Why Nike is Successful in Sport Area among International Students in the UK - Essay Example

?Chapter One Introduction 1 Introduction The Nike brand of sports apparel represents a large portion of the sportswear industry market on a global level. As the most popular brand of sportswear in the world, the products that they carry have an appeal within institutions with a multi-cultural mix of individuals. While Nike, Inc. has not been without its problems, the branding of the product has been done in such a way as to positively equate their products with a successful and full life, touching the consumer deeper than just through their sense of fitness, but suggesting that it extends into the core of the overall strength of their life (Schultz 2007, p. 114). The power of the branding is evident in the level of success that has been attained. In the United States, Nike sells a minimum of 20% of all athletic shoes sold. In addition, there are 18,000 retail stores worldwide located in over 140 nations (WetFeet 2008, p. 46). In the U.K., Nike holds 13.1% of all athletic shoe sales, with the most competition coming from Adidas at 12.3% (Hoye 2009, p. 161). With such a strong position in the market and a powerful brand that has a deep and meaningful mythology within the consumer philosophical framework, the brand in unlikely to lose momentum in the near future without a catastrophic external impact on its image. It is the intent of this study to give a preliminary look at the way in which the brand holds popularity for international students in a U.K. university environment. While it clearly holds popularity with U.K. students, it can be observed that the brand has a specific popularity with international students as well. The draw to the Nike brand is unique in that it is a single, iconic brand that seems to universally attract consumers. In this study the impact that the brand has on the international student consumer will be examined through a quantitative study and discussed through the findings of that study. 1.2 Background and Purpose. 1.2.1 Background 1.2.1.1 Company History Nike shoes were originally designed by Phil Knight and his original sales were sold out of the back of a green Plymouth Valiant, which is now a legendary automobile (Moore 2006, p. 160). Knight started making and selling athletic shoes in 1964. When he partnered with Bill Bowerman, their first incarnation as Blue Ribbon Sports, with each partner investing 500 dollars, became a small, but lucrative venture. However, one morning when Bowerman was looking at his waffle iron, the first innovation of the Nike athletic shoe was born. Bowerman looked at the iron and realized that by creating a rubberized sole out of a waffle style pattern, the shoe would have less impact and lighten the landing of a runner (Greene 2010, p. 25). Nike, Inc. was born in 1971, the shoe designs being overseen by Bowerman and the business end being attended to by Knight. The famous Nike swoosh was made by Carolyn Davidson for 35 dollars - an amount that was increased in a settlement that later reflected the power of that icon (Greene 2010, p. 27). During its history, the company has grown to a multinational company with a rich a lengthy narrative for the Nike story. The business model for manufacturing is designed around sub-contracting, the manufacture of their lines done in countries outside of the U.S. in order to save as much money as possible from that end. This has led to allegations and proven labour practices that fall outside of the distinctions made through global human rights organizations as proper worker rights. These accusations caused the company to pull the famous logo and take a conservative approach for a short time, but it was proven that the power of the branding far exceeded the negative publicity (Slaughter 2004, p. 261). 1.2.1.2 Portfolio The Nike portfolio is a group of brands that create a large amount of diverse revenue for the corporation. The portfolio includes Hurley International for skateboard equipment which was purchased in 2002 for 95 million dollars, U.S. Cole Haan is a high end designer brand which was the first acquisition made by the company in 1988 with a purchase price of 80 million dollars, U.S. In 1995, Nike acquired a company that makes hockey skates and hockey gear for 405 million dollars. While these purchases have all increased the Nike portfolio, the most profitable acquisition has been Converse, a maker of sneakers that have a retro-styled design aesthetic. The company was purchased in 2003 for 305 million dollars, U.S (Taylor 2008). Geoff Taylor, Nike Director of Risk Management issued a report that listed the overall statistics of the diverse interests of the company as the following: Revenues $14.9 Billion U.S 26,000 Employees 47 Countries hosting operations Central Headquarters in Beaverton, Oregan, USA The current breakdown represents the approximate earnings from each sector: USA 5.7 Billion dollars, EMEA 4.3 Billion dollars, AP 2 Billion dollars, Americas (other than the U.S.) .9 Billion dollars, and from other regions, 1.9 Billion dollars. 