wikipedia , During the Q1 of 2020, the company's online sales have grown by 36%. While the net income in mil. is $6,046 and revenue is $46,710 in 2022. 

As per the Forbes report, Nike's Financial Summary for 2022, the revenue is $46.9 billion with assets of $38.6 billion and profits of $6.1 billion.

The following image gives a glance at the percentage growth with the approaches.

Image Source:  Nike

Final Results

During the article study, we also found that problems may occur subsequently with changes made to the distribution, marketing, and management strategies of Nike.

Companies can refer to Nike's marketing strategy to influence the four Ps i.e, price, product, promotion, and place. New features may expand the changes to higher growth of the product and might develop a new market.

Source 1:  Nike-A Case Study Just Do It

Source 2:  Nike Marketing Case Study

Source 3:  An Investment Analysis Case Study: Nike - NYU Stern

Research Details

This article emphasizes curated study from three case studies apart from Nike’s official website.

Therefore, all the effective strategies are presented for information and education means for readers in response to the current marketing issues along with the given references in this article.

Winning the market is one technique that Nike has been doing so well since its implementation till date. What’s even interesting is having to market its products under its various brands and subsidiaries.

The subsidiaries like Nike+, Nike Golf, Nike Blazers, Nike Pro, Air Jordan, Air Max, and other brands like  Hurley Int., Jordan, and Converse.

In the field of such marketing, digital marketing plays a dominant role. To pursue a career in digital marketing training, choosing from a globally recognized ATO (An accredited training organization) from  Sprintzeal  accelerates your career of interest.

To explore more courses, consider visiting  Sprintzeal’s all courses  and earn a certification to level up your career.

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Nike, Inc.: Cost of Capital (v. 1.8) – Case Solution

Nike, Inc.: Cost of Capital (v. 1.8) case study allows students to find mistakes in a misleading WACC calculation.

​Robert F. Bruner; Jessica Chan Harvard Business Review ( UV0010-PDF-ENG ) October 10, 2001

Case questions answered:

• What is the WACC and why is it important to estimate a firm’s cost of capital? Do you agree with Joanna Cohen’s WACC calculation? Why or why not?
• If you do not agree with Cohen´s analysis, calculate your own WACC for Nike, Inc., and be prepared to justify your assumptions.
• Calculate the costs of equity using the CAPM and dividend discount model. What are the advantages and disadvantages of each method?
• What should Kimi Ford recommend regarding an investment in Nike?

Not the questions you were looking for? Submit your own questions & get answers .

Nike, Inc.: Cost of Capital (v. 1.8) Case Answers

1. what is the wacc, and why is it important to estimate a firm’s cost of capital do you agree with joanna cohen’s wacc calculation why or why not.

The WACC (Weighted Average Cost of Capital) is a firm’s cost of capital. Its components allow us to see how much it costs a company to raise money to finance new projects.

Calculating a company’s WACC allows investors and the company itself to determine an average acceptable return for projects. By knowing the costs of financing a new project, we can select projects that offer a return that is higher than the WACC.

We agree with certain elements of Joanna’s calculation, and we agree with the assertion that Nike, Inc.’s footwear and apparel divisions share similar enough risks to warrant one WACC calculation.

We also agree that Cole Haan faces different risks in an entirely different industry, but since it represents such a small fraction of total revenues, we should not calculate its individual WACC.

We agree with Joanna’s use of a 38% tax rate. The U.S. statutory rate is 35%, and by adding the average of Nike’s state taxes (2.5%-3.5%), we get a tax rate of 38%. The aforementioned statements are the only parts of Joanna’s calculation that we entirely agree with.

We disagree with the way she calculated Nike’s cost of debt since the purpose of WACC calculations is to determine the cost of new projects. We don’t believe that using interest expenses for the past year is an accurate representation of the company’s cost of debt.

We disagree with the use of book weights to determine equity’s weight in the company’s financing. The final disagreement we have with Cohen’s calculations is her beta calculation for the CAPM.

We disagree with taking the average of Nike’s beta through the years and using this as Nike’s current beta.

2. If you do not agree with Cohen’s analysis, calculate your own WACC for Nike Inc. and be prepared to justify your assumptions.

The first thing we will do in our WACC calculation is to calculate Nike’s cost of debt. Nike’s last issue of debt had a rating of A2 by Moody’s or A by S&P, given on October 25, 2000.

Given this rating, we can determine an approximation of Nike’s cost of debt. We will use the 10-year Treasury rate as our base rate and add the spread required, given Nike’s debt rating.

