Final project

Global Brand Management – Nike’s Global Brand

Dr. Deanne Larson

e-mail : [email protected]

Abstract: The purpose of this paper is to outline and analyze the

ingredients of a successful global brand which has and can continue

to sustain its global marketing goals. The brand analyzed in this

paper is Nike, one of the top sporting goods manufacturers in the

world. As part of the analysis of Nike’s global brand, a proposed

brand strategy and supporting marketing program will be

recommended using the components of Interbrand’s rating and

ranking evaluation. The analysis will use components of

Interbrand’s approach as the basis of understanding Nike’s current

strategy and standing and be used as input into the recommended

brand and marketing strategy.

Keywords: Interbrand, brand market strategy, global marketing,

brand association, global brand management

Reference: Reference to this paper should be made as follows:

Larson, D. (2011) “Global Brand Management – Nike’s Global

Brand”, The ISM Journal of International Business, ISSN 2150-1076,

Volume 1, Issue 3, December 2011.

Biographical Notes: Dr. Larson is an active management

practitioner and academic and a PhD candidate at the International

School of Management. Dr. Larson’s other doctoral degree is a

Doctorate of Management in Information Technology Leadership.

Her doctoral dissertation research focused on a grounded theory

qualitative study on establishing enterprise data strategy. She holds

Project Management Professional (PMP) and Certified Business

Intelligence Profession (CBIP) certifications. Larson attended AT&T

Executive Training at the Harvard Business School in 2001, focusing

on IT leadership. She presents several times at year at conferences.

Dr. Larson is Principal Faculty at City University of Seattle.

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Global Brand Management: Nike’s Global Brand - Larson 2

Introduction – Global Brand Management and Nike

Hollis (2008) outlined that few people understand what a brand is. Hollis explained branding

beginning with what it is not. A brand is not a business, trademark, corporate identity or a

veneer to be supplied to or ignored by the business. A definition supplied by Feldwick (2002)

defines a brand as a collection of perceptions in the mind of a consumer. If a brand is a

collection of perceptions, then one could logically say that brand management is perception

management. Managing perception is not considered an easy task, thus brand management

can be considered a challenging aspect of growing and maintaining a business.

To further understand brand management, eight associations are analyzed (Hollis, 2008).

Product characteristics, places and events where the product was used, product price,

product characteristics, the type of people who use it, and a product’s perceived value all

contribute to defining a brand. Brand association tends to be related to the rational and

emotional benefits consumers have; positive associations with brands influence consumers

to buy and become loyal consumers. Positive associations come from creative and ingenious

marketing, which strengthens the brand and reinforces positive associations.

Hollis (2008) extends Feldwick’s (2002) definition of brand by adding that a brand is not just

a collection of perceptions, but a set of perceptions that are shared and enduring in the

minds of customers. In order to build and maintain a strong brand, organizations must invest

in marketing that creates a unifying theme, creates and repeats positive associations, and

identifies the right touch-points with the consumer. Hollis outlined that ultimately,

consumers do not over think their brand choices and to create brand value, organizations

need to create clear, concise, and positive associations at all consumer touch-points to

influence buying behavior.

Another aspect of brand management is global brand management. Having a global brand is

more than having a wide geographical footprint (Hollis, 2008). Experts once believed that to

take a brand global it must be standardized; however, standardization has not proved to be

a factor in global brands. Coca-Cola, for example, has focused on a balanced strategy that

recognizes differences between markets but takes into account opportunities for economies

of scale. Hollis outlined that there is no single recipe for global brand success.

Hollis (2008) defined a global brand as, “one that has transcended its cultural origins to

develop strong relationships with consumers across different countries and cultures” (p.26).

With this definition of a global brand, global brand management would focus on not only

creating a set of shared and enduring perceptions but also managing those perceptions to

transcend cultural origins and develop strong customer relationships.

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Nike started out as Blue Ribbon Sports (BRS) launched by founders Phil Knight and Bill

Bowerman in 1968. In 1972, BRS changed its name to Nike, the Greek goddess of victory.

Nike, located in Beaverton, Oregon, United States, is a manufacturer of sportswear and

equipment and the leader in athletic shoes and apparel. Nike had $19.2 billion in revenue in

2009, which was a 3% increase over 2008. Nike launched its widely recognized and

successful logo in the 1980s, referred to as the “Swoosh”, and has used it consistently on all

of its products and apparel (Nike, 2010).