1.2.2 Purpose of the Study The purpose of the study is to determine the power of branding as it crosses international borders and closes the gap between cultures. Nike has been chosen to represent this concept because of the global power of the Nike brand and the prevalence of the brand in the U.K. universities amongst both foreign and national students. Understanding the power of branding leads to a better understanding of culture as it affects the ways in which people behave. Disciplines such as marketing, anthropology, sociology, and psychology all benefit from a further understanding of how a culture behaves. This study is intended to deepen that understanding through the perspective of a singular demand for a specific brand that crosses cultures in a multi-cultural environment. 1.3 Objectives and Research Questions. 1.3.1 Objectives The following objectives will frame the study in order to create boundaries of research. Within these objectives will be found the resources from which the research questions will be framed. To discover why international students are attracted to the Nike brand To discover the percentage of international students that seem to be wearing the Nike brand within the university To find out common perceptions of Nike across cultures To discover what commonalities cross cultures so that the Nike image is attractive to multiple cultures These objectives have framed the questions that were asked of the participants and have been used to create a questionnaire that reflects these concepts. 1.3.2 Research Questions The following research question have been used to create the questionnaire that was administered to the participants. 1. How does the mythology of the Nike brand connect across cultures? 2. What decisions go into choosing the Nike brand for sports apparel 3. What cultures, if any, do not connect to the Nike brand mythology:? 4. What common elements of the Nike culture close the gaps that exist between culture? 5. How does the human rights violation issue affect the decisions made by consumers to purchase Nike brand sports apparel? These questions have been used to frame the study, but the study has broadened each of these topics in order to more fully explore the essence of each concept. 1.4 Hypotheses Hypothesis One: Null Hypothesis: The Nike sportswear brand is popular among international students because it allows for the use of a globally known brand to be used to help in acculturation when a foreign student is striving to fit into a the multi-cultural environment of a university in the U.K. Alternative Hypothesis: The use of apparel from Nike is in no way associated or linked with the acculturation of foreign students as they attend a university in the U.K. within a multi-cultural environment. Hypothesis Two: Null Hypothesis: The lifestyle brand of Nike provides a framework for international students who wish to be a part of a multi-cultural social group within the university setting. Alternative Hypothesis: The lifestyle brand of Nike has no influence over the purchasing habits of international students as they become part of a multi-cultural social group within the university setting. Chapter Two Literature Review 2.1 Introduction The following literature review has been undertaken in order to more fully understand the nature and position of the Nike, Inc. brand within the global market. Through understanding the previous information that other scholars and authors have collected about the company, a greater understanding of the company can be developed. 2.2 The Nike Global Image 2.2.1 Nike Branding and Advertising The Nike brand has become one of the most powerful and iconic imagery in the world. According to Slaughter and Rhodes (2004) “the effect of contemporary branding strategies is to push the ‘host’ or sponsored culture into the background so that the brand emerges as the ‘star”(p. 258). The Nike swoosh is prominent on every piece of apparel made by Nike and is the central cosmetic design piece on every shoe. Nike is not sold through the power of their product, but through the power of their lifestyle image. The lifestyle image supports a belief system that becomes part of the consumer culture and infects the philosophies of the perception of how life should be lived. According to Phil Knight “Nike’s mission is not to sell shoes, but to enhance people’s lives through sports and fitness” (Slaughter 2004, p. 261), The difference between Nike and its competitors is that Nike decided to target, not just sports enthusiasts, but every person across the world. The idea is that every person is a potential consumer and demand from those consumers must be created by an understanding that every person has the need to participate in the culture that Nike has created. Nike claims on its website “If you have a body, you are an athlete”, connecting the existence of humanity with the need for athleticism, which is then connected to their products (Nikid 2011). Therefore, there is no real demographic breakdown of who Nike intends as their target audience as they clearly desire for every person to be part of their consumer base. Nike has been a marketing innovator in its use of celebrity endorsement deals. In 1977 the University of Nevada men’s basketball team coach signed a deal with Converse, then not owned by Nike, so that the corporation would give his team members two pair of shoes for every pair that was purchased for the team in exchange for