Nike sprints ahead of the competition?

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Malhotra and Birks: Marketing Research, 2nd Euro edition, Case studies

Case studies


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‘Getting to know you’ (Acreman, S. and Pegram, B.), originally published in Research Magazine, November 1999, pp. 36–41.

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Nike sprints ahead of the competition?

Nike was founded by Bill Bowerman, the legendary University of Oregon track and field coach, and Phil Knight, a University of Oregon business student and middle-distance runner under Bowerman. The partnership began in 1962 as Blue Ribbon Sports (BRS); their first-year sales totalled $8,000. In 1972 BRS changed its name to Nike, named after the Greek winged goddess of victory. Nike employs 22,000 people worldwide, from Nike World Headquarters in Oregon. With 1,500 employees working at the Laakdal Customer Service Centre, Belgium has the most employees of any EMEA (Europe, Middle East and Africa) country. The Netherlands is a close second, with 1,200 employees working at the European HQ in Hilversum. Nike is the number one athletic footwear company in the US and the number two American brand in terms of name recognition among overseas consumers, a status shared with IBM and second only to Coca-Cola.  This high degree of recognition is probably one of the main reasons Nike has been so immensely successful.  For the 2001 fiscal year sales in the US were $4,819m, up 2% from 2000. 51% of Nike revenue is generated by sales in the US. In Europe, sales were $2,585m, up 7% from 2000.  Despite their healthy levels of growth, analysts forecast a change in Nike’s future.  Although the company remains well managed, experts feel the company will have to work harder to grow in the future.  Consumers are becoming less than enthralled with Nike’s $100-plus prices and are ‘clearing out’ their Nike-filled closets with other brand name clothing.  Reebok and Adidas, the number two and three businesses in the industry, respectively, are hot on the heels of Nike.  Adidas is giving Nike a run for its money in women’s sports, running and soccer.  Reebok is focusing upon environmental issues in response to criticism of third-world exploitation levelled at the sportswear industry. Nike has adjusted its successful marketing formula, which was started in 1985.  The company hopes to shift attention to its product innovation and how the company has evolved.

Perhaps such success should be attributed in part to its wildly successful concept-based advertising campaigns.  The company uses a process that is often called ‘image transfer’. Nike ads almost never specifically place a product, or mention the brand name. A mood or atmosphere is created and then the brand is associated with that mood. ‘We don’t set out to make ads. The ultimate goal is to make a connection’, states Dan Weiden of one of Nike’s ad agencies.  One ad featured the Beatles and clips of Nike athletes Michael Jordan and John McEnroe juxtaposed with pictures of non-celebrities also engaged in sports.  It was used to infer that real athletes prefer Nike and that perhaps if the general audience buys the brand they will play better too.  Nike’s unpredictable image-based ads have ranged from the shocking, such as its portrayal of real blood and guts in a ‘Search and Destroy’ campaign used during the 1996 Olympic games; to humorous, such as the first ad used to launch Michael Jordan’s Jordan brand wear.  The latter advertising made the tongue-in-cheek suggestion that Jordan himself had a hand in production by slipping away from a Bulls’ game at half time to run over to his company and then making his way back in time for the game’s second half.

Of late, Nike has shifted to the new phase in its marketing campaign, emphasising more of its product innovation skills than the jokey, edgy attitude that it displayed in previous years.  ‘We recognise that our advertisements need to tell consumers that we’re about product innovation and not just athletes and exposure. We need to prove to consumers that we’re not just slapping a whoosh [the company trade-mark] on stuff to make a buck’, says Chris Zimmerman, director of Nike’s US advertising.  With the launch of the ‘I can’ campaign, Nike is showing less of the celebrity athletes that previously adorned its marketing output and showing more product usage than in the previous ‘Just Do It’ campaign.  Competitors Reebok and Adidas have recently featured more product-focused ads and have met with a great deal of success.  Despite this rearranged focus, Nike is not backing away from innovative marketing.

Also at the heart of Nike’s new strategy is the international arena.  That may prove to be the most difficult element for Nike to undertake.  According to one source there seems to be pretty strong recognition that in a few years Nike will be larger outside the United States than inside.  The problem that the company faces is that even though international sales currently make up one-third of Nike’s business, international business still pales in comparison with the domestic sales.  Nike would like to expand into the soccer and international sports arena, but to do so it will have to refocus marketing and distribution in order to re-establish itself as an authentic, technically superior sports shoe.  In the future, Nike would like to build up its presence in the key markets of China, Germany, Mexico and Japan.  Nike will focus its advertising on sports, and will feature sports that are of particular interest in a specific region.  Nike realises that while it is ahead of the competition, it still has a long, long way to run.


Jeff Jensen, ‘Reebok and Nike go head to head in soccer battle’, Advertising Age 68(18) (5 May 1997): 4.

Jeff Jensen, ‘Product innovation steps into spotlight at Nike’, Advertising Age 68(36) (8 September 1997): 3, 48.

Isabelle Sender, ‘Just do it, abroad’, Chain Store Age 73(10) (October 1997):  121–4.


