Nike's Marketing Strategy: Psychological and Public Relations

This case study explores Nike's marketing strategy that focuses on psychological and public relations tactics to build a positive brand image and inspire its audiences. It discusses Nike's collaboration with Google and Apple, its use of emotional branding, and its corporate social responsibility initiatives. The study also highlights Nike's focus on creating newsworthy shoes and its association with world-class athletes.

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CASE STUDY ON MARKETING
CASE STUDY ON MARKETING
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INTRODUCTION
Nike was established in 1962 by Portland coach bill Bowerman and Phil Knight. It
was initially known as Blue Ribbon Sports(Berge & Gaede,2017).. These two sports fanatic
joined hands to provide low-cost, high-tech running shoes for its audiences (Nisen,2013). The
two geniuses decide to import shoes from Japan into the States from the Japanese supplier
Onitsuka (now known as the Asics). The brand started off with sportswear, shoes and
equipments. However, due to some differences the relationship between the suppliers and Nike
withered away (Berge & Gaede,2017). The brand had to start from scratch and pave its way up
to where it is today. It had to overcome considerable amount of difficulties from all quarters.
Nike’s first office was a tiny room next to a bar (Knight,2016). It got its first ever brand
recognition in the year 1972. The brand produces a wide range of sports equipments like sports
shoes, running shoes, football, basketball, golf, tennis and more. The brand focuses on the
youth of the generation (Berge & Gaede,2017).
In the early years, Knight and his team had to compromise with the quality of the shoes
due to the shortage of funds (Knight,2016). However, the team had an eye for details and came
up with the idea of shoes that were full of personality and sophistication (Knight,2016). They
paid equal attention to the presentation of the shoes and the boxes. Knight knew that their
shoes had to be stylish (Knight,2016). Nike shoes were flashy and came in different colors. The
focus was later made on creating lighter shoes for the consumers (Knight,2016). The company
was also the first ever company to start a business deal with Japan after its frosty relationship
with America after the Second World War. It is shocking that Knight himself never believed in
the concept of advertising (Knight,2016). The founder thought of it as a waste of budget
(Knight,2016). This changed gradually when Phil began to scale the business and talk to
advertising agencies. Weiden and Kennedy Advertising Agency created the famous and
inspirational slogan ‘Just Do It’ (Angeles,2014). The slogan became the new anthem for
everyone (Brohi et al.,2016). Nike has collaborated with many reputed and renowned brands
and faces. Once such hyped collaboration has been with Kendrick Lamar. In the summer of
2013, Nike returned to the SB line with an updated version of the Tennis Classic inspired by
the mid-1980s. The Tennis Classic collection had added Zoom Air technology and came in
classic colors of black, white, blue and tennis ball style “Volt” yellow.
PSYCHOLOGICAL MARKETING STRATEGY
In order to reach where it is today, Nike has let their ads speak for itself without
screaming for brand recognition. Nike has taken up the psychological mega
marketing concept when it comes to advertising and branding
(Leug,Pedersen&Clemmensen,2016). Their ads rarely mention about their products
instead it induces emotions in the customers. This strategy is known as ‘emotional
branding’. Their ads are uniquely crafted to evoke specific emotions and feelings in the
minds of the consumers (Childs&Jin,2018). Nike uses the concept of hardships and
human predicaments to invoke the human heart. Nike believes that humans can
overcome any adversity and thus the brand tag says, “Just do it.” Therefore, each ad is
designed to motivate and inspire us (Brohi et al.,2016). Nike has used the ‘watercooler
moments’ experiences to spread their brand name from door to door. This is something
Nike is an expert in doing. They very well understand how people think and act. It is a lot
more tougher to create marketing concepts of one does not know the demands and
needs of the customers (Kesavan,Bernacchi&Mascarenhas,2013). Therfore, creating
compelling content is of significant importance. Having sound knowledge of the key
principles of psychology can lead to a good market position for the company (Martínez-
Mora&Merino,2014). One of the major game-changing moments for Nike was its

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collaboration with Google to make ‘Nike Phenomenal Shot’. Whenever a Nike athlete
scored a goal, display ads were delivered to all the fans in actual time of the event. The
fans could rotate their players around in 3D, use personalized filters, captions and
stickers and share the ‘Phenomenal Shot’ on social media (Mahdi et al.,2015). Not less
than 500,000 “Phenomenal Moments” were created. Another, mega marketing strategy
that Nike implemented was when it created its own YouTube series, ‘Margot Vs Lily’.