sponsorship advertising rights. Nike saw this concept as an opportunity to expand upon the idea. Nike gave free warm-up suits and shoes for the whole team and gave the coach 2500 dollars for the right to be prominently displayed and to be associated by the fans with their teams. The Nike sponsorship framework is now common practice with the offerings to the team and the coaches much higher, creating a lucrative avenue for both the teams and Nike for the advertising advantage (Slaughter 2002, p. 261). The deal that Michael made with Nike was unique and innovative in that the celebrity became a brand within the brand. Air Jordan’s became a popular shoe for Nike and has developed an entity that has some separation from the parent company (Cunningham 2009: Berman and Blakeman 2009). The power that Jordan brought to the company created a problem when he began to cross endorse several different products, creating what his agent refers to as a ‘super brand’. Because of the intensity of the power he built up through his shrewd endorsement deals, Jordan became an expensive commodity, creating some negotiating difficulties between the two entities of Nike and Jordan (Klein 2002, p. 57). 2.2.2 Global Sales On a global level, Nike out sells most all other brands. However, this is not the case in India where Nike and Reebok entered the sportswear market at about the same time. Sportswear is a relatively new line of product experience for the markets in India. Reebok, Nike, and Adidas are the globally recognized leaders with four local competitors rounding out the majority of sales in the industry. When Nike, Reebok and Adidas entered the market, 30% of the sales were shifted to the global competitors from the local competitors. Footwear India, Liberty, and Paragon, as well as the leading seller in India, Footwear limited, all had to start including the foreign shoes on their retail shelves in order to compete and hold onto a reasonable level of their share (Havaldar and Cavale 2007, p. C-6). Through creating sophisticated market analysis, American shoe manufacturers were able to enter the Indian market and shift consumer interest to American made shoes. The market was breached by connected the foreign brands to the sports culture of India, however Reebok managed to do this more successfully than Nike (Ray 2010, p. 332). Reebok connected their shoes to celebrity athletes within India, while Nike attempted to use internationally known sports celebrities in order to connect to the Indian market. Reebok won this contest, their endorsements more personal than those made for Nike (Havaldar and Cavale 2007, p. C-6). Although Reebok won the race in India, it is a prime example of the problems that are faced when entering into another culture. In India, the consumer culture is complex as Westernization has not fully developed within the nation. Consumerism does not yet have a firm social purpose. The cost of living is very low so the prices must reflect the relative earning potential of the consumers. According to Sengupta (2005) an approach to the market must be made with the philosophy of an “intermediate consumption of goods” as the culture is still maturing into the global community (p. 104). Through techniques that are referred to as ‘covert marketing’, consumer preferences are gathered and then designed into a mix of marketing that will meet the needs of the consumer. In terms of the way in which Nike approaches its global marketing, using India as a prime example despite the secondary market share, the company entered India with the intention of making an emotional connection with the people through nationalized interest in sporting events (Milne Bahl, and Rohm 2008). While the national stars were more successful for Reebok, the intention of Nike was to create a global community in which to pull India into its multi-national and multi-cultural social network. In this case, the advertising strategy of Reebok is to connect to those who consider themselves athletes and to target runners, while Nike has expressed a desire to connect to all of humanity because of the need for every person to considered the state of their fitness and health. Therefore, Nike is considered a lifestyle brand. While Reebok connects to runners as a good quality running shoe, Nike connects to the audience as facilitating a healthy and productive life with forward motion. By wearing Nike products, one belongs to a social group that achieves at a high level. It is not the context of the achievement, it the perceived level of performance that the group who wears Nike all seek to attain that makes them into a specified social group (Smart 1999). High end achievement fulfills the need of self-actualization as outlined in Maslow’s Hierarchy of needs, thus fulfilling more than the needs of a specific type of athlete, but fulfilling a human need that connects to every type of individual (Smoke 2005, p. 123). 