An Enquiry into Branding at Nike - Essay Example

? Company Case Analysis Project An Enquiry into Branding at Nike 0 Introduction Branding is an important aspect of marketing (Ashworth and Kavaratzis, 2010). It is a central theme in the development of the marketing plan which lies at the heart of corporate strategy (Kumar, 2009). Over the years, Nike has been one of the most popular brands around the world (Davis, 2010). The exposure that Nike enjoys around the world for their sporting brands are so high that most people can easily identify the brand. The success of Nike's branding drive is so glaring that most people it provides an exemplary platform for other businesses emulate and attempt to re-produce and recreate. The aim of this project is to examine Nike's branding strategy in order to identify the structure, challenges and recommendations for potential improvement. In order to attain this end, the following objectives will be explored: 1. A critical analysis of the strategy for success used by Nike over the past two decades. 2. An examination of the current challenges of the company. 3. Recommendations for the improvement of Nike's existing branding strategy 4. An identification of the branding model used by Nike which can be applicable to other companies. The report will involve a critique of the branding systems and strategies that Nike has used to attain results in its operations. It will analyse the dominant patterns and trends that are used by the company and the main approach which has resulted in the successes of Nike as a major global sports brand. The report will entail a review of the methods and approaches used by the company. The fundamental approach will be through a review of relevant literature. The review will cover the various internal dealings of the Nike and how it has paid off in the area of branding. 2.0 Literature Review This section will examine the important elements and components of the research and study. The section will critically evaluate different groundbreaking definitions and ideas that form the basic framework of the study. They will serve to define the core aspects and of the study and provide an understanding that will create the foundation for the fieldwork and actual research that will be conducted in this study. 2.1 Brand The question of what a “brand” is plays a significant role in this whole study. This is because the research provides a discussion brand-related matters in Nike, hence it is important to understand the concept of brand and its role in organisations' operations and activities. Kotler defines a brand as “a name, term, sign, symbol or design or a combination of this intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competitors” (Knoweles et al, 2010, p91). This implies that a brand is a unique identity or a unique representation that defines a given company's product or offering. This makes the company's offering different from what other companies in the industry are presenting to companies in the industry. To this end, Nike's offering is the popular symbol which makes it different from other competitors like Adidas and Puma who have very different symbols. The idea is to get a unique representation that is protected by law which sets each of the sports manufacturers apart from the other manufacturers. A brand creates and identification for the products in a given entity and builds an emotional connection that acts as basis on which communication with consumers can proceed (Schultz, 2009). This implies that the brand creates a basic and simple representation that other consumers can easily build some kind of connection to. The fundamental position of branding is to provide a means through which easy communication can be conducted. In other words, a brand creates an all-encompassing image which the consumers can identify with through minimal efforts. Once a brand is created, various concepts and ideas of the product offerings are woven into the brand and advertising and other marketing communication ventures are conducted through the brand and this makes it easier for the company to build a strong relationship with the brand and maintain long-lasting relationships with the company in question. 2.2 Corporate Branding Most writers make a distinction between corporate branding and product branding. The term “corporate” is often used in relation to an organisation or company whilst the term “product” refers to one of the goods or services that such an organisation offers for sale to consumers. Ormeno (2007) sums the concept of corporate branding in a statement that “a corporate brand differentiates the brand of a company from that of another company and it seeks to provide a broad portfolio for the different brands of a given entity to be compiled under one broad portfolio for efficient and effective marketing and promotions” (p17). This implies that a corporate brand serves two purposes. The first is to create a portfolio that sets the company apart from other competitors. The second purpose is that corporate branding provides a unified mechanism and system through which the different products of the company can be easily and conveniently promoted and communicated to the