Nike owns other brands as well including Converse, Cole Haan, Hurley International, and

Umbro. These brands contributed $2.5 billion to Nike’s $19.2 billion 2009 revenue. Nike

plans to grow these brands as well as invest in Nike as a global brand (Nike, 2010).

Building a Successful Global Brand

Hollis (2008) used the BrandDynamics™ Pyramid to describe a customer’s relationship with a

brand. The pyramid has five levels: presence, relevance, performance, advantage, and

bonding. An understanding of the pyramid provides context when analyzing the history,

growth, and sustainment of a brand.

The first level, presence, refers to the customer awareness of the brand through use of the

products, someone they know has used the products, or the customer has achieved

awareness through other means. The second level of the pyramid is relevance; customers

reach this level because they believe the brand provides value. The third level of the pyramid

is performance; customers at the performance level believe the brand is delivering on its

promises. The fourth level is advantage; at this level customers believe in a rational or

emotional benefit derived from the brand. The last level is bonding where customers believe

that the brand is the best one for them (Hollis, 2008).

Hollis (2008) provided five steps that can be used to evaluate the ingredients in building a

successful global brand. However, before an organization can focus on the five steps of

building a successful global brand, Hollis outlined foundational aspects that need to be in

place first. An organization must have a scalable and efficient business model, meaning that

an organization must be able to produce, distribute, and sell its products or services

efficiently. Another foundational aspect is innovation; not that an organization has to be first

at a new product or service, but to stay in touch with the latest trends and create products

and services accordingly.

Once an organization has its foundational aspects in place, Hollis (2008) outlined five

components required for a successful global brand: a great brand experience, clear and

consistent positioning, dynamism, authenticity, and a strong corporate culture. A great

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brand experience refers to a customer’s perception of service and value. Clear and

consistent positioning refers to the messaging of the brand; organizations are consistent

with the marketing messages and stay away from confusing the customer base. Dynamism

refers to producing trend-setting products and being a leader through communication and

actions. Authenticity refers to a brand’s origins; customers respect a brand that has stood

the test of time. A strong corporate culture refers to one that has a passion for its customers

and meets the needs of its customers.

The McKinsey Quarterly reported on Nike’s brand power in 1997, “Nike raced ahead of the

pack by exploiting its brand power to move from sports footwear into athletics clothing,

turning itself into a symbol of fitness and well-being. It then went several steps further,

positioning itself as an athletic lifestyle company which, by using celebrities such as the

basketball star Michael Jordan and the golfer Tiger Woods to endorse its goods, enabled

customers to identify with the lives of their sporting heroes. Today, the company offers

innovative and stylish products, backed by marketing that combines traditional advertising

with imaginative schemes to build basketball courts in inner cities and donate free Nike gear

to high schools” (p. 24).

Court, et al. (1997) combined the attributes of Hollis’ (2008) pyramid and five steps in

building a successful brand and outlined that to build global brand power, a brand needs

three basics – alignment between communication and delivery, consistent delivery, and

distinctive product – and personality and presence. Court, et al posited, “Nike brings

together celebrity endorsements, creative advertising, and innovative local marketing to

build a complex personality that couples an aspirational overachiever ethic with a notion of

community service” (p.33). Clearly Nike has been working at investing and growing its brand

for many years.

Interbrand

To propose a branding strategy and related marketing program that shows promise of

sustained success, an understanding of the brand rating and ranking approach used by a

major global branding report is required. Interbrand is an organization focused on creating

and managing brand value. According to its website, “Interbrand started in 1974 when the

world still thought of brands as just another word for logo. We have changed the world’s

view of branding and brand management by creating and managing brands as valuable

business assets” (Interbrand, 2010).

Interbrand’s rating and ranking approaches analyzes the ongoing investment and

management of the brand as a business asset. This method considers several ways in which

a brand touches and provides an organization with benefits. The results of the methodology

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are used to guide brand management, thus organizations use these results to make business

decisions. There are three components of Interbrand’s assessment: the branded products or

services’ financial performance, the role of brand in the purchase decision process, and the

strength of the brand (Interbrand, 2010).

