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The brand analysis of Nike based on its emotional branding and marketing strategies

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Abstract

Nowadays, Nike has become one of the most socially-conscious brands around the world because of its effective branding and marketing strategies. Therefore, it is worthwhile to understand the brand development of Nike and explore how Nike's branding and marketing strategies put it into a favorable position in the competitive market. This paper was committed to a brand analysis of Nike taking its main product—shoes as the example. The brand value proposition of Nike is to provide accessible, fashionable, innovative, and high-performance shoes for its customers in every sport. Customer-focused emotional branding and marketing have made Nike establish a strong emotional resonance for its audience and thereby developed a prominent brand cognitive. Additionally, although traditional marketing channels have still played an important role in brand publicity, digital marketing has functioned as a booster to help Nike develop new markets and enhance customer loyalty to the brand. Nevertheless, in order to obtain greater success in the high-performance athletic-product market, Nike needs to overcome huge internal and external challenges, such as inadequate product competitiveness, the impact of Covid-19 pandemic, and global economic uncertainty. In this paper, some practical suggestions were provided for the management to improve product competitiveness and strengthen the two-way interaction between the brand and its customers.
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The brand analysis of Nike based on its emotional branding
and marketing strategies
Guanming Wu
The Hainan University-Arizona State University Joint International Tourism College, Hainan
University, Haikou 570228, China
Abstract. Nowadays, Nike has become one of the most socially-conscious brands around the world
because of its effective branding and marketing strategies. Therefore, it is worthwhile to understand
the brand development of Nike and explore how Nike's branding and marketing strategies put it into
a favorable position in the competitive market. This paper was committed to a brand analysis of Nike
taking its main productshoes as the example. The brand value proposition of Nike is to provide
accessible, fashionable, innovative, and high-performance shoes for its customers in every sport.
Customer-focused emotional branding and marketing have made Nike establish a strong emotional
resonance for its audience and thereby developed a prominent brand cognitive. Additionally,
although traditional marketing channels have still played an important role in brand publicity, digital
marketing has functioned as a booster to help Nike develop new markets and enhance customer
loyalty to the brand. Nevertheless, in order to obtain greater success in the high-performance
athletic-product market, Nike needs to overcome huge internal and external challenges, such as
inadequate product competitiveness, the impact of Covid-19 pandemic, and global economic
uncertainty. In this paper, some practical suggestions were provided for the management to improve
product competitiveness and strengthen the two-way interaction between the brand and its
customers.
Keywords: Brand analysis; brand landscape; brand value proposition; emotional branding and
marketing.
1. Introduction
Nike is a sport's brand founded by Bill Bowerman and Phil Knight in the year 1964 and the
company is headquartered in Beaverton, Oregon, USA. The company specializes in athletic wear,
including sports shoes, apparel, athletic equipment, and other sport-related products. Nike has
actively expanded global market share since the 1970s. Nowadays, it has become a leader in the high-
performance athletic-product market. Nike's vision is to bring inspiration and innovation to every
athlete in the world, and its mission is to provide every Nike user with an opportunity to express
themselves and expand their potential.
Brand effect and brand value are two vital drivers of brand development that Nike attaches
importance to. Through effective emotional branding and marketing, Nike has gradually served as a
cultural symbol in the public mind which represents sportsmanship and human self-transcendence
(Li, 2020). Hence, it is apparent that Nike's success lies in bringing the brand and its consumers
together and stimulating a strong emotional resonance between them.
In fiscal 2021, revenues for Nike amounted to $44.5 billion which increased by 19 percent, and
the net income grew to $5.7 billion from $2.5 billion of 2020 (NIKE, Inc, 2021). The strong results
indicate Nike's prominent competitive advantage and deep connection with worldwide consumers.
Meanwhile, the branch brands and products have been rapidly developing and constantly exploring
new fields and markets. Therefore, it is worthwhile to understand the brand development of Nike and
investigate how Nike's branding and marketing strategies put it into a favorable position in the
competitive market, which can provide some implications for other brands and marketers in different
industries.
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2. SWOT analysis of Nike's landscape
Nike is one of the largest sellers of athletic footwear and athletic apparel in the world. The company
has more than 1000 stores in over 120 countries worldwide to sell its diverse footwear and sportswear
products for athletes and non-athletes.
Although there are many potential opportunities for Nike to obtain greater success, the company
has faced huge challenges in the stiff market competition. In order to deal with these situations, Nike
has made great efforts to update products, innovate development strategies, and then maintain its
favorable position in the competitive market. Hence, SWOT tool is utilized to assess Nike's landscape.