The best thing about Nike ads is that they team up with world-class athletes like Neymar
Jr, Ronaldo and others. Nike’s brand strategy is about the twist in the plot in their ads
where ordinary humans are depicted as both the hero and the villains of their own
destiny.
According to Graeme Newell who is an emotional marketing expert, Nike uses the
technique of self-pity, loathing and determination to make an impact on its consumers and build
loyalty. Thus, customer loyalty is strong in this scenario. Nike’s goal is to build a powerful brand
image and inspire its audiences (Cheah,2013). Nike uses the archetype age old tale where the
hero has a great enemy or several enemies that he has to fight against. Nike tells its audience
that the enemy is the mind. Therefore, the mind needs to be positive and focused. We should
not be bogged down by the dirty tricks played by the mind. Nike acts as a guardian angel that is
empathetic and supportive towards the humans in their struggle (Davis,2014). The brand knows
our internal battles and urges us to overcome them. The battle begins every morning as the
alarm goes off and it is still dark outside. Nike understands that every human being can identify
with an internal foe. Nike has portrayed us as the hero of our own story. Nike lost to Reebok in
1980s when it lost the remunerative aerobics market to Rebook. From then onwards, Nike has
worked itself up to reach where it is today. Nike collaborated with Apple’s iPod to create an
activity tracker that tracks the distance and speed of the user throughout a sensor attached
inside the sneaker. Thisbground breaking technology has resulted in the rise of Nike’s profit by
81%. Nike, even today leads the industry of sneakers when it comes to wearable technology,
design, comfort and more. Another way Nike executes its psychological marketing position is by
associating the achievements of the star athletes with the brand. This affirms the position of the
sneaker brand in the market.
Nike has always managed to create newsworthy shoes. There has not be one sneaker
by the giant brand that has not created enough sensation in the market. Shoes and sneakers by
Nike has always been the “next big thing” (Berge&Gaede,2017).. The Hyper Adapt 1.0 by Nike
had inbuilt sensors that molded the shoe to the original shape of the foot of the user when they
would step in it. Nike is known for making some really fun ads that people find entertaining yet
relatable. An ad by the world’s best sneaker brand says “Winner Stays” (Berge&Gaede,2017).
This ad by Nike features young teenage boys who transform into Ronaldo, Neymar Jr and other
famous footballers. The footballers were once ordinary kids just like us. The brand constantly
reminds us that in spite of being ordinary we can do extraordinary things and become
unrelenting winners(Berge&Gaede,2017). The fact that we can identify ourselves with the
brands is a big bonus for the legendary shoe- making brand. The brand also appeals to the
younger generation as it represents itself as cool, stylish and sporty- something that attracts the
next generation. Therefore, Nike is not just a brand but it is you and me. The founder of Nike,
Phil Knight in his book ‘Shoe Dog’ mentioned that he always believed that shoes were boring
(Knight,2016). He knew that the shoes should mean something to the person who purchases it.
The buyers should be able to emotionally relate with the shoes. The sneakers should stand for
something meaningful (Knight,2016). Therefore, Nike is not just another shoe company. It has
been shaping up people’s lives by motivating them and driving away their fears. The brand has
been synonymous with names like Kobe Bryant, Tiger Woods, Michael Jordan and many more
celebrities.