The following chart shows the movement of ten-year Treasury yields and the spread for S&P companies with different ratings (the red line represents Nike’s rating):

The black line represents the period in question, and the dotted line represents the average yield of A-rated corporate bonds in this period. Utilizing this graph, we can determine that Nike’s cost of debt would be…

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Nike: Sustainability and Labor Practices 1998-2013

By: Glenn Carroll, Debra Schifrin, David Brady

Nike's labor practices were the subject of high profile public protests in the 1990s, and CEO Mark Parker said the company still had a lot of work to do in that area. The case also details how making…

• Length: 28 page(s)
• Publication Date: Aug 13, 2013
• Discipline: General Management
• Product #: IB106-PDF-ENG

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The case discusses Nike's sustainability and labor practices from 1998 to 2013, focusing on the successful steps Nike took up and down the supply chain and in its headquarters to make its products and processes more environmentally friendly, and the challenges and complexities it was still facing in its efforts to improve labor conditions.

Nike's labor practices were the subject of high profile public protests in the 1990s, and CEO Mark Parker said the company still had a lot of work to do in that area. The case also details how making sustainability a key part of the design process led Nike to develop more innovative and high-performing products, such as a breakthrough running shoe called the Flyknit, which was widely worn at the 2012 Olympics. Following protests in the late 1990s over unsafe working conditions, low wage rates, excessive overtime, restrictions on employee organizing, and negative environmental impacts, Nike began shifting from a reactive to a proactive mode. During the 15 years covered in this case, Nike made significant changes in its sustainability practices, including moving its Corporate Responsibility team much further upstream in the organization, where it could have a greater impact on decisions by providing input early in the process. The company also developed multiple indexes that measured its sustainability practices and those of its independent contract manufacturers. The indexes had metrics for measuring the relevant impacts of product waste, water, chemistry, labor, and energy. Nike's critics said many labor issues had not been resolved, but Nike made progress in that area through collaboration with governments, NGOs and labor unions, and through management compliance trainings. If a contract factory did not score high enough on the company's sustainability and labor ratings scales, Nike would impose sanctions on the factory or even drop it from the supply chain. These actions took Nike off the top of most activists' target lists.

Learning Objectives

The learning objective of the case is for students to understand how a large, high-profile global company is navigating the complexities of becoming more sustainable and improving labor practices.

Aug 13, 2013

Discipline:

General Management

Geographies:

United States

Stanford Graduate School of Business

IB106-PDF-ENG

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Case Study | Inside Nike’s Radical Direct-to-Consumer Strategy

• Chantal Fernandez

In October 2020, in the middle of a global pandemic that had infected 188 countries, causing record sales damage across the retail sector, Nike’s share price hit an all-time high.

Like other retailers, Nike had been forced to close most of its network of more than 900 stores across the world, as had its key wholesale partners like Nordstrom and Foot Locker.

But the American sportswear giant’s performance during the pandemic, when its online sales spiked, signalled to many that Nike had the competency to prosper long term, in a future that will be increasingly defined by e-commerce and digital brand connections.

It was a validation of a strategy that Nike prioritised three years ago, dubbing it “Consumer Direct Offense,” but the seeds of the approach go back almost a decade.

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Above all, Nike is a marketing company. It doesn’t just sell sneakers; it sells the brand aspiration that imbues those sneakers with meaning. But to achieve the reach required to scale its business, Nike’s distribution strategy had long-relied on third-party retailers to sell its products, even if the consumer experience offered by those partners diluted its brand.

But in a future increasingly defined by e-commerce, fast-moving trends and, above all, the rising power of branding to drive consumer preference when competitors are just a click away, Nike realised that in order to thrive, it needed to take control of its distribution to better manage its brand and deepen its connection with consumers.

It was definitely architecting a new retail, and a bold, retail vision for Nike.

Such an evolution is easier said than done, especially for a business as large as Nike in a category as competitive as sportswear. But by radically cutting back on its wholesale distribution and raising the bar for brand experience with the third-party partners that remained; expanding its focus on content, community and customisation to keep customers close; investing in its data analytics and logistics capabilities; and rethinking the role of the store as a brand stage, Nike drove a veritable direct-to-consumer revolution.

When the pandemic hit, these shifts went into overdrive.

“It was definitely architecting a new retail, and a bold, retail vision for Nike,” said Heidi O’Neill, Nike’s president of consumer and marketplace, and one of the most prominent executives leading the brand’s new strategy in recent years. “But it started with our consumer, and we knew that consumers wanted a more direct relationship with us today.”

In this case study, BoF breaks down Nike’s pioneering direct-to consumer strategy and how it has worked to the brand’s advantage, propelling its share price to new heights during the global crisis of 2020.

Click below to read the case study now.

• Mark Parker
• John Donahoe
• direct to consumer
• athletic apparel

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