2.1 Strength
2.1.1 High-performance shoes to meet customers' needs
Nike is always on the way to enhance the performance of its shoes by adopting the best available
materials and latest technologies in order to satisfy customers' needs (See Table 1). Additionally,
Nike's products are fashionable and accessible to everyone.
Table 1. Customers' needs for athletic shoes
Basic needs
Expected needs
Augmented needs
Wear shoes for walk
Various categories of shoes for different
sports
Customization (Nike By You)
Different sizes and
colors
Fashionable design Smart shoes with self-lacing technology
High-quality→Durability
Valuable for collection (limited edition)
Comfort→Breathing shoes
Environmental-friendly and recyclable
materials
2.1.2 Prominent brand cognitive and awareness
There is no doubt that Nike has been one of the most recognizable brands in the world, its swoosh
symbol being easily recognized by everyone. On the one hand, high-quality products have provides
a solid foundation for its success. On the other hand, a strong and effective marketing strategy is
another indispensable factor which can lead to its success.
2.1.3 Superior marketing capabilities
The success of Nike can not be separated from its efforts made to advertise and market itself to the
world. The company has establish a close relationship with consumers intellectually and emotionally
to encourage them to trust the brand (Eyada, 2020). Moreover, Nike try to use social media and special
marketing campaigns to reach new audience and interact with them more directly.
2.2 Weakness
2.2.1 Hard to gain the trust from specific groups
Compared with other brands (e.g. Asics), Nike is hard to satisfy the needs of some specific groups,
such as marathon runners who like long-distance running. These groups have a higher standard on
the performance of running shoes, and thus they are inclined to choose Asics instead of Nike since
Asics specializes in running shoes.
2.2.2 Dependency on American market
Nike depends on the USA for substantial sales and revenues. According to NIKE, Inc. Reports
Fiscal 2021 Fourth Quarter and Full Year Results, the company's main earnings come from the market
of North America ($5,089 millions), much more than the earnings from Greater China, Europe,
Middle East & Africa, and Asia Pacific & Latin America (NIKE, Inc., 2021).
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2.3 Opportunity
2.3.1 Emerging Markets
Although having a large dependency on American market, Nike is still committed to expanding
its markets all over the world, such as India, China, and Brazil, because these markets are gradually
flourishing, and many potential opportunities for Nike to boost its sales in these countries still exist.
2.3.2 Less ties with big retailers
Nike has cut ties with wholesale retailers, including Zapoo's, Dillard's, Fred Meyer, and Boscov's,
which can closely align with consumers' wants and needs by interacting with the public more directly.
This is conducive to establishing a deeper trust and loyalty of customers to the brand. Additionally,
less ties with agents in global market can effectively purify Nike's sales channels and combat
counterfeit and shoddy goods.
2.4 Threat
2.4.1 Increasing competitive pressure
In contemporary era, the market competition in athletic footwear and apparel industry has become
more fierce because an increasing number of athletic-product companies (e.g. adidas, Vans, Skechers,
Reebok, Asics, and Puma) have engaged in the competition and tried to develop diversified product
lines.
2.4.2 The impact of Covid-19 pandemic and economic uncertainty
For one thing, on-going Covid-19 pandemic has greatly exacerbated global economic uncertainty
and made many companies expose their underlying problems, such as the concentrated distribution
of factories that can be easily affected by public crisis and natural hazards (Liu, 2021). For another,
Covid-19 pandemic has exerted a negative impact on people's desire to increase consumption because
of less disposable income. Besides, the downward pressure on the economy of many nations would
affect customers' purchase decision and buying behaviors.
3. Consumer target
Admittedly, Nike's primary target audience is athletes and the company has preferentially
considered serving athletes as one of its key goals for innovation. For example, in the Tokyo Olympics,
many professional athletes, especially runners, chose to wear Nike's super shoes' with an updated
cushion to help them run faster. However, in recent years, the company has paid more attention to
non-athlete market and supply many fashionable and high-quality shoes for these people.
By considering the influence of demographic factors on audience's purchase intention, Nike
provide products for consumers from all genders, ages, professions, and countries. The company
caters to both men and women equally and has been committed to building a long-term brand loyalty
among younger customers (Reis et al., 2016). Besides, Nike uses geographic segmentation to market
its products for different nations, regions and cities in distinct ways. For instance, Nike usually
combine its products with mainstream sports of a target market in order to attract more local
consumers.