public through a series of unified campaigns that creates an overall exposure of all the products and services in the portfolio. Corporate branding has grown in popularity in the past two decades because of the changing conditions in the global market place and the connection to corporate image (Schultz, 2009, p28). This statement implies that corporate branding has become more and more common and more popular because most companies and organisations now operates internationally. Hence, it is much better to have a single unified corporate brand identity in order to create a platform and system for the promotion of the company's brand around the world. This creates a healthy blend of globalisation and localisation of the strategy of a company, since the company has all the necessary brand infrastructure which plays a vital role in the company's activities. 2.3 Brand Equity Brand equity refers to the ability of a brand to attain results for a firm through two main things: consumer identification/connection and financial returns (Glynn and Woodside, 2009 p120). In other words, brand equity refers to the benefits that a firm derives from the use of a given brand in the representation of its product offering. This often culminates in the ability of consumers to build some connection with the product or service and it provides some kind of consumer interest in the product at hand. On the other hand, the other method of examining brand equity is to look at the financial results that are attained from the brand and its importance in providing better financial returns for the company in question. 2.4 Brand Architecture Kapferer (2008) states that every organisation creates some kind of hierarchy of branding systems and structures which work together to provide brand equity. The order include: 1. Product brand strategy which is unique for each and every product. 2. Flexible umbrella strategy for a class of products on offer. 3. Corporate maker brand strategy. 4. Maker's brand strategy 5. Endorsement brand strategy & 6. Source brand strategy (Kapferer, 2008). Through a combination of these strategies, a company can create a brand infrastructure. The brand infrastructure is expanded and investments are made into the capital base of the company and this is linked up to the marketing strategy of the company. In order to do this, the company undertakes the following four activities (Sanjit and Slater, 2011). First of all, they create a major company or range of brands. Secondly, they integrate the brands into the marketing strategy. Thirdly, they take feedback from consumers and fourthly, they innovate through the feedback that they get. Corporate brand endorsement has proven to be central to brand architecture (Hansen and Christensen (2011). This is implies that the corporate brand gets some kind of endorsement or positive review by a popular personality who is identified and connected with a brand in the portfolio. 2.5 Branding and Marketing Branding must be linked to the market communication of a company (Dahlen et al, 2010 p148). In other words, the branding forms the foundation for the creation of an appropriate message which is sent to the consumers to enable them to build an identification and connection with the brand. The brand position or the brand status provides the basis for the creation of a marketing strategy. This is done by linking the brand position with the marketing mix as a determinant of consumer connection (Van Gelder, 2013). This is because the marketing mix provide a system through which the brand can be put out for consumers to build some kind of affinity and make demands to the product or service that is being offered by a firm. Most branding campaigns in the world today use a blend of local and global strategies (Czinkota and Konkainen, 2010). Thus, most firms go by the slogan Think Global, Act Local and this creates a system through which they create universal brands and then find local partners through which they sell their products in different markets around the world. 2.6 Sports Branding Sports branding is a unique system through which sports companies brand their products and present it out for consumers to buy them. Sports branding is a very competitive niche today because it involves so many global players who use various techniques and means to gain consumer acceptance and linkages. Eksteen (2011) identifies that there are five main levels through which the product and corporate brand is linked to marketing in the sports branding industry. This include: 1. The creation of a corporate brand and a general class for consumers to choose from. 2. The creation of product brands that are used to create specific sports activities. 3. Product design is conducted in a way and manner that reflects the actual brand identity and the niche market that the company targets. 4. Marketing communication is carried out in a way that is in sync with the brand identity and this is used as the basis for different forms and levels of communication. 