Interbrand focuses on economic profit to determine financial performance. To determine

economic profit, taxes are removed from net operating profit. From the economic profit, a

capital charge is removed to account for the capital used to generate the brand’s revenues;

the capital charge rate is set by an industry weighted average cost of capital (WACC). Once

the economic profit is determined, it is analyzed for a forecasted five-year period and for a

terminal value. According to Interbrand’s Best Global Brands Report, “The terminal value

represents the brand’s expected performance beyond the forecast period. The economic

profit that is calculated is then multiplied against the role of the brand to determine the

branded earnings that contribute to the valuation total, as noted earlier” (p. 11).

The role of the brand focuses on the consumer’s decision to purchase because of the brand;

this does not include other influencers such as price or product features. Interbrand analyzes

the portion of the demand for a product or service that would be in excess of the demand of

a similar unbranded product. Brand percentage is multiplied by the economic profit which

results in the amount of branded earnings. Branded earnings are then applied to the brand

valuation total. Brand value results are determined by Interbrand by establishing brand

earnings, multiplying brand earnings by brand strength, and discounting the total to present

value (Interbrand, 2010)..

Brand strength is more complex than establishing economic profit and brand earnings.

According to Interbrand (2010), “Brand strength measures the ability of the brand to secure

the delivery of expected future earnings. Brand strength is reported on a 0 to 100 scale

(where 100 is perfect) as determined by an evaluation across 10 dimensions of brand

activation” (p.11). The 10 components of Interbrand’s brand strength score contribute

equally to assessing the brand’s ability to generate value. The 10 dimensions focus on all

aspects of the brand (products, people, partners, positioning) to create a holistic view of

brand evaluation. An update has been made to these components to include corporate

citizenship, audience fragmentation, product design, social media, and return on investment

(ROI) (Interbrand, 2010).

Interbrand determines brand strength based on the following 10 dimensions: commitment,

protection, clarity, responsiveness, authenticity, relevance, presence, understanding,

consistency, and differentiation. These 10 dimensions will be used to establish an evaluation

of Nike’s current marketing and brand strategy. According to Interbrand’s Best Global Brands

Report (2010), the 10 dimensions are defined as follows:

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Commitment: “A measure of an organization’s internal commitment or belief in

its brand. Commitment is the extent to which the brand receives support in terms

of time, influence and investment” (p.6). An example of a brand that did not

demonstrate commitment in 2010 was British Petroleum (BP), when an oil well in

the Gulf of Mexico continued to spew oil over a three month period damaging

the economy and the environment.

Protection: “This component examines how secure a brand is across a number of

dimensions – from legal protection and proprietary ingredients to design, scale or

geographical spread” (p.6). An example of protection can be seen with Kleenex

and Apple. Kleenex has become the name by which tissue is known and Apple

polices its i-prefix names to ensure no use of like names are being used.

Clarity: “The brand’s values, positioning and proposition must be clearly

articulated and shared across the organization, along with a clear view of its

target audiences, customer insights and drivers” (p.7). Organizations such as

Proctor and Gamble (P&G) and Unilever allocate budget to focus on research and

invest in highly skilled resources.

Responsiveness: “The component looks at a brand’s ability to adapt to market

changes, challenges, and opportunities. The brand should have a desire and

ability to constantly evolve and renew itself” (p.7). In this dimension, many

organizations have responded to customer concerns such as a desire to see

sustainable products like fuel efficient cars.

Authenticity: “This component is about how soundly a brand is based on an

internal capability. Authenticity asks if a brand has a defined heritage and a well-

grounded value set, as well as if it can deliver against customer’s expectation”

(p.8). An example of authenticity are those brands which have stayed the course

on what differentiated them in the first place, brands such as Chanel and Gucci.

Relevance: “This component estimates how well a brand fits with customer

needs, desires, and decision criteria across all appropriate demographics and

geographies” (p.8). Organizations such as the Gap have integrated mobile into its

brand experience by developing a mobile shopping platform that uses video

interviews, Twitter, and provides the ability to purchase products via the mobile

device.

Presence: “This measures the degree to which a brand feels omnipresent and

how positively consumers, customers and opinion formers discuss it in both

traditional and social media” (p.8). Starbucks is an example that integrates

different elements of social media such as blogs, YouTube, Facebook, and Twitter

to elevate its presence.