Given the impact of psychographic factors, such as lifestyles and personalities, Nike targets
individuals who enjoy sports and pursue high performance when doing sports, not only the athlete
but also non-athlete, such as gym regulars, football players, skateboarder, etc. In contemporary era,
more and more people want to develop an athletic lifestyle instead of a sedentary lifestyle since they
attach more importance to their own health. Therefore, a pair of high-performance sports shoes can
light people's passion and satisfy their athletic fantasy to motivate them to participate in sports. As a
matter of fact, Nike's value proposition is consistent with the positive attitude towards lifeto
pursue high performance”, which can resonate with people easily.
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4. Brand value proposition
Nike's brand value proposition is to provide fashionable, innovative and high-performance shoes
for customers in every sport to meet their changing demands. Meanwhile, the products are not only
worn by professional athletes but accessible to anyone. There are four main segments of Nike's value
proposition, namely accessibility, customization, innovation, and brand.
4.1 Accessibility
Nike has been devoted to creating superior shoes and apparels for supreme athletes and at the same
time supplying high-performance shoes for average people. Nike's official stores and outlets have
spread out to different countries and regions globally to sell its products. With the development of e-
commerce, the distribution channel has been expanded. Customers can realize cross-border purchases
in daily life.
4.2 Customization
On the online platform, Nike By You, customers are able to enjoy customized service offered by
Nike to participating in designing their own shoes. Moreover, Nike has established many physical
studios in countries, such as the UAS, the UK, China, Italy and so forth. Providing opportunities for
customers to participate in customization is a crucial way to strengthen the two-way interaction
between the brand and its audience.
4.3 Innovation
Nike's value proposition attaches importance to exploring innovation from various aspects to
design cutting-edge products, such as Nike Adapted BB, a basketball shoes with a self-lacing
technology and tracking capability. Undeniably, outstanding innovation capability is a key factor for
an enterprise not to be eliminated by the market
4.4 Brand
Compared with the counterpart of other brands, Nike's shoes have a more prominent collection
value. On the one hand, supreme athletes' endorsement can endow Nike's shoes with a strong spiritual
core. For instance, Air Jordan series has been popular because customers have established a
connection between the shoes with Michael Jordan's legendary career and life experiences (Wei,
2020). On the other hand, Nike uses co-branding to increase the added value of its products. For
example, Air Dior capsule collection, launched in June 2020 for Dior customers, restricted to just
13,000 pairs, including 5,000 allocated to loyal Dior customers.
5. Marketing and advertising strategies
5.1 The endorsement of successful athletes
The primary characteristic of Nike's advertising and marketing is that the company persists in
inviting prominent and influential athletes, teams, and sports leagues to endorse its brand and to use
its products in athletic contests. Consequently, a strong brand identity and loyalty can be built among
target audience.
5.2 Customer-focused marketing strategies
The focus of Nike's marketing strategies has experienced a dramatic change over the past two
decades. Initially, Nike paid attention to marketing products' quality and design since its shoes had a
higher performance than competitors' at that time. Nonetheless, the company has gradually attached
importance to a more customer-focused marketing approach to narrate brand's stories.
Undoubtedly, effective and ingenious marketing strategies are the key to a business's success. Nike
has made numerous efforts to establish a strong emotional relationship with consumers through
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advertisements and other methods since the company believes that everything is consumer-oriented
and customers' needs lead technical innovation. Therefore, an emotional bridge can be built between
Nike and the public, and the brand are better-equipped to consist with customers' specific goals, needs,
dreams, and lifestyles (Mustamil et al., 2014). For instance, Nike Goddess, a strategic initiative
launched by Nike, aims to do business with women and attract a broader female market. The company
has fully taken women's needs and consumption habits into consideration in order to satisfy their
desire for an active lifestyle.
5.3 Traditional and digital marketing
Another change is that in recent years Nike has reduced the dependence on traditional marketing
(e.g. telemarketing, broadcast, billboards, and magazines) and invested more in digital marketing
which can be more entertaining and interactive. Both traditional and digital marketing strategies are
employed by the company to reach the target audience and promote its value proposition.
In terms of traditional marketing, billboard advertisements have been considered as an important
means to show the brand image and catch customers' attentions. Customers can notice numerous
billboard advertisements of Nike in supermarkets, subways, stations, and LED screens, which can
greatly improve Nike's brand awareness. Besides, TV advertisements have played a significant role
in promoting brand value proposition. Nike invites many famous athletes and stars to endorse the
brand and utilizes celebrity charm to market its products. Meanwhile, Nike has taken advantage of
big sports events, such as Olympics and European Cup, to enhance the visibility of the brand and its
products.