  1. What is the management decision problem facing Nike as it attempts to retain its leadership position?
  2. Define the marketing research problem facing Nike, given the management decision problem you have identified.
  3. Develop two suitable research questions and formulate two hypotheses for each.
  4. How can the Internet be used to help Nike in conducting marketing research?


Getting to know you

Markets are becoming ever more competitive, with new brands competing for a share of consumers’ hearts and minds. Building a relationship with consumers is a challenge facing all organisations, but particularly so in the case of ‘emergent drinkers’ – those of legal drinking age up to 25. These consumers are highly experimental, and our only safe assumption is that their consumption habits will probably not follow on from those of preceding generations.

In 1997 Allied Domecq Spirits and Wines (ADSW), , recognised the danger of being distanced from this crucial group, particularly across geographical markets. They were not looking to understand a current user group per se, but rather to gain insight into the factors influencing brand adoption as these young drinkers mature.

Working with Pegram Walters International (PWI), , a unique programme of research was created. The objectives went far beyond an exploration of the current usage and attitudes of these consumers towards spirits, but also encompassed an exploration of their personal values, their feelings about their lives, their universe, their hopes and dreams. The project required a willingness to think beyond current market conditions and business objectives.

The broad objectives of the research, covering an elusive respondent set, clearly required an approach that would be both informal and unconventional. It needed to venture beyond ‘traditional’ marketing research in order to maximise the quality of data. Moreover, because of the innovative nature of the project, it required a high level of openness, communication and trust between client and agency to ensure that the information was both usable and relevant. In research terms there were two clear challenges:

  • Gathering information from this difficult-access consumer group
  • Integrating the information back into the organisation.

Gaining access to the adult emergent drinker

It was believed that to gain a real insight into the emergent drinker community, two realities would have to be taken into consideration:

  1. Nobody can understand a community better than the community itself.
  2. Information alone cannot provide valuable insight. Insight can only be developed from the blending of community understanding with external analysis.

Access to the community was provided via the development of the ‘information gatherers’ (IGs) concept. IGs would be representatives of the adult emergent drinker target group. They would participate in the research in order to interpret the dynamics of their own community for us. To accomplish this, adult emergent spirits drinkers were recruited, who were required to understand the objectives of the research project and to be able to communicate concepts. In this way, they would not only provide feedback on their own needs and actions but, more importantly, they would also be able to gather and interpret information from their peer group. IGs would become effectively both respondents and researchers, with the ability to provide rich, value-added insight.

It was felt that one of the key successes of this programme was a policy of maintaining honesty at all stages of the programme. By being completely open about the objectives with participants, by sharing the hopes and expectations with them, the IGs were empowered to have a stake in the project. As a result, they felt as committed to gaining valuable insight as the client and research agency. However, the recruitment of IGs also required both the client and the research agency to step away from established comfort zones and let go of control – two key ingredients to any programme of innovation. Overall there were three stages to the research design in each market.

In the first instance one-hour depth interviews were conducted. There were three clear objectives for this stage of research, to:

  1. Understand personal viewpoints on marketing and lifestyle issues;
  2. Clarify and/or narrow down topics for subsequent exploration at the workshop stage;
  3. Recruit appropriate ‘information gatherers’ (IGs).

Depth interviews were conducted to understand what was happening in respondents’ lives. They were invited to undertake ‘homework’ such as essays on their home lives, and to bring along items of personal importance to stimulate discussion. From this stage hypotheses were formulated on issues such as how they saw themselves and their future, relationships, self-discovery, and opting in or opting out of the system. In each market, from 20 depth interviews, 10 respondents were retained as IGs to accompany the researchers through the rest of the programme. It was believed to be important to conduct the bulk of the research in the environment in which alcohol was consumed. Leading-edge bars were rented out where 50 adult emergent drinkers were invited to participate in workshops.

From the time the participants entered the venue, the role of client and the research agency became purely observational, with the IGs leading the discussion throughout. A task guideline was designed which empowered the IGs with an understanding of the research needs, and then they were left to do it. As an additional record, the workshops were video-recorded. Because of the way in which they had been recruited, the IGs felt a real responsibility to get the right information. The participants felt comfortable within their peer group and, in the more natural bar environment, fed back real, relevant and honest information. Moreover, both respondents and IGs respected the process, allowing them to ‘buy into’ the research. On the night following the workshops, focus groups were reconvened with the IGs to discuss what actually happened, and their interpretation of what it actually meant. In this way, concentrated data were collected: what was observed, what consumers said, how it was reported back, and an initial understanding of what it all might actually mean.

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Communicating the findings with the client: Allied Domecq Spirits & Wines

To infuse the exercise with knowledge, learning and a sense of adventure, ADSW business teams were invited to spend a day of discovery. The day began by holding breakout sessions that included ADSW marketing and sales personnel, and their key agencies. The purpose was to gauge current assumptions about adult emergent drinkers, and where necessary to dispel some myths. They then ‘met’ the generation. It was felt that the best way to do this was to create fictional characters for the adult emergent drinker generation. These would enable ADSW ...

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