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Understanding: “Not only must customers recognize the brand, but there must

also be an in-depth understanding of its distinctive qualities and characteristics,

as well as those of the brand owner (p.9)”. Apple is immediately recognized by

consumers via its distinctive, clean, smooth lines of products. Apple’s product

design communicates the innovative vision of the company.

Consistency: “This measures the degree to which a brand is experienced without

fail across all touchpoints and formats” (p.9). Organizations such as McDonald’s

have adapted to local markets by being consistent about inconsistency.

McDonald’s adapts products to appeal to local markets.

Differentiation: “This is the degree to which customers perceive the brand to

have a positioning that is distinct from competition” (p.9). An example would

include the Apple iPhone and its third-party applications. Apple “apps” as they

are called are created by third-parties for the iPhone device. Other smartphone

brands such as Google and Blackberry have had to keep up with the innovation

created by Apple.

The 10 dimensions that Interbrand uses to determine brand strength will be used in the

analysis of Nike’s current marketing and brand strategy.

Nike’s Brand History

Stonehouse and Minocha (2008) posited that Nike has been a leader in management

practice and business innovation; foundational practices that enabled it to grow from a

specialist business in 1972 to a global brand. Nike is accepted as the sports apparel market

leader based on its revenue, global penetration, and market share. The “swoosh” and Nike’s

name (the Greek goddess of victory) are synonymous with high performance sports.

To understand how Nike as a brand has been developed, a review of its history is warranted.

Hollis (2008), Court, et al (1997), and Interbrand (2010) identified common characteristics

that contribute to brand strength such as commitment, consistency, authenticity, and clarity.

Examining a brief history of Nike will provide an understanding of how a foundation was

built that contributes to the strength of the Nike brand.

In 1972, when BRS (before Nike was Nike) was launched, the target audiences for its

products were serious, young athletes. BRS focused on creating high performance running

shoes. Founders Phil Knight and Bill Bowerman had in-depth knowledge on how athletes

depended on shoes to aid performance. The knowledge and experience of Knight and

Bowerman evolved into the product design and development core competencies practiced

by Nike today. Packaging the design and development core competencies with a high-profile

athlete contributed to growing sales (Stonehouse & Minocha, 2008).

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Through the 1970s and 1980s, prominent athletes continued to wear Nike shoes with its

swoosh logo; Nike shoes were constantly visible to sports fans. During this time period,

young people exhibited a desire to dress casually and began to copy admired athletes. Nike

recognized this trend and targeted its research to focus on young people in their teens and

early 20s to gain insight into their behavior and thinking. Through this research, Nike

established that young people tend to go through a rebellious streak and they identified

with successful athletes that demonstrated the same streak. This discovery led Nike to make

key decisions in design and development, marketing, sponsorship, and promotion

(Stonehouse & Minocha, 2008).

One of the first decisions that Nike made was to expand its product range to cover a wider

array of sports, including sports that were not popular in the United States. Another decision

made by Nike was to extend its apparel to include not only sportswear but also apparel that

was suitable for casual wear. Nike continued to build on its core competencies in design and

development, incorporating customer insight, and using high performance materials to

manufacture shoes and apparel. One significant design and development breakthrough was

the invention of the “Air” characteristic which incorporated air cushion into a shoe’s sole and

heel (Stonehouse & Minocha, 2008).

Nike had inherent core competencies that came from its founders; however, other

competencies were needed to reinforce consistency and commitment in its operations.

Nike’s leadership realized that they lacked the strategic knowledge to manufacture its own

products. Nike’s leadership decided to keep some activities, such as design and

development, in-house and outsource others such as manufacturing and logistics. Nike

outsources to Taiwan, China, and Brazil, imposing strict quality control standards

(Stonehouse & Minocha, 2008).

Supply chain tasks are considered important concerning the Nike brand. Nike focused on

retailers that only sell its products. In addition, Nike has launched its own retail stores called

Niketown. The benefits of Niketown stores enable Nike to deal directly with its customers.

Dealing directly with customers allows Nike to protect its brand and learn from customers.

Nike considers customer input strategic knowledge which is used as a competitive edge

(Stonehouse & Minocha, 2008).