2.5 Nike Global Labour Issues Nike has had problems with using foreign manufacturing plants that do not adhere to Western concepts of humane working conditions. Nike has been charged with using manufacturing firms with poor air ventilation with as much as 77% of the workers suffering from respiratory problems (Kasky 2007). Oxfam International got involved with mediating in Bulgarian factories with Nike and Adidas, but the result was that Nike pulled their manufacturing from many of those plants rather than comply (Conner and Dent 2006, p. 82). These issues created a great deal of global issues with the Nike image. However, in the years since the 1990’s when these types of reports occurred, Nike has worked to repair its image by becoming a socially responsible company. In a world with global communications that happens at lightening speed, this has become a necessity for survival. Along with serious reformations in the plants that make Nike shoes so that humane and healthy treatment is used, Nike has started a program in which used shoes that would normally go to a dump site are recycled to create sport surfaces (Our Community 2009). Through concerted efforts to create not only the appearance of a socially responsible company, but he actual actions of social responsibility, Nike has created an addition to its lifestyle aesthetic that supports the health of the world as well as the people within it. This global representation is part of the attraction that international students have to the product. 2.4 Socialization through Consumerism Western culture is greatly influenced by consumerism which creates a method of socialization (Barrington 2009, p. 123). In order for international immigrants and temporary long term visitors to assimilate into the culture, some consumerist behavior will undoubtedly have to occur. In order to gain access to social institutions and create upward mobility within the Western culture, assimilation through consumerism will most likely have to occur (Harden and Carley 2009, p. 163: Sherrod 2006, p. 31). Westernization is not only occurring through immigration, but through the infiltration of global firms into countries who are not acculturated to a Western aesthetic. According to Brunn (2006), “consumer acculturation can be seen as an important aspect of how consumers in a regional culture respond to the emergence and expansion of international retailers” (p. 317). Westernization through consumerism has become a unifying result of the globalization of the economy and those who wish to participate in the global unification that leads to higher levels of achievement within the business world are routinely attaining a consumerist philosophy to their choices of expenditures. The Westernization of the world is not wholly considered a positive aspect of modern culture. The dilution of many cultures has occurred in the modern world as consumerist philosophy has overwhelmed the global economy (Hollinger 2006, p. 46). Colonization has been the root of much of the superiority/inferiority dynamic that has occurred between Western conquering cultures with higher levels of industrialization through technology over cultures who remained pure to a more natural and native form of life. Both the conquering culture and the conquered have developed problems with asserting value to those cultures without technological superiority, even though they have rich histories and traditions that are worth preserving (McCloud 2008, p. 195: Oliver 2004, p. 61). 2.4 Summary The need to acculturate into a new culture is an important part of the immigration process, even when the process is short term for education. Through the adaptation of consumerist aesthetics, brand recognition can place someone into a social group within a multi-cultural community in order to create a sense of belonging. The Nike brand has had a rich global history, and although not all of that history has been positive, it is a Western icon that has worldwide recognition and a popular way I which people outside of the Western culture can find a way in which to assimilate. As well, the multiple cultures within the Western world find a sense of unification through wearing the same brand. Chapter Three Methodology 3.1 Introduction This study has been created using quantified research through a participant based survey and secondary research in order to provide a foundation for the findings. The research questions have been used to frame the study with concern for the objectives that have been outlined. 3.2 Research The research has been designed with a survey instrument that was administered to 50 participants. The results of the survey have been statistically rendered using SPSS software in order to find frequencies, means and chi square results. Using this information, findings have been assessed in order to outline the concepts that support the premise of the research. 3.2.1 Secondary Research The secondary research for this study has been conducted using multi-national resources that were primarily gathered through the use of Google Books in order to have a better understanding of this American based sportswear manufacturer. The research utilized books from different countries in order to create a more well-rounded understanding of the firm and on the branding that has been developed for Nike, Inc. 3.2.2 Primary Research Quantified research creates mathematical calculations that represent statistical representations of the most common answers. Through the use of SPSS software, these statistics can be converted into findings that represent associations between different statistical representations (Weinberg and Abramowitz 2008). 