Nike's New Marketing Strategy

Nike is no longer a leader in the sports marketing industry. It has implemented a more stringent management system, and its business performance has also climbed steadily.

Nike's "Innovation Kitchen" design studio is located in a 4 storey building with exquisite shape. In many ways, it can remind people of the start-up period of the company.

The headquarters of Nike is located in Beaverton, Oregon, covering an area of 70 hectares. The headquarters building is a building called Mia Ham (Mia Hamm). The innovative kitchen is located on the first floor of the building.

The reason why Nike is able to stand out in the sports shoes industry worth 35 billion dollars is because of Nike sports shoes, and the innovation kitchen is the birthplace of Nike sports shoes.

In the think tank with sneakers as the working center, designers find creative inspiration from various fields, from Irish style architecture to the circular arc of violin on the Viola family.

On the wall of the office shows every pair of Jordan shoes (Air Jordan) produced by Nike, and the workshop is filled with new design sketches of sneakers.

Innovative kitchen is a restricted area for most visitors and even for most Nike employees.

In a banter tone, the company wrote on the sign on the door: "the kitchen is heavy, and the idle people are free from it."

About 20 years ago, Tinker Hatfield, Nike's star designer, designed Jordan shoes here, which is also the best seller in history.

At present, Hatfield and his team are accounting for Nike's achievements in the 2004 Athens Olympic Games.

They made a series of super running shoes for the Olympic Games, including the "Monsterfly" designed for sprinters, and the "Air Zoom Miler" running shoes designed for long-distance runners. The former is a unique and attractive sprint shoe.

As a global company, Nike provides sponsorship for athletes from all over the world.

These athletes made brilliant achievements in the Athens Olympic Games, including 50 gold medals. In the 1500 meter long race, Morocco player Hisham Quiroi won the gold medal, Kenya player Bernard Laget won the silver medal, and Portuguese Rui Silva won the bronze medal.

All these athletes wear "Air Zoom Miler" running shoes while American sprinter Sean Crawford won the gold medal in the men's 200 meter dash race with Nike's "Monsterfly".

In addition, Nike's equipment is also outstanding in the public attention competition.

The famous hooks on the sneakers worn by the top 4 men in the 100 metre race.

establish one's authority

However, the most fascinating story of Nike is not on the playing field.

Nike, which is reckless and reckless, has been known for its contempt for top level sports events. But now the company that is good at guerrilla tactics has begun to go against it.

8 years ago, Nike moved the company's giant hook sign to Atlanta's basketball court without knowing anything about it. It launched a sneak attack on the sponsor Champion [Sara Lee Corp], a brand under the competition of Sarah.

When the photographer turned the camera lens to the audience's stand, the TV audience clearly saw the huge sign of Nike, but Champion did nothing in the competition.

Nike has even signed up to the US Olympic delegation to become an official sponsor of the US Olympic team's participation in the Beijing Olympic Games 4 years later. In addition, Nike has begun to converge its anti authority attitude.

The reason is very clear: when it comes to sports marketing, Nike is itself an authority.

30 years ago, Philip Nate founded Nike. He used to sell sneakers in the trunk of the car at track and field meetings.

In the 2004 fiscal year, Nike's turnover has exceeded 12 billion US dollars. At this time, Nike has finally developed.

Bill Bowerman is a track and field coach at University of Oregon. He founded Nike with knight.

With a spirit of innovation, he studied his wife's cookie baking mold carefully, and finally designed a new soles for athletic shoes.

Today, this spirit of innovation is still regarded by Nike as a standard.

However, when it comes to other businesses of the company, the situation is quite different.

In the past, in order to enhance the social popularity and expand the market share, Nike's senior manager worked entirely with intuition and tried every means to make use of every means at any cost, but now it has become a history.

Scott Bedbury, former marketing director of Nike, recalls how he introduced nad's advertising budget in 1987.

Bade bury asked the company to increase the advertising budget from $8 million to $34 million. He prepared everything for the budget to pass.

However, Nate put forward a question that Bade bury had never considered before: "how do we know that your budget is enough?"

As a result, Nike spent $48 million on advertising expenses that year.

This company, which is full of innovation in sports marketing, is reckless. It has always been spending a lot of money.

Last year, the $90 million advertising contract signed by Nike and Lebron James, the famous basketball player, is the best example of this.

But in the Nike company after rebirth, you rarely see a similar deal.

In recent years, Nike has begun to shift its focus to the daily management of the company, for example, to create first-class information systems, logistics systems and supply chain management. In the face of these efforts, Nike is full of enthusiasm as if it were planning marketing strategies and designing the most advanced sports shoes.

Nike is gradually seeking the right balance between the spirit of innovation and the daily management of the company.