Although product design and development contributes to Nike’s competitive advantage,

marketing and promotion contribute as well. Nike’s knowledge of its young customer base

remains a critical success factor in marketing and promotion. Nike employs famous athletes

to promote and endorse its products. The athletes which Nike works with are not only

successful, but also tend to be controversial as well. The controversial nature of the athletes

continues to appeal to the rebelliousness found in Nike’s young customer base. Nike has

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worked with Michael Jordan from basketball, John McEnroe from tennis, and David Beckham

from soccer (Stonehouse & Minocha, 2008). One of the most prominent athletes in the

world, Tiger Woods from golf, recently went through a public scandal that resulted in his

divorce; Nike continued to use Woods and even worked with him to try to repair his image

(Interbrand, 2010).

Nike’s Current Brand State

Reviewing Nike’s history, several characteristics contribute to Nike’s brand strength, one of

which is a strong customer relationship. To understand Nike’s relationship with its

customers, the BrandDynamics™ Pyramid is used. The pyramid has five levels: presence,

relevance, performance, advantage, and bonding.

Presence, customer awareness of the brand through use of the products, is a strong point of

Nike’s. Nike was built on an association with those who know the product; athletes help

design and actively use Nike’s products. Customers see experts using the products during

sporting events and associate Nike’s products as high performance and quality. Relevance,

customers believe the brand provides value, is inherent based on the athlete’s use and

sponsorship of Nike products; athletes would not use the product if they did not believe the

product provided value. Performance, customers believe the brand delivers on its promises,

is reinforced by two practices of Nike – design and development core competencies and

incorporating the input of athletes and customers into new products. Advantage, customers

believe in a benefit from the brand, comes from relevance and performance; high quality,

high performance products provide an advantage. Last, bonding, which occurs when

customers believe that the brand is the best for them, is reinforced by Nike’s research into

the thinking and behaviors of its customer base. Nike’s focus on its young customer base and

discovering the rebellious connection of young people to athletes continues to bond young

people to Nike products.

Foundational aspects are important components of an organization’s operational efficiency

which contribute to customer service and product satisfaction. According to Hollis (2008), an

organization must be able to produce, distribute, and sell its products or services efficiently.

As mentioned previously, Nike outsourced the manufacturing of its products, developed a

core competency in supply chain, and created retail stores to be closer to its customers.

Another foundational aspect is innovation; staying in touch with the latest trends and

creating products and services accordingly. According to Stonehouse and Minocha (2008),

“Nike’s leaders encourage its employees to think creatively and there is a strong but

informal team-based work ethic. Informality is used as a mechanism for promoting forward

thinking and the sharing of ideas, which are essential to the creation of new strategic

knowledge. Design teams work in informal and picturesque surroundings to develop new

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concepts and products to keep the company in touch with its customers. Laboratories and

test tracks to test out new products are also located on site” (p. 27). Nike’s leadership

believes there is a seven year brand cycle and spends large sums on continuous innovation.

Using Hollis’ (2008) five components to evaluate the ingredients in building a successful

global brand can further illustrate how Nike has developed brand strength. Hollis (2008)

outlined five components required for a successful global brand: a great brand experience,

clear and consistent positioning, dynamism, authenticity, and a strong corporate culture.

Nike has a strong customer relationship (as demonstrated through the use of the

BrandDynamics™ Pyramid), where customers have a high perception of service and value.

Nike focuses on providing a consistent message to its customer base by sticking to its

formula of partnering with famous athletes which reinforces its theme of producing high

performing products and value. Dynamism, producing trend-setting products and leading

through communication and actions, is a strong point for Nike as it focuses on product

innovation as part of its product lifecycle. Authenticity refers to a brand’s origins; Nike’s

continues practices that were established in 1972. To continue to illustrate a strong

corporate culture, Nike has consistently increased its corporate citizenship to keep the

“children in sweatshops” image from resurfacing (Interbrand, 2010).

Interbrand published its report on the Best Global Brands of 2010 and Nike placed 25th on

the list. Based on financial performance, the role of the brand, and brand strength, Nike

created a brand value of $13.7 billion, up 4% from 2009. Interbrand’s synopsis of the Nike

brand for 2010 included strengths on providing clear brand messaging, staying true to its

heritage and strong brand positioning. Nike continues to spend on endorsements but has

not overspent on promotions and advertising. Nike created a return on investment on $2.35

billion spent in global marketing by creating content that attracts millions without

advertising. Nike’s largest competitor is Adidas, which ranked 62nd on the Best Global

Brands of 2010 list and has a brand value of $5.5 billion, an increase of 2% over 2009.