5. Marketing strategy is created in order to integrate all marketing communication needs into the brand strategy and the brand architecture. Sports branding is promoted through marketing in four distinct phases (Johnson, 2012). This include the creation of brand awareness. After that, the company will seek to create a positive brand image through the communication of the positive aspects of the brand. From there, the company seeks brand equity and after that, the company pursues a quest for brand loyalty (Johnson, 2012). Another aspect of utilising branding in the sports industry is through sports personality endorsements (Blackdrew, 2011). This is a very important aspect of sports branding and sports marketing and it yields a lot of results for all major stakeholders. Sports personality endorsement involves the personalisation of the brand in the promotion of popularity (Blackdrew, 2011). 3.0 Research Methodology The research will be carried out through the study of critical elements and aspects of the Nike Company and its inherent aspects over the past few years. In doing this, the research will be done in three phases that will culminate in a critical overview of internal structures. Phase 1 In this phase, the branding strategy and the branding approaches that are used by Nike. The data for this phase will be collected from secondary sources like journals and books. This will create a broad understanding and broad framework of information about how they have traditionally done their branding. Phase 2 At this point, the research will critically examine the status of Nike's branding. This will involve an examination of the value and the worth of the Nike brand over the past years. The process will be done through data collected from various brand valuation models that have examined the worth of Nike's corporate brand. The fluctuations will be noted and issues will be identified. Phase 3 This phase will be the further investigation of the causes of the changes in the value and the worth of Nike's brand. The process will involve an interview with a professional brand consultant who knows about Nike's internal elements and aspects. The findings will be coordinated and used to provide important feedback on the process at hand. After the three phases are done, the final phase will involve the identification of trends and significant elements and aspects of the study. They will involve the identification of various changes in strategy and an analysis of the branding elements in the company. From there, recommendations will be made about how to improve the current branding position of Nike. 4.0 Results The actual research included various secondary and primary research works. The secondary research included a critical examination of books and other published materials. The primary research was done through an interview with a brand expert. 4.1 Fundamental Elements of Nike Brand Strategies Nike's overall brand strategy involves the use of the Greek winged goddess of victory who was called “Nike” (Weeks, 2011). This portrays the inherent element of victory and total success which the Nike brand seeks to project to consumers around the globe. The Nike brand comes with an element of showing conquest on the battlefield and this puts the brand on the same pedestal as a victorious team or group which will be depicted in sports today. The Nike brand instils myth into the products that the company offers to consumers around the world (Weeks, 2011). Nike positions itself as a brand that seeks to provide new levels of achievements to the greatest athletes in the world. Thus, the fundamental infrastructure of Nike is one of winning and success. This provides the foundation for the integration of winning teams and winning athletes as a depiction of the company's offerings. The following elements define the position of Nike: 1. Position: Nike's brand comes in as an iconic brand with world-class and expensive products. This presents the user as a successful individual who positions himself or herself amongst the best people of his time. 2. Central Theme: The central theme of Nike is to present a unique brand and distinctive logo that comes with a unique and distinctive advertising slogan. 3. Psychological Approach: The Nike brand helps to reflect the state of mind of the consumer. This is one of inspiration and drive (Almaney, 2009). The Nike brand tries to dare the consumers. The brand gets consumers to act to achieve goals and Nike comes with the image of achievements. One of the Nike campaigns that came with the title “Just Do It” indicate the psychological elements that Nike seeks to portray through the linkage to its consumers around the world. The marketing process involves people from different walks of life and this enables Nike to tell its story and get consumers interested in their offerings on different levels (Almaney, 2009). The Nike Brand gets consumers to believe that they achieve happiness, success and power by using Nike products (Weeks, 2011). There are some pillars that hold Nike's brand architecture system: 1. Athlete endorsements: Nike has a major system of athlete endorsements which include various top level athletes who stand up for the brand and show that Nike is a good product. 2. Innovation: Nike also bases its brand on the ability of the sports manufacturer to create new and innovative products that put the consumer and other sports personalities in the best positions of their careers. 