3.2.2.1 Questionnaires and Surveys The questionnaire was created using a participant group of 50 members representing a variety of national origins. The twenty question survey was developed using a Five Point Likert Scale in order to allow for a clear variety of answers that was both simple for the participants, but created a scale of answers from which to calculate results. The possible answers ranged from disagree strongly, to disagree somewhat, neutral, agree somewhat, to agree strongly. Each question is designed to create a progression from which the truth as it is perceived by the participant, can be attained. 3.2.2.2 Sampling Sampling is a process by which group participants are chosen. The participant group is intended to be a cross-section of society so that a representation of the population has been utilized to understand the social implications of the research questions on a broader level. The two types of sampling that are usually used to create a participant group are probability sampling and non-probability sampling (Babbie 2008, p. 203). The researcher chooses the most efficient means of creating a sample that will represent the group for which the research will provide an understanding. Trochim (2006) describes probability sampling as a random selection of participants in which the procedure provides each possible participant an equal possibility of being chosen as a part of the group. This method is difficult to fully utilize so this study will be using non-probability sampling in which criteria have been set in order to define the type of participant that will be used for the study. Non-probability sampling allows for the improbability of an equal an unbiased selection of candidates. The sample is defined by a set of parameters that allow for a person to be a part of the study if they meet the criteria. There are two broad types of non-probability sampling methodologies. The first is accidental and the second is purposive. Accidental sampling is done when one sets up in a specified location and then asks random passersby if they would participate in the survey. Purposive sampling, or deliberate sampling, uses a predefined group which provides possible participants from which the participants are then selected (Trochim 2006). Sometimes the participant group is selected because of convenience (Anderson, Sweeney and Williams 2009, p. 290). An example of this would be if the survey was conducted at a specified location that would contain a certain social group from which the participants were selected. This can be called convenience or deliberate sampling. Opportunity sampling is done when the researcher has a connection to the possible participants, such as when the research has a personal connection to the researcher such as belonging to the same social or cultural group as those who are being studied (Kumar 2004). This study will use a specific location in which a variety of people from the university are known to gather. In this location, a variety of people from different cultures will be approached in order to provide a broad sample of cultural differences. This type of sampling can be defined as opportunity sampling as well as convenience sampling. This non-purposive sampling allows for the researcher to create a screen from which to build criteria in which the sample can be obtained. The criteria for this sample will be that the individual be attending the university, familiar with the Nike brand, and be from non- U.K. origin. This will provide a sample from which the survey will have meaning in regard to the hypotheses. 3.2.2.3 Pilot Study The questionnaire was distributed to ten people in order to create a pilot study in which to determine the strengths and weaknesses of the instrument. The purpose of the pilot study was to define how the actual research would appropriately answer the framework of the research questions and approach reaching the objectives of the study. A discussion with the participants created a better understanding of how to edit the questionnaire for the most efficient and understandable set of inquiries. 3.3 Ethical Considerations The study is designed so that the participants will suffer no harm from having participated in the research. Any physical or mental harm that might occur is minimal to no event level, thus creating an ethical piece of research in which the participants are left without any harm. The purpose of the survey has been disclosed to the participants and their anonymity maintained. 3.4 Summary The methodology of this study is designed for quantitative research using non-probability sampling with a participant group who answered a survey in order to create the data. Ethical considerations have been assessed and the design of the survey will provide for confidentiality and safety. The selection of the participants was carefully managed so that a broad foundation of cultural differences could be represented. The survey was administered through the use of ethical means and was used in order to create statistical variances that helped to discover the results of the study. Chapter Four Findings. 