Interbrand suggested Nike should invest more in social media as this is one area that Adidas

does a better job. Nike received some negative criticism for standing by Tiger Woods during

his marriage scandal; however, remained unscathed. Last, Interbrand cited Nike’s

investment in corporate citizenship as an area that can continue to strengthen the brand.

Recommended Brand and Marketing Strategy

Based on Best Global Brands report of 2010 and Hollis (2008), Nike has strong brand value.

Hollis (2008) lists Nike as 6th on the global brand power score list. Interbrand has listed Nike

in its yearly report continuously since the 1990s as one of the top global brands (Interbrand,

2010). Clearly Nike’s strategy is working well.

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The recommended brand and marketing strategy will include reuse of some of Nike’s current

practices. Nike has focused on customer experience through maintaining true to its brand’s

authenticity, relevance, understanding, and consistency. Keeping a focus on these areas is

recommended as these practices have contributed to the brand strength, growth, and value

over the years. New recommendations to Nike’s brand and marketing strategy are based on

industry and markets trends. Interbrand provides analysis on trends that are currently

happening or will be surfacing in 2010 and in subsequent years. Four areas should be

considerations for Nike in adjusting its brand strategy: consumer packaged goods, retail,

technology, and digital.

Nike is predominantly a wholesale organization selling directly to its retail partners;

however, has a retail component as well with its own Nike retail stores. Within the last few

years, Nike has also focused more on its Internet presence with its online Nike stores,

NikeID, which allows consumers to customize products online, and individual performance

tracking for athletes. For these reasons, a closer scrutiny on trends in consumer packaged

goods; retail, technology, and digital are warranted.

Trends in consumer packaged goods (CPG) tend to be impacted by the global economy and

with the global economy struggling, price point and differentiation are immediate

considerations of consumers. Interbrand (2010) outlined that the principles for CPG success

are investing in customization and consumer connection. NikeiD is a good start to offering

consumers an opportunity to customize and personalize products, which strengthens the

consumer connection.

Retail trends have shifted from new brick and mortar store expansion to growth through e-

commerce (Interbrand, 2010). Organizations need to recognize that consumers are

interacting with brands through technology and wireless touchpoints. Nike has invested

more in its online presence and has partnered with Apple, Inc to integrate capturing athlete

performance metrics via the iPod or iPhone. Interbrand outlined that organizations need to

“act like a brand” through incorporating innovative products and value-add features. Brand

spaces, both virtual and physical, need to be personal and meaningful.

Technology and digital trends should be considered together. Technology enables the digital

trends that are emerging. According to Interbrand (2010), “consumers are embracing

technology at an unprecedented rate and interacting in new and different ways” (p.51).

Mobile web is the most popular form of access in emerging markets, where the economy is

actually growing. Trends in technology are moving to more of a vertical experience for

consumers. Apple, for instance, integrates its consumer experience across all of its

technology. More collaboration is occurring through natural competitors enabling a trend

toward allowing brands be present on any device or media.

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Digital trends provide new marketing opportunities. Facebook, for example, is reaching

consumers through all media and platforms and has led the trend in social networking

(Interbrand, 2010). Social media provides marketing and brand positioning opportunities

through leveraging social networking. Facebook allows consumers to provide feedback on

products that is more likely to be valuable and sincere. With the trend of social networking

rising, Nike needs to invest more in utilizing social media to interact with its consumer base.

Interbrand outlined that Nike trails Adidas in this area.

Using Interband’s brand value dimensions and considering the industry trends impacting

Nike, the following are the recommendations for Nike to consider in its marketing and brand

strategy:

Commitment: Nike continues to be strong in its commitment to its brand. Nike

has become an icon in the brand management area (Holt, 2003). According to

Holt, “Revered by their core customers, Nike has had the power to maintain a

firm hold in the marketplace for many years. Few marketers, however, have any

notion of how to turn their brands into icons, and that's because icons are built

according to principles entirely different from those of conventional marketing”

(p.43). Continuing the course in this area is recommended.

