Thursday, 6 August 2015

Nike: End of an era for chairman Phil Knight

Earlier this month Phil Knight announced he would be stepping down as the chairman of the sports apparel company Nike. As one of the most influential business people in the world, the self made CEO has generated an estimated personal wealth of $25.5 billion dollars. Knight co-founded the company back in 1962, which at the time was known as Blue Ribbon Sports. Initially they operated as a distributor of running shoes for the Japanese company, Onitsuka Tiger. They soon began designing and selling their own branded shoes and changed names to Nike in 1978.

Source: http://www.stanforddaily.com/
The company was named after the Greek Winged Goddess who personified victory. Its famous swoop logo was commissioned for a mere $35 and shortly after the famous “Just do it” slogan was coined. After increasing success in the late 70’s, Nike began to loose ground to competitors in the mid 1980’s. It was at this time Phil Knight began to realise the importance of marketing and began to make changes that still resonate and are felt in the company today.

Rather than being simply just a product and technology orientated company Nike began to put the consumer of the product in the spotlight. When asked if Nike is a technology company or marketing company, Knight replied “We’ve come around to saying that Nike is a marketing-oriented company, and the product is our most important marketing tool.” Nike’s decision to put customers interests first turned the from a million dollar company to a billion dollar company. 

Source: http://news.nike.com/
Nike’s consumers have played an important role in leading innovation over the years. They have also been able to collaborate with Nike in designing and customising shoes with NikeID launched back in 1999. One of the keys to Nike’s success has been their ability to understand and connect with consumers. Time and time again, Nike has been able to come up with new designs and target audiences and find meaningful ways to connect with them. By breaking their offerings into sub-brands Nike has been able to target everyone from elite athletes at the pinnacle of sport all the way to non-athletes who wear the apparel for fashion and not function.

After receiving significant criticism during the 90’s for their alleged use of child labour, Nike began to make significant changes in their commitment to corporate social responsibility. Being a marketing-orientated company, Knight realised that visibility is important and “It’s not enough to do good things. You have to let people know what you’re doing”. Marketing plays a critical function for Nike, not just in terms of getting their brand to market, but also highlighting the positive steps they have made to improve their environmental record with initiatives such as the Reuse-A-Shoe program.

With Phil Knight’s vision Nike have oozed creativity and innovation from the very beginning. Pushing the boundaries of technology in sports apparel has seen them benefit from superior products in the marketplace. However, in the post Phil Knight era, Nike must remember that its greatest ability comes from successfully connecting with their many customers.

Robert Brunning
Current student in the Master of Marketing program at the University of Sydney Business School

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