Impact of Strategic Sports Marketing on Product Development -A Case Study of Nike/Arjun J Chaudhuri

Impact of Strategic Sports Marketing on Product Development

                            -A Case Study of Nike-

Nike, Inc. is deemed the single most valuable sports brand globally for the manufacture, and marketing of   athletic shoes and apparel. The Beaverton, Oregon, USA headquartered company is stated to command more than 60% of the US footwear market which is the most valuable market for its shoe product. This athletic shoes and apparel company is highly aggressive in seeking endorsement of its athletic shoes and apparel from the world’s biggest names in sports that includes Derek Jeter, LeBron James and Cristiano Ronaldo who in exchange enter into lucrative endorsement contracts. That beyond seeking endorsement of its athletic shoes and apparel from individual athletes, Nike, Inc. is equally aggressive, and in turn has also entered into ‘team merchandise deals that have led to partnerships with some of sports’ most valuable teams, in the most popular sports league.

That Nike, Inc. was similarly involved at the 2015 Cricket World Cup and its iconic Swoosh logo and slogan registered as the Trademark of the athletic shoes and apparel company adorned the jersey of Team India. That Nike, Inc. entered into the contract for kit sponsorship with the BCCI in 2005 for 5-year deal worth $45 million, or $9 million per year. The ‘original’ contract for kit sponsorship with the BCCI was later extended to include the 2011 World Cup, in which tournament India went on to win the ‘World Cup’ on home soil later that year. That shortly afterwards Nike, Inc. renewed its contract, and held off the competing athletic shoes and apparel company: Adidas’s bid in winning the contract for kit jersey sponsorship by revising its new bid at $12 million per year payable to BCCI for another 5 additional years.

That Team India’s success was repeated with the victory at the 2013 ICC Champions Trophy in England two years later, thereby further exposing Nike, Inc. as the associated brand of cricket India, and its multi-billion fan base across demographics, chiefly in India, and rest of the test-playing Nations.

Interestingly, there was the brand war between Nike, and Adidas that was fought covertly when Nike-sponsored India played Adidas sponsored-South Africa in the 2015 World Cup, which to the delight of the multi-billion fan base resulted in victory for Team India. That the likely repeat of the same will be seen in the upcoming Cricket Series between India vs. South Africa starting 2^nd October 2015 next month.

However, the current dealings of Nike, Inc. with the BCCI don’t compare with the 1.3 billion USD Manchester United FC to provide kit sponsorship that is in sync with the EPL football club’s youth development program for talent promoted to the level of division grade football, and correlative increase in revenue for Nike, Inc. in UK from aspirants, and users of Nike kit, either for athletic performance or recreational use. 

That whether today’s marketing and sales approach of Nike, Inc. is unique to markets in India, and UK, the fact warranted is that it is clearly different from the initial approach of Nike, Inc. in 1968 when this athletic shoes and apparel company changed its brand name from Blue Ribbon Sports to Nike, Inc. as it stand today.

That back then Nike, Inc. was ‘founded’ by Philip Knight, Former  track athlete at the University of Oregon and his college coach at the University of Oregon, William Bowerman often discussed making or manufacturing ‘running shoes’ designed to improve the athlete’s performance, and each invested $500 to form and stock their own running shoe company: ‘Blue Ribbon Sports’ [BRS].

That Philip Knight whose ability lay in Marketing, and William Bowerman whose ability lay in product development quickly figured the ‘way’ to ‘gain’ customers for Nike ‘running shoes’. At the 1972 US Olympic trials in Eugene, Oregon, USA, Philip Knight and William Bowerman convinced several marathon runners to wear Nike running shoes. After the  marathon race at the 1972 US Olympic trials in Eugene, Oregon, USA, Philip Knight and William Bowerman advertised  that ‘4 of the Top 7 Finishers’ had  worn Nike running shoes.

That part of the athletic shoe company’s success came from ‘obtaining’ endorsements from professional athletes, including Tennis players: Jimmy Connors and John McEnroe.

In 1979, Nike Inc. began marketing the line of athletic clothing, and thereafter the athletic shoe and apparel company also ‘introduced running shoes made with insoles constructed with air filled sacs for cushioning, the technology co- developed  by the engineer from the US National Aeronautics and Space Administration [NASA].

That all this is far cry from how the economics and marketing of sports has advanced from the relatively simple production, distribution, exchange, and consumption of sports shoes and apparel products before that provided the impetus to new areas of marketing and product development to the present marketing and product development of sports shoes, and apparel, that takes prior discovered practices for granted, and added sports analytics to it as well.