Protection: Nike’s core competency of product design and development has

historically contributed to the authenticity and consistency of its brand. Nike is

secretive about upcoming product design and has a dedicated lab at its

Beaverton, Oregon, world headquarters for product development. The edge in

the design and development process is the input from the athletes into the

design. While no specific change is recommended, Nike will need to stay close to

the sports trends and identifying those athletes that its consumers value as role

models or heroes. Athletes change as new ones become rising stars and older

ones decide to retire.

Clarity: Nike has dedicated itself to be a leader in market research in order to

understand its customers. This is another strong point, especially since Nike

incorporates the results of its market research into its product design. Market

research allows Nike to gain insight into not only what its customers want, but

also what they might want in the future. Nike will need to continue building its

core competency of market research to understand trends. Nike forecasts its

product demand based on trends, not much on past product sales.

Responsiveness: Nike focuses on sponsorships of events and includes social-

awareness programs. As part of the 2010 World Cup, Nike created an anti-AIDS

campaign. Even though the World Cup event has ended, Nike has kept up the

momentum and messaging with this campaign. Nike should incorporate the use

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of more social media to understand what its consumers care about. Gaining this

insight would help Nike target its campaigns that resonate with its consumers;

this approach would strengthen its existing ties to consumers and gain new ones.

Authenticity and Relevance: Due to core competencies of market research,

product design and development, authenticity and relevance are strong points

for Nike. Market research will remain an area that needs consistent investment

and attention as markets tend to change and new ones emerge. Baby boomers,

while not the most active consumer segment, are staying healthier and active

longer. Nike may want to consider market research in this area; although some

experts outline that this could contribute to brand inconsistency (Holt, 2003).

Presence: As noted, Nike needs to step up its presence via social media. While

Nike’s web site is interactive and activity is increasing with NikeID, Nike has yet to

incorporate social media into its strategy. Nike’s top competitor, Adidas, is using

social media to get a better understanding of consumer priorities. Presence could

include focusing on increasing market penetration in emerging markets. Emerging

markets such as China, Brazil, Russia, and India are predicted to be a large

percentage of growth over the next 20 years (Interbrand, 2010).

Understanding and Consistency: Nike has been very consistent in its branding

approach. According to Interbrand (2010), “It would be hard to think of a brand

that has a clearer, more consistent heritage than Nike. From its name to its

positioning, victory is the thread that runs through the brand” (p.19). Victory is

the context that helps Nike also understands its consumers (in addition to market

research). Athletes inherently want to succeed, perform well, and win.

Differentiation: Nike has increased its product offerings, initially focusing on

running shoes, then apparel and then incorporating sports gear. Nike continues

to expand its offerings across product categories and different sports. Nike could

use social media to gain a better understanding of consumer preferences around

customization and what product differentiation makes sense.

Conclusion

Nike has evolved into an icon (Holt, 2003) and evidently has had a successful marketing and

brand strategy. Going forward, Nike will need to increase a focus on presence via the use of

technology and social media. Additionally, to maintain a strong connection with its

consumer base, Nike will need to stay close to market and industry trends as these are

success factors in maintaining its product leadership. Nike could improve its presence by

focusing on growth areas, such as emerging markets. Taking these recommendations into

account, the Nike brand can sustain its position as a global brand leader.

The ISM Journal of International Business ISSN: 2150-1076, Volume 1, Issue 3, July, December 2011

Global Brand Management: Nike’s Global Brand - Larson 14

References:

Court, D.; Freeling, A.; Leiter, M.; Parsons, A. (1997). If Nike can ‘just do it” why can’t we?

The McKinsey Quarterly. No. 3.

Feldwick, P. (2002). What is Brand Equity Anyway? World Advertising Research Center.

Henley-on-Thames, U.K.

Hollis, N. (2008). The Global Brand. How to Create and Develop Lasting Brand Value in the

World Market. Millward Brown. New York, USA.

Holt, D. (2003). What Becomes an Icon Most? Harvard Business Review. March.

Nike Investor Relations Web Site (2010). www.Nike.com

Interbrand (2010). The Best Global Brands of 2010. www.Interbrand.com

Stonehouse, G.; Minocha, S. (2008). Strategic Processes @ Nike—Making and Doing

Knowledge Management. Knowledge and Process Management Volume 15 Number 1

pp 24–31 (2008)

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