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PUBLIC RELATIONS STRATEGY
Public relations is an integrated process which aims to build positive image of the
company through media intending to increase the goodwill of the image. It helps to promote and
popularize the product among its respective customers (Theaker, 2017). It helps in acquiring
new customers, retaining the old ones, regaining the lacklustre market thereby increasing the
overall sales of the product. Nike has various ways to increase the sales through a strategic
public relations tactics. Writing a press release where the new products being launched or
renovated products are promoted. This strategy not only informs the respective customers of
the respective product but also helps to increase the customer base of the product. This is the
most appropriate way of informing public, however, collaborating with a sports star will increase
the visibility of the products(Grunig, 2013). A sports star can be well associated with the Nike
shoes as they are the prominent customers of the shoes which adds a goodwill insignia to the
product. Media coverage is also more when a celebrity is associated with a product which
persuades the customer to purchase the product (Smith, 2013). Nike can associate with a
celebrity to launch innovative products which will attract more media coverage by the media
persons thus capturing a wider customer base.
Nike can launch an online campaigns on social media where the public is asked to share
their best Nike shoe stories. The wining customers can win goodies, gift hampers, coupons,
discounts and many other things which will act as a robust feedback mechanism. The
feedback can be both positive and negative which will help the company to fix the loopholes
if any (Qrunig &Qrunig, 2016). It will add a personal touch with the top ranked customers and
add one to one contact with the customers. This will ensure the company to build its
reputation in a cost effective way. Further, it is not a time consuming process as the
respective customers and the generation of today utilizes and prefers the online medium of
communication (Illia, 2013). The youth are proactive users of social media like Facebook,
twitter, integral and other mediums. Digital medium in public relations strategy will ensure to
cover a larger group of people, thus increasing the public reach and visibility of a particular
product. Nike officials need to be more accessible to the media and conducting of interview
with the key staff such as CEO, Chairman, director, president, vice president and other key
officials will garner more attention by the media personnel thus creating headlines, public.
These officials when share there company’s policies, frameworks and other information it
creates a keen interest among the public at large (Valentini, 2015). The rivals are also keen
about the company’s crucial information to survive in a cut throat competitive market. Nike
officials can conduct marathon popularizing the idea of healthy mind and body which can
attract the customers who tend to remain physically fit. Marathon attract a larger public and
the registration fee earned through the marathon can be contributed to an orphanage or can
used as fund to gift Nike shoes to the young children of orphanage. This will inculcate a true
spirit of compassion in the public and will have a positive impact on the public. Further,
propagating the vibrant idea of fitness is creative approach to reach out the customers
(Pavlik & McIntosh, 2013). Growing pattern of obesity in the urban areas is a concern which
can be tackled through promotion of the idea of the fitness as core to the strategy. The
company officials are mainly confined to the four walls hence participating in the public
events like marathon will attract the public to remain in touch thus help in better positioning of
the product in the market.
Nike should maintain a proper public relations through its activities of corporate social
responsibility. Corporate social responsibility attempts to contribute towards the welfare of
the society by contributing its part towards the betterment of the society. This can be major
tool to build a positive perception of the company in the minds of the customer. In the current

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environmental concerns like that of global warming and climate change, company can run
initiatives like planting trees in their neighborhood. A plantation drive by the company will
enable the company to touch upon the major issues plaguing the people. Air pollution which
has been raging and treated as a major killer of the people can be focused through this
plantation drive. This shows the company is concerned about the public health. These
initiatives helps the company to connect to a larger mass of people thus establishing an
understanding and instill a trust and confidence among the public(Verčič&Sriramesh, 2015).
This is important for the long term sustainability of the company and loyalty of the customers.
Maintaining regular contact with the media persons, inviting media persons to the product
launches, events, parties of the company enable the company to remain visible in the news.