3. Anti-Corporate Appeal: Nike's brand emphasizes on the other side of the formal and the well structured system. It is positioned as the alternative lifestyle for the business executive, professional and top class entrepreneur. Thus, the use of some safe but informal designs are used to create and enhanced approach for the company. 4. Communities: Nike forms various communities and teams that are used to promote each of the brands in order to get them to appeal to specific groups. Community ambassadors are given tasks that enable them to build a philosophical view that goes deep into the mind of targeted consumers in that group. The process of promoting the Nike brand is emphasized through a three-stage approach (Kalb, 2013). This process enables the branding to be integrated into the marketing communication systems of the company: 1. A swoosh logo that is visible and used in the media. This provides a very strong impression on consumers and people who see the products. This integrates the brand strategy to the mental ability of the consumers. 2. Focus on athletes and other legendary figures. Nike uses important sportsmen in their fields who have achieved the greatest feats. These athletes like Michael Jordan are presented in a way and manner that makes Nike look robust and strong as compared to other brands. 3. Storytelling is integrated and woven around the brands. Each advert that Nike puts out there is crafted around a storyline that portrays the Nike brand in a positive light. 4. Social responsibility branding is conducted in relation to Nike. This helps the world to connect humanitarianism to the brand itself (Bouchet et al, 2011). 5. Strong differentiation through the product brands as opposed to other third-party companies that produce similar products (Ferrell and Hartline, 2010). 4.2 Position of Nike's Brand Nike's brand has been ranked by several companies and organizations around the world. The table below shows the main rankings by the major market research companies for the 2012/2013 period. Figure 1: 2013 Ranking of Nike's Brand Figure 2: Ranking of the Nike Brand 2007 - 2013 4.3 Explanation of Changes in Nike's Brand In an interview with a brand consultant in SyncForce, he identified that there are some issues that have occurred in the past six years that have had an effect on Nike's operations and activities: 1. Demographics of core customers: The Nike brand is common and more popular with people aged between 25 and 40. However, loyalty for younger people have shifted to other brands and they spend less time on Nike products. 2. Issues with major athletes: Nike has relied heavily on core athletes who act as the “face” of the brand. Nike saw a high degree of stability when Michael Jordan was the core face of the brand. However, in the past seven years, the problems with other brand ambassadors have led to some degree of issues with the brand image of Nike. Tiger Woods, Kobe Bryant and Oscar Pistorius have all gotten into some kind of trouble which has caused a slur on the brand. 3. Inappropriate Actions and Problems in Branding: Nike has gotten into several scandals over the past few years. These scandals include stating that “winning takes care of everything” after Tiger Woods regained his number 1 position in golf. This was heavily criticized around the world. 4. Cultural Problems and Challenges: The Nike Brand is struggling to gain acceptance in Europe and China. This is because the brand lacks that cultural appeal and connection that consumers in these countries seek. This has led to major challenges in trying to build the brand's status in these countries around the world. 5. Social Responsibility Issues: Most people now associate the brand of Nike with money making, corporatism and exploitation. Nike has come under the spotlight for being one of the organizations that exploit workers in poorer nations, pay little taxes for the earning they are making and make too much money with little concern for the wider society. Hence, Nike has come under severe criticisms from groups like Occupy Wall Street for corporatism. 5.0 Analysis The research identifies that Nikes brand is positioned to create a lasting image for the middle class to upper middle class people of societies around the world. Nike's brand present an image of victory and it comes with the central theme of a unique and distinctive product offering. The brand dares consumers to achieve things in their areas of sports and other activities. It gets consumers to believe in happiness and success. The Nike brand provides a foundation for the creation of a strong platform for communication and discussions on how to deal with problems and issues. The brand architecture of Nike creates a plug-in system that allows the marketing communication of strength, innovation, alternative lifestyle and class to be communicated to consumers around the world. Nike's brand also links up to the storytelling capabilities and activities of the company and the brand. This include the athlete endorsements and the innovations which are highly supported and emphasized by the high quality brand of the company. Communities are