As for digital marketing, social media, such as Instagram, Twitter, and Youtube, have become
important platforms for Nike to communicate and interact with its audience online, thereby increasing
its customers' emotional connection with the brand and stimulating their purchase intention (Sheth &
Kim, 2017). Generally, compared with its competitors, Nike has a higher engagement level of
audience and a bigger amount of followers and subscribers. Moreover, Nike has established its own
website where customers can get a lot of information concerning the company and its products.
Through official website, Nike also provides customized service for its consumers to allow them to
participate in the design of their own shoes. For example, Nike initiated BetterForIt Campaign on
social media in 2015 to encourage women to share their fitness and health experiences. Hence, a
feeling of competition and motivation can be formed in online community, giving other people an
inspiration to change their lifestyle.
6. Conclusion and discussion
Depending on the customer-focused brand value proposition and novel marketing strategies, Nike
has become one of the most socially-conscious brands around the world in contemporary era. The
brand value proposition of Nike is to provide accessible, innovative, fashionable, and high-
performance shoes for its customers in every sport. Effective emotional branding has made Nike build
a strong emotional resonance for its audience and form a prominent brand cognitive. Professional
athletes and young people are Nike's primary audience.
Compared with other sports brands, Nike possesses superior marketing capabilities. Inviting
influential celebrities to endorse the brand and creating distinctive brand stories for different segment
markets are two important marketing strategies Nike used to develop new markets and build brand
awareness. In recent years, Nike has been committed to digital marketing and taken advantage of
social media to establish various virtual communities and then strengthen the emotional interaction
with its customers anytime and anywhere, which has played a significant part in increasing customer
loyalty to the brand (Joshi & Nema, 2015). Nevertheless, Nike has faced enormous challenges in
improving the market competitiveness of its products and stimulating the purchase intention of
different customer groups, especially under the impact of on-going Covid-19 pandemic.
Consequently, some recommendations are propounded to deal with these challenges.
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Hardly can it be ignored that investing in technology strategically is the key to maintaining Nike's
industry-leading position because the company can gain a substantial advantage in athletic footwear
and apparel industry. There is no doubt that the earlier Nike adopts cutting-edge technology, the more
likely it is to seize market opportunities. Thus, Nike should keep pace with the fast-changing market
dynamics caused by technological development. Meanwhile, the company needs to stimulate its
endogeneity of innovation by changing organizational culture and accelerating its digital
transformation.
More importantly, Nike is an excellent storyteller since the company is good at creating distinctive
brand stories and advertisements. In general, Nike connects with its followers all over the world by
creating various sports stories which can establish an emotional bond between the brand and its
customers (Nakhil, 2019). This is the reason why Nike has sponsored many well-known athletes,
such as Cristiano Ronaldo, to narrate brand's stories. In the context of Covid-19 pandemic, Nike can
integrate more anti-pandemic stories into advertisements to show its corporate social responsibility
and build a trustworthy brand image. Additionally, millennial consumers has become Nike's main
target audience with diverse tastes and demands. Therefore, it is necessary for Nike to understand
their needs and create more appealing stories based on their consumption characteristics in order to
stimulate their purchase intention.
Furthermore, Nike can apply precision marketing to its customers by creating a customer profile
which can help the company convey its value proposition to target audience in a more effective way.
In fact, precision marketing is conducive to enhancing brand differentiation and providing better
experience for customers (Zhu & Gao, 2019). However, in athletic footwear and apparel industry, it
is hard for companies to use precision marketing for every segment market because one product is
impossible to meet all customers' demands, or huge development and production burdens will be put
on the company. Hence, it is more appropriate for sports brands to apply precision marketing to some
particular groups with similar portraits.
In order to offer the best experience for more customers, Nike can make great efforts to develop
differentiated services to attract different market segments and thereby increase company's profits.
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... It gives a thorough breakdown of both internal and external elements that may have an impact on a company's success. Positive qualities and assets that provide a business a competitive edge are referred to as a company's strengths [2]. A company's weaknesses are any places where work needs to be done to strengthen them. ...
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Nike's marketing strategy in China
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NIKE, Inc. reports fiscal 2021 fourth quarter and full year results
  • Inc Nike
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