The company should also collaborate with other fitness products like fitness watch,
events conducted by gymnasiums in the heart of the city to promote connect to the people more
closely (Olasky, 2013). The youth today is more conscious of its health while a major part of the
audience is splurging on junk food thus entrapping themselves in the vicious circle of
obesity.The company should adopt innovative means of communication and ideas not only
externally but also within the organization to ensure employee satisfaction. The employees are
the main proponent of spreading the perception about the company in the external environment.
Moreover, employees acts as representatives of the company in the market. Hence, Nike
should build efficient channels of communication within the organization. A dedicated team of
public relation department can plan out a public relations strategy through pilot projects
conducted over a period of time. After the completion of the pilot projects, the loopholes can be
assessed and fixed accordingly. The appropriate and relevant strategies and then be integrated
thereby eliminating the shortcomings. After a successful rolling out of the project and proper
assessment, the company can take execute on pan basis (Grunig, 2013).
ECONOMIC MARKETING STRATEGY
The business performance of Nike, depends upon the economic state, where it sells the
athletic footwear and the other sports shoes. The economic external factors are also important
for determining the Nike’s performance and its pricing strategy. The factors are the stable
economic condition of the developed market, the rapid growths in the developed market, this
imposes both theats and opportunities of the developing market and the slow down of the
Chinese economy also imposes threats on theNike’s business performance. The developed
market like the business markets in the United States, are relatively stable for Nike as this
market shows the stable growth of the company in these markets. Although, the rapid growth of
the developing markets also creates threats upon the business performance as it increases the
labor’s cost in the supply chain and the production facility of the company (Linna, 2018). The
slow down of the Chinese economy also creates threat for the business performance as the
business activities are mostly dependent on the Chinese business market for the sport shoes
and other. Therefore, all these external factors creates great impact on Nike’s business
performances and also determines the opportunities of the company as well as the threats of
the company (Ionela-Carmen, P. I. R. N. E. A, &Raluca-Andreea, 2015).
The price of the shoes are determined by Nike to maximize the profits for attracting the
desired share of the international market. In most of the cases, Nike’s investment for
technologyremains linked with the strategy of offering the products at a premium. The company
still follows and consider the current market while ensuring the price points and the price ranges
of the shoes. Based on the product, place and promotions of the product, the pricing strategy
are determined and there are two pricing strategies followed by the Nike business that is value-
based pricing strategy and the premium pricing strategy (Leroy, 2014). Nike considers the
product value perception of the consumers in implanting the value-based pricing strategy.

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During the marketing mix, this value helps the company to find out and determine the maximum
price; the customers are willing to pay specifically for the Nike sport shoes. In the context of the
premium pricing strategy, the pricing ranges remains high and it increases the value of the
brand and increases the value of the company as well as the quality of the product in the
competitive business market (Cotrim, 2015). The premium branding pricing strategy also
involves the advertisement of the shoes by involving the famous high profile celebrities. From
2014, the business has successfully increased the price of the product and has also generated
the higher sales and revenues. This trend continued as the company enjoys the increasing
sales by increasing the product’s prices (Viardot, 2014). Depending on these changes, the
company adjusts its price ranging and during the marketing mix, the company successfully
implements its pricing strategy for increasing the profit by emphasizing the high value in
promoting the shoes and its brands (Teufel & Zimmermann, 2015).
Nike outsources its production to more than 1 million of worker in the factories in China
and various countries all over the world. In 2013, the company declared that the retail sales of
the Nike branded sneaker has totaled $2.25 billion approximately 30 years after the brand
launched. By 2015, the total global sales of Nike brands amounted alone to $50 billion
approximately. In 2014, Nike has reported that the general cost of manufacturing one pair of
sneakers is $28.50 and then it need to be shipped to various countries (Markham, 2016). The
cost breakdown approximately to $27.50 for per pair for the Chinese factory labor and the
overhead costs and the shipping cost. The company declared at 2014, that they makes profit of
$4.50 on each pair of shoes, the wholesalers pays about $50 for per pair of sneakers and the
retailers marks the shoes 100% to recoup cost (Williams, 2015). In recent years, the cost of
labor in China, have created great impact on the profit margins. The retail sneaker prices
recently reflects the overall increase in both the marketing and the manufacturing cost. The
sneaker companies competes to build and maintain the marketing brands and in making it
desirable for meeting the target markets. The celebrities and the social marketing cite plays an
important role in determining the pricing range of the product and this creates a great impact on
the rise of prices at which the sneaker reaches the market (Li,Nukala, & Mohebbi, 2013).