Moreover, it is also increasingly relying on the newly established financial and management system in promoting the development of the company.

Robert Tumi, a stock analyst at RBC Dain Rauscher in Seattle, said: "the company's top executives are very clear about how to manage the innovation process and turn it into a company's profit.

Compared with the past, this is the most obvious change of Nike. "

In mediocrity?

In the past, Nike people basically relied on intuition to manage the company.

They decided to determine the output of sports shoes by guessing, and hoped to fill the shelves of retailers with these sports shoes.

Such a situation will never happen again.

Nike has improved its computer system in an all-round way, so that it can send more products to more parts of the world faster.

By systematically exploring new markets, Nike has become an industry leader in overseas markets, including some of the market segments that Nike once disliked, such as football and clothing.

Nike has also strengthened its management team.

After experiencing setbacks in the company's takeover pactions, Nike gradually learned how to manage these brands more effectively, such as Cole Haan, a gentleman shoe manufacturer, CONVERSE, CONVERSE, skateboard equipment manufacturer Hurley International, and straight row roller skates and ice shoes manufacturer Bauer.

In fact, expanding its brand portfolio is an integral part of Nike's overall development strategy.

For many of the faithful, these changes are nothing more than deviant.

Lebron James is cool, and the matrix structure and company acquisition are completely different.

Nevertheless, the new strategy adopted by Nike has worked.

In the 2004 fiscal year ending May 31st this year, Nike showed the world a great change in its financial position.

It was an unforgettable year for the company: Nike's profits recorded a record high of nearly $1 billion, an increase of 27% over the previous year, while the company's sales rose 15% to 12 billion 300 million dollars.

Not only that, the number of Nike's products orders in the world has risen sharply, up 10.7%.

While the North American market has experienced 8 quarters of continuous downturn, the number of orders increased by 10%.

This series of business performance has made investors smile. In their eyes, Nike is no longer a company that runs its volatile income and runs on fashion.

Today, Nike still maintains the rapid development momentum that can create large amounts of cash.

In the last financial year, Nike's discretionary cash flow amounted to $1 billion 200 million, and the return on capital investment of the company increased to 14% from 4 14% years ago.

Last fall, Nike's share dividend increased by 43%, and the Company repurchased $1 billion worth of stock.

The company plans to repurchase $1 billion 500 million in stock in the next 4 years.

Not long ago, Nike's stock trading volume reached $78 per share, an increase of 37% over the previous year, while the standard & Poor's 500 industrial index grew by only 9% during the same period.

In fact, the company, once famous for its rebellious spirit, is moving towards a respected blue chip company.

But who would have thought of all this?

Nike believes that after the implementation of the new management system, the company's annual profit growth rate can reach 15%, while the income growth rate will remain at a relatively high single digit level.

Wall Street is also optimistic about this view.

"Nike's current financial position is probably the best in nearly 10 years," said John Jean, an analyst at Susquehanna financial group in Pennsylvania.

In fact, some analysts believe that by the end of 2010, Nike is expected to become a company with an annual turnover of US $20 billion.

If a few years ago, this idea would be laughed at, Nike's sales began to decline after reaching 9 billion 600 million US dollars in 1998.

Even when Nike's super contract star and basketball giant Michael Jordan quit the basketball world in 2003, Nike's innovation capability seems to have dried up.

When consumers like to seek new changes begin to turn their attention to brands such as "Skechers", "K-Swiss" and "Newport", Jordan's basketball shoes with a price of 200 US dollars on each counter on the retailer are gradually neglected.

On the other hand, Nike has to deal with allegations of exploitation of Asian shoemaking workers.

The lack of new sports shoes and troubled company acquisitions did not change the company's embarrassment at that time.

Nike, which is eager to reinvigorate its momentum, has begun to raise its output substantially, but the result is that it has sent more sports shoes to customers that are not interested in the market.

As for the company's financial system, we can refer to the following facts: from 1997 to 1999, Nike did not even have a financial controller.

Later, Nate invited Donald Blair from PepsiCo Inc to be the chief financial officer of the company. Blair said, "our task is urgent."

In order to travel around the world and pursue other hobbies, Philip Nate once left Nike.

When Nike was in danger, Knight returned to the company.

It was 1999, and co founder Bowerman was dead. Nike is still struggling.

Knight, who is 66 years old, must solve all problems.

At a company conference, Knight stood in front of thousands of company employees, admits that the manager of the past management company failed.

Next, he made a self-examination.

Steve Miller, former global sports marketing director at Nike, was also present. He recalled: "he said he had not done his duty, and he said he could have done something better.

He was able to admit his dereliction of duty so frankly, which is quite surprising from my own point of view.