created and used to promote the brand advertising and the brand enhancement. Nike's branding position is very strong. In 2013, Nike is ranked between position 9 and 60 in nine of the world's most significant and most popular brand ranking activities. This shows that Nike maintains a healthy position in the global ranking position of brands around the world. However, in one of these rankings, Nike's brand has fluctuated significantly in the past seven years. The brand attained its highest rankings of 17 in the years 2012 and 2009. However, in-between these rankings, there are extreme gaps like 45 and 89 in other years. This shows that Nike's brand position has gone through so many significant changes that need very critical explanations and analysis to provide a logical answer to the problem. The interview on the causes of these fluctuations are identified to include brand maturity. This is because from the interview, it is apparent that Nike is more popular with people aged 25 and 40. These individuals grew up in an era where Nike was very popular and had so much appeal. However, people below age 25 are less interested in the Nike brand. This shows that Nike has gotten some issues with appeal to the younger people. This suggests brand maturity, which occurs when a brand loses its appeal to the masses and cannot bring about much changes to the consumers' decisions. Secondly, Nike has gotten some issues with its brand ambassadors. Many of them have been involved in image-tarnishing events which have affected them and tarnished the image of the Nike brand as well. Also, there have been brand communication problems which include the use of inappropriate language which has caused so much upset in different quarters of the market. Brand integration and brand identification is still a problem in emerging markets in China. This shows that there must be some adjustments to enable Nike to meet the demands of these different markets. Finally, corporate social responsibility has been criticized by liberals and other thinkers who believe that Nike's brand stands for some kind of oppression. It appears that there is the need for some kind of brand enhancement to integrate social sensitivity into the actions and activities of Nike as a global sports brand. 6.0 Conclusion & Recommendations Branding is about the identification of a unique identity that defines the corporate elements of a company. Branding leads to brand equity which is about consumer attention and/or financial results for the entity that uses it. Branding forms the basis for marketing communication and it creates an appeal to the consumers. Sports branding is unique and competitive but Nike has been at the forefront of the competition for the past 20 years. The research identifies that Nike's brand is steeped in a name that refers to the Greek god of victory. It provides an impression of victory and success amongst users of their products. Nike's brand shows success and it creates a kind of alternative dressing for the middle class and the rich. Nike's brand provides a foundation for communication and marketing programmes. Nike's brand can be linked and connected to the stories that are put together and they create a platform for athlete endorsements and innovations. Nike's brand position has been very strong. However, there have been a strong case of rise and falls that have occurred to the company's brand image. The problems and issues identifiable with Nike's branding problem include the maturity of the brand, issues with the brand ambassadors, brand communication problems, cultural issues and accusations of corporate exploitation of consumers. In line with these issues, the following recommendations are put forward: 1. Nike must relaunch its brand and create a sub-brand that will appeal to younger sections of the society and other members of the markets who might want to use their services. 2. Nike needs to find reliable and less problematic brand ambassadors. Only the most trusted individuals must be made brand ambassadors. 3. Branding and marketing communication tasks must be examined and re-examined critically before they are put out in the public. 4. The expansion into China and other emerging markets could be done through the acquisition of popular local brands as opposed to trying to impose the western-oriented Nike brand. 5. A new arm of corporate social responsibility branding must be carried out to show the world what Nike is doing for the wider society. References Almaney, J. (2009) Analysis of Nike Inc TIME Magazine Vol 2(3) 2009 Ashworth, G. J. and Kavaratzis, M. (2010) Towards Effective Place Brand Management: Branding European Cities and Regions Surrey: Edward Elgar Publishing. Blackshaw, I. S. (2011) Sports Marketing Agreements London: Springer Boucher, P., Hillairet, D., Bodent, G. (2011) Sports Brands London: Routledge. Cant, M. C. and Van Heerden, C. H. (2011) Marketing Management Cape Town: Juta Publishing Czinoka, M. R. and Konkainen, I. A. (2010) International Marketing Mason, OH: Cengage Dahlen, M., Lange, F. and Smith, T. (2010) Marketing Communication: A Brand Narrative Approach London: Wiley. Davis, J. A. 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