Nike targets its customers those mostly embraces the product intimacy and are not
bothered about the product and by this Nike imposes the higher prices of the product for
competing and for maintaining its brands value. Mostly, this pricing strategy are used for calling
for the higher prices of the product and also for pushing the perceived product value. The
company, among the customers, has also established this that the customers considers the
product is of the high quality and they are most likely to pay the higher price more often and also
consistently. This raised the pricing strategy more and it became most profitable for the
company thus they had made those customers as their targeted customers. Whenever the
customers are able to develop their product intimacy , then they make more of their known
persom associated with the product. This provokes them to pay whatever the price is quoted on
the product, the only condition is by seeing the Nike logo on the product, the customers can pay
whatever the price may be. While determining the price range of the product, the company
focuses on the targetes customers and the proper selection of the targeted customers has
made it one of the competing brand in the global market (Kreng & Wang, 2013). The price
ranges are also determined by having the information of the same product prices of the close
competing brand. This is necessary for the company to determine the price according to the
competing brand as it will enable the company to maintain the competence in the global
business market.
CONCLUSION

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Nike is a well-known brand and it is recognized by its Swoosh as the brand logo.
However, in order to achieve its vision Nike should implement the above-mentioned economic,
psychological and public relations marketing strategies. Nike can develop its own strategies in
such a way that it can also change the lives of millions of women, children and people in
general. It should not only aim for personal growth but also for the growth of the human
community at large. Nike should take the advantage of the ever- growing technology and
expand its business. It should also make it presence feel in under developed and developing
countries like Vietnam, Bangladesh, Nairobi, India, Afghanistan and others. Nike can help in the
upliftment of these countries and make a positive impact on these countries. If the brand is
engaged in any kind of social work, it will create goodwill for the brand and build a positive
brand image to its consumers. Innovation plays a major role in the marketing of a product. Nike
must understand that the audiences need products that will be different and unique. Hence,
innovation has to be updated on a daily basis. Nobody will buy something that is offered by the
some other brand or something that is already old. Pricing, as mentioned earlier is also of
greater significance. The customers will be attracted to a sneaker brand that is giving the same
quality sneaker at a much lower rate. Hence, the sneakers should be made a little more
affordable, especially in the third world countries. Nike should manufacture sneakers for all.
Nike is often seen as a brand that makes high quality, expensive and luxurious sneakers for the
upper class people. This clichéd thought should be done away with. The brand should focus in
making affordability its first priority. Everyone, irrespective of their background and income
should be able to wear Nike sneakers. Nike is also known for collaborating with FIFA and other
world class leagues. It should focus on local matches and for a change sponsor shoes to the
players. Nike can help find hidden talents in unknown places all over the world.
Nike can implement many more strategies for the expansion of its business. However, it
should implement strategies retain its loyal customers and increase brand awareness in the
places where it is still unknown. Nike should also focus on the young children and older
generation. It produces shoes only for sports fanatics and athletes. It is time that Nike starts
making shoes for young children. It should start manufacturing affordable, high comfort shoes
and sneakers for the old people. This will take the brand to the top notch. Not only the younger
generation but the older generation will also love the brand. Hence, Nike should keep in mind
about expanding its target audience. When the brand will take care of these factors, it will
emerge as one of the world’s most loved brands.

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