1.1 Introduction The research of the study consisted of both a secondary assessment of relevant research and a quantitative primary research study. The secondary research has shown that Nike has developed a strong representation as a lifestyle brand that has infiltrated the global market. The primary research has developed an understanding of that presence as it affects the international students who attend the university in the U.K. 4.2 Findings 4.2.1 Secondary Research The secondary research shows that Nike has worked to develop the lifestyle brand so that those who wear their apparel are associated with high performance achievers, regardless of the venue in which high performance is being exhibited. The branding creates a social group in which this type of attitude is both supported and appreciated, binding the group and closing some of the gaps between cultures when individuals are immersed in a multi-cultural environment. While Nike has shown some irresponsibility in the way in which they have created their human sustainability through utilizing companies with questionable labour practices, the efforts that have been made since that time to negotiate better work conditions has created a company in which a global presence is beginning to shine a positive light. Therefore, the reputation of Nike extends from the level of social responsibility that they are beginning to show into the ideals that the marketing and branding have exhibited as for a lifestyle brand. Therefore, Nike represents an opportunity for multicultural groups to close the gaps and become part of a social group that represents the ideals of the Nike brand when members where the Nike apparel. 4.2.2 Primary Research 4.3 Summary Chapter Five Discussion and Conclusion 5.1 Introduction Nike has provided a culture within its brand that can provide a social group that has a broad cultural variety. In this social group, those from different cultures can find a place in which to cultivate a sense of belonging. When immersed in a Western culture, some people will want to adapt to the consumerist philosophies on which the capitalism culture is based. Therefore, it is through the acquisition of certain brands that some of the acculturation can take place. The results of the study has shown that through the social sameness of belonging to a group that wears the same brand, acculturation can occur. 5.2 Discussion The results of the study show that the first hypothesis, “The Nike sportswear brand is popular among international students because it allows for the use of a globally known brand to be used to help in acculturation when a foreign student is striving to fit into a the multi-cultural environment of a university in the U.K“, has a clear possibility of showing to be true. The hypothesis is supported through the secondary research and the results of the primary research. It appears that the power of the brand is relevant to the reasons that the students in the participant group choose to wear Nike. This suggests that acculturation into the Western aesthetics of social grouping has some power over the purchasing choices within the group. The second hypothesis, “The lifestyle brand of Nike provides a framework for international students who wish to be a part of a multi-cultural social group within the university setting“, also appears to be true. The lifestyle that is promoted through the advertising of Nike affects the demand that the consumer has for the product. The international students are no less susceptible to the type of mythology that has been created by Nike than are the national students and the desire to be part of the community is connected to the perception that international students have to wearing the brand. 5.3 Conclusion The Nike brand has created such a powerful presence in the global community that it can provide a unifying element to international students as they attempt to fit into foreign university environments within the U.K. The research questions have provided a framework in which to create an understanding of how this brand has become popular with international university students within the U.K. The statistical data has shown that the brand has a powerful influence over the purchasing choices of all students, thus suggesting that it is a universally appreciated brand that creates the perception of an attractive lifestyle. The survey has supported both hypotheses and has provided research that can be continued to further explore the power of the branding in creating international cross-socialization. The effects of the marketing used by Nike has proven to be a powerful resource from which globalization of consumer interest can occur. Acculturation through consumer behavior supports the use of products such as Nike as a unifying cultural phenomenon. Therefore, the product can be considered iconic enough to provide a social group to which international students wish to be involved. The use of the product creates a level of belonging that an international student may wish to feel when put into an unknown environment. In addition, the attraction to a culture in which power and financial wealth appears to be much greater than within other cultures might draw students outside of the Western culture to emulate aspects of that world in order to facilitate upward mobility in a global economy. 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